HMS Settles Litigation Related To 2010 Asset Purchase - Agreement Substantially Reduces 2017 Jury Award
03 July 2018 - 6:30AM
HMS Holdings Corp. (Nasdaq:HMSY) today announced that it has
reached a settlement agreement in litigation pending in the Supreme
Court of New York. The case related to the acquisition earn out
portion of the purchase price for Allied Management Group Special
Investigation Unit, Inc. (“AMG”) which the Company acquired in
2010. As previously disclosed, a jury trial verdict was returned in
favor of the plaintiffs (Dennis Demetre and Lori Lewis) on their
breach of contract claim on November 3, 2017 which included an
award of $60 million in damages. The parties agreed to settle the
litigation for $20 million and a settlement agreement was signed on
June 27, 2018.
“We are pleased to have resolved this matter,” said Jeff
Sherman, CFO. The Company paid the settlement amount from available
cash on June 28th, so will record a charge in the second quarter.
“The settlement payment does not meaningfully change our overall
liquidity profile, which remains very strong, and the charge will
be treated as a non-recurring legal expense when we report second
quarter results, so will not impact our adjusted EPS,” added
Sherman.
About HMS
HMS is a leading provider of cost containment
solutions in the U.S. healthcare marketplace. Using innovative
technology as well as extensive data services and powerful
analytics, the Company delivers coordination of benefits, payment
integrity, and care management and consumer engagement solutions to
help healthcare payers improve financial performance and clinical
outcomes. Together our various services help customers recover
improper payments; prevent future improper payments; reduce fraud,
waste and abuse; better manage the care their members receive;
engage healthcare consumers to improve clinical outcomes and
increase retention; and achieve regulatory compliance. The Company
serves commercial health plans, state government agencies, federal
programs, at-risk providers, pharmacy benefit managers, employers
and other healthcare payers and sponsors; and also serves as a
subcontractor for certain business outsourcing and technology
firms.
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Dennis Oakes |
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Maria Perrin |
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SVP, Investor
Relations |
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Media Relations |
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dennis.oakes@hms.com |
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maria.perrin@hms.com |
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212-857-5786 |
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925-858-4881 |
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