HMS Holdings Provides An Update on Status of Fiscal Year-End SEC Reporting: Estimated Impact on FY2016 CMS Reserve Liability
March 16 2017 - 5:25PM
On March 16, 2017, HMS Holdings Corp. (the “Company” or “HMS”)
(NASDAQ:HMSY), a leading provider of coordination of benefits,
payment integrity and care management solutions for payers,
provided an update on the status of its fiscal year-end SEC
reporting.
On March 2, 2017, the Company filed a Form 12b-25
(the “Form 12b-25”) disclosing that the Company would be unable to
file its Annual Report on Form 10-K for the fiscal year ended
December 31, 2016 (the “2016 Form 10-K”) within the prescribed time
period without unreasonable effort or expense. The extension period
provided under Rule 12b-25 expires on March 16, 2017. The Company
is unable to file its 2016 Form 10-K within the extension period
because it needs additional time to complete the Company’s
previously disclosed review of its CMS reserve and related internal
controls over financial reporting. While the Company has not
yet completed its assessment of the effectiveness of its internal
controls over financial reporting as of December 31, 2016, it has
determined that there is a material weakness in its internal
controls related to the CMS reserves. The Company is continuing to
evaluate whether this issue affects its consolidated financial
results, primarily focusing on prior periods in which revenue
relating to the CMS business was recorded. The Company currently
expects the range of impact to the CMS reserve liability to be
within a range of $5 million increase or decrease to the recorded
reserve at December 31, 2016. Additionally, there could be
in-period or cumulative adjustments that could result from shifts
between accounting periods in the timing and amount of the reserve
liability that is recorded.
As a result of the foregoing, the Company expects
to receive a notification letter from the Listing Qualifications
Department of the NASDAQ Stock Market (“NASDAQ”), stating that the
Company is no longer in compliance with NASDAQ rules which requires
timely filing of periodic reports with the Securities and Exchange
Commission. The Company does not expect the notification to
have an immediate effect on the continued listing of the Company’s
common stock on the NASDAQ Global Select Market. The Company
separately has obtained an amendment to its Credit Agreement dated
May 3, 2013 among the Company, the guarantors party thereto, the
lenders party thereto and Citibank, N.A. as administrative agent,
providing the Company 180 days from its December 31, 2016 fiscal
year end to file its 2016 Form 10-K.
About HMS
HMS Holdings Corp., through its subsidiaries,
provides coordination of benefits, payment integrity and care
management solutions for payers. HMS serves state Medicaid
programs; commercial health plans, including Medicaid managed care,
Medicare Advantage and group and individual health lines of
business; federal government health agencies, including the Centers
for Medicare & Medicaid Services and the Veterans Health
Administration; government and private employers; child support
agencies; and other healthcare payers and sponsors. As a result of
HMS’s services, customers recover billions of dollars annually and
save billions more through the prevention of improper payments.
Safe Harbor Statement
This press release contains "forward-looking
statements" within the meaning of the U.S. Private Securities
Litigation Reform Act of 1995. Such statements reflect our current
expectations, projections and assumptions about our financial
results, business, the economy and future events or conditions.
They do not relate strictly to historical or current facts.
Forward‐looking statements can be identified by words such as
“aims,” “anticipates,” “believes,” “estimates,” “expects,”
“forecasts,” “intends,” “likely,” “may,” “plans,” “projects,”
“seeks,” “targets,” “will,” “would,” “could,” “should,” and similar
expressions and references to guidance, although some
forward-looking statements may be expressed differently. Additional
facts, different accounting determinations or remediation
activities could cause actual results to differ from those stated
or implied in our forward-looking statements, as could the other
factors, risks and uncertainties described in our most recent
Annual Report on Form 10-K and in our other filings with the
Securities and Exchange Commission. Factors or events that could
cause actual results to differ may emerge from time to time and are
difficult to predict. Should known or unknown risks or
uncertainties materialize, or should underlying assumptions prove
inaccurate, actual results may differ materially from past results
and those anticipated, estimated or projected. We caution you not
to place undue reliance upon any of these forward-looking
statements. Any forward-looking statements are made as of the
date of this press release. Except as may be required by law, we
disclaim any obligation to publicly update forward-looking
statements, whether as a result of new information, future events
or otherwise.
Investor Contact:
Dennis Oakes
SVP, Investor Relations
dennis.oakes@hms.com
212-857-5786
Media Contact:
Francesca Marraro
VP, Marketing and Communications
fmarraro@hms.com
212-857-5442
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