Irving health tech firm HMS explores sale amid COVID-19 financial strain

Irving-based HMS Holdings Corp. is exploring options including a sale, as the health-care data and technology provider grapples with the impact of the coronavirus, according to people familiar with the matter.

The company is working with advisers to review alternative strategies, the people said, asking not to be identified because the matter isn’t public. No final decision has been made and it could still opt to remain independent, the people said.

HMS Holdings’ shares closed 2% higher on Friday, closing at $24.37, giving the company a market value of about $2.2 billion. The stock is down 28% in the past year compared with the 16% gain in the S&P 500 index.

Representatives for HMS Holdings didn’t respond to requests for comment.

HMS, founded in 1974, provides data and analytics services that help federal agencies, health-care exchanges, hospital groups and other clients reduce costs, according to its annual report.

As of last year, HMS had more than 2,500 employees, including about 1,000 in its Irving headquarters. Most of its business comes from the more than 40 state Medicaid agencies and numerous private providers of Medicaid and Medicare that use its software tools to coordinate benefits, detect fraudulent payments, and send health-related messages, such as reminders to pick up prescriptions or get a flu shot.

Its net income fell 77% year-over-year to $6.6 million in the quarter ended June 30, according to a filing.

The coronavirus pandemic hurt revenue and profits in the quarter because of lower volume of work and contracts, it said in the filing. Many U.S. hospitals had to cancel routine visits and elective surgeries during the height of the pandemic.

Dr. Victor Pantano, CEO of Digital Health CRC, speaks during a press conference announcing a partnership with researchers at Stanford, Southern Methodist University and HMS to fight opioid addiction, hospital re-admittance and other challenges that drive up health care costs at HMS Corporate Headquarters in Irving, Tuesday, May 14, 2019. The partnership is funded by a grant from the Australian government.

Irving has long been favored by relocating corporations.

Doctors look at a lung CT image at a hospital in Xiaogan,China.

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