HMS Holdings Inc., the New York-based company hired by the Maine Department of Health and Human Services to audit dentists who treat MaineCare patients, is now worth $1.7 billion, according to an analysis of its stock price and held shares.

The publicly traded medical billing audit company used to be worth more – $5.7 billion in 2011 – according to financial statements filed with the Securities and Exchange Commission. It also has been worth much less, $658.8 million in 2008.

The fluctuations in stock prices and the company’s net worth are tied to policy decisions related to Medicaid and Medicare, government programs administered by the states, including a 2009 law requiring health care providers to transition to electronic record-keeping, and the 2010 Affordable Care Act.

Those two laws have driven up stock prices for HMS, which states hire to catch mistakes like double payments or fraudulent and errant Medicaid or Medicare claims. It’s a lucrative business. The U.S. Department of Health and Human Services has estimated that there are $70 billion in errant claims every year.

About two-thirds of the company’s revenues come from its cut of the savings it discovers in errant or fraudulent billings. About a third comes through fee-based contracts, according to investor analysis.

HMS has steadily claimed more of the auditing business as Medicaid and Medicare spending has increased nationally. The company has acquired smaller competitors, growth that has allowed HMS to provide auditing services to about 40 states, including Maine.


The vendor database with Maine’s Office of the State Controller shows the state has paid HMS at least $4.2 million since 2008, including nearly $610,000 in 2012. Its biggest contracts were in 2011 ($1.17 million) and 2010 ($1.02 million). Vendor data was unavailable for 2013.

A spokeswoman for the company did not return a call seeking comment.

HMS’s penetration into the states and its continued ability to secure federal contracts has ballooned its profits. In 2008 its stock price was a little less than $10 a share. At the time, its biggest client was the New York State Office of the Medicaid Inspector General, which hired HMS to audit Medicaid billings. New York comprised nearly 8 percent of the company’s revenue, according to SEC filings.

HMS also began acquiring federal auditing contracts, including a $5.7 million contract in 2008 for the Medicaid Integrity Program through the federal government’s Centers for Medicare and Medicaid Services. The agency has paid the company more than $1 billion for its auditing services since 2009.

HMS’s share price has climbed ever since, nearly doubling from 2008 to 2009. In its financial statement filed with the SEC at the end of 2009, the company noted that it was poised for growth as President Obama and the Democratic-controlled Congress began drafting the Affordable Care Act.

The company spends a fair amount of money lobbying Congress, the White House and the U.S. Department of Health and Human Services. Its most intense efforts coincided with its growth. HMS spent over $300,000 a year in 2008, 2009 and 2010, according to the Center for Responsive Politics. Its political action committee supported Democratic and Republican congressional candidates over that period, peaking at over $178,000 in donations in 2012.


Its political action committee was active in Maine in 2012, spending $2,800 in donations to Democratic and Republican leadership committees.

Steve Mistler can be contacted at 791-6345 or at:

[email protected]

Twitter: @stevemistler

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