OMB APPROVAL

OMB Number: 3235-0287

Expires: January 31, 2005

Estimated average burden
hours per response...0.5

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 4

STATEMENT OF CHANGES IN BENEFICIAL OWNERSHIP

Filed pursuant to Section 16(a) of the Securities Exchange Act of 1934,
Section 17(a) of the Public Utility Holding Company Act of 1935
or Section 30(h) of the Investment Company Act of 1940

o Check this box if no longer
subject to Section 16.
Form 4 or Form 5
obligations may continue.
See Instruction 1(b).

1.	Name and Address of Reporting Person*	2.	Issuer Name and Ticker or Trading Symbol				3.	I.R.S. Identification Number of Reporting Person, if an entity (Voluntary)
	Rydzewski Philip(Last) (First) (Middle)		Health Management Systems, Inc. (HMSY)
	1755 York Avenue, #31H (Street)	4.	Statement for Month/Day/Year 12/19/02				5.	If Amendment, Date of Original (Month/Day/Year)
		6.	Relationship of Reporting Person(s) to Issuer (Check All Applicable)				7.	Individual or Joint/Group Filing (Check Applicable Line)
	New York NY 10128 (City)        (State)        (Zip)		o	Director	o	10% Owner		x	Form Filed by One Reporting Person
			x	Officer (give title below)				o	Form Filed by More than One Reporting Person
			o	Other (specify below)
				Chief Financial Officer

Reminder:	Report on a separate line for each class of securities beneficially owned directly or indirectly.
*	If the form is filed by more than one reporting person, see instruction 4(b)(v).

Table I — Non-Derivative Securities Acquired, Disposed of, or Beneficially Owned

1.

Title of Security (Instr. 3)

2.

Transaction Date (Month/Day/Year)

2A.

Deemed Execution Date, if any (Month/Day/Year)

3.

Transaction Code (Instr. 8)

4.

Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)

5.

Amount of Sec- urities Beneficially Owned Following Reported Trans- action(s) (Instr. 3 and 4)

6.

Ownership Form: Direct (D) or Indirect (I) (Instr. 4) (1)

7.

Nature of Indirect Beneficial Ownership (Instr. 4)

Code

V

Amount

(A) or (D)

Price

Page 2

Table II — Derivative Securities Acquired, Disposed of, or Beneficially Owned   (e.g., puts, calls, warrants, options, convertible securities)

1.

Title of Derivative Security (Instr. 3)

2.

Conversion or Exercise Price of Derivative Security

3.

Transaction Date (Month/Day/Year)

3A.

Deemed Execution Date, if any (Month/Day/Year)

4.

Transaction Code (Instr. 8)

5.

Number of Derivative Securities Acquired (A) or Disposed of (D) (Instr. 3, 4 and 5)

Code

V

(A)

(D)

ISO

$3.41

12/19/02

A

100,000

Page 3

Table II — Derivative Securities Acquired, Disposed of, or Beneficially Owned — Continued (e.g., puts, calls, warrants, options, convertible securities)

6.

Date Exercisable and Expiration Date (Month/Day/Year)

7.

Title and Amount of Underlying Securities (Instr. 3 and 4)

8.

Price of Derivative Security (Instr. 5)

9.

Number of Derivative Securities Beneficially Owned Following Reported Transaction(s) (Instr. 4)

10.

Ownership Form of Derivative Security: Direct (D) or Indirect (I) (Instr. 4)

11.

Nature of Indirect Beneficial Ownership (Instr. 4)

Date Exercisable

Expiration Date

Title

Amount or Number of Shares

(1)

12/19/12

Common Stock

100,000

250,000

D

Explanation of Responses:

(1)    Options exercisable in one-third increments with one-third vesting immediately, one-third on December 19, 2003 and the remaining one-third on December 19, 2004.

/s/ Philip Rydzewski	12/23/02
**Signature of Reporting Person	Date

**	Intentional misstatements or omissions of facts constitute Federal Criminal Violations. See 18 U.S.C. 1001 and 15 U.S.C. 78ff(a).
Note:	File three copies of this Form, one of which must be manually signed. If space is insufficient, see Instruction 6 for procedure.

Page 4 -----END PRIVACY-ENHANCED MESSAGE-----