8-K

                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                                    FORM 8-K

                                 Current Report

     PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

      Dated of Report (date of earliest event reported) January 31, 2003

                        Health Management Systems, Inc.
             (Exact name of registrant as specified in its charter)

      New York                   0-20946                13-2770433
State of Incorporation        Commission File        (I.R.S. Employer
                                  Number             Identification Number)

                401 Park Avenue South, New York, New York 10016
               (Address of principal executive offices, zip code)

                                 (212) 685-4545
              (Registrant's telephone number, including area code)

                                 Not Applicable
             (Former name, former address, and former fiscal year,
                         if changed since last report.)

Item 5. Other Events.

On January 31, 2003, the Company made the announcement contained in the press
release furnished as Exhibit 99.1 to the Current Report.

Item 7. Financial Statements and Exhibits

     (c) Exhibits

          99.1 Press Release dated January 31, 2003



                                   SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.



Date:  January 31, 2003          HEALTH MANAGEMENT SYSTEMS, INC.
                                 ------------------------------
                                          (Registrant)




                                 By: /s/ William F. Miller III
                                     -------------------------------------
                                     William F. Miller III
                                     Chairman and Chief Executive Officer
                                     (Principal Executive Officer)




                                 By: /s/ Philip Rydzewski
                                     -------------------------------------
                                     Philip Rydzewski
                                     Chief Financial Officer
                                     (Principal Financial Officer and
                                       Accounting Officer)

EX-99.1

Nasdaq:HMSY
Health Management Systems, Inc.
401 Park Avenue South
New York, New York 10016
(212) 685-4545
(212) 857-5004 (fax)


                                 PRESS RELEASE


Release:        January 31, 2003

Contact:        Kathy Arendt, Corporate Secretary
                (212) 857-5423
                (212) 857-5004 (fax)
                E-Mail: invest@hmsy.com
                http://www.hmsy.com


               Announcement from Health Management Systems, Inc.


New York, NY, January 31, 2003-Health Management Systems, Inc. (Nasdaq:  HMSY)
announced today that it had received an administrative subpoena from the United
States Attorney's Office for the Southern District of New York. The subpoena
seeks the production of certain documents from January 1982 to present relating
to medical reimbursement claims submitted to Medicare and other healthcare
programs by the Company on behalf of a significant client in the Provider
Services Division. The United States Attorney's Office has not asserted any
violations of law or applicable healthcare regulations by either the Company or
the client. The Company's services are subject to regulation pertaining to
billing for Medicare and Medicaid services, which primarily involve record
keeping requirements and other provisions designed to prevent unauthorized
payments.

The Company intends to cooperate fully with the investigation.
However, the Company is not able at this time to give any assurances as to the
duration or outcome of the investigation or as to the effect that any
proceedings that may be brought by the government may have on the Company's
business.

                                     # # #


     HMSY furnishes information-based revenue enhancement and business office
outsourcing services to healthcare providers and payors. We help our clients
increase revenue, accelerate reimbursement and reduce operating and
administrative costs.


Nasdaq:HMSY
Health Management Systems, Inc.
401 Park Avenue South
New York, New York 10016
(212) 685-4545
(212) 857-5004 (fax)


                                 PRESS RELEASE

Certain statements in this press release constitute "forward-looking statements"
within the meaning of the Private Securities Litigation Reform Act of 1995 (the
"Reform Act"). Such forward-looking statements involve known and unknown risks,
uncertainties, and other factors that may cause the actual results, performance,
or achievements of HMSY, or industry results, to be materially different from
any future results, performance, or achievements expressed or implied by such
forward-looking statements. The important factors that could cause actual
results to differ materially from those indicated by such forward-looking
statements include, but are not limited to (i) the information being of a
preliminary nature and therefore subject to further adjustment; (ii) the ability
of HMSY to contain costs in view of its revised revenue outlook, to grow
internally or by acquisition and to integrate acquired businesses into the HMSY
group of companies; (iii) the uncertainties of litigation; (iv) HMSY's
dependence on significant customers; (v) changing conditions in the healthcare
industry which could simplify the reimbursement process and adversely affect
HMSY's business; (vi) government regulatory and political pressures which could
reduce the rate of growth of healthcare expenditures and/or discourage the
assertion of claims for reimbursement against and delay the ultimate receipt of
payment from third party payors; (vii) competitive actions by other companies,
including the development by competitors of new or superior services or products
or the entry into the market of new competitors; (viii) all the risks inherent
in the development, introduction, and implementation of new products and
services; and other factors both referenced and not referenced in this press
release. When used in this release, the words "focus," "believe," "confident,"
"strong," "potential," and similar expressions are intended to identify
forward-looking statements, and the above described risks inherent therein.

                                     # # #