Benefit Solutions Practice Area (BSPA) to Merge with Health Management Systems, Inc. (HMS).  

Dear Clients of Public Consulting Group,

From our earliest days, Public Consulting Group (PCG) has dedicated itself to exceptional client service which requires that we grow and change with our clients' needs.
 
Whether you are a Health and Human Services agency, a public school, or a health care insurance organization, PCG has tried to help you address many of the management, financial and technology challenges you face. Our ability to adapt and respond to your changing needs has been a critical component of our company's strategy and will remain so now more then ever. We are announcing today that PCG and HMS Holdings Corporation (NASDAQ: HMSY) have agreed to integrate our Benefits Solutions Practice Area (BSPA) into Health Management Systems, Inc. (HMS). We believe that by combining BSPA and HMS, our customers will be better served by a company that can provide broader range of Third Party Liability recovery services. We are convinced that this strategic initiative will produce dramatic benefits for all of our current and future customers.

Going forward, PCG will remain dedicated to the values that have long guided our relationship with you: commitment to quality client service, value oriented performance-based pricing backed by efficient business operations, and our continued resolve to recruit and develop the best consulting professionals.
 
Our breadth of capabilities is expanded through our Strategic Alliance with our colleagues at HMS, and their expertise and COB solutions we'll be even more capable of providing you solutions in three major areas:

Strategy & Finance: PCG will develop and offer an increasingly sophisticated portfolio of revenue maximization/cost savings strategies and approaches to address evolving concerns and constraints presented by Medicare/Medicaid programs. With appropriate authorization, we will be able to access years of detailed claims data on your behalf to analyze budgetary implications related to utilization and policy changes. Under the terms of this Strategic Alliance, PCG will become the primary provider of revenue-related consulting services for HMS. In turn, HMS will become the primary provider of COB services for PCG on its revenue maximization and cost savings projects.
 
Education Services: The PCG Education Services Practice Area (ESPA) will benefit in two major ways. First, we will be able to commit additional management resources to support its rapid growth and product expansion. Secondly, PCG will reinvest a substantial portion of the proceeds from the merger into finding new products, people, and possibly companies to support our clients' evolving needs. We will have deeper and broader capabilities in consulting, outsourcing, and support to help you strategize and manage your Medicaid billing and Administrative Claiming, IEP compliance, SIS management, and executive decision making process (EDsmart).  

Public Partnerships, LLC (PPL): PCG has named one of its senior Principals, Marc Fenton, as full-time President/CEO of our affiliate company, PPL. Assisting state and local governments to launch initiatives related to Consumer Directed Services, PPL will continue its remarkable trajectory of growth by serving as the technical and management infrastructure to support some of our nation's most needy individuals and their families. 

We are excited by the prospects and growth opportunities that will result from the merger of BSPA with HMSY. We are, however, mindful that PCG growth and success MUST be inspired by innovation and creativity before it is translated into solutions. This process always starts with you and the needs of your agency, your school, your health care institution or your company. We expect to execute the merger by September 30, 2006. Between now and then, we are committed to ensuring that each project continues in the high-quality fashion you have come to expect from PCG.

Please feel free to contact Mr. Stephen P. Skinner, Director of Marketing/Government Affairs with any questions or comments at 617-426-2026 or sskinner@pcgus.com . We look forward to working with you for a long time to come and thank you for your continued business.

Sincerely,

William S. Mosakowski
President and CEO
Public Consulting Group, Inc.