Exhibit 10.1

EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (the “ Agreement ”) is made as of July 28, 2014 by and between HMS Holdings Corp., a Delaware corporation (“ HMS ”), and Jeffrey S. Sherman, an individual (“ you ”) (and, together with HMS, the “ Parties ”) to provide services, as directed, to the entities comprising the “ Company ” (HMS Holdings Corp. (“ HMS Holdings ” and with HMS, and their respective subsidiaries and affiliates)).

WHEREAS, the Company wishes to employ you, and you wish to be employed by the Company.

NOW THEREFORE, in consideration of your acceptance of employment, the Parties agree to be bound by the terms contained in this Agreement as follows:

1.                                               Engagement . Effective September 8, 2014 (the “ Effective Date ”) but subject to Section 9(l), the Company will employ you as Executive Vice President, CFO. You acknowledge that the Company organizes itself across multiple entities and that your being assigned to work directly for HMS Holdings or for one of its subsidiaries or affiliates will not, in and of itself, breach this Agreement. You will report directly to the Chief Executive Officer or his or her designee (“ Supervisor ”).

2.                                               Commitment. During the Employment Period (as defined in Section 3 below), you must devote your full working time and attention to the Company. During the Employment Period, you must not engage in any employment, occupation, consulting or other similar activity without your Supervisor’s prior written consent. You will perform your services under this Agreement primarily at the Company’s offices in Irving, TX. or at such place or places as you and the Company may agree. You understand and agree that your employment will require travel from time to time in a manner consistent with Company policy.

3.                                               Employment Period . HMS hereby agrees to employ you and you hereby accept employment with HMS upon the terms set forth in this Agreement, for the period commencing on the Effective Date and ending when and as provided in Section 6 (the “ Employment Period ”).

4.                                               Cash and Bonus .

(a)                                  Base Salary. You will receive a base salary of $500,000 annualized (as may be adjusted under this Agreement, the “ Base Salary ”). The Company will pay your Base Salary periodically in arrears not less frequently than monthly in accordance with the Company’s regular payroll practices as in effect from time to time (which currently provide for bi-weekly payments). The Company will review your Base Salary periodically and may adjust your Base Salary at that time.

(b)                                  Bonus . You will be eligible to receive bonus compensation (the “ Bonus ”) from the Company in respect of each fiscal year (or portion thereof) during the Employment Period, in each case as the Company may determine on the basis of such performance based or other criteria as it determines appropriate. For every year of your employment other than the bonus for 2014, the target bonus for your position is 65% of your base salary. HMS will guarantee you a minimum bonus payment of at least $150,000 (not prorated) for the plan year 2014, to be paid in 2015.

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(c)                                          Sign On Bonus. Upon completing 90 days of employment, you will also receive a special bonus of $200,000 (the “Sign On Bonus”).  You agree that you will repay a prorata portion of the Sign On Bonus within 10 days after your employment ends if your employment ends before the first anniversary of the Effective Date because of a termination for Cause or your resignation (other than a resignation for Good Reason within 24 months after a Change in Control) (each as defined below). The proration will be determined based on reducing the amount owed by a proportionate part of the full 12 months as you complete each month of service.

(d)                                         Initial Equity Grant . As soon as practicable after the Effective Date, and subject to Compensation Committee approval, HMS Holdings will grant you an equity award to be valued at $750,000 on the date of grant, consisting of $750,000 in the form of nonqualified stock options with respect to the HMS Holdings’ common stock (the “ Common Stock ”). The value for the options will be determined using the HMS Holdings’ standard Black-Scholes assumptions applied as of the date of grant. The equity grants will be under and subject to the terms of the HMS Holdings Fourth Amended and Restated 2006 Stock Plan (the “ 2006 Plan ”) and will contain HMS Holdings’ customary terms and conditions for such grants, subject to the express provisions in this subsection. Assuming continued employment, the options under the grant will have a seven year term.

5.                                       Employee Benefits .

(a)                                  Employee Welfare, Equity Compensation, and Retirement Plans. You will, to the extent eligible, be entitled to participate at a level commensurate with your position in all employee equity compensation plans and welfare benefit and retirement plans and programs the Company provides to its employees in accordance with the terms thereof as in effect from time to time. The Company may change or terminate the benefits at any time. You will be eligible for health and welfare benefits on the first day of the first month following 30 days of employment.

(b)                                  Business Expenses. Upon submission of appropriate documentation in accordance with Company policies, the Company will promptly pay, or reimburse you for, all reasonable business expenses that you incur in performing your duties under this Agreement, including travel, entertainment, professional dues and subscriptions, as long as such expenses are reimbursable under the Company’s policies. Any payments or expenses provided in this Section 5(b) will be paid in accordance with Section 7(c).

(c)                                   Paid Time Off. You will earn paid time off (PTO) at the rate of 18 hours per month (annualized to 27 days per year), or such greater number as the Company determines from time to time, provided that any carryover from year to year will be subject to the Company’s generally applicable policies.

6.                                       Termination of Employment.

(a)                                  General . Subject in each case to the provisions of this Section 6 and the other provisions of this Agreement relating to our respective rights and obligations upon termination of your employment, nothing in this Agreement interferes with or limits in any way the

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Company’s or your right to terminate your employment at any time, for any reason or no reason, and nothing in this Agreement confers on you any right or obligation to continue in the Company’s employ. The Company, in its sole discretion, may elect to terminate your employment immediately at any time subject to compliance with any obligations it has under this Section 6. If your employment ceases for any or no reason, you (or your estate, as applicable) will be entitled to receive (in addition to any compensation and benefits you are entitled to receive under Section 6(b) below): (i) any earned but unpaid Base Salary and, to the extent consistent with general Company policy, accrued but unused paid time off through and including the date of termination of your employment to be paid in accordance with the Company’s regular payroll practices and with applicable law but no later than the next regularly scheduled pay period, (ii) unreimbursed business expenses in accordance with the Company’s policies for which expenses you have provided appropriate documentation, to be paid in accordance with Section 7(c), and (iii) any amounts or benefits to which you are then entitled under the terms of the benefit plans then sponsored by the Company in accordance with their terms (and not accelerated to the extent acceleration does not satisfy Section 409A of the Internal Revenue Code of 1986, as amended (“ Section 409A ” of the “ Code ”)). Notwithstanding any other provision in this Agreement to the contrary, you will be entitled to severance, if any, solely through the terms of this Section 6, unless another written agreement between you and the Company (and approved by the head of the Company’s Human Resources Department) expressly provides otherwise.

(b)                           Termination Without Cause. If during the employment period the Company terminates your employment without Cause (defined below) in addition to the amounts described in Section 6(a), the Company will pay to you the following, subject to compliance with Section 6(b) (iii):

(i)                              Cash Severance . The Company will pay to you in cash an amount equal to twelve times your monthly Base Salary, paid ratably in equal installments over a twelve month period beginning in the first payroll period following the Release Effective Date (as defined below) (or such later date required by Section 7) in accordance with the Company’s standard payroll policies and procedures and in a manner consistent with Section 7;

(ii)                           Benefits . The Company will pay you a lump sum amount equal to twelve times the difference between the monthly COBRA coverage premium for the same type of medical and dental coverage (single, family, or other) you are receiving as of the date your employment ends and your then monthly employee contribution. This payment will be taxable and subject to withholding. You may use the amount received for any purpose.

(iii)                          Release . To receive any severance benefits provided for under this Agreement or otherwise, you must deliver to the Company a separation agreement and general release of claims on the form the Company provides (releasing all releasable claims other than to payments under Section 6 or outstanding equity and including obligations to cooperate with the Company and reaffirming your obligations under the Restrictive Covenants Agreement (as defined below)), which agreement and release must become irrevocable within 60 days (or such earlier date as the release provides) following the date of your termination of employment. Benefits under Section 6(b)(i) and (ii) will be paid or commence in the first regular payroll beginning after the release becomes effective, subject to any delays required by Section 7; provided, however , that if the last day of the 60 day period for an effective release falls in

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the calendar year following the year of your date of termination, the severance payments will be paid or begin no earlier than January 1 of such subsequent calendar year. The date on which your release of claims becomes effective is the “ Release Effective Date .” You must continue to comply with the Restrictive Covenants Agreement to continue to receive severance benefits.

(c)                                   Termination for Cause, Voluntary Resignation.

(i)                               General .   If, during the Employment Period, the Company terminates your employment for Cause, or you resign from your employment (other than for Good Reason), you will be entitled only to the payments described in Section 6(a) (excluding, on a termination for Cause, clause (ii) of Section 6(a)), unless applicable law otherwise requires payment. You may resign, other than for Good Reason, at any time and for any reason, by giving at least 30 days’ prior written notice to the Company. The Company may choose to respond to such notice of resignation by ending your active employment during the Notice Period, in which event you would remain an employee of the Company through the remainder of the Notice Period and continue to receive your Base Salary, less applicable deductions, and continue vesting under any outstanding equity grants through the end of the Notice Period. You will have no further right to receive any other compensation or benefits after such termination or resignation of employment, except as determined in accordance with the terms of the employee benefit plans or programs of the Company or as required by law.

(ii)                                   Definitions .

(I)                                    Cause . For purposes of this Agreement, “ Cause ” means any of the following: your (i) fraud with respect to the Company; (ii) material misrepresentation to any regulatory agency, governmental authority, outside or internal auditors, internal or external Company counsel, or the HMS Holdings Board of Directors (the “ HMS Holdings Board ” concerning the operation or financial status of the Company; (iii) theft or embezzlement of assets of the Company; (iv) your conviction, or plea of guilty or nolo contendere to any felony (or to a felony charge reduced to a misdemeanor), or, with respect to your employment, to any misdemeanor (other than a traffic violation); (v) material failure to follow the Company’s conduct and ethics policies that have been provided or made available to you; (vi) material breach of this Agreement or the Restrictive Covenants Agreement; and/or (vii) continued failure to attempt in good faith to perform your duties as reasonably assigned by your Supervisor at the time. Before terminating your employment for Cause under clauses (v) — (vii) above, the Company will specify in writing to you the nature of the act, omission, refusal, or failure that it deems to constitute Cause and, if the Company reasonably considers the situation to be correctable, give you 30 days after you receive such notice to correct the situation (and thus avoid termination for Cause), unless the HMS Holdings Board agrees to further extend the time for correction. You agree that the Company will have discretion exercised in a reasonable manner to determine whether your correction is sufficient. Nothing in this definition prevents the Company from removing you from your position with the Company at any time and for any reason.

(II)                               Good Reason . For purposes of this Agreement, “ Good Reason ” means, the occurrence, without your prior written consent, of any of the following events: (i) any material diminution in your authority, duties or

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responsibilities with the Company; (ii) a requirement that you report to an officer other than your then current Supervisor if the result is that your new Supervisor has materially diminished authority, duties, or responsibilities in comparison with your prior supervisor; (iii) a material reduction in your Base Salary or Target Bonus percentage; (iv) the Company’s requiring you to perform your principal services primarily in a geographic area more than 50 miles from the Company’s offices in Irving, TX (or such other place of primary employment for you at which you have agreed to provide such services); or (v) a material breach by the Company of any material provision of this Agreement. No resignation will be treated as resignation for Good Reason unless (x) you have given written notice to the Company of your intention to terminate your employment for Good Reason, describing the grounds for such action, no later than 90 days after the first occurrence of such circumstances, (y) you have provided the Company with at least 30 days in which to cure the circumstances, and (z) if the Company is not successful in curing the circumstance, you end your employment within 30 days following the cure period in (y). If the Company informs you that it will not treat your resignation as for Good Reason, you may withdraw the resignation and remain employed (provided that you do so before the original notice of resignation becomes effective) or may proceed and dispute the Company’s decision.

(d)                                  Death or Disability. Your employment hereunder will terminate immediately upon your death or Disability. “ Disability ” means the Company based upon appropriate medical evidence, determines you have become physically or mentally incapacitated so as to render you incapable of performing your usual and customary duties, with or without a reasonable accommodation, for 120 or more days, whether or not consecutive, during any 12 month period. You are also disabled if you are found to be disabled within the meaning of the Company’s long-term disability insurance coverage as then in effect (or would be so found if you applied for the coverage or benefits). Employment termination under this subsection is not covered by Section 6(b), and you or your heirs will receive only the benefits and compensation in Section 6(a) (together, as applicable, with any life or disability insurance payments). Nothing in this Section 6(d) prevents the Company from removing you from your position with the Company or, under Section 6(b) or 6(c), from terminating your employment at any time, subject to compliance with those subsections.

7.                                      Effect of Section 409A of the Code .

(a)                                  Six Month Delay . If and to the extent any portion of any payment, compensation or other benefit provided to you in connection with your employment termination is determined to constitute “nonqualified deferred compensation” within the meaning of Section 409A and you are a specified employee as defined in Section 409A(a)(2)(B)(i), as determined by the Company in accordance with its procedures, by which determination you hereby agree that you are bound, such portion of the payment, compensation or other benefit shall not be paid before the earlier of (i) the expiration of the six month period measured from the date of your “separation from service” (as determined under Section 409A) or (ii) the tenth day following the date of your death following such separation from service (the “ New Payment Date ”). The aggregate of any payments that otherwise would have been paid to you during the period between the date of separation from service and the New Payment Date shall be paid to you in a lump sum in the first payroll period beginning after such New Payment Date, and any remaining payments will be paid on their original schedule.

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(b)                                         General 409A Principles . For purposes of this Agreement, a termination of employment will mean a “separation from service” as defined in Section 409A. For purposes of this Agreement, each amount to be paid or benefit to be provided will be construed as a separate identified payment for purposes of Section 409A, and any payments that are due within the “short term deferral period” as defined in Section 409A or are paid in a manner covered by Treas. Reg. Section 1.409A-1(b)(9)(iii) will not be treated as deferred compensation unless applicable law requires otherwise. Neither the Company nor you will have the right to accelerate or defer the delivery of any such payments or benefits except to the extent specifically permitted or required by Section 409A. This Agreement is intended to comply with the provisions of Section 409A and this Agreement shall, to the extent practicable, be construed in accordance therewith. Terms defined in this Agreement will have the meanings given such terms under Section 409A if and to the extent required to comply with Section 409A. In any event, the Company makes no representations or warranty and will have no liability to you or any other person if any provisions of or payments under this Agreement are determined to constitute deferred compensation subject to Code Section 409A but not to satisfy the conditions of that section.

(c)                                          Expense Timing . Payments with respect to reimbursements of business expenses will be made in the ordinary course in accordance with the Company’s procedures (generally within 45 days after you have submitted appropriate documentation) and, in any case, on or before the last day of the calendar year following the calendar year in which the relevant expense is incurred. The amount of expenses eligible for reimbursement, or in-kind benefits provided, during a calendar year may not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other calendar year. The right to reimbursement or in-kind benefits is not subject to liquidation or exchange for another benefit.

8.                                       Restrictive Covenants . In connection with signing this Agreement, you are signing a Noncompetition, Nonsolicitation, Proprietary and Confidential Information and Developments Agreement (the “ Restrictive Covenants Agreement ”), which addresses your responsibilities to the Company in connection with confidentiality, transfer and protection of intellectual property, noncompetition, nonsolicitation of employees and customers, and nondisparagement.

9.                                       Miscellaneous .

(a)                                         Notices . All notices required or permitted under this Agreement must be in writing and will be deemed effective upon personal delivery or three business days following deposit in a United States Post Office, by certified mail, postage prepaid, or one business day after it is sent for next-business day delivery via a reputable nationwide overnight courier service in the case of notice to the Company at its then principal headquarters, and in the case of notice to you to the current address on file with the Company. Notice to the Company must include a separate notice to the General Counsel of HMS Holdings. Either Party may change the address to which notices are to be delivered by giving notice of such change to the other Party in the manner set forth in this Section 9(a).

(b)                                  No Mitigation .  You are not required to seek other employment or otherwise mitigate the value of any severance benefits contemplated by this Agreement, nor will any such benefits be reduced by any earnings or benefits that you may receive from any other source. Notwithstanding any other provision of this Agreement, any sum or sums paid under this Agreement will be in lieu of any amounts to which you may otherwise be entitled under the terms of any severance plan, policy, program, agreement or other arrangement sponsored by

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the Company or an affiliate of the Company.

(c)                             Waiver of Jury Trial . TO THE EXTENT NOT PROHIBITED BY APPLICABLE LAW THAT CANNOT BE WAIVED, THE PARTIES HEREBY WAIVE, AND COVENANT THAT THEY WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR OTHER PROCEEDING ARISING IN WHOLE OR IN PART UNDER OR IN CONNECTION WITH THIS AGREEMENT OR THE RELEASE IT CONTEMPLATES, WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, THE PARTIES AGREE THAT ANY PARTY MAY FILE A COPY OF THIS PARAGRAPH WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE THEIR RIGHTS TO TRIAL BY JURY IN ANY PROCEEDING WHATSOEVER BETWEEN THEM RELATING TO THIS AGREEMENT OR TO ANY OF THE MATTERS CONTEMPLATED UNDER THIS AGREEMENT, RELATING TO YOUR EMPLOYMENT, OR COVERED BY THE CONTEMPLATED RELEASE.

(d)                                  Severability. Each provision of this Agreement must be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be prohibited by or invalid under applicable law, such provision will be ineffective only to the extent of such prohibition or invalidity, without invalidating the remainder of such provision or the remaining provisions of this Agreement. Moreover, if an arbitrator or a court of competent jurisdiction determines any of the provisions contained in this Agreement to be unenforceable because the provision is excessively broad in scope, whether as to duration, activity, geographic application, subject or otherwise, it will be construed, by limiting or reducing it to the extent legally permitted, so as to be enforceable to the extent compatible with then applicable law to achieve the intent of the Parties.

(e)                                   Assignment. This Agreement will be binding upon and will inure to the benefit of (i) your heirs, beneficiaries, executors and legal representatives upon your death and (ii) any successor of the Company. Any such successor of the Company will be treated as substituted for the Company under the terms of this Agreement for all purposes. The Company may assign this Agreement without your consent, and such an assignment will not terminate your employment for purposes of triggering your entitlement to severance. You specifically agree that any assignment may include rights under the Restrictive Covenants Agreement without requiring your consent; provided , however , that an assignment that occurs after the termination of your employment will not expand in any manner the scope of the Restrictive Covenants Agreement. As used herein, “successor” will mean any person, firm, corporation or other business entity that at any time, whether by purchase, merger or otherwise, directly or indirectly acquires all or substantially all of the assets or business of the Company. Any attempted assignment, transfer, conveyance or other disposition of any interest in your rights to receive any form of compensation hereunder will be null and void.

(f)                                    No Oral Modification, Waiver, Cancellation or Discharge. This Agreement may only be amended, canceled or discharged or any obligations thereunder waived through a writing signed by you and any duly authorized executive officer of the Company.

(g)                                   No Conflict of Interest . You confirm that you have fully disclosed to HMS Holdings and the other entities in the Company, to the best of your knowledge, all circumstances under which you, your immediate family and other persons who reside in your household have or may have a conflict of interest with the Company. You further agree to fully

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disclose to the Company any such circumstances that might arise during your employment upon your becoming aware of such circumstances.

(h)                                  Other Agreements . You hereby represent that your performance of all the terms of this Agreement and the performance of your duties as an employee of the Company does not and will not breach any agreement to keep in confidence proprietary information, knowledge or data acquired by you in confidence or in trust prior to your employment with the Company. You also represent that you are not a party to or subject to any restrictive covenants, legal restrictions, policies, commitments or other agreements in favor of any entity or person that would in any way preclude, inhibit, impair or limit your ability to perform your obligations under this Agreement, including noncompetition agreements or nonsolicitation agreements, and you further represent that your performance of the duties and obligations under this Agreement does not violate the terms of any agreement to which you are a party.  You agree that you will not enter into any agreement or commitment or agree to any policy that would prevent or hinder your performance of duties and obligations under this Agreement.

(i)                                      Survivorship. The respective rights and obligations of the Company and you hereunder will survive any termination of your employment to the extent necessary to preserve the intent of such rights and obligations.

(j)                                     Withholding. The Company will be entitled to withhold, or cause to be withheld, any amount of federal, state, city or other withholding taxes or other amounts either required by law or authorized by you with respect to payments made to you in connection with your employment.

(k)                                  Company Policies . References in this Agreement to Company policies and procedures are to those policies and procedures in effect at the Effective Date, as the Company may amend them from time to time.

(l)                                      Background Checks. The Company’s offer of at-will employment is contingent upon your authorization and successful completion of background checks, reference checks, and drug testing. You may be required to execute authorizations for the Company and/or their third party vendor to obtain consumer reports and/or investigative consumer reports and use them in conducting background checks and drug testing as a condition to your employment.

(m)                              Governing Law; Dispute Resolution. The Parties agree that the Federal Arbitration Act, 9 U.S.C. §1 et seq. and the National Rules (as defined below) shall apply to the interpretation and enforcement of this Agreement. The laws of the State of Texas shall govern the substantive merits of any legal dispute set forth herein, without regard to conflicts of law provisions. In case of any controversy or claim arising out of or related to this Agreement or relating to your employment (including claims relating to employment discrimination), except as expressly excluded herein, each Party agrees to give the other Party notice of an intent to seek arbitration under this Agreement and 10 days to reach a resolution. Should resolution of any controversy or claim not be reached following provision of notice and a reasonable opportunity to cure, then the dispute (including the arbitrability of the dispute itself) shall be settled by arbitration under the American Arbitration Association’s National Rules for the Resolution of Employment Disputes (the “ National Rules ”). A single arbitrator shall be selected in accordance with the National Rules. The dispute will be arbitrated in Dallas, Texas, absent mutual agreement of the Parties to another venue. Any claim or controversy not submitted to arbitration in accordance with this Section 9(m) (other than as provided under the Restrictive Covenants Agreement) will be waived, and thereafter no arbitrator, arbitration panel,

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tribunal, or court will have the power to rule or make any award on any such claim or controversy. In determining a claim or controversy under this Agreement and in making an award, the arbitrator must consider the terms and provisions of this Agreement, as well as all applicable federal, state, or local laws. The award rendered in any arbitration proceeding held under this Section 9(m) shall be final and binding and judgment upon the award may be entered in any court having jurisdiction thereof. Claims for workers’ compensation or unemployment compensation benefits are not covered by this Section 9(m). Also not covered by this Section 9(m) are claims by the Company or by you for temporary restraining orders, preliminary injunctions or permanent injunctions (“equitable relief”) in cases in which such equitable relief would be otherwise authorized by law or pursuant to the Restrictive Covenants Agreement. The Company will be responsible for paying any filing fee of the sponsoring organization and the fees and costs of the arbitrator; provided, however, that if you initiate the claim, you will contribute an amount equal to the filing fee you would have incurred to initiate a claim in the court of general jurisdiction in the State of Texas. Each party will pay for its own costs and attorneys’ fees, if any, provided that the arbitrator or court, as applicable, may award reasonable costs and expenses in favor of the prevailing party. The Company and you agree that the decision as to whether a party is the prevailing party in an arbitration, or a legal proceeding that is commenced in connection therewith will be made in the sole discretion of the arbitrator or, if applicable, the court.

Any action, suit or other legal proceeding with respect to equitable relief that is excluded from arbitration above must be commenced only in a court of the State of Texas (or, if appropriate, a federal court located within the State of Texas), and the Company and you each consent to the jurisdiction of such a court. With respect to any such court action, the Parties hereto (a) submit to the personal jurisdiction of such courts; (b) consent to service of process by the means specified under Section 9(a); and (c) waive any other requirement (whether imposed by statute, rule of court, or otherwise) with respect to personal jurisdiction, inconvenient forum, or service of process.

(n)                                  Interpretation. The parties agree that this Agreement will be construed without regard to any presumption or rule requiring construction or interpretation against the drafting party. References in this Agreement to “include” or “including” should be read as though they said “without limitation” or equivalent forms.

(o)                                  Entire Agreement. This Agreement and any documents referred to herein represent the entire agreement of the Parties and will supersede any and all previous contracts, arrangements or understandings between the Company and you.

Signatures on Page Following

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IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed and you have hereunto set your hand to be effective as of the dates below.

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Exhibit 10.2

NONCOMPETITION, NONSOLICITATION, PROPRIETARY AND CONFIDENTIAL INFORMATION AND DEVELOPMENTS AGREEMENT

This Noncompetition, Nonsolicitation, Proprietary and Confidential Information and Developments Agreement (the “ Agreement ”) is made by and between the entity in the Company (as defined below) that employs you and Jeffrey S. Sherman (“ you ”).  For purposes of the Agreement, the “ Company ” includes HMS Holdings Corp. and its direct and indirect subsidiaries, corporate or other affiliates, and their successors and assigns.

In consideration of your employment with the Company and for other valuable consideration, the receipt and sufficiency of which consideration you hereby acknowledge, you agree as follows:

1.                                       Condition of Employment; Nature of Business; Duration of Obligations .

To become and remain an employee of the Company, you must sign and comply with this Agreement, which will assist in protecting our business and protect our Proprietary Information (as defined below). Our business makes regular use of Proprietary Information that is more valuable to us because it is kept confidential. You acknowledge that the nature of the Company’s business is such that protection of our Proprietary Information is critical to our business’s survival and success. You agree that the Company’s business operates throughout the United States and so needs to be protected accordingly. You expressly agree that this Agreement will continue to apply to you if and when you are transferred among the entities constituting the Company. You agree that any change or changes in your employment duties or compensation after signing this Agreement does not affect the validity or scope of this Agreement. You acknowledge that this Agreement does not constitute a contract of employment, either express or implied, and does not imply that the Company will continue your employment for any period of time. Your obligations under this Agreement will continue with respect to Proprietary Information during and after your employment for as long as such information continues to meet the definition of Proprietary Information as set forth in this Agreement and your obligations with respect to noncompetition and nonsolicitation will have the time limits described below. Your obligations with respect to Developments (as defined below) will apply during and after employment as described in Section 4.

2.                                       Noncompetition and Nonsolicitation .

(a)                                  In exchange for your continued employment and the receipt of Proprietary Information with respect to the Company, you agree that, while the Company employs you and for a period of 12 months after your employment ends for any reason (the “ Noncompetition Period ”), you will not directly or indirectly (whether as an owner, partner, officer, employee, director, investor, lender, consultant, independent contractor or otherwise) do any of the following:

(i)              Compete. In the geographical area where the Company does business or, at the time your employment ends, plans to do business, you will not engage or assist others in engaging in any business or enterprise that competes with the Company’s business, including any business or enterprise that develops, designs, produces, manufactures, markets, licenses, sells, renders, or provides any product or service that competes with any product or service actually or planned to be developed, designed, produced, manufactured, marketed, licensed, sold, rendered, or provided by the Company while you are or were employed by the Company; provided that your passive ownership of not more than 1% of the outstanding stock of a publicly-held company will not, by itself, violate this provision. For purposes of this Agreement, you agree that the Company does business throughout and plans to do business throughout the United States;

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(ii)           You agree that, if you violate any provisions of this Section 2(a), the Noncompetition Period will be extended by any period of time during which you are in violation, until your period of compliance equals or exceeds, in the aggregate, the Noncompetition Period. If any court of competent jurisdiction finds any restriction set forth in this Section 2 to be unenforceable because the restriction extends for too long a period of time or over too great a range of activities or in too broad a geographic area, the restriction shall be interpreted to extend only over the maximum period of time, range of activities, or geographic area as to which it may be enforceable.

(b)                                  In exchange for your continued employment and the receipt of Proprietary Information with respect to the Company, you agree that, while the Company employs you and for a period of 12 months after your employment ends for any reason, you will not directly or indirectly (whether as an owner, partner, officer, employee, director, investor, lender, consultant, independent contractor or otherwise) do any of the following:

(i)                                      Solicit Clients, Customers, or Accounts . You will not, either alone or in association with others, actually or attempt to solicit, divert, or take away the business or patronage of any of the Company’s clients, customers, or accounts, or prospective clients, customers, or accounts, that the Company contacted, solicited, or served while you were employed by the Company or about which you have Proprietary Information, provided that this Section 2(b)(i) does not prevent you from soliciting clients, customers, or accounts (if you are not using Proprietary Information to do so) for purposes that are not in actual or potential competition with the Company;

(ii)                                   Solicit or Hire Company Employees and Independent Contractors . You will not, either alone or in association with others, actually or attempt to (x) solicit, recruit or induce any Company employee or independent contractor to leave the Company’s service or (y) solicit, recruit, hire, or engage as an employee or independent contractor any individual whom the Company employed or engaged at any time while you were employed by the Company, except for an individual whose employment or other service relationship with the Company ended at least six months before the date of your action; and/or

(iii)                                Disclose or Utilize Product Development. You will not, either alone or in association with others, disclose to, or utilize for the benefit of, any entity other than the Company, any systems or product development ideas, concepts, or strategies that you or others in communication with you explored, generated, initiated, or discussed for potential implementation during your employment with the Company, even if the Company has not implemented such ideas, concepts, or strategies by the time your employment with the Company ends.

For the purposes of subsection (a) and (b), the terms “customer,” “client,” or “account” as applied to governmental agencies will mean the agency or department for which any of the products or services of the Company are sold or performed during the applicable period, any related program office, and any agency, department, or office that succeeds to the functions of any agency, department, or office to which the Company then provides or within the preceding 12 months provided goods or services (to the extent that the successor replaces part or all of the customer or client to which the Company provided goods or services).

(c)                                   You further agree that, during the Noncompetition Period, you will provide a copy of this Agreement to all persons and entities with whom you seek to be hired or do business as an individual service provider before accepting employment, engagement, board service, or a comparable position with any of entity engaged in any manner in the healthcare or healthcare servicing industry.

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3.                                       Proprietary and Confidential Information .

(a)                                  You agree that all information and know-how, whether or not in writing, and not in the Public Domain (as defined below) of a private, secret, or confidential nature concerning the Company’s business, business relationships, or financial affairs (collectively, “ Proprietary Information ”) are and will be the exclusive property of the Company. By way of illustration but not limitation, Proprietary Information includes

(i)                                      information or material relating to the Company’s inventions, improvements, discoveries, “know-how,” technological developments, or unpublished writings or other works of authorship, or to the materials, apparatus, processes, formulae, plans or methods used in developing, manufacturing, or marketing the Company’s software, products or services, or to financial or personnel data;

(ii)                                   information on or material relating to the Company that when received is marked as “proprietary,” “private,” or “confidential”;

(iii)                                the Company’s trade secrets;

(iv)                               software of the Company in various stages of development, including computer programs in source code and binary code form, software designs, specifications, programming aids (including “library subroutines” and productivity tools), programming languages, interfaces, visual displays, technical documentation, user manuals, data files and databases of the Company; and

(v)                                  any similar information of the type described above that the Company obtained from another party and that the Company treats as or designates as being proprietary, private or confidential, whether or not owned or developed by the Company.

Proprietary Information must not be improperly disclosed or misused. You will not disclose any Proprietary Information to others outside the Company without written approval by a duly authorized officer of the Company or use the Proprietary Information for any unauthorized purposes, either during or at any time after your employment with the Company, unless and until such Proprietary Information has become public knowledge without your fault. While employed by the Company, you will use your best efforts to prevent any unauthorized publication or disclosure of any Proprietary Information.

(b)                                  Proprietary Information can appear in many forms, all of which must be protected. You agree that all disks, files, documents, letters, memoranda, reports, records, data, drawings, sketches, notebooks, program listings, computer equipment or devices, computer programs, or any other written, photographic, electronic, audio, or other tangible or intangible material containing Proprietary Information, whether created by you or others, that comes into your custody or possession, will be and are the exclusive property of the Company. You must use these materials only in performing your duties for the Company, and you must not copy or remove the materials from the Company’s premises except in the pursuit of the Company’s business. When your employment with the Company ends or at the Company’s request, you agree to return to the Company any and all such materials or copies of the materials in your custody, possession, or control. After such delivery, you agree not to retain any such materials or copies of the materials.

(c)                                   Your obligations with Proprietary Information will extend beyond materials created by or for the Company. You acknowledge that the Company from time to time may have agreements with other persons or with the United States Government, or other governmental entities, or related agencies, that impose obligations or restrictions on the Company regarding inventions made during the course of work

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under such agreements or regarding the confidential nature of such work. You agree to be bound by all such obligations and restrictions that are made known to you and to take all action necessary to discharge the obligations of the Company under such agreements.

(d)                                  Proprietary Information does not include any information in the Public Domain. The term “ Public Domain ” means information (a) that was broadly available in the public domain at the time of disclosure to you or thereafter becomes broadly available to the public domain, other than through a breach of this agreement or a wrongful act by you or anyone else subject to an obligation to maintain confidentiality or to protect Proprietary Information; or (b) which was independently developed by you or others before you were employed by the Company (or was independently developed by you or others after your employment by the Company has terminated) and that was so developed without reference to, access to, or use of Proprietary Information and not in breach of this Agreement or any other agreement or obligation to maintain confidentiality or protect Proprietary Information.

4.                                       Developments .

(a)                                  As part of your position with the Company, you have made and may make developments and inventions of value to the Company. You agree that you will make full and prompt disclosure to the Company of all inventions, creations, improvements, ideas, discoveries, trade secrets, secret processes, technology, methods, developments, software, and works of authorship or other creative works, whether patentable or not, that are created, made, conceived or reduced to practice by you or under your direction or jointly with others during your employment by the Company, whether or not during normal working hours or on the premises of the Company (all of which are collectively referred to in this Agreement as “ Developments ”). The Company may use any of your recommendations, information, approaches, suggestions, concepts, ideas, or Developments without compensation beyond your normal compensation as an employee.

(b)                                  You agree to assign and do hereby assign to the Company (or any person or entity the Company designates) all of your right, title and interest in and to all Developments and all related patents, patent applications, copyrights and copyright applications that are not excluded by the next sentence. However, this subsection 4(b) does not apply to Developments that do not relate to the present or planned business or research and development of the Company and that you made and conceived not during normal working hours, not on the Company’s premises and not using the Company’s tools, devices, equipment or Proprietary Information. You understand that, if applicable state law prevents an agreement from assigning to the employer certain classes of inventions made by an employee, this subsection 4(b) will be interpreted not to apply to any invention that a court rules and/or the Company agrees falls within such classes. You hereby also waive all claims to moral rights in any Developments.

(c)                                   You agree to cooperate fully with the Company, both during and after your employment with the Company, with respect to procuring, maintaining, and enforcing copyrights, patents and other intellectual property rights (both in the United States and foreign countries) relating to Developments. You agree to sign all papers, including copyright applications, patent applications, declarations, oaths, formal assignments, assignments of priority rights and powers of attorney, that the Company may deem necessary or desirable to protect its rights and interests in any Development. You further agree that if the Company cannot, after reasonable effort, secure your signature on any such papers, any officer of the Company will be entitled to execute any such papers as your agent and attorney-in-fact, and you hereby irrevocably designate and appoint each officer of the Company as your agent and attorney-in-fact to execute any such papers on your behalf and to take any and all actions as the Company may consider necessary or desirable to protect its rights and interests in any Development under the conditions described in this sentence.

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(d)                                  Attached hereto as Exhibit A is a list of developments, patents, inventions, improvements, copyrightable materials, methods, research data and results, analytical approaches and discoveries, whether patentable or not, that you developed, conceived or acquired prior to your employment with the Company (“ Prior Developments ”). You hereby agree not to claim or assert any right, title or interest in any other developments, patents, inventions, improvements, copyrightable materials, methods, research data and results, analytical approaches and discoveries not disclosed on Exhibit A attached hereto, except as otherwise provided herein. If there are no Prior Developments listed on Exhibit A, you represent that there are no such Prior Developments.

(e)                                   If you provide to the Company or incorporate in any Company product or system any Prior Developments, or work of any similar nature (from any source), whenever created, that you have not prepared or originated in the performance of your employment with the Company (collectively, “ Incorporated Developments ”), you hereby grant to the Company a royalty-free, fully paid-up, non- exclusive, perpetual and irrevocable license throughout the world to use, modify, create derivative works from, disclose, publish, translate, reproduce, deliver, perform, dispose of, and to authorize others so to do, all such Incorporated Developments. You will not include in any Incorporated Developments that you deliver to the Company or use on its behalf, without the prior written approval of the Company, any material you or others have or will patent, copyright or trademark unless you provide the Company with the written permission of the holder of any patent, copyright or trademark owner for the Company to use such material in a manner consistent with then-current Company policy.

5.                                       Other Agreements .

You confirm that you have disclosed in writing to the Company any and all agreements you have with any previous employer or other party that would or might require you (i) to refrain from using or disclosing any trade secret or confidential or proprietary information in the course of your employment with the Company, (ii) to refrain from competing, directly or indirectly, with the business of such previous employer or any other party, or (iii) to refrain from soliciting employees, customers or suppliers of such previous employer or other party. You further confirm that you have not breached and, as an employee of the Company, you will not breach any agreement described in the preceding sentence nor breach any other obligation to keep in confidence proprietary information, knowledge, or data you acquired in confidence or in trust before your employment with the Company. You also represent that you will not disclose to the Company or induce the Company to use any confidential or proprietary information or material belonging to any previous employer or others.

6.                                       General Provisions .

(a)                                  Return of Property . When your employment ends or when the Company otherwise requests, you agree to return to the Company any and all Company property in your possession, custody or control, including all keys, files, records, equipment (including computer hardware, software, printers, wireless handheld devices, cellular phones, etc.).

(b)                                  Acknowledgements and Equitable Remedies . You acknowledge that the restrictions contained in this Agreement are necessary for the protection of the business and goodwill of the Company and agree that the restrictions are reasonable for such purpose. You agree that any breach of this Agreement will cause the Company substantial and irrevocable damage that is difficult to measure. Therefore, if a breach or threatened breach occurs, you agree that the Company, in addition to such other remedies as may be available, will have the right to obtain specific performance and injunctive relief without posting a bond. You hereby waive the adequacy of a remedy at law as a defense to such relief. You further agree that you will indemnify and hold the Company harmless from any liabilities, including defense costs, it may incur

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because you breached any of the obligations under Sections 2 or 5 or improperly revealed or used any Proprietary Information or have threatened to do so.

(c)                                   Entire Agreement and Amendment . This Agreement supersedes all prior agreements, written or oral, between the Company and you relating to the subject matter of this Agreement. This Agreement may not be modified, changed or discharged in whole or in part, except by an agreement in writing signed by a duly authorized officer of the Company and you.

(d)                                  Severability; Waiver . The invalidity or unenforceability of any provision of this Agreement will not affect or impair the validity or enforceability of any other provision of this Agreement. No delay or omission by the Company in exercising any right under this Agreement will operate as a waiver of that or any other right. A waiver or consent given by the Company on any one occasion is effective only in that instance and will not be construed as a bar to or waiver of any right on any other occasion.

(e)                                   Successor and Assigns; Third Party Beneficiaries . This Agreement will bind and inure to the benefit of both parties and their respective successors and assigns, including any corporation or entity with which or into which the Company may be merged or that may succeed to all or substantially all of its assets or business; provided , however , that your obligations are personal and you cannot assign them to others. You specifically agree that HMS Holdings Corp. is a third party beneficiary of this Agreement and may enforce it directly for its or its affiliates’ benefit.

(f)                                    Governing Law, Forum and Jury Trial Waiver . This Agreement will be governed by and construed as a sealed instrument under and in accordance with the laws of the State of Texas without regard to conflicts of law provisions. Any action, suit or other legal proceeding that is commenced to resolve any matter arising under or relating to any provision of this Agreement must be commenced only in a court of the State of Texas (or, if appropriate, a federal court located within the State of Texas), and the Company and you each consents to the jurisdiction of such a court. With respect to any such court action, the Company and you (a) submit to the personal jurisdiction of such courts; (b) consent to service of process by the means specified under Section 6(g); and (c) waive any other requirement (whether imposed by statute, rule of court, or otherwise) with respect to personal jurisdiction, inconvenient forum, or service of process. The Company and you each hereby irrevocably waives any right to a trial by jury in any action, suit or other legal proceeding arising under or relating to any provision of this Agreement.

(g)                                   Notices . All notices required or permitted under this Agreement must be in writing and will be deemed effective upon personal delivery or three business days following deposit in a United States Post Office, by certified mail, postage prepaid, or one business day after it is sent for next-business day delivery via a reputable nationwide overnight courier service in the case of notice to the Company at its then principal headquarters and in the case of notice to you to the current address on file with the Company. Either party may change the address to which notices are to be delivered by giving notice of such change to the other party in the manner set forth in this Section 6(g).

(h)                                  Notification . You agree that the Company is entitled to communicate your obligations under this Agreement to any future employer or prospective employer of yours and may provide such employer(s) with a copy of this Agreement.

Signatures on Following Page

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YOU ACKNOWLEDGE THAT YOU HAVE CAREFULLY READ THIS AGREEMENT AND UNDERSTAND AND AGREE TO ALL OF THE PROVISIONS IN THIS AGREEMENT.

Witness our hands and seals:

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EXHIBIT A

Ladies and Gentlemen:

The following is a complete list of Prior Developments that I have made, conceived, developed or first reduced to practice (in whole or in part, either alone or jointly with others) prior to my employment by the Company that I desire to clarify are not subject to the Proprietary and Confidential Information and Developments Agreement.

x                                   No Prior Developments

o                                     See below:

o                                     Additional sheets attached

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