QuadraMed Announces Departure of CFO; Names New Restatement Leader; Further Updates...

Business Editors & Health/Medical Writers

SAN RAFAEL, Calif.--(BUSINESS WIRE)--Dec. 23, 2002

QuadraMed Corporation (Nasdaq:QMDCE) today announced that Martin Aquino, its chief financial officer, had resigned after the Company advised him that it had uncovered inaccuracies

Mr. Aquino had been referred to the Company by a turnaround management firm and references from a public accountant and another public company for which he had done similar work were positive.

Since late August when Mr. Aquino began working as a consultant for QuadraMed, the Company has strengthened its internal finance team to 48 persons, including 20 certified public accountants. Deloitte and Touche LLP, which has assisted the Company with forensic accounting procedures since mid-August, and Pisenti & Brinker LLP, the Company's independent public accountants for 2000 and 2001 and for the restatement of 1999, have both advised the Company since Mr. Aquino's departure that they remain comfortable with the competency of the Company's finance team. Nevertheless, QuadraMed said it is evaluating and investigating the work of Mr. Aquino, named chief financial officer in November, and the impact, if any, his departure will have on the restatement process and its timing.

The Company also said that it has retained Charles Stahl, formerly an audit partner with Deloitte & Touche LLP, as a full-time consultant to lead the final phase of the restatement effort. Mr. Stahl, a financial consultant in private practice with expertise in the areas of accounting, tax and technology, is a certified public accountant licensed in the State of California. He will begin his work immediately. QuadraMed has also initiated a search for a new chief financial officer.

The Company further announced that it is continuing to work with its auditors as they conduct their respective audit and review processes on its restated financial statements for the years ended December 31, 1999, 2000 and 2001 and the quarter ended March 31, 2002 and its unfiled financial statements for the quarters ended June 30 and September 30, 2002.

QuadraMed will advise and update the Securities and Exchange Commission and the Nasdaq Listing Qualifications Panel regarding today's announcement.

About QuadraMed Corporation

QuadraMed is dedicated to developing information technology and providing consulting services that help healthcare professionals deliver outstanding patient care with optimum efficiency. Offering real-world solutions for every aspect of acute care information management, QuadraMed has four main product lines: Affinity(R) Healthcare Information System, Quantim(R) Health Information Management Software and Services, Complysource(R) Compliance Solutions, and Chancellor(TM) Financial Products and Services. Behind our products and services are nearly 1000 professionals whose healthcare experience has earned QuadraMed the trust and loyalty of its many customers. To find out more about QuadraMed, visit www.quadramed.com.

Cautionary Statement on Risks Associated With Forward-Looking

Statements

This press release contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 that are subject to risks and uncertainties. The words "believe," "expect," "anticipate," "intend," "plan," "estimate," "may," "should," "could," and similar expressions are intended to identify such statements. Forward-looking statements are not guarantees of future performance and are to be interpreted only as of the date on which they are made. QuadraMed undertakes no obligation to update of revise any forward-looking statement. As previously announced, QuadraMed is in the process of restating its historical financial statements.

Important factors that could cause QuadraMed's actual results to differ materially from these forward-looking statements include, but are not limited to, the following: (i) forensic procedures carried out by QuadraMed may not be sufficient to permit the restatements to be completed on a timely basis or at all; (ii) QuadraMed's ability to remain listed on the Nasdaq National Market; (iii) QuadraMed's quarterly operating results may vary, (iv) QuadraMed's stock price may be volatile, (v) QuadraMed's investments are subject to market risk, (vi) QuadraMed faces product development risks from rapid technological changes, (vii) QuadraMed's products may be subject to bugs and other errors, (viii) QuadraMed's intellectual property and technology may be subject to infringement claims or be infringed upon, (ix) QuadraMed's products and services, particularly those sold to government entities and those sold to customers receiving government reimbursement, are subject to scrutiny, regulation, and possible future regulation by state and federal governments; (x) increased competition for QuadraMed's products and services, and (xi) QuadraMed may need to use its cash balances to repurchase or redeem its subordinated convertible debentures. QuadraMed does not intend this list of important factors to be exhaustive and advises investors that it discusses other risks and uncertainties that could cause QuadraMed's actual results to differ from these forward-looking statements in its periodic reports filed with the Securities and Exchange Commission ("SEC"). These SEC filings can be accessed through the Investor Relations section of our website, www.quadramed.com, or through the SEC's EDGAR Database at www.sec.gov (QuadraMed has EDGAR CIK No. 0001018833).

Note to Editors: QuadraMed, Affinity, Quantim, and Complysource are registered trademarks of QuadraMed Corporation. Chancellor is a trademark of QuadraMed Corporation. All other trademarks and registered trademarks are the properties of their respective holders.