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RAC award may be upcoming after GAO decision, says Wells Fargo

After HMS Holdings (HMSY) disclosed that the GAO has denied its protest of the terms in the request for quotes for the recompete of the Medicare Recovery Audit Contractors, or RAC, contract, Wells Fargo said the CMS may award contract recompetes in the near term. Wells, which notes that HMSY, Performant (PFMT) and CGI Group (GIB) each hold a prime role on one of the four RAC regions, believes the incumbents are well-positioned to retain their spots, though the firm also thinks some could drop out as PRGX Global (PRGX) has. Wells has Market Perform ratings on both Performant and CGI Group.