| Delaware                             |   | 62-1117144               |
|--------------------------------------|--------|--------------------------|
| (State      or Other Jurisdiction of |   | (I.R.S.      Employer    |
| Incorporation      or Organization)  |   | Identification      No.) |

| 701      Cool Springs Boulevard, Franklin, TN  37067 |
|----------------------------------------------------------------|
| (Address      of Principal Executive Offices) (ZipCode)        |

| 615-614-4929                                                   |
|----------------------------------------------------------------|
| (Registrant’s      Telephone Number, Including AreaCode) |

|                                                                                         |
|----------------------------------------------------------------------------------------------|
| (Former      name, former address and former fiscal year, if changed since last      report) |

----

| Non-accelerated      filer ¨ | (Do      not check if a smaller reporting company) | Smaller      reporting company ¨ |
|-----------------------------------|----------------------------------------------------|---------------------------------------|

----

|   |         |     |                                                                                            | Page     |   |
|--------|--------------|----------|-------------------------------------------------------------------------------------------------|----------|--------|
|   | Part      I  |     |                                                                                            |     |   |
|   |         | Item 1.  | Financial Statements                                                                            | 4        |   |
|   |         | Item 2.  | Management’s Discussion and Analysis of Financial Condition      andResults of Operations |  21 |   |
|   |         | Item 3.  | Quantitative and Qualitative Disclosures About Market      Risk                                 | 39       |   |
|   |         | Item 4.  | Controls and Procedures                                                                         | 39       |   |
|   | Part      II |     |                                                                                            |     |   |
|   |         | Item 1.  | Legal Proceedings                                                                               | 40       |   |
|   |         | Item 1A. | Risk Factors                                                                                    | 42       |   |
|   |         | Item 2.  | Unregistered Sales of Equity Securities and Use of      Proceeds                                | 42       |   |
|   |         | Item 3.  | Defaults Upon Senior Securities                                                                 | 42       |   |
|   |         | Item 4.  | Submission of Matters to a Vote of Security      Holders                                        | 43       |   |
|   |         | Item 5.  | Other Information                                                                               | 43       |   |
|   |         | Item 6.  | Exhibits                                                                                        | 43       |   |

----

| Item      1. | Financial Statements |   |
|--------------|----------------------|--------|

|   |                                                                     |   | September      30, |     |   |   | December      31, |   |     |   |
|--------|--------------------------------------------------------------------------|--------|--------------------|----------|--------|--------|-------------------|--------|----------|--------|
|   |                                                                     |   | 2009               |     |   |   | 2008              |   |     |   |
|   | Current      assets:                                                     |   |               |     |   |   |              |   |     |   |   |
|   | Cash      and cash equivalents                                           |   | $                  | 2,309    |   |   |              | $      | 5,157    |   |   |
|   | Accounts      receivable, net                                            |   |               | 121,924  |   |   |              |   | 115,108  |   |   |
|   | Prepaid      expenses                                                    |   |               | 11,325   |   |   |              |   | 13,479   |   |   |
|   | Other      current assets                                                |   |               | 5,618    |   |   |              |   | 3,810    |   |   |
|   | Income      taxes receivable                                             |   |               | 8,415    |   |   |              |   | —  |   |   |
|   | Deferred      tax asset                                                  |   |               | 26,404   |   |   |              |   | 30,488   |   |   |
|   |   Total      current assets                                    |   |               | 175,995  |   |   |              |   | 168,042  |   |   |
|   |                                                                     |   |               |     |   |   |              |   |     |   |   |
|   | Property      and equipment:                                             |   |               |     |   |   |              |   |     |   |   |
|   | Leasehold      improvements                                              |   |               | 41,270   |   |   |              |   | 34,635   |   |   |
|   | Computer      equipment and related software                             |   |               | 148,212  |   |   |              |   | 138,369  |   |   |
|   | Furniture      and office equipment                                      |   |               | 29,006   |   |   |              |   | 29,610   |   |   |
|   | Capital      projects in process                                         |   |               | 32,577   |   |   |              |   | 17,462   |   |   |
|   |                                                                     |   |               | 251,065  |   |   |              |   | 220,076  |   |   |
|   | Less      accumulated depreciation                                       |   |               | (132,841 | )      |   |              |   | (108,635 | )      |   |
|   |                                                                     |   |               | 118,224  |   |   |              |   | 111,441  |   |   |
|   |                                                                     |   |               |     |   |   |              |   |     |   |   |
|   | Other      assets                                                        |   |               | 7,063    |   |   |              |   | 18,089   |   |   |
|   |                                                                     |   |               |     |   |   |              |   |     |   |   |
|   | Customer      contracts, net                                             |   |               | 28,652   |   |   |              |   | 32,715   |   |   |
|   | Other      intangible assets, net                                        |   |               | 66,563   |   |   |              |   | 68,207   |   |   |
|   | Goodwill,      net                                                       |   |               | 484,584  |   |   |              |   | 484,596  |   |   |
|   |                                                                     |   |               |     |   |   |              |   |     |   |   |
|   | Total      assets                                                        |   | $                  | 881,081  |   |   |              | $      | 883,090  |   |   |
|   |                                                                     |   |               |     |   |   |              |   |     |   |   |
|   | See      accompanying notes to the consolidated financial    statements. |   |               |     |   |   |              |   |     |   |   |

----

|   |                                                                                              |   | September      30, |   |   |   | December      31, |   |   |
|--------|---------------------------------------------------------------------------------------------------|--------|--------------------|--------|--------|--------|-------------------|--------|--------|
|   |                                                                                              |   | 2009               |   |   |   | 2008              |   |   |
|   | Current      liabilities:                                                                         |   |               |   |   |   |              |   |   |
|   | Accounts      payable                                                                             | $      | 22,399             |   |   | $      | 21,633            |   |   |
|   | Accrued      salaries and benefits                                                                |   | 65,168             |   |   |   | 33,161            |   |   |
|   | Accrued      liabilities                                                                          |   | 26,873             |   |   |   | 26,294            |   |   |
|   | Deferred      revenue                                                                             |   | 5,060              |   |   |   | 6,904             |   |   |
|   | Contract      billings in excess of earned revenue                                                |   | 75,099             |   |   |   | 71,406            |   |   |
|   | Income      taxes payable                                                                         |   |  —      |   |   |   | 8,034             |   |   |
|   | Current      portion of long-term debt                                                            |   | 2,657              |   |   |   | 2,035             |   |   |
|   | Current      portion of long-term liabilities                                                     |   | 4,371              |   |   |   | 4,609             |   |   |
|   | Total      current liabilities                                                                    |   | 201,627            |   |   |   | 174,076           |   |   |
|   |                                                                                              |   |               |   |   |   |              |   |   |
|   | Long-term      debt                                                                               |   | 263,852            |   |   |   | 304,372           |   |   |
|   | Long-term      deferred tax liability                                                             |   | 10,898             |   |   |   | 8,073             |   |   |
|   | Other      long-term liabilities                                                                  |   | 38,181             |   |   |   | 39,533            |   |   |
|   |                                                                                              |   |               |   |   |   |              |   |   |
|   | Stockholders’      equity:                                                                  |   |               |   |   |   |              |   |   |
|   | Preferred      stock                                                                              |   |               |   |   |   |              |   |   |
|   |       $.001      par value, 5,000,000 shares                        |   |               |   |   |   |              |   |   |
|   | authorized,      none outstanding                                                                 |   |  —      |   |   |   |  —     |   |   |
|   | Common      stock                                                                                 |   |               |   |   |   |              |   |   |
|   |       $.001      par value, 120,000,000 shares authorized,          |   |               |   |   |   |              |   |   |
|   |         33,790,729      and 33,648,976 shares outstanding |   | 34                 |   |   |   | 34                |   |   |
|   | Additional      paid-in capital                                                                   |   | 220,060            |   |   |   | 213,461           |   |   |
|   | Retained      earnings                                                                            |   | 151,370            |   |   |   | 148,506           |   |   |
|   | Accumulated      other comprehensive loss                                                         |   | (4,941             | )      |   |   | (4,965            | )      |   |
|   |   Total      stockholders’ equity                                                 |   | 366,523            |   |   |   | 357,036           |   |   |
|   |                                                                                              |   |               |   |   |   |              |   |   |
|   | Total      liabilities and stockholders’ equity                                             | $      | 881,081            |   |   | $      | 883,090           |   |   |
|   |                                                                                              |   |               |   |   |   |              |   |   |

|   | See      accompanying notes to the consolidated financial    statements. |   |
|--------|--------------------------------------------------------------------------|--------|

----

|                                                                                                                                          |   | Three      Months Ended |    | Nine      Months Ended |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------|---------|------------------------|--------|
|                                                                                                                                          |   | September      30,      |    | September      30,     |   |
|                                                                                                                                          |   | 2009                    |    | 2008                   |   | 2009 |   | 2008 |   |
|                                                                                                                                          |   |                    |    |                   |   |   |   |   |   |   |   |   |   |
| Revenues                                                                                                                                      |   | $                       | 181,642 |                   | $      | 187,448 |   | $ | 542,214 |   | $ | 561,432 |   |
| Cost      of services (exclusive of depreciation and amortization of $8,517, $9,316,      $25,843, and $27,116, respectively, included below) |   |                    | 132,498 |                   |   | 125,628 |   |   | 393,097 |   |   | 381,884 |   |
| Selling,      general & administrative expenses                                                                                           |   |                    | 17,816  |                   |   | 17,493 |   |   | 55,050 |   |   | 55,156 |   |
| Depreciation      and amortization                                                                                                            |   |                    | 11,956  |                   |   | 12,949 |   |   | 36,155 |   |   | 37,813 |   |
|                                                                                                                                          |   |                    |    |                   |   |   |   |   |   |   |   |   |   |
| Operating      income                                                                                                                         |   |                    | 19,372  |                   |   | 31,378 |   |   | 57,912 |   |   | 86,579 |   |
| Gain      on sale of investment                                                                                                               |   |                    | — |                   |   | — |   |   | (2,581 | ) |   | — |   |
| Interest      expense                                                                                                                         |   |                    | 3,888   |                   |   | 5,366 |   |   | 12,091 |   |   | 15,529 |   |
| Legal      settlement and related costs                                                                                                       |   |                    | — |                   |   | — |   |   | 39,956 |   |   | — |   |
|                                                                                                                                          |   |                    |    |                   |   |   |   |   |   |   |   |   |   |
| Income      before income taxes                                                                                                               |   |                    | 15,484  |                   |   | 26,012 |   |   | 8,446 |   |   | 71,050 |   |
| Income      tax expense                                                                                                                       |   |                    | 6,682   |                   |   | 10,389 |   |   | 5,582 |   |   | 28,900 |   |
|                                                                                                                                          |   |                    |    |                   |   |   |   |   |   |   |   |   |   |
| Net      income                                                                                                                               |   | $                       | 8,802   |                   | $      | 15,623 |   | $ | 2,864 |   | $ | 42,150 |   |
|                                                                                                                                          |   |                    |    |                   |   |   |   |   |   |   |   |   |   |
| Earnings      per share:                                                                                                                      |   |                    |    |                   |   |   |   |   |   |   |   |   |   |
|   Basic                                                                                                                             |   | $                       | 0.26    |                   | $      | 0.46 |   | $ | 0.08 |   | $ | 1.22 |   |
|                                                                                                                                          |   |                    |    |                   |   |   |   |   |   |   |   |   |   |
|   Diluted                                                                                                                           |   | $                       | 0.26    |                   | $      | 0.45 |   | $ | 0.08 |   | $ | 1.17 |   |
|                                                                                                                                          |   |                    |    |                   |   |   |   |   |   |   |   |   |   |
| Weighted      average common shares                                                                                                           |   |                    |    |                   |   |   |   |   |   |   |   |   |   |
| and      equivalents:                                                                                                                         |   |                    |    |                   |   |   |   |   |   |   |   |   |   |
|   Basic                                                                                                                             |   |                    | 33,745  |                   |   | 33,599 |   |   | 33,701 |   |   | 34,474 |   |
|   Diluted                                                                                                                           |   |                    | 34,481  |                   |   | 34,567 |   |   | 34,232 |   |   | 35,891 |   |
|                                                                                                                                          |   |                    |    |                   |   |   |   |   |   |   |   |   |   |

----

|                                                         |   |      |          |   |   |          |   |     |          | Accumulated        |   |                |   |   |   |
|--------------------------------------------------------------|--------|-----------|---------------|--------|--------|---------------|--------|----------|---------------|--------------------|--------|---------------------|--------|--------|--------|
|                                                         |   |      |          |   |   | Additional    |   |     |          | Other              |   |                |   |   |   |
|                                                         |   | Preferred |          | Common |   | Paid-in       |   | Retained |          | Comprehensive      |   |                |   |   |   |
|                                                         |   | Stock     |          | Stock  |   | Capital       |   | Earnings |          | Income      (Loss) |   | Total               |   |   |   |
| Balance,      December 31, 2008                              |   |      | $—      |   |   | $34           |   |     | $213,461      |               |   | $148,506            |   |   |   |  $(4,965 | ) |   | $357,036 |   |
|                                                         |   |      |          |   |   |          |   |     |          |               |   |                |   |   |   |   |   |   |   |   |
| Comprehensive      income:                                   |   |      |          |   |   |          |   |     |          |               |   |                |   |   |   |   |   |   |   |   |
|                                                         |   |      |          |   |   |          |   |     |          |               |   |                |   |   |   |   |   |   |   |   |
| Net      income                                              |   |      |  — |   |   |  — |   |     |  — |               |   | 2,864               |   |   |   |  — |   |   | 2,864 |   |
|                                                         |   |      |          |   |   |          |   |     |          |               |   |                |   |   |   |   |   |   |   |   |
| Net      change in fair value of interest rate               |   |      |          |   |   |          |   |     |          |               |   |                |   |   |   |   |   |   |   |   |
| swaps,      net of income taxes of $1,246                    |   |      |  — |   |   |  — |   |     |  — |               |   |  —       |   |   |   | 1,591 |   |   | 1,591 |   |
|                                                         |   |      |          |   |   |          |   |     |          |               |   |                |   |   |   |   |   |   |   |   |
| Change      in fair value of investment, net of              |   |      |          |   |   |          |   |     |          |               |   |                |   |   |   |   |   |   |   |   |
| income      tax benefit of $49                               |   |      |  — |   |   |  — |   |     |  — |               |   |  —       |   |   |   | (71 | ) |   |   (71 | ) |
|                                                         |   |      |          |   |   |          |   |     |          |               |   |                |   |   |   |   |   |   |   |   |
| Sale      of investment, net of income taxes of $1,045  |   |      |  — |   |   |  — |   |     |  — |               |   |  —       |   |   |   | (1,536 | ) |   |   (1,536 | ) |
|                                                         |   |      |          |   |   |          |   |     |          |               |   |                |   |   |   |   |   |   |   |   |
| Foreign      currency translation adjustment                 |   |      |  — |   |   |  — |   |     |  — |               |   | —             |   |   |   | 40 |   |   | 40 |   |
|                                                         |   |      |          |   |   |          |   |     |          |               |   |                |   |   |   |   |   |   |   |   |
| Total      comprehensive income                              |   |      |          |   |   |          |   |     |          |               |   |                |   |   |   |   |   |   | 2,888 |   |
|                                                         |   |      |          |   |   |          |   |     |          |               |   |                |   |   |   |   |   |   |   |   |
| Exercise      of stock options                               |   |      |  — |   |   |  — |   |     | 265           |               |   |  —       |   |   |   |  —  |   |   | 265 |   |
|                                                         |   |      |          |   |   |          |   |     |          |               |   |                |   |   |   |   |   |   |   |   |
| Tax      effect of option exercises                          |   |      |  — |   |   |  — |   |     | (793          | )                  |   |  —  |   |   |   |  —  |   |   | (793 | ) |
|                                                         |   |      |          |   |   |          |   |     |          |               |   |                |   |   |   |   |   |   |   |   |
| Repurchase      of stock options                             |   |      |  — |   |   |  — |   |     | (736          | )                  |   |  —       |   |   |   |  —  |   |   | (736 | ) |
|                                                         |   |      |          |   |   |          |   |     |          |               |   |                |   |   |   |   |   |   |   |   |
| Share-based      employee compensation expense               |   |      |  — |   |   |  — |   |     | 7,863         |               |   |  —  |   |   |   |  —  |   |   | 7,863 |   |
|                                                         |   |      |          |   |   |          |   |     |          |               |   |                |   |   |   |   |   |   |   |   |
| Balance,      September 30, 2009                             |   |      | $—      |   |   | $34           |   |     | $220,060      |               |   | $151,370            |   |   |   |  $(4,941 | ) |   | $366,523 |   |

| See      accompanying notes to the consolidated financial    statements. |
|--------------------------------------------------------------------------|

----

|                                                             |   | Nine      Months EndedSeptember      30, |     |
|------------------------------------------------------------------|--------|------------------------------------------|----------|
|                                                             |   | 2009                                     |     |   |   | 2008 |   |
| Cash      flows from operating activities:                       |   |                                     |     |   |   |   |   |   |   |
| Net      income                                                  |   | $                                        | 2,864    |   |   |   | $ | 42,150 |   |
| Adjustments      to reconcile net income to net cash provided by |   |                                     |     |   |   |   |   |   |   |
| operating      activities, net of business acquisitions:         |   |                                     |     |   |   |   |   |   |   |
| Depreciation      and amortization                               |   |                                     | 36,155   |   |   |   |   | 37,813 |   |
| Amortization      of deferred loan costs                         |   |                                     | 1,128    |   |   |   |   | 881 |   |
| Gain      on sale of investment                                  |   |                                     | (2,581   | ) |   |   |   | — |   |
| Loss      on disposal of property and equipment                  |   |                                     | 955      |   |   |   |   | 1,346 |   |
| Share-based      employee compensation expense                   |   |                                     | 7,863    |   |   |   |   | 12,714 |   |
| Excess      tax benefits from share-based payment arrangements   |   |                                     | (162     | ) |   |   |   | (3,487 | ) |
| Increase      in accounts receivable, net                        |   |                                     | (6,776   | ) |   |   |   | (19,049 | ) |
| (Increase)      decrease in other current assets                 |   |                                     | (5,490   | ) |   |   |   | 1,926 |   |
| Increase      in accounts payable                                |   |                                     | 4,462    |   |   |   |   | 2,968 |   |
| Increase      in accrued salaries and benefits                   |   |                                     | 31,965   |   |   |   |   | 15,640 |   |
| (Decrease)      increase in other current liabilities            |   |                                     | (3,667   | ) |   |   |   | 2,341 |   |
| Deferred      income taxes                                       |   |                                     | 5,339    |   |   |   |   | (7,727 | ) |
| Other                                                            |   |                                     | 3,479    |   |   |   |   | 8,002 |   |
| Increase      in other assets                                    |   |                                     | (454     | ) |   |   |   | (1,581 | ) |
| Payments      on other long-term liabilities                     |   |                                     | (2,935   | ) |   |   |   | (2,156 | ) |
| Net      cash flows provided by operating activities             |   |                                     | 72,145   |   |   |   |   | 91,781 |   |
|                                                             |   |                                     |     |   |   |   |   |   |   |
| Cash      flows from investing activities:                       |   |                                     |     |   |   |   |   |   |   |
| Acquisition      of property and equipment                       |   |                                     | (35,638  | ) |   |   |   | (62,026 | ) |
| Sale      of investment                                          |   |                                     | 11,626   |   |   |   |   | — |   |
| Change      in restricted cash                                   |   |                                     | (538     | ) |   |   |   | — |   |
| Other                                                            |   |                                     | (3,655   | ) |   |   |   | (4,543 | ) |
| Net      cash flows used in investing activities                 |   |                                     | (28,205  | ) |   |   |   | (66,569 | ) |
|                                                             |   |                                     |     |   |   |   |   |   |   |
| Cash      flows from financing activities:                       |   |                                     |     |   |   |   |   |   |   |
| Proceeds      from issuance of long-term debt                    |   |                                     | 283,900  |   |   |   |   | 87,287 |   |
| Payments      of long-term debt                                  |   |                                     | (325,826 | ) |   |   |   | (42,965 | ) |
| Deferred      loan costs                                         |   |                                     | (784     | ) |   |   |   | — |   |
| Exercise      of stock options                                   |   |                                     | 265      |   |   |   |   | 3,668 |   |
| Excess      tax benefits from share-based payment arrangements   |   |                                     | 162      |   |   |   |   | 3,487 |   |
| Repurchases      of common stock                                 |   |                                     | —  |   |   |   |   | (94,208 | ) |
| Repurchase      of stock options                                 |   |                                     | (736     | ) |   |   |   | — |   |
| Change      in outstanding checks and other                      |   |                                     | (3,982   | ) |   |   |   | — |   |
| Net      cash flows used in financing activities                 |   |                                     | (47,001  | ) |   |   |   | (42,731 | ) |
|                                                             |   |                                     |     |   |   |   |   |   |   |
| Effect      of exchange rate changes on cash                     |   |                                     | 213      |   |   |   |   | (76 | ) |
|                                                             |   |                                     |     |   |   |   |   |   |   |
| Net      decrease in cash and cash equivalents                   |   |                                     | (2,848   | ) |   |   |   | (17,595 | ) |
|                                                             |   |                                     |     |   |   |   |   |   |   |
| Cash      and cash equivalents, beginning of period              |   |                                     | 5,157    |   |   |   |   | 40,515 |   |
|                                                             |   |                                     |     |   |   |   |   |   |   |
| Cash      and cash equivalents, end of period                    |   | $                                        | 2,309    |   |   |   | $ | 22,920 |   |

| See      accompanying notes to the consolidated financial    statements. |
|--------------------------------------------------------------------------|

----

| (1) | Basis      of Presentation |   |
|-----|----------------------------|--------|

| (2) | Recently      Issued Accounting Standards |   |
|-----|-------------------------------------------|--------|

| (3) | Share-Based      Compensation |   |
|-----|-------------------------------|--------|

----

|   |                                   |   |   |   |                |   | Weighted-         |   |               |    |   |
|--------|----------------------------------------|--------|--------|--------|---------------------|--------|-------------------|--------|--------------------|---------|--------|
|   |                                   |   |   |   |                |   | Average           |   |               |    |   |
|   |                                   |   |   |   | Weighted-           |   | Remaining         |   | Aggregate          |    |   |
|   |                                   |   | Shares |   | Average             |   | Contractual       |   | Intrinsic          |    |   |
|   | Options                                |   | (000s) |   | Exercise      Price |   | Term      (years) |   | Value      ($000s) |    |   |
|   | Outstanding      at January 1, 2009    |   | 4,124  |   | $                   | 20.20  |              |   |               |    |   |   |
|   | Granted                                |   | 1,153  |   |                | 11.69  |              |   |               |    |   |   |
|   | Exercised                              |   | (51    | )      |                | 5.09   |              |   |               |    |   |   |
|   | Forfeited      or expired              |   | (181   | )      |                | 21.62  |              |   |               |    |   |   |
|   | Outstanding      at September 30, 2009 |   | 5,045  |   |                | 18.36  |              | 4.96   |               | $14,705 |   |   |
|   | Exercisable      at September 30, 2009 |   | 3,472  |   |                | 19.43  |              | 3.50   |               | 9,249   |   |   |

|   |                                 |   |   |   |   |        Weighted-       |   |
|--------|--------------------------------------|--------|--------|--------|--------|-----------------------------|--------|
|   |                                 |   |   |   |   |        Average         |   |
|   |                                 |   | Shares |   |   |        Grant      Date |   |
|   | Nonvested      Shares                |   | (000s) |   |   |        Fair      Value |   |
|   | Nonvested      at January 1, 2009    |   | 501    |   |   | $                           | 41.01  |   |
|   | Granted                              |   | 666    |   |   |                        | 11.09  |   |
|   | Vested                               |   | (87    | )      |   |                        | 44.02  |   |
|   | Forfeited                            |   | (58    | )      |   |                        | 24.02  |   |
|   | Nonvested      at September 30, 2009 |   | 1,022  |   |   |                        | 22.23  |   |

| (4) | Income      Taxes |   |
|-----|-------------------|--------|

----

| (5) | Derivative      Investments and Hedging Activities |   |
|-----|----------------------------------------------------|--------|

----

|   | (In      $000s)                                                     |   | Foreign      currency exchange contracts |   | Interest      rate swap agreements |   |   |
|--------|---------------------------------------------------------------------|--------|------------------------------------------|--------|------------------------------------|--------|--------|
|   | Assets:                                                             |   |                                     |   |                               |   |   |
|   |   Derivatives      not designated as hedging instruments: |   |                                     |   |                               |   |   |
|   |      Other      current assets             |   | $1,259                                   |   | $—                           |   |   |
|   |                                                                |   |                                     |   |                               |   |   |
|   |  Derivatives      designated as hedging instruments:           |   |                                     |   |                               |   |   |
|   |      Other      assets                     |   | —                                  |   | —                            |   |   |
|   | Total      assets                                                   |   | $1,259                                   |   | $—                           |   |   |
|   |                                                                |   |                                     |   |                               |   |   |
|   |  Liabilities:                                                  |   |                                     |   |                               |   |   |
|   |   Derivatives      not designated as hedging instruments: |   |                                     |   |                               |   |   |
|   |      Accrued      liabilities              |   | $1,333                                   |   | $—                           |   |   |
|   |                                                                |   |                                     |   |                               |   |   |
|   |   Derivatives      designated as hedging instruments:     |   |                                     |   |                               |   |   |
|   |      Accrued      liabilities              |   | —                                  |   | 845                                |   |   |
|   |      Other      long-term liabilities      |   | —                                  |   | 7,609                              |   |   |
|   | Total      liabilities                                              |   | $1,333                                   |   | $8,454                             |   |   |
|   |                                                                |   |                                     |   |                               |   |   |

|   |   |  Swap      # |   | Original      NotionalAmount      (in $000s) |   | Fixed      InterestRate |   | Termination      Date  |   |   |   |   |   |
|--------|--------|-------------------|--------|----------------------------------------------|--------|-------------------------|--------|------------------------|--------|--------|--------|--------|--------|
|   |   | 1                 |   | $184,000                                     |   | 4.995                   | %      | March      31, 2010    | (1)    |   |   |   |   |
|   |   | 2                 |   | 46,000                                       |   | 4.995                   | %      | March      31, 2010    | (2)    |   |   |   |   |
|   |   | 3                 |   | 40,000                                       |   | 3.987                   | %      | December      31, 2009 |   |   |   |   |   |
|   |   | 4                 |   | 40,000                                       |   | 3.433                   | %      | December      30, 2011 |   |   |   |   |   |
|   |   | 5                 |   | 50,000                                       |   | 3.688                   | %      | December      30, 2011 |   |   |   |   |   |
|   |   | 6                 |   | 40,000                                       |   | 3.855                   | %      | December      30, 2011 | (3)    |   |   |   |   |
|   |   | 7                 |   | 30,000                                       |   | 3.760                   | %      | March      30, 2011    | (4)    |   |   |   |   |
|   |   | 8                 |   | 57,500                                       |   | 3.385                   | %      | December      31, 2013 | (5)    |   |   |   |   |
|   |   | 9                 |   | 57,500                                       |   | 3.375                   | %      | December      31, 2013 | (6)    |   |   |   |   |

----

| (1)      The principal value of this swap agreement amortizes over a 39-month      period.  During the three months ended September 30, 2009, the |
|-------------------------------------------------------------------------------------------------------------------------------------------------------------|
| notional      amount of this swap was $56million.                                                                                                           |

|                                                                            |   | Three      Months Ended September 30, 2009                                                 |   | Nine      Months Ended September 30, 2009                                                                 |
|---------------------------------------------------------------------------------|--------|--------------------------------------------------------------------------------------------|--------|-----------------------------------------------------------------------------------------------------------|
|     Derivatives      inCash      Flow Hedging Relationships |   |  Amount      of Gain (Loss) Recognized in OCI on Derivatives (Effective      Portion) |   |  Location      of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective      Portion) |   |  Amount      of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective      Portion) |   |  Amount      of Gain (Loss) Recognized in OCI on Derivatives (Effective      Portion) |   | Location      of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective      Portion) |   |  Amount      of Gain (Loss) Reclassified from Accumulated OCI into Income (Effective      Portion) |
| Interest      rate swap agreements, gross of tax effect                         |   | $(2,603)                                                                              |   | Interest      expense                                                                                     |   | $(1,818)  |   | $(2,167) |   | Interest      expense |   | $(5,005)  |

|   |   |                        |   | Notional           |   |   |
|--------|--------|-----------------------------|--------|--------------------|--------|--------|
|   |   | Foreign      Currency       |   | Amount      (000s) |   |   |
|   |   | Euro                        |   | €231         |   |   |
|   |   | British      Pound Sterling |   | £107          |   |   |
|   |   | Australian      Dollar      |   | AUD      925       |   |   |

----

| (6) | Fair      Value Measurements |   |
|-----|------------------------------|--------|

|   | Level 1:  Quoted      prices in active markets for identical assets or liabilities;                                                                                                                                                                                                                                                                                                                            |   |
|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|
|   | Level 2:  Quoted      prices for similar instruments in active markets; quoted prices for      identical or similar instruments in markets that are not active; and      model-based valuation techniques in which all significant assumptions are      observable in the market or can be corroborated by observable market data      for substantially the full term of the assets or liabilities;      and  |   |
|   | Level 3:  Unobservable      inputs that are supported by little or no market activity and typically      reflect management’s estimates of assumptions that market participants      would use in pricing the asset or liability.                                                                                                                                                                             |   |

|   |                                     |   |  Gross      Fair Value –Level      2 |   |   |    Netting      (1) |   |   |   Net      Fair Value |   |   |   |
|--------|------------------------------------------|--------|-------------------------------------------------|--------|--------|------------------------------------|--------|--------|---------------------------------|--------|--------|--------|
|   | Assets:                                  |   |                                            |   |   |                               |   |   |                            |   |   |   |
|   | Foreign      currency exchange contracts | $      | 1,259                                           |   | $      | (1,259                             | )      | $      | —                         |   |   |   |
|   | Interest      rate swap agreements       | $      | —                                         |   | $      | —                            |   | $      | —                         |   |   |   |
|   | Liabilities:                             |   |                                            |   |   |                               |   |   |                            |   |   |   |
|   | Foreign      currency exchange contracts | $      | 1,333                                           |   | $      | (1,259                             | )      | $      | 74                              |   |   |   |
|   | Interest      rate swap agreements       | $      | 8,454                                           |   | $      | —                            |   | $      | 8,454                           |   |   |   |

----

|   | · | Cash      and cash equivalents – The carrying amount of $2.3 million approximates      fair value because of the short maturity of those instruments (less than      three months). |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | Long-term      debt –The estimated fair value of outstanding borrowings under the Third      Amended Credit Agreement is based on the average of the prices set by the      issuing bank given current market conditions and is not necessarily      indicative of the amount we could realize in a current market exchange.      The estimated fair value and carrying amount of outstanding borrowings      under the Third Amended Credit Agreement at September 30, 2009 are $242.8      million and $261.5 million,respectively. |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

| (7) | Long-Term      Debt |   |
|-----|---------------------|--------|

----

| (8) | Restructuring      and Related Charges |   |
|-----|----------------------------------------|--------|

|                                                                                                                                                                                                                                                                                                                                                                                          |   | (In      000s)                                                       |   |   |   |   |   |   |   |
|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|----------------------------------------------------------------------|--------|--------|--------|--------|--------|--------|--------|
|                                                                                                                                                                                                                                                                                                                                                                                          |   |                                                                 |   |   |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                          |   | Accrued      restructuring and related charges at January 1, 2009    | $      | 10,460 |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                          |   | Additions                                                            |   | 191    |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                          |   | Payments                                                             |   | (7,619 | )      |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                          |   | Adjustments      (1)                                                 |   | (1,209 | )      |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                          |   | Accrued      restructuring and related charges at September 30, 2009 | $      | 1,823  |   |   |   |   |   |
|                                                                                                                                                                                                                                                                                                                                                                                          |   |                                                                 |   |   |   |   |   |   |   |
| (1)      Adjustments for the nine months ended September 30, 2009 resulted from      actual severance amounts differing from initial estimates due to employees      who were expected to be terminated but were instead transitioned to new      roles, as well as a favorable adjustment to lease termination costs due to      unanticipated demand for certain unused office space.  |

----

| (9) | Commitments      and Contingencies |   |
|-----|------------------------------------|--------|

----

----

| (10) | Sale      of Investment |   |
|------|-------------------------|--------|

| (11) | Comprehensive      Income |   |
|------|---------------------------|--------|

| (12) | Earnings      Per Share |   |
|------|-------------------------|--------|

----

| (In      000s, except per share data)                                                                                                 |   | Three      Months EndedSeptember      30, |   |   | Nine      Months EndedSeptember  30, |   |
|---------------------------------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------|--------|--------|------------------------------------------------|--------|
|                                                                                                                                  |   | 2009                                      |   | 2008   |                                           |   | 2009 |   | 2008 |   |
| Numerator:                                                                                                                            |   |                                      |   |   |                                           |   |   |   |   |   |   |   |   |   |
| Net      income - numerator for basic earnings per share                                                                              |   | $                                         | 8,802  |   | $                                              | 15,623 |   |   | $ | 2,864 |   | $ | 42,150 |   |
|                                                                                                                                  |   |                                      |   |   |                                           |   |   |   |   |   |   |   |   |   |
| Denominator:                                                                                                                          |   |                                      |   |   |                                           |   |   |   |   |   |   |   |   |   |
| Shares      used for basic earnings per share                                                                                         |   |                                      | 33,745 |   |                                           | 33,599 |   |   |   | 33,701 |   |   | 34,474 |   |
| Effect      of dilutive securities outstanding:                                                                                       |   |                                      |   |   |                                           |   |   |   |   |   |   |   |   |   |
| Non-qualified      stock options                                                                                                      |   |                                      | 389    |   |                                           | 809    |   |   |   | 281 |   |   | 1,267 |   |
| Restricted      stock units                                                                                                           |   |                                      | 347    |   |                                           | 159    |   |   |   | 250 |   |   | 150 |   |
| Shares      used for diluted earnings per share                                                                                       |   |                                      | 34,481 |   |                                           | 34,567 |   |   |   | 34,232 |   |   | 35,891 |   |
|                                                                                                                                  |   |                                      |   |   |                                           |   |   |   |   |   |   |   |   |   |
| Earnings      per share:                                                                                                              |   |                                      |   |   |                                           |   |   |   |   |   |   |   |   |   |
| Basic                                                                                                                                 |   | $                                         | 0.26   |   | $                                              | 0.46   |   |   | $ | 0.08 |   | $ | 1.22 |   |
| Diluted                                                                                                                               |   | $                                         | 0.26   |   | $                                              | 0.45   |   |   | $ | 0.08 |   | $ | 1.17 |   |
|                                                                                                                                  |   |                                      |   |   |                                           |   |   |   |   |   |   |   |   |   |
| Dilutive      securities outstanding not included in the computation of earnings per      share because their effect is antidilutive: |   |                                      |   |   |                                           |   |   |   |   |   |   |   |   |   |
| Non-qualified      stock options                                                                                                      |   |                                      | 3,354  |   |                                           | 2,688  |   |   |   | 3,633 |   |   | 1,724 |   |
|         Restricted      stock units                                                           |   |                                      | 104    |   |                                           | 204    |   |   |   | 195 |   |   | 132 |   |

| (13) | Subsequent      Events |   |
|------|------------------------|--------|

----

| Item 2. | Management’s Discussion and Analysis of Financial Condition      and Results of Operations |   |
|---------|--------------------------------------------------------------------------------------------------|--------|

|   | · | fostering      wellness and disease prevention through total population screening, health      risk assessments and supportive interventions;  and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | providing      access to health improvement programs, such as fitness, weight management,      complementary and alternative medicine and smoking    cessation. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | promoting      the reduction of lifestyle behaviors that lead to poor health or chronic      conditions; and |
|--------|--------|--------------------------------------------------------------------------------------------------------------|

|   | · | providing      educational materials and personal interactions with highly trained nurses      and other healthcare professionals to create and sustain healthier      behaviors for those individuals at-risk or in the early stages of chronic      conditions. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | incorporating      the latest, evidence-based clinical guidelines into interventions to      optimize patient health outcomes; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------|

|   | · | developing      care support plans and motivating members to set attainable goals for      themselves; |
|--------|--------|--------------------------------------------------------------------------------------------------------|

|   | · | providing      local market resources to address acute episodic      interventions; |
|--------|--------|-------------------------------------------------------------------------------------|

|   | · | coordinating      members’ care with their healthcare providers;  and |
|--------|--------|-----------------------------------------------------------------------------|

|   | · | providing      software licensing and management consulting in support of health and care      support services. |
|--------|--------|------------------------------------------------------------------------------------------------------------------|

|   | · | our      ability to sign and implement new contracts for our    solutions; |
|--------|--------|----------------------------------------------------------------------------|

|   | · | our      ability to accurately forecast performance and the timing of revenue      recognition under the terms of our customer contracts ahead of data      collection and reconciliation in order to provide forward-looking      guidance; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the      impact of national healthcare reform proposals and the potential impact of      healthcare reform legislation, if enacted, on our operations and/or the      demand for our services; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the      impact of any new or      proposed legislation, regulations and interpretations relating to      the Medicare Prescription Drug, Improvement, and Modernization Act of      2003, including the potential expansion to Phase II for Medicare Health      Support programs and any legislative or regulatory changes with respect to      Medicare Advantage; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | our      ability to reach mutual agreement with the Centers for Medicare &      Medicaid Services (“CMS”) with respect to results under Phase I of      Medicare Health Support; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | our      ability to anticipate the rate of market acceptance of our solutions in      potential international markets; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------|

|   | · | our      ability to accurately forecast the costs necessary to implement our      strategy of establishing a presence in international    markets; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the      risks associated with foreign currency exchange rate fluctuations and our      ability to hedge against suchfluctuations; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the      risks associated with a significant concentration of our revenues with      a limited number of customers; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------|

|   | · | our      ability to effect cost savings and clinical outcomes improvements under      our contracts and reach mutual agreement with customers with respect to      cost savings, or to effect such savings and improvements within      the time frames contemplated byus; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | our      ability to achieve estimated annualized revenue in backlog in the manner      and within the timeframe we expect, which is based on certain estimates      regarding the implementation of ourservices; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | our      ability and/or the ability of our customers to enroll participants in our      programs in a manner and within the timeframe anticipated by      us; |   |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------|--------|

|   | · | the      ability of our customers to provide timely and accurate data that is      essential to the operation and measurement of our performance under the      terms of our contracts; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | our      ability to favorably resolve contract billing and interpretation      issues with our customers; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------|

|   | · | our      ability to service our debt and make principal and interest payments as      those payments become due; |
|--------|--------|------------------------------------------------------------------------------------------------------------------|

|   | · | the      risks associated with changes in macroeconomic conditions, which may      reduce the demand and/or the timing of purchases for our services from      customers or potential customers, reduce the number of covered lives of      our existing customers, restrict our ability to obtain additional      financing, or impact the availability of credit under our Third Amended      Credit Agreement; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | counterparty      risk associated with our interest rate swap agreements and foreign      currency exchange contracts; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------|

|   | · | our      ability to integrate acquired businesses or technologies into our      business; |
|--------|--------|-------------------------------------------------------------------------------------------|

|   | · | the      impact of any impairment of our goodwill or other intangible      assets; |
|--------|--------|------------------------------------------------------------------------------------|

|   | · | our      ability to develop new products and deliver outcomes on those      products; |
|--------|--------|---------------------------------------------------------------------------------------|

|   | · | our      ability to implement our new integrated data and technology solutions      platform within the timeframe and cost estimates that we      expect; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | our      ability to retain existing customers and to renew or maintain contracts      with our customers under existing terms or restructure these      contracts on terms that would not have a material negative impact on      our results of operations; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | our ability      to obtain adequate financing to provide the capital that may be      necessary to support our operations and to support or guarantee our      performance under new contracts; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | unusual      and unforeseen patterns of healthcare utilization by individuals with      diabetes, cardiac, respiratory and/or other diseases or conditions for      which we provide services; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the      ability of our customers to maintain the number of covered lives enrolled      in the plans during the terms of  our agreements; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the      impact of litigation involving us and/or our  subsidiaries; |
|--------|--------|----------------------------------------------------------------------|

|   | · | the      impact of future state, federal, and international healthcare and other      applicable legislation and regulations on our ability to deliver      our services and on the financial health of our customers and their      willingness to purchase ourservices; |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | current      geopolitical turmoil, the continuing threat of domestic or international      terrorism, and the potential emergence of a health pandemic;      and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | other      risks detailed in our Annual Report on Form 10-K for the fiscal year ended      August 31, 2008 and other filings with the Securities and Exchange      Commission. |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   |                    |   | September      30, |   | September      30, |   |   |   |   |   |
|--------|-------------------------|--------|--------------------|--------|--------------------|--------|--------|--------|--------|--------|
|   |                    |   | 2009               |   | 2008               |   |   |   |   |   |
|   | Available      lives(1) |   | 196,100,000        |   | 192,500,000        |   |   |   |   |   |
|   | Billed      lives       |   | 35,900,000         |   | 31,700,000         |   |   |   |   |   |

|   | · | keep      healthy individuals healthy; |
|--------|--------|----------------------------------------|

|   | · | mitigate      and slow the progression of disease associated with family or lifestyle      risk factors; and |
|--------|--------|--------------------------------------------------------------------------------------------------------------|

|   | · | promote      the best possible health for those who are already affected by existing      health conditions or disease. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------|

----

----

----

----

----

----

|   |                                              |   | Three      Months Ended |   |    | Nine      Months Ended |   |   |   |    |   |   |   |
|--------|---------------------------------------------------|--------|-------------------------|--------|---------|------------------------|--------|--------|--------|---------|--------|--------|--------|
|   |                                              |   | September      30,      |   |    | September      30,     |   |   |   |    |   |   |   |
|   |                                              |   | 2009                    |   | 2008    |                   |   | 2009   |   | 2008    |   |   |   |   |   |   |   |
|   |                                              |   |                    |   |    |                   |   |   |   |    |   |   |   |   |   |   |   |
|   | Revenues                                          |   | 100.0                   | %      | 100.0   | %                      |   | 100.0  | %      | 100.0   | %      |   |   |   |   |   |   |
|   | Cost      of services (exclusive of depreciation  |   |                    |   |    |                   |   |   |   |    |   |   |   |   |   |   |   |
|   | and      amortization included below)             |   | 72.9                    | %      | 67.0    | %                      |   | 72.5   | %      | 68.0    | %      |   |   |   |   |   |   |
|   | Selling,      general and administrative expenses |   | 9.8                     | %      | 9.3     | %                      |   | 10.2   | %      | 9.8     | %      |   |   |   |   |   |   |
|   | Depreciation      and amortization                |   | 6.6                     | %      | 6.9     | %                      |   | 6.7    | %      | 6.7     | %      |   |   |   |   |   |   |
|   | Operating      income (1)                         |   | 10.7                    | %      | 16.7    | %                      |   | 10.7   | %      | 15.4    | %      |   |   |   |   |   |   |
|   |                                              |   |                    |   |    |                   |   |   |   |    |   |   |   |   |   |   |   |
|   | Gain      on sale of investment                   |   | —                 |   | — |                   |   | (0.5   | )%     | — |   |   |   |   |   |   |   |
|   | Interest      expense                             |   | 2.1                     | %      | 2.9     | %                      |   | 2.2    | %      | 2.8     | %      |   |   |   |   |   |   |
|   | Legal      settlement and related costs           |   | —                 |   | — |                   |   | 7.4    | %      | — |   |   |   |   |   |   |   |
|   |                                              |   |                    |   |    |                   |   |   |   |    |   |   |   |   |   |   |   |
|   | Income      before income taxes (1)               |   | 8.5                     | %      | 13.9    | %                      |   | 1.6    | %      | 12.7    | %      |   |   |   |   |   |   |
|   | Income      tax expense                           |   | 3.7                     | %      | 5.5     | %                      |   | 1.0    | %      | 5.1     | %      |   |   |   |   |   |   |
|   |                                              |   |                    |   |    |                   |   |   |   |    |   |   |   |   |   |   |   |
|   | Net      income (1)                               |   | 4.8                     | %      | 8.3     | %                      |   | 0.5    | %      | 7.5     | %      |   |   |   |   |   |   |

|   | · | contract      restructurings and terminations with certain customers;  and |
|--------|--------|----------------------------------------------------------------------------|

|   | · | decreased      revenues related to one of the Medicare Health Support pilots, which ended      in July 2008 and for which we recognized $2.2 million of revenue during      the three months ended September 30, 2008 based on performance      data. |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | increased      revenues from fitness center programs, primarily due to an increase in      participation in these programs as well as in the number of members      eligible for them; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | increased      performance-based revenues due to our ability to measure and achieve      performance targets on certain contracts during the three months ended      September 30, 2009; and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the      commencement of contracts with newcustomers. |
|--------|--------|-------------------------------------------------------|

----

|  | · | contract      restructurings and terminations with certain customers;      and |
|--|--------|--------------------------------------------------------------------------------|

|   | · | decreased      revenues related to one of the Medicare Health Support pilots, which ended      in July 2008 and for which we recognized $7.5 million of revenue during      the nine months ended September 30, 2008 based on performance      data. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | increased      revenues from fitness center programs, primarily due to an increase in      participation in these programs as well as in the number of members      eligible for them; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | increased      performance-based revenues due to our ability to measure and achieve      performance targets on certain contracts during the nine months      ended September 30, 2009; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the      commencement of contracts with new customers;  and |
|--------|--------|-------------------------------------------------------------|

|   | · | growth      in the number of self-insured employer lives under existing customer      contracts. |
|--------|--------|-------------------------------------------------------------------------------------------------------|

|   | · | an      increased portion of our revenue generated by fitness center programs,      which typically have a higher cost of services as a percentage of revenue      than our other programs; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the      addition of certain participating locations to our fitness center network      that have a higher cost of services as a percentage of      revenue; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | contract      restructurings and volume incentives with certain customers that resulted      in either decreased revenues or lower per member fees without a      proportional corresponding decrease incosts; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | an      increase in the level of employee bonus provision based on the Company’s      year-to-date financial performance against established internal targets      during these periods; and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | costs      related to our new integrated data and technology solutions      platform. |
|--------|--------|---------------------------------------------------------------------------------------|

|   | · | a      decrease in salaries and benefits expense, primarily due to a      restructuring of the Company that was largely completed during the fourth      quarter of calendar 2008 and a decrease in health insurance costs related      to changes in employee medical plan design in calendar 2009, which      included a number of wellness initiatives aimed at improving employee      health; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | cost      savings related to certain cost management initiatives;  and |
|--------|--------|------------------------------------------------------------------------|

|   | · | a      decrease in stock-based compensation costs, primarily due to the Company’s      repurchase of certain employee stock options in December    2008. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | an      increased portion of our revenue generated by fitness center programs,      which typically have a higher cost of services as a percentage of revenue      than our other programs; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | the      addition of certain participating locations to our fitness center network      that have a higher cost of services as a percentage of      revenue; |
|--------|--------|--------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | contract      restructurings and volume incentives with certain customers that resulted      in either decreased revenues or lower per member fees without a      proportional corresponding decrease in costs;  and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | an      increase in the level of employee bonus provision based on the Company’s      year-to-date financial performance against established internal targets      during these periods. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | a      decrease in salaries and benefits expense, primarily due to a      restructuring of the Company that was largely completed during the fourth      quarter of calendar 2008 and a decrease in health insurance costs related      to changes in employee medical plan design in calendar 2009, which      included a number of wellness initiatives aimed at improving employee      health; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | cost      savings related to certain cost management initiatives;  and |
|--------|--------|------------------------------------------------------------------------|

|   | · | a      decrease in stock-based compensation costs, primarily due to the Company’s      repurchase of certain employee stock options in December    2008. |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | a      net increase in salaries and benefits expense, primarily due to the recent      Company restructuring, which included an increased focus on research and      development activities, resulting in an increase in personnel dedicated to      these activities that more than offset the reduction in headcount      resulting from this restructuring and other workforce      reductions; |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | an      increase in the level of employee bonus provision based on the Company’s      year-to-date financial performance against established internal targets      during these periods; and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | costs      associated with positioning our brand and solutions in conjunction with      ongoing healthcare reformproposals. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------|

|   | · | a      net increase in salaries and benefits expense, primarily due to severance      costs and the recent Company restructuring, which included an increased      focus on research and development activities, resulting in an increase in      personnel dedicated to these activities that more than offset the      reduction in headcount resulting from this restructuring and other      workforce reductions; and |
|--------|--------|----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   | · | an      increase in the level of employee bonus provision based on the Company’s      year-to-date financial performance against established internal targets      during these periods. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | a      decrease in amortization expense related to certain intangible assets that      became fully amortized in September2008; |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------|

|   | · | a      decrease in depreciation expense related to retirements of fixed assets as      part of the Company restructuring in December 2008 (see Note 8);      and |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | a      decrease in depreciation expense related to certain computer hardware that      became fully depreciated during2009. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------|

----

----

|   | · | payments      during the nine months ended September 30, 2009 related to the      aforementioned legal settlement and related costs and  fees; |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | a      decrease in cash collections on accounts receivable for the nine months      ended September 30, 2009 compared to the nine months ended September 30,      2008, primarily as a result of the decrease in revenues in      2009; |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | payments      during the nine months ended September 30, 2009 related to a restructuring      of the Company that was largely completed during the fourth quarter of      calendar 2008, which primarily consisted of severance costs and costs      associated with capacity consolidation;and |
|--------|--------|-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | a      higher amount of lease incentives received during the nine months ended      September 30, 2008 compared to the nine months ended September 30, 2009,      primarily related to our new corporate headquarters in    2008. |
|--------|--------|-----------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

|   | · | a      decrease in income tax payments primarily related to higher estimated      payments in 2008; and |
|--------|--------|---------------------------------------------------------------------------------------------------------|

|   | · | a      decrease in interest payments, primarily as a result of a decrease in      floating interest rates on outstanding borrowings under the Third Amended      Credit Agreement. |
|--------|--------|------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|

----

|   |   |  Swap      # |   | Original      NotionalAmount      (in $000s) |   | Fixed      InterestRate |   | Termination      Date  |   |   |   |   |   |
|--------|--------|-------------------|--------|----------------------------------------------|--------|-------------------------|--------|------------------------|--------|--------|--------|--------|--------|
|   |   | 1                 |   | $184,000                                     |   | 4.995                   | %      | March      31, 2010    | (1)    |   |   |   |   |
|   |   | 2                 |   | 46,000                                       |   | 4.995                   | %      | March      31, 2010    | (2)    |   |   |   |   |
|   |   | 3                 |   | 40,000                                       |   | 3.987                   | %      | December      31, 2009 |   |   |   |   |   |
|   |   | 4                 |   | 40,000                                       |   | 3.433                   | %      | December      30, 2011 |   |   |   |   |   |
|   |   | 5                 |   | 50,000                                       |   | 3.688                   | %      | December      30, 2011 |   |   |   |   |   |
|   |   | 6                 |   | 40,000                                       |   | 3.855                   | %      | December      30, 2011 | (3)    |   |   |   |   |
|   |   | 7                 |   | 30,000                                       |   | 3.760                   | %      | March      30, 2011    | (4)    |   |   |   |   |
|   |   | 8                 |   | 57,500                                       |   | 3.385                   | %      | December      31, 2013 | (5)    |   |   |   |   |
|   |   | 9                 |   | 57,500                                       |   | 3.375                   | %      | December      31, 2013 | (6)    |   |   |   |   |

----

credit markets
 not improve, wecannot assure you that we would be able to secure additional financing if neededand, if such funds were available, whether the terms or conditions would beacceptable to us.

----

| Item      3. | Quantitative and Qualitative Disclosures About      Market Risk |   |
|--------------|-----------------------------------------------------------------|--------|

| Item      4. | Controls and Procedures |   |
|--------------|-------------------------|--------|

----

| Item      1. | Legal Proceedings |   |
|--------------|-------------------|--------|

----

----

| Item      1A. | Risk Factors |   |
|---------------|--------------|--------|

| Item      2. | Unregistered Sales of Equity Securities and Use of      Proceeds |   |
|--------------|------------------------------------------------------------------|--------|

|   | Not      Applicable. |   |
|--------|----------------------|--------|

| Item      3. | Defaults Upon Senior Securities |   |
|--------------|---------------------------------|--------|

|   | Not      Applicable. |   |
|--------|----------------------|--------|

----

| Item      4. | Submission of Matters to a Vote of Security      Holders |   |
|--------------|----------------------------------------------------------|--------|

|   | Not      Applicable. |   |
|--------|----------------------|--------|

| Item      5. | Other Information |   |
|--------------|-------------------|--------|

|   | Not      Applicable. |   |
|--------|----------------------|--------|

| Item      6. | Exhibits |   |
|--------------|----------|--------|

|   | (a) | Exhibits |
|--------|-----|----------|

|   |   |                                                                                                                                                                            |
|--------|--------|---------------------------------------------------------------------------------------------------------------------------------------------------------------------------------|
| 31.1   |   | Certification of Chief Executive Officer pursuant      to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as      amended                                     |
|   |   |                                                                                                                                                                            |
| 31.2   |   | Certification of Chief Financial Officer pursuant      to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act, as      amended                                     |
|   |   |                                                                                                                                                                            |
| 32     |   | Certification of Chief Executive Officer and Chief      Financial Officer pursuant to 18 U.S.C 1350, as adopted pursuant to      Section 906 of the Sarbanes-Oxley Act of  2002 |

----

|   |                  |   |   | Healthways,      Inc.               |
|--------|-----------------------|--------|--------|-------------------------------------|
|   |                  |   |   | (Registrant)                        |
|   |                  |   |   |                                |
|   |                  |   |   |                                |
|   |                  |   |   |                                |
|   |                  |   |   |                                |
| Date   | November      9, 2009 |   | By     | /s/      Mary A. Chaput             |
|   |                  |   |   | Mary      A. Chaput                 |
|   |                  |   |   | Chief      Financial Officer        |
|   |                  |   |   | (Principal      Financial Officer)  |
|   |                  |   |   |                                |
|   |                  |   |   |                                |
|   |                  |   |   |                                |
|   |                  |   |   |                                |
| Date   | November      9, 2009 |   | By     | /s/      Alfred Lumsdaine           |
|   |                  |   |   | Alfred      Lumsdaine               |
|   |                  |   |   | Chief      Accounting Officer       |
|   |                  |   |   | (Principal      Accounting Officer) |

----