| ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
| TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 | |||||
| (State or other jurisdiction of incorporation or organization) | (I.R.S. Employer Identification No.) | ||||
| (Address of principal executive offices) | (Zip Code) | ||||
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||
| ☒ | Accelerated filer | ☐ | Non-accelerated filer | ☐ | Smaller reporting company | Emerging growth company | |||||||||||||||||||||||
| Page | ||||||||
| PART I | ||||||||
Item 1. | Business | |||||||
Item 1A. | Risk Factors | |||||||
Item 1B. | Unresolved Staff Comments | |||||||
Item 2. | Properties | |||||||
Item 3. | Legal Proceedings | |||||||
Item 4. | Mine Safety Disclosures | |||||||
| PART II | ||||||||
Item 5. | Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | |||||||
Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | |||||||
Item 7A. | ||||||||
Item 8. | Consolidated Financial Statements and Supplementary Data | |||||||
Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | |||||||
Item 9A. | Controls and Procedures | |||||||
Item 9B. | Other Information | |||||||
| PART III | ||||||||
Item 10. | ||||||||
Item 11. | Executive Compensation | |||||||
Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | |||||||
Item 13. | Certain Relationships and Related Transactions, and Director Independence | |||||||
Item 14. | Principal Accountant Fees and Services | |||||||
| PART IV | ||||||||
Item 15. | Exhibits and Financial Statement Schedules | |||||||
SIGNATURES | ||||||||
| Item 1. | Business | ||||
| Item 1A. | Risk Factors | ||||
| Item 1B. | Unresolved Staff Comments | ||||
| Item 2. | Properties | ||||
| Item 3. | Legal Proceedings | ||||
| Item 4. | Mine Safety Disclosures | ||||
| Item 5. | Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities | ||||
| Period | Total Number of Shares Purchased (1) | Average Price Paid per Share (2) | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2) | Approximate Dollar Value of Shares that May Yet be Purchased Under Publicly Announced Plans or Programs (in millions) (2) | ||||||||||||||||||||||||||||
| October 1, 2022 through October 31, 2022 | 1,666,212 | $ | 17.61 | 1,478,392 | $ | 453.2 | ||||||||||||||||||||||||||
| November 1, 2022 through November 30, 2022 | — | $ | — | — | $ | 453.2 | ||||||||||||||||||||||||||
| December 1, 2022 through December 31, 2022 | 21,462 | $ | 10.95 | — | $ | 453.2 | ||||||||||||||||||||||||||
| (1) | Amounts include stock repurchased under our repurchase program (see discussion in footnote 2 below) and the surrender of shares of our stock related to employees’ tax withholding upon vesting of restricted stock of 187,820, zero, and 21,462 shares for the months ended October 31, 2022, November 30, 2022, and December 31, 2022, respectively. See Note 13, Share-Based Compensation, to our consolidated financial statements included in this Annual Report on Form 10-K. | ||||
| (2) | On October 22, 2021, the Board adopted a new repurchase program and authorized the repurchase of up to $200.0 million of our common stock from time to time in the open market or in privately negotiated transactions (the “2021 Repurchase Program”). On January 9, 2022, the Board increased the authorization under the 2021 Repurchase Program to an aggregate amount of up to $500.0 million. The average price paid per share of common stock repurchased under the 2021 Repurchase Program is the execution price, including commissions paid to brokers. The timing and amount of any shares repurchased under the 2021 Repurchase Program will be determined by our management based on its evaluation of market conditions and other factors. The 2021 Repurchase Program may be suspended or discontinued at any time. See Note 12, Stockholders’ Equity, to our consolidated financial statements included in this Annual Report on Form 10-K. | ||||

| 12/31/2017 | 12/31/2018 | 12/31/2019 | 12/31/2020 | 12/31/2021 | 12/31/2022 | |||||||||||||||
| R1 RCM Inc. | $100.00 | $180.27 | $294.33 | $544.67 | $578.00 | $248.30 | ||||||||||||||
| NYSE Composite Index | $100.00 | $88.80 | $108.62 | $113.40 | $134.00 | $118.55 | ||||||||||||||
| NASDAQ Health Care Index | $100.00 | $95.83 | $120.58 | $156.81 | $151.25 | $120.35 | ||||||||||||||
| Item 6. | [Reserved] | ||||
| Item 7. | Management’s Discussion and Analysis of Financial Condition and Results of Operations | ||||
| Year Ended December 31, | 2022 vs. 2021 Change | 2021 vs. 2020 Change | ||||||||||||||||||||||||||||||||||||||||||
| 2022 | 2021 | 2020 | Amount | % | Amount | % | ||||||||||||||||||||||||||||||||||||||
| (In millions, except percentages) | ||||||||||||||||||||||||||||||||||||||||||||
| Consolidated Statement of Operations Data: | ||||||||||||||||||||||||||||||||||||||||||||
| Net operating fees | $ | 1,309.7 | $ | 1,211.8 | $ | 1,093.8 | $ | 97.9 | 8.1 | % | $ | 118.0 | 10.8 | % | ||||||||||||||||||||||||||||||
| Incentive fees | 106.8 | 143.8 | 70.6 | (37.0) | (25.7) | % | 73.2 | 103.7 | % | |||||||||||||||||||||||||||||||||||
| Modular and other | 389.9 | 119.0 | 106.4 | 270.9 | 227.6 | % | 12.6 | 11.8 | % | |||||||||||||||||||||||||||||||||||
| Total net services revenue | 1,806.4 | 1,474.6 | 1,270.8 | 331.8 | 22.5 | % | 203.8 | 16.0 | % | |||||||||||||||||||||||||||||||||||
| Operating expenses: | ||||||||||||||||||||||||||||||||||||||||||||
| Cost of services | 1,445.1 | 1,162.8 | 1,021.1 | 282.3 | 24.3 | % | 141.7 | 13.9 | % | |||||||||||||||||||||||||||||||||||
| Selling, general and administrative | 174.8 | 120.0 | 102.4 | 54.8 | 45.7 | % | 17.6 | 17.2 | % | |||||||||||||||||||||||||||||||||||
| Other expenses | 183.5 | 46.1 | 67.3 | 137.4 | 298.0 | % | (21.2) | (31.5) | % | |||||||||||||||||||||||||||||||||||
| Total operating expenses | 1,803.4 | 1,328.9 | 1,190.8 | 474.5 | 35.7 | % | 138.1 | 11.6 | % | |||||||||||||||||||||||||||||||||||
| Income from operations | 3.0 | 145.7 | 80.0 | (142.7) | (97.9) | % | 65.7 | 82.1 | % | |||||||||||||||||||||||||||||||||||
| Gain on business disposition | — | — | 55.7 | — | — | % | (55.7) | (100.0) | % | |||||||||||||||||||||||||||||||||||
| Net interest expense | (64.0) | (18.9) | (17.3) | (45.1) | 238.6 | % | (1.6) | 9.2 | % | |||||||||||||||||||||||||||||||||||
| Net income (loss) before income tax provision (benefit) | (61.0) | 126.8 | 118.4 | (187.8) | (148.1) | % | 8.4 | 7.1 | % | |||||||||||||||||||||||||||||||||||
| Income tax provision (benefit) | (3.4) | 29.6 | 1.3 | (33.0) | (111.5) | % | 28.3 | n.m. | ||||||||||||||||||||||||||||||||||||
| Net income (loss) | $ | (57.6) | $ | 97.2 | $ | 117.1 | $ | (154.8) | (159.3) | % | $ | (19.9) | (17.0) | % | ||||||||||||||||||||||||||||||
| Adjusted EBITDA (1) | $ | 425.5 | $ | 343.6 | $ | 240.0 | $ | 81.9 | 23.8 | % | $ | 103.6 | 43.2 | % | ||||||||||||||||||||||||||||||
| Year End December 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | ||||||||||||||||||
| (In millions) | ||||||||||||||||||||
| Net income (loss) (GAAP) | $ | (57.6) | $ | 97.2 | $ | 117.1 | ||||||||||||||
| Net interest expense | 64.0 | 18.9 | 17.3 | |||||||||||||||||
| Income tax provision (benefit) | (3.4) | 29.6 | 1.3 | |||||||||||||||||
| Depreciation and amortization expense | 172.0 | 77.5 | 68.7 | |||||||||||||||||
| Share-based compensation expense (1) | 61.9 | 74.3 | 24.0 | |||||||||||||||||
| CoyCo 2 share-based compensation expense (2) | 5.1 | — | — | |||||||||||||||||
| Gain on business disposition (3) | — | — | (55.7) | |||||||||||||||||
| Other expenses (4) | 183.5 | 46.1 | 67.3 | |||||||||||||||||
| Adjusted EBITDA (Non-GAAP) | $ | 425.5 | $ | 343.6 | $ | 240.0 | ||||||||||||||
| Year Ended December 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | ||||||||||||||||||
| (In millions) | ||||||||||||||||||||
| Net cash (used in) provided by operating activities | $ | (9.9) | $ | 264.8 | $ | 61.8 | ||||||||||||||
| Net cash used in investing activities | (949.5) | (340.4) | (117.0) | |||||||||||||||||
| Net cash provided by financing activities | 943.0 | 31.4 | 137.9 | |||||||||||||||||
| Effect of exchange rate changes in cash | (3.6) | (0.5) | (0.4) | |||||||||||||||||
| Net (decrease) increase in cash, cash equivalents, and restricted cash | (20.0) | (44.7) | 82.3 | |||||||||||||||||
| Item 7A. | Qualitative and Quantitative Disclosures about Market Risk | ||||
| Item 8. | Consolidated Financial Statements and Supplementary Data | ||||
| Item 9. | Changes in and Disagreements with Accountants on Accounting and Financial Disclosure | ||||
| Item 9A. | Controls and Procedures | ||||
| Item 9B. | Other Information | ||||
| Item 9C. | Disclosure Regarding Foreign Jurisdictions that Prevent Inspections | ||||
| Item 10. | Directors, Executive Officers, and Corporate Governance | ||||
| Item 11. | Executive Compensation | ||||
| Item 12. | Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters | ||||
| (a) | (b) | (c) | ||||||||||||||||||
| Plan Category | Number of Securities to be Issued Upon Exercise of Outstanding Options and Restricted Stock Units | Weighted- Average Exercise Price of Outstanding Options | Number of Securities Remaining Available for Future Issuance Under Equity Compensation Plans (Excluding Securities reflected in Column (a)) | |||||||||||||||||
| Equity compensation plans approved by stockholders (1) | 14,124,381 | $ | 3.38 | 7,348,028 | ||||||||||||||||
| Equity compensation plans not approved by stockholders (2) | 5,965,628 | $ | — | 259,372 | ||||||||||||||||
| Total | 20,090,009 | 7,607,400 | ||||||||||||||||||
| Item 13. | Certain Relationships and Related Transactions, and Director Independence | ||||
| Item 14. | Principal Accountant Fees and Services | ||||
| Item 15. | Exhibits and Financial Statement Schedules | ||||
| 101.INS | XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document | ||||
| 101.SCH | XBRL Taxonomy Extension Schema Document | ||||
| 101.CAL | XBRL Taxonomy Extension Calculation Linkbase Document | ||||
| 101.LAB | XBRL Taxonomy Extension Label Linkbase Document | ||||
| 101.DEF | XBRL Taxonomy Extension Definition Linkbase Document | ||||
| 101.PRE | XBRL Taxonomy Extension Presentation Linkbase Document | ||||
| 104 | Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101) | ||||
| * | Management contract or compensatory plan or arrangement required to be filed pursuant to Item 15(b) of Form 10-K. | ||||
| + | Certain portions of this exhibit have been redacted pursuant to Item 601(b)(2)(ii) of Regulation S-K. The Company agrees to furnish supplementally an unredacted copy of the exhibit to the SEC upon request. | ||||
| ^ | Certain portions of this exhibit have been redacted pursuant to Item 601(b)(10)(iv) of Regulation S-K. The Company agrees to furnish supplementally an unredacted copy of the exhibit to the SEC upon request. | ||||
| Item 16. | Form 10-K Summary | ||||
| R1 RCM INC. | |||||
| By: | /s/ Lee Rivas | ||||
| Lee Rivas | |||||
| Chief Executive Officer | |||||
| By: | /s/ Jennifer Williams | ||||
| Jennifer Williams | |||||
| Chief Financial Officer and Treasurer | |||||
| Signature | Title | Date | ||||||||||||
/s/ Lee Rivas Lee Rivas | Chief Executive Officer and Director (Principal Executive Officer) | February 16, 2023 | ||||||||||||
/s/ Jennifer Williams Jennifer Williams | Chief Financial Officer and Treasurer (Principal Financial Officer) | February 16, 2023 | ||||||||||||
/s/ Richard B. Evans, Jr. Richard B. Evans, Jr. | Corporate Controller (Principal Accounting Officer) | February 16, 2023 | ||||||||||||
/s/ Bradford Kyle Armbrester Bradford Kyle Armbrester | Director | February 16, 2023 | ||||||||||||
/s/ Agnes Bundy Scanlan Agnes Bundy Scanlan | Director | February 16, 2023 | ||||||||||||
/s/ Brian K. Dean Brian K. Dean | Director | February 16, 2023 | ||||||||||||
/s/ Jeremy Delinsky Jeremy Delinsky | Director | February 16, 2023 | ||||||||||||
/s/ David M. Dill David M. Dill | Director | February 16, 2023 | ||||||||||||
/s/ Michael C. Feiner Michael C. Feiner | Director | February 16, 2023 | ||||||||||||
/s/ Joseph Flanagan Joseph Flanagan | Director | February 16, 2023 | ||||||||||||
/s/ John B. Henneman III John B. Henneman III | Lead Director | February 16, 2023 | ||||||||||||
/s/ Matthew Holt Matthew Holt | Director | February 16, 2023 | ||||||||||||
/s/ Neal Moszkowski Neal Moszkowski | Director | February 16, 2023 | ||||||||||||
/s/ Ian Sacks Ian Sacks | Director | February 16, 2023 | ||||||||||||
/s/ Jill Smith Jill Smith | Director | February 16, 2023 | ||||||||||||
/s/ Anthony J. Speranzo Anthony J. Speranzo | Chair of the Board | February 16, 2023 | ||||||||||||
/s/ Anthony R. Tersigni Anthony R. Tersigni | Director | February 16, 2023 | ||||||||||||
/s/ Janie Wade Janie Wade | Director | February 16, 2023 | ||||||||||||
| Page | |||||||||||
| Audited Consolidated Financial Statements | |||||||||||
Report of Independent Registered Public Accounting Firm (PCAOB ID: | F-2 | ||||||||||
| Consolidated Balance Sheets | F-6 | ||||||||||
| Consolidated Statements of Operations and Comprehensive Income (Loss) | F-7 | ||||||||||
| Consolidated Statements of Stockholders’ Equity | F-8 | ||||||||||
| Consolidated Statements of Cash Flows | F-9 | ||||||||||
| Notes to Consolidated Financial Statements | F-10 | ||||||||||
| Revenue recognition - Incentive fee arrangements | ||||||||
| Description of the Matter | As described in Note 2 to the consolidated financial statements, the Company recognizes revenue related to financial performance-based incentive fees ratably as the performance obligation for revenue cycle management services is satisfied. Incentive fees are structured to reflect quarterly or annual performance and are evaluated on a contract-by-contract basis. Auditing the Company’s recognition and measurement of variable incentive fees revenues is subjective due to the estimation uncertainty in the calculations for amounts recognized but unbilled at year end. In these situations, the Company performs an assessment of the estimated total incentive fees expected and the related revenues to be recognized. Further, the nature and terms of each individual customer agreement for end-to-end revenue cycle management services varies, and each contract requires separate analysis to ensure that incentive fee revenue recognition is appropriate. | |||||||
| How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the review of customer agreements and related amendments and incentive fee calculations, including management’s internal controls over unbilled incentive fees at year end and the assessment of the estimated constraint applied to the incentive fee revenues, if any. To test the appropriateness of the timing of recognition and measurement of incentive fee revenues at year end, our audit procedures included, among others, obtaining and reviewing the customer contracts and any related amendments, and independently confirming the unbilled incentive fee amounts recognized at year end directly with external customers. In addition, we compared historically estimated and recognized incentive fees to the actual amounts billed and collected in subsequent periods to assess the accuracy of management’s estimation process. | |||||||
Cloudmed business combination – valuation of developed technology | ||||||||
| Description of the Matter | As described in Note 3 to the consolidated financial statements, the Company completed its acquisition of all the outstanding equity interests of Revint Holdings, LLC (“Cloudmed”) for consideration of approximately $3.3 billion on June 21, 2022. The transaction was accounted for as a business combination. Auditing the Company’s accounting for its acquisition of Cloudmed was complex due to the significant estimation required by management to determine the preliminary fair value of the acquired identified intangible assets of $1,366.6 million, the most significant of which is developed technology of $1,025.0 million. The significant estimation uncertainty was primarily due to the sensitivity of the respective fair value to the key assumptions included in the valuation. The Company used a discounted cash flow model to measure the fair value of the developed technology intangible assets. The significant assumptions used to estimate the fair value of the intangible assets included discount rates and certain assumptions that form the basis of the forecasted results (e.g., revenue and cost growth rates and technology obsolescence curves). These significant assumptions are forward looking and could be affected by future economic and market conditions. | |||||||
| How We Addressed the Matter in Our Audit | We obtained an understanding, evaluated the design and tested the operating effectiveness of the Company’s controls addressing the risks of material misstatement over its accounting for the Cloudmed acquisition including, among others, management’s process to establish the significant assumptions and measure the acquired developed technology intangible asset. This included testing controls over management’s review of the significant assumptions and other inputs used in the determination of fair value. The testing was inclusive of key management review controls to evaluate the acquired developed technology and estimated future sales, and controls to ensure that the data used to evaluate and support the significant assumptions was complete, accurate and, where applicable, verified to appropriate data sources. To test the Company’s accounting for the Cloudmed acquisition, our audit procedures included, among others, inspecting the terms of the executed agreement, evaluating the Company’s selection of the valuation methodology, evaluating the methods and significant assumptions used by the Company’s valuation specialist, and evaluating the completeness and accuracy of the underlying data supporting the significant assumptions and estimates. We involved our valuation specialists to assist with the evaluation of methodologies used by the Company and the significant assumptions included in the fair value estimates. We also evaluated the Company’s disclosures in the consolidated financial statements. | |||||||
Cloudmed contract asset | ||||||||
| Description of the Matter | As described in Note 2 to the consolidated financial statements, a majority of revenue arising from the recently-acquired Cloudmed business relates to services provided to identify and deliver opportunities for the Company’s healthcare provider customers for incremental reimbursement from their respective payors. As the majority of the ultimate revenue earned for the services provided will be dependent on the amount of incremental reimbursements collected by Cloudmed’s customers in a future period, the variable consideration must be estimated to reflect the Company’s expectations about the amount it will be entitled to receive from its customers. As the revenue recognized is not finalized and billed until a future period, accounting for revenue in the Cloudmed business results in the recognition of a contract asset. At the date of the Cloudmed acquisition the acquired contract asset was $92.4 million and the balance was $115.9 million at December 31, 2022. Auditing the Company’s contract asset involved challenging judgment because the calculation involves certain subjective management assumptions, notably the realization rate to estimate the total amount that the Company’s customers are likely to collect from their payors after the services have been provided. The Company’s variable consideration is estimated based on the Company’s historical experience at the customer and service line level. | |||||||
| How We Addressed the Matter in Our Audit | To test the appropriateness of the contract asset, at acquisition and at the balance sheet date, our audit procedures included, among others, obtaining and reviewing the customer agreements, evaluating the significant assumptions used by management (see above) and testing the accuracy and completeness of the underlying data used in management’s calculation. This included testing management’s estimate of their customers’ expected incremental reimbursements from the payors through inspection of source documentation such as evidence of actual subsequent collections. In addition, we evaluated the estimates made based on the Company’s historical experience and performed sensitivity analyses to evaluate the impact to the recognized contract asset that would result from changes in the significant assumptions. | |||||||
| December 31, | ||||||||||||||
| 2022 | 2021 | |||||||||||||
| Assets | ||||||||||||||
| Current assets: | ||||||||||||||
| Cash and cash equivalents | $ | $ | ||||||||||||
Accounts receivable, net of $ | ||||||||||||||
Accounts receivable, net of $ | ||||||||||||||
| Current portion of contract assets, net | ||||||||||||||
| Prepaid expenses and other current assets | ||||||||||||||
| Total current assets | ||||||||||||||
| Property, equipment and software, net | ||||||||||||||
| Operating lease right-of-use assets | ||||||||||||||
| Non-current portion of contract assets, net | ||||||||||||||
| Non-current portion of deferred contract costs | ||||||||||||||
| Intangible assets, net | ||||||||||||||
| Goodwill | ||||||||||||||
| Non-current deferred tax assets | ||||||||||||||
| Other assets | ||||||||||||||
| Total assets | $ | $ | ||||||||||||
| Liabilities | ||||||||||||||
| Current liabilities: | ||||||||||||||
| Accounts payable | $ | $ | ||||||||||||
| Current portion of customer liabilities | ||||||||||||||
| Current portion of customer liabilities - related party | ||||||||||||||
| Accrued compensation and benefits | ||||||||||||||
| Current portion of operating lease liabilities | ||||||||||||||
| Current portion of long-term debt | ||||||||||||||
| Accrued expenses and other current liabilities | ||||||||||||||
| Total current liabilities | ||||||||||||||
| Non-current portion of customer liabilities | ||||||||||||||
| Non-current portion of customer liabilities - related party | ||||||||||||||
| Non-current portion of operating lease liabilities | ||||||||||||||
| Long-term debt | ||||||||||||||
| Non-current deferred tax liabilities | ||||||||||||||
| Other non-current liabilities | ||||||||||||||
| Total liabilities | ||||||||||||||
| Stockholders’ equity: | ||||||||||||||
Common stock, $ | ||||||||||||||
| Additional paid-in capital | ||||||||||||||
| Accumulated deficit | ( | ( | ||||||||||||
| Accumulated other comprehensive loss | ( | ( | ||||||||||||
Treasury stock, at cost, | ( | ( | ||||||||||||
| Total stockholders’ equity | ||||||||||||||
| Total liabilities and stockholders’ equity | $ | $ | ||||||||||||
| Year Ended December 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | ||||||||||||||||||
Net services revenue ($ | $ | $ | $ | |||||||||||||||||
| Operating expenses: | ||||||||||||||||||||
| Cost of services | ||||||||||||||||||||
| Selling, general and administrative | ||||||||||||||||||||
| Other expenses | ||||||||||||||||||||
| Total operating expenses | ||||||||||||||||||||
| Income from operations | ||||||||||||||||||||
| Gain on business disposition | ||||||||||||||||||||
| Net interest expense | ( | ( | ( | |||||||||||||||||
| Income (loss) before income tax provision (benefit) | ( | |||||||||||||||||||
| Income tax provision (benefit) | ( | |||||||||||||||||||
| Net income (loss) | $ | ( | $ | $ | ||||||||||||||||
| Net income (loss) per common share: | ||||||||||||||||||||
| Basic | $ | ( | $ | ( | $ | |||||||||||||||
| Diluted | $ | ( | $ | ( | $ | |||||||||||||||
| Weighted average shares used in calculating net income (loss) per common share: | ||||||||||||||||||||
| Basic | ||||||||||||||||||||
| Diluted | ||||||||||||||||||||
| Consolidated statements of comprehensive income (loss) | ||||||||||||||||||||
| Net income (loss) | ( | |||||||||||||||||||
| Other comprehensive income (loss): | ||||||||||||||||||||
| Net change on derivatives designated as cash flow hedges, net of tax | ( | |||||||||||||||||||
| Foreign currency translation adjustments | ( | ( | ( | |||||||||||||||||
| Total other comprehensive income (loss), net of tax | $ | $ | $ | ( | ||||||||||||||||
| Comprehensive income (loss) | $ | ( | $ | $ | ||||||||||||||||
| Basic: | ||||||||||||||||||||
| Net income (loss) | $ | ( | $ | $ | ||||||||||||||||
| Less dividends on preferred shares | ( | ( | ||||||||||||||||||
| Less income allocated to preferred shareholders | ( | |||||||||||||||||||
| Net income (loss) available/allocated to common shareholders - basic | $ | ( | $ | ( | $ | |||||||||||||||
| Diluted: | ||||||||||||||||||||
| Net income (loss) | $ | ( | $ | $ | ||||||||||||||||
| Less dividends on preferred shares | ( | ( | ||||||||||||||||||
| Less income allocated to preferred shareholders | ( | |||||||||||||||||||
| Net income (loss) available/allocated to common shareholders - diluted | $ | ( | $ | ( | $ | |||||||||||||||
| Common Stock | Treasury Stock | Additional Paid-In Capital | Accumulated Deficit | Accumulated Other Comprehensive Loss | Total | |||||||||||||||||||||||||||||||||||||||||||||
| Shares | Amount | Shares | Amount | |||||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2019 | $ | ( | $ | ( | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||
Impact of standard adoption, net of tax of $ | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
| Adjusted balance at January 1, 2020 | ( | ( | ( | ( | ||||||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation expense | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock related to share-based compensation plans | — | — | ( | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Exercise of vested stock options | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Dividends paid/accrued on preferred stock | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
| Acquisition of treasury stock related to share-based compensation plans | — | — | ( | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Net change on derivatives designated as cash flow hedges, net of tax of $ | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustments | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2020 | $ | ( | $ | ( | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||
| Share-based compensation expense | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock related to share-based compensation plans | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Exercise of vested stock options | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Acquisition of treasury stock related to share-based compensation plans | — | — | ( | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
| Repurchase of common stock | — | — | ( | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Net change on derivatives designated as cash flow hedges, net of tax of | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Conversion of preferred shares | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Inducement dividend | — | — | — | — | ( | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock related to inducement | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Exercise of warrants pursuant to cashless provisions | — | — | ( | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Net income | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2021 | $ | ( | $ | ( | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||
| Share-based compensation expense | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| CoyCo 2 share-based compensation expense | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock related to share-based compensation plans | — | — | — | — | — | — | — | |||||||||||||||||||||||||||||||||||||||||||
| Issuance of common stock | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||||
| Replacement awards issued in conjunction with acquisitions | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Exercise of vested stock options | — | ( | ( | — | — | |||||||||||||||||||||||||||||||||||||||||||||
| Acquisition of treasury stock related to share-based compensation plans | — | — | ( | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
| Repurchases of common stock | — | — | ( | ( | — | — | — | ( | ||||||||||||||||||||||||||||||||||||||||||
Net change on derivatives designated as cash flow hedges, net of tax of $ | — | — | — | — | — | — | ||||||||||||||||||||||||||||||||||||||||||||
| Foreign currency translation adjustment | — | — | — | — | — | — | ( | ( | ||||||||||||||||||||||||||||||||||||||||||
| Net loss | — | — | — | — | — | ( | — | ( | ||||||||||||||||||||||||||||||||||||||||||
| Balance at December 31, 2022 | $ | ( | $ | ( | $ | $ | ( | $ | ( | $ | ||||||||||||||||||||||||||||||||||||||||
| Year Ended December 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | ||||||||||||||||||
| Operating activities | ||||||||||||||||||||
| Net income (loss) | $ | ( | $ | $ | ||||||||||||||||
| Adjustments to reconcile net income (loss) to net cash (used in) provided by operations: | ||||||||||||||||||||
| Depreciation and amortization | ||||||||||||||||||||
| Amortization of debt issuance costs | ||||||||||||||||||||
| Share-based compensation | ||||||||||||||||||||
| CoyCo 2 share-based compensation | ||||||||||||||||||||
| Gain on sale of Emergency Medical Services business | ( | |||||||||||||||||||
| Loss/(gain) on disposal and right-of-use asset write-downs | ( | |||||||||||||||||||
| Provision for credit losses | ||||||||||||||||||||
| Deferred income taxes | ( | ( | ||||||||||||||||||
| Non-cash lease expense | ||||||||||||||||||||
| Other | ( | |||||||||||||||||||
| Changes in operating assets and liabilities: | ||||||||||||||||||||
| Accounts receivable and related party accounts receivable | ( | ( | ( | |||||||||||||||||
| Contract assets | ( | |||||||||||||||||||
| Prepaid expenses and other assets | ( | ( | ( | |||||||||||||||||
| Accounts payable | ( | ( | ||||||||||||||||||
| Accrued compensation and benefits | ( | ( | ||||||||||||||||||
| Lease liabilities | ( | ( | ( | |||||||||||||||||
| Other liabilities | ( | ( | ||||||||||||||||||
| Customer liabilities and customer liabilities - related party | ( | ( | ||||||||||||||||||
| Net cash (used in) provided by operating activities | ( | |||||||||||||||||||
| Investing activities | ||||||||||||||||||||
| Purchases of property, equipment, and software | ( | ( | ( | |||||||||||||||||
| Payment for business acquisitions, net of cash acquired | ( | ( | ( | |||||||||||||||||
| Proceeds from sale of Emergency Medical Services business, net of cash disposed | ||||||||||||||||||||
| Other | ( | |||||||||||||||||||
| Net cash used in investing activities | ( | ( | ( | |||||||||||||||||
| Financing activities | ||||||||||||||||||||
| Issuance of senior secured debt, net of discount and issuance costs | ||||||||||||||||||||
| Borrowings on revolver | ||||||||||||||||||||
| Payment of debt issuance costs | ( | ( | ||||||||||||||||||
| Repayment of senior secured debt | ( | ( | ( | |||||||||||||||||
| Repayments on revolver | ( | ( | ( | |||||||||||||||||
| Payment of contingent consideration liability | ( | |||||||||||||||||||
| Deferred payment related to acquisition of RevWorks | ( | |||||||||||||||||||
| Inducement of preferred stock conversion | ( | |||||||||||||||||||
| Payment of equity issuance costs | ( | |||||||||||||||||||
| Exercise of vested stock options | ||||||||||||||||||||
| Purchase of treasury stock | ( | ( | ||||||||||||||||||
| Shares withheld for taxes | ( | ( | ( | |||||||||||||||||
| Other | ( | ( | ( | |||||||||||||||||
| Net cash provided by financing activities | ||||||||||||||||||||
| Effect of exchange rate changes in cash | ( | ( | ( | |||||||||||||||||
| Net (decrease) increase in cash, cash equivalents, and restricted cash | ( | ( | ||||||||||||||||||
| Cash, cash equivalents, and restricted cash at beginning of period | ||||||||||||||||||||
| Cash, cash equivalents, and restricted cash at end of period | $ | $ | $ | |||||||||||||||||
| Supplemental disclosures of cash flow information | ||||||||||||||||||||
| Accrued dividends payable to preferred stockholders | $ | $ | $ | |||||||||||||||||
| Property, equipment and software purchases not paid | $ | $ | $ | |||||||||||||||||
| Assets obtained in exchange for common stock | $ | $ | $ | |||||||||||||||||
| Interest paid | $ | $ | $ | |||||||||||||||||
| Income taxes paid | $ | $ | $ | |||||||||||||||||
| Income taxes refunded | $ | $ | $ | |||||||||||||||||
| December 31, 2022 | December 31, 2021 | |||||||||||||
| Prepaid expenses and other current assets | $ | $ | ||||||||||||
| Non-current portion of deferred contract costs | ||||||||||||||
| Total deferred contract costs | $ | $ | ||||||||||||
| Buildings and land | ||||||||
| Computers and other equipment | ||||||||
| Leasehold improvements | Shorter of | |||||||
| Office furniture | ||||||||
| Software | ||||||||
| December 31, 2022 | December 31, 2021 | |||||||||||||
| Buildings and land | $ | $ | ||||||||||||
| Computer and other equipment | ||||||||||||||
| Leasehold improvements | ||||||||||||||
| Software | ||||||||||||||
| Office furniture | ||||||||||||||
| Property, equipment and software, gross | ||||||||||||||
| Less accumulated depreciation and amortization | ( | ( | ||||||||||||
| Property, equipment and software, net | $ | $ | ||||||||||||
| Year Ended December 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | ||||||||||||||||||
| Cost of services | $ | $ | $ | |||||||||||||||||
| Selling, general and administrative | ||||||||||||||||||||
| Total depreciation and amortization | $ | $ | $ | |||||||||||||||||
| Fair Value | ||||||||
| Stock consideration transferred to the Sellers (1) | $ | |||||||
| Cash consideration (2) | ||||||||
| Replacement awards issued to Cloudmed equity award holders (3) | ||||||||
| Total consideration | $ | |||||||
| Purchase Price Allocation | ||||||||
| Total purchase consideration | $ | |||||||
| Allocation of consideration to assets acquired and liabilities assumed: | ||||||||
| Cash and cash equivalents | $ | |||||||
| Accounts receivable | ||||||||
| Current portion of contract assets | ||||||||
| Property, equipment and software | ||||||||
| Operating lease right-of-use assets | ||||||||
| Non-current portion of contract assets | ||||||||
| Intangible assets | ||||||||
| Goodwill | ||||||||
| Other assets | ||||||||
| Accounts payable | ( | |||||||
| Customer liabilities | ( | |||||||
| Accrued compensation and benefits | ( | |||||||
| Operating lease liabilities | ( | |||||||
| Deferred income tax liabilities | ( | |||||||
| Other liabilities | ( | |||||||
| Net assets acquired | $ | |||||||
| Useful Life | Gross Carrying Value | |||||||||||||
| Customer Relationships | $ | |||||||||||||
| Technology | $ | |||||||||||||
| Tradename | $ | |||||||||||||
| Favorable leasehold interests | Life of lease | $ | ||||||||||||
| Company Name | Description of the Business | Description of the Acquisition | ||||||
| iVinci Partners, LLC d/b/a VisitPay (“VisitPay”) | Provider of digital payment solutions | Purchased all outstanding equity interests | ||||||
| Year Ended December 31, | ||||||||||||||
| 2022 | 2021 | |||||||||||||
| Net services revenue | $ | $ | ||||||||||||
| Net loss | $ | ( | $ | ( | ||||||||||
| December 31, 2022 | December 31, 2021 | |||||||||||||||||||||||||||||||||||||
| Gross Carrying Value | Accumulated Amortization | Net Book Value | Gross Carrying Value | Accumulated Amortization | Net Book Value | |||||||||||||||||||||||||||||||||
| Customer relationships | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
| Technology | ( | ( | ||||||||||||||||||||||||||||||||||||
| Tradename | ( | ( | ||||||||||||||||||||||||||||||||||||
| Favorable leasehold interests | ||||||||||||||||||||||||||||||||||||||
| Total intangible assets | $ | $ | ( | $ | $ | $ | ( | $ | ||||||||||||||||||||||||||||||
| 2023 | $ | |||||||
| 2024 | ||||||||
| 2025 | ||||||||
| 2026 | ||||||||
| 2027 | ||||||||
| Thereafter | ||||||||
| Total | $ | |||||||
| Goodwill | ||||||||
| Balance as of December 31, 2021 | $ | |||||||
| Cloudmed Acquisition | ||||||||
| Change in foreign currency rates | ( | |||||||
| Balance as of December 31, 2022 | $ | |||||||
| Year Ended December 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | ||||||||||||||||||
| Net operating fees | $ | $ | $ | |||||||||||||||||
| Incentive fees | ||||||||||||||||||||
| Modular and other (1) | ||||||||||||||||||||
| Net services revenue | $ | $ | $ | |||||||||||||||||
| December 31, 2022 | December 31, 2021 | ||||||||||
| Contract assets, net | |||||||||||
| Current | $ | $ | |||||||||
| Non-current | |||||||||||
| Total contract assets, net | $ | $ | |||||||||
| Contract liabilities | |||||||||||
| Current (1) | $ | $ | |||||||||
| Non-current (2) | |||||||||||
| Total contract liabilities | $ | $ | |||||||||
| Contract Assets | ||||||||
| Balance as of June 30, 2022 | $ | |||||||
| Revenue recognized | ||||||||
| Amounts billed | ( | |||||||
| Other (1) | ||||||||
Balance as of December 31, 2022 | $ | |||||||
| Net operating fees | Incentive fees | ||||||||||
| 2023 | $ | $ | |||||||||
| 2024 | |||||||||||
| 2025 | |||||||||||
| 2026 | |||||||||||
| 2027 | |||||||||||
| Thereafter | |||||||||||
| Total | $ | $ | |||||||||
| Year Ended December 31, | |||||||||||
| 2022 | 2021 | ||||||||||
| Beginning balance | $ | $ | |||||||||
| Cumulative effect of Cloudmed ASC 326 adoption | |||||||||||
| Provision (recoveries) | |||||||||||
| Write-offs | ( | ( | |||||||||
| Ending balance | $ | $ | |||||||||
| Year Ended December 31, | ||||||||||||||
| 2022 | 2021 | |||||||||||||
| Operating lease cost | $ | $ | ||||||||||||
| Sublease income | ( | ( | ||||||||||||
| Total lease cost | $ | $ | ||||||||||||
| Year Ended December 31, | ||||||||||||||
| 2022 | 2021 | |||||||||||||
| Weighted average remaining lease term | ||||||||||||||
| Weighted average incremental borrowing rate | % | % | ||||||||||||
| Cash paid for amounts included in the measurement of lease liabilities: | ||||||||||||||
| Operating cash flows for operating leases | $ | $ | ||||||||||||
| ROU assets obtained or acquired in exchange for operating lease obligations (1) | ||||||||||||||
| Operating Leases | ||||||||
| 2023 | $ | |||||||
| 2024 | ||||||||
| 2025 | ||||||||
| 2026 | ||||||||
| 2027 | ||||||||
| Thereafter | ||||||||
| Total | ||||||||
| Less: | ||||||||
| Imputed interest | ||||||||
| Present value of lease liabilities | $ | |||||||
| December 31, 2022 | December 31, 2021 | ||||||||||
| Accrued service costs, current | $ | $ | |||||||||
| Collections payable to clients, current | |||||||||||
| Customer deposits, current | |||||||||||
| Refund liabilities, current | |||||||||||
| Deferred revenue (contract liabilities), current | |||||||||||
| Current portion of customer liabilities (1) | |||||||||||
| Deferred revenue (contract liabilities), non-current | |||||||||||
| Non-current portion of customer liabilities (1) | |||||||||||
| Total customer liabilities | $ | $ | |||||||||
| December 31, 2022 | December 31, 2021 | |||||||||||||
| Senior Revolver (1) | $ | $ | ||||||||||||
| Term A Loans | ||||||||||||||
| Term B Loan | ||||||||||||||
| Unamortized discount and issuance costs | ( | ( | ||||||||||||
| Total debt | ||||||||||||||
| Less: Current maturities | ( | ( | ||||||||||||
| Total long-term debt | $ | $ | ||||||||||||
| Scheduled Maturities | ||||||||
| 2023 | $ | |||||||
| 2024 | ||||||||
| 2025 | ||||||||
| 2026 | ||||||||
| 2027 | ||||||||
| Thereafter | ||||||||
| Total | $ | |||||||
December 31, 2022 | December 31, 2021 | |||||||||||||
| Foreign currency forward contracts | ||||||||||||||
| Prepaid expenses and other current assets | $ | $ | ||||||||||||
| Other accrued expenses | ||||||||||||||
| Total foreign current forward contracts | $ | $ | ||||||||||||
| Interest rate swaps | ||||||||||||||
| Prepaid expenses and other current assets | $ | $ | ||||||||||||
| Other assets | ||||||||||||||
| Other accrued expenses | ||||||||||||||
| Total interest rate swaps | $ | $ | ||||||||||||
| Year Ended December 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | ||||||||||||||||||
| Expected dividend yield | ||||||||||||||||||||
| Risk-free interest rate | ||||||||||||||||||||
| Expected volatility | ||||||||||||||||||||
| Expected term (in years) | ||||||||||||||||||||
| Year Ended December 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | ||||||||||||||||||
| Share-Based Compensation Expense Allocation Details: | ||||||||||||||||||||
| Cost of services | $ | $ | $ | |||||||||||||||||
| Selling, general and administrative | ||||||||||||||||||||
| Other | ||||||||||||||||||||
| Total share-based compensation expense (1) | $ | $ | $ | |||||||||||||||||
| Shares | Weighted- Average Exercise Price | Weighted- Average Remaining Contractual Term (in years) | Aggregate Intrinsic Value (in millions) | |||||||||||||||||||||||
| Outstanding at January 1, 2020 | $ | $ | ||||||||||||||||||||||||
| Granted | ||||||||||||||||||||||||||
| Exercised | ( | |||||||||||||||||||||||||
| Canceled/forfeited | ( | |||||||||||||||||||||||||
| Expired | ( | |||||||||||||||||||||||||
| Outstanding at December 31, 2020 | $ | $ | ||||||||||||||||||||||||
| Granted | ||||||||||||||||||||||||||
| Exercised | ( | |||||||||||||||||||||||||
| Canceled/forfeited | ( | |||||||||||||||||||||||||
| Expired | ( | |||||||||||||||||||||||||
| Outstanding at December 31, 2021 | $ | $ | ||||||||||||||||||||||||
| Granted | ||||||||||||||||||||||||||
| Exercised | ( | |||||||||||||||||||||||||
| Canceled/forfeited | ( | |||||||||||||||||||||||||
| Expired | ( | |||||||||||||||||||||||||
| Outstanding at December 31, 2022 | $ | $ | ||||||||||||||||||||||||
| Outstanding, vested and exercisable at December 31, 2020 | $ | $ | ||||||||||||||||||||||||
| Outstanding, vested and exercisable at December 31, 2021 | $ | $ | ||||||||||||||||||||||||
| Outstanding, vested and exercisable at December 31, 2022 | $ | $ | ||||||||||||||||||||||||
| Weighted- Average Grant Date Fair Value | ||||||||||||||||||||||||||
| RSUs | PBRSUs | RSU | PBRSU | |||||||||||||||||||||||
| Outstanding and unvested at January 1, 2020 | $ | $ | ||||||||||||||||||||||||
| Granted | ||||||||||||||||||||||||||
| Performance factor adjustment | ||||||||||||||||||||||||||
| Vested | ( | ( | ||||||||||||||||||||||||
| Forfeited | ( | ( | ||||||||||||||||||||||||
| Outstanding and unvested at December 31, 2020 | $ | $ | ||||||||||||||||||||||||
| Granted | ||||||||||||||||||||||||||
| Performance factor adjustment | ||||||||||||||||||||||||||
| Vested | ( | ( | ||||||||||||||||||||||||
| Forfeited | ( | ( | ||||||||||||||||||||||||
| Outstanding and unvested at December 31, 2021 | $ | $ | ||||||||||||||||||||||||
| Granted | ||||||||||||||||||||||||||
| Performance factor adjustment | ||||||||||||||||||||||||||
| Vested | ( | ( | ||||||||||||||||||||||||
| Forfeited | ( | ( | ||||||||||||||||||||||||
| Outstanding and unvested at December 31, 2022 | $ | $ | ||||||||||||||||||||||||
Shares surrendered for taxes for year ended December 31, 2022 | ||||||||||||||||||||||||||
Cost of shares surrendered for taxes for the year ended December 31, 2022 (in millions) | ||||||||||||||||||||||||||
Shares surrendered for taxes for the year ended December 31, 2021 | ||||||||||||||||||||||||||
Cost of shares surrendered for taxes for the year ended December 31, 2021 (in millions) | ||||||||||||||||||||||||||
Shares surrendered for taxes for the year ended December 31, 2020 | ||||||||||||||||||||||||||
Cost of shares surrendered for taxes for the year ended December 31, 2020 (in millions) | ||||||||||||||||||||||||||
| Year Ended December 31, | |||||||||||||||||
| 2022 | 2021 | 2020 | |||||||||||||||
| Severance and related employee benefits (1) | $ | $ | $ | ||||||||||||||
| Business acquisition costs (2) | |||||||||||||||||
| Integration costs (3) | |||||||||||||||||
| Strategic initiatives (4) | |||||||||||||||||
| Global business services center expansion project in the Philippines (5) | |||||||||||||||||
| Customer employee transition and restructuring expenses (6) | ( | ( | |||||||||||||||
| Facility-exit charges (7) | |||||||||||||||||
| Other (8) | |||||||||||||||||
| Total other expenses | $ | $ | $ | ||||||||||||||
| Year Ended December 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | ||||||||||||||||||
| Domestic | $ | ( | $ | $ | ||||||||||||||||
| Foreign | ||||||||||||||||||||
| Total income (loss) before income taxes | $ | ( | $ | $ | ||||||||||||||||
| Current | Deferred | Total | ||||||||||||||||||
| Year Ended December 31, 2020 | ||||||||||||||||||||
| U.S. Federal | $ | $ | ( | $ | ( | |||||||||||||||
| State & Local | ||||||||||||||||||||
| Foreign | ( | |||||||||||||||||||
| $ | $ | ( | $ | |||||||||||||||||
| Year Ended December 31, 2021 | ||||||||||||||||||||
| U.S. Federal | $ | ( | $ | $ | ||||||||||||||||
| State & Local | ||||||||||||||||||||
| Foreign | ||||||||||||||||||||
| $ | $ | $ | ||||||||||||||||||
| Year Ended December 31, 2022 | ||||||||||||||||||||
| U.S. Federal | $ | $ | ( | $ | ( | |||||||||||||||
| State & Local | ( | ( | ||||||||||||||||||
| Foreign | ||||||||||||||||||||
| $ | $ | ( | $ | ( | ||||||||||||||||
| Year Ended December 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | ||||||||||||||||||
| Federal statutory tax rate | % | % | % | |||||||||||||||||
| Change in income tax rate resulting from: | ||||||||||||||||||||
| State and local income taxes, net of federal tax benefits | % | % | % | |||||||||||||||||
| Additional tax on foreign source income | ( | % | % | % | ||||||||||||||||
| Share-based compensation | % | ( | % | ( | % | |||||||||||||||
| Non-deductible expenses | ( | % | % | % | ||||||||||||||||
| Gain on sale | % | % | ( | % | ||||||||||||||||
| Other | ( | % | % | ( | % | |||||||||||||||
| Effective tax rate | % | % | % | |||||||||||||||||
| As of December 31, | ||||||||||||||
| 2022 | 2021 | |||||||||||||
| Deferred tax assets and liabilities: | ||||||||||||||
| Net operating loss carryforwards | $ | $ | ||||||||||||
| Share-based compensation | ||||||||||||||
| Accrued bonus | ||||||||||||||
| Advanced billing revenue | ||||||||||||||
| Alternative minimum tax | ||||||||||||||
| Interest expense limitation | ||||||||||||||
| Deferred rent liabilities | ||||||||||||||
| Deferred FICA liability | ||||||||||||||
| Fixed assets | ||||||||||||||
| Other | ||||||||||||||
| Total deferred tax assets | ||||||||||||||
| Intangible assets | ( | ( | ||||||||||||
| Fixed assets | ( | |||||||||||||
| Deferred contract costs | ( | ( | ||||||||||||
Foreign withholding tax | ( | ( | ||||||||||||
| Deferred rent assets | ( | ( | ||||||||||||
| Less valuation allowances | ( | ( | ||||||||||||
| Net deferred tax | $ | ( | $ | |||||||||||
| Preferred Stock | ||||||||||||||
| Shares Issued and Outstanding | Carrying Value | |||||||||||||
| Balance at January 1, 2020 | $ | |||||||||||||
| Dividends paid/accrued dividends | ||||||||||||||
| Balance at December 31, 2020 | $ | |||||||||||||
| Dividends paid/accrued dividends | ||||||||||||||
| Conversion of Preferred Stock | ( | ( | ||||||||||||
| Balance at December 31, 2021 | $ | |||||||||||||
| Year Ended December 31, | ||||||||||||||||||||
| 2022 | 2021 | 2020 | ||||||||||||||||||
| Basic EPS: | ||||||||||||||||||||
| Net income (loss) | $ | ( | $ | $ | ||||||||||||||||
| Less dividends on preferred shares (1) | ( | ( | ||||||||||||||||||
| Less income allocated to preferred shareholders | ( | |||||||||||||||||||
| Net income (loss) available/(allocated) to common shareholders - basic | $ | ( | $ | ( | $ | |||||||||||||||
| Diluted EPS: | ||||||||||||||||||||
| Net income (loss) | $ | ( | $ | $ | ||||||||||||||||
| Less dividends on preferred shares (1) | ( | ( | ||||||||||||||||||
| Less income allocated to preferred shareholders | ( | |||||||||||||||||||
| Net income (loss) available/(allocated) to common shareholders - diluted | $ | ( | $ | ( | $ | |||||||||||||||
| Basic weighted-average common shares | ||||||||||||||||||||
| Add: Effect of dilutive equity awards | ||||||||||||||||||||
| Add: Effect of dilutive warrants | ||||||||||||||||||||
| Diluted weighted average common shares | ||||||||||||||||||||
| Net income (loss) per common share (basic) | $ | ( | $ | ( | $ | |||||||||||||||
| Net income (loss) per common share (diluted) | $ | ( | $ | ( | $ | |||||||||||||||
December 31, 2022 | December 31, 2021 | ||||||||||
| Accrued service costs, current | $ | $ | |||||||||
| Collections payable to clients, current | |||||||||||
| Refund liabilities, current | |||||||||||
| Deferred revenue (contract liabilities), current | |||||||||||
| Current portion of customer liabilities | |||||||||||
| Deferred revenue (contract liabilities), non-current | |||||||||||
| Non-current portion of customer liabilities | |||||||||||
| Total customer liabilities | $ | $ | |||||||||
| Year Ended December 31, | ||||||||||||||||||||
| Customer Name | 2022 | 2021 | 2020 | |||||||||||||||||
| Ascension and its affiliates | ||||||||||||||||||||
| Intermountain Healthcare | ||||||||||||||||||||
| December 31, 2022 | December 31, 2021 | ||||||||||
| Prepaid expenses | $ | $ | |||||||||
| Acquisition and disposition contingent assets | |||||||||||
| Notes receivable | |||||||||||
| Derivative assets | |||||||||||
| Healthcare rebates receivable | |||||||||||
| Deferred contract costs | |||||||||||
| Other current assets | |||||||||||
| Total prepaid expenses and other current assets | $ | $ | |||||||||
| December 31, 2022 | December 31, 2021 | ||||||||||
| Accrued expenses | $ | $ | |||||||||
| Notes payable | |||||||||||
| Acquisition deferred payments | |||||||||||
| Other current liabilities | |||||||||||
| Total accrued expenses and other current liabilities | $ | $ | |||||||||
| Subsidiary | Jurisdiction of Organization | ||||
| Accretive Health Mauritius, Inc. | Mauritius | ||||
| Acustream, LLC | Delaware | ||||
| AS Buyer, Inc. | Delaware | ||||
| cGate Health, Inc. | Delaware | ||||
| Clearsight Intermediate Holdings, Inc. | Delaware | ||||
| CloudMed LLC | Arizona | ||||
| Cloudmed Blocker Parent, LLC | Delaware | ||||
| Cloudmed Holdings 1, Inc. | Delaware | ||||
| Cloudmed Holdings 2, Inc. | Delaware | ||||
| Cloudmed Solutions, LLC | Delaware | ||||
| Data Bound Solutions LLC | Florida | ||||
| Eligibill, LLC | Wisconsin | ||||
| Empire Medical Review Services, LLC | Wisconsin | ||||
| Flare Capital Partners Investment Company | Delaware | ||||
| Implementation Management Assistance, LLC | Pennsylvania | ||||
| Intermedix ARM, LLC | Delaware | ||||
| Intermedix Corporation | Delaware | ||||
| Intermedix Holdings, Inc. | Delaware | ||||
| Intermedix Midco, Inc. | Delaware | ||||
| Intermedix Office Based, LLC | Delaware | ||||
| Intermedix Staffing, Inc. | Delaware | ||||
| iVinci Partners, LLC | Delaware | ||||
| Managed Care Revenue Consulting Group, LLC | New York | ||||
| Medical Consultants, Inc. | Oklahoma | ||||
| Par8o, LLC | Delaware | ||||
| Practice Support Resources, LLC | Texas | ||||
| Praxis Healthcare Solutions, LLC | Texas | ||||
| Project Links Parent, Inc. | Delaware | ||||
| R1 RCM Blocker LLC | Delaware | ||||
| R1 RCM Holdco Inc. | Delaware | ||||
| R1 RCM Global Private Limited | India | ||||
| R1 RCM India Private Limited | India | ||||
| R1 RCM Philippines, Inc. | Philippines | ||||
| Revint Intermediate III, LLC | Delaware | ||||
| Revint Holdings, LLC | Delaware | ||||
| Rover16, Inc. | Delaware | ||||
| SCHEDULING.COM, INC. | Delaware | ||||
| Tonic Health LLC | Delaware | ||||
| Triage Consulting Group, LLC | Delaware | ||||
| Washington & West, LLC | Maryland | ||||
Audit Information |
12 Months Ended |
|---|---|
Dec. 31, 2022 | |
| Audit Information [Abstract] | |
| Auditor Firm ID | 42 |
| Auditor Name | Ernst & Young LLP |
| Auditor Location | Chicago, Illinois |
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Accounts receivable, allowance | $ 15.1 | $ 2.4 |
| Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
| Common stock, shares authorized (in shares) | 750,000,000 | 500,000,000 |
| Common stock, shares issued (in shares) | 439,950,125 | 298,320,928 |
| Common stock, shares outstanding (in shares) | 416,597,885 | 278,226,242 |
| Treasury stock, shares (in shares) | 23,352,240 | 20,094,686 |
| Related Party | ||
| Accounts receivable, allowance | $ 0.1 | $ 0.1 |
Consolidated Statements of Operations and Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Income Statement [Abstract] | |||
| Net services revenue, from related party | $ 881.0 | $ 893.5 | $ 809.5 |
Consolidated Statements of Stockholders' Equity (Parenthetical) - USD ($) $ in Millions |
12 Months Ended | |||
|---|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
Dec. 31, 2019 |
|
| Accounting Standards Update [Extensible List] | ASC 326 | |||
| Cumulative Effect, Period of Adoption, Adjustment | ||||
| Impact of credit-loss, standard adoption, tax | $ 0.3 | |||
| AOCI Attributable to Parent | ||||
| Net change on derivatives designated as cash flow hedges, tax | $ 3.1 | $ 0.7 | $ 0.6 | |
Description of Business |
12 Months Ended |
|---|---|
Dec. 31, 2022 | |
| Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
| Description of Business | Description of Business R1 RCM Inc. (the “Company”) is a leading provider of technology-driven solutions that transform the patient experience and financial performance of healthcare providers. The Company helps healthcare providers generate sustainable improvements in their operating margins and cash flows while also enhancing patient, physician, and staff satisfaction for its customers. The Company achieves these results for its customers by managing healthcare providers’ revenue cycle operations, which encompass patient registration, insurance and benefit verification, scheduling, medical treatment documentation and coding, bill preparation, and collections from patients and payers. The Company does so by deploying a unique operating model that leverages its extensive healthcare domain experience, innovative technology and intelligent automation, and process excellence. The Company assists its revenue cycle management (“RCM”) customers in managing their revenue cycle operating costs while simultaneously increasing the portion of the maximum potential services revenue they receive. Together, these benefits can generate significant and sustainable improvements in operating margins and cash flows for the Company’s customers. The Company’s largest service offering consists of end-to-end RCM services for health systems, hospitals, and physician groups, which The Company deploys through an operating partner relationship or a co-managed relationship. Under an operating partner relationship, the Company provides comprehensive revenue cycle infrastructure to providers, including all revenue cycle personnel, technology solutions, and process workflow. Under a co-managed relationship, the Company leverages its customers’ existing RCM staff and processes, and supplement them with the Company’s infused management, subject matter specialists, proprietary technology solutions, and other resources. Under the operating partner model, the Company’s employees are the revenue cycle personnel providing services and the Company typically controls third party vendors either through direct contracts or the assumption of the customer’s vendor contracts. As a result, under the operating partner model the Company records higher expenses as well as higher revenues related to the negotiated cost to collect. Under the co-managed model, the revenue cycle personnel and third party vendors remain with the customer and those costs do not impact the Company’s financial results. For the years ended December 31, 2022, 2021, and 2020, substantially all of the Company’s net operating and incentive fees from end-to-end RCM services were generated under the operating partner model. The Company also offers modular solutions, allowing customers to engage the Company to address specific revenue cycle improvement opportunities, such as revenue intelligence solutions (which were enhanced through the acquisition of Revint Holdings, LLC (“Cloudmed”)), automation solutions, revenue integrity solutions, PM, accounts receivables and denials recovery, PAS, CDI, coding management, business office services, and patient experience. Once implemented, the Company’s technology solutions, processes, and services are deeply embedded in its customers’ day-to-day revenue cycle operations. The Company believes its service offerings are adaptable to meet an evolving healthcare regulatory environment, technology standards, and market trends. Ascension On February 16, 2016, the Company entered into a long-term strategic partnership with Ascension Health Alliance, the parent of the Company’s largest customer and the nation’s largest Catholic and non-profit health system, and TowerBrook Capital Partners (“TowerBrook”), an investment management firm (the “2016 Transaction”). As part of the 2016 Transaction, the Company amended and restated its Master Professional Services Agreement (“A&R MPSA”) with Ascension Health (“Ascension”) effective February 16, 2016 with an initial term of ten years. Pursuant to the A&R MPSA and with certain limited exceptions, the Company is the exclusive provider of RCM services and PAS with respect to acute care services provided by the hospitals affiliated with Ascension that execute supplement agreements with the Company. On April 30, 2021, the Company and Ascension entered into Amendment No. 5 to the A&R MPSA, effective as of May 1, 2021, extending the agreement to April 30, 2031, among other amendments. Cloudmed Acquisition On June 21, 2022, pursuant to the Transaction Agreement and Plan of Merger (the “Transaction Agreement”), dated as of January 9, 2022, among R1 RCM Inc. (f/k/a Project Roadrunner Parent Inc.), R1 RCM Holdco Inc. (f/k/a R1 RCM Inc.), now a wholly-owned subsidiary of the Company (“Old R1 RCM”), Project Roadrunner Merger Sub Inc., formerly a wholly-owned subsidiary of the Company (“R1 Merger Sub”), Cloudmed, CoyCo 1, L.P. (“CoyCo 1”), CoyCo 2, L.P. (“CoyCo 2” and, together with CoyCo 1, the “Sellers”), and, solely for certain purposes set forth therein, NMC Ranger Holdings, LLC, the Company purchased Cloudmed, a leader in Revenue Intelligence™ solutions for healthcare providers, and affiliated entities (collectively, the “Cloudmed entities”), through (i) a merger of R1 Merger Sub with and into Old R1 RCM with Old R1 RCM as the surviving entity, which resulted in Old R1 RCM becoming a wholly-owned subsidiary of the Company (the “Holding Company Reorganization”) and (ii) the Sellers contributing 100% of the equity of a blocker parent corporation of the Cloudmed entities in exchange for an aggregate of 135,929,742 shares of common stock, of the Company subject to certain adjustments following the closing as set forth in the Transaction Agreement (the “Cloudmed Acquisition,” and together with the Holding Company Reorganization, the “2022 Transactions”). In October 2022, the Company finalized those adjustments, resulting in an additional 55,846 shares issued to the Sellers. For further details on the total consideration paid, refer to Note 3, Acquisitions. Cloudmed’s revenue intelligence platform combines cloud-based data architecture and deep domain expertise with intelligent automation to analyze large volumes of medical records, payment data, and complex medical insurance models to identify opportunities to deliver additional revenue to customers. The Company believes this transaction will enable the Company to further its ability to deliver transformative value to healthcare providers through a more fulsome platform of differentiated capabilities by creating a scaled leader across both end-to-end RCM and technology-driven revenue intelligence. Holding Company Reorganization Pursuant to the Transaction Agreement, immediately prior to the completion of the Cloudmed Acquisition, Old R1 RCM implemented the Holding Company Reorganization, which resulted in the Company owning all of the capital stock of Old R1 RCM. Each share of Old R1 RCM’s common stock that was issued and outstanding immediately prior to the Holding Company Reorganization was automatically exchanged into an equivalent corresponding share of Company Common Stock, having the same designations, rights, powers, and preferences and the qualifications, limitations, and restrictions as the corresponding share of common stock of Old R1 RCM being converted. Accordingly, upon consummation of the Holding Company Reorganization, all Old R1 RCM stockholders became stockholders of the Company. Immediately prior to the consummation of the Holding Company Reorganization, the name of Old R1 RCM was changed to “R1 RCM Holdco Inc.” and the name of the Company was changed to “R1 RCM Inc.” The Company is the successor issuer to Old R1 RCM pursuant to Rule 12g-3(a) under the Securities Exchange Act of 1934, as amended (the “Exchange Act”). The shares of Company Common Stock, as successor to Old R1 RCM, began trading on The Nasdaq Global Select Market (“Nasdaq”) under the symbol “RCM” on June 22, 2022. Emergency Medical Services Disposition As part of our portfolio analysis and strategic initiatives, the Company disposed the emergency medical services (“EMS”) business on October 30, 2020 for $140.0 million, inclusive of a $5.0 million hold-back amount subject to the completion of certain transition services, to be paid approximately one year from the date of the disposition (the “EMS Disposition”). The total sale price net of costs to sell was $132.7 million, which included customary adjustments for working capital, indebtedness, cash, and transaction expenses. R1 allocated goodwill to the disposed business based on the relative fair value methodology. The total goodwill allocated to the EMS Disposition was $7.1 million. The gain recognized on the EMS Disposition was $55.7 million.
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Summary of Significant Accounting Policies |
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| Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The consolidated financial statements include the assets, liabilities and results of operations of the Company and its wholly owned subsidiaries. All material intercompany transactions and balances have been eliminated in consolidation. The preparation of financial statements in conformity with the United States generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes. Actual results can differ from those estimates. Revenue Recognition The Company’s largest source of revenue is its operating partner arrangement to provide end-to-end RCM services. The Company also generates revenue through modular RCM solutions, where customers will engage the Company for only specific components of its end-to-end RCM service offering on a fixed-fee or volumetric basis. Revenue Cycle Management RCM services fees are primarily variable and performance related, and are generally viewed as a series of distinct services in which there are identifiable increments within a long-term service contract. Variable consideration for end-to-end RCM services are allocated to and recognized over the related time period as the amounts reflect the consideration the Company is entitled to and relate specifically to the Company’s efforts to satisfy its performance obligation. Fees for physician group RCM services include variable consideration contingent on customer collections, and inputs to the Company’s revenue estimates typically include historical service fees and historical customer collection amounts. RCM services fees consist of net operating fees, incentive fees, and modular and other fees. Net Operating Fees The Company’s net operating fees consist of: i.gross base fees invoiced to customers; less ii.corresponding costs of customers’ revenue cycle operations which the Company pays pursuant to its RCM agreements, including salaries and benefits for the customers’ RCM personnel, and related third-party vendor costs; plus iii.fees accrued for physician group RCM services. The Company recognizes revenue related to net operating fees ratably as the performance obligation for the RCM services is satisfied. Base fees are typically billed in advance of the quarter and paid in three monthly payments as the entity performs and the customer simultaneously receives and consumes the benefits of the services provided. The costs of customers’ revenue cycle operations, which the Company pays pursuant to its RCM agreements, are accrued based on the service period. Net operating fees for physician groups are invoiced on a monthly basis and payment terms are typically 30 days. Incentive Fees Incentive fees are structured to reflect quarterly or annual performance and are evaluated on a contract-by-contract basis. The Company estimates incentive fee revenue based on contractually agreed-upon financial or operating metrics. The Company recognizes revenue related to incentive fees ratably as the performance obligation for RCM services is satisfied, to the extent that it is probable that a significant reversal of cumulative revenue will not occur once the uncertainty is resolved. Incentive fees are typically billed and paid on a quarterly basis. Modular and Other The Company recognizes revenue related to modular and other RCM fees as RCM services are provided. Fees are typically variable in nature and revenue is recognized as services are provided or when any uncertainty associated with the variable fee is subsequently resolved. The customer simultaneously receives and consumes the benefits provided by the services and the fees are typically billed on a monthly basis and payment terms are typically 30 days. To the extent that certain service fees are fixed and not subject to refund, adjustment, or concession, these fees are generally recognized into revenue ratably as the performance obligation is satisfied. The Company recognizes revenue from PAS in the period in which the service is performed. The Company’s PAS arrangements typically consist of an obligation to provide specific services to customers upon request. These services are provided under a fixed price per unit arrangement. Fees for the Company's PAS arrangements are typically billed on a monthly basis with 30 to 60 day payment terms. PM services arrangements include a single performance obligation, constituting a series, to manage and administer various non-clinical aspects of a customer’s physician practice, which may be comprised of numerous physical office locations. Consideration for PM services is typically variable in nature and allocated to and recognized over the related time period as the amounts reflect the consideration the Company is entitled to and relate specifically to the Company’s effort to satisfy its performance obligation. PM services fees are invoiced on a monthly basis and payment terms are typically 30 days. Bundled Services Modular RCM solutions may be sold separately or bundled in a contract. End-to-end RCM services are typically sold separately but may be bundled with PAS. PAS are commonly sold separately. The typical length of an end-to-end RCM contract is to ten years (subject to the parties’ respective termination rights) but varies from customer to customer. Modular RCM agreements generally vary in length between and three years. For bundled arrangements, the Company accounts for individual services as a separate performance obligation if a service is separately identifiable from other items in the bundled arrangement and if a customer can benefit from it on its own or with other resources that are readily available to the customer. Revenue for the individual services is recognized ratably as services are performed, which is materially within the same accounting period for the services in the bundle. PAS are provided at a customer’s election but do not represent material rights as the services are priced at standalone selling price throughout the life of the agreement. Cost of Services Cost of services consist of (i) on-site personnel and technology costs, (ii) global business services costs, and (iii) other costs. On-site personnel and technology costs consist primarily of wages, bonuses, benefits, share-based compensation, travel, and other costs associated with employees who are assigned to customer sites to help manage the Company’s customers’ revenue cycle operations. The other significant portion of such expenses is an allocation of the costs associated with maintaining, improving, and deploying our integrated proprietary technology suite. Global business services costs relate to the Company’s global business services centers in the U.S. and internationally that perform patient scheduling and pre-registration, medical transcription, cash posting, reconciliation of payments to billing records, patient follow-up, and Medicaid eligibility determination for our customers. The Company incurs expenses related to salaries and benefits for employees in its global business services centers and non-payroll costs associated with operating its global business services centers. Other expenses consist of costs related to managing other services. These expenses consist primarily of wages, bonuses, benefits, rent, share-based compensation, amortization of intangible assets, assumed vendor contracts for onboarded customers, and other costs. Costs associated with generating the Company’s net services revenue are expensed as incurred, with the exception of deferred contract costs, which are certain costs associated with the initial phases of customer contracts and the related transition of customer hospitals and physician groups that are deferred. These fulfillment costs relate directly to the Company’s responsibilities under the corresponding customer contracts, generate or enhance resources of the Company that will be used in satisfying its performance obligations in the future, and are expected to be recovered through the margins realized. The following table summarizes the breakout of deferred contract costs:
The associated assets are amortized as services are transferred to the customer over the remaining life of the contracts. For the years ended December 31, 2022 and 2021, total amortization was $8.3 million and $4.6 million, respectively, and there were no associated impairment losses. Comprehensive Income Comprehensive income is the net income of the Company combined with other changes in stockholders’ equity not involving ownership interest changes. For the Company, such changes are foreign currency translation adjustments and changes in derivatives designated as cash flow hedges. Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cloud Computing Arrangements The Company capitalizes qualifying set-up and implementation costs related to the Company’s cloud computing arrangements. The deferred costs are amortized over the term of the associated cloud computing arrangement on a straight-line basis unless another systematic and rational basis is more representative of the pattern in which the Company expects to benefit from access to the cloud computing arrangement. Capitalized cloud computing implementation costs are presented in prepaid expenses and other current assets and other assets on the Consolidated Balance Sheets. As of December 31, 2022 and 2021, the Company had net capitalized cloud computing implementation costs of $6.8 million and $8.6 million, respectively. Property, Equipment and Software Property, equipment and software are stated at cost, and related depreciation and amortization are calculated on the straight-line method over the estimated useful lives of the assets. The Company capitalizes qualifying internal and third-party costs and hardware and software costs related to the Company’s software development activities. The Company amortizes the capitalized software development costs over their estimated life on a straight-line basis. The major classifications of property, equipment and software and their expected useful lives are as follows:
Property, equipment and software consist of the following:
Property, equipment and software, net, located internationally was $20.3 million and $13.9 million as of December 31, 2022 and 2021, respectively. The remaining property, equipment and software was located in the U.S. The following table summarizes the allocation of depreciation and amortization expense between cost of services and selling, general and administrative expenses:
Impairment of Long-Lived Assets Property, equipment, software, right-of-use (“ROU”) assets, deferred contract costs, and other acquired intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If circumstances require a long-lived asset or asset group be reviewed for possible impairment, the Company first compares undiscounted cash flows expected to be generated by each asset or asset group to its carrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment charge is recognized to the extent that the carrying value exceeds the fair value. There was no material impairment of property, equipment, software, deferred contract costs, or other acquired intangible assets for the years ended December 31, 2022, 2021, and 2020. For the years ended December 31, 2022, 2021, and 2020, we impaired ROU assets and related leasehold improvements related to leased facilities which we exited. See Note 8, Leases, and Note 14, Other, for more information. Accrued Compensation and Benefits Accrued compensation and benefits consists of accrued payroll, bonus, paid time off, health benefits, severance, and compensation and benefits related taxes. Fair Value of Financial Instruments The Company records its financial assets and liabilities at fair value. The accounting standard for fair value (i) defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date, (ii) establishes a framework for measuring fair value, (iii) establishes a hierarchy of fair value measurements based upon the ability to observe inputs used to value assets and liabilities, (iv) requires consideration of nonperformance risk, and (v) expands disclosures about the methods used to measure fair value. The accounting standard establishes a three-level hierarchy of measurements based upon the reliability of observable and unobservable inputs used to arrive at fair value. Observable inputs are independent market data, while unobservable inputs reflect the Company’s assumptions about valuation. The three levels of the hierarchy are defined as follows: •Level 1: Observable inputs such as quoted prices in active markets for identical assets and liabilities; •Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and •Level 3: Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. The carrying amounts of the Company’s financial instruments, which include financial assets and liabilities such as cash and cash equivalents, restricted cash equivalents, accounts receivable, net, accounts payable, accrued service costs, accrued compensation and benefits, and certain other current assets and accrued expenses, approximate their fair values, due to their short-term nature. See Note 11, Derivative Financial Instruments, for a discussion of the fair value of the Company’s forward currency derivative contracts and interest rate swaps. The Company believes the carrying value of the senior revolver and term loans (see Note 10, Debt) approximates fair value as they are variable rate bank debt. Other than the items discussed above, the Company does not have any financial assets or liabilities that are required to be measured at fair value on a recurring basis. Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using current tax laws and enacted tax rates in effect for the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company records a valuation allowance for deferred tax assets if, based upon the weight of all available evidence, both positive and negative, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the relevant tax authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest amount of benefit that has a greater than 50% percent likelihood of being realized upon ultimate settlement. Interest and penalties relating to income taxes are recognized in our income tax provision in the consolidated statements of operations and comprehensive income. Legal and Other Contingencies In the normal course of business, the Company is subject to regulatory investigations or legal proceedings, as well as demands, claims and threatened litigation. The Company records an estimated loss for any claim, lawsuit, investigation or proceeding when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Significant judgment is required in both the determination of the probability and whether the loss can be reasonably estimated. Actual expenses could differ from such estimates. Foreign Currency Translation and Transaction Gains (Losses) Assets and liabilities of non-U.S. subsidiaries that operate in a local currency environment, where such local currency is the functional currency, are translated to U.S. dollars at exchange rates in effect at the balance sheet date. As of December 31, 2022 and 2021, the Company had net assets of $81.5 million and $51.0 million in foreign entities, respectively. Income and expense accounts are translated at average exchange rates during the year which approximates the rates in effect at the transaction dates. The resulting translation adjustments are recorded as a separate component of accumulated other comprehensive income (loss). Share-Based Compensation Expense The Company determines the expense for all employee share-based compensation awards by estimating their fair value and recognizing such value as an expense, on a ratable basis, in the consolidated financial statements over the requisite service period in which the employees earn the awards. Performance-based stock awards are recognized in expense when the performance metrics are probable to be achieved. Changes in the estimate of achievement of the performance metrics are recognized in the period of the change through a cumulative catch-up. The Company assesses the performance metrics in its awards on a quarterly basis to determine if a cumulative catch-up is necessary. The fair value of stock options is calculated using the Black-Scholes option pricing model. For the year ended December 31, 2022, the number of options granted (24,344) was immaterial. As part of the transactions contemplated by the Transaction Agreement, equity awards held by certain employees of Cloudmed (“Former Class P Units”) were modified, through a series of transactions, into awards (“Management Units”) of CoyCo 2. Certain Former Class P Units that were subject to performance-based vesting conditions did not become vested upon the closing of the Cloudmed Acquisition (“Unvested Units”). The Management Units issued by CoyCo 2 are treated as share-based compensation under ASC 718, Compensation - Stock Compensation. The Unvested Units are not awards of the Company and the participants will receive no additional shares of the Company upon satisfaction of the vesting criteria described in Note 13, Share-Based Compensation. However, GAAP requires the Company recognize the cost of share-based compensation granted by an investor (CoyCo 2) to the Company’s employees and service providers for services that benefit the Company’s operations (hereafter, “CoyCo 2 share-based compensation expense”), and a corresponding capital contribution because the costs are incurred on the Company’s behalf. A Monte Carlo simulation was used to estimate the fair value of the Unvested Units. The Company recognizes compensation expense using a straight-line method over the applicable service or performance period. During each quarter, the share-based compensation expense is adjusted to reflect forfeitures during the period. Treasury Stock The Company records treasury stock at the cost to acquire such shares, including commissions paid to brokers. Treasury stock is included as a component of stockholders’ equity. Earnings (Loss) Per Share Basic net income per share is computed by dividing net income, less any dividends, accretion or decretion, redemption or induced conversion on the preferred stock, by the weighted average number of common shares outstanding during the period. As the preferred stock formerly but no longer in issue (as defined in Note 12) participates in dividends alongside the Company’s common stock (per their participating dividends), the preferred stock would constitute participating securities under ASC 260-10, Earnings Per Share, and are applied to earnings per share using the two-class method. Under this method, all earnings (distributed and undistributed) are allocated to common shares and participating securities based on their respective rights to receive dividends. Diluted net income per share is calculated by adjusting the denominator used in the basic net income per share computation by potentially dilutive securities outstanding during the period plus, when their effect is dilutive, incremental shares consisting of shares subject to stock options, restricted stock units (“RSUs”), performance-based restricted stock units (“PBRSUs”), and shares issuable upon conversion of preferred stock. Recently Issued Accounting Standards and Disclosures In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”). ASU 2021-08 requires companies to apply Topic 606, Revenue from Contracts with Customers, to recognize and measure contract assets and contract liabilities obtained in a business combination. The ASU amendments will generally result in the recognition of contract assets and contract liabilities by the acquirer at amounts consistent with those recorded by the acquiree immediately before the acquisition date. The Company prospectively adopted ASU 2021-08 effective April 1, 2022 and preliminarily recognized contract assets of $92.4 million and contract liabilities of $3.3 million as part of the Cloudmed Acquisition. In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”). ASU 2022-03 clarifies that a contractual sale restriction on an equity security should not be considered in measuring the security’s fair value. The Company will adopt ASU 2022-03 prospectively effective January 1, 2024 and is currently evaluating the impact of the standard on its consolidated financial statements.
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Acquisitions |
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| Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Acquisitions | Acquisitions Assets acquired and liabilities assumed in a business combination are recorded at their estimated fair value on the date of the acquisition. The difference between the purchase price amount and the net fair value of assets acquired and liabilities assumed is recognized as goodwill on the balance sheet if the purchase price exceeds the estimated net fair value or as a bargain purchase gain on the income statement if the purchase price is less than the estimated net fair value. The allocation of the purchase price may be modified up to one year after the acquisition date as more information is obtained about the fair value of assets acquired and liabilities assumed. Cloudmed On June 21, 2022, the Company completed the acquisition of Cloudmed for a purchase price of $3.3 billion. The following table summarizes the fair value of the total consideration paid:
(1) The stock consideration fair value includes a 12.5% discount for lack of marketability factor related to an 18-month lock-up period during which the Sellers may not sell their Company common stock. (2) Cash consideration includes the repayment of Cloudmed’s pre-existing credit facility that was paid off at closing and was not assumed by the Company. (3) Represents the pre-acquisition service portion of the fair value of 1,536,220 replacement RSUs issued to Cloudmed equity award holders at closing. The Company funded the cash consideration component and the Company’s associated transaction expenses with a combination of cash on hand and the incurrence of additional indebtedness (see Note 10, Debt). The purchase price has been provisionally allocated to assets acquired and liabilities assumed based on their fair value as of the acquisition date. The fair value estimate of assets acquired and liabilities assumed is pending the completion of various elements, including gathering further information about the identification and completeness of all assets and liabilities acquired, the finalization of an independent appraisal and valuation of the fair value of the assets acquired and liabilities assumed, and final review by the Company’s management. Some of the more significant amounts that are not yet finalized relate to the fair value of intangible assets (including goodwill), contract assets, and income and non-income related taxes. Accordingly, management considers the balances shown in the following table to be preliminary, and there could be adjustments to the consolidated financial statements, including changes in our amortization expense related to the valuation of intangible assets acquired and their respective useful lives, among other adjustments. The preliminary fair value of assets acquired and liabilities assumed is:
The intangible assets identified in conjunction with the Cloudmed Acquisition and their preliminary fair values are as follows:
The goodwill recognized is primarily attributable to growth and cost reduction synergies that are expected to be achieved from the integration of Cloudmed. None of the goodwill is expected to be deductible for income tax purposes. Included in the Consolidated Statements of Operations and Comprehensive Income (Loss) for the year ended December 31, 2022 are net sales of $260.0 million and net loss before income taxes of $10.7 million related to the operations of Cloudmed since the acquisition date of June 21, 2022. Measurement period adjustments The Company had various measurement period adjustments due to an updated valuation report and additional information received since the Cloudmed Acquisition. The significant adjustments during the three months ended December 31, 2022 included a $3.5 million decrease to intangible assets related to updated assumptions and information included in the valuation report, an increase to the deferred income tax liability of $103.4 million related to updated tax return information, and an offset of these changes to goodwill. In conjunction with the adjustments, the Company adjusted amortization expense in the three months ended December 31, 2022. Prior Acquisitions During 2021, the Company acquired the following business:
In 2020, the Company purchased certain assets related to the RevWorks services business from Cerner Corporation. In accordance with the purchase agreement, the Company paid the first deferred payment of $12.5 million in the third quarter of 2021. The remaining deferred payment of $12.5 million was payable on the second anniversary of the closing date (August 2022) and is included in other accrued expenses on the Consolidated Balance Sheet as of December 31, 2022 as it had not been paid as of such date. The two deferred payments related to the RevWorks acquisition were contractual obligations of the Company; however, they are refundable to the Company if certain RevWorks customer revenue targets defined in the purchase agreement for the first two years following the acquisition are not achieved. The parties are currently engaged in arbitration to finalize the remaining deferred payment and contingently refundable consideration amounts. The contingently refundable consideration is stated at an amount approximating the amount expected to be realized. Pro Forma Results (Unaudited) The following table summarizes, on a pro forma basis, the combined results of the Company as though the Cloudmed Acquisition had occurred as of January 1, 2021 and the VisitPay acquisition had occurred as of January 1, 2020. These pro forma results are not necessarily indicative of the actual consolidated results had the acquisitions occurred as of those dates or of the future consolidated operating results for any period. Pro forma results are:
Adjustments were made to earnings to adjust depreciation and amortization to reflect the fair value of identified assets acquired, to adjust share-based compensation expense for awards granted in connection with the acquisitions, to record the effects of extinguishing the debt of the acquired companies and replacing it with the debt of the Company, to adjust timing of acquisition related costs incurred by the Company, and to record the income tax effect of these adjustments.
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Intangible Assets |
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| Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Intangible Assets | Intangible Assets The following table provides the gross carrying value and accumulated amortization for each major class of definite-lived intangible assets at December 31, 2022 and December 31, 2021:
The fair value of the identifiable intangible assets was derived utilizing an income approach to derive the present value of future cash flows from developed technology, customer relationships, tradename, and favorable leasehold interests. Intangible asset amortization expense was $117.4 million, $22.9 million, and $18.1 million for the years ended December 31, 2022, 2021, and 2020 respectively. Amortization expense for intangible assets is included in cost of services on the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss). The Company has no indefinite-lived intangible assets. Estimated annual amortization expense related to intangible assets with definite lives as of December 31, 2022 is as follows:
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Goodwill |
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| Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill | Goodwill Goodwill represents the difference between the purchase price of acquired companies and the related fair value of the net assets acquired, which applies the acquisition method of accounting. Changes in the carrying amount of goodwill for the year ended December 31, 2022 were:
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Revenue Recognition |
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| Revenue Recognition | Revenue Recognition Disaggregation of Revenue In the following table, revenue is disaggregated by source of revenue:
(1) Modular and other revenue primarily consists of service fees related to Cloudmed and revenue integrity solutions, PM services, PAS, and software subscription revenue. Contract Balances The following table provides information about contract assets, net and contract liabilities from contracts with customers:
(1) Current contract liabilities include $7.6 million and $7.8 million classified in the current portion of customer liabilities and $2.1 million and $2.5 million classified in the current portion of customer liabilities - related party as of December 31, 2022 and 2021, respectively. (2) Non-current contract liabilities include $5.0 million and $3.3 million classified in the non-current portion of customer liabilities and $13.7 million and $15.4 million classified in the non-current portion of customer liabilities - related party as of December 31, 2022 and 2021, respectively. The contract assets, net balance will increase or decrease based on the timing of invoices and recognition of revenue. Prior to the Cloudmed Acquisition, the Company did not have significant contract assets. Significant changes in the carrying amount of contract assets, net for the six months ended December 31, 2022 were as follows:
(1) Other primarily includes measurement period adjustments to the contract assets acquired from the Cloudmed Acquisition. A contract asset is recorded when the Company has recognized revenue but does not yet have the right to invoice. A receivable is recognized in the period the Company provides services when the Company’s right to consideration is unconditional. Payment terms on invoiced amounts are typically 30-60 days. The Company recognized revenue of $94.8 million and $98.0 million during the years ended December 31, 2022 and 2021, which amounts were included in contract liabilities on January 1 of the respective periods. These revenue amounts include $85.8 million and $88.1 million for the years ended December 31, 2022 and 2021, respectively, related to advanced billings which become accounts receivable and contract liabilities on the first day of the respective service period. Refer to Note 3, Acquisitions, for the preliminary contract assets acquired and contract liabilities assumed as part of the Cloudmed Acquisition. Transaction Price Allocated to the Remaining Performance Obligation The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period. The estimated revenue does not include amounts of variable consideration that are constrained.
The amounts presented in the table above include variable fee estimates of the Company’s physician groups RCM services contracts, fixed fees, and forecasted incentive fees. Fixed fees are typically recognized ratably as the performance obligation is satisfied and forecasted incentive fees are measured cumulatively over the contractually defined performance period. Estimates of revenue expected to be recognized in future periods also exclude unexercised customer options to purchase services within the Company’s PAS contracts that do not represent material rights to the customer. The Company does not disclose information about remaining performance obligations with an original expected duration of one year or less. The Company has elected certain of the optional exemptions from the disclosure requirement for remaining performance obligations for specific situations in which an entity need not estimate variable consideration to recognize revenue. Accordingly, the Company applies a practical expedient to its modular RCM solutions and does not disclose information about variable consideration from remaining performance obligations when the Company has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the entity’s performance completed to date. PAS performance obligations are typically short in duration (often less than 1 day) with any uncertainty related to the associated variable consideration resolved as each increment of service (completion of a level of care review or an appeal) is completed which reflects the value the customer receives from the Company’s fulfillment of the performance obligation. Modular RCM solutions performance obligations for variable consideration are of short duration with fees corresponding to the value the customer has realized, for example, patient accounts collected on behalf of the customer or medical record lines transcribed. For end-to-end RCM contracts, the Company does not disclose information about remaining, wholly unsatisfied performance obligations for variable consideration that the Company is able to allocate to one or more, but not all, of the performance obligations in its contracts. The Company’s end-to-end RCM services performance obligations are satisfied over time and are substantially the same from period to period under either a co-managed or operating partner model. Fees are variable and consist of net operating fees and incentive fees, with the uncertainty related to net operating fees and certain incentive fees being resolved quarterly, and with the uncertainty of other incentive fees being resolved annually. The information presented in the table above includes estimates for incentive fees where the uncertainty related to the final fee is resolved on longer than a quarterly basis and to the extent the Company does not believe the associated consideration is constrained.
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| Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accounts Receivable and Allowance for Credit Losses | Accounts Receivable and Allowance for Credit Losses Accounts receivable is comprised of unpaid balances pertaining to modular solutions and end-to-end RCM customers, net receivable balances for end-to-end RCM customers after considering cost reimbursements owed to such customers, including related accrued balances, and amounts due from physician RCM and PM customers. The Company evaluates its accounts receivable for expected credit losses quarterly. The Company maintains an estimated allowance for credit losses to reduce its accounts receivable to the amount that it believes will be collected. This allowance is based on the Company’s historical experience, its assessment of each customer’s ability to pay, the length of time a balance has been outstanding, input from key Company resources assigned to each customer, the status of any ongoing operations with each applicable customer, and business and industry factors such as significant shifts in the healthcare environment which the Company believes may have impacted or will impact its customers’ financial health and ability to pay. During the year ended December 31, 2022, the Company increased the allowance for credit losses related to a physician customer by $9.6 million due to the customer facing financial challenges and its resulting inability to make a contractually required payment during the year. As a result of reviewing the potential expected outcomes related to this customer, the Company holds an allowance for credit losses of $10.1 million related to an overall receivable balance of $32.6 million as of December 31, 2022. The Company has presented the rollforward below on a consolidated basis as the currently expected credit losses for its large integrated healthcare system customers are not anticipated to be material. Movements in the allowance for credit losses related to accounts receivable are as follows:
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Leases |
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| Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases | Leases The Company determines if an arrangement is a lease at inception. The Company has operating leases for corporate offices, operational facilities, global business services centers, and certain equipment. Operating leases with terms greater than one year at commencement are included in operating lease ROU assets and operating lease liabilities (current and non-current) on the Consolidated Balance Sheets. Operating ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the incremental borrowing rate, determined based on the information available at the lease commencement date, is used in calculating the present value of lease payments. ROU assets also include any lease prepayments made and excludes any lease incentives. The Company’s leases may include options to extend the lease term and the Company’s determination of the likely lease term incorporates these options when it is reasonably certain that they will be exercised. The Company elected to not separate lease and non-lease components for building and equipment leases. The Company will account for the lease and non-lease components, such as fixed service charges, as a single lease component. For leases with an initial term of 12 months or less, expense is recognized on a straight-line basis over the lease term. Leases have remaining lease terms of up to 11 years, some of which include options to extend the leases for up to 10 years. In circumstances where there are significant foreign tax incentives, the Company has determined it to be reasonably certain to exercise the renewal options. The Company subleases certain office spaces to third parties. The components of lease costs are as follows:
The following table summarizes the supplemental information related to operating leases:
(1) This amount includes ROU assets acquired from the Cloudmed Acquisition. For details on the preliminary ROU assets acquired and liabilities assumed, refer to Note 3, Acquisitions. The Company presents all non-cash charges related to any modification or reassessment events triggering remeasurement, and obtaining new leases for non-cash consideration that result in adjustments to the lease liability or ROU asset as non-cash transactions. As part of evaluating its footprint, the Company exited certain leased facilities. During the three months ended December 31, 2022, the Company recorded ROU asset and related leasehold improvement impairments of $17.0 million as a result of decisions to exit various leases acquired as part of the Cloudmed Acquisition. Maturities of lease liabilities as of December 31, 2022 are as follows:
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Customer Liabilities |
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| Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Customer Liabilities | Customer Liabilities Customer liabilities include (i) accrued service costs (amounts due and accrued for cost reimbursements), (ii) collections payable to clients (consisting primarily of amounts collected on behalf of the Company’s physician group customers to be remitted within twelve months), (iii) customer deposits (consisting of amounts due as a refund to the Company’s customers on base fees and incentive fees), (iv) refund liabilities (amounts potentially due as a refund to the Company’s customers on incentive fees), and (v) deferred revenue (contract liabilities) (fixed or variable fees amortized to revenue over the service period). Customer liabilities consist of the following:
(1) Current and non-current portion of customer liabilities include amounts for a related party. See Note 19, Related Party Transactions, for further discussion.
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Debt |
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| Debt Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt | Debt The carrying amounts of debt consist of the following:
(1) As of December 31, 2022, the Company had $100.0 million in borrowings, $0.9 million letters of credit outstanding, and $499.1 million of availability under the senior secured revolving credit facility (“Senior Revolver”). Second Amended and Restated Senior Secured Credit Facilities On July 1, 2021, the Company and certain of its subsidiaries entered into an amended and restated senior credit agreement (the “A&R Credit Agreement”) with Bank of America, N.A., as administrative agent, and the lenders named therein, and governing credit facilities consisting of a $700.0 million senior secured term loan facility and a $450.0 million senior revolver. The proceeds from the A&R Credit Agreement, in addition to cash on hand, were used to refinance, in full, all debt under the existing credit agreement, which consisted of a $325.0 million senior secured term loan facility and a $100.0 million senior secured revolving credit facility, and to fund the VisitPay acquisition. For the year ended December 31, 2021, the carrying amounts of debt presented in the table above were incurred under the A&R Credit Agreement. On June 21, 2022, the Company and certain of its subsidiaries entered into a second amended and restated senior credit agreement (the “Second A&R Credit Agreement”) with Bank of America, N.A., as administrative agent, and the lenders named therein, governing the Company’s second amended and restated senior secured credit facilities (the “Senior Secured Credit Facilities”), was executed and consisted of the $691.3 million existing senior secured term loan A facility (the “Existing Term A Loan”), a $540.0 million senior secured incremental term loan A facility (the “Incremental Term A Loan,” and together with the Existing Term A Loan, the “Term A Loans”), a $500.0 million senior secured term loan B facility (the “Term B Loan,” and together with the Term A Loans, the “Senior Term Loans”), and a $600.0 million Senior Revolver. In conjunction with entering into the Second A&R Credit Agreement, the Company incurred $7.2 million and capitalized $6.4 million of debt issuance costs. The Incremental Term A Loan has a five-year maturity and the Term B Loan has a seven-year maturity. The Existing Term A Loan and Senior Revolver mature on July 1, 2026. The Second A&R Credit Agreement provides that the Company may make one or more offers to the lenders, and consummate transactions with individual lenders that accept the terms contained in such offers, to extend the maturity date of the lender’s term loans and/or revolving commitments, subject to certain conditions, and any extended term loans or revolving commitments will constitute a separate class of term loans or revolving commitments. Borrowings under the Senior Secured Credit Facilities bear interest, at the Company’s option, at: (i) an Alternate Base Rate (“ABR”) equal to the greater of (a) the prime rate of Bank of America, N.A., (b) the federal funds rate plus 0.50% per annum, and (c) the Term Secured Overnight Financing Rate (“SOFR”) for an interest period of one-month beginning on such day plus 100 basis points, plus between 0.25% and 1.50% dependent on the Company’s total net leverage ratio (provided that the Term SOFR rate applicable to the Term A Loans shall not be less than 0.00% per annum, and the Term SOFR rate applicable to the Term B Loan shall not be less than 0.50% per annum); or (ii) the Term SOFR rate (provided that the Term SOFR rate applicable to the Term A Loans shall not be less than 0.00% per annum, and the Term SOFR rate applicable to the Term B Loan shall not be less than 0.50% per annum), plus between 1.25% and 2.50%, dependent on the Company’s total net leverage ratio. The interest rate as of December 31, 2022 was 6.57% for the Term A Loans and Senior Revolver and 7.32% for the Term B Loan. The Company is also required to pay an unused commitment fee to the lenders under the Senior Revolver at a rate between 0.20% and 0.40% of the average daily unutilized commitments thereunder dependent on the Company’s total net leverage ratio. The Second A&R Credit Agreement requires the Company to make mandatory prepayments, subject to certain exceptions, with: (i) beginning with fiscal year ending December 31, 2023, 50% (which percentage will be reduced upon the Company’s achievement of certain total net leverage ratios) of the Company’s annual excess cash flow, (ii) 100% of net cash proceeds of all non-ordinary course asset sales or other dispositions of property or casualty events, subject to certain exceptions and thresholds, and (iii) 100% of the net cash proceeds of any debt incurrence, other than debt permitted under the Second A&R Credit Agreement. The Second A&R Credit Agreement contains several financial and non-financial covenants. The Company was in compliance with all of the covenants in the Second A&R Credit Agreement as of December 31, 2022. The obligations under the Second A&R Credit Agreement are secured by a pledge of 100% of the capital stock of certain domestic subsidiaries owned by the Company and a security interest in substantially all of the Company’s tangible and intangible assets and the tangible and intangible assets of certain domestic subsidiaries. The proceeds from the new Senior Secured Credit Facilities were or will be used, in addition to cash on hand, (1) to refinance, in full, all existing indebtedness under the A&R Credit Agreement, and amend and restate all commitments thereunder (the “Refinancing”), (2) to pay certain fees and expenses incurred in connection with the entry into the Second A&R Credit Agreement and the Refinancing, (3) to fund the 2022 Transactions, and to pay the fees, premiums, expenses, and other transaction costs incurred in connection therewith, and (4) to finance working capital needs of the Company and its subsidiaries for general corporate purposes. Debt Maturities Scheduled maturities of the Company’s long-term debt for each of the five years succeeding December 31, 2022 and thereafter are summarized as follows:
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Derivative Financial Instruments |
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| Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative Financial Instruments | Derivative Financial Instruments The Company actively manages the risk of changes in foreign currency exchange rates and change in interest rates through non-deliverable foreign currency forward contracts and interest rate swap contracts traded in over-the-counter markets governed by International Swaps and Derivatives Association, Inc. (ISDA) agreements. Positions are monitored using techniques such as market value and sensitivity analyses. The Company does not enter into derivative transactions for speculative purposes. The change in fair value of a hedging instrument is recorded in accumulated other comprehensive loss as a separate component of stockholders’ equity and is reclassified into either cost of services or interest expense in the consolidated statement of operations and comprehensive income during the period in which the hedged transaction impacts earnings. Fair values for derivative financial instruments are based on prices computed using third-party valuation models and are classified as Level 2 in accordance with the three-level hierarchy of fair value measurements. The Company utilizes cash flow hedges to manage its currency risk arising from its global business services centers. As of December 31, 2022, the Company has recorded $0.4 million of unrealized losses in accumulated other comprehensive income related to foreign currency hedges. The Company estimates that $0.4 million of losses reported in accumulated other comprehensive income are expected to be reclassified into earnings within the next 12 months. Amounts reclassified into cost of services were a net loss of $1.4 million and a net gain of $1.4 million for the years ended December 31, 2022 and 2021, respectively. As of December 31, 2022, the Company’s foreign currency forward contracts have maturities extending no later than December 31, 2023, and had total notional value of $126.4 million. As of December 31, 2021, the total notional amount of the Company’s foreign currency forward contracts was $84.3 million. The Company also utilizes cash flow hedges to reduce variability in interest cash flows from its outstanding debt. As of December 31, 2022, the Company has recorded $13.7 million of unrealized gains in accumulated other comprehensive income related to interest rate swaps. The Company estimates that $8.7 million of gains reported in accumulated other comprehensive income are expected to be reclassified into earnings within the next 12 months. Amounts reclassified into interest expense were a net loss of $0.2 million and $1.5 million for the years ended December 31, 2022 and 2021. As of December 31, 2022, the Company’s interest rate swaps extend no later than June 30, 2025 and had total notional amounts of $500.0 million. As of December 31, 2021, the total notional amount of the Company’s interest rate swaps was $100.0 million. The location and fair value of derivative instruments designated as hedges in the Consolidated Balance Sheets as of December 31, 2022 and December 31, 2021 are as follows:
As of December 31, 2022 and December 31, 2021, the accumulated gain, net of tax, recognized in accumulated other comprehensive loss was $9.9 million and $0.7 million, respectively. The Company classifies cash flows from its derivative programs as cash flows from operating activities in the consolidated statements of cash flows. As of December 31, 2022, the Company held no derivatives, or non-derivative hedging instruments, that were designated in fair value or net investment hedges. On July 5, 2022, the Company entered into an agreement with a third party regarding the potential purchase of a business that would expand the service capabilities of the Company. This agreement is effective through approximately the end of 2023 and allows the other party to sell the business to the Company for $150.0 million, subject to the negotiation of a definitive agreement and the satisfaction of agreed upon closing conditions, including the requirement that the purchase price be deemed to be fair value at the time of the potential transaction. The parties, assuming an agreement is reached, would also need to reach agreement as to whether the purchase price would be paid in cash or shares of common stock of the Company.
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Stockholders' Equity |
12 Months Ended |
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Dec. 31, 2022 | |
| Equity [Abstract] | |
| Stockholders' Equity | Stockholders’ Equity Preferred Stock and Warrants As of December 31, 2022 and 2021, the Company had 5,000,000 shares of authorized preferred stock, with a par value of $0.01. The preferred stock may be issued from time to time in one or more series. The Board of Directors of the Company (“Board”) is authorized to determine the rights, preferences, privileges, and restrictions of the Company’s authorized but unissued shares of preferred stock. On February 16, 2016, at the close of the 2016 Transaction, the Company issued to TCP-ASC ACHI Series LLLP (“TCP-ASC”), a limited liability limited partnership jointly owned by Ascension Health Alliance and investment funds affiliated with TowerBrook: (i) 200,000 shares of its 8.00% Series A Convertible Preferred Stock, par value $0.01 per share (the “Series A Preferred Stock” or “Preferred Stock”), for an aggregate price of $200 million and (ii) an exercisable warrant to acquire up to 60 million shares of its common stock with an exercise price of $3.50 per common share and a term of ten years. The Series A Preferred Stock was immediately convertible into shares of common stock. As of December 31, 2022 and 2021, the Company had zero shares of Series A Preferred Stock outstanding. The Series A Preferred Stock was converted to common stock on January 15, 2021. See Note 16, 8.00% Series A Convertible Preferred Stock, for additional information. On January 23, 2018, the Company issued an exercisable warrant to acquire up to 1.5 million shares of its common stock with an exercise price of $6.00 per common share to IHC Health Services, Inc (“Intermountain”). As of December 31, 2022 and 2021, 42.0 million total warrants were outstanding for TCP-ASC and Intermountain. Common Stock Each outstanding share of the Company’s common stock, par value $0.01 per share, is entitled to one vote per share on all matters submitted to a vote by shareholders. Subject to the rights of any preferred stock which may from time to time be outstanding, the holders of outstanding shares of common stock are entitled to receive dividends and, upon liquidation or dissolution, are entitled to receive pro rata all assets legally available for distribution to stockholders. No dividends were declared or paid on the common stock during 2022 or 2021. Treasury Stock On November 13, 2013, the Board authorized a repurchase of up to $50.0 million of the Company’s common stock in the open market or in privately negotiated transactions (the “2013 Repurchase Program”). Between October 1, 2021 and October 27, 2021, the Company finalized authorized repurchases under the 2013 Repurchase Program. On October 22, 2021, the Board adopted a new repurchase program and authorized the repurchase of up to $200.0 million of our common stock from time to time in the open market or in privately negotiated transactions (the “2021 Repurchase Program”). On January 9, 2022, the Board increased the authorization under the 2021 Repurchase Program to an aggregate amount of up to $500.0 million. The timing and amount of any shares repurchased under the 2021 Repurchase Program will be determined by the Company’s management based on its evaluation of market conditions and other factors. The 2021 Repurchase Program may be suspended or discontinued at any time at the sole discretion of the Board. Any repurchased shares will be available for use in connection with the Company’s stock plans and for other corporate purposes. The Company funds the repurchases from cash on hand. During the years ended December 31, 2022 and 2021, 2,080,518 and 2,629,257 shares were repurchased, respectively. No shares have been retired. As of December 31, 2022 and 2021, the Company held in treasury 10,031,168 and 7,950,650 shares of repurchased stock, respectively. Treasury stock also includes repurchases of Company stock related to employees’ tax withholding upon vesting of restricted shares. For the years ended December 31, 2022 and 2021, the Company repurchased 1,174,754 and 796,908 shares related to employees’ tax withholding upon vesting of restricted shares, respectively. See Note 13, Share-Based Compensation, for additional information.
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Share-Based Compensation |
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| Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-Based Compensation | Share-Based Compensation The Company maintains three stock incentive plans: the Amended and Restated Stock Option Plan (the “2006 Plan”), the Third Amended and Restated Stock 2010 Incentive Plan (the “2010 Amended Plan,” together with the 2006 Plan, the “Plans”), and the R1 RCM Inc. 2022 Inducement Plan (the “Inducement Plan”). In December 2016, the Company’s stockholders approved the Second Amended and Restated 2010 Stock Incentive Plan, which authorized the issuance of an additional 17 million shares of the Company’s common stock pursuant to awards. On May 20, 2021, the Company’s stockholders approved the Third Amended and Restated 2010 Stock Incentive Plan, which amended and restated the Company’s Second Amended and Restated 2010 Stock Incentive Plan and authorized the issuance of an additional 9.6 million shares of the Company’s common stock pursuant to awards. Under the Plans, the Company is authorized to issue up to a maximum of 55,974,756 shares of common stock. This number includes any shares that remained available for issuance under the 2006 Plan as of the date of the IPO and any shares subject to awards that were outstanding under the 2006 Plan as of the date of the IPO that expire, terminate or are otherwise surrendered, canceled, forfeited or repurchased by the Company without the issuance of shares thereunder. The Company will not make any further grants under the 2006 Plan. The 2010 Amended Plan provides for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, Restricted Stock Awards, RSUs, and other share-based awards. As of December 31, 2022, 7,348,028 shares were available for future grants of awards under the 2010 Amended Plan. To the extent that previously granted awards under the 2006 Plan or 2010 Amended Plan expire, terminate or are otherwise surrendered, canceled or forfeited, the number of shares available for future awards under the 2010 Amended Plan will increase. Under the terms of the Plans, all stock options will expire if they are not exercised within ten years of their grant date. Generally all employee options and RSUs vest ratably between and four years. On June 21, 2022, the Board adopted the Inducement Plan to accommodate equity grants to new employees of the Company hired in connection with the 2022 Transactions. Under the Inducement Plan, the Company may grant RSUs (including PBRSUs) with respect to up to a total of 6,225,000 shares of common stock to new employees. Pursuant to Rule 5635(c)(4) of the NASDAQ Listing Rules, the Inducement Plan was adopted without stockholder approval. The Inducement Plan only provides for the grant of RSUs (including PBRSUs), and its terms are otherwise substantially similar to the 2010 Amended Plan, including with respect to treatment of equity awards in the event of a “change in control” as defined under the Inducement Plan. In accordance with Rule 5635(c)(4) of the NASDAQ Listing Rules, awards under the Inducement Plan can only be made to individuals not previously employees or non-employee directors of the Company (or following such individuals’ bona fide period of non-employment with the Company), as an inducement material to the individuals’ entry into employment with the Company or in connection with a merger or acquisition, to the extent permitted by Rule 5635(c)(3) of the NASDAQ Listing Rules. As of December 31, 2022, 259,372 shares were available for future grants of awards under the Inducement Plan. However, to the extent that previously granted awards under the Inducement Plan expire, terminate or are otherwise surrendered, canceled or forfeited, the number of shares available for future awards under the Inducement Plan will increase. For the years ended December 31, 2022, 2021, and 2020, the Company recognized $9.8 million, $12.7 million, and $37.3 million, respectively, of income tax benefit from windfalls associated with vesting and exercises of equity awards The Company uses the Black-Scholes option pricing model to estimate the fair value of its service-based options as of their grant dates. The volatility for the options was calculated based on an analysis of historical volatility. The Company assesses current performance on performance-based PBRSUs by reviewing historical performance to date, along with any adjustments which have been approved to the reported performance, and changes to the projections to determine the probable outcome of the awards. The current estimates are then compared to the scoring metrics and any necessary adjustments are reflected in the current period to update share-based compensation expense to the current performance expectations. A Monte Carlo simulation was used to estimate the fair value of the Unvested Units, which are being amortized over a period of 4 years on a straight-line basis. The volatility for the Unvested Units was calculated based on an analysis of historical and implied volatility. The following table sets forth the significant assumptions used in the calculation of share-based compensation expense during 2022, 2021, and 2020:
Total share-based compensation costs that have been included in the Company’s consolidated statements of operations were as follows:
(1) Included in the share-based compensation expense above is $5.1 million of CoyCo 2 share-based compensation expense for the year ended December 31, 2022. See further discussion below. In addition to the share-based compensation expense recorded above, $0.3 million, $0.6 million, and $0.1 million of share-based compensation expense was capitalized to deferred contract costs for the years ended December 31, 2022, 2021, and 2020, respectively. See Note 2, Summary of Significant Accounting Policies, for further discussion. Stock options The following table sets forth a summary of all option activity under all plans for the years ended December 31, 2022, 2021, and 2020:
The weighted-average grant date fair value of options granted during the years ended December 31, 2022, 2021, and 2020 was $9.55, $9.34, and $4.41 per share, respectively. The total intrinsic value of the options exercised in the years ended December 31, 2022, 2021, and 2020 was $26.5 million, $38.2 million, and $30.5 million, respectively. The total fair value of options vested during the years ended December 31, 2022, 2021, and 2020 was $0.1 million, $1.4 million, and $2.2 million, respectively. Restricted stock units and performance-based restricted stock units The following table sets forth a summary of all RSU and PBRSU activity during the years ended December 31, 2022, 2021, and 2020:
Upon consummation of the Holding Company Reorganization, outstanding restricted units of Cloudmed were replaced by an aggregate 1,536,220 RSUs of the Company. The Company also issued an aggregate of 3,173,184 inducement RSUs and PBRSUs to certain employees of Cloudmed under Nasdaq Listing Rule 5635(c)(4) pursuant to its newly adopted 2022 Inducement Plan. The Company’s RSU and PBRSU agreements allow employees to surrender to the Company shares of common stock upon vesting of their RSUs and PBRSUs in lieu of their payment of the required personal employment-related taxes. Shares surrendered for payment of personal employment-related taxes are held in treasury. Outstanding PBRSUs vest upon satisfaction of both time-based and performance-based conditions. Depending on the award, performance condition targets may include cumulative adjusted EBITDA, end-to-end RCM agreement growth, modular sales revenue, or other specific performance factors. Depending on the percentage level at which the performance-based conditions are satisfied, the number of shares vesting could be between 0% and 200% of the number of PBRSUs originally granted. Based on the established targets, the maximum number of shares that could vest for all outstanding PBRSUs is 13,753,594. CoyCo 2, L.P. Limited Partnership Units Former Class P Units were originally issued to employees of Cloudmed and its affiliates (“Participants”) in connection with and as a part of the compensation and incentive arrangements between Cloudmed and such Participants prior to the consummation of the Cloudmed Acquisition. A portion of the Former Class P Units immediately vested upon the closing of the Cloudmed Acquisition. In connection with the Cloudmed Acquisition, Cloudmed caused the Former Class P Units, including the Unvested Units, to be converted into Management Units. At the time of the closing of the Cloudmed Acquisition, 97,875 Unvested Units were converted into 514,986 Management Units. In general, Unvested Units vest upon the achievement of certain performance criteria, including achievement by the Sellers’ owner, New Mountain Capital, L.L.C. (“New Mountain”), of (i) specified multiples of Base Equity Value (“BEV”) (i.e., generally the aggregate equity value of New Mountain’s investment in Cloudmed as of the original grant date), or (ii) specified Multiples on Invested Capital (“MIC”) with respect to New Mountain Capital’s pre-Cloudmed Acquisition investment in Cloudmed, and subject to continued service with the Company and its affiliates, including Cloudmed through the applicable vesting date.
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| Other Expenses | Other Expenses Other expenses are incurred in connection with acquisition and integration costs, various exit activities, transformation initiatives, and organizational changes to improve our business alignment and cost structure. The following table summarizes the other expenses (income) recognized for the years ended December 31, 2022, 2021, and 2020:
(1) These costs relate to restructuring and business reorganization events. (2) These are costs, including legal, consulting, and bank fees, that are directly related to the closing of business acquisitions and include changes to contingent consideration. (3) These costs reflect efforts to integrate acquisitions from a systems, processes, and people perspective and to achieve synergies expected from the transaction. Costs include consulting fees, IT vendor spend, severance, early lease termination of Cloudmed facilities, and certain payroll costs. (4) These costs relate to performing portfolio and capital structure analyses and transactions and other business transformation projects (including large scale system projects) as part of the Company’s growth strategy. Costs include vendor spend, employee time and expenses spent on activities, severance, and retention amounts. (5) These costs include legal and consulting fees related to the establishment of the Company’s inaugural global business services center in the Philippines as well as severance costs for personnel whose roles are being relocated. The entry into the Philippines is the first new organic global business services center country expansion by the Company in approximately 15 years. (6) As part of the transition of customer personnel to the Company under certain operating partner model contracts, the Company agreed to reimburse the customer, or directly pay affected employees, for severance and retention costs related to certain employees who were not transitioned to the Company, or whose jobs were relocated after the employee transitioned to the Company. (7) As part of evaluating its footprint, the Company has exited certain leased facilities. Costs include asset impairment charges, early termination fees, and other costs related to exited leased facilities (excluding early lease termination of Cloudmed facilities, which is included in (3) above). (8) For the years ended December 31, 2022, 2021, and 2020, other includes $2.5 million, $11.3 million, and $10.9 million, respectively, of expenses related to the COVID-19 pandemic.
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Income Taxes |
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| Income Tax Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income Taxes | Income Taxes The domestic and foreign components of income (loss) before income taxes consist of the following:
For the years ended December 31, 2022, 2021, and 2020, the Company’s current and deferred income tax expense (benefit) attributable to income from operations are as follows:
Reconciliation of the difference between the effective tax rate and the statutory U.S. federal income tax rate is as follows:
The following table sets forth the Company’s net deferred tax as of December 31, 2022 and 2021:
At December 31, 2022, the Company had cumulative U.S. federal and state net operating loss (“NOL”) carryforwards of approximately $181.5 million and $223.4 million, respectively, which are available to offset U.S. federal and state taxable income in future periods. These amounts include net operating losses acquired through acquisitions which are subject to Section 382 of the Internal Revenue Code. The general limitation rules allow the Company to utilize the net operating losses subject to an annual limitation that is determined by multiplying the federal long-term tax-exempt rate by the Company’s value immediately before the ownership change. The federal net operating losses will start to expire in 2024. 2017 Tax Reform subjects a U.S. shareholder to tax on Global Intangible Low-Taxed Income (“GILTI”) earned by certain foreign subsidiaries. An entity can make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or to provide for the tax expense related to GILTI in the year the tax is incurred. The Company has elected to recognize the tax on GILTI as a period expense in the period the tax is incurred. A valuation allowance is required to be established when, based on currently available information, it is more likely than not that all or a portion of a deferred tax asset will not be realized. The guidance on accounting for income taxes provides important factors in determining whether a deferred tax asset will be realized, including whether there has been sufficient taxable income in recent years and whether sufficient income can reasonably be expected in future years in order to utilize the deferred tax asset. Consideration is given to the weight of all available evidence, both positive and negative. The Company estimates its already contracted business growth will be profitable and allow the Company to utilize its NOL carryforwards and other deferred tax assets. Accordingly, the Company believes that it is more likely than not that the remaining deferred tax assets will be realized. Should the Company not operationally execute as expected, and the growth in business not be as profitable as expected, such realizability assessment may change. The Company has recorded valuation allowances at December 31, 2022 and 2021 of $7.1 million and $6.4 million, respectively, based on its assessment that it is more likely than not that a portion of the Company’s separate state income tax net operating loss will not be realized because the Company no longer has business activities in that state, or where the activity level has decreased to such a level where the Company believes the NOL will not be realized. The December 31, 2022 valuation allowance includes $3.4 million attributable to research and development credits and $2.2 million for a capital loss. The 2022, 2021, and 2020 foreign current tax provision includes $3.2 million, $3.0 million, and $2.4 million, respectively, for income taxes arising from the pre-tax income of the Company’s India subsidiaries. The tax provisions are net of the impact of a tax holiday in India. The Company’s benefits from this tax holiday were $4.9 million, $4.7 million, and $4.3 million for the years ended December 31, 2022, 2021, and 2020, respectively. The tax holidays are set to expire between March 31, 2024 and March 31, 2027. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. The Company’s unrecognized tax benefits as of December 31, 2022, 2021, and 2020 were not material. In connection with tax return examinations, contingencies can arise that generally result from different interpretations of tax laws and regulations as they pertain to the amount, timing or inclusion of revenues and expenses in taxable income, or the ability to utilize tax credits to reduce income taxes payable. While it is probable, based on the potential outcome of the Company’s federal and state tax examinations or the expiration of the statute of limitations for specific jurisdictions, that the liability for unrecognized tax benefits may increase or decrease within the next 12 months, the Company does not expect any such change would have a material effect on its financial condition, results of operations or cash flow. The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax of multiple state and foreign jurisdictions. U.S. federal income tax returns for 2018 and all subsequent years are currently open for examination. State jurisdictions vary for open tax years. The statute of limitations for most states ranges from to six years. Certain income tax returns since fiscal year 2009 for the Company’s India subsidiaries are currently open for final determination.
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8.00% Series A Convertible Preferred Stock |
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| Temporary Equity Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| 8.00% Series A Convertible Preferred Stock | 8.00% Series A Convertible Preferred Stock At the close of the 2016 Transaction on February 16, 2016 (as described in Note 1), the Company issued to TCP-ASC: (i) 200,000 shares of Preferred Stock, for an aggregate price of $200 million, and (ii) a warrant with a term of ten years to acquire up to 60 million shares of common stock at an exercise price of $3.50 per share, on the terms and subject to the conditions set forth in the Warrant Agreement (“Warrant”). On January 15, 2021, TCP-ASC converted all of its 294,266 shares of Preferred Stock into 117,706,400 shares of common stock of the Company into which the shares were convertible pursuant to the Certificate of Designation of the Preferred Stock, and, in consideration therefor, the Company (i) issued 21,582,800 additional shares of common stock to TCP-ASC, and (ii) paid TCP-ASC $105.0 million in cash. On January 19, 2021, the Company filed a Certificate of Elimination of 8.00% Series A Convertible Preferred Stock with the Secretary of State of the State of Delaware to eliminate the Certificate of Designations of the 8.00% Series A Convertible Preferred Stock. The consideration paid to induce the conversion was recorded as a dividend of $592.3 million and reduced income available to common shareholders in our earnings per share calculation. The dividend was calculated as the cash paid of $105.0 million plus the fair value on the conversion date of the additional 21,582,800 shares of common stock issued as consideration for the conversion. Dividend Rights The holders of the Preferred Stock were entitled to receive cumulative dividends January 1, April 1, July 1, and October 1 of each year (dividend payment dates), which commenced on April 1, 2016, at a rate equal to 8% per annum (preferred dividend) multiplied by the liquidation preference per share, initially $1,000 per share adjusted for any unpaid cumulative preferred dividends. As of December 31, 2020, the Company had accrued dividends of $5.8 million associated with the Preferred Stock, of which $5.8 million was paid in additional shares and $940 was paid in cash in January 2021. For the year ended December 31, 2020, the dividends paid, or accrued, in additional shares of Preferred Stock totaled $22.4 million. The following summarizes the Preferred Stock activity for the years ended December 31, 2021 and 2020:
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Earnings (Loss) Per Share |
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| Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Earnings (Loss) Per Share | Earnings (Loss) Per ShareBasic net income (loss) per share is computed by dividing net income (loss), less any dividends, accretion or decretion, redemption or induced conversion on the preferred stock, by the weighted average number of common shares outstanding during the period. As the preferred stock participated in dividends alongside the Company’s common stock (per their participating dividends), the preferred stock constituted participating securities under ASC 260-10, Earnings Per Share, and were applied to earnings per share using the two-class method. Under this method, all earnings (distributed and undistributed) were allocated to common shares and participating securities based on their respective rights to receive dividends. Diluted net income (loss) per share is calculated by adjusting the denominator used in the basic net income (loss) per share computation by potentially dilutive securities outstanding during the period plus, when their effect is dilutive, incremental shares consisting of shares subject to stock options, shares issuable upon vesting of RSUs and PBRSUs, and shares issuable upon conversion of preferred stock. Basic and diluted net income (loss) per common share are calculated as follows:
(1) The 2021 dividend on preferred shares includes amounts related to the conversion of the preferred shares. See Note 16, 8.00% Series A Convertible Preferred Stock, for more information. Because of their anti-dilutive effect, 20,090,009, 12,875,730, 97,244 common share equivalents comprised of stock options, PBRSUs, and RSUs have been excluded from the diluted earnings per share calculation for the years ended December 31, 2022, 2021, and 2020, respectively. Additionally, for the years ended December 31, 2022 and 2021, warrants to acquire up to 42.0 million shares of the Company’s common stock have been excluded from the diluted earnings per share calculation because they were anti-dilutive.
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Commitments and Contingencies |
12 Months Ended |
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Dec. 31, 2022 | |
| Commitments and Contingencies Disclosure [Abstract] | |
| Commitments and Contingencies | Commitments and Contingencies Legal Proceedings Other than as described below, the Company is not presently a party to any material litigation or regulatory proceeding and is not aware of any pending or threatened litigation or regulatory proceeding against the Company which, individually or in the aggregate, could have a material adverse effect on its business, operating results, financial condition or cash flows. On April 13, 2021 and April 19, 2021, respectively, certain purported stockholders of the Company filed two complaints in the Delaware Court of Chancery regarding the Company’s January 15, 2021 recapitalization transaction with TCP-ASC. Both complaints allege that TCP-ASC, Ascension, and TowerBrook controlled the Company and breached their fiduciary duties by using that alleged control to force the Company to overpay in redeeming TCP-ASC’s preferred stock as part of the recapitalization transaction. The plaintiffs seek an unspecified amount of damages against TCP-ASC, Ascension, and TowerBrook. The plaintiffs also allege that the Company and TCP-ASC entered into amendments to the Investor Rights Agreement that the plaintiffs contend contain provisions that are void under the Company’s charter, bylaws, and the Delaware General Corporation Law. The cases have since been consolidated into a single action. All defendants have answered the Complaint and discovery has commenced. On February 18, 2022, plaintiffs filed a supplement to their complaint, naming certain additional defendants and asserting additional claims related to the Company’s agreement to acquire Cloudmed, which was announced on January 10, 2022. The additional claims assert that: (i) TCP-ASC, Ascension, and Towerbrook, along with the Company’s directors (“Individual Defendants”), breached their fiduciary duties by causing the Company to enter into and approving the Cloudmed acquisition, respectively, which plaintiffs claim will perpetuate TCP-ASC’s, Ascension’s, and Towerbrook’s control over the Company and entrench the Individual Defendants by virtue of certain agreements entered into as part of the transaction, including a Second Amended Investor Rights Agreement with TCP-ASC (the “Seconded Amended Investor Rights Agreement”) and an Investor Rights Agreement with Cloudmed (the “Cloudmed Investor Rights Agreement”); and (ii) Cloudmed’s stockholders aided and abetted such breaches. Plaintiffs also allege that certain provisions in the Cloudmed Investor Rights Agreement and the Second Amended Investor Rights Agreement are void under the Company’s charter, bylaws, and the Delaware General Corporation law.The plaintiffs seek a declaratory judgment and an unspecified amount of damages, as well as attorneys’ fees and costs. The Company believes it has meritorious defenses to all claims against it and intends to vigorously defend itself against these claims. In May 2016, the Company was served with a False Claims Act case brought by a former emergency department service associate who worked at a hospital of one of the Company’s customers, MedStar Inc.’s Washington Hospital Center (“WHC”), along with WHC and three other hospitals that were PAS clients and a place holder, John Doe hospital, representing all PAS customers (U.S. ex rel. Graziosi vs. Accretive Health, Inc. et. al.), and seeking money damages, False Claims Act penalties, and plaintiff’s attorneys’ fees. The Third Amended Complaint alleges that the Company’s PAS business violates the federal False Claims Act. The case was originally filed under seal in 2013 in the federal district court in Chicago, was presented to the U.S. Attorney in Chicago, and the U.S. Attorney declined to intervene. Both the Company’s and plaintiff’s motions for summary judgment were denied in December 2020, and the parties have completed damage and expert discovery. Additional dispositive motions are expected to extend into 2023, with trial, if necessary, in mid-to-late 2023. The Company believes it has meritorious defenses to all claims in the case and intends to vigorously defend itself against these claims.
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Related Party Transactions |
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| Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Related Party Transactions | Related Party Transactions As a result of the closing of the 2016 Transaction with Ascension Health Alliance on February 16, 2016 and Ascension Health Alliance’s ownership interest in TCP-ASC, Ascension became a related party to the Company. This note, encompasses transactions between Ascension and its affiliates, including AMITA Health, and the Company pursuant to the A&R MPSA, including all supplements, amendments, and other documents entered into in connection therewith. See Note 1, Description of Business, and Note 16, 8.00% Series A Convertible Preferred Stock, for further discussion about the agreements with Ascension. In conjunction with the Cloudmed Acquisition, New Mountain became a new related party. There were no material transactions with New Mountain subsequent to the Cloudmed Acquisition. Net services revenue from services provided to Ascension, as well as corresponding accounts receivable and customer liabilities are presented in the Consolidated Statements of Operations and Comprehensive Income (Loss) and the Consolidated Balance Sheets. Customer liabilities for Ascension consist of the following:
Since Ascension is the Company’s largest customer, a significant percentage of the Company’s cost of services is associated with providing services to Ascension. However, due to the nature of the Company’s global business services and information technology operations, it is impractical to assign the dollar amount associated with services provided to Ascension. On May 27, 2021 and May 28, 2021, the Company issued 16,750,000 shares of common stock to TCP-ASC upon the cashless exercise of a portion of the Warrant to purchase 19,535,145 shares of common stock at an exercise price of $3.50 per share based upon a market value of $24.54 to $24.64 per share as determined under the terms of the Warrant.
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Segments and Customer Concentrations |
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| Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Segments and Customer Concentrations | Segments and Customer Concentrations The Company has determined that it has a single operating segment in accordance with the way that management operates and views the business. All of the Company’s significant operations are organized around the single business of providing management services of revenue cycle operations for U.S.-based healthcare providers. Accordingly, for purposes of segment disclosures, the Company has only one operating and reportable segment. Customers comprising greater than 10% of net services revenue are as follows:
The loss of customers within the Ascension health system or Intermountain network would have a material adverse impact on the Company’s operations. As of December 31, 2022 and 2021, the Company had a concentration of credit risk with Ascension, representing 10% and 17% of accounts receivable, respectively. See Note 19, Related Party Transactions, for more information about the Company’s relationship with Ascension.
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Retirement Plan |
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Dec. 31, 2022 | |
| Retirement Benefits [Abstract] | |
| Retirement Plan | Retirement Plan The Company maintains 401(k) retirement plans that are intended to be tax-qualified defined contribution plans under Section 401(k) of the Internal Revenue Code. In general, all employees are eligible to participate. In conjunction with acquisitions, the Company may integrate or maintain the acquiree’s 401(k) plan. For the years ended December 31, 2022, 2021, and 2020, Company contributions to the 401(k) plans were $13.3 million, $9.1 million, and $3.6 million, respectively. In response to the COVID-19 pandemic, the Company announced several temporary cost reduction actions, including the suspension of matching contributions to the 401(k) plans effective May 29, 2020 for exempt associates and June 5, 2020 for hourly associates. However, participants were able to continue making salary deferral contributions to the 401(k) plans. The 401(k) match was reinstated on a prospective basis for both plans effective as of the first paycheck in January 2021.
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Supplemental Financial Information |
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| Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Supplemental Financial Information | Supplemental Financial Information Prepaid expenses and other current assets is comprised of the following:
Accrued expenses and other current liabilities is comprised of the following:
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Summary of Significant Accounting Policies (Policies) |
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| Accounting Policies [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Basis of Presentation | Basis of PresentationThe consolidated financial statements include the assets, liabilities and results of operations of the Company and its wholly owned subsidiaries. All material intercompany transactions and balances have been eliminated in consolidation. The preparation of financial statements in conformity with the United States generally accepted accounting principles (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes. Actual results can differ from those estimates. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue Recognition | Revenue Recognition The Company’s largest source of revenue is its operating partner arrangement to provide end-to-end RCM services. The Company also generates revenue through modular RCM solutions, where customers will engage the Company for only specific components of its end-to-end RCM service offering on a fixed-fee or volumetric basis. Revenue Cycle Management RCM services fees are primarily variable and performance related, and are generally viewed as a series of distinct services in which there are identifiable increments within a long-term service contract. Variable consideration for end-to-end RCM services are allocated to and recognized over the related time period as the amounts reflect the consideration the Company is entitled to and relate specifically to the Company’s efforts to satisfy its performance obligation. Fees for physician group RCM services include variable consideration contingent on customer collections, and inputs to the Company’s revenue estimates typically include historical service fees and historical customer collection amounts. RCM services fees consist of net operating fees, incentive fees, and modular and other fees. Net Operating Fees The Company’s net operating fees consist of: i.gross base fees invoiced to customers; less ii.corresponding costs of customers’ revenue cycle operations which the Company pays pursuant to its RCM agreements, including salaries and benefits for the customers’ RCM personnel, and related third-party vendor costs; plus iii.fees accrued for physician group RCM services. The Company recognizes revenue related to net operating fees ratably as the performance obligation for the RCM services is satisfied. Base fees are typically billed in advance of the quarter and paid in three monthly payments as the entity performs and the customer simultaneously receives and consumes the benefits of the services provided. The costs of customers’ revenue cycle operations, which the Company pays pursuant to its RCM agreements, are accrued based on the service period. Net operating fees for physician groups are invoiced on a monthly basis and payment terms are typically 30 days. Incentive Fees Incentive fees are structured to reflect quarterly or annual performance and are evaluated on a contract-by-contract basis. The Company estimates incentive fee revenue based on contractually agreed-upon financial or operating metrics. The Company recognizes revenue related to incentive fees ratably as the performance obligation for RCM services is satisfied, to the extent that it is probable that a significant reversal of cumulative revenue will not occur once the uncertainty is resolved. Incentive fees are typically billed and paid on a quarterly basis. Modular and Other The Company recognizes revenue related to modular and other RCM fees as RCM services are provided. Fees are typically variable in nature and revenue is recognized as services are provided or when any uncertainty associated with the variable fee is subsequently resolved. The customer simultaneously receives and consumes the benefits provided by the services and the fees are typically billed on a monthly basis and payment terms are typically 30 days. To the extent that certain service fees are fixed and not subject to refund, adjustment, or concession, these fees are generally recognized into revenue ratably as the performance obligation is satisfied. The Company recognizes revenue from PAS in the period in which the service is performed. The Company’s PAS arrangements typically consist of an obligation to provide specific services to customers upon request. These services are provided under a fixed price per unit arrangement. Fees for the Company's PAS arrangements are typically billed on a monthly basis with 30 to 60 day payment terms. PM services arrangements include a single performance obligation, constituting a series, to manage and administer various non-clinical aspects of a customer’s physician practice, which may be comprised of numerous physical office locations. Consideration for PM services is typically variable in nature and allocated to and recognized over the related time period as the amounts reflect the consideration the Company is entitled to and relate specifically to the Company’s effort to satisfy its performance obligation. PM services fees are invoiced on a monthly basis and payment terms are typically 30 days. Bundled Services Modular RCM solutions may be sold separately or bundled in a contract. End-to-end RCM services are typically sold separately but may be bundled with PAS. PAS are commonly sold separately. The typical length of an end-to-end RCM contract is to ten years (subject to the parties’ respective termination rights) but varies from customer to customer. Modular RCM agreements generally vary in length between and three years. For bundled arrangements, the Company accounts for individual services as a separate performance obligation if a service is separately identifiable from other items in the bundled arrangement and if a customer can benefit from it on its own or with other resources that are readily available to the customer. Revenue for the individual services is recognized ratably as services are performed, which is materially within the same accounting period for the services in the bundle. PAS are provided at a customer’s election but do not represent material rights as the services are priced at standalone selling price throughout the life of the agreement. Cost of Services Cost of services consist of (i) on-site personnel and technology costs, (ii) global business services costs, and (iii) other costs. On-site personnel and technology costs consist primarily of wages, bonuses, benefits, share-based compensation, travel, and other costs associated with employees who are assigned to customer sites to help manage the Company’s customers’ revenue cycle operations. The other significant portion of such expenses is an allocation of the costs associated with maintaining, improving, and deploying our integrated proprietary technology suite. Global business services costs relate to the Company’s global business services centers in the U.S. and internationally that perform patient scheduling and pre-registration, medical transcription, cash posting, reconciliation of payments to billing records, patient follow-up, and Medicaid eligibility determination for our customers. The Company incurs expenses related to salaries and benefits for employees in its global business services centers and non-payroll costs associated with operating its global business services centers. Other expenses consist of costs related to managing other services. These expenses consist primarily of wages, bonuses, benefits, rent, share-based compensation, amortization of intangible assets, assumed vendor contracts for onboarded customers, and other costs. Costs associated with generating the Company’s net services revenue are expensed as incurred, with the exception of deferred contract costs, which are certain costs associated with the initial phases of customer contracts and the related transition of customer hospitals and physician groups that are deferred. These fulfillment costs relate directly to the Company’s responsibilities under the corresponding customer contracts, generate or enhance resources of the Company that will be used in satisfying its performance obligations in the future, and are expected to be recovered through the margins realized. The following table summarizes the breakout of deferred contract costs:
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| Comprehensive Income | Comprehensive Income Comprehensive income is the net income of the Company combined with other changes in stockholders’ equity not involving ownership interest changes. For the Company, such changes are foreign currency translation adjustments and changes in derivatives designated as cash flow hedges.
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| Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents.
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| Cloud Computing Arrangements | Cloud Computing Arrangements The Company capitalizes qualifying set-up and implementation costs related to the Company’s cloud computing arrangements. The deferred costs are amortized over the term of the associated cloud computing arrangement on a straight-line basis unless another systematic and rational basis is more representative of the pattern in which the Company expects to benefit from access to the cloud computing arrangement.
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| Property, Equipment and Software | Property, Equipment and Software Property, equipment and software are stated at cost, and related depreciation and amortization are calculated on the straight-line method over the estimated useful lives of the assets. The Company capitalizes qualifying internal and third-party costs and hardware and software costs related to the Company’s software development activities. The Company amortizes the capitalized software development costs over their estimated life on a straight-line basis.
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| Impairment of Long-Lived Assets | Impairment of Long-Lived AssetsProperty, equipment, software, right-of-use (“ROU”) assets, deferred contract costs, and other acquired intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If circumstances require a long-lived asset or asset group be reviewed for possible impairment, the Company first compares undiscounted cash flows expected to be generated by each asset or asset group to its carrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment charge is recognized to the extent that the carrying value exceeds the fair value. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Accrued Compensation and Benefits | Accrued Compensation and BenefitsAccrued compensation and benefits consists of accrued payroll, bonus, paid time off, health benefits, severance, and compensation and benefits related taxes. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company records its financial assets and liabilities at fair value. The accounting standard for fair value (i) defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date, (ii) establishes a framework for measuring fair value, (iii) establishes a hierarchy of fair value measurements based upon the ability to observe inputs used to value assets and liabilities, (iv) requires consideration of nonperformance risk, and (v) expands disclosures about the methods used to measure fair value. The accounting standard establishes a three-level hierarchy of measurements based upon the reliability of observable and unobservable inputs used to arrive at fair value. Observable inputs are independent market data, while unobservable inputs reflect the Company’s assumptions about valuation. The three levels of the hierarchy are defined as follows: •Level 1: Observable inputs such as quoted prices in active markets for identical assets and liabilities; •Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and •Level 3: Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable.
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| Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using current tax laws and enacted tax rates in effect for the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company records a valuation allowance for deferred tax assets if, based upon the weight of all available evidence, both positive and negative, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the relevant tax authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest amount of benefit that has a greater than 50% percent likelihood of being realized upon ultimate settlement. Interest and penalties relating to income taxes are recognized in our income tax provision in the consolidated statements of operations and comprehensive income.
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| Legal and Other Contingencies | Legal and Other Contingencies In the normal course of business, the Company is subject to regulatory investigations or legal proceedings, as well as demands, claims and threatened litigation. The Company records an estimated loss for any claim, lawsuit, investigation or proceeding when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Significant judgment is required in both the determination of the probability and whether the loss can be reasonably estimated. Actual expenses could differ from such estimates.
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| Foreign Currency Translation and Transaction Gains (Losses) | Foreign Currency Translation and Transaction Gains (Losses)Assets and liabilities of non-U.S. subsidiaries that operate in a local currency environment, where such local currency is the functional currency, are translated to U.S. dollars at exchange rates in effect at the balance sheet date. As of December 31, 2022 and 2021, the Company had net assets of $81.5 million and $51.0 million in foreign entities, respectively. Income and expense accounts are translated at average exchange rates during the year which approximates the rates in effect at the transaction dates. The resulting translation adjustments are recorded as a separate component of accumulated other comprehensive income (loss). | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-Based Compensation Expense | Share-Based Compensation Expense The Company determines the expense for all employee share-based compensation awards by estimating their fair value and recognizing such value as an expense, on a ratable basis, in the consolidated financial statements over the requisite service period in which the employees earn the awards. Performance-based stock awards are recognized in expense when the performance metrics are probable to be achieved. Changes in the estimate of achievement of the performance metrics are recognized in the period of the change through a cumulative catch-up. The Company assesses the performance metrics in its awards on a quarterly basis to determine if a cumulative catch-up is necessary. The fair value of stock options is calculated using the Black-Scholes option pricing model. For the year ended December 31, 2022, the number of options granted (24,344) was immaterial. As part of the transactions contemplated by the Transaction Agreement, equity awards held by certain employees of Cloudmed (“Former Class P Units”) were modified, through a series of transactions, into awards (“Management Units”) of CoyCo 2. Certain Former Class P Units that were subject to performance-based vesting conditions did not become vested upon the closing of the Cloudmed Acquisition (“Unvested Units”). The Management Units issued by CoyCo 2 are treated as share-based compensation under ASC 718, Compensation - Stock Compensation. The Unvested Units are not awards of the Company and the participants will receive no additional shares of the Company upon satisfaction of the vesting criteria described in Note 13, Share-Based Compensation. However, GAAP requires the Company recognize the cost of share-based compensation granted by an investor (CoyCo 2) to the Company’s employees and service providers for services that benefit the Company’s operations (hereafter, “CoyCo 2 share-based compensation expense”), and a corresponding capital contribution because the costs are incurred on the Company’s behalf. A Monte Carlo simulation was used to estimate the fair value of the Unvested Units. The Company recognizes compensation expense using a straight-line method over the applicable service or performance period. During each quarter, the share-based compensation expense is adjusted to reflect forfeitures during the period.
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| Treasury Stock | Treasury Stock The Company records treasury stock at the cost to acquire such shares, including commissions paid to brokers. Treasury stock is included as a component of stockholders’ equity.
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| Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic net income per share is computed by dividing net income, less any dividends, accretion or decretion, redemption or induced conversion on the preferred stock, by the weighted average number of common shares outstanding during the period. As the preferred stock formerly but no longer in issue (as defined in Note 12) participates in dividends alongside the Company’s common stock (per their participating dividends), the preferred stock would constitute participating securities under ASC 260-10, Earnings Per Share, and are applied to earnings per share using the two-class method. Under this method, all earnings (distributed and undistributed) are allocated to common shares and participating securities based on their respective rights to receive dividends. Diluted net income per share is calculated by adjusting the denominator used in the basic net income per share computation by potentially dilutive securities outstanding during the period plus, when their effect is dilutive, incremental shares consisting of shares subject to stock options, restricted stock units (“RSUs”), performance-based restricted stock units (“PBRSUs”), and shares issuable upon conversion of preferred stock.
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| Recently Issued Accounting Standards and Disclosures | Recently Issued Accounting Standards and Disclosures In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”). ASU 2021-08 requires companies to apply Topic 606, Revenue from Contracts with Customers, to recognize and measure contract assets and contract liabilities obtained in a business combination. The ASU amendments will generally result in the recognition of contract assets and contract liabilities by the acquirer at amounts consistent with those recorded by the acquiree immediately before the acquisition date. The Company prospectively adopted ASU 2021-08 effective April 1, 2022 and preliminarily recognized contract assets of $92.4 million and contract liabilities of $3.3 million as part of the Cloudmed Acquisition. In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”). ASU 2022-03 clarifies that a contractual sale restriction on an equity security should not be considered in measuring the security’s fair value. The Company will adopt ASU 2022-03 prospectively effective January 1, 2024 and is currently evaluating the impact of the standard on its consolidated financial statements.
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| Goodwill | GoodwillGoodwill represents the difference between the purchase price of acquired companies and the related fair value of the net assets acquired, which applies the acquisition method of accounting. | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative Financial Instruments | Derivative Financial Instruments The Company actively manages the risk of changes in foreign currency exchange rates and change in interest rates through non-deliverable foreign currency forward contracts and interest rate swap contracts traded in over-the-counter markets governed by International Swaps and Derivatives Association, Inc. (ISDA) agreements. Positions are monitored using techniques such as market value and sensitivity analyses. The Company does not enter into derivative transactions for speculative purposes. The change in fair value of a hedging instrument is recorded in accumulated other comprehensive loss as a separate component of stockholders’ equity and is reclassified into either cost of services or interest expense in the consolidated statement of operations and comprehensive income during the period in which the hedged transaction impacts earnings. Fair values for derivative financial instruments are based on prices computed using third-party valuation models and are classified as Level 2 in accordance with the three-level hierarchy of fair value measurements.
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Summary of Significant Accounting Policies (Tables) |
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| Accounting Policies [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Deferred Contract Costs | The following table summarizes the breakout of deferred contract costs:
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| Schedule of Property, Equipment and Software Useful Lives | The major classifications of property, equipment and software and their expected useful lives are as follows:
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| Schedule of Property, Equipment and Software | Property, equipment and software consist of the following:
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| Summary Depreciation and Amortization Expense | The following table summarizes the allocation of depreciation and amortization expense between cost of services and selling, general and administrative expenses:
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Acquisitions (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Business Combination and Asset Acquisition [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Acquisitions | The following table summarizes the fair value of the total consideration paid:
(1) The stock consideration fair value includes a 12.5% discount for lack of marketability factor related to an 18-month lock-up period during which the Sellers may not sell their Company common stock. (2) Cash consideration includes the repayment of Cloudmed’s pre-existing credit facility that was paid off at closing and was not assumed by the Company. (3) Represents the pre-acquisition service portion of the fair value of 1,536,220 replacement RSUs issued to Cloudmed equity award holders at closing.During 2021, the Company acquired the following business:
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| Schedule of Fair Value of Assets Acquired and Liabilities Assumed | The preliminary fair value of assets acquired and liabilities assumed is:
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| Schedule of Intangible Assets Identified with Acquisition | The intangible assets identified in conjunction with the Cloudmed Acquisition and their preliminary fair values are as follows:
The following table provides the gross carrying value and accumulated amortization for each major class of definite-lived intangible assets at December 31, 2022 and December 31, 2021:
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| Schedule of Pro Forma Results | The following table summarizes, on a pro forma basis, the combined results of the Company as though the Cloudmed Acquisition had occurred as of January 1, 2021 and the VisitPay acquisition had occurred as of January 1, 2020. These pro forma results are not necessarily indicative of the actual consolidated results had the acquisitions occurred as of those dates or of the future consolidated operating results for any period. Pro forma results are:
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Intangible Assets (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Intangible Assets | The intangible assets identified in conjunction with the Cloudmed Acquisition and their preliminary fair values are as follows:
The following table provides the gross carrying value and accumulated amortization for each major class of definite-lived intangible assets at December 31, 2022 and December 31, 2021:
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| Schedule of Estimated Annual Amortization Expense | Estimated annual amortization expense related to intangible assets with definite lives as of December 31, 2022 is as follows:
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Goodwill (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Changes in Carrying Amount of Goodwill | Changes in the carrying amount of goodwill for the year ended December 31, 2022 were:
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Revenue Recognition (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Revenue from Contract with Customer [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Disaggregated Revenue By Source | In the following table, revenue is disaggregated by source of revenue:
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| Schedule of Contract Assets, Net and Contract Liabilities | The following table provides information about contract assets, net and contract liabilities from contracts with customers:
(1) Current contract liabilities include $7.6 million and $7.8 million classified in the current portion of customer liabilities and $2.1 million and $2.5 million classified in the current portion of customer liabilities - related party as of December 31, 2022 and 2021, respectively. (2) Non-current contract liabilities include $5.0 million and $3.3 million classified in the non-current portion of customer liabilities and $13.7 million and $15.4 million classified in the non-current portion of customer liabilities - related party as of December 31, 2022 and 2021, respectively.The contract assets, net balance will increase or decrease based on the timing of invoices and recognition of revenue. Prior to the Cloudmed Acquisition, the Company did not have significant contract assets. Significant changes in the carrying amount of contract assets, net for the six months ended December 31, 2022 were as follows:
(1) Other primarily includes measurement period adjustments to the contract assets acquired from the Cloudmed Acquisition.
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| Schedule of Transaction Price Allocated to the Remaining Performance Obligation | The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period. The estimated revenue does not include amounts of variable consideration that are constrained.
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Accounts Receivable and Allowance for Credit Losses (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Receivables [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Allowance for Credit Losses Related to Accounts Receivable | Movements in the allowance for credit losses related to accounts receivable are as follows:
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Leases (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Leases [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedules of Components of Lease Costs and Supplemental Information Related to Operating Leases | The components of lease costs are as follows:
The following table summarizes the supplemental information related to operating leases:
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| Schedule of Operating Lease Maturity | Maturities of lease liabilities as of December 31, 2022 are as follows:
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Customer Liabilities (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other Liabilities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Customer Liabilities | Customer liabilities consist of the following:
(1) Current and non-current portion of customer liabilities include amounts for a related party. See Note 19, Related Party Transactions, for further discussion.
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Debt (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Debt Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Carrying Values Long-Term Debt | The carrying amounts of debt consist of the following:
(1) As of December 31, 2022, the Company had $100.0 million in borrowings, $0.9 million letters of credit outstanding, and $499.1 million of availability under the senior secured revolving credit facility (“Senior Revolver”).
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| Schedule of Maturities of Long-term Debt | Scheduled maturities of the Company’s long-term debt for each of the five years succeeding December 31, 2022 and thereafter are summarized as follows:
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Derivative Financial Instruments (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Derivative Instruments and Hedging Activities Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position, Location | The location and fair value of derivative instruments designated as hedges in the Consolidated Balance Sheets as of December 31, 2022 and December 31, 2021 are as follows:
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Share-Based Compensation (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Share-Based Payment Arrangement [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Valuation Assumptions | The following table sets forth the significant assumptions used in the calculation of share-based compensation expense during 2022, 2021, and 2020:
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| Schedule of Share-based Compensation Expense | Total share-based compensation costs that have been included in the Company’s consolidated statements of operations were as follows:
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| Schedule of Stock Option Activity | The following table sets forth a summary of all option activity under all plans for the years ended December 31, 2022, 2021, and 2020:
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| Schedule of Restricted Stock Units and Performance-based Restricted Stock Units Activity | The following table sets forth a summary of all RSU and PBRSU activity during the years ended December 31, 2022, 2021, and 2020:
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Other Expenses (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Other Income and Expenses [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Other Expenses | The following table summarizes the other expenses (income) recognized for the years ended December 31, 2022, 2021, and 2020:
(1) These costs relate to restructuring and business reorganization events. (2) These are costs, including legal, consulting, and bank fees, that are directly related to the closing of business acquisitions and include changes to contingent consideration. (3) These costs reflect efforts to integrate acquisitions from a systems, processes, and people perspective and to achieve synergies expected from the transaction. Costs include consulting fees, IT vendor spend, severance, early lease termination of Cloudmed facilities, and certain payroll costs. (4) These costs relate to performing portfolio and capital structure analyses and transactions and other business transformation projects (including large scale system projects) as part of the Company’s growth strategy. Costs include vendor spend, employee time and expenses spent on activities, severance, and retention amounts. (5) These costs include legal and consulting fees related to the establishment of the Company’s inaugural global business services center in the Philippines as well as severance costs for personnel whose roles are being relocated. The entry into the Philippines is the first new organic global business services center country expansion by the Company in approximately 15 years. (6) As part of the transition of customer personnel to the Company under certain operating partner model contracts, the Company agreed to reimburse the customer, or directly pay affected employees, for severance and retention costs related to certain employees who were not transitioned to the Company, or whose jobs were relocated after the employee transitioned to the Company. (7) As part of evaluating its footprint, the Company has exited certain leased facilities. Costs include asset impairment charges, early termination fees, and other costs related to exited leased facilities (excluding early lease termination of Cloudmed facilities, which is included in (3) above). (8) For the years ended December 31, 2022, 2021, and 2020, other includes $2.5 million, $11.3 million, and $10.9 million, respectively, of expenses related to the COVID-19 pandemic.
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Income Taxes (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Income Tax Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Domestic and Foreign Components of Income (Loss) | The domestic and foreign components of income (loss) before income taxes consist of the following:
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| Schedule of Current and Deferred Income Tax Expense (Benefit) | For the years ended December 31, 2022, 2021, and 2020, the Company’s current and deferred income tax expense (benefit) attributable to income from operations are as follows:
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| Schedule of Reconciliation of Effective Income Tax Rate | Reconciliation of the difference between the effective tax rate and the statutory U.S. federal income tax rate is as follows:
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| Schedule of Net Deferred Tax | The following table sets forth the Company’s net deferred tax as of December 31, 2022 and 2021:
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8.00% Series A Convertible Preferred Stock (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Temporary Equity Disclosure [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Summary of Preferred Stock Activity | The following summarizes the Preferred Stock activity for the years ended December 31, 2021 and 2020:
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Earnings (Loss) Per Share (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Earnings Per Share [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Basic and Diluted Net Income (Loss) Per Common Share | Basic and diluted net income (loss) per common share are calculated as follows:
(1) The 2021 dividend on preferred shares includes amounts related to the conversion of the preferred shares. See Note 16, 8.00% Series A Convertible Preferred Stock, for more information.
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Related Party Transactions (Tables) |
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Dec. 31, 2022 | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Related Party Transactions [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Related Party Transactions | Net services revenue from services provided to Ascension, as well as corresponding accounts receivable and customer liabilities are presented in the Consolidated Statements of Operations and Comprehensive Income (Loss) and the Consolidated Balance Sheets. Customer liabilities for Ascension consist of the following:
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Segments and Customer Concentrations (Tables) |
12 Months Ended | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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Dec. 31, 2022 | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Segment Reporting [Abstract] | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Customer Concentration, Net Services Revenue | Customers comprising greater than 10% of net services revenue are as follows:
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Supplemental Financial Information (Tables) |
12 Months Ended | ||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
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| Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
| Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets is comprised of the following:
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| Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities is comprised of the following:
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Summary of Significant Accounting Policies - Summary of Deferred Contract Costs (Details) - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Capitalized Contract Cost [Line Items] | ||
| Prepaid expenses and other current assets | $ 5.1 | $ 3.7 |
| Non-current portion of deferred contract costs | 26.7 | 23.4 |
| Total deferred contract costs | 31.8 | 27.1 |
| Prepaid expenses and other current assets | ||
| Capitalized Contract Cost [Line Items] | ||
| Prepaid expenses and other current assets | 5.1 | 3.7 |
| Non-current portion of deferred contract costs | ||
| Capitalized Contract Cost [Line Items] | ||
| Non-current portion of deferred contract costs | $ 26.7 | $ 23.4 |
Summary of Significant Accounting Policies - Property, Equipment and Software Useful Lives (Details) |
12 Months Ended |
|---|---|
Dec. 31, 2022 | |
| Buildings and land | |
| Property, Plant and Equipment [Line Items] | |
| Useful lives | 30 years |
| Computers and other equipment | |
| Property, Plant and Equipment [Line Items] | |
| Useful lives | 3 years |
| Leasehold improvements | Maximum | |
| Property, Plant and Equipment [Line Items] | |
| Useful lives | 10 years |
| Office furniture | |
| Property, Plant and Equipment [Line Items] | |
| Useful lives | 5 years |
| Software | Minimum | |
| Property, Plant and Equipment [Line Items] | |
| Useful lives | 3 years |
| Software | Maximum | |
| Property, Plant and Equipment [Line Items] | |
| Useful lives | 5 years |
Summary of Significant Accounting Policies - Schedule of Property, Equipment and Software (Details) - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Property, Plant and Equipment [Line Items] | ||
| Property, equipment and software, gross | $ 379.6 | $ 267.2 |
| Less accumulated depreciation and amortization | (214.8) | (172.5) |
| Property, equipment and software, net | 164.8 | 94.7 |
| Buildings and land | ||
| Property, Plant and Equipment [Line Items] | ||
| Property, equipment and software, gross | 24.3 | 0.0 |
| Computer and other equipment | ||
| Property, Plant and Equipment [Line Items] | ||
| Property, equipment and software, gross | 75.6 | 60.4 |
| Leasehold improvements | ||
| Property, Plant and Equipment [Line Items] | ||
| Property, equipment and software, gross | 24.1 | 23.3 |
| Software | ||
| Property, Plant and Equipment [Line Items] | ||
| Property, equipment and software, gross | 243.2 | 177.0 |
| Office furniture | ||
| Property, Plant and Equipment [Line Items] | ||
| Property, equipment and software, gross | $ 12.4 | $ 6.5 |
Summary of Significant Accounting Policies - Allocation of Depreciation and Amortization Expense between Cost of Services and Selling, General and Administrative Expenses (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Property, Plant and Equipment [Line Items] | |||
| Total depreciation and amortization | $ 54.6 | $ 54.6 | $ 50.6 |
| Cost of services | |||
| Property, Plant and Equipment [Line Items] | |||
| Total depreciation and amortization | 53.4 | 51.8 | 46.6 |
| Selling, general and administrative | |||
| Property, Plant and Equipment [Line Items] | |||
| Total depreciation and amortization | $ 1.2 | $ 2.8 | $ 4.0 |
Acquisitions - Narrative (Details) $ in Millions |
1 Months Ended | 3 Months Ended | 12 Months Ended | |||||
|---|---|---|---|---|---|---|---|---|
|
Jun. 21, 2022
USD ($)
|
Aug. 31, 2022
USD ($)
|
Aug. 31, 2020
payment
|
Dec. 31, 2022
USD ($)
|
Sep. 30, 2021
USD ($)
|
Dec. 31, 2022
USD ($)
|
Dec. 31, 2021
USD ($)
|
Dec. 31, 2020
USD ($)
|
|
| Business Acquisition [Line Items] | ||||||||
| Increase to intangible assets | $ (3.5) | |||||||
| Increase to the deferred income tax liability | $ 103.4 | |||||||
| Payments to acquire business | $ 0.0 | $ 12.5 | $ 0.0 | |||||
| Cloudmed | ||||||||
| Business Acquisition [Line Items] | ||||||||
| Purchase price | $ 3,300.0 | |||||||
| Net sales | 260.0 | |||||||
| Net loss, before income taxes, since acquisition date | $ 10.7 | |||||||
| RevWorks | ||||||||
| Business Acquisition [Line Items] | ||||||||
| Payments to acquire business | $ 12.5 | $ 12.5 | ||||||
| Number of deferred payments | payment | 2 | |||||||
| Payments to acquire business, number of payments, refund period, if circumstances met | 2 years | |||||||
Acquisitions - Fair Value Total Consideration Paid (Details) - Cloudmed $ in Millions |
Jun. 21, 2022
USD ($)
shares
|
|---|---|
| Business Acquisition [Line Items] | |
| Stock consideration transferred to the Sellers | $ 2,390.5 |
| Cash consideration | 879.8 |
| Total purchase consideration | $ 3,281.6 |
| Stock consideration fair value discount percent | 12.50% |
| Cloudmed | |
| Business Acquisition [Line Items] | |
| Lock-up period | 18 months |
| Restricted Stock Units (RSUs) | |
| Business Acquisition [Line Items] | |
| Replacement awards issued to Cloudmed equity award holders | $ 11.3 |
| Replacement awards issued to Cloudmed equity award holders, shares (in shares) | shares | 1,536,220 |
Acquisitions - Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions |
Jun. 21, 2022 |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|---|
| Allocation of consideration to assets acquired and liabilities assumed: | |||
| Goodwill | $ 2,658.2 | $ 554.7 | |
| Cloudmed | |||
| Business Acquisition [Line Items] | |||
| Total purchase consideration | $ 3,281.6 | ||
| Allocation of consideration to assets acquired and liabilities assumed: | |||
| Cash and cash equivalents | 32.1 | ||
| Accounts receivable | 61.8 | ||
| Current portion of contract assets | 68.5 | ||
| Property, equipment and software | 5.0 | ||
| Operating lease right-of-use assets | 25.3 | ||
| Non-current portion of contract assets | 23.9 | ||
| Intangible assets | 1,366.6 | ||
| Goodwill | 2,103.6 | ||
| Other assets | 6.7 | ||
| Accounts payable | (31.9) | ||
| Customer liabilities | (3.3) | ||
| Accrued compensation and benefits | (93.0) | ||
| Operating lease liabilities | (25.4) | ||
| Deferred income tax liabilities | (245.4) | ||
| Other liabilities | (12.9) | ||
| Net assets acquired | $ 3,281.6 |
Acquisitions - Schedule of Intangible Assets Information (Details) - Cloudmed $ in Millions |
Jun. 21, 2022
USD ($)
|
|---|---|
| Customer Relationships | |
| Business Acquisition [Line Items] | |
| Useful Life | 18 years |
| Gross Carrying Value | $ 318.0 |
| Technology | |
| Business Acquisition [Line Items] | |
| Useful Life | 7 years |
| Gross Carrying Value | $ 1,025.0 |
| Tradename | |
| Business Acquisition [Line Items] | |
| Useful Life | 5 years |
| Gross Carrying Value | $ 23.5 |
| Favorable leasehold interests | |
| Business Acquisition [Line Items] | |
| Gross Carrying Value | $ 0.1 |
Acquisitions - Pro Forma Results (Details) - Cloudmed Acquisition and VisitPay Acquisition - USD ($) $ in Millions |
12 Months Ended | |
|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
| Business Acquisition [Line Items] | ||
| Net services revenue | $ 2,009.7 | $ 1,813.5 |
| Net loss | $ (55.0) | $ (177.5) |
Intangible Assets - Components of Intangible Assets (Details) - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Finite-Lived Intangible Assets [Line Items] | ||
| Gross Carrying Value | $ 1,683.1 | $ 316.5 |
| Accumulated Amortization | (168.6) | (51.1) |
| Net Book Value | 1,514.5 | 265.4 |
| Customer relationships | ||
| Finite-Lived Intangible Assets [Line Items] | ||
| Gross Carrying Value | 418.0 | 100.0 |
| Accumulated Amortization | (36.3) | (20.8) |
| Net Book Value | 381.7 | 79.2 |
| Technology | ||
| Finite-Lived Intangible Assets [Line Items] | ||
| Gross Carrying Value | 1,240.5 | 215.5 |
| Accumulated Amortization | (129.3) | (30.2) |
| Net Book Value | 1,111.2 | 185.3 |
| Tradename | ||
| Finite-Lived Intangible Assets [Line Items] | ||
| Gross Carrying Value | 24.5 | 1.0 |
| Accumulated Amortization | (3.0) | (0.1) |
| Net Book Value | 21.5 | 0.9 |
| Favorable leasehold interests | ||
| Finite-Lived Intangible Assets [Line Items] | ||
| Gross Carrying Value | 0.1 | 0.0 |
| Accumulated Amortization | 0.0 | 0.0 |
| Net Book Value | $ 0.1 | $ 0.0 |
Intangible Assets - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Goodwill and Intangible Assets Disclosure [Abstract] | |||
| Intangible asset amortization expense | $ 117.4 | $ 22.9 | $ 18.1 |
Intangible Assets - Future Amortization (Details) - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | ||
| 2023 | $ 197.2 | |
| 2024 | 195.3 | |
| 2025 | 193.7 | |
| 2026 | 193.7 | |
| 2027 | 191.2 | |
| Thereafter | 543.4 | |
| Net Book Value | $ 1,514.5 | $ 265.4 |
Goodwill - Carrying Amount of Goodwill (Details) $ in Millions |
12 Months Ended |
|---|---|
|
Dec. 31, 2022
USD ($)
| |
| Goodwill [Roll Forward] | |
| Beginning Balance | $ 554.7 |
| Cloudmed Acquisition | 2,103.6 |
| Change in foreign currency rates | (0.1) |
| Ending Balance | $ 2,658.2 |
Goodwill - Narrative (Details) |
12 Months Ended |
|---|---|
|
Dec. 31, 2022
USD ($)
reporting_unit
| |
| Goodwill and Intangible Assets Disclosure [Abstract] | |
| Number of reporting units | reporting_unit | 1 |
| Impairment of goodwill | $ | $ 0 |
Revenue Recognition - Schedule of Disaggregated Revenue by Source (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Disaggregation of Revenue [Line Items] | |||
| Net services revenue | $ 1,806.4 | $ 1,474.6 | $ 1,270.8 |
| Net operating fees | |||
| Disaggregation of Revenue [Line Items] | |||
| Net services revenue | 1,309.7 | 1,211.8 | 1,093.8 |
| Incentive fees | |||
| Disaggregation of Revenue [Line Items] | |||
| Net services revenue | 106.8 | 143.8 | 70.6 |
| Modular and other | |||
| Disaggregation of Revenue [Line Items] | |||
| Net services revenue | $ 389.9 | $ 119.0 | $ 106.4 |
Revenue Recognition - Schedule of Contract Balances (Details) - USD ($) $ in Millions |
Dec. 31, 2022 |
Jun. 30, 2022 |
Dec. 31, 2021 |
|---|---|---|---|
| Contract assets, net | |||
| Current | $ 83.9 | $ 0.0 | |
| Non-current | 32.0 | 0.0 | |
| Total contract assets, net | 115.9 | $ 89.6 | 0.0 |
| Contract liabilities | |||
| Current | 9.7 | 10.3 | |
| Non-current | 18.7 | 18.7 | |
| Total contract liabilities | 28.4 | 29.0 | |
| Current portion of customer liabilities | 7.6 | 7.8 | |
| Non-current portion of customer liabilities | 5.0 | 3.3 | |
| Investor | |||
| Contract liabilities | |||
| Current portion of customer liabilities | 2.1 | 2.5 | |
| Non-current portion of customer liabilities | $ 13.7 | $ 15.4 |
Revenue Recognition - Changes to Contract Assets (Details) $ in Millions |
6 Months Ended |
|---|---|
|
Dec. 31, 2022
USD ($)
| |
| Contract Assets | |
| Balance as of June 30, 2022 | $ 89.6 |
| Revenue recognized | 172.9 |
| Amounts billed | (151.0) |
| Other | 4.4 |
| Balance as of December 31, 2022 | $ 115.9 |
Revenue Recognition - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | |
|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
| Disaggregation of Revenue [Line Items] | ||
| Revenue recognized | $ 94.8 | $ 98.0 |
| Revenue performance obligation, period | PAS performance obligations are typically short in duration (often less than 1 day) with any uncertainty related to the associated variable consideration resolved as each increment of service (completion of a level of care review or an appeal) is completed which reflects the value the customer receives from the Company’s fulfillment of the performance obligation. | |
| Accounts Receivable | ||
| Disaggregation of Revenue [Line Items] | ||
| Revenue recognized, advanced billings | $ 85.8 | $ 88.1 |
Accounts Receivable and Allowance for Credit Losses - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
| Increase in allowance | $ 11.1 | $ 0.7 | |
| Initial increase, allowance for credit losses | 15.2 | $ 2.5 | $ 3.8 |
| Contract assets | 2.2 | ||
| Physician Customer | |||
| Accounts, Notes, Loans and Financing Receivable [Line Items] | |||
| Increase in allowance | 9.6 | ||
| Initial increase, allowance for credit losses | 10.1 | ||
| Accounts receivable, gross | $ 32.6 | ||
Accounts Receivable and Allowance for Credit Losses - Schedule of Allowance for Credit Losses Related to Accounts Receivable (Details) - USD ($) $ in Millions |
12 Months Ended | |
|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
| Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
| Beginning balance | $ 2.5 | $ 3.8 |
| Provision (recoveries) | 11.1 | 0.7 |
| Write-offs | (0.2) | (2.0) |
| Ending balance | 15.2 | 2.5 |
| ASC 326 | Cloudmed | ||
| Accounts Receivable, Allowance for Credit Loss [Roll Forward] | ||
| Beginning balance | $ 1.8 | 0.0 |
| Ending balance | $ 1.8 | |
Leases - Narrative (Details) $ in Millions |
3 Months Ended |
|---|---|
|
Dec. 31, 2022
USD ($)
| |
| Lessee, Lease, Description [Line Items] | |
| Right of use asset impairments | $ 17.0 |
| Maximum | |
| Lessee, Lease, Description [Line Items] | |
| Operating lease, term (up to) | 11 years |
| Operating lease, renewal term (up to) | 10 years |
Leases - Schedule of Lease Costs (Details) - USD ($) $ in Millions |
12 Months Ended | |
|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
| Leases [Abstract] | ||
| Operating lease cost | $ 22.1 | $ 15.8 |
| Sublease income | (1.6) | (2.3) |
| Total lease cost | $ 20.5 | $ 13.5 |
Leases - Schedule of Supplemental Information Related to Operating Leases (Details) - USD ($) $ in Millions |
12 Months Ended | |
|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
| Leases [Abstract] | ||
| Weighted average remaining lease term | 7 years | 7 years |
| Weighted average incremental borrowing rate | 6.52% | 8.10% |
| Cash paid for amounts included in the measurement of lease liabilities: | ||
| Operating cash flows for operating leases | $ 27.0 | $ 22.8 |
| ROU assets obtained or acquired in exchange for operating lease obligations | $ 67.7 | $ 20.3 |
Leases - Schedule of Operating Lease Maturity (Details) $ in Millions |
Dec. 31, 2022
USD ($)
|
|---|---|
| Operating Leases | |
| 2023 | $ 24.6 |
| 2024 | 23.9 |
| 2025 | 22.6 |
| 2026 | 16.8 |
| 2027 | 10.7 |
| Thereafter | 40.7 |
| Total | 139.3 |
| Less: | |
| Imputed interest | 26.9 |
| Present value of lease liabilities | $ 112.4 |
Customer Liabilities - Schedule of Customer Liabilities (Details) - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Other Liabilities Disclosure [Abstract] | ||
| Accrued service costs, current | $ 21.9 | $ 32.3 |
| Collections payable to clients, current | 29.1 | 3.0 |
| Customer deposits, current | 1.5 | 0.0 |
| Refund liabilities, current | 2.7 | 3.8 |
| Deferred revenue (contract liabilities), current | 9.7 | 10.3 |
| Current portion of customer liabilities | 64.9 | 49.4 |
| Deferred revenue (contract liabilities), non-current | 18.7 | 18.7 |
| Non-current portion of customer liabilities | 18.7 | 18.7 |
| Total customer liabilities | $ 83.6 | $ 68.1 |
Debt - Carrying Amounts of Debt (Details) - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Debt Instrument [Line Items] | ||
| Long-term debt | $ 1,810.1 | |
| Unamortized discount and issuance costs | (23.6) | $ (3.2) |
| Total debt | 1,786.5 | 772.4 |
| Less: Current maturities | (53.9) | (17.5) |
| Total long-term debt | 1,732.6 | 754.9 |
| Senior Revolver | Line of Credit | ||
| Debt Instrument [Line Items] | ||
| Long-term debt | 100.0 | 80.0 |
| Borrowing availability | 499.1 | |
| Term A Loans | Line of Credit | ||
| Debt Instrument [Line Items] | ||
| Long-term debt | 1,211.4 | 695.6 |
| Term B Loan | Line of Credit | ||
| Debt Instrument [Line Items] | ||
| Long-term debt | 498.7 | $ 0.0 |
| Letter of Credit | Line of Credit | ||
| Debt Instrument [Line Items] | ||
| Long-term debt | $ 0.9 |
Debt - Schedule of Maturities of Long-term Debt (Details) $ in Millions |
Dec. 31, 2022
USD ($)
|
|---|---|
| Debt Disclosure [Abstract] | |
| 2023 | $ 53.9 |
| 2024 | 67.0 |
| 2025 | 67.0 |
| 2026 | 718.3 |
| 2027 | 430.2 |
| Thereafter | 473.7 |
| Total | $ 1,810.1 |
Derivative Financial Instruments- Schedule Of Derivative Instruments as Hedged on Consolidated Balance Sheets (Details) - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Derivative [Line Items] | ||
| Derivative assets | $ 8.8 | $ 1.7 |
| Foreign currency forward contracts | Cash Flow Hedging | Designated as Hedging Instrument | ||
| Derivative [Line Items] | ||
| Derivative assets | 0.1 | 1.7 |
| Derivative liability | 0.5 | 0.0 |
| Derivative, fair value, net | 0.6 | 1.7 |
| Interest rate swaps | Cash Flow Hedging | Designated as Hedging Instrument | ||
| Derivative [Line Items] | ||
| Derivative assets | 8.7 | 0.0 |
| Derivative asset, noncurrent | 5.0 | 0.0 |
| Derivative liability | 0.0 | 0.7 |
| Derivative, fair value, net | $ 13.7 | $ 0.7 |
Share-Based Compensation - Assumptions (Details) |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
| Expected dividend yield | 0.00% | 0.00% | 0.00% |
| Risk-free interest rate, minimum | 1.40% | 0.40% | 0.30% |
| Risk-free interest rate, maximum | 3.30% | 1.00% | 1.70% |
| Expected volatility, minimum | 43.00% | ||
| Expected volatility, maximum | 50.00% | ||
| Expected volatility | 43.00% | 43.00% | |
| Expected term (in years) | 5 years 6 months | 5 years 6 months | |
| Minimum | |||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
| Expected term (in years) | 4 years | ||
| Maximum | |||
| Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
| Expected term (in years) | 5 years 6 months | ||
Other Expenses - Other Costs (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Other Income and Expenses [Abstract] | |||
| Severance and related employee benefits | $ 1.2 | $ 2.2 | $ 6.4 |
| Business acquisition costs | 74.5 | 4.0 | 16.7 |
| Integration costs | 40.2 | 2.6 | 5.4 |
| Strategic initiatives | 23.2 | 9.1 | 7.2 |
| Global business services center expansion project in the Philippines | 26.7 | 1.8 | 0.0 |
| Customer employee transition and restructuring expenses | (0.4) | 4.9 | (0.2) |
| Facility-exit charges | 7.9 | 3.4 | 17.5 |
| Other | 10.2 | 18.1 | 14.3 |
| Other expenses | $ 183.5 | 46.1 | 67.3 |
| Number of years since new country entry | 15 years | ||
| COVID-19 related costs, included in Other | $ 2.5 | $ 11.3 | $ 10.9 |
Income Taxes - Schedule of Domestic and Foreign Components of Income (Loss) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Income Tax Disclosure [Abstract] | |||
| Domestic | $ (81.0) | $ 110.1 | $ 99.4 |
| Foreign | 20.0 | 16.7 | 19.0 |
| Income (loss) before income tax provision (benefit) | $ (61.0) | $ 126.8 | $ 118.4 |
Income Taxes - Schedule of Current and Deferred Income Tax Expense (Benefit) (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Current | |||
| U.S. Federal | $ 0.9 | $ (0.1) | $ 0.2 |
| State & Local | 3.9 | 3.4 | 0.0 |
| Foreign | 3.2 | 3.0 | 2.4 |
| Current Income Tax Expense (Benefit) | 8.0 | 6.3 | 2.6 |
| Deferred | |||
| U.S. Federal | (11.5) | 21.7 | (0.3) |
| State & Local | (5.0) | 0.0 | 1.0 |
| Foreign | 5.1 | 1.6 | (2.0) |
| Deferred Income Tax Expense (Benefit) | (11.4) | 23.3 | (1.3) |
| Total | |||
| U.S. Federal | (10.6) | 21.6 | (0.1) |
| State & Local | (1.1) | 3.4 | 1.0 |
| Foreign | 8.3 | 4.6 | 0.4 |
| Total Current and Deferred Income Tax Expense (Benefit) | $ (3.4) | $ 29.6 | $ 1.3 |
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Income Tax Disclosure [Abstract] | |||
| Federal statutory tax rate | 21.00% | 21.00% | 21.00% |
| Change in income tax rate resulting from: | |||
| State and local income taxes, net of federal tax benefits | 1.00% | 2.00% | 1.00% |
| Additional tax on foreign source income | (12.00%) | 3.00% | 3.00% |
| Share-based compensation | 20.00% | (8.00%) | (24.00%) |
| Non-deductible expenses | (23.00%) | 5.00% | 13.00% |
| Gain on sale | 0.00% | 0.00% | (11.00%) |
| Other | (1.00%) | 0.00% | (2.00%) |
| Effective tax rate | 6.00% | 23.00% | 1.00% |
Income Taxes - Schedule of Net Deferred Tax (Details) - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Deferred tax assets and liabilities: | ||
| Net operating loss carryforwards | $ 50.0 | $ 54.7 |
| Share-based compensation | 16.6 | 12.2 |
| Accrued bonus | 13.7 | 8.5 |
| Advanced billing revenue | 6.8 | 7.2 |
| Alternative minimum tax | 6.2 | 6.4 |
| Interest expense limitation | 11.1 | 0.1 |
| Deferred rent liabilities | 29.1 | 19.3 |
| Deferred FICA liability | 0.0 | 3.0 |
| Fixed assets | 1.0 | 0.0 |
| Other | 13.1 | 12.3 |
| Total deferred tax assets | 147.6 | 123.7 |
| Intangible assets | (292.6) | (41.7) |
| Fixed assets | 0.0 | (1.5) |
| Deferred contract costs | (8.0) | (8.7) |
| Foreign withholding tax | (10.2) | (4.2) |
| Deferred rent assets | (20.0) | (13.6) |
| Less valuation allowances | (7.1) | (6.4) |
| Net deferred tax | $ (190.3) | |
| Net deferred tax | $ 47.6 |
Income Taxes - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Income Tax Examination [Line Items] | |||
| Valuation allowance | $ 7.1 | $ 6.4 | |
| Current tax provision | 8.0 | 6.3 | $ 2.6 |
| Unrecognized tax benefits | $ 0.0 | 0.0 | 0.0 |
| Statute of limitations minimum | 3 years | ||
| Statute of limitations maximum | 6 years | ||
| SCI Acquisition | Deferred Tax Assets, Tax Credit Carryforwards, Research and Development | |||
| Income Tax Examination [Line Items] | |||
| Valuation allowance | $ 3.4 | ||
| SCI Acquisition | Deferred Tax Assets, Tax Credit Carryforwards, Capital Loss | |||
| Income Tax Examination [Line Items] | |||
| Valuation allowance | 2.2 | ||
| U.S. Federal | |||
| Income Tax Examination [Line Items] | |||
| Operating loss carryforwards | 181.5 | ||
| State | |||
| Income Tax Examination [Line Items] | |||
| Operating loss carryforwards | 223.4 | ||
| Valuation allowance | 7.1 | 6.4 | |
| India | |||
| Income Tax Examination [Line Items] | |||
| Current tax provision | 3.2 | 3.0 | 2.4 |
| Benefit from tax holiday | $ 4.9 | $ 4.7 | $ 4.3 |
8.00% Series A Convertible Preferred Stock - Schedule of Preferred Stock Activity (Details) - Redeemable Convertible Preferred Stock - USD ($) $ in Millions |
12 Months Ended | |
|---|---|---|
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Shares Issued and Outstanding | ||
| Beginning Balance (in shares) | 288,497 | 266,529 |
| Dividends paid/accrued dividends (in shares) | 5,769 | 21,968 |
| Conversion of Preferred Stock (in shares) | (294,266) | |
| Ending Balance (in shares) | 0 | 288,497 |
| Carrying Value | ||
| Beginning Balance | $ 251.5 | $ 229.1 |
| Dividends paid/accrued dividends | 0.0 | 22.4 |
| Conversion of Preferred Stock | (251.5) | |
| Ending Balance | $ 0.0 | $ 251.5 |
Earnings (Loss) Per Share - Narrative (Details) - shares |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
| Antidilutive securities excluded from computation of earnings per share (in shares) | 20,090,009 | 12,875,730 | 97,244 |
| Warrant | |||
| Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
| Antidilutive securities excluded from computation of earnings per share (in shares) | 42,000,000 | 42,000,000 | |
Commitments and Contingencies - Narrative (Details) |
Apr. 19, 2021
claim
|
|---|---|
| TCP-ASC Recapitalization Litigation | Pending Litigation | |
| Loss Contingencies [Line Items] | |
| Number of complaints filed | 2 |
Related Party Transactions - Summary Amounts Included in Balance Sheet (Details) - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Related Party Transaction [Line Items] | ||
| Collections payable to clients, current | $ 29.1 | $ 3.0 |
| Refund liabilities, current | 2.7 | 3.8 |
| Deferred revenue (contract liabilities), current | 9.7 | 10.3 |
| Current portion of customer liabilities | 64.9 | 49.4 |
| Deferred revenue (contract liabilities), non-current | 18.7 | 18.7 |
| Non-current portion of customer liabilities | 18.7 | 18.7 |
| Total customer liabilities | 83.6 | 68.1 |
| Ascension | ||
| Related Party Transaction [Line Items] | ||
| Accrued service costs, current | 4.3 | 4.2 |
| Collections payable to clients, current | 0.3 | 0.6 |
| Refund liabilities, current | 0.7 | 0.6 |
| Deferred revenue (contract liabilities), current | 2.1 | 2.5 |
| Current portion of customer liabilities | 7.4 | 7.9 |
| Deferred revenue (contract liabilities), non-current | 13.7 | 15.4 |
| Non-current portion of customer liabilities | 13.7 | 15.4 |
| Total customer liabilities | $ 21.1 | $ 23.3 |
Segments and Customer Concentrations - Narrative (Details) - segment |
12 Months Ended | |
|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
|
| Segment Reporting Information [Line Items] | ||
| Number of operating segments | 1 | |
| Number of reportable segments | 1 | |
| Accounts Receivable | Customer Concentration Risk | Ascension and its affiliates | ||
| Segment Reporting Information [Line Items] | ||
| Concentration percentage | 10.00% | 17.00% |
Segments and Customer Concentrations - Concentration Risk by Customer (Details) - Sales Revenue - Customer Concentration Risk |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Ascension and its affiliates | |||
| Concentration Risk [Line Items] | |||
| Concentration percentage | 49.00% | 61.00% | 64.00% |
| Intermountain Healthcare | |||
| Concentration Risk [Line Items] | |||
| Concentration percentage | 12.00% | 14.00% | 14.00% |
Retirement Plan - Narrative (Details) - USD ($) $ in Millions |
12 Months Ended | ||
|---|---|---|---|
Dec. 31, 2022 |
Dec. 31, 2021 |
Dec. 31, 2020 |
|
| Retirement Benefits [Abstract] | |||
| Company contributions to the plan | $ 13.3 | $ 9.1 | $ 3.6 |
Supplemental Financial Information - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
| Prepaid expenses | $ 35.1 | $ 27.8 |
| Acquisition and disposition contingent assets | 20.0 | 29.1 |
| Notes receivable | 12.0 | 1.0 |
| Derivative assets | 8.8 | 1.7 |
| Healthcare rebates receivable | 5.9 | 4.5 |
| Deferred contract costs | 5.1 | 3.7 |
| Other current assets | 23.4 | 9.4 |
| Total prepaid expenses and other current assets | $ 110.3 | $ 77.2 |
Supplemental Financial Information - Schedule of Accrued Compensation and Benefits (Details) - USD ($) $ in Millions |
Dec. 31, 2022 |
Dec. 31, 2021 |
|---|---|---|
| Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
| Accrued expenses | $ 36.4 | $ 33.8 |
| Notes payable | 15.5 | 8.3 |
| Acquisition deferred payments | 12.5 | 12.5 |
| Other current liabilities | 6.2 | 4.5 |
| Total accrued expenses and other current liabilities | $ 70.6 | $ 59.1 |
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