Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Oct. 31, 2016 | |
Document and Entity Information [Abstract] | ||
Entity Registrant Name | TEAM HEALTH HOLDINGS INC. | |
Entity Central Index Key | 1,082,754 | |
Current Fiscal Year End Date | --12-31 | |
Entity Filer Category | Large Accelerated Filer | |
Document Type | 10-Q | |
Document Period End Date | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Entity Common Stock, Shares Outstanding | 74,464,838 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 15,315 | $ 28,563 |
Short-term Investments | 1,581 | 1,985 |
Accounts receivable, less allowance for uncollectibles of $500,645 and $653,070 in 2015 and 2016, respectively | 821,963 | 730,459 |
Prepaid expenses and other current assets | 65,138 | 73,807 |
Receivables under insured programs | 38,913 | 36,004 |
Income tax receivable | 3,287 | 28,791 |
Total current assets | 946,197 | 899,609 |
Insurance subsidiaries' and other investments | 99,939 | 111,940 |
Property and equipment, net | 84,141 | 87,907 |
Other intangibles, net | 320,477 | 335,637 |
Goodwill | 2,485,591 | 2,427,802 |
Deferred income taxes | 48,625 | 50,250 |
Receivables under insured programs | 102,272 | 90,747 |
Other | 383,333 | 56,950 |
Total Assets | 4,470,575 | 4,060,842 |
Current liabilities: | ||
Accounts payable | 57,060 | 66,358 |
Accrued compensation and physician payable | 323,709 | 337,455 |
Other accrued liabilities | 305,931 | 257,651 |
Current maturities of long-term debt | 390,120 | 68,900 |
Total current liabilities | 1,076,820 | 730,364 |
Long-term debt, less current maturities | 2,298,985 | 2,337,363 |
Other non-current liabilities | 376,619 | 346,427 |
Shareholders’ equity: | ||
Common stock, ($0.01 par value; 100,000 shares authorized, 73,092 and 74,285 shares issued and outstanding at December 31, 2015 and September 30, 2016, respectively) | 743 | 731 |
Additional paid-in capital | 876,908 | 836,458 |
Accumulated deficit | (166,211) | (196,144) |
Accumulated other comprehensive earnings | 2,172 | 1,503 |
Team Health Holdings, Inc. shareholders’ equity | 713,612 | 642,548 |
Noncontrolling interests | 4,539 | 4,140 |
Total shareholders' equity including noncontrolling interests | 718,151 | 646,688 |
Total liabilities and shareholders' equity | $ 4,470,575 | $ 4,060,842 |
Consolidated Balance Sheets (U3
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Statement of Financial Position [Abstract] | ||
Allowance for uncollectibles | $ 653,070 | $ 500,645 |
Common stock, par value | $ 0.01 | $ 0.01 |
Common stock, shares authorized | 100,000,000 | 100,000,000 |
Common stock, shares outstanding | 74,285,000 | 73,092,000 |
Common stock, shares issued | 74,285,000 | 73,092,000 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Earnings (Unaudited) - USD ($) shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Statement [Abstract] | ||||
Net revenue before provision for uncollectibles | $ 1,925,775 | $ 1,525,409 | $ 5,581,210 | $ 4,390,682 |
Provision for uncollectibles | 784,281 | 626,228 | 2,181,499 | 1,773,062 |
Net revenue | 1,141,494 | 899,181 | 3,399,711 | 2,617,620 |
Cost of services rendered (exclusive of depreciation and amortization shown separately below) | ||||
Professional service expenses | 909,712 | 707,871 | 2,703,436 | 2,058,876 |
Professional liability costs | 33,912 | 27,474 | 114,351 | 81,371 |
General and administrative expenses (includes contingent purchase and other acquisition compensation expense) | 101,323 | 67,066 | 300,925 | 219,214 |
Other (income) expense, net | (6,337) | 2,137 | (7,947) | (182) |
Depreciation | 8,979 | 6,290 | 25,081 | 17,423 |
Amortization | 23,772 | 20,633 | 71,425 | 62,085 |
Interest expense, net | 28,525 | 5,572 | 90,255 | 14,132 |
Transaction, integration, and reorganization costs | 20,836 | 3,869 | 48,337 | 7,170 |
Loss on refinancing of debt | 1,069 | 0 | ||
Earnings before income taxes | 20,772 | 58,269 | 52,779 | 157,531 |
Provision for income taxes | 10,216 | 22,837 | 22,579 | 65,178 |
Net earnings | 10,556 | 35,432 | 30,200 | 92,353 |
Net (loss) earnings attributable to noncontrolling interests | 75 | (10) | 266 | (78) |
Net earnings attributable to Team Health Holdings, Inc. | $ 10,481 | $ 35,442 | $ 29,934 | $ 92,431 |
Net earnings per share of Team Health Holdings, Inc. | ||||
Basic | $ 0.14 | $ 0.49 | $ 0.41 | $ 1.29 |
Diluted | $ 0.14 | $ 0.48 | $ 0.40 | $ 1.26 |
Weighted average shares outstanding | ||||
Basic (shares) | 74,166 | 72,361 | 73,823 | 71,900 |
Diluted (shares) | 75,304 | 73,687 | 75,225 | 73,351 |
Net change in fair value of investments, net of tax | $ (242) | $ 230 | $ 669 | $ (370) |
Comprehensive earnings | 10,314 | 35,662 | 30,869 | 91,983 |
Comprehensive (loss) earnings attributable to noncontrolling interests | 75 | (10) | 266 | (78) |
Comprehensive earnings attributable to Team Health Holdings, Inc. | $ 10,239 | $ 35,672 | $ 30,603 | $ 92,061 |
Consolidated Statements of Com5
Consolidated Statements of Comprehensive Earnings (Parenthetical) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Statement [Abstract] | ||||
Contingent purchase and other acquisition compensation expense recognized | $ 9,818 | $ (3,530) | $ 28,669 | $ 12,230 |
Net change in fair value of investments, tax | $ (133) | $ 124 | $ 359 | $ (213) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Operating Activities | ||
Net earnings | $ 30,200 | $ 92,353 |
Adjustments to reconcile net earnings: | ||
Depreciation | 25,081 | 17,423 |
Amortization | 71,425 | 62,085 |
Amortization of deferred financing costs | 6,674 | 2,142 |
Equity based compensation expense | 24,470 | 13,197 |
Provision for uncollectibles | 2,181,499 | 1,773,062 |
Deferred income taxes | (2,400) | (34,140) |
Non-cash loss on refinancing of debt | 905 | 0 |
(Gain) loss on sale of investments and other assets | 34 | (1,879) |
Net gain on joint venture deconsolidation | (4,346) | 0 |
Equity in joint venture income | (4,446) | (2,856) |
Changes in operating assets and liabilities, net of acquisitions: | ||
Accounts receivable | (2,281,334) | (1,846,532) |
Prepaids and other assets | (2,720) | (9,774) |
Income tax accounts | 20,947 | 29,585 |
Accounts payable | (9,684) | 8,624 |
Accrued compensation and physician payable | (5,430) | 2,439 |
Contingent purchase liabilities | 22,943 | (13) |
Other accrued liabilities | 3,635 | (3,034) |
Professional liability reserves | 29,972 | 29,261 |
Net cash provided by operating activities | 107,425 | 131,943 |
Investing Activities | ||
Purchases of property and equipment | (22,189) | (31,123) |
Net proceeds from disposition of assets | 50 | 1,189 |
Cash paid for acquisitions, net of cash acquired | (395,085) | (116,314) |
Payments for the purchase of investments | (458) | 0 |
Proceeds from the sale of investments | 2,532 | 7,332 |
Purchases of investments at insurance subsidiaries | (50,961) | (67,887) |
Proceeds from investments at insurance subsidiaries | 62,318 | 79,422 |
Net proceeds from joint venture deconsolidation | 2,754 | 0 |
Net cash used in investing activities | (401,039) | (127,381) |
Financing Activities | ||
Payments on long-term debt | (32,348) | (11,250) |
Proceeds from note payable | 288 | 0 |
Payments on revolving credit facility | (697,700) | (989,500) |
Proceeds from revolving credit facility | 1,007,700 | 950,500 |
Payments of financing costs | (1,587) | 0 |
Payments related to contingent purchase obligations | (18,397) | 0 |
Contributions from noncontrolling interests | 1,989 | 1,683 |
Proceeds from the issuance of common stock under stock purchase plans | 4,952 | 3,445 |
Proceeds from exercise of stock options | 17,938 | 23,185 |
Tax benefit from exercise of stock options | 1,263 | 15,475 |
Payments related to settlement of equity based awards | (3,732) | 0 |
Net cash (used in) provided by financing activities | 280,366 | (6,462) |
Net decrease in cash and cash equivalents | (13,248) | (1,900) |
Cash and cash equivalents, beginning of period | 28,563 | 20,094 |
Cash and cash equivalents, end of period | 15,315 | 18,194 |
Interest paid | 78,746 | 13,619 |
Taxes paid, net of refunds | $ 3,752 | $ 52,120 |
Organization and Basis of Prese
Organization and Basis of Presentation | 9 Months Ended |
Sep. 30, 2016 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Organization and Basis of Presentation | Organization and Basis of Presentation The accompanying unaudited consolidated financial statements include the accounts of Team Health Holdings, Inc. (the Company) its subsidiaries and its affiliates, including its affiliated medical groups, and have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial reporting, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements. In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal recurring items) necessary for a fair presentation of results for the interim periods presented. The results of operations for any interim period are not necessarily indicative of results for the full year. The consolidated balance sheet of the Company at December 31, 2015 has been derived from the audited financial statements at that date, but does not include all of the information and disclosures required by U.S. GAAP for complete financial statements. These financial statements and the notes thereto should be read in conjunction with the December 31, 2015 audited consolidated financial statements and the notes thereto included in our annual report on Form 10-K for fiscal year 2015 filed with the Securities and Exchange Commission (the SEC). The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the accompanying consolidated financial statements and notes. Actual results could differ from those estimates. Certain amounts for the prior year have been reclassified to conform to the current year’s presentation. |
Recently Adopted and Recently I
Recently Adopted and Recently Issued Accounting Guidance | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Pronouncements and Changes in Accounting Principles | Recently Adopted and Recently Issued Accounting Guidance Changes to U.S. GAAP are established by the Financial Accounting Standards Board (FASB) in the form of accounting standards updates (ASUs) to the FASB’s Accounting Standards Codification. The Company considers the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on the Company's consolidated financial position or results of operations. In May 2014, the FASB issued ASU No. 2014-09, “ Revenue from Contracts with Customers (Topic 606), ” which establishes a comprehensive revenue recognition standard for virtually all industries under U.S. GAAP. The standard is effective for public entities for annual reporting periods beginning after December 15, 2017, including interim periods therein, with early adoption permitted for annual reporting periods beginning after December 15, 2016, including interim periods therein. The Company is in the process of evaluating the impact that adoption of this new accounting standard may have on the Company's consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, “ Leases (Topic 842) ,” which will change how companies account for and present lease arrangements. The guidance requires companies to recognize leased assets and liabilities for both capital and operating leases. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018, and interim periods therein, and early adoption is permitted. Companies are required to adopt the guidance on a modified retrospective method. The Company is in the process of evaluating the impact that adoption of this new accounting standard may have on the Company's consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, “ Compensation - Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting ,” which requires companies to recognize the income tax effects of awards in the income statement when the awards vest or are settled (i.e., additional paid-in-capital pools will be eliminated). In addition, the new guidance changes the limit that companies are allowed to withhold for employees without triggering liability classification and allows companies to make a policy election to either recognize forfeitures as they occur or estimate them. The new guidance is effective for annual reporting periods beginning after December 15, 2016, and interim periods within those annual periods, and early adoption is permitted. The required transition methods for each aspect of the new guidance varies between prospective, retrospective and modified retrospective. The Company has not yet determined which method of adoption it will select and is in the process of evaluating the impact that adoption of this new accounting standard may have on the Company's consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, “ Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments, ” which clarifies guidance on the classification of certain cash receipts and payments in the statement of cash flows. ASU 2016-15 is effective for annual reporting periods beginning after December 15, 2017, and interim periods therein, and early adoption is permitted. Companies are required to adopt the guidance on a retrospective method, unless impracticable, at which point prospective application is appropriate. The Company is in the process of evaluating the impact that adoption of this new accounting standard may have on the Company's consolidated financial statements. The Company has implemented all new accounting pronouncements that are in effect and that could materially impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued, but are not yet effective, that might have a material impact on the consolidated financial statements of the Company unless otherwise noted in prior updates or above. |
Acquisitions and Contingent Pur
Acquisitions and Contingent Purchase Obligations | 9 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
Acquisitions and Contingent Purchase Obligations | Acquisitions and Contingent Purchase Obligations Acquisitions During the nine months ended September 30, 2016 , the Company completed nine acquisitions of emergency medicine, anesthesia services and hospital medicine businesses with operations in California, Connecticut, Florida, Michigan, Ohio and Rhode Island for total consideration of $83.2 million , which expanded the Company's presence in those respective markets. The results of operations of the acquired businesses have been included in the Company’s consolidated financial statements beginning on the respective acquisition dates. The Consolidated Statements of Comprehensive Earnings for the nine months ended September 30, 2016 includes net revenues of $17.7 million related to acquisitions completed during this period. Pro forma results of operations have not been presented because the effect of these acquisitions is not material to the Company’s consolidated results of operations individually or in the aggregate. The purchase price for these acquisitions was allocated, based on management’s estimates, in accordance with ASC Topic 805, “Business Combinations” (ASC 805). The Company’s purchase price allocation for business combinations completed during recent periods is preliminary and may be subject to revision as additional information about the fair value of acquired working capital becomes available. Additional information, which existed as of the acquisition date but at that time was unknown to the Company, may become known to the Company during the remainder of the measurement period, a period not to exceed 12 months from the acquisition date. The purchase price for these acquisitions completed during the nine months ended September 30, 2016 was allocated as shown in the table below (in thousands): September 30, 2016 Accounts receivable $ 3,024 Prepaid expenses and other assets 70 Other intangibles (consisting of physician and hospital agreements) 34,564 Goodwill (of which $29.1 million is tax deductible) 51,955 Accounts payable (1,165 ) Accrued compensation and physician payable (1,493 ) Other accrued liabilities (718 ) Contingent purchase liability (1,050 ) Net deferred income taxes (2,025 ) Total purchase price $ 83,162 IPC Healthcare, Inc. (IPC) Acquisition On November 23, 2015, the Company completed the acquisition of IPC in a cash transaction. At closing, the Company paid approximately $1.60 billion in cash to the former owners of IPC in exchange for all of the outstanding equity interests of IPC. The accounting for the acquisition of IPC will be completed within the timeframe prescribed by the provisions of ASC 805. The Company continues to obtain information relative to the fair values of assets acquired and liabilities assumed. Acquired assets and assumed liabilities include, but are not limited to, accounts receivable, other intangible assets, current and noncurrent taxes payable, deferred taxes, contingent purchase liabilities, and other accrued liabilities. The valuations are based on appraisal reports or other appropriate valuation techniques to determine the fair value of the assets acquired or liabilities assumed. During 2016 , factors became known that resulted in changes to the purchase price allocation of assets and liabilities existing at the date of the IPC transaction. The estimated fair values of assets acquired and liabilities assumed, specifically accounts receivable, current and noncurrent taxes payable, deferred taxes, contingent purchase liability and other intangible assets, may be subject to change as additional information is received. The purchase price allocation adjustments for this acquisition are summarized as follows (in thousands): As of Adjustments to As of December 31, 2015 Purchase Price Allocation September 30, 2016 Short term investments $ 1,985 $ — $ 1,985 Accounts receivable 127,265 (11,355 ) 115,910 Prepaid expenses and other assets 6,347 (316 ) 6,031 Receivables under insured programs 36,255 — 36,255 Property and equipment 10,541 216 10,757 Income tax receivable 12,528 — 12,528 Net deferred income taxes 64,301 (1,936 ) 62,365 Other intangibles (consisting of marketing-related and technology-based intangibles and physician and hospital agreements) 4,975 21,700 26,675 Goodwill (of which the tax deductible amount was $368,283) 1,574,757 5,594 1,580,351 Accounts payable (15,627 ) 313 (15,314 ) Accrued compensation and physician payable (43,856 ) — (43,856 ) Other accrued liabilities (63,809 ) (13,260 ) (77,069 ) Contingent purchase liability (30,639 ) (2,768 ) (33,407 ) Assumed notes payable (148,249 ) — (148,249 ) Other non-current liabilities (61,894 ) 1,812 (60,082 ) Total consideration paid, net of acquired cash and cash equivalents of $28,059 $ 1,474,880 $ — $ 1,474,880 Subsequent Acquisitions Effective October 1, 2016, the first day of the fourth quarter of fiscal year 2016, the Company acquired the operations of an emergency medicine business located in Florida for a purchase price of approximately $311.9 million , which the Company funded on September 30, 2016 . As of September 30, 2016 , the cash paid for this acquisition was classified within other assets in the Consolidated Balance Sheets. In addition to the cash paid, there are potential future contingent purchase obligations of $26.7 million related to this acquisition. The Company's operating results for the reported periods were not impacted by this acquisition as it was completed subsequent to September 30, 2016 . During October 2016, the company completed the acquisition of the operations of an emergency medicine business located in Illinois that provides care to approximately 48,000 patients each year. The Company is still in the process of completing the purchase price allocation for this acquisition. Contingent Purchase Obligations In accordance with ASC 805, the Company records its contingent consideration as a component of the opening balance sheet unless there is a continuing employment provision. Contingent consideration with a continuing employment provision is recognized ratably over the defined performance period as compensation expense which is included as a component of general and administrative expense (and parenthetically disclosed with other acquisition-related compensation expense) in the results of the Company’s operations. The payment of contingent purchase obligations is included as a component of financing, unless there is a continuing employment provision, in which case it is included as a component of operating cash flows. As of September 30, 2016 , the Company estimates it may have to pay $88.3 million (excluding $26.7 million related to the acquisition funded on September 30, 2016 , but effective October 1, 2016) in future contingent payments for acquisitions made prior to September 30, 2016 , based upon the current projected performance of the acquired operations of which $65.5 million is recorded as a liability in other liabilities and other non-current liabilities on the Company’s Consolidated Balance Sheet. The remaining estimated liability of $22.9 million will be recorded as contingent purchase compensation expense over the remaining performance periods. The current estimate of future contingent payments could increase or decrease depending upon the actual performance of the acquisition over the respective performance periods. These payments will be made should the acquired operations achieve the financial targets or certain contract terms as agreed to in the respective acquisition agreements, including the requirements for continuing employment. When measured on a recurring basis, this liability is considered Level 3 in the fair value hierarchy due to the use of unobservable inputs to measure fair value. The contingent purchase and other acquisition compensation expense recognized for the nine months ended September 30, 2015 and 2016 was $12.2 million and $28.7 million , respectively. The changes to the Company’s accumulated contingent purchase liability for the nine months ended September 30, 2016 are as follows (in thousands): Contingent purchase liability at December 31, 2015 $ 57,080 Payments (24,047 ) Contingent purchase and other acquisition compensation expense recognized 28,669 Adjustments to contingent purchase liability recognized at acquisition date 3,756 Contingent purchase liability at September 30, 2016 $ 65,458 Estimated unrecognized contingent purchase compensation expense as of September 30, 2016 is as follows (in thousands): For the remainder of the year ended December 31, 2016 $ 6,025 For the year ended December 31, 2017 11,069 For the year ended December 31, 2018 3,635 For the year ended December 31, 2019 1,515 For the year ended December 31, 2020 625 $ 22,869 |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company applies the provisions of FASB ASC Topic 820, “Fair Value Measurements and Disclosures,” (ASC Topic 820), in determining the fair value of its financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. ASC Topic 820 prioritizes the inputs used in measuring fair value into the following hierarchy: Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; Level 3 Unobservable inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing. The following table provides information on those assets and liabilities the Company currently measures at fair value on a recurring basis as of December 31, 2015 and September 30, 2016 (in thousands): Carrying Amount in Consolidated Balance Sheet December 31, 2015 Fair Value December 31, 2015 Fair Value Level 1 Fair Value Level 2 Fair Value Level 3 Insurance subsidiaries' and other investments: Money market funds $ 18,238 $ 18,238 $ 18,238 $ — $ — Municipal bonds 87,121 87,121 — 87,121 — Mutual funds 64 64 — 64 — Private investments 2,818 2,818 — — 2,818 Corporate bonds 3,699 3,699 — 3,699 — Total investments of insurance subsidiaries $ 111,940 $ 111,940 $ 18,238 $ 90,884 $ 2,818 Supplemental employee retirement plan investments: Mutual funds $ 45,868 $ 45,868 $ — $ 45,868 $ — Carrying Amount in Consolidated Balance Sheet September 30, 2016 Fair Value September 30, 2016 Fair Value Level 1 Fair Value Level 2 Fair Value Level 3 Insurance subsidiaries' and other investments: Money market funds $ 7,539 $ 7,539 $ 7,539 $ — $ — Municipal bonds 83,016 83,016 — 83,016 — Mutual funds 48 48 — 48 — Private investments 1,947 1,947 — — 1,947 Corporate bonds 7,389 7,389 — 7,389 — Total investments of insurance subsidiaries $ 99,939 $ 99,939 $ 7,539 $ 90,453 $ 1,947 Supplemental employee retirement plan investments: Mutual funds $ 55,655 $ 55,655 $ — $ 55,655 $ — The Company’s insurance subsidiaries' and other investments are valued using market prices on active markets (Level 1) and less active markets (Level 2), in addition to using alternative information when market data is not available (Level 3). Level 1 investment valuations are obtained from real-time quotes for transactions in active exchange markets involving identical assets. Level 2 investment valuations are obtained from readily available pricing sources for comparable investments or identical investments in less active markets. The fair values of the Company’s supplemental employee retirement investments are based on quoted prices. Level 3 investment valuations require significant management judgment and are based on transaction price, company performance, and market conditions. For the nine months ended September 30, 2016 there were no transfers between Levels 1, 2 or 3. See Note 5 for more information regarding the Company’s investments. The Company classified its municipal bonds, mutual funds, and corporate bonds within Level 2 because these securities were valued based on quoted prices in markets that are less active, broker or dealer quotations or alternative pricing sources with reasonable levels of price transparency. The Company classified its private investments within Level 3 because active market pricing is not readily available and, as such, the Company uses net asset values as an estimate of fair value as a practical expedient. The valuation of non-public private equity investments requires significant management judgment due to the absence of observable quoted market prices, inherent lack of liquidity, and the long-term nature of such assets. These investments are valued initially based upon transaction price. In determining valuation adjustments resulting from the investment review process, emphasis is placed on current company performance and market conditions. In addition to the preceding disclosures prescribed by the provisions of FASB ASC Topic 820, ASC Topic 825 “ Financial Instruments ” requires the disclosure of the estimated fair value of financial instruments. The Company’s short term financial instruments include cash and cash equivalents, short term investments, accounts receivable, and accounts payable. The carrying value of the short term financial instruments approximates the fair value due to their short term nature. These financial instruments have no stated maturities or the financial instruments have short term maturities that approximate market. The fair value of the Company's debt is estimated using quoted market prices when available. When quoted market prices are not available, fair value is estimated based on current market interest rates for debt with similar maturities (Level 2). At September 30, 2016 , the estimated fair value of the Company’s outstanding debt was $2.77 billion compared to a carrying value of $2.74 billion . |
Investments
Investments | 9 Months Ended |
Sep. 30, 2016 | |
Investments [Abstract] | |
Investments | Investments Investments are primarily comprised of securities held by the Company and its captive insurance subsidiaries in connection with its participant directed supplemental employee retirement plan. Investments held by the Company and its captive insurance subsidiaries are classified as available-for-sale securities. The unrealized gains or losses of investments held by the Company and its captive insurance subsidiaries are included in accumulated other comprehensive earnings as a separate component of shareholders’ equity, unless the decline in value is deemed to be other-than-temporary and the Company does not have the intent and ability to hold such securities until their full cost can be recovered, in which case such securities are written down to fair value and the loss is charged to current period earnings. The investments held by the Company in connection with its participant directed supplemental employee retirement plan are classified as trading securities; therefore, changes in fair value associated with these investments are recognized as a component of earnings. At December 31, 2015 and September 30, 2016 , amortized cost basis and aggregate fair value of the Company’s available-for-sale securities by investment type were as follows (in thousands): Cost Basis Gross Unrealized Gains Gross Unrealized Losses Fair Value December 31, 2015 Money market funds $ 18,238 $ — $ — $ 18,238 Municipal bonds 84,983 2,411 (273 ) 87,121 Mutual funds 64 — — 64 Private investments 2,712 106 — 2,818 Corporate bonds 3,718 6 (25 ) 3,699 $ 109,715 $ 2,523 $ (298 ) $ 111,940 September 30, 2016 Money market funds $ 7,539 $ — $ — $ 7,539 Municipal bonds 80,187 3,001 (172 ) 83,016 Mutual funds 48 — — 48 Private Investments 1,711 236 — 1,947 Corporate bonds 7,204 185 — 7,389 $ 96,689 $ 3,422 $ (172 ) $ 99,939 At December 31, 2015 and September 30, 2016 , the amortized cost basis and aggregate fair value of the Company’s available-for-sale securities by contractual maturities were as follows (in thousands): Cost Basis Gross Unrealized Gains Gross Unrealized Losses Fair Value December 31, 2015 Due in less than one year $ 24,099 $ 35 $ (54 ) $ 24,080 Due after one year through five years 57,537 1,647 (79 ) 59,105 Due after five years through ten years 23,389 674 (56 ) 24,007 Due after ten years 1,914 61 (109 ) 1,866 Total $ 106,939 $ 2,417 $ (298 ) $ 109,058 September 30, 2016 Due in less than one year $ 16,987 $ 89 $ — $ 17,076 Due after one year through five years 60,055 2,082 (90 ) 62,047 Due after five years through ten years 17,888 1,015 (82 ) 18,821 Total $ 94,930 $ 3,186 $ (172 ) $ 97,944 A summary of the Company’s temporarily impaired available-for-sale investment securities as of December 31, 2015 and September 30, 2016 follows (in thousands): Impaired Less Than 12 Months Impaired Over 12 Months Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses December 31, 2015 Municipal bonds $ 13,189 $ (103 ) $ 2,575 $ (170 ) $ 15,764 $ (273 ) Corporate bonds 3,120 (25 ) — — 3,120 (25 ) Total investment $ 16,309 $ (128 ) $ 2,575 $ (170 ) $ 18,884 $ (298 ) September 30, 2016 Municipal bonds $ 3,389 $ (72 ) $ 2,433 $ (100 ) $ 5,822 $ (172 ) Total investment $ 3,389 $ (72 ) $ 2,433 $ (100 ) $ 5,822 $ (172 ) The unrealized losses resulted from changes in market interest rates, not from changes in the probability of contractual cash flows. Because the Company has the ability and intent to hold the investments until a recovery of carrying value and full collection of the amounts due according to the contractual terms of the investments is expected, the Company does not consider these investments to be other-than-temporarily impaired at September 30, 2016 . During the nine months ended September 30, 2016 , the Company recorded a gain of approximately $0.4 million on the sale of specifically identified investments. As of December 31, 2015 and September 30, 2016 , the investments related to the participant directed supplemental employee retirement plan totaled $45.9 million and $55.7 million , respectively, and are included in other assets in the accompanying consolidated balance sheets. The net trading gains on those investments for the nine months ended September 30, 2015 and September 30, 2016 that were still held by the Company as of September 30, 2015 and September 30, 2016 were as follows (in thousands): 2015 2016 Net (losses) gains recognized during the nine months ended September 30, 2015 and 2016, respectively on trading securities $ (1,467 ) $ 1,259 Less: Net gains (losses) recognized during the period on trading securities sold during the nine months ended September 30, 2015 and 2016, respectively (35 ) (120 ) Unrealized (losses) gains recognized on trading securities still held at September 30, 2015 and 2016, respectively $ (1,432 ) $ 1,379 The Company has an investment in a variable interest entity that operates urgent care clinics. The Company was previously the primary beneficiary of the entity and consolidated the entity’s operations, but the Company sold a portion of its ownership to the other joint venture partner in the third quarter of 2016 for $3.3 million , which resulted in a gain of $4.3 million . As a result, the Company determined that it is no longer the primary beneficiary of the entity as it does not have the power to direct the activities that most significantly impact the economic performance of the entity nor the responsibility to absorb a majority of the expected losses. The entity is not consolidated and the investment is accounted for under the equity method, which is classified in other assets in the accompanying consolidated balance sheets and measured at fair value. The determination of whether the Company is the primary beneficiary was performed at the time of our initial investment and performed again when the entity was deconsolidated from the Company’s financial statements. As of September 30, 2016 , the fair value of this investment was $0.9 million . |
Net Revenue
Net Revenue | 9 Months Ended |
Sep. 30, 2016 | |
Revenue, Net [Abstract] | |
Net Revenue | Net Revenues Net revenues consists of fee for service revenue, contract revenue and other revenue. The Company’s net revenues are principally derived from the provision of healthcare staffing services to patients within healthcare facilities and is recorded in the period the services are rendered. Under the fee for service arrangements, the Company bills patients for services provided and receives payment from patients or their third-party payors. Fee for service revenue reflects gross fee for service charges less contractual allowances and policy discounts, where applicable. Contractual adjustments represent the Company’s estimate of discounts and other adjustments to be recognized from gross fee for service charges under contractual payment arrangements, primarily with commercial, managed care and governmental payment plans such as Medicare and Medicaid when the Company’s providers participate in such plans. Contractual adjustments are not reflected in self-pay fee for service revenue. Contract revenue represents revenue generated under contracts in which the Company provides physician and other healthcare staffing and administrative services in return for a contractually negotiated fee. Contract revenue consists primarily of billings based on hours of healthcare staffing provided at agreed-to hourly rates, monthly contractual rates, or certain operational or financial metrics. Revenue in such cases is recognized as the hours are worked by the Company’s affiliated staff and contractors or as metrics are realized. Other revenue consists primarily of revenue from management and billing services provided to outside parties. Revenue is recognized for such services pursuant to the terms of the contracts with customers. The Company also records a provision for uncollectible accounts based primarily on historical collection experience to record accounts receivables at the estimated amounts expected to be collected. Net revenues consisted of the following (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2016 2015 2016 Medicare $ 183,120 20.4 % $ 344,660 30.2 % $ 530,047 20.2 % $ 1,032,522 30.4 % Medicaid 166,015 18.5 206,896 18.1 476,151 18.2 606,707 17.8 Commercial and managed care 462,652 51.5 551,960 48.4 1,322,652 50.5 1,612,048 47.4 Self-pay 496,910 55.3 568,418 49.8 1,405,252 53.7 1,582,967 46.6 Other 21,576 2.4 26,301 2.3 61,777 2.4 73,263 2.2 Unbilled 2,369 0.3 4,948 0.4 15,979 0.6 7,532 0.2 Net fee for service revenue before provision for uncollectibles 1,332,642 148.2 1,703,183 149.2 3,811,858 145.6 4,915,039 144.6 Contract revenue before provision for uncollectibles 182,631 20.3 211,986 18.6 549,998 21.0 618,931 18.2 Other 10,136 1.1 10,606 0.9 28,826 1.1 47,240 1.4 Net revenues before provision for uncollectibles 1,525,409 169.6 1,925,775 168.7 4,390,682 167.7 5,581,210 164.2 Provision for uncollectibles (626,228 ) (69.6 ) (784,281 ) (68.7 ) (1,773,062 ) (67.7 ) (2,181,499 ) (64.2 ) Net revenues $ 899,181 100.0 % $ 1,141,494 100.0 % $ 2,617,620 100.0 % $ 3,399,711 100.0 % The Company employs several methodologies for determining its allowance for uncollectibles depending on the nature of the net revenues before provision for uncollectibles recognized. The Company initially determines gross revenue for its fee for service patient visits based upon established fee schedule prices. Such gross revenue is reduced for estimated contractual allowances for those patient visits covered by contractual insurance arrangements to result in estimated net revenues before provision for uncollectibles. Net revenues before provision for uncollectibles is then reduced for management’s estimate of uncollectible amounts. Fee for service net revenues represents estimated cash to be collected from such patient visits and is net of management’s estimate of account balances estimated to be uncollectible. The provision for uncollectible fee for service patient visits is based on historical experience resulting from approximately 25 million fee for service patient visits and procedures over the last twelve months. The significant volume of patient visits and the terms of thousands of commercial and managed care contracts and the various reimbursement policies relating to governmental healthcare programs do not make it feasible to evaluate fee for service accounts receivable on a specific account basis. Fee for service accounts receivable collection estimates are reviewed on a quarterly basis for each fee for service contract by period of accounts receivable origination. Such reviews include the use of historical cash collection percentages by contract adjusted for the lapse of time since the date of the patient visit. In addition, when actual collection percentages differ from expected results, on a contract by contract basis, supplemental detailed reviews of the outstanding accounts receivable balances may be performed by the Company’s billing operations to determine whether there are facts and circumstances existing that may cause a different conclusion as to the estimate of the collectibility of that contract’s accounts receivable from the estimate resulting from using the historical collection experience. Contract-related net revenues are billed based on the terms of the contract at amounts expected to be collected. Such billings are typically submitted on a monthly basis and aged trial balances are prepared. Allowances for estimated uncollectible amounts related to such contract billings are made based upon periodic reviews of specific accounts and invoices once it is concluded that such amounts are not likely to be collected. Approximately 98% of the Company’s allowance for doubtful accounts is related to receivables for fee for service patient visits. The principal exposure for uncollectible fee for service visits is centered in self-pay patients and, to a lesser extent, for co-payments and deductibles from patients with insurance. While the Company does not specifically allocate the allowance for doubtful accounts to individual accounts or specific payor classifications, the portion of the allowance, excluding IPC, associated with fee for service charges as of September 30, 2016 was equal to approximately 93% of outstanding self-pay fee for service patient accounts. The methodologies employed to compute allowances for doubtful accounts were unchanged between 2015 and 2016 . |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets The changes in the carrying amount of goodwill during the year ended December 31, 2015 and the nine months ended September 30, 2016 were as follows (in thousands): Goodwill $ 869,038 Accumulated impairment loss (144,579 ) Additions through acquisitions 1,703,343 Balance, December 31, 2015 $ 2,427,802 Goodwill $ 2,572,381 Accumulated impairment loss (144,579 ) Increases from prior year acquisition purchase price allocation adjustments 5,834 Additions through current year acquisitions 51,955 Balance, September 30, 2016 $ 2,485,591 The following is a summary of intangible assets and related amortization as of December 31, 2015 and September 30, 2016 (in thousands): Gross Carrying Amount Accumulated Amortization As of December 31, 2015: Contracts $ 494,569 $ (170,873 ) Other 21,716 (9,775 ) Total $ 516,285 $ (180,648 ) As of September 30, 2016: Contracts $ 517,686 $ (214,821 ) Other 31,161 (13,549 ) Total $ 548,847 $ (228,370 ) Aggregate amortization expense: For the nine months ended September 30, 2016 $ 71,425 Estimated amortization expense: For the remainder of the year ended December 31, 2016 $ 23,777 For the year ended December 31, 2017 91,249 For the year ended December 31, 2018 75,555 For the year ended December 31, 2019 66,521 For the year ended December 31, 2020 46,679 For the years ended December 31, 2021 and thereafter 16,696 Total $ 320,477 Intangible assets are amortized over their estimated life, which is approximately one to six years. As of September 30, 2016 , the weighted average remaining amortization period for intangible assets was 3.4 years. |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | Long-Term Debt Long-term debt as of September 30, 2016 consisted of the following (in thousands): Tranche A Term Loan Facility $ 555,000 Tranche B Term Loan Facility 1,305,440 7.25% Senior Notes due 2023 545,000 Revolving Credit Facility 332,000 Total outstanding debt 2,737,440 Debt issuance costs (48,335 ) 2,689,105 Less current portion (390,120 ) $ 2,298,985 The Company's senior secured credit facilities (Credit Facility) consist of a $600.0 million tranche A term loan facility (Tranche A Term Loan Facility), a $1.31 billion tranche B term loan facility (Tranche B Term Loan Facility) and a $650.0 million revolving credit facility (Revolving Credit Facility). The Tranche A Term Loan and Revolving Credit Facility have a maturity date of October 2, 2019 . The Tranche B Term Loan Facility has a maturity date of November 23, 2022 . The maturity dates under the Credit Facility are subject to extension with lender consent according to the terms of the senior credit agreement (the Senior Credit Agreement). The interest rate on any outstanding Revolving Credit Facility borrowings and Tranche A Term Loan Facility borrowings, and the commitment fee applicable to undrawn revolving commitments, is priced off a grid based upon the Company’s first lien net leverage ratio and is currently LIBOR + 2.00% in the case of revolving credit borrowings under the Revolving Credit Facility and Tranche A Term Loan Facility and 0.35% in the case of unused revolving commitments. The weighted average interest rate for the nine months ended September 30, 2016 was 2.70% for amounts outstanding under the Tranche A Term Loan Facility. On June 2, 2016, the Company amended its Senior Credit Agreement (the Amendment) to reduce the interest rate applicable to any outstanding Tranche B Term Loans from LIBOR plus 3.75% to LIBOR plus 3.00% . The Company effected this reduction in pricing through a refinancing of the existing Tranche B Term Loan Facility. The Amendment also requires the Company to pay a 1.0% prepayment penalty on any amount prepaid if the Tranche B Term Loan Facility is repriced in order to effect a reduction in pricing prior to December 2, 2016. Other significant terms and conditions of the Senior Credit Agreement, including the maturity date of November 23, 2022 and the LIBOR floor of 0.75% , did not change under the amendment. The Company had $332.0 million borrowings outstanding under the Revolving Credit Facility as of September 30, 2016 , and the Company had $6.8 million of standby letters of credit outstanding against the Revolving Credit Facility commitment. The Credit Facility agreement contains both affirmative and negative covenants, including limitations on the Company’s ability to incur additional indebtedness, sell material assets, retire, redeem or otherwise reacquire its capital stock, acquire the capital stock or assets of another business and pay dividends, and requires the Company to comply with a maximum total leverage ratio, tested quarterly. At September 30, 2016 , the Company was in compliance with all of its covenants under the senior credit facility agreement. The Credit Facility is secured by substantially all of the Company’s U. S. subsidiaries’ assets. Senior Notes and Indenture On November 23, 2015, Team Health, Inc., a wholly-owned subsidiary of the Company (the Issuer), completed the private placement of $545.0 million aggregate principal amount of 7.25% Senior Notes due 2023 (the Notes). The Notes are senior unsecured obligations and are fully and unconditionally guaranteed on a senior unsecured basis by the Company and, subject to certain exceptions, each of its existing and future material domestic wholly-owned restricted subsidiaries, referred to, collectively, as “Guarantors.” The Notes bear interest at 7.25% per annum and mature on December 15, 2023 . Interest is payable semi-annually on June 15 and December 15 of each year, beginning on June 15, 2016, to holders of record at the close of business on June 1 or December 1, as the case may be, immediately preceding each such interest payment date. Prior to December 15, 2018, the Issuer may redeem some or all of the Notes at a redemption price equal to 100% of the principal amount of the Notes redeemed, plus accrued and unpaid interest to, but excluding, the redemption date, if any, plus the “make-whole” premium set forth in the indenture. On and after December 15, 2018, the Company may redeem the Notes, in whole or in part, at the redemption prices set forth in the indenture, plus accrued and unpaid interest to, but excluding, the redemption date. In addition, prior to December 15, 2018, the Company may also redeem up to 40% of the aggregate principal amount of the Notes at a redemption price equal to 107.25% of the aggregate principal amount thereof, in each case, using an amount not to exceed the net cash proceeds from certain equity offerings, plus accrued and unpaid interest to, but excluding, the redemption date. The indenture governing the Notes due 2023 contains restrictive covenants that limit among other things, the ability of us and our restricted subsidiaries to incur or guarantee additional debt or issue disqualified stock or certain preferred stock; pay dividends and make other distributions on, or redeem or repurchase, capital stock; make certain investments; incur certain liens; enter into certain transactions with affiliates; merge or consolidate; enter into agreements that restrict the ability of certain restricted subsidiaries to make dividends or other payments to us or each of our existing and future material domestic wholly-owned restricted subsidiaries, referred to, collectively, as “Guarantors”; designate restricted subsidiaries as unrestricted subsidiaries; and transfer or sell certain assets. These covenants are subject to a number of important limitations and exceptions. The Indenture also contains customary events of default which would permit the holders of the Notes to declare those Notes to be immediately due and payable if not cured within applicable grace periods, including the failure to make timely payments on the Notes or other material indebtedness, the failure to satisfy covenants and specified events of bankruptcy and insolvency. Aggregate annual maturities of long-term debt as of September 30, 2016 are as follows (in thousands): 2016 $ 390,120 2017 73,120 2018 58,120 2019 418,120 2020 and thereafter 1,797,960 |
Professional Liability Insuranc
Professional Liability Insurance | 9 Months Ended |
Sep. 30, 2016 | |
Malpractice Insurance [Abstract] | |
Professional Liability Insurance | Professional Liability Insurance The Company’s professional liability loss reserves included in other accrued liabilities and other non-current liabilities in the accompanying consolidated balance sheets consisted of the following (in thousands): December 31, September 30, Estimated losses under self-insured programs $ 245,070 $ 273,655 Estimated losses under commercial insurance programs 126,751 141,185 371,821 414,840 Less estimated payable within one year 105,028 102,478 $ 266,793 $ 312,362 The changes to the Company’s estimated losses under self-insured programs as of September 30, 2016 were as follows (in thousands): Balance, December 31, 2015 $ 245,070 Reserves related to current period 62,802 Changes related to prior year reserves 14,284 Assumed liabilities (1,812 ) Payments for current period reserves (880 ) Payments for prior period reserves (45,809 ) Balance, September 30, 2016 $ 273,655 The Company provides for its estimated professional liability losses through a combination of self-insurance and commercial insurance programs. Losses under commercial insurance programs in excess of the limit of coverage remain as a self-insured obligation of the Company. A portion of the professional liability loss risks that have been provided for through self-insurance (claims-made basis) are transferred to and funded into captive insurance companies. The accounts of the captive insurance companies are fully consolidated with those of the other operations of the Company in the accompanying consolidated financial statements. The self-insurance components of our risk management program include reserves for future claims incurred but not reported (IBNR). As of December 31, 2015 , of the $245.1 million of estimated losses under self-insured programs, approximately $157.4 million represented an estimate of IBNR claims and expenses and additional loss development, with the remaining $87.7 million representing specific case reserves. Of the specific case reserves as of December 31, 2015 , $3.0 million represented case reserves that had settled but not yet funded, and $84.7 million reflected unsettled case reserves. As of September 30, 2016 , of the $273.7 million of estimated losses under self-insurance programs, approximately $160.7 million represented an estimate of IBNR claims and expenses and additional loss development, with the remaining $113.0 million representing specific case reserves. Of the specific case reserves as of September 30, 2016 , $3.4 million represented case reserves that had been settled but not yet funded, and $109.6 million reflected unsettled case reserves. The Company’s provisions for losses under its self-insurance components are estimated using the results of periodic actuarial studies. Such actuarial studies include numerous underlying estimates and assumptions, including assumptions as to future claim losses, the severity and frequency of such projected losses, loss development factors and others. The Company’s provisions for losses under its self-insured components are subject to subsequent adjustment should future actuarial projected results for such periods indicate projected losses greater or less than previously projected. During the first quarter of 2016, the Company reserved $14.3 million to settle two separate professional liability claims originating from prior years in excess of coverage limits, which was fully funded as of September 30, 2016 . See Note 10 for more information regarding these settlements. The Company’s most recent actuarial valuation was completed in October 2016. Based on the results of the actuarial study completed in October 2016, management determined no additional change was necessary in the consolidated reserves for professional liability losses during the third quarter of 2016 related to prior year loss estimates. The discount rate on professional liability reserves (including IPC as noted below) was 1.1% at September 30, 2016 compared to 1.6% at December 31, 2015 . IPC Professional Liability Reserves IPC is fully insured on a claims-made basis up to policy limits through a third party malpractice insurance policy, which ends December 31 of each year. The Company has established reserves for this segment for claims incurred and reported and IBNR during the policy period. These reserves of $25.8 million as of September 30, 2016 and the timing of payment of such amounts are estimated based upon actuarial loss projections, which are updated semi-annually, and discounted using the current weighted average Treasury rate over a 10 year period. |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Commitments and Contingencies Disclosure [Abstract] | |
Contingencies | Contingencies Litigation The Company is currently a party to various legal proceedings arising in the ordinary course of business. The legal proceedings the Company is involved in from time to time include lawsuits, claims, audits and investigations with government and non-government parties, including those arising out of services provided, personal injury claims, professional liability claims, the Company's billing, collection and marketing practices, employment disputes and contractual claims, and seek monetary and other relief, including statutory damages and penalties.. If an unfavorable ruling were to occur, there exists the possibility of a material adverse impact on the Company's net earnings in the period in which the ruling occurs. The estimate of the potential impact from such legal proceedings on the Company's financial position or overall results of operations could change in the future. On August 14, 2015, a purported stockholder of IPC filed a putative class action complaint in the Court of Chancery of the State of Delaware (the Court of Chancery), captioned Smukler v. IPC Healthcare, Inc., et al., C.A. No. 11392-CB. On August 18, 2015, a second purported stockholder of IPC filed a putative class action in the Court of Chancery, captioned Crescente v. Singer, et al., C.A. No. 11405-CB. On September 11, 2015, the Court of Chancery entered an order (the Consolidation Order) consolidating the two actions under the caption In re IPC Healthcare, Inc., Consolidated C.A. No. 11392-CB (the Consolidated Action), and a consolidated class action complaint (the Consolidated Complaint) was filed on September 18, 2015. The Consolidated Complaint named as defendants the members of IPC’s board of directors, the Company, and Intrepid Merger Sub, Inc. (Merger Sub). The Consolidated Complaint alleged that the IPC directors breached their fiduciary duties, and that the Company and Merger Sub aided and abetted those breaches, by failing to disclose certain material information in the IPC Preliminary Schedule 14A relating to the proposed acquisition of IPC by the Company (the Transaction). The Consolidated Complaint sought, among other relief, a preliminary injunction and recovery of the costs of the Consolidated Action, including reasonable attorneys’ fees and expenses. On November 6, 2015, plaintiffs’ counsel and defendants’ counsel executed a memorandum of understanding, or MOU, memorializing the terms of an agreement in principle pursuant to which IPC agreed to make certain supplemental disclosures relating to the Transaction in a Form 8-K, and plaintiffs agreed to dismissal of the Consolidated Action with prejudice and the release of certain claims. On November 6, 2015, IPC filed a Form 8-K with the supplemental disclosures with the SEC. On April 11, 2016, following a series of rulings by the Court of Chancery in other actions challenging mergers, plaintiffs and defendants agreed to replace the MOU with an agreement that plaintiffs would voluntarily dismiss the Consolidated Action on the basis that it was mooted by the supplemental disclosures contained in the Form 8-K. On April 12, 2016, the Court of Chancery entered a Stipulation and Order Concerning Plaintiffs’ Voluntary Dismissal of the Action and Plaintiffs’ Counsel’s Anticipated Application for an Award of Attorneys’ Fees and Expenses (the Dismissal Order). The Dismissal Order dismissed the Consolidated Action as moot and dismissed the claims asserted in the Consolidated Complaint with prejudice as to the named plaintiffs and without prejudice as to other members of the purported class. The Court of Chancery retained jurisdiction over the Consolidated Action solely for the purpose of adjudicating the anticipated application by plaintiffs’ counsel for an award of fees and expenses. On May 19, 2016, plaintiffs filed their application for an award of fees and expenses, in the total amount of $350,000 . The Company filed its opposition to such application on June 30, 2016, and, on July 14, 2016, plaintiffs filed their reply papers. Subsequent to the filing of plaintiffs' reply papers, plaintiffs’ counsel and defendants’ counsel engaged in arm’s-length discussions regarding the payment of attorneys’ fees and reimbursement of expenses to plaintiffs' counsel. The Company has agreed to pay plaintiffs' counsel attorneys' fees in the amount of $100,000 , inclusive of expenses. On October 31, 2016, the Court of Chancery approved a Stipulation and Order Concerning Dismissal of the Consolidated Action and Approving Notice of Payment of Attorneys’ Fees and Expenses, entered into by the parties, which provided for the payment of $100,000 in attorneys’ fees and expenses to plaintiffs’ counsel, the final dismissal and closing of the Consolidated Action, and the provision of notice to stockholders of the payment to plaintiffs’ counsel. The Court of Chancery has not been asked to review, and will pass no judgment on, the payment or amount of the agreed-upon fee to plaintiffs’ counsel or its reasonableness. On November 13, 2015, the U.S. District Court for the Eastern District of Wisconsin ordered the unsealing and service of a qui tam complaint, filed on March 27, 2014, and captioned United States of America, ex rel. John Mamalakis, M.D., the States of California, Colorado, Delaware, Florida, Georgia, Hawaii, Iowa, Maryland, Michigan, Nevada, New Jersey, North Carolina, Oklahoma, Tennessee, Texas, Wisconsin and the District of Columbia v. Anesthetix Management, LLC, d/b/a Anesthetix of TeamHealth, Team Health Holdings, Inc., Sonya Pease, M.D., John Ippolito, M.D., Edward Lee, M.D., Howard Stroup, M.D., Sammy Dean, M.D., and Jacqueline Peters, M.D. (Defendants) (Case No. 2:14cv00349-CNC). On June 11, 2014, the United States gave notice of its intention, and the intention of all of the other states and the District of Columbia, not to intervene in the lawsuit. On March 10, 2016, Team Health Holdings, Inc. was served with the complaint. The complaint alleges that the defendants submitted false claims to federal and state health insurance programs for “medical direction” of anesthesia services (rather than “medical supervision”) that were provided at Wheaton Franciscan Hospital-All Saints Hospital (All Saints) in Racine, Wisconsin, as well as numerous other non-identified hospitals and clinics from 2010 to the present. Plaintiff also claims retaliatory termination, alleging that he was terminated from his employment for voicing his concerns about the anesthesia services. Plaintiff seeks recovery of all Medicare and Medicaid reimbursement that the defendants received as a result of the allegedly false claims and treble damages under the False Claims Act, as well as a civil penalty for each such false Medicare and Medicaid claim. On April 15, 2016, plaintiff amended his complaint, removing all of the individual defendants as well as the claims filed on behalf of Delaware, Georgia, Hawaii, Iowa, Maryland, Nevada, North Carolina, Oklahoma, Tennessee and Texas. On May 2, 2016, Defendants filed a motion to dismiss the entirety of the complaint pursuant to Federal Rules of Civil Procedure 9(b) and 12(b)(6), or in the alternative, to compel arbitration of the retaliatory discharge claim. On July 1, 2016, Relator filed his opposition to the motion. Defendants filed their reply in support of the motion on July 18, 2016. The Motion remains under advisement and the Company expects the Court to decide it soon. The Company intends to vigorously defend against the allegations in this matter. The Company does not believe that the final outcome of this matter will be material. In August 2011, a medical malpractice suit was filed against three of the Company’s affiliates and one of its physicians along with other co-defendants, including a hospital, in the Superior Court of New Jersey, Camden County, alleging a failure to diagnose sepsis in 2010. In July 2012, a medical malpractice suit was filed in the Court of Common Pleas, Luzerne, Pennsylvania against one Company affiliate and one of its physicians and a co-defendant hospital, alleging a failure to diagnose a stroke in 2010. In March 2016, both cases resulted in settlements in excess of insurance coverage limits where the Company was required to fund a total of $14.3 million , which represents the Company's contribution to the overall settlements that includes the other defendants. As of September 30, 2016 , these settlements have been fully funded. Healthcare Regulatory Matters Laws and regulations governing the Medicare and Medicaid programs are complex and subject to interpretation. Compliance with such laws and regulations can be subject to future governmental review and interpretation as well as significant regulatory action. From time to time, governmental regulatory agencies will conduct inquiries and audits of the Company’s practices. It is the Company’s current practice and future intent to cooperate with such inquiries. In addition to laws and regulations governing the Medicare and Medicaid programs, there are a number of federal and state laws and regulations governing such matters as the corporate practice of medicine and fee splitting arrangements, anti-kickback statutes, physician self-referral laws, false or fraudulent claims filing and patient privacy requirements. The failure to comply with any of such laws or regulations could have an adverse impact on the Company's operations and financial results. Government Claim On June 7, 2010, the Company's subsidiary, IPC, received a civil investigative demand (CID) issued by the Department of Justice (DOJ), U.S. Attorney’s Office for the Northern District of Illinois. The CID requested information concerning claims that IPC had submitted to Medicare and Medicaid. The CID covered the period from January 1, 2003, through June 4, 2010, and requested production of a range of documents relating to IPC’s Medicare and Medicaid participation, physician arrangements, operations, billings and compliance programs. IPC produced responsive documents and was in contact with representatives of the DOJ who informed IPC that the inquiry related to a qui tam whistleblower action filed under court seal in the U.S. District Court for the Northern District of Illinois (Chicago). The case is captioned United States ex rel. Oughatiyan v. IPC The Hospitalist Company, Inc. (Civ. No. 09-C-5418). IPC also was informed that several state attorneys general were examining its Medicaid claims in coordination with the DOJ. On December 5, 2013, the U.S. District Court partially lifted the seal on the civil False Claims Act case related to this investigation. The unsealed portions of the Court docket at that time included the whistleblower’s Complaint which contains allegations of improper billing to Medicare and Medicaid, a Notice of Election to Intervene filed by the federal government and a Notice of Election to Decline Intervention filed by the State of Illinois and 12 other states that participated in the investigation. On June 16, 2014, the federal government filed its Complaint in Intervention against IPC and several of its subsidiaries in the U.S. District Court. The Complaint in Intervention contains allegations of improper billing to Medicare, Medicaid and other federal healthcare programs from January 1, 2003 to the present, seeks to recover treble damages and civil penalties under the civil False Claims Act, and seeks to recover damages under common law theories of payment by mistake and unjust enrichment. On August 13, 2014, the Company's subsidiary, IPC and the IPC subsidiary defendants filed a joint motion to dismiss the Complaint in Intervention or, in the alternative, to sever claims against the defendants. The federal government filed its response on September 18, 2014, to which the defendants replied on September 25, 2014. The court’s decision, which was filed on February 17, 2015, granted the motion to dismiss in part and denied it in part. The Court’s Opinion and Order dismissed the 29 IPC subsidiary and affiliate defendants without prejudice, but the Court denied the request to dismiss IPC Healthcare, Inc., which remains the sole defendant in the lawsuit. The parties are engaged in negotiations to attempt to resolve the matter, but if an acceptable settlement cannot be reached, the Company intends to continue contesting the case. On June 14, 2016, the Company entered into a Tolling Agreement, which was extended on November 3, 2016, with the United States of America, through the United States Attorney’s Office for the Eastern District of Tennessee and the United States Department of Health and Human Services, and the State of Tennessee, through the Tennessee Attorney General’s Office, to continue ongoing discussions related to emergency department coding practices for professional services rendered in the State of Tennessee. On June 9, 2014, the Attorney General for the State of Tennessee issued a CID to one of the Company's affiliated entities, Southeastern Emergency Physicians, LLC, about possible false claims for payments associated with professional services furnished to Bureau of TennCare patients. The CID requested that the Company produce records and documents. In conjunction with the inquiry of the Attorney General for the State of Tennessee, the United States Department of Justice, U.S. Attorney’s Office for the Eastern District of Tennessee, on May 26, 2015, sent an informal request for information and documentation to Southeastern Emergency Physicians, LLC, HCFS Health Care Financial Services and TeamHealth. The request sought information relating to the Company's emergency department coding practices for professional services rendered in the State of Tennessee and the production of training and compliance materials. The Company has been timely responding to requests for information and documentation and is continuing to cooperate with the Tennessee Attorney General and the U.S. Attorney’s Office. The Company is currently unable to determine the potential impact, if any, that will result from this matter. On October 25, 2016, the Company received a CID from the United States Department of Justice pursuant to the Federal False Claims Act concerning the submission of claims to federal healthcare programs for certain professional services furnished by the Company's affiliated provider groups at certain healthcare facilities, including healthcare facilities located in Colorado and Texas. The CID requests, among other things, information related to professional services furnished to critical care patients and professional service split/shared visits involving both physicians and mid-level practitioners (such as physician assistants and nurse practitioners). The CID requests responses to written interrogatories and the production of documents and other information relating to Company coding and billing policies. The Company is cooperating with the Department of Justice. The Company is currently unable to determine the potential impact, if any, that will result from this matter. Florida Medicaid Reimbursement Suspension The Company's subsidiary, IPC, received notice on August 7, 2015 that the Florida Agency for Health Care Administration (AHCA) temporarily suspended Medicaid fee-for-service and Medicaid managed care payments to IPC’s Florida affiliate, InPatient Consultants of Florida, Inc. d/b/a IPC of Florida, because IPC of Florida is “under investigation by a state or federal agency.” Since receiving this notice, and based on its failure to contain the required specificity under the applicable federal regulation, IPC has sought additional information from AHCA regarding the basis of the payment suspension, including through repeated discussions with the responsible AHCA officials; by submitting a request for documents through the Florida Public Records Law (PRL) on August 27, 2015; and by filing a petition for formal administrative review on September 4, 2015. Following these actions, IPC received a revised letter on September 9, 2015 in which AHCA clarified that the investigation causing the payment suspension concerns IPC of Florida’s alleged “up-coding” and “billing for the highest level of inpatient hospital care, which may not be medically necessary.” Since receipt of this revised notice, which still failed to contain the required specificity, IPC has continued to engage with AHCA to obtain information that would enable IPC to rebut the basis for the payment suspension. These efforts have included submitting a second PRL request on September 18, 2015 and submitting a letter to AHCA providing information to support a determination by AHCA that it has “good cause” to discontinue the payment suspension, consistent with the applicable federal regulation. On October 23, 2015, IPC received an order dismissing IPC’s petition for formal administrative review on the grounds that there is no final agency action and because the suspension is a contract action not appropriate for an administrative hearing. The Company is continuing its discussions with AHCA officials in an effort to resolve this matter. It is not possible to predict when any of the above matters may be resolved, the time or resources that the Company will need to devote to the matters, or what impact, if any, the outcome of any of the matters might have on the Company's business, consolidated financial position, results of operations, or cash flows. |
Equity-based Compensation
Equity-based Compensation | 9 Months Ended |
Sep. 30, 2016 | |
Share-based Compensation [Abstract] | |
Share-based Compensation | Equity-based Compensation Equity Incentive Plans In May 2013, the Company's shareholders approved the Team Health Holdings, Inc. Amended and Restated 2009 Stock Incentive Plan (the Stock Plan) that amended the 2009 Stock Incentive Plan. In connection with the acquisition of IPC, the IPC replacement awards were issued based on a conversion ratio of the IPC common share value to Team Health weighted average share price immediately prior to the closing. The Company assumed and restated the Amended and Restated Team Health Holdings, Inc. 1997 Equity Participation Plan, the Amended and Restated 2002 Equity Participation Plan of Team Health Holdings, Inc., the Amended and Restated Team Health Holdings, Inc. 2007 Equity Participation Plan, and the Amended and Restated Team Health Holdings, Inc. 2012 Equity Participation Plan (collectively the IPC Plans) for the sole purpose of completing the exchange of equity awards. There will be no further issuances under these plans. Purpose. The purpose of the Stock Plan is to aid in recruiting and retaining key employees, directors, consultants, and other service providers of outstanding ability and to motivate those employees, directors, consultants, and other service providers to exert their best efforts on behalf of the Company and its affiliates by providing incentives through the granting of options, stock appreciation rights and other stock-based awards. Shares Subject to the Plan. The Stock Plan provides that the total number of shares of common stock that may be issued is 15,100,000 , of which approximately 593,000 are available to grant as of September 30, 2016 . Shares of the Company’s common stock covered by awards that terminate or lapse without the payment of consideration may be granted again under the Stock Plan. The following table summarizes the status of options under the Stock Plan as of September 30, 2016 : Shares (in thousands) Weighted Average Exercise Price Aggregate Intrinsic Value (in thousands) Weighted Average Remaining Life in Years Outstanding at beginning of year 4,780 $ 28.07 $ 86,342 5.3 Granted 1,134 35.30 Exercised (881 ) 20.59 16,930 Expired or forfeited (203 ) 44.96 Outstanding at end of period 4,830 $ 30.51 $ 34,285 5.4 Exercisable at end of period 3,098 $ 24.31 $ 34,280 4.4 Intrinsic value is the amount by which the stock price as of September 30, 2016 exceeds the exercise price of the options. The Company granted approximately 1,134,000 options, of which approximately 442,000 were performance share options, during the nine months ended September 30, 2016 . The market based performance stock options vest if the market conditions are met and the grantee remains employed over the requisite service period. As of September 30, 2016 , the Company had approximately $20.3 million of unrecognized compensation expense, net of estimated forfeitures related to unvested options, which will be recognized over the remaining requisite service period. The fair value of options granted in 2016 was based on the grant date fair value as calculated by the Black-Scholes option pricing formula, while the performance share options fair value was based on the grant date fair value as calculated by the Monte Carlo option pricing formula. The expected life is the mid-point between the vesting date and the end of the contractual term, except for the performance options, which have an expected life based on the mid-point between the option expiration date and the date at which the market condition is first fulfilled. The Company uses this simplified method, as described in ASC 718, due to changes in option grant contractual terms causing insufficient historical exercise data. The Company will continue to evaluate the use of the simplified method as historical exercise data becomes more sufficient. The following assumptions were used: Time vested options Performance share options Expected life 5 years 4.6 years Volatility 34.9 % 40.2 % Risk free interest rate 1.3 % 1.4 % Option value $ 12.14 $ 10.39 Assumed dividend rate — % — % Restricted awards are grants of restricted stock, restricted stock units and performance stock units that are not vested (Restricted Awards). The Company granted approximately 642,000 shares of Restricted Awards in 2016 . The Company had $30.9 million of expense remaining to be recognized over the requisite service period for Restricted Awards at September 30, 2016 . The Restricted Awards generally vest annually over a three to four -year period from the initial grant date for the grants made to the independent board members and management. The performance stock units vest at the end of three years from the initial grant date. The actual number of performance stock units to be awarded will be based on the achievement of certain predetermined financial and operational performance targets during the initial two year period starting in the year of the grant. The related expense will be tracked and adjusted as appropriate to reflect the actual shares issued. Market Share Unit Awards In September 2016 , the Company granted approximately 127,000 market share units (MSU). The vesting of these awards is contingent upon the Company's twenty day average closing price immediately preceding the MSU vesting date. The awards vest in three annual tranches and have a maximum potential to vest at 200% based on stock performance and a minimum potential of 75% . The related stock-based compensation expense is determined based on the estimated fair value of the underlying shares on the date of grant and is recognized using the accelerated method over the vesting term. The estimated fair value was calculated using a Monte Carlo simulation model. The fair value of the awards granted in September was $39.26 . The awards are included in the restricted stock unit table above. The Company had $4.9 million of expense remaining to be recognized over the requisite service period for the MSUs at September 30, 2016 . The market share units vest over a three year period from the initial grant date. A summary of changes in total outstanding unvested restricted and market share unit awards for the nine months ended September 30, 2016 is as follows (in thousands): Restricted Stock Restricted Units Performance Units Market Share Units Total Outstanding at beginning of year 100 766 — — 866 Granted — 498 144 127 769 Vested (53 ) (276 ) — — (329 ) Forfeited and expired (5 ) (94 ) (33 ) — (132 ) Outstanding at September 30, 2016 42 894 111 127 1,174 Stock Purchase Plans In May 2010, the Company’s Board of Directors (the Board) adopted the 2010 Employee Stock Purchase Plan (ESPP) and the 2010 Nonqualified Stock Purchase Plan (NQSPP). The ESPP provides for the issuance of up to 600,000 shares to the Company’s employees. All eligible employees are granted identical rights to purchase common stock in each Board authorized offering under the ESPP. Rights granted pursuant to any offering under the ESPP terminate immediately upon cessation of an employee’s employment for any reason. In general, an employee may reduce his or her contribution or withdraw from participation in an offering at any time during the purchase period for such offering. Employees receive a 5% discount on shares purchased under the ESPP. Rights granted under the plan are not transferable and may be exercised only by the person to whom such rights are granted. Offerings occur every six months in April and October. As of September 30, 2016 , contributions under the ESPP totaled $3.3 million . In October 2016, approximately 101,000 shares of the Company’s common stock were issued to plan participants. The NQSPP provides for the issuance of up to 800,000 shares to our independent contractors. All eligible contractors are granted identical rights to purchase common stock in each Board authorized offering under the NQSPP. Rights granted pursuant to any offering under the NQSPP terminate immediately upon cessation of a contractor’s relationship with the Company for any reason. In general, a contractor may reduce his or her contribution or withdraw from participation in an offering at any time during the purchase period for such offering. Contractors receive a 5% discount on shares purchased under the NQSPP. Rights granted under the NQSPP are not transferable and may be exercised only by the person to whom such rights are granted. Offerings occur every six months in April and October. As of September 30, 2016 , contributions under the NQSPP totaled $0.9 million . In October 2016, approximately 29,000 shares of the Company’s common stock were issued to plan participants. Equity Based Compensation Expense Equity based compensation expense, including $3.9 million of expense, primarily associated with changes in executive leadership, recorded in transaction, integration and reorganization costs during the nine months ended September 30, 2016 , and the resulting tax benefits were as follows (in thousands): Nine Months Ended September 30, 2015 2016 Stock options $ 7,212 $ 6,277 Restricted awards 5,923 18,060 Market share units — 51 Stock purchase plan 62 82 Total equity based compensation expense $ 13,197 $ 24,470 Tax benefit of equity based compensation expense $ 5,081 $ 9,360 |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | Earnings Per Share The Company computes basic earnings per share using the weighted average number of shares outstanding. The Company computes diluted earnings per share using the weighted average number of shares outstanding plus the dilutive effect of outstanding stock options, restricted awards, and stock purchase plans. The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2015 2016 2015 2016 Net earnings attributable to Team Health Holdings, Inc. (numerator for basic and diluted earnings per share) $ 35,442 $ 10,481 $ 92,431 $ 29,934 Denominator: Weighted average shares outstanding 72,361 74,166 71,900 73,823 Effect of dilutive securities: Stock options 1,086 871 1,176 988 Restricted awards 237 199 272 340 Market share units — 61 — 67 Stock purchase plans 3 7 3 7 Shares used for diluted earnings per share 73,687 75,304 73,351 75,225 Basic net earnings per share of Team Health Holdings, Inc. $ 0.49 $ 0.14 $ 1.29 $ 0.41 Diluted net earnings per share of Team Health Holdings, Inc. $ 0.48 $ 0.14 $ 1.26 $ 0.40 Securities excluded from diluted earnings per share of Team Health Holdings, Inc. because they were antidilutive: Stock options 519 1,685 258 1,622 Restricted awards — 173 — 215 |
Noncontrolling Interests in Con
Noncontrolling Interests in Consolidated Entity | 9 Months Ended |
Sep. 30, 2016 | |
Noncontrolling Interest [Abstract] | |
Noncontrolling Interest Disclosure | Noncontrolling Interests in Consolidated Entity As of September 30, 2016 , the Company is party to one joint venture arrangement. The joint venture provides administrative management and billing services to certain existing and planned urgent care clinics the Company and joint venture partners operate. The consolidated financial statements include all assets, liabilities, revenues and expenses of the less than 100% owned entity that the Company controls. Accordingly, the Company has recorded noncontrolling interests in the earnings and equity of this entity. In connection with this arrangement, the Company received joint venture contributions of $2.0 million during the nine months ended September 30, 2016 . |
Transaction, Integration and Re
Transaction, Integration and Reorganization Costs | 9 Months Ended |
Sep. 30, 2016 | |
Transaction, integration, and reorganization costs [Abstract] | |
Transaction, integration and reorganization costs | Transaction, Integration and Reorganization Costs For the nine months ended September 30, 2016 , the Company recognized certain transaction, integration, and reorganization costs in the amount of $48.3 million . For 2016 , these expenses include IPC severance and integration costs of $19.3 million , $11.7 million of professional, advisory, and legal costs associated with the activities of (i) the Board's special advisory committee (which was responsible for reviewing and evaluating possible strategic alternatives available to the Company) and (ii) the JANA agreement, $8.8 million of charges associated with the executive leadership transition during the third quarter of 2016, $6.9 million of severance and lease impairment costs associated with a reorganization of the Company's legacy operations, and $1.6 million of legacy transaction costs. For the nine months ended September 30, 2015 , the Company recognized $7.2 million of costs related to advisory, legal, accounting and other fees incurred related to acquisition activity, of which $2.6 million was associated with the IPC transaction. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income | 9 Months Ended |
Sep. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | |
Accumulated Other Comprehensive Earnings (Loss) | Accumulated Other Comprehensive Earnings The changes in accumulated other comprehensive earnings related to available-for-sale securities were as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2016 2015 2016 Balance at beginning of period $ 1,095 $ 2,414 $ 1,695 $ 1,503 Other comprehensive earnings (loss): Net unrealized gain (loss) 451 (367 ) (436 ) 1,422 Tax (expense) benefit (124 ) 133 213 (359 ) Total other comprehensive earnings (loss) before reclassifications, net of tax 327 (234 ) (223 ) 1,063 Net amount reclassified to earnings (1) (97 ) (8 ) (147 ) (394 ) Tax benefit (expense) (2) — — — — Total amount reclassified from accumulated other comprehensive earnings, net of tax (3) (97 ) (8 ) (147 ) (394 ) Total other comprehensive earnings (loss) 230 (242 ) (370 ) 669 Balance at end of period $ 1,325 $ 2,172 $ 1,325 $ 2,172 (1) This amount was included in Other (income) expense, net on the accompanying Consolidated Statement of Comprehensive Earnings. (2) These amounts were included in Provision for income taxes on the accompanying Consolidated Statement of Comprehensive Earnings. (3) A positive amount indicates a corresponding charge to earnings and a negative amount indicates a corresponding benefit to earnings. |
Segment Reporting
Segment Reporting | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Segment Reporting | Segment Reporting During the fourth quarter of 2015, the Company completed certain changes to its management reporting structure to better align its businesses with the Company objectives and operating strategies. These changes resulted in changes among the Company's previously reported operating and reportable segments. The third quarter 2015 segment results have been reclassified to conform to the current year reporting of these businesses. The Company determined, in accordance with segment reporting guidance, that it provides services through eight operating segments which are aggregated into four reportable segments: Hospital Based Services, IPC Healthcare, Specialty Services, and Other Services. The Hospital Based Services segment, which is an aggregation of emergency medicine, anesthesia, and the Company's legacy acute care services, provides comprehensive healthcare service programs to users of healthcare services on a fee for service as well as a cost plus or contract basis. The IPC Healthcare segment consists of the business acquired in connection with the IPC transaction and provides comprehensive acute hospital medicine and post-acute provider service programs to users of healthcare services. The Specialty Services segment, which is an aggregation of military and government healthcare staffing, clinical services, and nurse call center operations, provides comprehensive healthcare service programs to users of healthcare services in an outpatient setting or in a non-hospital based environment. The Other Services segment is an aggregation of locums staffing, scribes, and billing, collection and consulting services that provides a range of other comprehensive healthcare services. The operating segments included in the Specialty Services or Other Services reportable segments, while similar in the types of services provided by those operating segments included in the Hospital Based Services segment, do not meet the aggregation criteria prescribed by the segment reporting guidance nor do they meet the quantitative thresholds that would require a separate presentation. The accounting policies of the segments are the same as those described in the summary of significant accounting policies included in our Annual Report on Form 10-K for fiscal year 2015 filed with the SEC. Segment amounts disclosed are prior to any elimination entries made in consolidation, except in the case of net revenues, where intercompany charges have been eliminated. Certain corporate expenses are not allocated to the segments. These unallocated expenses are corporate expenses, net interest expense, depreciation and amortization, transaction costs and income taxes. The Company evaluates segment performance based on profit and loss before the aforementioned expenses. The following table presents financial information for each reportable segment. Depreciation, amortization, management fee and other expenses separately identified in the consolidated statements of operations are included as a reduction to the respective segments’ operating earnings for each period below (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2016 2015 2016 Net Revenues: Hospital Based Services $ 831,261 $ 894,792 $ 2,412,049 $ 2,632,504 IPC Healthcare — 177,125 — 555,506 Specialty Services 42,165 42,806 129,851 134,314 Other Services 25,731 26,742 75,648 77,304 General Corporate 24 29 72 83 $ 899,181 $ 1,141,494 $ 2,617,620 $ 3,399,711 Operating Earnings: Hospital Based Services $ 92,087 $ 78,733 $ 236,150 $ 209,589 IPC Healthcare — 5,181 — 25,449 Specialty Services 4,083 8,362 14,941 19,287 Other Services 5,715 6,754 19,158 19,827 General Corporate (38,044 ) (49,733 ) (98,586 ) (131,118 ) $ 63,841 $ 49,297 $ 171,663 $ 143,034 Reconciliation of Operating Earnings to Net Earnings: Operating earnings $ 63,841 $ 49,297 $ 171,663 $ 143,034 Interest expense, net 5,572 28,525 14,132 90,255 Provision for income taxes 22,837 10,216 65,178 22,579 Net earnings $ 35,432 $ 10,556 $ 92,353 $ 30,200 |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events [Text Block] | Subsequent Event On October 31, 2016, the Company announced that it entered into an Agreement and Plan of Merger (the Merger Agreement) to be acquired by funds affiliated with The Blackstone Group L.P. and certain co-investors. The Company entered into a Merger Agreement with Tennessee Parent, Inc., a Delaware corporation (Parent) and Tennessee Merger Sub, Inc., a Delaware corporation and wholly owned subsidiary of Parent (Merger Sub), pursuant to which Merger Sub will be merged with and into the Company (the Merger) with the Company surviving the Merger as a wholly owned subsidiary of Parent. The Company's Board of Directors unanimously approved the Merger Agreement and resolved to recommend that the Company's stockholders vote to adopt the Merger Agreement. Until the tenth business day following the end of the go-shop period, the Company may continue to engage with any third party that made an acquisition proposal prior to the end of the go-shop period that the Board of Directors has determined in good faith, after consultation with outside counsel and its financial advisors, is or could reasonably be expected to result in a superior proposal as defined in the Merger Agreement (each, an Excluded Party). At the effective time of the Merger (the Effective Time), each share of the Company’s common stock, par value $0.01 per share, issued and outstanding immediately prior to the Effective Time (other than shares of the Company’s common stock held by Parent, Merger Sub or any other direct or indirect wholly-owned subsidiary of Parent, shares owned by the Company (including shares held in treasury) or any of its direct or indirect wholly-owned subsidiaries, and shares owned by stockholders who have properly made and not withdrawn or lost a demand for appraisal rights under Delaware law) will be converted into the right to receive $43.50 in cash, without interest and subject to applicable withholding taxes (the Merger Consideration). Pursuant to the Merger Agreement, (i) each outstanding Company stock option will immediately vest and be canceled and converted into the right to receive an amount in cash equal to the product of (x) the total number of shares of Company common stock subject to each Company stock option multiplied by (y) the excess, if any, of the Merger Consideration over the per share exercise price under such Company stock option and (ii) each outstanding Company restricted stock unit or similar stock right (other than Company performance share units and market stock units, each a “Company stock unit”) will be canceled and converted into the right to receive an amount in cash equal to the product of (x) the number of shares of Company common stock subject to such Company stock unit multiplied by (y) the Merger Consideration. Each outstanding Company performance share unit will be canceled at the Effective Time, and the holder of such Company performance share unit will be entitled to receive an amount in cash equal to the product of (x) the number of shares of Company common stock subject to such Company performance share unit (assuming performance resulted in a payout at the target level award) multiplied by (y) the Merger Consideration. Performance options will vest to the extent the relevant performance vesting thresholds are achieved based on the per share Merger Consideration and, with respect to market share units, a holder of market share units will be entitled to receive an amount in cash equal to the product of (x) the MSU End Price (as set forth in his applicable award agreement) and (y) the relevant performance multiplier (as set forth in his applicable award agreement) that is determined by reference to the per share Merger Consideration. The cash payments in respect of the canceled equity awards will generally be paid as soon as reasonably practicable after the Effective Time, subject to potential delayed payment in the case of any equity awards subject to existing deferral elections. The Merger Agreement contains certain termination rights for the Company and Parent, including the right of the Company to terminate the Merger Agreement to accept a superior proposal, subject to specified limitations, and provides that, upon termination of the Merger Agreement by the Company or Parent upon specified conditions, the Company will be required to pay Parent a termination fee of $50.4 million under specified conditions where the Company terminates the Merger Agreement in connection with its entry into a superior proposal with an Excluded Party and of $100.8 million under other specified conditions. The Merger Agreement also provides that Parent will be required to pay the Company a reverse termination fee of $201.7 million upon the termination of the Merger Agreement by the Company under specified conditions. There can be no assurance that approval of the Company's stockholders will be obtained or that the Merger Agreement will not be otherwise terminated under the circumstances triggering these obligations. If triggered, payment of these fees and costs will negatively impact the Company's results of operations, financial condition and cash flows. The closing of the Merger is subject to a condition that the Merger Agreement be adopted by the affirmative vote of the holders of a majority of all of the outstanding shares of the Company’s common stock entitled to vote thereon at such meeting. Consummation of the Merger is also subject to (i) the absence of any law, injunction or other order that prohibits the consummation of the Merger, (ii) the expiration or early termination of the applicable waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and (iii) other customary closing conditions. The transaction is expected to close in the first quarter of 2017. If completed, the Merger will result in the Company becoming a wholly owned subsidiary of Parent and the Company's shares will no longer be listed on any public market. Additional information about the Merger and the Merger Agreement, including circumstances under which the Merger Agreement can be terminated and the ramifications of such termination, as well as other terms and conditions, is set forth in the Company's Current Report on Form 8-K filed with the SEC on October 31, 2016. |
(Policies)
(Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Changes and Error Corrections [Abstract] | |
New Accounting Pronouncements, Policy | Changes to U.S. GAAP are established by the Financial Accounting Standards Board (FASB) in the form of accounting standards updates (ASUs) to the FASB’s Accounting Standards Codification. The Company considers the applicability and impact of all ASUs. ASUs not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on the Company's consolidated financial position or results of operations. In May 2014, the FASB issued ASU No. 2014-09, “ Revenue from Contracts with Customers (Topic 606), ” which establishes a comprehensive revenue recognition standard for virtually all industries under U.S. GAAP. The standard is effective for public entities for annual reporting periods beginning after December 15, 2017, including interim periods therein, with early adoption permitted for annual reporting periods beginning after December 15, 2016, including interim periods therein. The Company is in the process of evaluating the impact that adoption of this new accounting standard may have on the Company's consolidated financial statements. In February 2016, the FASB issued ASU 2016-02, “ Leases (Topic 842) ,” which will change how companies account for and present lease arrangements. The guidance requires companies to recognize leased assets and liabilities for both capital and operating leases. ASU 2016-02 is effective for annual reporting periods beginning after December 15, 2018, and interim periods therein, and early adoption is permitted. Companies are required to adopt the guidance on a modified retrospective method. The Company is in the process of evaluating the impact that adoption of this new accounting standard may have on the Company's consolidated financial statements. In March 2016, the FASB issued ASU 2016-09, “ Compensation - Stock Compensation (Topic 718), Improvements to Employee Share-Based Payment Accounting ,” which requires companies to recognize the income tax effects of awards in the income statement when the awards vest or are settled (i.e., additional paid-in-capital pools will be eliminated). In addition, the new guidance changes the limit that companies are allowed to withhold for employees without triggering liability classification and allows companies to make a policy election to either recognize forfeitures as they occur or estimate them. The new guidance is effective for annual reporting periods beginning after December 15, 2016, and interim periods within those annual periods, and early adoption is permitted. The required transition methods for each aspect of the new guidance varies between prospective, retrospective and modified retrospective. The Company has not yet determined which method of adoption it will select and is in the process of evaluating the impact that adoption of this new accounting standard may have on the Company's consolidated financial statements. In August 2016, the FASB issued ASU 2016-15, “ Statement of Cash Flows (Topic 230), Classification of Certain Cash Receipts and Cash Payments, ” which clarifies guidance on the classification of certain cash receipts and payments in the statement of cash flows. ASU 2016-15 is effective for annual reporting periods beginning after December 15, 2017, and interim periods therein, and early adoption is permitted. Companies are required to adopt the guidance on a retrospective method, unless impracticable, at which point prospective application is appropriate. The Company is in the process of evaluating the impact that adoption of this new accounting standard may have on the Company's consolidated financial statements. The Company has implemented all new accounting pronouncements that are in effect and that could materially impact its consolidated financial statements and does not believe that there are any other new accounting pronouncements that have been issued, but are not yet effective, that might have a material impact on the consolidated financial statements of the Company unless otherwise noted in prior updates or above. |
Business Combinations Policy | In accordance with ASC 805, the Company records its contingent consideration as a component of the opening balance sheet unless there is a continuing employment provision. Contingent consideration with a continuing employment provision is recognized ratably over the defined performance period as compensation expense which is included as a component of general and administrative expense (and parenthetically disclosed with other acquisition-related compensation expense) in the results of the Company’s operations. The payment of contingent purchase obligations is included as a component of financing, unless there is a continuing employment provision, in which case it is included as a component of operating cash flows. |
Fair Value of Financial Instruments, Policy | The Company’s insurance subsidiaries' and other investments are valued using market prices on active markets (Level 1) and less active markets (Level 2), in addition to using alternative information when market data is not available (Level 3). Level 1 investment valuations are obtained from real-time quotes for transactions in active exchange markets involving identical assets. Level 2 investment valuations are obtained from readily available pricing sources for comparable investments or identical investments in less active markets. The fair values of the Company’s supplemental employee retirement investments are based on quoted prices. Level 3 investment valuations require significant management judgment and are based on transaction price, company performance, and market conditions. The Company applies the provisions of FASB ASC Topic 820, “Fair Value Measurements and Disclosures,” (ASC Topic 820), in determining the fair value of its financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements. ASC Topic 820 prioritizes the inputs used in measuring fair value into the following hierarchy: Level 1 Quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2 Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable; Level 3 Unobservable inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing. |
Revenue Recognition, Policy | Net revenues consists of fee for service revenue, contract revenue and other revenue. The Company’s net revenues are principally derived from the provision of healthcare staffing services to patients within healthcare facilities and is recorded in the period the services are rendered. Under the fee for service arrangements, the Company bills patients for services provided and receives payment from patients or their third-party payors. Fee for service revenue reflects gross fee for service charges less contractual allowances and policy discounts, where applicable. Contractual adjustments represent the Company’s estimate of discounts and other adjustments to be recognized from gross fee for service charges under contractual payment arrangements, primarily with commercial, managed care and governmental payment plans such as Medicare and Medicaid when the Company’s providers participate in such plans. Contractual adjustments are not reflected in self-pay fee for service revenue. Contract revenue represents revenue generated under contracts in which the Company provides physician and other healthcare staffing and administrative services in return for a contractually negotiated fee. Contract revenue consists primarily of billings based on hours of healthcare staffing provided at agreed-to hourly rates, monthly contractual rates, or certain operational or financial metrics. Revenue in such cases is recognized as the hours are worked by the Company’s affiliated staff and contractors or as metrics are realized. Other revenue consists primarily of revenue from management and billing services provided to outside parties. Revenue is recognized for such services pursuant to the terms of the contracts with customers. The Company also records a provision for uncollectible accounts based primarily on historical collection experience to record accounts receivables at the estimated amounts expected to be collected. |
Trade and Other Accounts Receivable, Policy | The Company employs several methodologies for determining its allowance for uncollectibles depending on the nature of the net revenues before provision for uncollectibles recognized. The Company initially determines gross revenue for its fee for service patient visits based upon established fee schedule prices. Such gross revenue is reduced for estimated contractual allowances for those patient visits covered by contractual insurance arrangements to result in estimated net revenues before provision for uncollectibles. Net revenues before provision for uncollectibles is then reduced for management’s estimate of uncollectible amounts. Fee for service net revenues represents estimated cash to be collected from such patient visits and is net of management’s estimate of account balances estimated to be uncollectible. The provision for uncollectible fee for service patient visits is based on historical experience resulting from approximately 25 million fee for service patient visits and procedures over the last twelve months. The significant volume of patient visits and the terms of thousands of commercial and managed care contracts and the various reimbursement policies relating to governmental healthcare programs do not make it feasible to evaluate fee for service accounts receivable on a specific account basis. Fee for service accounts receivable collection estimates are reviewed on a quarterly basis for each fee for service contract by period of accounts receivable origination. Such reviews include the use of historical cash collection percentages by contract adjusted for the lapse of time since the date of the patient visit. In addition, when actual collection percentages differ from expected results, on a contract by contract basis, supplemental detailed reviews of the outstanding accounts receivable balances may be performed by the Company’s billing operations to determine whether there are facts and circumstances existing that may cause a different conclusion as to the estimate of the collectibility of that contract’s accounts receivable from the estimate resulting from using the historical collection experience. Contract-related net revenues are billed based on the terms of the contract at amounts expected to be collected. Such billings are typically submitted on a monthly basis and aged trial balances are prepared. Allowances for estimated uncollectible amounts related to such contract billings are made based upon periodic reviews of specific accounts and invoices once it is concluded that such amounts are not likely to be collected. Approximately 98% of the Company’s allowance for doubtful accounts is related to receivables for fee for service patient visits. The principal exposure for uncollectible fee for service visits is centered in self-pay patients and, to a lesser extent, for co-payments and deductibles from patients with insurance. While the Company does not specifically allocate the allowance for doubtful accounts to individual accounts or specific payor classifications, the portion of the allowance, excluding IPC, associated with fee for service charges as of September 30, 2016 was equal to approximately 93% of outstanding self-pay fee for service patient accounts. The methodologies employed to compute allowances for doubtful accounts were unchanged between 2015 and 2016 . |
Segment Reporting, Policy | The accounting policies of the segments are the same as those described in the summary of significant accounting policies included in our Annual Report on Form 10-K for fiscal year 2015 filed with the SEC. Segment amounts disclosed are prior to any elimination entries made in consolidation, except in the case of net revenues, where intercompany charges have been eliminated. Certain corporate expenses are not allocated to the segments. These unallocated expenses are corporate expenses, net interest expense, depreciation and amortization, transaction costs and income taxes. The Company evaluates segment performance based on profit and loss before the aforementioned expenses. |
Acquisitions and Contingent P25
Acquisitions and Contingent Purchase Obligations (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Business Combinations [Abstract] | |
Purchase price allocation | The purchase price for these acquisitions was allocated, based on management’s estimates, in accordance with ASC Topic 805, “Business Combinations” (ASC 805). The Company’s purchase price allocation for business combinations completed during recent periods is preliminary and may be subject to revision as additional information about the fair value of acquired working capital becomes available. Additional information, which existed as of the acquisition date but at that time was unknown to the Company, may become known to the Company during the remainder of the measurement period, a period not to exceed 12 months from the acquisition date. The purchase price for these acquisitions completed during the nine months ended September 30, 2016 was allocated as shown in the table below (in thousands): September 30, 2016 Accounts receivable $ 3,024 Prepaid expenses and other assets 70 Other intangibles (consisting of physician and hospital agreements) 34,564 Goodwill (of which $29.1 million is tax deductible) 51,955 Accounts payable (1,165 ) Accrued compensation and physician payable (1,493 ) Other accrued liabilities (718 ) Contingent purchase liability (1,050 ) Net deferred income taxes (2,025 ) Total purchase price $ 83,162 IPC Healthcare, Inc. (IPC) Acquisition On November 23, 2015, the Company completed the acquisition of IPC in a cash transaction. At closing, the Company paid approximately $1.60 billion in cash to the former owners of IPC in exchange for all of the outstanding equity interests of IPC. The accounting for the acquisition of IPC will be completed within the timeframe prescribed by the provisions of ASC 805. The Company continues to obtain information relative to the fair values of assets acquired and liabilities assumed. Acquired assets and assumed liabilities include, but are not limited to, accounts receivable, other intangible assets, current and noncurrent taxes payable, deferred taxes, contingent purchase liabilities, and other accrued liabilities. The valuations are based on appraisal reports or other appropriate valuation techniques to determine the fair value of the assets acquired or liabilities assumed. During 2016 , factors became known that resulted in changes to the purchase price allocation of assets and liabilities existing at the date of the IPC transaction. The estimated fair values of assets acquired and liabilities assumed, specifically accounts receivable, current and noncurrent taxes payable, deferred taxes, contingent purchase liability and other intangible assets, may be subject to change as additional information is received. The purchase price allocation adjustments for this acquisition are summarized as follows (in thousands): As of Adjustments to As of December 31, 2015 Purchase Price Allocation September 30, 2016 Short term investments $ 1,985 $ — $ 1,985 Accounts receivable 127,265 (11,355 ) 115,910 Prepaid expenses and other assets 6,347 (316 ) 6,031 Receivables under insured programs 36,255 — 36,255 Property and equipment 10,541 216 10,757 Income tax receivable 12,528 — 12,528 Net deferred income taxes 64,301 (1,936 ) 62,365 Other intangibles (consisting of marketing-related and technology-based intangibles and physician and hospital agreements) 4,975 21,700 26,675 Goodwill (of which the tax deductible amount was $368,283) 1,574,757 5,594 1,580,351 Accounts payable (15,627 ) 313 (15,314 ) Accrued compensation and physician payable (43,856 ) — (43,856 ) Other accrued liabilities (63,809 ) (13,260 ) (77,069 ) Contingent purchase liability (30,639 ) (2,768 ) (33,407 ) Assumed notes payable (148,249 ) — (148,249 ) Other non-current liabilities (61,894 ) 1,812 (60,082 ) Total consideration paid, net of acquired cash and cash equivalents of $28,059 $ 1,474,880 $ — $ 1,474,880 |
Accumulated contingent purchase expense liability | The changes to the Company’s accumulated contingent purchase liability for the nine months ended September 30, 2016 are as follows (in thousands): Contingent purchase liability at December 31, 2015 $ 57,080 Payments (24,047 ) Contingent purchase and other acquisition compensation expense recognized 28,669 Adjustments to contingent purchase liability recognized at acquisition date 3,756 Contingent purchase liability at September 30, 2016 $ 65,458 |
Estimated unrecognized contingent purchase compensation expense | Estimated unrecognized contingent purchase compensation expense as of September 30, 2016 is as follows (in thousands): For the remainder of the year ended December 31, 2016 $ 6,025 For the year ended December 31, 2017 11,069 For the year ended December 31, 2018 3,635 For the year ended December 31, 2019 1,515 For the year ended December 31, 2020 625 $ 22,869 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Summary of assets and liabilities measured at fair value on a recurring basis | The following table provides information on those assets and liabilities the Company currently measures at fair value on a recurring basis as of December 31, 2015 and September 30, 2016 (in thousands): Carrying Amount in Consolidated Balance Sheet December 31, 2015 Fair Value December 31, 2015 Fair Value Level 1 Fair Value Level 2 Fair Value Level 3 Insurance subsidiaries' and other investments: Money market funds $ 18,238 $ 18,238 $ 18,238 $ — $ — Municipal bonds 87,121 87,121 — 87,121 — Mutual funds 64 64 — 64 — Private investments 2,818 2,818 — — 2,818 Corporate bonds 3,699 3,699 — 3,699 — Total investments of insurance subsidiaries $ 111,940 $ 111,940 $ 18,238 $ 90,884 $ 2,818 Supplemental employee retirement plan investments: Mutual funds $ 45,868 $ 45,868 $ — $ 45,868 $ — Carrying Amount in Consolidated Balance Sheet September 30, 2016 Fair Value September 30, 2016 Fair Value Level 1 Fair Value Level 2 Fair Value Level 3 Insurance subsidiaries' and other investments: Money market funds $ 7,539 $ 7,539 $ 7,539 $ — $ — Municipal bonds 83,016 83,016 — 83,016 — Mutual funds 48 48 — 48 — Private investments 1,947 1,947 — — 1,947 Corporate bonds 7,389 7,389 — 7,389 — Total investments of insurance subsidiaries $ 99,939 $ 99,939 $ 7,539 $ 90,453 $ 1,947 Supplemental employee retirement plan investments: Mutual funds $ 55,655 $ 55,655 $ — $ 55,655 $ — |
Investments (Tables)
Investments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Investments [Abstract] | |
Summary of amortized cost basis and aggregate fair value of available-for-sale securities by investment type | At December 31, 2015 and September 30, 2016 , amortized cost basis and aggregate fair value of the Company’s available-for-sale securities by investment type were as follows (in thousands): Cost Basis Gross Unrealized Gains Gross Unrealized Losses Fair Value December 31, 2015 Money market funds $ 18,238 $ — $ — $ 18,238 Municipal bonds 84,983 2,411 (273 ) 87,121 Mutual funds 64 — — 64 Private investments 2,712 106 — 2,818 Corporate bonds 3,718 6 (25 ) 3,699 $ 109,715 $ 2,523 $ (298 ) $ 111,940 September 30, 2016 Money market funds $ 7,539 $ — $ — $ 7,539 Municipal bonds 80,187 3,001 (172 ) 83,016 Mutual funds 48 — — 48 Private Investments 1,711 236 — 1,947 Corporate bonds 7,204 185 — 7,389 $ 96,689 $ 3,422 $ (172 ) $ 99,939 |
Summary of amortized cost basis and aggregate fair value of available-for-sale securities by contractual maturities | At December 31, 2015 and September 30, 2016 , the amortized cost basis and aggregate fair value of the Company’s available-for-sale securities by contractual maturities were as follows (in thousands): Cost Basis Gross Unrealized Gains Gross Unrealized Losses Fair Value December 31, 2015 Due in less than one year $ 24,099 $ 35 $ (54 ) $ 24,080 Due after one year through five years 57,537 1,647 (79 ) 59,105 Due after five years through ten years 23,389 674 (56 ) 24,007 Due after ten years 1,914 61 (109 ) 1,866 Total $ 106,939 $ 2,417 $ (298 ) $ 109,058 September 30, 2016 Due in less than one year $ 16,987 $ 89 $ — $ 17,076 Due after one year through five years 60,055 2,082 (90 ) 62,047 Due after five years through ten years 17,888 1,015 (82 ) 18,821 Total $ 94,930 $ 3,186 $ (172 ) $ 97,944 |
Summary of temporarily impaired available-for-sale investment securities | A summary of the Company’s temporarily impaired available-for-sale investment securities as of December 31, 2015 and September 30, 2016 follows (in thousands): Impaired Less Than 12 Months Impaired Over 12 Months Total Fair Value Unrealized Losses Fair Value Unrealized Losses Fair Value Unrealized Losses December 31, 2015 Municipal bonds $ 13,189 $ (103 ) $ 2,575 $ (170 ) $ 15,764 $ (273 ) Corporate bonds 3,120 (25 ) — — 3,120 (25 ) Total investment $ 16,309 $ (128 ) $ 2,575 $ (170 ) $ 18,884 $ (298 ) September 30, 2016 Municipal bonds $ 3,389 $ (72 ) $ 2,433 $ (100 ) $ 5,822 $ (172 ) Total investment $ 3,389 $ (72 ) $ 2,433 $ (100 ) $ 5,822 $ (172 ) |
Summary of trading gains and losses on investments related to participant directed supplemental employee retirement plan | As of December 31, 2015 and September 30, 2016 , the investments related to the participant directed supplemental employee retirement plan totaled $45.9 million and $55.7 million , respectively, and are included in other assets in the accompanying consolidated balance sheets. The net trading gains on those investments for the nine months ended September 30, 2015 and September 30, 2016 that were still held by the Company as of September 30, 2015 and September 30, 2016 were as follows (in thousands): 2015 2016 Net (losses) gains recognized during the nine months ended September 30, 2015 and 2016, respectively on trading securities $ (1,467 ) $ 1,259 Less: Net gains (losses) recognized during the period on trading securities sold during the nine months ended September 30, 2015 and 2016, respectively (35 ) (120 ) Unrealized (losses) gains recognized on trading securities still held at September 30, 2015 and 2016, respectively $ (1,432 ) $ 1,379 |
Net Revenue (Tables)
Net Revenue (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Revenue, Net [Abstract] | |
Schedule of net revenue | Net revenues consisted of the following (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2016 2015 2016 Medicare $ 183,120 20.4 % $ 344,660 30.2 % $ 530,047 20.2 % $ 1,032,522 30.4 % Medicaid 166,015 18.5 206,896 18.1 476,151 18.2 606,707 17.8 Commercial and managed care 462,652 51.5 551,960 48.4 1,322,652 50.5 1,612,048 47.4 Self-pay 496,910 55.3 568,418 49.8 1,405,252 53.7 1,582,967 46.6 Other 21,576 2.4 26,301 2.3 61,777 2.4 73,263 2.2 Unbilled 2,369 0.3 4,948 0.4 15,979 0.6 7,532 0.2 Net fee for service revenue before provision for uncollectibles 1,332,642 148.2 1,703,183 149.2 3,811,858 145.6 4,915,039 144.6 Contract revenue before provision for uncollectibles 182,631 20.3 211,986 18.6 549,998 21.0 618,931 18.2 Other 10,136 1.1 10,606 0.9 28,826 1.1 47,240 1.4 Net revenues before provision for uncollectibles 1,525,409 169.6 1,925,775 168.7 4,390,682 167.7 5,581,210 164.2 Provision for uncollectibles (626,228 ) (69.6 ) (784,281 ) (68.7 ) (1,773,062 ) (67.7 ) (2,181,499 ) (64.2 ) Net revenues $ 899,181 100.0 % $ 1,141,494 100.0 % $ 2,617,620 100.0 % $ 3,399,711 100.0 % |
Goodwill and Other Intangible29
Goodwill and Other Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule Of Changes In Goodwill | The changes in the carrying amount of goodwill during the year ended December 31, 2015 and the nine months ended September 30, 2016 were as follows (in thousands): Goodwill $ 869,038 Accumulated impairment loss (144,579 ) Additions through acquisitions 1,703,343 Balance, December 31, 2015 $ 2,427,802 Goodwill $ 2,572,381 Accumulated impairment loss (144,579 ) Increases from prior year acquisition purchase price allocation adjustments 5,834 Additions through current year acquisitions 51,955 Balance, September 30, 2016 $ 2,485,591 |
Summary of intangible assets and related amortization | The following is a summary of intangible assets and related amortization as of December 31, 2015 and September 30, 2016 (in thousands): Gross Carrying Amount Accumulated Amortization As of December 31, 2015: Contracts $ 494,569 $ (170,873 ) Other 21,716 (9,775 ) Total $ 516,285 $ (180,648 ) As of September 30, 2016: Contracts $ 517,686 $ (214,821 ) Other 31,161 (13,549 ) Total $ 548,847 $ (228,370 ) Aggregate amortization expense: For the nine months ended September 30, 2016 $ 71,425 Estimated amortization expense: For the remainder of the year ended December 31, 2016 $ 23,777 For the year ended December 31, 2017 91,249 For the year ended December 31, 2018 75,555 For the year ended December 31, 2019 66,521 For the year ended December 31, 2020 46,679 For the years ended December 31, 2021 and thereafter 16,696 Total $ 320,477 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Schedule of long-term debt | Long-term debt as of September 30, 2016 consisted of the following (in thousands): Tranche A Term Loan Facility $ 555,000 Tranche B Term Loan Facility 1,305,440 7.25% Senior Notes due 2023 545,000 Revolving Credit Facility 332,000 Total outstanding debt 2,737,440 Debt issuance costs (48,335 ) 2,689,105 Less current portion (390,120 ) $ 2,298,985 |
Schedule of aggregate annual maturities of long-term debt | Aggregate annual maturities of long-term debt as of September 30, 2016 are as follows (in thousands): 2016 $ 390,120 2017 73,120 2018 58,120 2019 418,120 2020 and thereafter 1,797,960 |
Professional Liability Insura31
Professional Liability Insurance (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Malpractice Insurance [Abstract] | |
Summary of professional liability loss reserves | The Company’s professional liability loss reserves included in other accrued liabilities and other non-current liabilities in the accompanying consolidated balance sheets consisted of the following (in thousands): December 31, September 30, Estimated losses under self-insured programs $ 245,070 $ 273,655 Estimated losses under commercial insurance programs 126,751 141,185 371,821 414,840 Less estimated payable within one year 105,028 102,478 $ 266,793 $ 312,362 |
Summary of estimated losses under self-insured programs | The changes to the Company’s estimated losses under self-insured programs as of September 30, 2016 were as follows (in thousands): Balance, December 31, 2015 $ 245,070 Reserves related to current period 62,802 Changes related to prior year reserves 14,284 Assumed liabilities (1,812 ) Payments for current period reserves (880 ) Payments for prior period reserves (45,809 ) Balance, September 30, 2016 $ 273,655 |
Equity-based Compensation (Tabl
Equity-based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Share-based Compensation [Abstract] | |
Stock options status under Stock Plan | The following table summarizes the status of options under the Stock Plan as of September 30, 2016 : Shares (in thousands) Weighted Average Exercise Price Aggregate Intrinsic Value (in thousands) Weighted Average Remaining Life in Years Outstanding at beginning of year 4,780 $ 28.07 $ 86,342 5.3 Granted 1,134 35.30 Exercised (881 ) 20.59 16,930 Expired or forfeited (203 ) 44.96 Outstanding at end of period 4,830 $ 30.51 $ 34,285 5.4 Exercisable at end of period 3,098 $ 24.31 $ 34,280 4.4 |
Stock option valuation assumptions | The fair value of options granted in 2016 was based on the grant date fair value as calculated by the Black-Scholes option pricing formula, while the performance share options fair value was based on the grant date fair value as calculated by the Monte Carlo option pricing formula. The expected life is the mid-point between the vesting date and the end of the contractual term, except for the performance options, which have an expected life based on the mid-point between the option expiration date and the date at which the market condition is first fulfilled. The Company uses this simplified method, as described in ASC 718, due to changes in option grant contractual terms causing insufficient historical exercise data. The Company will continue to evaluate the use of the simplified method as historical exercise data becomes more sufficient. The following assumptions were used: Time vested options Performance share options Expected life 5 years 4.6 years Volatility 34.9 % 40.2 % Risk free interest rate 1.3 % 1.4 % Option value $ 12.14 $ 10.39 Assumed dividend rate — % — % |
Summary of changes in unvested shares of restricted awards | A summary of changes in total outstanding unvested restricted and market share unit awards for the nine months ended September 30, 2016 is as follows (in thousands): Restricted Stock Restricted Units Performance Units Market Share Units Total Outstanding at beginning of year 100 766 — — 866 Granted — 498 144 127 769 Vested (53 ) (276 ) — — (329 ) Forfeited and expired (5 ) (94 ) (33 ) — (132 ) Outstanding at September 30, 2016 42 894 111 127 1,174 |
Share-based compensation | Equity based compensation expense, including $3.9 million of expense, primarily associated with changes in executive leadership, recorded in transaction, integration and reorganization costs during the nine months ended September 30, 2016 , and the resulting tax benefits were as follows (in thousands): Nine Months Ended September 30, 2015 2016 Stock options $ 7,212 $ 6,277 Restricted awards 5,923 18,060 Market share units — 51 Stock purchase plan 62 82 Total equity based compensation expense $ 13,197 $ 24,470 Tax benefit of equity based compensation expense $ 5,081 $ 9,360 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Basic and diluted earnings per share | The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2015 2016 2015 2016 Net earnings attributable to Team Health Holdings, Inc. (numerator for basic and diluted earnings per share) $ 35,442 $ 10,481 $ 92,431 $ 29,934 Denominator: Weighted average shares outstanding 72,361 74,166 71,900 73,823 Effect of dilutive securities: Stock options 1,086 871 1,176 988 Restricted awards 237 199 272 340 Market share units — 61 — 67 Stock purchase plans 3 7 3 7 Shares used for diluted earnings per share 73,687 75,304 73,351 75,225 Basic net earnings per share of Team Health Holdings, Inc. $ 0.49 $ 0.14 $ 1.29 $ 0.41 Diluted net earnings per share of Team Health Holdings, Inc. $ 0.48 $ 0.14 $ 1.26 $ 0.40 Securities excluded from diluted earnings per share of Team Health Holdings, Inc. because they were antidilutive: Stock options 519 1,685 258 1,622 Restricted awards — 173 — 215 |
Accumulated Other Comprehensi34
Accumulated Other Comprehensive Income (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Statement of Comprehensive Income [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The changes in accumulated other comprehensive earnings related to available-for-sale securities were as follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2016 2015 2016 Balance at beginning of period $ 1,095 $ 2,414 $ 1,695 $ 1,503 Other comprehensive earnings (loss): Net unrealized gain (loss) 451 (367 ) (436 ) 1,422 Tax (expense) benefit (124 ) 133 213 (359 ) Total other comprehensive earnings (loss) before reclassifications, net of tax 327 (234 ) (223 ) 1,063 Net amount reclassified to earnings (1) (97 ) (8 ) (147 ) (394 ) Tax benefit (expense) (2) — — — — Total amount reclassified from accumulated other comprehensive earnings, net of tax (3) (97 ) (8 ) (147 ) (394 ) Total other comprehensive earnings (loss) 230 (242 ) (370 ) 669 Balance at end of period $ 1,325 $ 2,172 $ 1,325 $ 2,172 (1) This amount was included in Other (income) expense, net on the accompanying Consolidated Statement of Comprehensive Earnings. (2) These amounts were included in Provision for income taxes on the accompanying Consolidated Statement of Comprehensive Earnings. (3) A positive amount indicates a corresponding charge to earnings and a negative amount indicates a corresponding benefit to earnings. |
Segment Reporting (Tables)
Segment Reporting (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Summary of financial information of reportable segment | The following table presents financial information for each reportable segment. Depreciation, amortization, management fee and other expenses separately identified in the consolidated statements of operations are included as a reduction to the respective segments’ operating earnings for each period below (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2015 2016 2015 2016 Net Revenues: Hospital Based Services $ 831,261 $ 894,792 $ 2,412,049 $ 2,632,504 IPC Healthcare — 177,125 — 555,506 Specialty Services 42,165 42,806 129,851 134,314 Other Services 25,731 26,742 75,648 77,304 General Corporate 24 29 72 83 $ 899,181 $ 1,141,494 $ 2,617,620 $ 3,399,711 Operating Earnings: Hospital Based Services $ 92,087 $ 78,733 $ 236,150 $ 209,589 IPC Healthcare — 5,181 — 25,449 Specialty Services 4,083 8,362 14,941 19,287 Other Services 5,715 6,754 19,158 19,827 General Corporate (38,044 ) (49,733 ) (98,586 ) (131,118 ) $ 63,841 $ 49,297 $ 171,663 $ 143,034 Reconciliation of Operating Earnings to Net Earnings: Operating earnings $ 63,841 $ 49,297 $ 171,663 $ 143,034 Interest expense, net 5,572 28,525 14,132 90,255 Provision for income taxes 22,837 10,216 65,178 22,579 Net earnings $ 35,432 $ 10,556 $ 92,353 $ 30,200 |
Acquisitions and Contingent P36
Acquisitions and Contingent Purchase Obligations - Purchase Price Allocation (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Dec. 31, 2015 | |
Business Acquisition [Line Items] | ||
Goodwill | $ 2,485,591 | $ 2,427,802 |
Accrued contingent purchase liability | (65,458) | (57,080) |
Current Year Acquisitions | ||
Business Acquisition [Line Items] | ||
Accounts receivable | 3,024 | |
Prepaid expenses and other assets | 70 | |
Net deferred income taxes | (2,025) | |
Other intangibles | 34,564 | |
Goodwill | 51,955 | |
Accounts payable | (1,165) | |
Accrued compensation and physician payable | (1,493) | |
Other accrued liabilities | (718) | |
Accrued contingent purchase liability | (1,050) | |
Total purchase price | 83,162 | |
Tax deductible goodwill | 29,100 | |
IPC Acquisition | ||
Business Acquisition [Line Items] | ||
Short term investments | 1,985 | 1,985 |
Accounts receivable | 115,910 | 127,265 |
Adjustments to the purchase price allocation, Accounts Receivable | (11,355) | |
Prepaid expenses and other assets | 6,031 | 6,347 |
Adjustments to the purchase price allocation, Prepaids and Other Assets | (316) | |
Receivables under insured programs | 36,255 | 36,255 |
Property and equipment | 10,757 | 10,541 |
Adjustments to the purchase price allocation, Property, Plant, and Equipment | 216 | |
Income tax receivable | 12,528 | 12,528 |
Business Combination Recognized Identifiable Assets Acquired and Liabilities Assumed, Deferred Tax Assets | 62,365 | 64,301 |
Adjustments to the purchase price allocation - deferred tax | (1,936) | |
Other intangibles | 26,675 | 4,975 |
Adjustments to the purchase price allocation, Other Intangibles | 21,700 | |
Goodwill | 1,580,351 | 1,574,757 |
Adjustments to the purchase price allocation, Goodwill | 5,594 | |
Accounts payable | (15,314) | (15,627) |
Adjustments to the purchase price allocation, Accounts Payable | 313 | |
Accrued compensation and physician payable | (43,856) | (43,856) |
Other accrued liabilities | (77,069) | (63,809) |
Adjustments to the purchase price allocation, Other Accrued Liabilities | (13,260) | |
Accrued contingent purchase liability | (33,407) | (30,639) |
Adjustments to the purchase price allocation, Contingent Purchase Liability | (2,768) | |
Assumed notes payable | (148,249) | (148,249) |
Other non-current liabilities | (60,082) | (61,894) |
Adjustments to the purchase price allocation, Other Non-Current Liabilities | 1,812 | |
Total purchase price | 1,474,880 | $ 1,474,880 |
Tax deductible goodwill | 368,283 | |
Acquired Cash and Equivalents | $ 28,059 |
Acquisitions and Contingent P37
Acquisitions and Contingent Purchase Obligations - Contingent Purchase Liability (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Business Combination, Separately Recognized Transactions [Line Items] | ||||
Contingent purchase liability at December 31, 2015 | $ 57,080 | |||
Payments | (24,047) | |||
Contingent purchase and other acquisition compensation expense recognized | $ 9,818 | $ (3,530) | 28,669 | $ 12,230 |
Adjustments to contingent purchase liability recognized at acquisition date | 3,756 | |||
Contingent purchase liability at September 30, 2016 | $ 65,458 | $ 65,458 |
Acquisitions and Contingent P38
Acquisitions and Contingent Purchase Obligations - Estimated Contingent Purchase Expense (Details) $ in Thousands | Sep. 30, 2016USD ($) |
Business Combination, Separately Recognized Transactions [Line Items] | |
Estimated unrecognized contingent purchase compensation expense | $ 22,869 |
For the remainder of the year ended December 31, 2016 | |
Business Combination, Separately Recognized Transactions [Line Items] | |
Estimated unrecognized contingent purchase compensation expense | 6,025 |
For the year ended December 31, 2017 | |
Business Combination, Separately Recognized Transactions [Line Items] | |
Estimated unrecognized contingent purchase compensation expense | 11,069 |
For the year ended December 31, 2018 | |
Business Combination, Separately Recognized Transactions [Line Items] | |
Estimated unrecognized contingent purchase compensation expense | 3,635 |
For the year ended December 31, 2019 | |
Business Combination, Separately Recognized Transactions [Line Items] | |
Estimated unrecognized contingent purchase compensation expense | 1,515 |
For the year ended December 31, 2020 | |
Business Combination, Separately Recognized Transactions [Line Items] | |
Estimated unrecognized contingent purchase compensation expense | $ 625 |
Acquisitions and Contingent P39
Acquisitions and Contingent Purchase Obligations (Details Textual) visit in Thousands, $ in Thousands | Oct. 01, 2016USD ($) | Nov. 23, 2015USD ($) | Oct. 31, 2016visit | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)Business | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)visit | Dec. 31, 2015USD ($) |
Business Acquisition [Line Items] | |||||||||
Number of businesses acquired | Business | 9 | ||||||||
Total cash paid for acquisitions | $ 395,085 | $ 116,314 | |||||||
Net revenue | $ 1,141,494 | $ 899,181 | 3,399,711 | 2,617,620 | |||||
Contingent Consideration Estimate | 88,300 | 88,300 | $ 88,300 | ||||||
Fee for service patient visits | visit | 25,000 | ||||||||
Accrued contingent purchase liability | 65,458 | 65,458 | $ 65,458 | $ 57,080 | |||||
Remaining estimated liability to be recorded as contingent purchase compensation expense | 22,869 | 22,869 | 22,869 | ||||||
Contingent purchase and other acquisition compensation expense recognized | 9,818 | $ (3,530) | 28,669 | 12,230 | |||||
Current Year Acquisitions | |||||||||
Business Acquisition [Line Items] | |||||||||
Total cash paid for acquisitions | 83,162 | ||||||||
Net revenue | 17,700 | ||||||||
Accrued contingent purchase liability | 1,050 | 1,050 | 1,050 | ||||||
IPC Acquisition | |||||||||
Business Acquisition [Line Items] | |||||||||
Payments to acquire businesses, gross | $ 1,600,000 | ||||||||
Accrued contingent purchase liability | $ 33,407 | 33,407 | $ 33,407 | $ 30,639 | |||||
Subsequent Event | |||||||||
Business Acquisition [Line Items] | |||||||||
Total cash paid for acquisitions | $ 311,900 | ||||||||
Contingent Consideration Estimate | $ 26,700 | ||||||||
Fee for service patient visits | visit | 48 | ||||||||
General and Administrative Expense | |||||||||
Business Acquisition [Line Items] | |||||||||
Contingent purchase and other acquisition compensation expense recognized | $ 28,669 | $ 12,230 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Mutual funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments the Company currently measures at fair value on a recurring basis | $ 55,655 | $ 45,868 |
Fair Value Level 2 [Member] | Mutual funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments the Company currently measures at fair value on a recurring basis | 55,655 | 45,868 |
Reported Value Measurement [Member] | Mutual funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments the Company currently measures at fair value on a recurring basis | 55,655 | 45,868 |
Insurance subsidiaries [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments the Company currently measures at fair value on a recurring basis | 99,939 | 111,940 |
Insurance subsidiaries [Member] | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments the Company currently measures at fair value on a recurring basis | 7,539 | 18,238 |
Insurance subsidiaries [Member] | Municipal bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments the Company currently measures at fair value on a recurring basis | 83,016 | 87,121 |
Insurance subsidiaries [Member] | Mutual funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments the Company currently measures at fair value on a recurring basis | 48 | 64 |
Insurance subsidiaries [Member] | Private investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments the Company currently measures at fair value on a recurring basis | 1,947 | 2,818 |
Insurance subsidiaries [Member] | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments the Company currently measures at fair value on a recurring basis | 7,389 | 3,699 |
Insurance subsidiaries [Member] | Fair Value Level 1 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments the Company currently measures at fair value on a recurring basis | 7,539 | 18,238 |
Insurance subsidiaries [Member] | Fair Value Level 1 [Member] | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments the Company currently measures at fair value on a recurring basis | 7,539 | 18,238 |
Insurance subsidiaries [Member] | Fair Value Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments the Company currently measures at fair value on a recurring basis | 90,453 | 90,884 |
Insurance subsidiaries [Member] | Fair Value Level 2 [Member] | Municipal bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments the Company currently measures at fair value on a recurring basis | 83,016 | 87,121 |
Insurance subsidiaries [Member] | Fair Value Level 2 [Member] | Mutual funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments the Company currently measures at fair value on a recurring basis | 48 | 64 |
Insurance subsidiaries [Member] | Fair Value Level 2 [Member] | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments the Company currently measures at fair value on a recurring basis | 7,389 | 3,699 |
Insurance subsidiaries [Member] | Fair Value Level 3 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments the Company currently measures at fair value on a recurring basis | 1,947 | 2,818 |
Insurance subsidiaries [Member] | Fair Value Level 3 [Member] | Private investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments the Company currently measures at fair value on a recurring basis | 1,947 | 2,818 |
Insurance subsidiaries [Member] | Reported Value Measurement [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments the Company currently measures at fair value on a recurring basis | 99,939 | 111,940 |
Insurance subsidiaries [Member] | Reported Value Measurement [Member] | Money market funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments the Company currently measures at fair value on a recurring basis | 7,539 | 18,238 |
Insurance subsidiaries [Member] | Reported Value Measurement [Member] | Municipal bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments the Company currently measures at fair value on a recurring basis | 83,016 | 87,121 |
Insurance subsidiaries [Member] | Reported Value Measurement [Member] | Mutual funds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments the Company currently measures at fair value on a recurring basis | 48 | 64 |
Insurance subsidiaries [Member] | Reported Value Measurement [Member] | Private investments | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments the Company currently measures at fair value on a recurring basis | 1,947 | 2,818 |
Insurance subsidiaries [Member] | Reported Value Measurement [Member] | Corporate bonds | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Investments the Company currently measures at fair value on a recurring basis | $ 7,389 | $ 3,699 |
Fair Value Measurements (Deta41
Fair Value Measurements (Details Textual) $ in Thousands | Sep. 30, 2016USD ($) |
Summary of amortized cost basis and aggregate fair value of available-for-sale securities by investment type | |
Fair Value, Assets, Level 2 to Level 1 Transfers, Amount | $ 0 |
Fair Value, Assets, Level 1 to Level 2 Transfers, Amount | 0 |
Fair Value, Liabilities, Level 2 to Level 1 Transfers, Amount | 0 |
Fair Value, Liabilities, Level 1 to Level 2 Transfers, Amount | 0 |
Fair value of outstanding debt | 2,770,000 |
Carrying value of debt | $ 2,737,440 |
Investments - Amortized Cost B
Investments - Amortized Cost Basis and Aggregate Fair Value by Investment Type (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract] | ||
Cost Basis | $ 96,689 | $ 109,715 |
Gross Unrealized Gains | 3,422 | 2,523 |
Gross Unrealized Losses | (172) | (298) |
Fair Value | 99,939 | 111,940 |
Money market funds | ||
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract] | ||
Cost Basis | 7,539 | 18,238 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 7,539 | 18,238 |
Municipal bonds | ||
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract] | ||
Cost Basis | 80,187 | 84,983 |
Gross Unrealized Gains | 3,001 | 2,411 |
Gross Unrealized Losses | (172) | (273) |
Fair Value | 83,016 | 87,121 |
Mutual funds | ||
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract] | ||
Cost Basis | 48 | 64 |
Gross Unrealized Gains | 0 | 0 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 48 | 64 |
Private investments | ||
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract] | ||
Cost Basis | 1,711 | 2,712 |
Gross Unrealized Gains | 236 | 106 |
Gross Unrealized Losses | 0 | 0 |
Fair Value | 1,947 | 2,818 |
Corporate bonds | ||
Available-for-sale Securities, Fair Value to Amortized Cost Basis [Abstract] | ||
Cost Basis | 7,204 | 3,718 |
Gross Unrealized Gains | 185 | 6 |
Gross Unrealized Losses | 0 | (25) |
Fair Value | $ 7,389 | $ 3,699 |
Investments - Amortized Cost43
Investments - Amortized Cost Basis and Aggregate Fair Value by Contractual Maturities (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Summary of amortized cost basis and aggregate fair value of available-for-sale securities by contractual maturities | ||
Due in less than one year, Cost Basis | $ 16,987 | $ 24,099 |
Due after one year through five years, Cost Basis | 60,055 | 57,537 |
Due after five years through ten years, Cost Basis | 17,888 | 23,389 |
Due after ten years, Cost Basis | 1,914 | |
Total Cost Basis | 94,930 | 106,939 |
Due in less than one year, Fair Value | 17,076 | 24,080 |
Due after one year through five years, Fair Value | 62,047 | 59,105 |
Due after five years through ten years, Fair Value | 18,821 | 24,007 |
Due after ten years, Fair Value | 1,866 | |
Total Fair Value | 97,944 | 109,058 |
Gross Unrealized Gain | 3,186 | 2,417 |
Gross Unrealized Loss | (172) | (298) |
Due in less than one year | ||
Summary of amortized cost basis and aggregate fair value of available-for-sale securities by contractual maturities | ||
Gross Unrealized Gain | 89 | 35 |
Gross Unrealized Loss | 0 | (54) |
Due after one year through five years | ||
Summary of amortized cost basis and aggregate fair value of available-for-sale securities by contractual maturities | ||
Gross Unrealized Gain | 2,082 | 1,647 |
Gross Unrealized Loss | (90) | (79) |
Due after five years through ten years | ||
Summary of amortized cost basis and aggregate fair value of available-for-sale securities by contractual maturities | ||
Gross Unrealized Gain | 1,015 | 674 |
Gross Unrealized Loss | $ (82) | (56) |
Due after ten years | ||
Summary of amortized cost basis and aggregate fair value of available-for-sale securities by contractual maturities | ||
Gross Unrealized Gain | 61 | |
Gross Unrealized Loss | $ (109) |
Investments - Temporarily Impa
Investments - Temporarily Impaired Securities (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Summary of temporarily impaired available-for-sale investment securities | ||
Impaired Less Than 12 Months, Fair Value | $ 3,389 | $ 16,309 |
Impaired Less Than 12 Months, Unrealized Losses | (72) | (128) |
Impaired Over 12 Months, Fair Value | 2,433 | 2,575 |
Impaired Over 12 Months, Unrealized Losses | (100) | (170) |
Total, Fair Value | 5,822 | 18,884 |
Total, Unrealized Losses | (172) | (298) |
Municipal bonds | ||
Summary of temporarily impaired available-for-sale investment securities | ||
Impaired Less Than 12 Months, Fair Value | 3,389 | 13,189 |
Impaired Less Than 12 Months, Unrealized Losses | (72) | (103) |
Impaired Over 12 Months, Fair Value | 2,433 | 2,575 |
Impaired Over 12 Months, Unrealized Losses | (100) | (170) |
Total, Fair Value | 5,822 | 15,764 |
Total, Unrealized Losses | (172) | (273) |
Corporate bonds | ||
Summary of temporarily impaired available-for-sale investment securities | ||
Impaired Less Than 12 Months, Fair Value | 3,120 | |
Impaired Less Than 12 Months, Unrealized Losses | (25) | |
Impaired Over 12 Months, Fair Value | 0 | |
Impaired Over 12 Months, Unrealized Losses | 0 | |
Total, Fair Value | 3,120 | |
Total, Unrealized Losses | $ 0 | $ (25) |
Investments - Trading Gains an
Investments - Trading Gains and Losses on Participant Directed Investments (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Investments [Abstract] | ||
Net (losses) gains recognized during the nine months ended September 30, 2015 and 2016, respectively on trading securities | $ 1,259 | $ (1,467) |
Less: Net gains (losses) recognized during the period on trading securities sold during the nine months ended September 30, 2015 and 2016, respectively | (120) | (35) |
Unrealized (losses) gains recognized on trading securities still held at September 30, 2015 and 2016, respectively | $ 1,379 | $ (1,432) |
Investments (Details Textual)
Investments (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Investments, Debt and Equity Securities [Abstract] | ||||
Recorded gain on the sale of available for sale investments | $ 394 | |||
Supplemental employee retirement plan | $ 55,655 | 55,655 | $ 45,868 | |
Proceeds from Divestiture of Interest in Subsidiaries and Affiliates | 3,300 | |||
Gain (Loss) on Disposition of Other Assets | 4,300 | 4,346 | $ 0 | |
Equity Method Investments, Fair Value Disclosure | $ 900 | $ 900 |
Net Revenue (Details)
Net Revenue (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Schedule of net revenue | ||||
Net fee for service revenue before provision for uncollectibles | $ 1,703,183 | $ 1,332,642 | $ 4,915,039 | $ 3,811,858 |
Percentage of net fee-for-service revenue before provision for uncollectibles | 149.20% | 148.20% | 144.60% | 145.60% |
Contract revenue before provision for uncollectibles | $ 211,986 | $ 182,631 | $ 618,931 | $ 549,998 |
Percentage of contract before provision for uncollectibles | 18.60% | 20.30% | 18.20% | 21.00% |
Other | $ 10,606 | $ 10,136 | $ 47,240 | $ 28,826 |
Percentage, other | 0.90% | 1.10% | 1.40% | 1.10% |
Net revenues before provision for uncollectibles | $ 1,925,775 | $ 1,525,409 | $ 5,581,210 | $ 4,390,682 |
Percentage of net revenue before provision for uncollectibles | 168.70% | 169.60% | 164.20% | 167.70% |
Provision for uncollectibles | $ (784,281) | $ (626,228) | $ (2,181,499) | $ (1,773,062) |
Percentage of provision for uncollectibles | (68.70%) | (69.60%) | (64.20%) | (67.70%) |
Net revenue | $ 1,141,494 | $ 899,181 | $ 3,399,711 | $ 2,617,620 |
Percentage of net revenue | 100.00% | 100.00% | 100.00% | 100.00% |
Medicare [Member] | ||||
Schedule of net revenue | ||||
Net fee for service revenue before provision for uncollectibles | $ 344,660 | $ 183,120 | $ 1,032,522 | $ 530,047 |
Percentage of net fee-for-service revenue before provision for uncollectibles | 30.20% | 20.40% | 30.40% | 20.20% |
Medicaid [Member] | ||||
Schedule of net revenue | ||||
Net fee for service revenue before provision for uncollectibles | $ 206,896 | $ 166,015 | $ 606,707 | $ 476,151 |
Percentage of net fee-for-service revenue before provision for uncollectibles | 18.10% | 18.50% | 17.80% | 18.20% |
Commercial and managed care [Member] | ||||
Schedule of net revenue | ||||
Net fee for service revenue before provision for uncollectibles | $ 551,960 | $ 462,652 | $ 1,612,048 | $ 1,322,652 |
Percentage of net fee-for-service revenue before provision for uncollectibles | 48.40% | 51.50% | 47.40% | 50.50% |
Self-pay [Member] | ||||
Schedule of net revenue | ||||
Net fee for service revenue before provision for uncollectibles | $ 568,418 | $ 496,910 | $ 1,582,967 | $ 1,405,252 |
Percentage of net fee-for-service revenue before provision for uncollectibles | 49.80% | 55.30% | 46.60% | 53.70% |
Other [Member] | ||||
Schedule of net revenue | ||||
Net fee for service revenue before provision for uncollectibles | $ 26,301 | $ 21,576 | $ 73,263 | $ 61,777 |
Percentage of net fee-for-service revenue before provision for uncollectibles | 2.30% | 2.40% | 2.20% | 2.40% |
Unbilled Revenue [Member] | ||||
Schedule of net revenue | ||||
Net fee for service revenue before provision for uncollectibles | $ 4,948 | $ 2,369 | $ 7,532 | $ 15,979 |
Percentage of net fee-for-service revenue before provision for uncollectibles | 0.40% | 0.30% | 0.20% | 0.60% |
Net Revenue (Details Textual)
Net Revenue (Details Textual) visit in Millions | 12 Months Ended |
Sep. 30, 2016visit | |
Revenue, Net [Abstract] | |
Fee for service patient visits | 25 |
Doubtful accounts related to gross fees for fee-for-service patient visits | 98.00% |
Outstanding self-pay fee-for-service patient accounts | 93.00% |
Goodwill and Other Intangible49
Goodwill and Other Intangible Assets - Changes in Goodwill (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Goodwill [Line Items] | ||
Goodwill, gross | $ 2,572,381 | $ 869,038 |
Accumulated impairment loss | (144,579) | (144,579) |
Additions through acquisitions | 1,703,343 | |
Beginning Balance | 2,427,802 | |
Ending Balance | 2,485,591 | $ 2,427,802 |
Prior Year Acquisitions [Member] | ||
Goodwill [Line Items] | ||
Increases from prior year acquisition purchase price allocation adjustments | 5,834 | |
Current Year Acquisitions | ||
Goodwill [Line Items] | ||
Additions through acquisitions | 51,955 | |
Ending Balance | $ 51,955 |
Goodwill and Other Intangible50
Goodwill and Other Intangible Assets - Intangible Assets and Related Amortization (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Summary of intangible assets and related amortization | |||||
Gross Carrying Amount | $ 548,847 | $ 548,847 | $ 516,285 | ||
Accumulated Amortization | (228,370) | (228,370) | (180,648) | ||
Aggregate amortization expense: | |||||
For the nine months ended September 30, 2016 | 23,772 | $ 20,633 | 71,425 | $ 62,085 | |
Estimated amortization expense: | |||||
For the remainder of the year ended December 31, 2016 | 23,777 | 23,777 | |||
For the year ended December 31, 2017 | 91,249 | 91,249 | |||
For the year ended December 31, 2018 | 75,555 | 75,555 | |||
For the year ended December 31, 2019 | 66,521 | 66,521 | |||
For the year ended December 31, 2020 | 46,679 | 46,679 | |||
For the years ended December 31, 2021 and thereafter | 16,696 | 16,696 | |||
Intangible Assets, Net (Excluding Goodwill) | 320,477 | 320,477 | 335,637 | ||
Contracts | |||||
Summary of intangible assets and related amortization | |||||
Gross Carrying Amount | 517,686 | 517,686 | 494,569 | ||
Accumulated Amortization | (214,821) | (214,821) | (170,873) | ||
Other | |||||
Summary of intangible assets and related amortization | |||||
Gross Carrying Amount | 31,161 | 31,161 | 21,716 | ||
Accumulated Amortization | $ (13,549) | $ (13,549) | $ (9,775) |
Goodwill and Other Intangible51
Goodwill and Other Intangible Assets (Details Textual) | 9 Months Ended |
Sep. 30, 2016 | |
Finite Lived Intangible Assets [Line Items] | |
Remaining amortization period | 3 years 5 months 4 days |
Maximum | |
Finite Lived Intangible Assets [Line Items] | |
Estimated useful life of contract intangibles | 6 years |
Minimum | |
Finite Lived Intangible Assets [Line Items] | |
Estimated useful life of contract intangibles | 1 year |
Long-Term Debt (Details)
Long-Term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Schedule of long-term debt | ||
Long-term debt | $ 2,689,105 | |
Total outstanding debt | 2,737,440 | |
Debt issuance costs, net | (48,335) | |
Current maturities of long-term debt | (390,120) | $ (68,900) |
Long term debt, less current maturities | 2,298,985 | $ 2,337,363 |
Revolving Credit Facility [Member] | Line of Credit [Member] | ||
Schedule of long-term debt | ||
Long-term debt | 332,000 | |
Term A Loan Facility [Member] | Notes Payable to Banks [Member] | ||
Schedule of long-term debt | ||
Long-term debt | 555,000 | |
Term B Loan Facility [Member] | Notes Payable to Banks [Member] | ||
Schedule of long-term debt | ||
Long-term debt | 1,305,440 | |
7.25% Senior Notes [Member] | Senior Notes [Member] | ||
Schedule of long-term debt | ||
Long-term debt | $ 545,000 |
Long-Term Debt - Aggregate Ann
Long-Term Debt - Aggregate Annual Maturities of Long-Term Debt (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Maturities of Long-term Debt [Abstract] | ||
Rolling year one | $ 390,120 | $ 68,900 |
Rolling year two | 73,120 | |
Rolling year three | 58,120 | |
Rolling year four | 418,120 | |
Rolling year five | $ 1,797,960 |
Long-Term Debt (Details Textual
Long-Term Debt (Details Textual) - USD ($) $ in Thousands | 3 Months Ended | 5 Months Ended | 9 Months Ended |
Sep. 30, 2016 | Jun. 02, 2016 | Sep. 30, 2016 | |
Debt Instrument [Line Items] | |||
Long-term debt | $ 2,689,105 | $ 2,689,105 | |
Standby letters of credit [Member] | |||
Debt Instrument [Line Items] | |||
Letters of credit outstanding | 6,800 | 6,800 | |
Notes Payable to Banks [Member] | Term A Loan Facility [Member] | |||
Debt Instrument [Line Items] | |||
Face amount of debt instrument | 600,000 | $ 600,000 | |
Maturity date | Oct. 2, 2019 | ||
Percentage points added to LIBOR | 2.00% | ||
Weighted average interest rate | 2.70% | ||
Long-term debt | 555,000 | $ 555,000 | |
Notes Payable to Banks [Member] | Term B Loan Facility [Member] | |||
Debt Instrument [Line Items] | |||
Face amount of debt instrument | $ 1,310,000 | $ 1,310,000 | |
Maturity date | Nov. 23, 2022 | ||
Percentage points added to LIBOR | 3.00% | 3.75% | |
Prepayment Fee Percentage | 1.00% | 1.00% | |
Long-term debt | $ 1,305,440 | $ 1,305,440 | |
Senior Notes [Member] | 7.25% Senior Notes [Member] | |||
Debt Instrument [Line Items] | |||
Face amount of debt instrument | 545,000 | $ 545,000 | |
Maturity date | Dec. 15, 2023 | ||
Long-term debt | $ 545,000 | $ 545,000 | |
Stated interest rate | 7.25% | 7.25% | |
Redemption price | 100.00% | ||
Percentage of principal amount redeemed | 40.00% | ||
Partial redemption price | 107.25% | ||
Line of Credit [Member] | Revolving Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Borrowing capacity | $ 650,000 | $ 650,000 | |
Revolver maturity date | Oct. 2, 2019 | ||
Percentage points added to LIBOR | 2.00% | ||
Unused capacity interest rate | 0.35% | ||
Long-term debt | $ 332,000 | $ 332,000 | |
Minimum | Notes Payable to Banks [Member] | Term B Loan Facility [Member] | |||
Debt Instrument [Line Items] | |||
Percentage points added to LIBOR | 0.75% |
Professional Liability Insura55
Professional Liability Insurance - Professional Liability Loss Reserve (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Malpractice Insurance [Abstract] | ||
Estimated losses under self-insured programs | $ 273,655 | $ 245,070 |
Estimated losses under commercial insurance programs | 141,185 | 126,751 |
Professional liability loss reserves | 414,840 | 371,821 |
Less estimated payable within one year | 102,478 | 105,028 |
Professional liability loss reserves, Noncurrent | $ 312,362 | $ 266,793 |
Professional Liability Insura56
Professional Liability Insurance - Estimated Losses Under Self-Insured Programs (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Malpractice Insurance [Abstract] | |
Balance, December 31, 2015 | $ 245,070 |
Reserves related to current period | 62,802 |
Changes related to prior year reserves | 14,284 |
Assumed liabilities | (1,812) |
Payments for current period reserves | (880) |
Payments for prior period reserves | (45,809) |
Balance, September 30, 2016 | $ 273,655 |
Professional Liability Insura57
Professional Liability Insurance (Details Textual) $ in Thousands | 1 Months Ended | 9 Months Ended | 12 Months Ended |
Oct. 31, 2016USD ($) | Sep. 30, 2016USD ($)Claim | Dec. 31, 2015USD ($) | |
Malpractice Insurance [Line Items] | |||
Estimated losses under self-insured programs | $ 273,655 | $ 245,070 | |
Reserve for settlement of prior year claims | $ 14,284 | ||
Number of claims settled | Claim | 2 | ||
Professional liability reserves, discount rate | 1.10% | 1.60% | |
Professional liability loss reserves | $ 414,840 | $ 371,821 | |
Estimated IBNR | |||
Malpractice Insurance [Line Items] | |||
Estimated losses under self-insured programs | 160,700 | 157,400 | |
Specific Case Reserves | |||
Malpractice Insurance [Line Items] | |||
Estimated losses under self-insured programs | 113,000 | 87,700 | |
Settled But Not Yet Funded Specific Case Reserves | |||
Malpractice Insurance [Line Items] | |||
Estimated losses under self-insured programs | 3,400 | 3,000 | |
Unsettled Specific Case Reserves | |||
Malpractice Insurance [Line Items] | |||
Estimated losses under self-insured programs | 109,600 | $ 84,700 | |
Subsequent Event | |||
Malpractice Insurance [Line Items] | |||
Prior year claims and claims adjustment expense | $ 0 | ||
IPC Acquisition | |||
Malpractice Insurance [Line Items] | |||
Professional liability loss reserves | $ 25,800 | ||
Discount Factor Period | 10 years |
Contingencies (Details Textual)
Contingencies (Details Textual) - 9 months ended Sep. 30, 2016 | healthcare_professionals | USD ($) | Business | state |
Loss Contingencies [Line Items] | ||||
Loss Contingency, Damages Sought, Value | $ 350,000 | |||
Litigation Settlement, Expense | 100,000 | |||
Reserve for settlement of prior year claims | $ 14,284,000 | |||
August 2011 [Member] | ||||
Loss Contingencies [Line Items] | ||||
Number of defendants | 1 | 3 | ||
July 2012 [Member] | ||||
Loss Contingencies [Line Items] | ||||
Number of defendants | 1 | 1 | ||
Civ. No. 09-C-5418 [Member] | ||||
Loss Contingencies [Line Items] | ||||
Number of defendants | Business | 29 | |||
Number of plaintiffs | state | 12 | |||
CID [Member] | ||||
Loss Contingencies [Line Items] | ||||
Number of defendants | Business | 1 |
Equity-based Compensation - St
Equity-based Compensation - Stock Option Status Under Stock Plan (Details) - Stock options - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 | Sep. 30, 2016 |
Shares (in thousands) | |||
Outstanding at beginning of year | 4,780 | ||
Granted | 1,134 | ||
Exercised | (881) | ||
Expired or forfeited | (203) | ||
Outstanding at end of period | 4,830 | 4,780 | 4,830 |
Exercisable at end of period | 3,098 | 3,098 | |
Weighted Average Exercise Price | |||
Outstanding at beginning of year | $ 28.07 | ||
Granted | 35.30 | ||
Exercised | 20.59 | ||
Expired or forfeited | 44.96 | ||
Outstanding at end of period | $ 30.51 | $ 28.07 | 30.51 |
Exercisable at end of period | $ 24.31 | $ 24.31 | |
Aggregate Intrinsic Value (in thousands) and Weighted Average Remaining Life in Years | |||
Aggregate intrinsic value outstanding at beginning of year | $ 86,342 | ||
Aggregate intrinsic value exercised | 16,930 | ||
Aggregate intrinsic value outstanding at end of period | $ 34,285 | $ 86,342 | 34,285 |
Aggregate intrinsic value exercisable at end of period | $ 34,280 | $ 34,280 | |
Weighted average remaining life at balance sheet date | 5 years 4 months 24 days | 5 years 3 months 18 days | |
Weighted average remaining life exercisable at end of period | 4 years 4 months 24 days |
Equity-based Compensation - Val
Equity-based Compensation - Valuation Assumptions (Details) - 2009 Stock Plan | 9 Months Ended |
Sep. 30, 2016$ / shares | |
Stock options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected Term | 5 years |
Expected volatility rate | 34.90% |
Risk free interest rate | 1.30% |
Weighted average grant date fair value | $ 12.14 |
Expected Dividend Rate | 0.00% |
Performance Share Options | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected Term | 4 years 7 months 14 days |
Expected volatility rate | 40.20% |
Risk free interest rate | 1.40% |
Weighted average grant date fair value | $ 10.39 |
Expected Dividend Rate | 0.00% |
Equity-based Compensation - Ch
Equity-based Compensation - Changes in Unvested Shares of Restricted Awards (Details) shares in Thousands | 9 Months Ended |
Sep. 30, 2016shares | |
Summary of changes in unvested restricted stock awards | |
Outstanding at beginning of year | 866 |
Granted | 769 |
Vested | (329) |
Forfeited and expired | (132) |
Outstanding at September 30, 2016 | 1,174 |
Restricted Units | |
Summary of changes in unvested restricted stock awards | |
Outstanding at beginning of year | 766 |
Granted | 498 |
Vested | (276) |
Forfeited and expired | (94) |
Outstanding at September 30, 2016 | 894 |
2009 Stock Plan | Restricted Stock | |
Summary of changes in unvested restricted stock awards | |
Outstanding at beginning of year | 100 |
Granted | 0 |
Vested | (53) |
Forfeited and expired | (5) |
Outstanding at September 30, 2016 | 42 |
2009 Stock Plan | Performance Units | |
Summary of changes in unvested restricted stock awards | |
Outstanding at beginning of year | 0 |
Granted | 144 |
Vested | 0 |
Forfeited and expired | (33) |
Outstanding at September 30, 2016 | 111 |
2009 Stock Plan | Market Share Unit | |
Summary of changes in unvested restricted stock awards | |
Outstanding at beginning of year | 0 |
Granted | 127 |
Vested | 0 |
Forfeited and expired | 0 |
Outstanding at September 30, 2016 | 127 |
2009 Stock Plan | Restricted Awards | |
Summary of changes in unvested restricted stock awards | |
Granted | 642 |
Equity-based Compensation - Eq
Equity-based Compensation - Equity Based Compensation Expense (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016 | Sep. 30, 2015 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Equity based compensation expense | $ 24,470 | $ 13,197 |
Tax benefit of equity based compensation expense | 9,360 | 5,081 |
Stock options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Equity based compensation expense | 6,277 | 7,212 |
Restricted Awards | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Equity based compensation expense | 18,060 | 5,923 |
Market Share Unit | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Equity based compensation expense | 51 | 0 |
Stock Purchase Plans | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Equity based compensation expense | 82 | $ 62 |
Transaction Integration and Reorganization Costs | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Equity based compensation expense | $ 3,900 |
Equity-based Compensation (Deta
Equity-based Compensation (Details Textual) - USD ($) $ / shares in Units, $ in Millions | 1 Months Ended | 9 Months Ended |
Oct. 31, 2016 | Sep. 30, 2016 | |
Share-Based Compensation (Textual) [Abstract] | ||
Equity awards granted | 769,000 | |
Stock options | ||
Share-Based Compensation (Textual) [Abstract] | ||
Options granted in period | 1,134,000 | |
Unrecognized compensation expense, options | $ 20.3 | |
Performance Share Options | ||
Share-Based Compensation (Textual) [Abstract] | ||
Options granted in period | 442,000 | |
Restricted awards | ||
Share-Based Compensation (Textual) [Abstract] | ||
Compensation Not yet Recognized, Share-based Awards Other than Options | $ 30.9 | |
2009 Stock Plan | ||
Share-Based Compensation (Textual) [Abstract] | ||
Total number of shares of common stock that may be issued | 15,100,000 | |
Number of shares available for grant | 593,000 | |
2009 Stock Plan | Restricted awards | ||
Share-Based Compensation (Textual) [Abstract] | ||
Equity awards granted | 642,000 | |
2009 Stock Plan | Performance Units | ||
Share-Based Compensation (Textual) [Abstract] | ||
Equity awards granted | 144,000 | |
Award vesting period | 2 years | |
Award requisite service period | 3 years | |
2009 Stock Plan | Market Share Unit | ||
Share-Based Compensation (Textual) [Abstract] | ||
Equity awards granted | 127,000 | |
Compensation Not yet Recognized, Share-based Awards Other than Options | $ 4.9 | |
Award vesting period | 3 years | |
Measurement Period For Market Share Unit Vesting | 20 days | |
Equity Instruments Other than Options, Intrinsic value per share of Grants in Period | $ 39.26 | |
2010 Employee Stock Purchase Plan | Employee Stock | ||
Share-Based Compensation (Textual) [Abstract] | ||
Total number of shares of common stock that may be issued | 600,000 | |
Discount on shares purchased | 5.00% | |
Contributions to the stock purchase plan | $ 3.3 | |
2010 Nonqualified Stock Purchase Plan | Nonqualified Stock Purchase Plan | ||
Share-Based Compensation (Textual) [Abstract] | ||
Total number of shares of common stock that may be issued | 800,000 | |
Discount on shares purchased | 5.00% | |
Contributions to the stock purchase plan | $ 0.9 | |
Minimum | Restricted awards | ||
Share-Based Compensation (Textual) [Abstract] | ||
Award vesting period | 3 years | |
Maximum | Restricted awards | ||
Share-Based Compensation (Textual) [Abstract] | ||
Award vesting period | 4 years | |
Subsequent Event | 2010 Employee Stock Purchase Plan | Employee Stock | ||
Share-Based Compensation (Textual) [Abstract] | ||
Shares issued during period under Employee Stock Purchase Plan | 101,000 | |
Subsequent Event | 2010 Nonqualified Stock Purchase Plan | Nonqualified Stock Purchase Plan | ||
Share-Based Compensation (Textual) [Abstract] | ||
Shares issued during period under Non-qualified Stock Purchase Plans | 29,000 | |
Tranche one | Minimum | 2009 Stock Plan | Market Share Unit | ||
Share-Based Compensation (Textual) [Abstract] | ||
Award Vesting Rights, Percentage | 75.00% | |
Tranche one | Maximum | 2009 Stock Plan | Market Share Unit | ||
Share-Based Compensation (Textual) [Abstract] | ||
Award Vesting Rights, Percentage | 200.00% | |
Tranche two | Minimum | 2009 Stock Plan | Market Share Unit | ||
Share-Based Compensation (Textual) [Abstract] | ||
Award Vesting Rights, Percentage | 75.00% | |
Tranche two | Maximum | 2009 Stock Plan | Market Share Unit | ||
Share-Based Compensation (Textual) [Abstract] | ||
Award Vesting Rights, Percentage | 200.00% | |
Tranche three | Minimum | 2009 Stock Plan | Market Share Unit | ||
Share-Based Compensation (Textual) [Abstract] | ||
Award Vesting Rights, Percentage | 75.00% | |
Tranche three | Maximum | 2009 Stock Plan | Market Share Unit | ||
Share-Based Compensation (Textual) [Abstract] | ||
Award Vesting Rights, Percentage | 200.00% |
Earnings Per Share (Details)
Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Basic and diluted earnings per share | ||||
Net earnings attributable to Team Health Holdings, Inc. (numerator for basic and diluted earnings per share) | $ 10,481 | $ 35,442 | $ 29,934 | $ 92,431 |
Denominator: | ||||
Weighted average shares outstanding | 74,166 | 72,361 | 73,823 | 71,900 |
Stock options | 871 | 1,086 | 988 | 1,176 |
Restricted awards | 199 | 237 | 340 | 272 |
Incremental Common Shares Attributable to Dilutive Effect of Contingently Issuable Units with Market Condition | 61 | 0 | 67 | 0 |
Stock purchase plans | 7 | 3 | 7 | 3 |
Shares used for diluted earnings per share | 75,304 | 73,687 | 75,225 | 73,351 |
Basic net earnings per share of Team Health Holdings, Inc. | $ 0.14 | $ 0.49 | $ 0.41 | $ 1.29 |
Diluted net earnings per share of Team Health Holdings, Inc. | $ 0.14 | $ 0.48 | $ 0.40 | $ 1.26 |
Stock options | ||||
Denominator: | ||||
Securities excluded from diluted earnings per share of Team Health Holdings, Inc. because they were antidilutive: | 1,685 | 519 | 1,622 | 258 |
Restricted awards | ||||
Denominator: | ||||
Securities excluded from diluted earnings per share of Team Health Holdings, Inc. because they were antidilutive: | 173 | 0 | 215 | 0 |
Noncontrolling Interests in C65
Noncontrolling Interests in Consolidated Entity (Details) $ in Thousands | 9 Months Ended | |
Sep. 30, 2016USD ($)Business | Sep. 30, 2015USD ($) | |
Noncontrolling Interest [Abstract] | ||
Number of Joint Venture Arrangements | Business | 1 | |
Contributions from noncontrolling interests | $ | $ 1,989 | $ 1,683 |
Transaction, Integration and 66
Transaction, Integration and Reorganization Costs (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Business Acquisition [Line Items] | ||||
Transaction, integration, and reorganization costs | $ 20,836 | $ 3,869 | $ 48,337 | $ 7,170 |
Professional, advisory and legal costs | 11,700 | |||
IPC Acquisition | ||||
Business Acquisition [Line Items] | ||||
Recognized transaction costs | 19,300 | $ 2,600 | ||
Non-IPC | ||||
Business Acquisition [Line Items] | ||||
Recognized transaction costs | 1,600 | |||
Executive leadership transition costs | ||||
Business Acquisition [Line Items] | ||||
Severance and lease impairment costs | 8,800 | |||
Severance and lease costs | ||||
Business Acquisition [Line Items] | ||||
Severance and lease impairment costs | $ 6,900 |
Accumulated Other Comprehensi67
Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | ||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Balance at beginning of period | $ 2,414 | $ 1,095 | $ 1,503 | $ 1,695 | $ 1,695 | |
Total other comprehensive earnings (loss) | (242) | 230 | 669 | (370) | (370) | |
Balance at end of period | 2,172 | 1,325 | 2,172 | 1,325 | $ 1,503 | |
Accumulated Net Investment Gain (Loss) Including Portion Attributable to Noncontrolling Interest | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Net unrealized gain (loss) | (367) | 451 | 1,422 | (436) | ||
Tax (expense) benefit | 133 | (124) | (359) | 213 | ||
Total other comprehensive earnings (loss) before reclassifications, net of tax | (234) | 327 | 1,063 | (223) | ||
Reclassification out of Accumulated Other Comprehensive Income | Accumulated Net Investment Gain (Loss) Including Portion Attributable to Noncontrolling Interest | ||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||
Net amount reclassified to earnings(1) | [1] | (8) | (97) | (394) | (147) | |
Tax benefit (expense)(2) | [2] | 0 | 0 | 0 | 0 | |
Total amount reclassified from accumulated other comprehensive earnings, net of tax(3) | [3] | $ (8) | $ (97) | $ (394) | $ (147) | |
[1] | This amount was included in Other (income) expense, net on the accompanying Consolidated Statement of Comprehensive Earnings. | |||||
[2] | These amounts were included in Provision for income taxes on the accompanying Consolidated Statement of Comprehensive Earnings. | |||||
[3] | A positive amount indicates a corresponding charge to earnings and a negative amount indicates a corresponding benefit to earnings. |
Segment Reporting (Details)
Segment Reporting (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Summary of financial information of reportable segment | ||||
Net Revenues: | $ 1,141,494 | $ 899,181 | $ 3,399,711 | $ 2,617,620 |
Operating Earnings: | 49,297 | 63,841 | 143,034 | 171,663 |
Interest expense, net | 28,525 | 5,572 | 90,255 | 14,132 |
Provision for income taxes | 10,216 | 22,837 | 22,579 | 65,178 |
Net earnings | 10,556 | 35,432 | 30,200 | 92,353 |
Operating Segments [Member] | Hospital Based Services [Member] | ||||
Summary of financial information of reportable segment | ||||
Net Revenues: | 894,792 | 831,261 | 2,632,504 | 2,412,049 |
Operating Earnings: | 78,733 | 92,087 | 209,589 | 236,150 |
Operating Segments [Member] | IPC Healthcare | ||||
Summary of financial information of reportable segment | ||||
Net Revenues: | 177,125 | 0 | 555,506 | 0 |
Operating Earnings: | 5,181 | 0 | 25,449 | 0 |
Operating Segments [Member] | Specialty Services | ||||
Summary of financial information of reportable segment | ||||
Net Revenues: | 42,806 | 42,165 | 134,314 | 129,851 |
Operating Earnings: | 8,362 | 4,083 | 19,287 | 14,941 |
Operating Segments [Member] | Other Services | ||||
Summary of financial information of reportable segment | ||||
Net Revenues: | 26,742 | 25,731 | 77,304 | 75,648 |
Operating Earnings: | 6,754 | 5,715 | 19,827 | 19,158 |
Corporate, Non-Segment [Member] | Corporate Segment [Member] | ||||
Summary of financial information of reportable segment | ||||
Net Revenues: | 29 | 24 | 83 | 72 |
Operating Earnings: | $ (49,733) | $ (38,044) | $ (131,118) | $ (98,586) |
Segment Reporting (Details Text
Segment Reporting (Details Textual) | 9 Months Ended |
Sep. 30, 2016Segments | |
Segment Reporting Information, Additional Information [Abstract] | |
Number of Operating Segments | 8 |
Number of Reportable Segments | 4 |
Subsequent Event (Details)
Subsequent Event (Details) - Subsequent Event $ / shares in Units, $ in Millions | Oct. 31, 2016USD ($)$ / shares |
Subsequent Event [Line Items] | |
Potential Superior Proposal Termination Payment | $ 50.4 |
Potential Termination Fee, Other Circumstance | 100.8 |
Gain Contingency, Unrecorded Amount | $ 201.7 |
Blackstone [Member] | TeamHealth [Member] | |
Subsequent Event [Line Items] | |
Potential Merger, Share Price | $ / shares | $ 43.50 |