Athenahealth (ATHN) 10-Q 27 Apr 17 2017 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2017	Apr. 24, 2017
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Mar. 31, 2017
Document Fiscal Year Focus	2,017
Document Fiscal Period Focus	Q1
Trading Symbol	ATHN
Entity Registrant Name	ATHENAHEALTH INC
Entity Central Index Key	1,131,096
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Entity Common Stock, Shares Outstanding		39,834,132

Condensed Consolidated Balance

Condensed Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 98	$ 147.4
Accounts receivable, net	164.3	161.6
Prepaid expenses and other current assets	41.4	34.2
Total current assets	303.7	343.2
Property and equipment, net	361.1	347.7
Capitalized software costs, net	125.3	125.8
Purchased intangible assets, net	107.7	112.1
Goodwill	240.7	240.7
Deferred tax assets, net	50.4	2.2
Investments and other assets	17.2	17.5
Total assets	1,206.1	1,189.2
Current liabilities:
Accounts payable	4.4	9.5
Accrued compensation	55.6	89.7
Accrued expenses	57	51.7
Current portion of long-term debt	14.6	18.3
Deferred revenue	33.6	28.7
Total current liabilities	165.2	197.9
Deferred rent, net of current portion	30.8	30.8
Long-term debt, net of current portion	269.1	272.8
Deferred revenue, net of current portion	47.3	48.4
Other long-term liabilities	6.3	6
Total liabilities	518.7	555.9
Commitments and contingencies
Stockholders’ equity:
Preferred stock, $0.01 par value: 5.0 shares authorized; no shares issued and outstanding at March 31, 2017 and December 31, 2016	0	0
Common stock, $0.01 par value: 125.0 shares authorized; 41.1 shares issued and 39.8 shares outstanding at March 31, 2017; 40.8 shares issued and 39.5 shares outstanding at December 31, 2016	0.4	0.4
Additional paid-in capital	598.4	591.5
Treasury stock, at cost, 1.3 shares	(1.2)	(1.2)
Accumulated other comprehensive loss	(0.5)	(0.9)
Retained earnings	90.3	43.5
Total stockholders’ equity	687.4	633.3
Total liabilities and stockholders’ equity	$ 1,206.1	$ 1,189.2

Condensed Consolidated Balance3

Condensed Consolidated Balance Sheets (Unaudited) (Parenthetical) - $ / shares	Mar. 31, 2017	Dec. 31, 2016
Statement of Financial Position [Abstract]
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares issued (in shares)	0	0
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	125,000,000	125,000,000
Common stock, shares issued (in shares)	41,100,000	40,800,000
Common stock, shares outstanding (in shares)	39,800,000	39,500,000
Treasury stock, shares (in shares)	1,300,000	1,300,000

Condensed Consolidated Statemen

Condensed Consolidated Statements of Income (Unaudited) - USD ($) shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Revenue:
Business services	$ 278.3	$ 247.5
Implementation and other	7.1	8.6
Total revenue	285.4	256.1
Cost of revenue	144.4	132.4
Gross profit	141	123.7
Other operating expenses:
Selling and marketing	65.7	59.8
Research and development	42.8	30.3
General and administrative	31.4	33.3
Total other operating expenses	139.9	123.4
Operating income	1.1	0.3
Other expense	(1.2)	(1.8)
Loss before income tax (provision) benefit	(0.1)	(1.5)
Income tax (provision) benefit	(1.3)	0.7
Net loss	$ (1.4)	$ (0.8)
Net income (loss) per share - Basic (in dollars per share)	$ (0.03)	$ (0.02)
Net income per share - Diluted (in dollars per share)	$ (0.03)	$ (0.02)
Weighted average shares used in computing net loss per share:
Basic (in shares)	39.6	39
Diluted (in shares)	39.6	39

Condensed Consolidated Stateme5

Condensed Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Statement of Comprehensive Income [Abstract]
Net loss	$ (1.4)	$ (0.8)
Other comprehensive income
Foreign currency translation adjustment	0.4	0
Total other comprehensive income	0.4	0
Comprehensive loss	$ (1)	$ (0.8)

Condensed Consolidated Stateme6

Condensed Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net loss	$ (1.4)	$ (0.8)
Adjustments to reconcile net loss to net cash provided by operating activities:
Depreciation and amortization	37.5	33
Deferred income tax	1	(1)
Stock-based compensation expense	14.2	15.2
Other reconciling adjustments	0.1	0.1
Changes in operating assets and liabilities:
Accounts receivable, net	(2.7)	0.9
Prepaid expenses and other current assets	(7.2)	(5.1)
Other long-term assets	0.3	(0.2)
Accounts payable	(1.2)	(4.4)
Accrued expenses and other long-term liabilities	0.1	9.5
Accrued compensation	(35.9)	(38.8)
Deferred revenue	3.7	(0.7)
Deferred rent	0.3	0.6
Net cash provided by operating activities	8.8	8.3
CASH FLOWS FROM INVESTING ACTIVITIES:
Capitalized software costs	(17)	(20.8)
Purchases of property and equipment	(24.9)	(18.7)
Net cash used in investing activities	(41.9)	(39.5)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from issuance of common stock under stock plans and warrants	5.5	5.8
Taxes paid related to net share settlement of stock awards	(14.5)	(16)
Payments on long-term debt	(7.5)	0
Net cash used in financing activities	(16.5)	(10.2)
Effect of exchange rate changes on cash and cash equivalents	0.2	0.1
Net decrease in cash and cash equivalents	(49.4)	(41.3)
Cash and cash equivalents at beginning of period	147.4	141.9
Cash and cash equivalents at end of period	98	100.6
Non-cash transaction
Property, equipment, and purchased software recorded in accounts payable and accrued expenses	21.2	9.5
Additional disclosures
Cash paid for interest, net	1.6	1.8
Cash paid for taxes	$ 0	$ 0.1

BASIS OF PRESENTATION

BASIS OF PRESENTATION	3 Months Ended
	Mar. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
BASIS OF PRESENTATION	BASIS OF PRESENTATION General – The accompanying unaudited condensed consolidated financial statements have been prepared by athenahealth, Inc. (which we refer to as the Company, we, us, or our) in accordance with accounting principles generally accepted in the United States, or GAAP, for interim financial reporting and as required by Regulation S-X, Rule 10-01, and include the results of operations of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The year-end condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by GAAP for complete financial statements. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of items of a normal and recurring nature) necessary to fairly present the financial position as of March 31, 2017 , the results of operations for the three months ended March 31, 2017 and 2016 , and cash flows for the three months ended March 31, 2017 and 2016 . The results of operations for the three month period ended March 31, 2017 are not necessarily indicative of the results to be expected for the full year. When preparing financial statements in conformity with GAAP, we must make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses during the reporting period. Actual results could differ from those estimates, and such differences could be material. We consider events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure. Exit Costs, Including Restructuring Costs – Exit costs, including restructuring costs, represent costs related to workforce reductions and to terminate certain lease or other contractual agreements for strategic re-alignment purposes. The activity in the exit cost accrual during the three months ended March 31, 2017 is due to restructuring costs incurred during the three months ended December 31, 2016 and was as follows: Workforce Reductions Accrual at December 31, 2016 $ 3.1 Additions — Cash Payments (3.1 ) Accrual at March 31, 2017 $ — Related Party Transaction – We have a long-term investment in a vendor that provides business partner outsourcing services for us. The total expense related to this vendor for the three months ended March 31, 2017 and March 31, 2016 was $14.3 million and $8.1 million , respectively, and the total amount payable related to this vendor at March 31, 2017 and December 31, 2016 was $5.0 million and $4.6 million , respectively. Recently Adopted Pronouncement – In March 2016, the Financial Accounting Standards Board, or FASB, issued new guidance which changes the accounting for stock-based compensation. The guidance simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. We adopted this standard on January 1, 2017, using a modified retrospective approach, which requires the cumulative effect of initially applying the standard to be recorded as an adjustment to the opening balance of retained earnings of the annual reporting period that includes the date of initial application, and which resulted in a cumulative-effect increase of $49.2 million to retained earnings and deferred tax assets. Upon adoption, we now recognize all excess tax benefits and tax deficiencies as income tax expense or benefit in the income statement. We will no longer present excess tax benefits within cash flows from financing activities but instead present these cash flows in cash flows from operating activities in the condensed consolidated statements of cash flows. Prior to adoption, the excess tax benefits and tax deficiencies were recorded to additional paid-in capital and excess tax benefits were not recorded until they were able to be utilized. In addition, we elected to no longer calculate an estimate of expected forfeitures and began recognizing forfeitures as they occurred, including a cumulative-effect decrease of $1.0 million to retained earnings at January 1, 2017 with the offset as an increase to additional paid-in capital. See table below for the changes in beginning stockholders' equity as a result of this implementation. Common Stock Additional Paid-In Capital Treasury Stock Accumulated Other Comprehensive Loss Retained Earnings Total Stockholders' Equity Shares Amount Shares Amount BALANCE – December 31, 2016 40.8 $ 0.4 $ 591.5 (1.3 ) $ (1.2 ) $ (0.9 ) $ 43.5 $ 633.3 Cumulative effect of adoption of new accounting standard 1.0 48.2 49.2 BALANCE – January 1, 2017 40.8 $ 0.4 $ 592.5 (1.3 ) $ (1.2 ) $ (0.9 ) $ 91.7 $ 682.5 New Accounting Pronouncements Not Yet Adopted – The new revenue recognition guidance, which was issued in March 2014, is effective for public companies for annual reporting periods beginning after December 15, 2017, including interim periods within those reporting periods. The new revenue recognition guidance outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. In addition, the new standard provides guidance on accounting for certain revenue-related costs including costs associated with obtaining and fulfilling a contract. The new standard provides companies with two implementation methods. Companies can choose to adopt the standard retrospectively and apply the guidance to each prior reporting period presented. Alternatively, a modified retrospective adoption methodology is permitted, whereby the cumulative impact of all prior periods would be recorded in retained earnings or other impacted balance sheet line items as of January 1, 2018, the date of adoption. Under this method, previously presented years' financial position and results would not be adjusted. We anticipate that the new revenue recognition standard will have a material impact on our consolidated financial statements with respect to the capitalization of certain commissions, other contract acquisition-based costs, and contract fulfillment costs. Currently, one of the criteria impacting the timing of our revenue recognition is the requirement of fees to be either fixed or determinable. The new guidance neither limits fees that can be recognized to only those that are fixed or determinable, nor requires deferral of some contingent revenue. We have assessed the pattern of our revenue recognition under the new guidance and are currently determining the financial impact on adoption and going forward. We intend to disclose the impact in our subsequent quarterly filings as it becomes available. Upon adoption of the new guidance, we expect to record a cumulative adjustment to our consolidated balance sheet based on our adoption methodology, including an adjustment to our retained earnings to adjust for the impact of certain contract fulfillment costs, costs to obtain a contract, and certain revenue measurement adjustments. We have not yet decided on our adoption methodology. In February 2016, the FASB issued new accounting guidance for leases. The new lease guidance most significantly impacts lessee accounting and disclosures. First, this guidance requires lessees to identify arrangements that should be accounted for as leases. Under this guidance, for lease arrangements exceeding a 12-month term, a right-of-use asset and lease obligation is recorded by the lessee for all leases, whether operating or financing, while the income statement will reflect lease expense for operating leases and amortization/interest expense for financing leases. The balance sheet amount recorded for existing leases at the date of adoption of this guidance must be calculated using the applicable incremental borrowing rate at the date of adoption. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. In addition, the new lease guidance requires the use of the modified retrospective method. This guidance is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. We anticipate that this standard will have a material impact on our consolidated financial statements, as all long-term leases will be capitalized on the consolidated balance sheet.

BUSINESS COMBINATIONS

BUSINESS COMBINATIONS	3 Months Ended
	Mar. 31, 2017
Business Combinations [Abstract]
BUSINESS COMBINATIONS	BUSINESS COMBINATIONS Patient IO On August 25, 2016, we acquired Filament Labs, Inc. (doing business as “Patient IO”), an Austin-based care coordination platform used by providers to engage patients and caregivers outside of the clinic. We acquired Patient IO to strengthen our ability to partner with providers as they deliver value-based care. We anticipate this acquisition will accelerate our movement toward becoming a trusted resource and partner to the patient. The purchase price of Patient IO was $15.2 million , net of cash acquired. The purchase price excludes $9.6 million to be earned by key employees of Patient IO based upon continued employment, which is accounted for as compensation expense and will be recognized in the condensed consolidated statements of income over the requisite service period. The fair value of net assets acquired included purchased intangible assets of $5.3 million related to technology acquired and $0.6 million related to customer relationships. The $10.7 million excess of purchase consideration over the fair value of the net assets acquired was allocated to goodwill, which is deductible for U.S. income tax purposes. Arsenal Health On April 11, 2016, we acquired Arsenal Health, formerly known as Smart Scheduling, Inc., for $1.7 million . We purchased Arsenal Health in order to add its schedule optimization functionality to our athenaCoordinator offering. We expect this acquisition to accelerate our capabilities in machine learning and predictive analytics. The fair value of the purchased intangible assets related to technology acquired was $0.9 million . The $0.8 million excess of purchase consideration over the fair value of the purchased intangible assets acquired was allocated to goodwill, which is deductible for U.S. income tax purposes. In conjunction with this acquisition, Smart Scheduling, Inc. settled the convertible note receivable and related interest from our More Disruption Please, or MDP, Accelerator Program, which represented a total fair value of $0.3 million .

NET LOSS PER SHARE

NET LOSS PER SHARE	3 Months Ended
	Mar. 31, 2017
Earnings Per Share [Abstract]
NET LOSS PER SHARE	NET LOSS PER SHARE Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding and potentially dilutive securities outstanding during the period under the treasury stock method. Potentially dilutive securities include stock options, restricted stock units, and shares to be purchased under the employee stock purchase plan. Under the treasury stock method, dilutive securities are assumed to be exercised at the beginning of the periods and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Securities are excluded from the computation of diluted net income (loss) per share if their effect would be anti-dilutive to earnings per share; therefore, in periods of net loss, shares used to calculate basic and dilutive net loss per share are equivalent. The following table reconciles the weighted average shares outstanding for basic and diluted net income (loss) per share for the periods indicated: Three Months Ended March 31, 2017 2016 Net loss $ (1.4 ) $ (0.8 ) Weighted average shares used in computing basic net loss per share 39.6 39.0 Net loss per share – Basic $ (0.03 ) $ (0.02 ) Net loss $ (1.4 ) $ (0.8 ) Weighted average shares used in computing diluted net loss per share 39.6 39.0 Net loss per share – Diluted $ (0.03 ) $ (0.02 )

FAIR VALUE OF FINANCIAL INSTRUM

FAIR VALUE OF FINANCIAL INSTRUMENTS	3 Months Ended
	Mar. 31, 2017
Fair Value Disclosures [Abstract]
FAIR VALUE OF FINANCIAL INSTRUMENTS	FAIR VALUE OF FINANCIAL INSTRUMENTS As of March 31, 2017 and December 31, 2016 , the carrying amounts of cash and cash equivalents, receivables, accounts payable, and accrued expenses approximated their estimated fair values because of the short-term nature of these financial instruments. Money market funds are valued using a market approach based upon the quoted market prices of identical instruments when available or other observable inputs such as trading prices of identical instruments in inactive markets or similar securities. Our MDP Accelerator program is designed to cultivate health care information technology start-ups and expand services offered to our provider network. MDP Accelerator portfolio investments as of March 31, 2017 and December 31, 2016 are typically made in the form of convertible notes receivable or cost method investments, which are included in investments and other assets on our condensed consolidated balance sheets. At March 31, 2017 , as there is no indication of performance risk, we estimate that the fair value of the notes receivable approximates cost, based on inputs including the original transaction prices, our own recent transactions in the same or similar instruments, completed or pending third-party transactions in the underlying investments, subsequent rounds of financing, and changes in financial ratios or cash flows. As of March 31, 2017 and December 31, 2016 , we had $285.0 million and $292.5 million , respectively, outstanding on our term loan facility and we had not drawn on our revolving credit facility under our senior credit facility. The credit facility carries a variable interest rate set at current market rates, and as such, the carrying value approximates fair value. The following table presents information about our financial assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2017 and December 31, 2016 , and indicates the fair value hierarchy of the valuation techniques we utilized to determine such fair value. In general, fair values determined by Level 1 inputs utilize quoted prices in active markets for identical assets or liabilities, and fair values determined by Level 2 inputs utilize quoted prices in inactive markets for identical assets or liabilities obtained from readily available pricing sources for similar instruments. The fair values determined by Level 3 inputs are unobservable values which are supported by little or no market activity. It is our policy to recognize transfers between levels of the fair value hierarchy, if any, at the end of the reporting period; however, there have been no such transfers during any of the periods presented. Fair Value Measurements as of March 31, 2017, Using Level 1 Level 2 Level 3 Total Cash and cash equivalents: Money market $ 15.0 $ — $ — $ 15.0 Debt securities: MDP Accelerator portfolio — — 0.5 0.5 Total assets $ 15.0 $ — $ 0.5 $ 15.5 Fair Value Measurements as of December 31, 2016, Using Level 1 Level 2 Level 3 Total Cash and cash equivalents: Money market $ 15.0 $ — $ — $ 15.0 Debt securities: MDP Accelerator portfolio — — 0.5 0.5 Total assets $ 15.0 $ — $ 0.5 $ 15.5 The following table presents our financial instruments measured at fair value using unobservable inputs (Level 3) as of the three months ended March 31, 2017 and 2016: Fair Value Measurements Using Unobservable Inputs (Level 3) Fair Value Measurements Using Unobservable Inputs (Level 3) Three Months Ended March 31, 2017 Three Months Ended March 31, 2016 Balance, beginning of period $ 0.5 $ 1.3 Conversion — — Settlement — — Impairment — — Balance, end of period $ 0.5 $ 1.3

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES	3 Months Ended
	Mar. 31, 2017
Commitments and Contingencies Disclosure [Abstract]
COMMITMENTS AND CONTINGENCIES	COMMITMENTS AND CONTINGENCIES We are engaged from time to time in certain legal disputes arising in the ordinary course of business, including employment discrimination claims and challenges to our intellectual property. We believe that we have adequate legal defenses and that the likelihood of a loss contingency relating to the ultimate disposition of any of these disputes is remote. When the likelihood of a loss contingency becomes at least reasonably possible with respect to any of these disputes, or, as applicable in the future, if there is at least a reasonable possibility that a loss exceeding amounts already recognized may have been incurred, we will revise our disclosures in accordance with the relevant authoritative guidance. Additionally, we will accrue a liability for loss contingencies when we believe that it is both probable that a liability has been incurred and that we can reasonably estimate the amount of the loss. We will review these accruals and adjust them to reflect ongoing negotiations, settlements, rulings, advice of legal counsel, and other relevant information. To the extent new information is obtained, and our views on the probable outcomes of claims, suits, assessments, investigations, or legal proceedings change, changes in our accrued liabilities would be recorded in the period in which such determination is made.

BASIS OF PRESENTATION (Policies

BASIS OF PRESENTATION (Policies)	3 Months Ended
	Mar. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Basis of Presentation	General – The accompanying unaudited condensed consolidated financial statements have been prepared by athenahealth, Inc. (which we refer to as the Company, we, us, or our) in accordance with accounting principles generally accepted in the United States, or GAAP, for interim financial reporting and as required by Regulation S-X, Rule 10-01, and include the results of operations of the Company and its wholly-owned subsidiaries. All intercompany balances and transactions have been eliminated in consolidation. The year-end condensed consolidated balance sheet data was derived from audited financial statements but does not include all disclosures required by GAAP for complete financial statements. In the opinion of the Company’s management, the accompanying unaudited condensed consolidated financial statements contain all adjustments (consisting of items of a normal and recurring nature) necessary to fairly present the financial position as of March 31, 2017 , the results of operations for the three months ended March 31, 2017 and 2016 , and cash flows for the three months ended March 31, 2017 and 2016 . The results of operations for the three month period ended March 31, 2017 are not necessarily indicative of the results to be expected for the full year. When preparing financial statements in conformity with GAAP, we must make estimates and assumptions that affect the reported amounts of assets, liabilities, revenue, and expenses during the reporting period. Actual results could differ from those estimates, and such differences could be material. We consider events or transactions that occur after the balance sheet date but before the financial statements are issued to provide additional evidence relative to certain estimates or to identify matters that require additional disclosure.
Exit Costs, Including Restructuring Costs	Exit Costs, Including Restructuring Costs – Exit costs, including restructuring costs, represent costs related to workforce reductions and to terminate certain lease or other contractual agreements for strategic re-alignment purposes.
Recently Adopted and New Accounting Pronouncements	New Accounting Pronouncements Not Yet Adopted – The new revenue recognition guidance, which was issued in March 2014, is effective for public companies for annual reporting periods beginning after December 15, 2017, including interim periods within those reporting periods. The new revenue recognition guidance outlines a single comprehensive model for entities to use in accounting for revenue arising from contracts with customers and supersedes most current revenue recognition guidance, including industry-specific guidance. In addition, the new standard provides guidance on accounting for certain revenue-related costs including costs associated with obtaining and fulfilling a contract. The new standard provides companies with two implementation methods. Companies can choose to adopt the standard retrospectively and apply the guidance to each prior reporting period presented. Alternatively, a modified retrospective adoption methodology is permitted, whereby the cumulative impact of all prior periods would be recorded in retained earnings or other impacted balance sheet line items as of January 1, 2018, the date of adoption. Under this method, previously presented years' financial position and results would not be adjusted. We anticipate that the new revenue recognition standard will have a material impact on our consolidated financial statements with respect to the capitalization of certain commissions, other contract acquisition-based costs, and contract fulfillment costs. Currently, one of the criteria impacting the timing of our revenue recognition is the requirement of fees to be either fixed or determinable. The new guidance neither limits fees that can be recognized to only those that are fixed or determinable, nor requires deferral of some contingent revenue. We have assessed the pattern of our revenue recognition under the new guidance and are currently determining the financial impact on adoption and going forward. We intend to disclose the impact in our subsequent quarterly filings as it becomes available. Upon adoption of the new guidance, we expect to record a cumulative adjustment to our consolidated balance sheet based on our adoption methodology, including an adjustment to our retained earnings to adjust for the impact of certain contract fulfillment costs, costs to obtain a contract, and certain revenue measurement adjustments. We have not yet decided on our adoption methodology. In February 2016, the FASB issued new accounting guidance for leases. The new lease guidance most significantly impacts lessee accounting and disclosures. First, this guidance requires lessees to identify arrangements that should be accounted for as leases. Under this guidance, for lease arrangements exceeding a 12-month term, a right-of-use asset and lease obligation is recorded by the lessee for all leases, whether operating or financing, while the income statement will reflect lease expense for operating leases and amortization/interest expense for financing leases. The balance sheet amount recorded for existing leases at the date of adoption of this guidance must be calculated using the applicable incremental borrowing rate at the date of adoption. Leases with a term of 12 months or less will be accounted for similar to existing guidance for operating leases today. In addition, the new lease guidance requires the use of the modified retrospective method. This guidance is effective for public companies for fiscal years, and interim periods within those fiscal years, beginning after December 15, 2018. Early adoption is permitted. We anticipate that this standard will have a material impact on our consolidated financial statements, as all long-term leases will be capitalized on the consolidated balance sheet. Recently Adopted Pronouncement – In March 2016, the Financial Accounting Standards Board, or FASB, issued new guidance which changes the accounting for stock-based compensation. The guidance simplifies several aspects of the accounting for employee share-based payment transactions, including the accounting for income taxes, forfeitures, and statutory tax withholding requirements, as well as classification in the statement of cash flows. We adopted this standard on January 1, 2017, using a modified retrospective approach, which requires the cumulative effect of initially applying the standard to be recorded as an adjustment to the opening balance of retained earnings of the annual reporting period that includes the date of initial application, and which resulted in a cumulative-effect increase of $49.2 million to retained earnings and deferred tax assets. Upon adoption, we now recognize all excess tax benefits and tax deficiencies as income tax expense or benefit in the income statement. We will no longer present excess tax benefits within cash flows from financing activities but instead present these cash flows in cash flows from operating activities in the condensed consolidated statements of cash flows. Prior to adoption, the excess tax benefits and tax deficiencies were recorded to additional paid-in capital and excess tax benefits were not recorded until they were able to be utilized. In addition, we elected to no longer calculate an estimate of expected forfeitures and began recognizing forfeitures as they occurred, including a cumulative-effect decrease of $1.0 million to retained earnings at January 1, 2017 with the offset as an increase to additional paid-in capital. See table below for the changes in beginning stockholders' equity as a result of this implementation.
Net Income (Loss) per Share	Basic net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding during the period. Diluted net income (loss) per share is computed by dividing net income (loss) by the weighted average number of common shares outstanding and potentially dilutive securities outstanding during the period under the treasury stock method. Potentially dilutive securities include stock options, restricted stock units, and shares to be purchased under the employee stock purchase plan. Under the treasury stock method, dilutive securities are assumed to be exercised at the beginning of the periods and as if funds obtained thereby were used to purchase common stock at the average market price during the period. Securities are excluded from the computation of diluted net income (loss) per share if their effect would be anti-dilutive to earnings per share; therefore, in periods of net loss, shares used to calculate basic and dilutive net loss per share are equivalent.
Fair Value of Financial Instruments	As of March 31, 2017 and December 31, 2016 , the carrying amounts of cash and cash equivalents, receivables, accounts payable, and accrued expenses approximated their estimated fair values because of the short-term nature of these financial instruments. Money market funds are valued using a market approach based upon the quoted market prices of identical instruments when available or other observable inputs such as trading prices of identical instruments in inactive markets or similar securities. Our MDP Accelerator program is designed to cultivate health care information technology start-ups and expand services offered to our provider network. MDP Accelerator portfolio investments as of March 31, 2017 and December 31, 2016 are typically made in the form of convertible notes receivable or cost method investments, which are included in investments and other assets on our condensed consolidated balance sheets. At March 31, 2017 , as there is no indication of performance risk, we estimate that the fair value of the notes receivable approximates cost, based on inputs including the original transaction prices, our own recent transactions in the same or similar instruments, completed or pending third-party transactions in the underlying investments, subsequent rounds of financing, and changes in financial ratios or cash flows.
Commitments and Contingencies	We are engaged from time to time in certain legal disputes arising in the ordinary course of business, including employment discrimination claims and challenges to our intellectual property. We believe that we have adequate legal defenses and that the likelihood of a loss contingency relating to the ultimate disposition of any of these disputes is remote. When the likelihood of a loss contingency becomes at least reasonably possible with respect to any of these disputes, or, as applicable in the future, if there is at least a reasonable possibility that a loss exceeding amounts already recognized may have been incurred, we will revise our disclosures in accordance with the relevant authoritative guidance. Additionally, we will accrue a liability for loss contingencies when we believe that it is both probable that a liability has been incurred and that we can reasonably estimate the amount of the loss. We will review these accruals and adjust them to reflect ongoing negotiations, settlements, rulings, advice of legal counsel, and other relevant information. To the extent new information is obtained, and our views on the probable outcomes of claims, suits, assessments, investigations, or legal proceedings change, changes in our accrued liabilities would be recorded in the period in which such determination is made.

BASIS OF PRESENTATION (Tables)

BASIS OF PRESENTATION (Tables)	3 Months Ended
	Mar. 31, 2017
Organization, Consolidation and Presentation of Financial Statements [Abstract]
Activity Related to Exit Costs	The activity in the exit cost accrual during the three months ended March 31, 2017 is due to restructuring costs incurred during the three months ended December 31, 2016 and was as follows: Workforce Reductions Accrual at December 31, 2016 $ 3.1 Additions — Cash Payments (3.1 ) Accrual at March 31, 2017 $ —
Schedule of Changes in Beginning Stockholders' Equity	See table below for the changes in beginning stockholders' equity as a result of this implementation. Common Stock Additional Paid-In Capital Treasury Stock Accumulated Other Comprehensive Loss Retained Earnings Total Stockholders' Equity Shares Amount Shares Amount BALANCE – December 31, 2016 40.8 $ 0.4 $ 591.5 (1.3 ) $ (1.2 ) $ (0.9 ) $ 43.5 $ 633.3 Cumulative effect of adoption of new accounting standard 1.0 48.2 49.2 BALANCE – January 1, 2017 40.8 $ 0.4 $ 592.5 (1.3 ) $ (1.2 ) $ (0.9 ) $ 91.7 $ 682.5

NET LOSS PER SHARE (Tables)

NET LOSS PER SHARE (Tables)	3 Months Ended
	Mar. 31, 2017
Earnings Per Share [Abstract]
Schedule of Earnings Per Share, Basic and Diluted	The following table reconciles the weighted average shares outstanding for basic and diluted net income (loss) per share for the periods indicated: Three Months Ended March 31, 2017 2016 Net loss $ (1.4 ) $ (0.8 ) Weighted average shares used in computing basic net loss per share 39.6 39.0 Net loss per share – Basic $ (0.03 ) $ (0.02 ) Net loss $ (1.4 ) $ (0.8 ) Weighted average shares used in computing diluted net loss per share 39.6 39.0 Net loss per share – Diluted $ (0.03 ) $ (0.02 )

FAIR VALUE OF FINANCIAL INSTR15

FAIR VALUE OF FINANCIAL INSTRUMENTS (Tables)	3 Months Ended
	Mar. 31, 2017
Fair Value Disclosures [Abstract]
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis	The following table presents information about our financial assets and liabilities that are measured at fair value on a recurring basis as of March 31, 2017 and December 31, 2016 , and indicates the fair value hierarchy of the valuation techniques we utilized to determine such fair value. In general, fair values determined by Level 1 inputs utilize quoted prices in active markets for identical assets or liabilities, and fair values determined by Level 2 inputs utilize quoted prices in inactive markets for identical assets or liabilities obtained from readily available pricing sources for similar instruments. The fair values determined by Level 3 inputs are unobservable values which are supported by little or no market activity. It is our policy to recognize transfers between levels of the fair value hierarchy, if any, at the end of the reporting period; however, there have been no such transfers during any of the periods presented. Fair Value Measurements as of March 31, 2017, Using Level 1 Level 2 Level 3 Total Cash and cash equivalents: Money market $ 15.0 $ — $ — $ 15.0 Debt securities: MDP Accelerator portfolio — — 0.5 0.5 Total assets $ 15.0 $ — $ 0.5 $ 15.5 Fair Value Measurements as of December 31, 2016, Using Level 1 Level 2 Level 3 Total Cash and cash equivalents: Money market $ 15.0 $ — $ — $ 15.0 Debt securities: MDP Accelerator portfolio — — 0.5 0.5 Total assets $ 15.0 $ — $ 0.5 $ 15.5
Schedule of Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation	The following table presents our financial instruments measured at fair value using unobservable inputs (Level 3) as of the three months ended March 31, 2017 and 2016: Fair Value Measurements Using Unobservable Inputs (Level 3) Fair Value Measurements Using Unobservable Inputs (Level 3) Three Months Ended March 31, 2017 Three Months Ended March 31, 2016 Balance, beginning of period $ 0.5 $ 1.3 Conversion — — Settlement — — Impairment — — Balance, end of period $ 0.5 $ 1.3

BASIS OF PRESENTATION - Activit

BASIS OF PRESENTATION - Activity Related to Exit Costs (Details) - Employee Severance $ in Millions	3 Months Ended
	Mar. 31, 2017USD ($)
Restructuring Reserve [Roll Forward]
Accrual, beginning of period	$ 3.1
Additions	0
Cash Payments	(3.1)
Accrual, end of period	$ 0

BASIS OF PRESENTATION - Narrati

BASIS OF PRESENTATION - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Jan. 01, 2017	Dec. 31, 2016
Accounting Standards Update 2016-09, Excess Tax Benefit Component
Related Party Transaction [Line Items]
Increase in deferred tax assets			$ 49.2
Retained Earnings
Related Party Transaction [Line Items]
Cumulative effect of new accounting principle				$ (48.2)
Retained Earnings | Accounting Standards Update 2016-09, Excess Tax Benefit Component
Related Party Transaction [Line Items]
Cumulative effect of new accounting principle				49.2
Retained Earnings | Accounting Standards Update 2016-09, Forfeiture Rate Component
Related Party Transaction [Line Items]
Cumulative effect of new accounting principle				1
Additional Paid-In Capital
Related Party Transaction [Line Items]
Cumulative effect of new accounting principle				(1)
Additional Paid-In Capital | Accounting Standards Update 2016-09, Forfeiture Rate Component
Related Party Transaction [Line Items]
Cumulative effect of new accounting principle			$ (1)
Long-Term Investment in Vendor
Related Party Transaction [Line Items]
Total related party expense	$ 14.3	$ 8.1
Total amount payable to related parties	$ 5			$ 4.6

BASIS OF PRESENTATION - Schedul

BASIS OF PRESENTATION - Schedule of Changes in Beginning Stockholders' Equity (Details) - USD ($) shares in Millions, $ in Millions	Mar. 31, 2017	Dec. 31, 2016
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Stockholders' equity, unadjusted	$ 687.4	$ 633.3
Common Stock
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Shares, outstanding (in shares)		40.8
Stockholders' equity, unadjusted		$ 0.4
Stockholders' equity, adjusted balance		0.4
Additional Paid-In Capital
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Stockholders' equity, unadjusted		591.5
Cumulative effect of adoption of new accounting standard		1
Stockholders' equity, adjusted balance		$ 592.5
Treasury Stock
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Shares, outstanding (in shares)		1.3
Stockholders' equity, unadjusted		$ (1.2)
Stockholders' equity, adjusted balance		(1.2)
Accumulated Other Comprehensive Loss
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Stockholders' equity, unadjusted		(0.9)
Stockholders' equity, adjusted balance		(0.9)
Retained Earnings
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Stockholders' equity, unadjusted		43.5
Cumulative effect of adoption of new accounting standard		48.2
Stockholders' equity, adjusted balance		91.7
Total Stockholders' Equity
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Stockholders' equity, unadjusted		633.3
Cumulative effect of adoption of new accounting standard		49.2
Stockholders' equity, adjusted balance		$ 682.5

BUSINESS COMBINATIONS - Narrati

BUSINESS COMBINATIONS - Narrative (Details) - USD ($) $ in Millions	Aug. 25, 2016	Apr. 11, 2016	Mar. 31, 2017	Dec. 31, 2016
Business Acquisition [Line Items]
Goodwill			$ 240.7	$ 240.7
Filament Labs, Inc
Business Acquisition [Line Items]
Purchase price, net of cash acquired	$ 15.2
Continued employment expense	9.6
Goodwill	10.7
Filament Labs, Inc | Technology-Based Intangible Assets
Business Acquisition [Line Items]
Intangible assets acquired	5.3
Filament Labs, Inc | Customer Relationships
Business Acquisition [Line Items]
Intangible assets acquired	$ 0.6
Arsenal Health
Business Acquisition [Line Items]
Goodwill		$ 0.8
Payments to acquire businesses, gross		1.7
Liability settled, fair value		0.3
Arsenal Health | Technology-Based Intangible Assets
Business Acquisition [Line Items]
Intangible assets acquired		$ 0.9

NET LOSS PER SHARE - Schedule o

NET LOSS PER SHARE - Schedule of Earnings Per Share, Basic and Diluted (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Earnings Per Share [Abstract]
Net loss	$ (1.4)	$ (0.8)
Weighted average shares used in computing basic net income (loss) per share (in shares)	39.6	39
Net income (loss) per share - Basic (in dollars per share)	$ (0.03)	$ (0.02)
Weighted average shares used in computing diluted net income (loss) per share (in shares)	39.6	39
Net income per share - Diluted (in dollars per share)	$ (0.03)	$ (0.02)

FAIR VALUE OF FINANCIAL INSTR21

FAIR VALUE OF FINANCIAL INSTRUMENTS - Narrative (Details) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Revolving Credit Facility | Senior Credit Facility
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term line of credit	$ 0	$ 0
Unsecured Debt | Senior Credit Facility, 2015
Fair Value, Balance Sheet Grouping, Financial Statement Captions [Line Items]
Long-term line of credit	$ 285,000,000	$ 292,500,000

FAIR VALUE OF FINANCIAL INSTR22

FAIR VALUE OF FINANCIAL INSTRUMENTS - Financial Assets and Liabilities that Are Measured at Fair Value on Recurring Basis (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions	Mar. 31, 2017	Dec. 31, 2016
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	$ 15.5	$ 15.5
Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	15	15
Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	0	0
Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Total assets	0.5	0.5
Money Market Funds
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents:	15	15
Money Market Funds | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents:	15	15
Money Market Funds | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents:	0	0
Money Market Funds | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Cash and cash equivalents:	0	0
MDP Accelerator portfolio
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities:	0.5	0.5
MDP Accelerator portfolio | Level 1
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities:	0	0
MDP Accelerator portfolio | Level 2
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities:	0	0
MDP Accelerator portfolio | Level 3
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Debt securities:	$ 0.5	$ 0.5

FAIR VALUE OF FINANCIAL INSTR23

FAIR VALUE OF FINANCIAL INSTRUMENTS - Schedule of Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation (Details) - Fair Value, Measurements, Recurring - Level 3 - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Balance, beginning of period	$ 0.5	$ 1.3
Conversion	0	0
Settlement	0	0
Impairment	0	0
Balance, end of period	$ 0.5	$ 1.3