Document_And_Entity_Informatio
Document And Entity Information | 9 Months Ended | |
Sep. 30, 2014 | Nov. 11, 2014 | |
Document and Entity Information [Abstract] | ' | ' |
Entity Registrant Name | 'PACIFIC HEALTH CARE ORGANIZATION INC | ' |
Document Type | '10-Q | ' |
Current Fiscal Year End Date | '--12-31 | ' |
Entity Common Stock, Shares Outstanding | ' | 802,424 |
Amendment Flag | 'false | ' |
Entity Central Index Key | '0001138476 | ' |
Entity Current Reporting Status | 'Yes | ' |
Entity Voluntary Filers | 'No | ' |
Entity Filer Category | 'Smaller Reporting Company | ' |
Entity Well-known Seasoned Issuer | 'No | ' |
Document Period End Date | 30-Sep-14 | ' |
Document Fiscal Year Focus | '2014 | ' |
Document Fiscal Period Focus | 'Q3 | ' |
Condensed_Consolidated_Balance
Condensed Consolidated Balance Sheets (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Current Assets | ' | ' |
Cash | $2,579,435 | $1,265,535 |
Accounts receivable, net of allowance of $15,533 and $15,860 | 2,086,754 | 1,518,813 |
Deferred tax asset | 41,513 | 41,513 |
Prepaid income taxes | 0 | 6,568 |
Prepaid expenses | 75,316 | 68,613 |
Total current assets | 4,783,018 | 2,901,042 |
Property and equipment, net | ' | ' |
Computer equipment | 191,489 | 130,717 |
Furniture and fixtures | 92,191 | 83,708 |
Office equipment | 27,160 | 26,560 |
Office equipment under capital lease | 63,923 | 63,923 |
Total property and equipment | 374,763 | 304,908 |
Less: accumulated depreciation and amortization | -212,566 | -177,158 |
Net property and equipment | 162,197 | 127,750 |
Other assets | 13,702 | 8,158 |
Total assets | 4,958,917 | 3,036,950 |
Current Liabilities | ' | ' |
Accounts payable | 333,766 | 108,496 |
Accrued expenses | 199,153 | 142,983 |
Income tax payable | 155,739 | 2,618 |
Current obligation under capital lease | 11,537 | 13,173 |
Deferred rent expense | 16,250 | 21,698 |
Total current liabilities | 716,445 | 288,968 |
Long term liabilities | ' | ' |
Noncurrent obligation under capital lease | 0 | 8,151 |
Total liabilities | 716,445 | 297,119 |
Commitments and Contingencies | ' | ' |
Shareholders’ Equity | ' | ' |
Preferred stock; 5,000,000 shares authorized at $0.001 par value; zero shares issued and outstanding | 0 | 0 |
Common stock, 50,000,000 shares authorized at $0.001 par value; 802,424 shares issued and outstanding | 802 | 802 |
Additional paid-in capital | 623,629 | 623,629 |
Retained earnings | 3,618,041 | 2,115,400 |
Total stockholders' equity | 4,242,472 | 2,739,831 |
Total liabilities and stockholders’ equity | $4,958,917 | $3,036,950 |
Condensed_Consolidated_Balance1
Condensed Consolidated Balance Sheets (Parentheticals) (USD $) | Sep. 30, 2014 | Dec. 31, 2013 |
Accounts receivable, allowance (in Dollars) | $15,533 | $15,860 |
Preferred stock, par value (in Dollars per share) | $0.00 | $0.00 |
Preferred stock, shares authorized | 5,000,000 | 5,000,000 |
Preferred stock, shares issued | 0 | 0 |
Preferred stock, shares outstanding | 0 | 0 |
Common stock par value (in Dollars per share) | $0.00 | $0.00 |
Common stock, shares authorized | 50,000,000 | 50,000,000 |
Common stock, shares issued | 802,424 | 802,424 |
Common stock, shares outstanding | 802,424 | 802,424 |
Condensed_Consolidated_Stateme
Condensed Consolidated Statements of Operations (Unaudited) (USD $) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2014 | Sep. 30, 2013 | Sep. 30, 2014 | Sep. 30, 2013 | |
Revenues: | ' | ' | ' | ' |
UR fees | $1,362,283 | $577,876 | $3,063,833 | $1,347,255 |
MBR fees | 526,341 | 345,253 | 1,444,524 | 1,060,519 |
HCO fees | 260,069 | 210,039 | 778,869 | 689,575 |
MPN fees | 285,415 | 223,625 | 797,449 | 638,841 |
NCM fees | 242,376 | 309,272 | 753,839 | 815,987 |
Other | 76,032 | 37,505 | 240,882 | 128,111 |
Total revenues | 2,752,516 | 1,703,570 | 7,079,396 | 4,680,288 |
Expenses: | ' | ' | ' | ' |
Depreciation and amortization | 12,642 | 10,918 | 35,408 | 32,623 |
Bad debt provision | 15,851 | 10,000 | 24,991 | 10,000 |
Consulting fees | 76,790 | 81,871 | 229,010 | 267,125 |
Salaries and wages | 699,096 | 517,400 | 1,878,041 | 1,547,197 |
Professional fees | 109,871 | 131,157 | 338,403 | 324,014 |
Insurance | 82,155 | 68,858 | 225,035 | 189,455 |
Outsource service fees | 658,233 | 202,960 | 1,324,248 | 511,374 |
Data maintenance | 12,953 | 9,355 | 53,685 | 46,178 |
General and administrative | 133,449 | 108,759 | 396,156 | 359,985 |
Total expenses | 1,801,040 | 1,141,278 | 4,504,977 | 3,287,951 |
Income from operations | 951,476 | 562,292 | 2,574,419 | 1,392,337 |
Other income (expense): | ' | ' | ' | ' |
Interest income | 0 | 1 | 0 | 460 |
Interest (expense) | -258 | -549 | -956 | -1,909 |
Total other income (expense) | -258 | -548 | -956 | -1,449 |
Income before taxes | 951,218 | 561,744 | 2,573,463 | 1,390,888 |
Income tax provision | 395,803 | 228,702 | 1,070,822 | 565,418 |
Net income | $555,415 | $333,042 | $1,502,641 | $825,470 |
Basic and fully diluted earnings per share: | ' | ' | ' | ' |
Earnings per share amount (in Dollars per share) | $0.69 | $0.42 | $1.87 | $1.03 |
Weighted average common shares outstanding (in Shares) | 802,424 | 802,424 | 802,424 | 802,424 |
Condensed_Consolidated_Stateme1
Condensed Consolidated Statements of Cash Flows (Unaudited) (USD $) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Cash flows from operating activities: | ' | ' |
Net income | $1,502,641 | $825,470 |
Adjustments to reconcile net income to net cash: | ' | ' |
Depreciation and amortization | 35,408 | 32,623 |
Changes in operating assets and liabilities | ' | ' |
(Decrease) in bad debt provision | -327 | 0 |
(Increase) in accounts receivable | -567,614 | -192,665 |
Decrease in receivable – other | 0 | 7,324 |
(Increase) in other assets | -5,544 | 0 |
(Increase) decrease in prepaid income tax | 6,568 | -597,922 |
(Increase) in prepaid expenses | -6,703 | -94,867 |
Increase in accounts payable | 225,270 | 4,193 |
Increase in accrued expenses | 56,170 | 175,001 |
Increase in income tax payable | 153,121 | 316,738 |
(Decrease) in deferred rent expense | -5,448 | -2,629 |
(Decrease) in unearned revenue | 0 | -2,443 |
Net cash provided by operating activities | 1,393,542 | 470,823 |
Cash flows from investing activities | ' | ' |
Purchases of furniture and equipment | -69,855 | -3,050 |
Net cash used by investing activities | -69,855 | -3,050 |
Cash flows from financing activities | ' | ' |
Payment of obligation under capital lease | -9,787 | -14,338 |
Net cash used in financing activities | -9,787 | -14,338 |
Increase in cash | 1,313,900 | 453,435 |
Cash at beginning of period | 1,265,535 | 479,674 |
Cash at end of period | 2,579,435 | 933,109 |
Cash paid for: | ' | ' |
Interest | 959 | 2,980 |
Income taxes paid | $911,134 | $846,502 |
NOTE_1_BASIS_OF_FINANCIAL_STAT
NOTE 1 - BASIS OF FINANCIAL STATEMENT PRESENTATION | 9 Months Ended |
Sep. 30, 2014 | |
Disclosure Text Block [Abstract] | ' |
Organization, Consolidation and Presentation of Financial Statements Disclosure [Text Block] | ' |
NOTE 1 – BASIS OF FINANCIAL STATEMENT PRESENTATION | |
The accompanying unaudited condensed consolidated financial statements have been prepared by the Company pursuant to the rules and regulations of the Securities and Exchange Commission (the “Commission”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted in accordance with such rules and regulations. The information furnished in the interim condensed consolidated financial statements includes normal recurring adjustments and reflects all adjustments, which, in the opinion of management, are necessary for a fair presentation of such financial statements. Although management believes the disclosures and information presented are adequate to make the information not misleading, it is suggested that these interim condensed financial statements be read in conjunction with the Company’s audited financial statements and notes thereto included in its Annual Report on Form 10-K for the year ended December 31, 2013. Operating results for the nine months ended September 30, 2014 are not necessarily indicative of the results to be expected for the year ending December 31, 2014. | |
Revenue Recognition — In general, the Company recognizes revenue when (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered, (iii) the fee is fixed or determinable and (iv) collectability is reasonably assured. Revenues are generated as services are provided to the customer based on the sales price agreed and collected. The Company recognizes revenue as the time is worked or as units of production are completed, which is when the revenue is earned and realized. Labor costs are recognized as the costs are incurred. The Company derives its revenue from the sale of Managed Care Services, Review Services and Case Management Services. These services may be sold individually or in combination. When a sale combines multiple elements, the Company accounts for multiple-deliverable revenue arrangements in accordance with the guidance included in ASC 605-25. | |
These fees include monthly administration fees, claim network fees, flat rate fees or hourly fees depending on the agreement with the client. Such revenue is recognized at the end of each month for which services are performed. | |
Management reviews each agreement in accordance with the provision of the revenue recognition topic ASC 605 that addresses multiple-deliverable revenue arrangements. The multiple-deliverable arrangements entered into consist of bundled managed care which included various units of accounting such as network solutions and patient management which includes managed care. Such elements are considered separate units of accounting due to each element having value to the customer on a stand-alone basis. The selling price for each unit of accounting is determined using the contract price. When the Company’s customers purchase several products the pricing of the products sold is generally the same as if the products were sold on an individual basis. Revenue is recognized as the work is performed in accordance with the Company’s customer contracts. Based upon the nature of the Company’s products, bundled managed care elements are generally delivered in the same accounting period. The Company recognizes revenue for patient management services ratably over the life of the customer contract. Based upon prior experience in managed care, the Company estimates the deferral amount from when the customer’s claim is received to when the customer contract expires. Advance payments from subscribers and billings made in advance are recorded on the balance sheet as deferred revenue. | |
Reclassifications – Certain 2013 quarterly and year-to-date balances have been reclassified to conform to the 2014 presentation. The reclassifications have had no effect on the financial position, operations or cash flows for the three month and nine month periods ended September 30, 2014. | |
NOTE_2_SUBSEQUENT_EVENTS
NOTE 2 - SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2014 | |
Subsequent Events [Abstract] | ' |
Subsequent Events [Text Block] | ' |
NOTE 2 – SUBSEQUENT EVENTS | |
During October 2014 the Company was notified by Companion Property & Casualty Insurance Company, who is a significant customer, that subject to certain closing conditions including necessary governmental and regulatory approvals, it will be acquired by Enstar Group Limited (“Enstar”). Upon completion of the acquisition, it is anticipated that Enstar will take in-house all of the business Companion currently outsources to Medex. If the transaction closes and Companion terminates Medex’s services, the Company anticipates MBR fees and total revenues could be impacted beginning with the first fiscal quarter 2015. The loss of this customer could also impact the Company’s profitability and liquidity until such time as the Company is able to replace the revenue generated from this customer. During the nine-month period ended September 30, 2014 MBR fees generated from this customer represented approximately 67% of total MBR fees and 14% of total revenue. During the nine month period ended September 30, 2013 MBR fees generated from this customer represented approximately 58% of total MBR fees and 14% of total revenue. | |
Based on recent statutory changes made by the Division of Workers’ Compensation, the Company has reinstated its lien representation services through Medex Legal Services during the fourth quarter of 2014. There are two reasons for the Company’s decision: 1) Lien activation fees have been declared unconstitutional by California courts, so the number of significant lien filings is again increasing; 2) and in November the Company was engaged by a public sector employer to handle its lien representation services. | |
Accounting_Policies_by_Policy_
Accounting Policies, by Policy (Policies) | 9 Months Ended |
Sep. 30, 2014 | |
Accounting Policies [Abstract] | ' |
Revenue Recognition, Policy [Policy Text Block] | ' |
Revenue Recognition — In general, the Company recognizes revenue when (i) persuasive evidence of an arrangement exists, (ii) delivery has occurred or services have been rendered, (iii) the fee is fixed or determinable and (iv) collectability is reasonably assured. Revenues are generated as services are provided to the customer based on the sales price agreed and collected. The Company recognizes revenue as the time is worked or as units of production are completed, which is when the revenue is earned and realized. Labor costs are recognized as the costs are incurred. The Company derives its revenue from the sale of Managed Care Services, Review Services and Case Management Services. These services may be sold individually or in combination. When a sale combines multiple elements, the Company accounts for multiple-deliverable revenue arrangements in accordance with the guidance included in ASC 605-25. | |
These fees include monthly administration fees, claim network fees, flat rate fees or hourly fees depending on the agreement with the client. Such revenue is recognized at the end of each month for which services are performed. | |
Management reviews each agreement in accordance with the provision of the revenue recognition topic ASC 605 that addresses multiple-deliverable revenue arrangements. The multiple-deliverable arrangements entered into consist of bundled managed care which included various units of accounting such as network solutions and patient management which includes managed care. Such elements are considered separate units of accounting due to each element having value to the customer on a stand-alone basis. The selling price for each unit of accounting is determined using the contract price. When the Company’s customers purchase several products the pricing of the products sold is generally the same as if the products were sold on an individual basis. Revenue is recognized as the work is performed in accordance with the Company’s customer contracts. Based upon the nature of the Company’s products, bundled managed care elements are generally delivered in the same accounting period. The Company recognizes revenue for patient management services ratably over the life of the customer contract. Based upon prior experience in managed care, the Company estimates the deferral amount from when the customer’s claim is received to when the customer contract expires. Advance payments from subscribers and billings made in advance are recorded on the balance sheet as deferred revenue. | |
Reclassification, Policy [Policy Text Block] | ' |
Reclassifications – Certain 2013 quarterly and year-to-date balances have been reclassified to conform to the 2014 presentation. The reclassifications have had no effect on the financial position, operations or cash flows for the three month and nine month periods ended September 30, 2014. |
NOTE_2_SUBSEQUENT_EVENTS_Detai
NOTE 2 - SUBSEQUENT EVENTS (Details) (Customer Concentration Risk [Member]) | 9 Months Ended | |
Sep. 30, 2014 | Sep. 30, 2013 | |
Sales Revenue, Services, Net [Member] | ' | ' |
NOTE 2 - SUBSEQUENT EVENTS (Details) [Line Items] | ' | ' |
Concentration Risk, Percentage | 67.00% | 58.00% |
Sales Revenue, Net [Member] | ' | ' |
NOTE 2 - SUBSEQUENT EVENTS (Details) [Line Items] | ' | ' |
Concentration Risk, Percentage | 14.00% | 14.00% |