Revenue Recognition | Revenue Recognition The following table summarizes the Company’s net revenue by primary source: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Net revenue: Capitated revenue $ 128,521 $ — $ 253,151 $ — Fee-for-service and other revenue 3,073 — 5,865 — Total Medicare revenue 131,594 — 259,016 — Partnership revenue 63,401 56,126 124,336 111,057 Net fee-for-service revenue 35,740 43,416 77,254 87,878 Membership revenue 25,104 20,874 49,335 41,070 Grant income — — — 1,763 Total commercial revenue 124,245 120,416 250,925 241,768 Total net revenue $ 255,839 $ 120,416 $ 509,941 $ 241,768 Net fee-for-service revenue (previously reported as net patient service revenue) is primarily generated from commercial third-party payers with which the One Medical entities have established contractual billing arrangements. The following table summarizes net fee-for-service revenue by source: Three Months Ended June 30, Six Months Ended June 30, 2022 2021 2022 2021 Net fee-for-service revenue: Commercial and government third-party payers $ 31,122 $ 39,608 $ 67,728 $ 81,843 Patients, including self-pay, insurance co-pays and deductibles 4,618 3,808 9,526 6,035 Net fee-for-service revenue $ 35,740 $ 43,416 $ 77,254 $ 87,878 The CARES Act was enacted on March 27, 2020 to provide economic relief to those impacted by the COVID-19 pandemic. The CARES Act includes various tax and lending provisions, among others. Under the CARES Act, the Company received an income grant of $1,763 from the Provider Relief Fund administered by the Health and Human Services ("HHS") during the six months ended June 30, 2021. The Company did not receive any income grants from the HHS for the three and six months ended June 30, 2022. Management has concluded that the Company met conditions of the grant funds and has recognized it as Grant income for the six months ended June 30, 2021. During the three and six months ended June 30, 2022, the Company recognized revenue of $25,021 and $32,448, which was included in the beginning deferred revenue balances as of April 1, 2022 and January 1, 2022, respectively. During the three and six months ended June 30, 2021, the Company recognized revenue of $20,041 and $26,187, which was included in the beginning deferred revenue balances as of April 1, 2021 and January 1, 2021, respectively. As of June 30, 2022, a total of $5,296 is included within deferred revenue related to variable consideration, of which $4,103 is classified as non-current as it will not be recognized within the next twelve months. The estimate of variable consideration is based on the Company’s assessment of historical, current, and forecasted performance. As summarized in the table below, the Company recorded contract assets and deferred revenue as a result of timing differences between the Company’s performance and the customer’s payment. June 30, December 31, 2022 2021 Balances from contracts with customers: Capitated accounts receivable, net $ 32,278 $ 23,903 All other accounts receivable, net 120,877 79,595 Contract asset (included in other current assets) 291 458 Deferred revenue $ 83,419 $ 77,245 Capitated accounts receivable and payable related to At-Risk arrangements are recorded net in the condensed consolidated balance sheets when a legal right of offset exists. A right of offset exists when all of the following conditions are met: 1) each of two parties (the Company and the third-party payer) owes the other determinable amounts; 2) the reporting party (the Company) has the right to offset the amount owed with the amount owed by the other party (the third-party payer); 3) the reporting party (the Company) intends to offset; and 4) the right of offset is enforceable by law. The capitated accounts receivable and payable are recorded at the contract level and consist of the Company’s Capitated Revenue attributed from enrolled At-Risk members less actual paid medical claims expense. If the Capitated Revenue exceeds the actual medical claims expense at the end of the reporting period, such surplus is recorded as capitated accounts receivable within accounts receivable, net in the condensed consolidated balance sheets. If the actual medical claims expense exceeds the Capitated Revenue, such deficit is recorded as capitated accounts payable within other current liabilities in the condensed consolidated balance sheets. As of June 30, 2022, the Company has capitated accounts receivable, net, of $32,278 and capitated accounts payable, net, of $1,680, representing amounts due from and to Medicare Advantage payers and CMS in At-Risk arrangements, respectively. The capitated accounts receivable and payable are presented net of IBNR claims liability and other adjustments. There were no significant prior period adjustments or changes to the assumptions used in estimating the IBNR claims liability as of June 30, 2022. The Company believes the amounts accrued to cover IBNR claims as of June 30, 2022 are adequate. Components of capitated accounts receivable, net is summarized below: June 30, December 31 2022 2021 Capitated accounts receivable $ 91,561 $ 56,384 IBNR claims liability (57,286) (32,320) Other adjustments (1,997) (161) Capitated accounts receivable, net $ 32,278 $ 23,903 Components of capitated accounts payable, net is summarized below: June 30, December 31 2022 2021 Capitated accounts (receivable), payable $ (6,245) $ 5,483 IBNR claims liability 7,761 1,438 Other adjustments 164 299 Capitated accounts payable, net $ 1,680 $ 7,220 Activity in IBNR claims liability from December 31, 2021 through June 30, 2022 is summarized below: Amount Balance as of December 31, 2021 $ 33,078 Incurred related to: Current period 215,332 Prior periods (1,466) 213,866 Paid related to: Current period (152,738) Prior periods (29,159) (181,897) Balance as of June 30, 2022 $ 65,047 The Company does not disclose the value of remaining performance obligations for (i) contracts with an original contract term of one year or less, (ii) contracts for which the Company recognizes revenue at the amount to which it has the right to invoice when that amount corresponds directly with the value of services performed, and (iii) variable consideration allocated entirely to a wholly unsatisfied performance obligation or to a wholly unsatisfied distinct service that forms part of a single performance obligation. For those contracts that do not meet the above criteria, the Company’s remaining performance obligation as of June 30, 2022, is expected to be recognized as follows: Less than Greater Total As of June 30, 2022 $ 15,193 $ 27,002 $ 42,195 |