Performant Healthcare (PHLT) 10-Q 8 Nov 13 2013 Q3 Quarterly report Financial data

Document_and_Entity_Informatio

Document and Entity Information	9 Months Ended
	Sep. 30, 2013	Nov. 06, 2013
Document Document And Entity Information [Abstract]	'	'
Entity Registrant Name	'Performant Financial Corporation	'
Entity Central Index Key	'0001550695	'
Current Fiscal Year End Date	'--12-31	'
Entity Filer Category	'Non-accelerated Filer	'
Document Type	'10-Q	'
Document Period End Date	30-Sep-13	'
Document Fiscal Year Focus	'2013	'
Trading Symbol	'PFMT	'
Document Fiscal Period Focus (Q1,Q2,Q3,FY)	'Q3	'
Amendment Flag	'false	'
Entity Common Stock, Shares Outstanding	'	48,158,711

Consolidated_Balance_Sheets

Consolidated Balance Sheets (USD $)	Sep. 30, 2013	Dec. 31, 2012
In Thousands, unless otherwise specified
Current assets:	'	'
Cash and cash equivalents	$69,554	$37,843
Trade accounts receivable, net of allowance for doubtful accounts of $53 and $65, respectively and estimated allowance for appeals of $1,997 and $1,199, respectively	30,593	23,044
Deferred income taxes	6,331	3,798
Prepaid expenses and other current assets	2,756	2,876
Debt issuance costs, current portion	1,073	1,125
Total current assets	110,307	68,686
Property, equipment, and leasehold improvements, net	24,323	20,669
Identifiable intangible assets, net	33,445	36,244
Goodwill	81,572	81,572
Debt issuance costs, net	3,049	3,844
Other assets	613	730
Total assets	253,309	211,745
Current liabilities:	'	'
Current maturities of notes payable	10,763	11,040
Accrued salaries and benefits	10,537	9,288
Accounts payable	1,799	1,403
Other current liabilities	6,461	8,252
Income taxes payable	6,229	430
Deferred revenue	0	2,187
Estimated liability for appeals	12,697	4,378
Total current liabilities	48,486	36,978
Notes payable, net of current portion	125,232	136,729
Deferred income taxes	12,660	11,271
Other liabilities	1,898	2,694
Total liabilities	188,276	187,672
Commitments and contingencies	'	'
Stockholders’ equity:	'	'
Common stock, $0.0001 par value. Authorized, 500,000 shares at September 30, 2013 and December 31, 2012; issued and outstanding 48,159 and 45,392 shares at September 30, 2013 and December 31, 2012, respectively	4	4
Additional paid-in capital	48,460	35,970
Retained earnings (deficit)	16,569	-11,901
Total stockholders’ equity	65,033	24,073
Total liabilities and stockholders’ equity	$253,309	$211,745

Consolidated_Balance_Sheets_Pa

Consolidated Balance Sheets (Parenthetical) (USD $)	Sep. 30, 2013	Dec. 31, 2012
In Thousands, except Share data, unless otherwise specified
Statement of Financial Position [Abstract]	'	'
Allowance for doubtful accounts	$53	$65
Estimated allowance for appeals	$1,997	$1,199
Common Stock, par value	$0.00	$0.00
Common Stock, Authorized shares	500,000	500,000
Common Stock, issued shares	48,159	45,392
Common Stock, outstanding shares	48,159	45,392

Consolidated_Statements_of_Ope

Consolidated Statements of Operations (USD $)	3 Months Ended		9 Months Ended
In Thousands, except Per Share data, unless otherwise specified	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Income Statement [Abstract]	'	'	'	'
Revenues	$76,808	$53,400	$195,326	$154,099
Operating expenses:	'	'	'	'
Salaries and benefits	25,060	21,003	72,942	59,426
Other operating expenses	23,563	18,240	65,314	53,053
Total operating expenses	48,623	39,243	138,256	112,479
Income from operations	28,185	14,157	57,070	41,620
Debt extinguishment costs	0	0	0	-3,679
Interest expense	-2,863	-3,175	-8,752	-9,329
Interest income	0	2	0	64
Income before provision for income taxes	25,322	10,984	48,318	28,676
Provision for income taxes	9,868	4,601	19,848	11,698
Net income	15,454	6,383	28,470	16,978
Accrual for preferred stock dividends	0	0	0	2,038
Net income per share attributable to common shareholders	$15,454	$6,383	$28,470	$14,940
Net income per share attributable to common shareholders	'	'	'	'
Basic	$0.32	$0.14	$0.60	$0.34
Diluted	$0.31	$0.13	$0.58	$0.32
Weighted average shares	'	'	'	'
Basic	48,050	44,337	47,247	43,519
Diluted	49,556	47,811	49,315	47,164

Consolidated_Statement_of_Chan

Consolidated Statement of Changes in Stockholders' Equity (USD $)	Total	Common Stock	Additional Paid-In Capital	Retained Earnings (Deficit)
In Thousands, except Share data
Balance, value at Dec. 31, 2012	$24,073	$4	$35,970	($11,901)
Balance, shares at Dec. 31, 2012	'	45,392,000	'	'
Exercise of stock options (in shares)	'	2,767,000	'	'
Exercise of stock options	1,653	'	1,653	'
Stock-based compensation expense	2,196	'	2,196	'
Income tax benefit from employee stock options	8,641	'	8,641	'
Net income	28,470	'	'	28,470
Balance, value at Sep. 30, 2013	$65,033	$4	$48,460	$16,569
Balance, shares at Sep. 30, 2013	'	48,159,000	'	'

Consolidated_Statements_of_Cas

Consolidated Statements of Cash Flows (USD $)	9 Months Ended
In Thousands, unless otherwise specified	Sep. 30, 2013	Sep. 30, 2012
Cash flows from operating activities:	'	'
Net income	$28,470	$16,978
Adjustments to reconcile net income to net cash provided by operating activities:	'	'
Loss on disposal of asset	1	52
Depreciation and amortization	7,840	7,002
Write-off of unamortized debt issuance costs	0	335
Deferred income taxes	-1,144	173
Stock-based compensation	2,196	883
Interest expense from debt issuance costs and amortization of discount note payable	939	946
Interest income on notes receivable from stockholders	0	-57
Changes in operating assets and liabilities:	'	'
Trade accounts receivable	-7,549	-4,734
Prepaid expenses and other current assets	120	841
Income tax receivable	0	-800
Other assets	117	-12
Accrued salaries and benefits	1,249	-794
Accounts payable	396	1,518
Other current liabilities	-1,791	-1,262
Income taxes payable	5,799	-470
Deferred revenue	-2,187	285
Estimated liability for appeals	8,319	3,205
Other liabilities	-137	306
Net cash provided by operating activities	42,638	24,395
Cash flows from investing activities:	'	'
Purchase of property, equipment, and leasehold improvements	-8,697	-7,355
Purchase of perpetual software license and computer equipment	0	-837
Net cash used in investing activities	-8,697	-8,192
Cash flows from financing activities:	'	'
Borrowing under notes payable	0	156,000
Borrowing under line of credit	0	4,500
Redemption of preferred stock	0	-60,286
Repayment of notes payable	-11,774	-100,656
Repayment of line of credit	0	-12,698
Debt issuance costs paid	0	-3,061
Proceeds from exercise of stock options	1,653	137
Proceeds from issuance of stock	0	12,844
Receipt from stockholder	0	2,323
Payment to stockholders	0	-1,761
Purchase of treasury stock	0	-1,225
Income tax benefit from employee stock options	8,641	380
Payment of purchase obligation	-750	-500
Net cash used in financing activities	-2,230	-4,003
Net increase in cash and cash equivalents	31,711	12,200
Cash and cash equivalents at beginning of period	37,843	20,004
Cash and cash equivalents at end of period	69,554	32,204
Supplemental disclosures of cash flow information:	'	'
Cash paid for income taxes	6,552	12,415
Cash paid for interest	7,796	8,358
Cash paid as debt extinguishment	0	3,344
Supplemental disclosure of non-cash investing and financing activities:	'	'
Obligation payable to sellers of perpetual license	0	3,250
Issuance of common stock as part of debt issuance costs	$0	$2,796

Organization_and_Description_o

Organization and Description of Business	9 Months Ended
	Sep. 30, 2013
Accounting Policies [Abstract]	'
Organization and Description of Business	'
	Organization and Description of Business
	(a)	Basis of Presentation and Organization
	The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles, or U.S. GAAP, for interim financial information and with 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 unaudited interim financial statements furnished herein include all adjustments necessary (consisting only of normal recurring adjustments) for a fair presentation of our and our subsidiaries’ financial position at September 30, 2013, the results of our operations for the three and nine months ended September 30, 2013 and 2012 and cash flows for the nine months ended September 30, 2013 and 2012. Interim financial statements are prepared on a basis consistent with our annual consolidated financial statements. The interim financial statements included herein should be read in conjunction with the consolidated financial statements and related notes included in our annual report on Form 10-K for the years ended December 31, 2012, 2011 and 2010.
	We are a leading provider of technology-enabled recovery and analytics services in the United States. Our services help identify and recover delinquent or defaulted assets and improper payments for both government and private clients in a broad range of markets. Our clients typically operate in complex and regulated environments and outsource their recovery needs in order to reduce losses on billions of dollars of defaulted student loans, improper healthcare payments and delinquent state tax and federal treasury and other receivables. We generally provide our services on an outsourced basis, where we handle many or all aspects of the clients’ recovery processes.
	Our consolidated financial statements include the operations of Performant Financial Corporation (PFC), its wholly owned subsidiary Performant Business Services, Inc., and its wholly owned subsidiaries Performant Recovery, Inc. (Recovery) and Performant Technologies, Inc. PFC is a Delaware corporation headquartered in California and was formed in 2003. Performant Business Services, Inc. is a Nevada corporation founded in 1997. Recovery is a California corporation founded in 1976. Performant Technologies, Inc. is a California corporation that was formed in 2004. All significant intercompany balances and transactions have been eliminated in consolidation.
	We are managed and operated as one business, with a single management team that reports to the Chief Executive Officer.
	The preparation of the consolidated financial statements in conformity with U.S. GAAP, requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, primarily accounts receivable, intangible assets, estimated liability for appeals, accrued expenses, and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Our actual results could differ from those estimates.
	(b)	Revenues, Accounts Receivable, and Estimated Liability for Appeals
	Revenue is recognized upon the collection of defaulted loan and debt payments. Loan rehabilitation revenue is recognized when the rehabilitated loans are sold (funded) by clients. Incentive revenue is recognized upon receipt of official notification of incentive award from customers. Under the Company’s RAC contract with CMS, the Company recognizes revenues when the healthcare provider has paid CMS for a given claim or offset. Providers have the right to appeal a claim and may pursue additional appeals if the initial appeal is found in favor of CMS. The Company accrues an estimated liability for appeals based on the amount of commissions received which are subject to appeal and which the Company estimates are probable of being returned to providers following successful appeal. At September 30, 2013, a total of $14.7 million was presented as an allowance against revenue, representing the Company’s estimate of claims that may be overturned. Of this amount, $2.0 million was related to amounts in accounts receivable and $12.7 million was related to commissions which had already been received. The $12.7 million balance at September 30, 2013, and the $4.4 million balance as of December 31, 2012, represents the Company’s best estimate of the probable amount of losses related to appeals of claims for which commissions were previously collected. In addition to the $12.7 million amount accrued at September 30, 2013, the Company estimates that it is reasonably possible that it could be required to pay an additional amount up to approximately $3.8 million as a result of potentially successful appeals. To the extent that required payments by the Company exceed the amount accrued, revenues in the applicable period would be reduced by the amount of the excess.

Property_Equipment_and_Leaseho

Property, Equipment, and Leasehold Improvements	9 Months Ended
	Sep. 30, 2013
Property, Plant and Equipment [Abstract]	'
Property, Equipment, and Leasehold Improvements	'
	Property, Equipment, and Leasehold Improvements
	Property, equipment, and leasehold improvements consist of the following at September 30, 2013 and December 31, 2012 (in thousands):
		September 30,			December 31,
		2013			2012
	Land	$	1,767		$	1,767
	Building and leasehold improvements	5,626			5,500
	Furniture, equipment, and automobile	4,940			4,408
	Computer hardware and software	48,513			40,886
		60,846			52,561
	Less accumulated depreciation and amortization	(36,523		)	(31,892		)
	Property, equipment and leasehold improvements, net	$	24,323		$	20,669
	Depreciation and amortization expense of property, equipment and leasehold improvements was $1.8 million and $1.5 million for the three months ended September 30, 2013 and 2012, respectively, and $5.1 million and $4.3 million for the nine months ended September 30, 2013 and 2012, respectively.

Credit_Agreement

Credit Agreement	9 Months Ended
	Sep. 30, 2013
Debt Disclosure [Abstract]	'
Credit Agreement	'
	Credit Agreement
	On March 19, 2012 we recapitalized, entering into a credit agreement (the Agreement) consisting of a Term A Loan of $57.0 million, a Term B Loan of $79.5 million, and a revolving credit facility of $11.0 million. In connection with the recapitalization, our old credit facility, scheduled to mature in 2012, was extinguished, and our indebtedness on the old facility was paid in full. On June 28, 2012, the Agreement was amended to increase the Term B Loan to $99.0 million. Payments under the Agreement for the next five years and thereafter are as follows (in thousands):
	Year Ending December 31,	Amount
	Remainder of 2013	$	2,691
	2014	10,763
	2015	10,763
	2016	10,763
	2017	9,996
	Thereafter	91,019
	Total	$	135,995
	The Term A Loan is charged interest either at Prime (subject to a 2.50% floor) +4.25% or LIBOR (subject to a 1.50% floor) +5.25%, which was 6.75% at September 30, 2013. The Term A loan requires quarterly payments of $2.4 million, with the remaining outstanding principal balance due March 19, 2017. As of September 30, 2013, the Term A loan ending balance, including the current portion was $40.9 million.
	The Term B loan is charged interest at Prime +4.75% (subject to a 2.50% floor) or LIBOR (subject to a 1.50% floor) +5.75% which was 7.25% at September 30, 2013. The Term B loan requires quarterly payments of $0.2 million, with the outstanding principal balance due March 19, 2018. As of September 30, 2013, the Term B loan ending balance, including the current portion was $95.1 million.
	We have a line of credit under the Agreement which allows for borrowings of up to $11.0 million. Borrowings accrue interest at Prime +4.25% or LIBOR +5.25%, which was 6.75% at September 30, 2013. Both the Prime and the LIBOR alternatives are subject to minimum rate floors. In addition, a facility fee of 0.5% is assessed on the commitment amount. There were no outstanding borrowings under this line of credit at September 30, 2013, and a letter of credit outstanding in the amount of $1.4 million, leaving remaining borrowing capacity under the line of credit of $9.6 million at September 30, 2013. The line of credit expires in March 19, 2017.
	The Agreement contains a prepayment provision which requires the Company to perform an annual excess cash flow computation based on earnings before interest, taxes, depreciation and amortization compared to changes in working capital. Based on the results of this computation, in May 2013, the Company made a payment of $3.6 million to the lenders.
	The Agreement contains certain restrictive financial covenants, which require, among other things, that we meet a minimum fixed charge coverage ratio of 1.2 and maximum total debt to EBITDA ratio of 3.25. Additionally, these covenants restrict the Company and its subsidiaries’ ability to incur certain types or amounts of indebtedness, incur liens on certain assets, make material changes in corporate structure or the nature of its business, dispose of material assets, engage in a change in control transaction, make certain foreign investments, enter into certain restrictive agreements, or engage in certain transactions with affiliates. We were in compliance with all such covenants at September 30, 2013.
	Debt extinguishment costs of $3.7 million were expensed during the first quarter of 2012, including $3.3 million of fees paid to lenders, and $0.3 million of unamortized debt issuance costs associated with the old credit facility.

Commitments_under_Operating_Le

Commitments under Operating Leases	9 Months Ended
	Sep. 30, 2013
Leases [Abstract]	'
Commitments under Operating Leases	'
	Commitments under Operating Leases
	We have entered into various non-cancelable operating lease agreements for certain of our office facilities and equipment with original lease periods expiring between 2013 and 2020. Certain of these arrangements have free rent periods and /or escalating rent payment provisions, and we recognize rent expense under such arrangements on a straight-line basis.
	Future minimum rental commitments under non-cancelable leases as of September 30, 2013 are as follows (in thousands):
	Year Ending December 31,	Amount
	Remainder of 2013	$	460
	2014	1,875
	2015	1,622
	2016	1,285
	2017	1,037
	Thereafter	771
	Total	$	7,050
	Operating lease expense was $0.7 million million and $0.6 million million for the three months ended September 30, 2013 and 2012, respectively, and was $1.9 million million and $1.9 million million for the nine months ended September 30, 2013 and 2012, respectively.

Secondary_Offerings_of_Capital

Secondary Offerings of Capital Stock	9 Months Ended
	Sep. 30, 2013
Equity [Abstract]	'
Secondary Offerings of Capital Stock	'
	Secondary Offerings of Capital Stock
	In January 2013, we completed a secondary offering in which selling stockholders sold 9,200,000 shares of Common Stock at a public offering price of $10.65 per share. The Company did not receive any proceeds from the sale of the shares by the selling stockholders. The Company paid related offering expenses of $0.6 million. In addition, a financial advisor to the Company was paid $1.0 million for financial advisory services. These costs have been expensed, and are included in other operating expenses.
	In April 2013, we completed a secondary offering in which selling stockholders sold 6,500,000 shares of Common Stock at a public offering price of $12.00 per share. The Company did not receive any proceeds from the sale of the shares by the selling stockholders. The Company paid the related offering expenses of $0.5 million. In addition, a financial advisor to the Company was paid $0.8 million for financial advisory services. These costs have been expensed, and are included in other operating expenses.

Stockbased_Compensation

Stock-based Compensation	9 Months Ended
	Sep. 30, 2013
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]	'
Stock-based Compensation	'
	6. Stock-based Compensation
	Total stock-based compensation expense charged as salaries and benefits expense in the consolidated statements of operations was $0.8 million and $0.8 million for the three months ended September 30, 2013 and 2012, respectively, and $2.2 million and $0.9 million for the nine months ended September 30, 2013 and 2012, respectively.
	The following table shows stock option activity for the nine months ended September 30, 2013:
		Outstanding		Weighted		Weighted	Aggregate
		Options		average		average	Intrinsic  Value
				exercise price		remaining	(in thousands)
				per share		contractual life
						(Years)
	Outstanding at December 31, 2012	7,909,724		$	3.85	5.89	$	49,410
	Granted	313,600		11.85
	Forfeited	(102,381	)	10.05
	Exercised	(2,754,731	)	0.6
	Outstanding at September 30, 2013	5,366,212		$	5.87	6.8	$	27,310
	Vested or expected to vest(1) at September 30, 2013	5,246,060		$	5.79	6.75	$	27,159
	Exercisable at September 30, 2013	2,818,379		$	2.57	5.2	$	23,485
	-1	Options expected to vest reflect an estimated forfeiture rate.
	We estimated the total fair value of the 2013 grants to be $1.9 million using a Black-Scholes option pricing model, and the following assumptions:
	Expected volatility	50.30% – 56.40%
	Expected dividends	—
	Expected term (years)	6.10 – 6.50
	Risk-free interest rate	1.06% – 1.83%
	The Company recognizes share-based compensation costs as expense on a straight-line basis over the option vesting period, which generally is 5 years.

Income_Taxes

Income Taxes	9 Months Ended
	Sep. 30, 2013
Income Tax Disclosure [Abstract]	'
Income Taxes	'
	Income Taxes
	Our effective income tax rate changed to 41.1% for the nine months ended September 30, 2013 from 40.8% for the nine months ended September 30, 2012. The increase in the effective rate is primarily due to the lack of deductibility of offering expenses of $1.1 million and financial advisory fees of $1.8 million associated with the secondary offerings described in Note 5.
	We file income tax returns with the U.S. federal government and various state jurisdictions. We are no longer subject to U.S. federal income tax examinations for years before 2011. We operate in a number of state and local jurisdictions, most of which have never audited our records. Accordingly, we are subject to state and local income tax examinations based upon the various statutes of limitations in each jurisdiction. We are currently being examined by the Franchise Tax Board of California for tax years 2008, 2009 and 2010 and Florida Department of Revenue for tax years 2009, 2010 and 2011.
	On September 13, 2013 the Internal Revenue Service issued final regulations governing when taxpayers must capitalize and when they must deduct their expenses for acquiring, maintaining, repairing and replacing tangible personal property.  The new regulations will apply to the fiscal year starting January 1, 2014.  Performant has not completed its analysis of the new regulations but does not expect that the new regulations will have a material impact on the effective tax rate.

Earnings_per_Share

Earnings per Share	9 Months Ended
	Sep. 30, 2013
Earnings Per Share [Abstract]	'
Earnings per Share	'
	Earnings per Share
	For the three and nine months ended September 30, 2013, and the three months ended September 30, 2012, basic income per share is calculated by dividing net income available to holders of Common Stock by the sum of the weighted average number of shares of Common Stock outstanding during the period. For the nine months ended September 30, 2012, basic income per share is calculated by dividing net income available to holders of Common Stock by the sum of the weighted average number of shares of Common Stock outstanding during the period plus the weighted average number of shares of Series A Convertible Preferred Stock outstanding during the period. The shares of Series A Convertible Preferred Stock are included in the basic denominator because they can be converted into shares of Common Stock for no cash consideration, and are thus considered outstanding shares of Common Stock in computing basic earnings per share. Diluted income per share is calculated by dividing net income available to common shareholders by the weighted average number of shares of Common Stock and dilutive common share equivalents outstanding during the period. Common share equivalents consist of stock options and restricted stock units. The Company excluded 2,623,314 options and 2,574,709 options from the calculation of diluted earnings per share for the three and nine months ended September 30, 2013, respectively, whose combined exercise price, unamortized fair value and excess tax benefits were greater during the period than the average price for the Company’s common stock because their effect would be anti-dilutive.
	The following table reconciles the basic to diluted weighted average shares outstanding using the treasury stock method (shares in thousands):
		Three Months Ended		Nine Months Ended
		September 30,		September 30,
		2013	2012	2013	2012
	Weighted average shares outstanding – basic	48,050	44,337	47,247	43,519
	Dilutive effect of stock options	1,506	3,474	2,068	3,645
	Weighted average shares outstanding – diluted	49,556	47,811	49,315	47,164

Related_Party_Transactions

Related Party Transactions	9 Months Ended
	Sep. 30, 2013
Related Party Transactions [Abstract]	'
Related Party Transactions	'
	Related Party Transactions
	Our notes payable are held by a number of lenders, one of whom, the lending syndicate agent, also holds shares of our common stock. As a result, these entities are considered related parties. Interest expense under these arrangements totaled $2.5 million and $3.1 million for the three months ended September 30, 2013 and 2012, respectively, and $7.7 million and $9.2 million for the nine months ended September 30, 2013 and 2012, respectively.

Subsequent_Events

Subsequent Events	9 Months Ended
	Sep. 30, 2013
Subsequent Events [Abstract]	'
Subsequent Events	'
	Subsequent Events
	We have evaluated subsequent events through the date these consolidated financial statements were issued and there are no other events that have occurred that would require adjustments or disclosures to our consolidated financial statements.

Organization_and_Description_o1

Organization and Description of Business (Policies)	9 Months Ended
	Sep. 30, 2013
Accounting Policies [Abstract]	'
Basis of Presentation and Organization	'
	(a)	Basis of Presentation and Organization
	The accompanying unaudited consolidated financial statements have been prepared in accordance with U.S. Generally Accepted Accounting Principles, or U.S. GAAP, for interim financial information and with 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 unaudited interim financial statements furnished herein include all adjustments necessary (consisting only of normal recurring adjustments) for a fair presentation of our and our subsidiaries’ financial position at September 30, 2013, the results of our operations for the three and nine months ended September 30, 2013 and 2012 and cash flows for the nine months ended September 30, 2013 and 2012. Interim financial statements are prepared on a basis consistent with our annual consolidated financial statements. The interim financial statements included herein should be read in conjunction with the consolidated financial statements and related notes included in our annual report on Form 10-K for the years ended December 31, 2012, 2011 and 2010.
	We are a leading provider of technology-enabled recovery and analytics services in the United States. Our services help identify and recover delinquent or defaulted assets and improper payments for both government and private clients in a broad range of markets. Our clients typically operate in complex and regulated environments and outsource their recovery needs in order to reduce losses on billions of dollars of defaulted student loans, improper healthcare payments and delinquent state tax and federal treasury and other receivables. We generally provide our services on an outsourced basis, where we handle many or all aspects of the clients’ recovery processes.
	Our consolidated financial statements include the operations of Performant Financial Corporation (PFC), its wholly owned subsidiary Performant Business Services, Inc., and its wholly owned subsidiaries Performant Recovery, Inc. (Recovery) and Performant Technologies, Inc. PFC is a Delaware corporation headquartered in California and was formed in 2003. Performant Business Services, Inc. is a Nevada corporation founded in 1997. Recovery is a California corporation founded in 1976. Performant Technologies, Inc. is a California corporation that was formed in 2004. All significant intercompany balances and transactions have been eliminated in consolidation.
	We are managed and operated as one business, with a single management team that reports to the Chief Executive Officer.
	The preparation of the consolidated financial statements in conformity with U.S. GAAP, requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, primarily accounts receivable, intangible assets, estimated liability for appeals, accrued expenses, and disclosure of contingent assets and liabilities at the date of the consolidated financial statements and the reported amounts of revenues and expenses during the reporting periods. Our actual results could differ from those estimates.
Revenues, Accounts Receivable, and Estimated Liability for Appeals	'
	(b)	Revenues, Accounts Receivable, and Estimated Liability for Appeals
	Revenue is recognized upon the collection of defaulted loan and debt payments. Loan rehabilitation revenue is recognized when the rehabilitated loans are sold (funded) by clients. Incentive revenue is recognized upon receipt of official notification of incentive award from customers. Under the Company’s RAC contract with CMS, the Company recognizes revenues when the healthcare provider has paid CMS for a given claim or offset. Providers have the right to appeal a claim and may pursue additional appeals if the initial appeal is found in favor of CMS. The Company accrues an estimated liability for appeals based on the amount of commissions received which are subject to appeal and which the Company estimates are probable of being returned to providers following successful appeal. At September 30, 2013, a total of $14.7 million was presented as an allowance against revenue, representing the Company’s estimate of claims that may be overturned. Of this amount, $2.0 million was related to amounts in accounts receivable and $12.7 million was related to commissions which had already been received. The $12.7 million balance at September 30, 2013, and the $4.4 million balance as of December 31, 2012, represents the Company’s best estimate of the probable amount of losses related to appeals of claims for which commissions were previously collected. In addition to the $12.7 million amount accrued at September 30, 2013, the Company estimates that it is reasonably possible that it could be required to pay an additional amount up to approximately $3.8 million as a result of potentially successful appeals. To the extent that required payments by the Company exceed the amount accrued, revenues in the applicable period would be reduced by the amount of the excess.

Property_Equipment_and_Leaseho1

Property, Equipment, and Leasehold Improvements (Tables)	9 Months Ended
	Sep. 30, 2013
Property, Plant and Equipment [Abstract]	'
Property, Equipment, and Leasehold Improvements	'
	Property, equipment, and leasehold improvements consist of the following at September 30, 2013 and December 31, 2012 (in thousands):
		September 30,			December 31,
		2013			2012
	Land	$	1,767		$	1,767
	Building and leasehold improvements	5,626			5,500
	Furniture, equipment, and automobile	4,940			4,408
	Computer hardware and software	48,513			40,886
		60,846			52,561
	Less accumulated depreciation and amortization	(36,523		)	(31,892		)
	Property, equipment and leasehold improvements, net	$	24,323		$	20,669

Credit_Agreement_Tables

Credit Agreement (Tables)	9 Months Ended
	Sep. 30, 2013
Debt Disclosure [Abstract]	'
Payments Under Credit Agreement	'
	Payments under the Agreement for the next five years and thereafter are as follows (in thousands):
	Year Ending December 31,	Amount
	Remainder of 2013	$	2,691
	2014	10,763
	2015	10,763
	2016	10,763
	2017	9,996
	Thereafter	91,019
	Total	$	135,995

Commitments_under_Operating_Le1

Commitments under Operating Leases (Tables)	9 Months Ended
	Sep. 30, 2013
Leases [Abstract]	'
Future Minimum Rental Commitments Under Non-Cancelable Leases	'
	Certain of these arrangements have free rent periods and /or escalating rent payment provisions, and we recognize rent expense under such arrangements on a straight-line basis.
	Future minimum rental commitments under non-cancelable leases as of September 30, 2013 are as follows (in thousands):
	Year Ending December 31,	Amount
	Remainder of 2013	$	460
	2014	1,875
	2015	1,622
	2016	1,285
	2017	1,037
	Thereafter	771
	Total	$	7,050

Stockbased_Compensation_Tables

Stock-based Compensation (Tables)	9 Months Ended
	Sep. 30, 2013
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]	'
Stock Option Activity	'
	The following table shows stock option activity for the nine months ended September 30, 2013:
		Outstanding		Weighted		Weighted	Aggregate
		Options		average		average	Intrinsic  Value
				exercise price		remaining	(in thousands)
				per share		contractual life
						(Years)
	Outstanding at December 31, 2012	7,909,724		$	3.85	5.89	$	49,410
	Granted	313,600		11.85
	Forfeited	(102,381	)	10.05
	Exercised	(2,754,731	)	0.6
	Outstanding at September 30, 2013	5,366,212		$	5.87	6.8	$	27,310
	Vested or expected to vest(1) at September 30, 2013	5,246,060		$	5.79	6.75	$	27,159
	Exercisable at September 30, 2013	2,818,379		$	2.57	5.2	$	23,485
	-1	Options expected to vest reflect an estimated forfeiture rate.
Assumptions to Estimate Fair Value Options	'
	We estimated the total fair value of the 2013 grants to be $1.9 million using a Black-Scholes option pricing model, and the following assumptions:
	Expected volatility	50.30% – 56.40%
	Expected dividends	—
	Expected term (years)	6.10 – 6.50
	Risk-free interest rate	1.06% – 1.83%

Earnings_per_Share_Tables

Earnings per Share (Tables)	9 Months Ended
	Sep. 30, 2013
Earnings Per Share [Abstract]	'
Reconciliation of Basic to Diluted Weighted Average Shares	'
	The following table reconciles the basic to diluted weighted average shares outstanding using the treasury stock method (shares in thousands):
		Three Months Ended		Nine Months Ended
		September 30,		September 30,
		2013	2012	2013	2012
	Weighted average shares outstanding – basic	48,050	44,337	47,247	43,519
	Dilutive effect of stock options	1,506	3,474	2,068	3,645
	Weighted average shares outstanding – diluted	49,556	47,811	49,315	47,164

Organization_and_Description_o2

Organization and Description of Business - Additional Information (Detail) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Accounting Policies [Abstract]	'	'
Allowance against revenue	$14,700,000	'
Estimated allowance for appeals	1,997,000	1,199,000
Estimated liability for appeals	12,697,000	4,378,000
Estimated additional liability for appeals	$3,800,000	'

Property_Equipment_and_Leaseho2

Property, Equipment, and Leasehold Improvements (Detail) (USD $)	Sep. 30, 2013	Dec. 31, 2012
In Thousands, unless otherwise specified
Property, Plant and Equipment [Line Items]	'	'
Property, equipment and leasehold equipment, gross	$60,846	$52,561
Less accumulated depreciation and amortization	-36,523	-31,892
Property, equipment and leasehold improvements, net	24,323	20,669
Land	'	'
Property, Plant and Equipment [Line Items]	'	'
Property, equipment and leasehold equipment, gross	1,767	1,767
Building and leasehold improvements	'	'
Property, Plant and Equipment [Line Items]	'	'
Property, equipment and leasehold equipment, gross	5,626	5,500
Furniture, equipment, and automobile	'	'
Property, Plant and Equipment [Line Items]	'	'
Property, equipment and leasehold equipment, gross	4,940	4,408
Computer hardware and software	'	'
Property, Plant and Equipment [Line Items]	'	'
Property, equipment and leasehold equipment, gross	$48,513	$40,886

Property_Equipment_and_Leaseho3

Property, Equipment, and Leasehold Improvements - Additional Information (Detail) (USD $)	3 Months Ended		9 Months Ended
In Millions, unless otherwise specified	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Property, Plant and Equipment [Abstract]	'	'	'	'
Depreciation and amortization expense of property, equipment and leasehold improvements	$1.80	$1.50	$5.10	$4.30

Credit_Agreement_Additional_In

Credit Agreement - Additional Information (Detail) (USD $)

3 Months Ended

9 Months Ended

0 Months Ended

9 Months Ended

9 Months Ended

Mar. 31, 2012

31-May-13

Mar. 19, 2012

Sep. 30, 2013

Mar. 19, 2012

Sep. 30, 2013

Sep. 30, 2013

Jun. 28, 2012

Sep. 30, 2013

Mar. 19, 2012

Sep. 30, 2013

Sep. 30, 2013

Mar. 19, 2012

Sep. 30, 2013

Sep. 30, 2013

Sep. 30, 2013

Sep. 30, 2013

Sep. 30, 2013

Term A Loan

Term A Loan

Term A Loan

Term A Loan

Term B Loan

Term B Loan

Term B Loan

Term B Loan

Term B Loan

Revolving credit facility

Line of Credit

Line of Credit

Line of Credit

Line of Credit

Line of Credit

Prime Rate Plus

LIBOR Plus

Prime Rate Plus

LIBOR Plus

Minimum

Maximum

Prime Rate Plus

LIBOR Plus

Line of Credit Facility [Line Items]

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Recapitalized amount under credit agreement

'

'

'

$40,900,000

$57,000,000

'

'

'

$95,100,000

$79,500,000

'

'

$11,000,000

'

'

'

'

'

Credit facility maturity year

'

'

'2012

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Amendment of agreement to increase Term B Loan

'

'

'

'

'

'

'

99,000,000

'

'

'

'

'

'

'

'

'

'

Interest rate terms

'

'

'

'Interest either at Prime (subject to a 2.50% floor) +4.25% or LIBOR (subject to a 1.50% floor) +5.25%, which was 6.75%

'

'

'

'

'Interest at Prime +4.75% (subject to a 2.50% floor) or LIBOR (subject to a 1.50% floor) +5.75%, which was 7.25%

'

'

'

'

'Interest at Prime + 4.25% or LIBOR + 5.25%, which was 6.75%

'

'

'

'

Floor rate (as a percent)

'

'

'

'

'

2.50%

1.50%

'

'

'

2.50%

1.50%

'

'

'

'

'

'

Basis spread on variable rate (as a percent)

'

'

'

'

'

4.25%

5.25%

'

'

'

4.75%

5.75%

'

'

'

'

4.25%

5.25%

Interest rate (as a percent)

'

'

'

6.75%

'

'

'

'

7.25%

'

'

'

'

6.75%

'

'

'

'

Quarterly payments of principal

'

'

'

2,400,000

'

'

'

'

200,000

'

'

'

'

'

'

'

'

'

Expiry date of line of credit

'

'

'

19-Mar-17

'

'

'

'

19-Mar-18

'

'

'

'

19-Mar-17

'

'

'

'

Borrowing under line of credit, maximum

'

'

'

'

'

'

'

'

'

'

'

'

'

11,000,000

'

'

'

'

Facility commitment fee (as a percent)

'

'

'

'

'

'

'

'

'

'

'

'

'

0.50%

'

'

'

'

Letter of credit outstanding

'

'

'

'

'

'

'

'

'

'

'

'

'

1,400,000

'

'

'

'

Remaining borrowing capacity under the line of credit

'

'

'

'

'

'

'

'

'

'

'

'

'

9,600,000

'

'

'

'

Prepayment of excess cash flow

'

3,600,000

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Fixed charge coverage ratio

'

'

'

'

'

'

'

'

'

'

'

'

'

'

1.2

'

'

'

Total debt to EBITDA ratio

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

3.25

'

'

Payments of debt extinguishment costs

3,700,000

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Fees paid to lenders

3,300,000

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Unamortized debt issuance cost

$300,000

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

'

Payments_Under_Credit_Agreemen

Payments Under Credit Agreement (Detail) (USD $)	Sep. 30, 2013
In Thousands, unless otherwise specified
Debt Disclosure [Abstract]	'
Remainder of 2013	$2,691
2014	10,763
2015	10,763
2016	10,763
2017	9,996
Thereafter	91,019
Total	$135,995

Commitments_under_Operating_Le2

Commitments under Operating Leases Commitments under Operating Leases - Additional Information (Detail) (USD $)	3 Months Ended		9 Months Ended
In Millions, unless otherwise specified	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Commitment And Contingencies [Line Items]	'	'	'	'
Operating lease expense	$0.70	$0.60	$1.90	$1.90
Minimum	'	'	'	'
Commitment And Contingencies [Line Items]	'	'	'	'
Non-cancelable operating lease agreements expiration date	'	'	'2013	'
Maximum	'	'	'	'
Commitment And Contingencies [Line Items]	'	'	'	'
Non-cancelable operating lease agreements expiration date	'	'	'2020	'

Commitments_under_Operating_Le3

Commitments under Operating Leases Future Minimum Rental Commitments Under Non-Cancelable Leases (Detail) (USD $)	Sep. 30, 2013
In Thousands, unless otherwise specified
Commitments and Contingencies Disclosure [Abstract]	'
Remainder of 2013	$460
2014	1,875
2015	1,622
2016	1,285
2017	1,037
Thereafter	771
Total	$7,050

Secondary_Offerings_of_Capital1

Secondary Offerings of Capital Stock - Additional Information (Detail) (USD $)	1 Months Ended		9 Months Ended
In Millions, except Share data, unless otherwise specified	Apr. 30, 2013	Jan. 31, 2013	Sep. 30, 2013
Capital Stock [Line Items]	'	'	'
Offering expenses	$0.50	$0.60	$1.80
Amount paid to financial advisor	$0.80	$1	'
Common Stock	'	'	'
Capital Stock [Line Items]	'	'	'
Common stock, shares sold	6,500,000	9,200,000	'
Stock, price per share	$12	$10.65	'

Stockbased_Compensation_Additi

Stock-based Compensation - Additional Information (Detail) (USD $)	3 Months Ended		9 Months Ended
In Millions, unless otherwise specified	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Disclosure of Compensation Related Costs, Share-based Payments [Abstract]	'	'	'	'
Total stock-based compensation expense	$0.80	$0.80	$2.20	$0.90
Estimated total fair value of grants	$1.90	'	$1.90	'
Options vesting period	'	'	'5 years	'

Stock_Option_Activity_Detail

Stock Option Activity (Detail) (Options, USD $)	9 Months Ended		12 Months Ended
In Thousands, except Share data, unless otherwise specified	Sep. 30, 2013		Dec. 31, 2012
Options	'		'
Outstanding Options	'		'
Options Outstanding	7,909,724		'
Granted	313,600		'
Forfeited	-102,381		'
Exercised	-2,754,731		'
Options Outstanding	5,366,212		7,909,724
Vested or expected to vest	5,246,060	[1]	'
Exercisable	2,818,379		'
Weighted average exercise price per share	'		'
Options Outstanding	$3.85		'
Granted	$11.85		'
Forfeited	$10.05		'
Exercised	$0.60		'
Options Outstanding	$5.87		$3.85
Vested or expected to vest	$5.79	[1]	'
Exercisable	$2.57		'
Weighted average remaining contractual life (Years)	'		'
Options Outstanding	'6 years 9 months 18 days		'5 years 10 months 21 days
Options Vested or expected to vest	'6 years 9 months		'
Options Exercisable	'5 years 2 months 12 days		'
Options Outstanding	'6 years 9 months 18 days		'5 years 10 months 21 days
Aggregate Intrinsic Value	'		'
Options Outstanding	$49,410		'
Options Vested or expected to vest	27,159	[1]	'
Options Outstanding	27,310		49,410
Options Exercisable	$23,485		'
[1]	Options expected to vest reflect an estimated forfeiture rate.

Assumptions_to_Estimate_Fair_V

Assumptions to Estimate Fair Value Options (Detail)	9 Months Ended
	Sep. 30, 2013
Share Based Payment Award Stock Options Valuation Assumptions [Line Items]	'
Expected dividends	0.00%
Minimum	'
Share Based Payment Award Stock Options Valuation Assumptions [Line Items]	'
Expected volatility (as a percent)	50.30%
Expected term (years)	'6 years 1 month 6 days
Risk-free interest rate (as a percent)	1.06%
Maximum	'
Share Based Payment Award Stock Options Valuation Assumptions [Line Items]	'
Expected volatility (as a percent)	56.40%
Expected term (years)	'6 years 6 months
Risk-free interest rate (as a percent)	1.83%

Income_Taxes_Additional_Inform

Income Taxes - Additional Information (Detail) (USD $)	1 Months Ended		9 Months Ended
In Millions, unless otherwise specified	Apr. 30, 2013	Jan. 31, 2013	Sep. 30, 2013	Sep. 30, 2012
Income Tax Disclosure [Abstract]	'	'	'	'
Effective income tax rate (as a percent)	'	'	41.10%	40.80%
Amount paid to financial advisor	'	'	$1.10	'
Offering expenses	$0.50	$0.60	$1.80	'

Earnings_per_Share_Additional_

Earnings per Share - Additional Information (Detail)	3 Months Ended	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013
Earnings Per Share [Abstract]	'	'
Options to purchase shares	2,623,314	2,574,709

Reconciliation_of_Basic_to_Dil

Reconciliation of Basic to Diluted Weighted Average Shares (Detail)	3 Months Ended		9 Months Ended
In Thousands, unless otherwise specified	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Earnings Per Share [Abstract]	'	'	'	'
Weighted average shares outstanding – basic	48,050	44,337	47,247	43,519
Dilutive effect of stock options	1,506	3,474	2,068	3,645
Weighted average shares outstanding – diluted	49,556	47,811	49,315	47,164

Related_Party_Transactions_Rel

Related Party Transactions Related Party Transactions - Additional Information (Detail) (USD $)	3 Months Ended		9 Months Ended
In Millions, unless otherwise specified	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Related Party Transactions [Abstract]	'	'	'	'
Interest expense under these arrangements	$2.50	$3.10	$7.70	$9.20