Document and Entity Information
Document and Entity Information - shares | 3 Months Ended | |
Mar. 31, 2016 | May. 05, 2016 | |
Document And Entity Information [Abstract] | ||
Entity Registrant Name | QUORUM HEALTH CORPORATION | |
Entity Central Index Key | 1,650,445 | |
Document Type | 10-Q | |
Document Period End Date | Mar. 31, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q1 | |
Current Fiscal Year End Date | --12-31 | |
Trading Symbol | QHC | |
Amendment Flag | false | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 29,475,039 |
Condensed Combined Statements o
Condensed Combined Statements of Income (Loss) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Statement [Abstract] | ||
Operating revenues (net of contractual allowances and discounts) | $ 614,484 | $ 606,472 |
Provision for bad debts | 64,933 | 58,855 |
Net operating revenues | 549,551 | 547,617 |
Operating costs and expenses: | ||
Salaries and benefits | 256,862 | 260,066 |
Supplies | 63,661 | 64,552 |
Other operating expenses | 164,745 | 152,258 |
Transaction costs related to the spin-off | 3,735 | |
Electronic health records incentive reimbursement | (4,208) | (7,707) |
Rent | 12,549 | 12,437 |
Depreciation and amortization | 31,157 | 31,698 |
Total operating costs and expenses | 528,501 | 513,304 |
Income from operations | 21,050 | 34,313 |
Interest expense, net | 27,452 | 25,802 |
Equity in earnings of unconsolidated affiliates | (41) | (18) |
(Loss) income before income taxes | (6,361) | 8,529 |
(Benefit from) provision for income taxes | (1,674) | 2,705 |
Net (loss) income | (4,687) | 5,824 |
Less: Net income (loss) attributable to noncontrolling interests | 315 | (375) |
Net (loss) income attributable to Quorum Health Corporation | $ (5,002) | $ 6,199 |
Condensed Combined Balance Shee
Condensed Combined Balance Sheets (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 996 | $ 1,106 |
Patient accounts receivable, net of allowance for doubtful accounts of $335,072 and $346,507 at March 31, 2016 and December 31, 2015, respectively | 480,518 | 467,964 |
Supplies | 61,124 | 60,542 |
Prepaid expenses and taxes | 21,296 | 16,030 |
Other current assets | 91,243 | 92,743 |
Total current assets | 655,177 | 638,385 |
Property and equipment | 1,619,496 | 1,603,653 |
Less accumulated depreciation and amortization | (743,411) | (723,404) |
Property and equipment, net | 876,085 | 880,249 |
Goodwill | 541,785 | 541,704 |
Other assets, net | 229,283 | 234,518 |
Total assets | 2,302,330 | 2,294,856 |
Current liabilities: | ||
Current maturities of long-term debt | 7,560 | 7,915 |
Accounts payable | 132,273 | 147,571 |
Accrued liabilities: | ||
Employee compensation | 97,881 | 82,620 |
Other | 85,794 | 66,270 |
Total current liabilities | 323,508 | 304,376 |
Long-term debt | 16,809 | 15,500 |
Due to Parent, net | 1,789,420 | 1,800,908 |
Deferred income taxes | 41,038 | 41,030 |
Other long-term liabilities | 109,009 | 108,141 |
Total liabilities | 2,279,784 | 2,269,955 |
Redeemable noncontrolling interests in equity of combined entities | 8,335 | 8,958 |
EQUITY | ||
Parent's equity | 3,137 | 3,184 |
Noncontrolling interests in equity of combined entities | 11,074 | 12,759 |
Total equity | 14,211 | 15,943 |
Total liabilities and equity | $ 2,302,330 | $ 2,294,856 |
Condensed Combined Balance She4
Condensed Combined Balance Sheets (Parenthetical) (Unaudited) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Statement Of Financial Position [Abstract] | ||
Allowance for doubtful patient accounts | $ 335,072 | $ 346,507 |
Condensed Combined Statements 5
Condensed Combined Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Cash flows from operating activities: | ||
Net (loss) income | $ (4,687) | $ 5,824 |
Adjustments to reconcile net (loss) income to net cash provided by (used in) operating activities: | ||
Depreciation and amortization | 31,157 | 31,698 |
Other non-cash income, net | (554) | (371) |
Changes in operating assets and liabilities, net of effects of acquisitions: | ||
Patient accounts receivable | (12,554) | (12,433) |
Supplies, prepaid expenses and taxes, and other current assets | (4,365) | (7,067) |
Accounts payable and accrued liabilities | 14,911 | (54,635) |
Other non-current operating assets and liabilities | 489 | 3,334 |
Net cash provided by (used in) operating activities | 24,397 | (33,650) |
Cash flows from investing activities: | ||
Acquisitions of facilities and other related equipment | 105 | |
Purchases of property and equipment | (12,840) | (9,939) |
Purchases of and costs to develop information technology | (2,526) | (997) |
Proceeds from sale of property and equipment | 858 | 100 |
Increase in other investments | (53) | (1,425) |
Net cash used in investing activities | (14,456) | (12,261) |
Cash flows from financing activities: | ||
(Decrease) increase in borrowings from Parent, net | (6,486) | 52,200 |
Decrease in indebtedness of receivables facility, net | (2,333) | |
Redemption of noncontrolling investments in joint ventures | (12) | |
Distributions to noncontrolling investors in joint ventures | (2,484) | (130) |
Issuance of long-term debt | 20 | 60 |
Repayments of long-term indebtedness | (1,089) | (396) |
Net cash (used in) provided by financing activities | (10,051) | 49,401 |
Net change in cash and cash equivalents | (110) | 3,490 |
Cash and cash equivalents at beginning of period | 1,106 | 2,559 |
Cash and cash equivalents at end of period | 996 | 6,049 |
Supplemental disclosure of cash flow information: | ||
Assets acquired under capital leases | 2,023 | |
Third Parties [Member] | ||
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | 569 | 419 |
Community Health Systems, Inc [Member] | ||
Supplemental disclosure of cash flow information: | ||
Cash paid for interest | $ 26,883 | $ 25,383 |
Spin-Off From Community Health
Spin-Off From Community Health Systems, Inc. | 3 Months Ended |
Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
Spin-Off from Community Health Systems, Inc. Disclosure | 1. SPIN-OFF FROM COMMUNITY HEALTH SYSTEMS, INC. Spin-off On August 3, 2015, Community Health Systems, Inc. (“CHS” or “Parent”) announced a plan to spin off 38 hospitals and Quorum Health Resources, LLC (“QHR”) into Quorum Health Corporation (“Quorum Health,” “QHC” or the “Company”), an independent, publicly traded corporation. On April 29, 2016, CHS completed the spin-off of QHC through the distribution of 100% of the outstanding common stock, par value $0.0001 per share, of QHC to CHS stockholders (the “Spin-off”). To complete the Spin-off, the Board of Directors of CHS declared a pro rata dividend of QHC’s common stock to CHS stockholders of record as of the close of business on April 22, 2016 (the “Record Date”). Each CHS stockholder of record on the Record Date received a distribution of one share of QHC common stock for every four shares of CHS’ common stock held as of the Record Date plus cash in lieu of fractional shares. As a result of the Spin-off, QHC is now an independent public company trading on the New York Stock Exchange (the “NYSE”) under the symbol “QHC.” In connection with the Spin-off, CHS and QHC entered into a Separation and Distribution Agreement as well as certain ancillary agreements on April 29, 2016. These agreements allocate between CHS and QHC the various assets, employees, liabilities and obligations (including investments, property, employee benefits and tax-related assets and liabilities) that comprise the separate companies and govern certain relationships between, and activities of, CHS and QHC for a period of time after the Spin-off. See Note 3 for a further description of these agreements between QHC and CHS. Pursuant to a special distribution paid by QHC to CHS as part of the series of transactions engaged in to complete the Spin-off, QHC distributed approximately $1.2 billion in cash generated from the net proceeds of certain financing arrangements entered into by the Company as part of the separation. See below for further discussion of the financing arrangements entered into by the Company in connection with the Spin-off. Stand-Alone Public Company Costs Prior to the Spin-off, Quorum Health Corporation had no operations other than those related to the preparation to receive the assets and liabilities of Quorum Health from CHS. Following the Spin-off, Quorum Health Corporation became an independent public company. Upon the Spin-off, QHC assumed responsibility for all of its stand-alone public company costs, including the costs of certain services provided by CHS prior to the Spin-off. The estimated expenses associated with being an independent, public company include costs associated with corporate administrative services such as tax, treasury, audit, risk management, legal, investor relations and human resources and are estimated to be approximately $3 million higher annually than amounts previously allocated to QHC by CHS. Additionally, costs and expenses associated with the transition services agreements are estimated to be approximately $5 million higher annually than amounts previously allocated to QHC by CHS. Senior Notes and Credit Facilities On April 22, 2016, QHC issued $400 million aggregate principal amount of 11.625% Senior Notes due 2023 (the “Notes”). The Notes are senior unsecured obligations of the Company and are guaranteed on a senior basis by certain of the Company’s subsidiaries. The Notes mature on April 15, 2023 and bear interest at a rate of 11.625% per annum, payable semi-annually in arrears on April 15 and October 15 of each year, beginning on October 15, 2016. The agreement governing the Notes contains covenants that, among other things, limit the ability of the Company and certain of its subsidiaries to: · incur or guarantee additional indebtedness; · pay dividends or make other restricted payments; · make certain investments; · create or incur certain liens; · sell assets and subsidiary stock; · transfer all or substantially all of their assets or enter into merger or consolidation transactions; and · enter into transactions with affiliates. On April 29, 2016, the Company entered into a credit agreement (the “CS Agreement”), among the Company, the lenders party thereto and Credit Suisse AG, Cayman Islands Branch (“Credit Suisse”), as administrative agent and collateral agent. The CS Agreement provides for an $880 million senior secured term loan facility (the “Term Facility”) and a $100 million senior secured revolving credit facility (the “Revolving Facility” and, together with the Term Facility, the “Senior Facilities”). The available borrowings from the Revolving Facility will be used by the Company for working capital and general corporate purposes. The Term Facility has a maturity date of April 29, 2022 subject to customary acceleration events and repayment, extension or refinancing. Interest under the Term Facility accrues, at the option of the Company, at adjusted LIBOR plus 5.75% or the alternate base rate plus 4.75%. Interest under the Revolving Facility accrues, at the option of the Company, at adjusted LIBOR plus 2.75% or the alternate base rate plus 1.75%. The Revolving Facility has a maturity date of April 29, 2021, subject to certain customary acceleration events and repayment, extension or refinancing. On April 29, 2016, the Company also entered into an ABL Credit Agreement (the “UBS Credit Agreement,” and together with the CS Agreement, collectively, the “Credit Agreements”), among the Company, the lenders party thereto and UBS AG, Stamford Branch (“UBS”), as administrative agent and collateral agent. The UBS Credit Agreement provides for a $125 million senior secured asset-based revolving credit facility (the “ABL Facility”). The available borrowings from the ABL Facility will be used for working capital and general corporate purposes. The ABL Facility has a maturity date of April 29, 2021, subject to customary acceleration events and repayment, extension or refinancing. Interest under the ABL Facility accrues, at the option of the Company, at a base rate or LIBOR (except that all swingline borrowings will accrue interest based on the base rate), plus, an applicable margin determined by the average excess availability under the ABL Facility for the fiscal quarter immediately preceding the date of determination. The applicable margin ranges from 1.75% to 2.25% for LIBOR advances and from 0.75% to 1.25% for base rate advances. The Credit Agreements contain customary negative covenants, which limit the Company’s ability to incur additional indebtedness, create liens, make investments, make restricted payments or specified payments and merge or acquire assets, among other things. In addition, if excess availability under the ABL Facility were to fall below certain specified levels, certain additional covenants (including fixed charge coverage ratio requirements) would be triggered, and the lenders would assume and control the Company’s cash. The Credit Agreements contain customary events of default, including payment defaults, material breaches of representations and warranties, covenant defaults, default on other material indebtedness, customary ERISA events of default, bankruptcy and insolvency, material judgments, invalidity of liens on collateral, change of control or cessation of business. The Credit Agreements also contain customary affirmative covenants and representations and warranties. On April 29, 2016, the gross offering proceeds from the Notes, less initial purchasers’ discount of 1.734%, were released from escrow to the Company. The net proceeds were used by the Company, together with the borrowings under the Senior Facilities, which includes the Term Facility issued at 98.0% of par value, to pay a $1.2 billion special dividend to CHS on April 29, 2016, and were used, together with the borrowings under the Senior Facilities, to pay the fees and expenses related to the Spin-off and for cash on hand to remain with the Company for initial working capital purposes. |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2016 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Presentation and Significant Accounting Policies Disclosure | 2. BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES The unaudited condensed combined financial statements of Quorum Health as of March 31, 2016 and December 31, 2015 and for the three month periods ended March 31, 2016 and 2015 have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The financial data presented herein should be read in conjunction with the combined financial statements and accompanying notes as of December 31, 2015 and 2014 and for the three years ended December 31, 2015, 2014 and 2013 presented in the Company’s Registration Statement on Form 10, as amended, initially filed with the Securities and Exchange Commission on September 4, 2015 and declared effective on April 4, 2016 (“Form 10”). In the opinion of management, the financial data presented includes all adjustments necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented. Results for interim periods should not be considered indicative of results for the full year. Certain information and disclosures normally included in the notes to condensed combined financial statements have been condensed or omitted as permitted by the rules and regulations of the Securities and Exchange Commission (the “SEC”). The Company believes the disclosures are adequate to make the information presented not misleading. Throughout the periods covered by the condensed combined financial statements, QHC did not operate as a separate entity and stand-alone financial statements were not historically prepared. QHC is comprised of certain stand-alone legal entities for which discrete financial information is available. The accompanying condensed combined financial statements have been prepared on a stand-alone basis and are derived from the consolidated financial statements and accounting records of CHS. The condensed combined financial statements represent QHC’s financial position, results of operations and cash flows as its business was operated as part of CHS prior to the Spin-off, in conformity with U.S. GAAP. The condensed combined financial statements included herein may not necessarily be indicative of the results of operations, financial position and cash flows of QHC in the future or had it operated as a separate, independent company during the periods presented. The condensed combined financial statements included herein do not reflect any changes that occurred in the financing and operations of QHC, or any such changes that may occur in the future, as a result of the Spin-off. The condensed combined statements of income include expense allocations for certain corporate functions historically provided by CHS, including, but not limited to, employee benefits administration, treasury, risk management, audit, legal, information technology support, and other shared services. These expenses were allocated to QHC based on direct usage or benefit where identifiable, with the remainder allocated to QHC using methods based on proportionate formulas involving total costs, net operating revenues, number of licensed beds or other various allocation methods. Management believes the assumptions and methodologies underlying the allocation of general corporate overhead expenses from CHS are reasonable. However, such expenses may not be indicative of the actual level of expense that would have been incurred by the Company if it had operated as an independent, publicly traded company or of the costs expected to be incurred in the future. CHS uses a centralized approach to cash management and to financing its operations, including the operations of QHC for the periods presented. Accordingly, none of the cash and cash equivalents swept to the CHS corporate accounts were allocated to QHC in the condensed combined financial statements. Prior to the Spin-off, transactions between QHC and CHS were accounted for through Due to Parent, net. See Note 3 for a further description of related party transactions between QHC and CHS. Business . The principal business of QHC is to provide general hospital healthcare and other outpatient services in its markets across the United States. As of March 31, 2016, QHC owned or leased 38 hospitals, licensed for 3,577 beds in 16 states. The Company also provides additional outpatient services at urgent care centers, imaging centers and surgery centers. Furthermore, through Quorum Health Resources, LLC (“QHR”), the Company provides management advisory and consulting services to non-affiliated general acute care hospitals located throughout the United States. Use of Estimates . The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed combined financial statements. Actual results could differ from those estimates under different assumptions or conditions. Principles of Combination . All significant transactions with CHS have been included in the condensed combined balance sheets within Due to Parent, net, and all intra-company accounts, profits and transactions have been eliminated. Included in the Company’s results of operations is the Company’s equity in pre-tax earnings from all of its investments in unconsolidated affiliates. Noncontrolling interests in less-than-wholly-owned combined entities of QHC are presented as a component of total equity to distinguish between the interests of QHC and the interests of the noncontrolling owners. Revenues and expenses from these subsidiaries are included in the combined amounts as presented on the condensed combined statements of income, along with a net income measure that separately presents the amounts attributable to the controlling interests and the amounts attributable to the noncontrolling interests for each of the periods presented. Noncontrolling interests that are redeemable or may become redeemable at a fixed or determinable price at the option of the holder or upon the occurrence of an event outside of the control of the Company are presented in mezzanine equity on the condensed combined balance sheets. Cost of Revenue . Substantially all of the Company’s operating costs and expenses are “cost of revenue” items. Operating costs that could be classified as general and administrative by the Company include, among other things, corporate management fees allocated to QHC from CHS for a portion of CHS’ corporate office costs. These charges are in addition to other direct expense allocations from CHS. The corporate management fees are calculated based on the Company’s proportion of CHS’s total licensed beds and are included as a component of other operating expenses in the accompanying condensed combined statements of income. Total corporate management fees were $8.8 million and $8.9 million for the three months ended March 31, 2016 and 2015, respectively. Third-Party Reimbursement . Net patient service revenues are reported at the estimated net realizable amount from patients, third-party payors and others for services rendered. Operating revenues include amounts estimated by management to be reimbursable by Medicare and Medicaid under prospective payment systems, provisions of cost-reimbursement and other payment methods. Amounts received by the Company for treatment of patients covered by such programs are generally less than the standard billing rates. The differences between the estimated program reimbursement rates and the standard billing rates are accounted for as contractual adjustments, which are deducted from gross revenues to arrive at operating revenues (net of contractual allowances and discounts). These operating revenues are an estimate of the net realizable amount due from these payors. The process of estimating contractual allowances requires the Company to estimate the amount expected to be received based on payor contract provisions. The key assumption in this process is the estimated contractual reimbursement percentage, which is based on payor classification and historical paid claims data. Due to the complexities involved in these estimates, actual payments the Company receives could be different from the amounts it estimates and records. Final settlements under some of these programs are subject to adjustment based on administrative review and audit by third parties. Adjustments to previous program reimbursement estimates are accounted for as contractual allowance adjustments and reported in the periods that such adjustments become known. Contractual allowance adjustments related to final settlements and previous program reimbursement estimates unfavorably impacted net operating revenues by $1.8 million and $0.5 million during the three months ended March 31, 2016 and 2015, respectively. Amounts due to third-party payors were $33.2 million and $21.0 million as of March 31, 2016 and December 31, 2015, respectively, and are included in other accrued liabilities in the condensed combined balance sheets. Amounts due from third-party payors were $35.4 million and $33.7 million as of March 31, 2016 and December 31, 2015, respectively, and are included in other current assets in the condensed combined balance sheets. Allowance for Doubtful Accounts . Accounts receivable are reduced by an allowance for amounts that could become uncollectible in the future. Substantially all of the Company’s receivables are related to providing healthcare services to patients at its hospitals and affiliated businesses. The Company estimates the allowance for doubtful accounts by reserving a percentage of all self-pay accounts receivable without regard to aging category, based on collection history, adjusted for expected recoveries and any anticipated changes in trends. The Company’s ability to estimate the allowance for doubtful accounts is not impacted by not utilizing an aging of net accounts receivable, as management believes that substantially all of the risk exists at the point in time such accounts are identified as self-pay. The percentage used to reserve for all self-pay accounts is based on the Company’s collection history. For all other non-self-pay payor categories, the Company reserves an estimated amount on historical collection rates for the uncontractualized portion of all accounts aging over 365 days from the date of discharge. These amounts represent an immaterial percentage of the Company’s outstanding accounts receivable. The Company collects substantially all of its third-party insured receivables, which include receivables from governmental agencies. Collections are impacted by the economic ability of patients to pay and the effectiveness of the Company’s collection efforts. Significant changes in payor mix, business office operations, economic conditions or trends in federal and state governmental healthcare coverage could affect the Company’s collection of accounts receivable and the estimates of the collectability of future accounts receivable and are considered in the Company’s estimates of accounts receivable collectability. The Company also continually reviews its overall reserve adequacy by monitoring historical cash collections as a percentage of trailing net revenue less provision for bad debts, as well as by analyzing current period net revenue and admissions by payor classification, aged accounts receivable by payor, days revenue outstanding, the composition of self-pay receivables between pure self-pay patients and the patient responsibility portion of third-party insured receivables and the impact of recent acquisitions and dispositions. Operating revenues, net of contractual allowances and discounts (before provision for bad debts), were as follows (in thousands): Three Months Ended March 31, 2016 2015 Medicare $ 133,868 $ 138,116 Medicaid 103,068 104,334 Managed care and commercial 285,950 272,377 Self-pay 64,754 62,914 Non-patient 26,844 28,731 Total $ 614,484 $ 606,472 Other Operating Expenses . Other operating expenses consist primarily of purchased services, including medical specialist fees ($86.1 million and $77.1 million for the three months ended March 31, 2016 and 2015, respectively), property taxes and insurance ($35.3 million and $27.8 million for the three months ended March 31, 2016 and 2015, respectively), repairs and maintenance expenses ($11.2 million and $11.7 million for the three months ended March 31, 2016 and 2015, respectively), and corporate management fees ($8.8 million and $8.9 million for the three months ended March 31, 2016 and 2015, respectively). Electronic Health Records Incentive Reimbursement. The federal government has implemented a number of regulations and programs designed to promote the use of electronic health records (“EHR”) technology and, pursuant to the Health Information Technology for Economic and Clinical Health Act (“HITECH”), established requirements for a Medicare and Medicaid incentive payments program for eligible hospitals and professionals that adopt and meaningfully use certified EHR technology. The Company utilizes a gain contingency model to recognize EHR incentive payments. Recognition occurs when the eligible hospitals adopt or demonstrate meaningful use of certified EHR technology for the applicable payment period and have available the Medicare cost report information for the relevant full cost report year used to determine the final incentive payment. Medicaid EHR incentive payments are calculated based on prior period Medicare cost report information available at the time when eligible hospitals adopt, implement, upgrade or demonstrate meaningful use of certified EHR technology. Since the information for the relevant full Medicare cost report year is available at the time of attestation, the incentive income from resolving the gain contingency is recognized when eligible hospitals adopt, implement, upgrade or demonstrate meaningful use of certified EHR technology. Medicare EHR incentive payments are calculated based on the Medicare cost report information for the full cost report year that began during the federal fiscal year in which meaningful use is demonstrated. Since the necessary information is only available at the end of the relevant full Medicare cost report year and after the cost report is settled, the incentive income from resolving the gain contingency is recognized when eligible hospitals demonstrate meaningful use of certified EHR technology and the information for the applicable full Medicare cost report year to determine the final incentive payment is available. In some instances, the Company may receive estimated Medicare EHR incentive payments prior to when the Medicare cost report information used to determine the final incentive payment is available. In these instances, recognition of the gain for EHR incentive payments is deferred until all recognition criteria described above are met. Eligibility for annual Medicare incentive payments is dependent on providers successfully attesting to the meaningful use of EHR technology. Medicaid incentive payments are available to providers in the first payment year that they adopt, implement or upgrade certified EHR technology; however, providers must demonstrate meaningful use of such technology in any subsequent payment years to qualify for additional incentive payments. Medicaid EHR incentive payments are fully funded by the federal government and administered by the states; however, the states are not required to offer EHR incentive payments to providers. The Company recognized $4.2 million and $7.7 million during the three months ended March 31, 2016 and 2015, respectively, of incentive reimbursement for HITECH incentives from Medicare and Medicaid related to certain of the Company’s hospitals and for certain of the Company’s employed physicians that have demonstrated meaningful use of certified EHR technology or have completed attestations to their adoption or implementation of certified EHR technology. These incentive reimbursements are presented as a reduction of operating costs and expenses in the condensed combined statements of income. The Company received cash related to the incentive reimbursement for HITECH incentives of $12.3 million and $6.8 million during the three months ended March, 31, 2016 and 2015, respectively. The Company recorded $4.7 million as deferred revenue at March 31, 2016, as all criteria for gain recognition had not been met, which is included in other accrued liabilities in the condensed combined balance sheet. The Company had no deferred revenue at December 31, 2015. The Company had receivables for incentive reimbursements for which the recognition criteria had been met, but payment was not yet received, of $5.9 million and $11.2 million as of March 31, 2016 and December 31, 2015, respectively. These receivables are included in other current assets in the condensed combined balance sheets. Due to Parent, net. Due to Parent, net in the condensed combined balance sheets represents CHS’ historical investment in QHC, cost allocations from CHS to QHC, the net effect of transactions with QHC, including capital expenditures, and cash transferred from QHC to CHS under CHS’ cash management program. These related amounts were funded by CHS principally under long-term borrowing arrangements with the individual hospital facilities. The long-term borrowing arrangements represent QHC’s historical commitment to provide payment in full to CHS for this intercompany indebtedness. The intercompany indebtedness of QHC with CHS was extinguished concurrent with the Spin-off. See Note 3 for a description of related party transactions with CHS. New Accounting Pronouncements. In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, which outlines a single comprehensive model for recognizing revenue and supersedes most existing revenue recognition guidance, including guidance applicable to the healthcare industry. This ASU provides companies the option of applying a full or modified retrospective approach upon adoption. In August 2015, the FASB issued ASU 2015-14, which defers the effective date until fiscal years beginning after December 15, 2017 with early adoption permitted for annual periods beginning after December 15, 2016. The Company expects to adopt this ASU on January 1, 2018 and is currently evaluating its plan for adoption and the impact on its revenue recognition policies, procedures and control framework and the resulting impact on its combined financial position, results of operations and cash flows. In April 2015, the FASB issued ASU 2015-03, which requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct reduction from the carrying amount of that debt liability, consistent with the accounting for debt discounts. The ASU did not change the measurement or recognition guidance for debt issuance costs, only the classification. This ASU is effective for fiscal years beginning after December 15, 2015, with early adoption permitted. The Company adopted this ASU on January 1, 2016; however, there are no debt issuance costs on the Company’s condensed combined balance sheets for the periods presented. The Company began recognizing the debt issuance costs associated with its new indebtedness entered into in April 2016 in connection with the Spin-off in accordance with ASU 2015-03. In November 2015, the FASB issued ASU 2015-17, which amended the balance sheet classification requirements for deferred income taxes to simplify their presentation in the statement of financial position. The ASU requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. This ASU is effective for fiscal years beginning after December 31, 2016, with early adoption permitted. The Company early adopted the provisions of this ASU for the presentation and classification of its deferred tax assets and liabilities at December 31, 2015. The effect of this change primarily resulted in the current portion of deferred income taxes at December 31, 2015 being included in the noncurrent deferred income tax liability. In January 2016, the FASB issued ASU 2016-01, which amends the measurement, presentation and disclosure requirements for equity investments, other than those accounted for under the equity method or that require consolidation of the investee. The ASU eliminates the classification of equity investments as available-for-sale with any changes in fair value of such investments recognized in other comprehensive income, and requires entities to measure equity investments at fair value, with any changes in fair value recognized in net income. This ASU is effective for fiscal years beginning after December 15, 2017, with early adoption permitted. The Company expects to adopt this ASU on January 1, 2018, and is currently evaluating the impact that adoption of this ASU will have on its combined financial position and results of operations. In February 2016, the FASB issued ASU 2016-02, which amends the accounting for leases, requiring lessees to recognize most leases on their balance sheet with a right-of-use asset and a lease liability. Leases will be classified as either finance or operating leases, which will impact the expense recognition of such leases over the lease term. The ASU also modifies the lease classification criteria for lessors and eliminates some of the real estate leasing guidance previously applied for certain leasing transactions. This ASU is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company expects to adopt this ASU on January 1, 2019. Because of the number of leases the Company utilizes to support its operations, the adoption of this ASU is expected to have a material impact on the Company’s combined financial position and results of operations. Management is currently evaluating the extent of this anticipated impact on the Company’s combined financial position and results of operations, and the quantitative and qualitative factors that will impact the Company as part of the adoption of this ASU, as well as any changes to its leasing strategy that may occur because of the changes to the accounting and recognition of leases. In March 2016, the FASB issued ASU 2016-09, which was issued to simplify some of the accounting guidance for share-based compensation. Among the areas impacted by the amendments in this ASU is the accounting for income taxes related to share-based payments, accounting for forfeitures, classification of awards as equity or liabilities, and classification on the statement of cash flows. This ASU is effective for fiscal years beginning after December 15, 2016, with early adoption permitted. The Company expects to adopt this ASU on January 1, 2017. Management is evaluating the impact that the adoption of this ASU will have on its combined financial position, results of operations and cash flows. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions Disclosure | 3. RELATED PARTY TRANSACTIONS Allocation of Corporate Expenses and Other Transactions with CHS Historically, QHC has been managed and operated in the normal course of business with other affiliates of CHS. Accordingly, certain shared expenses were allocated to QHC and reflected as expenses in the stand-alone condensed combined financial statements. If possible, these allocations were made on a specific identification basis. Otherwise, the expenses were allocated to QHC based on other appropriate methods, depending on the nature of the expense to be allocated. Management of QHC and CHS consider the allocation methodologies used to be reasonable and appropriate reflections of the historical CHS expenses attributable to QHC for purposes of the stand-alone financial statements. The expenses reflected in the condensed combined financial statements may not be indicative of expenses that will be incurred by QHC as an independent, publicly traded company in the future. Charges for functions historically provided to QHC by CHS are primarily attributable to CHS’ performance of many shared services from which the Company benefits. Such services include executive and divisional management, treasury, accounting, risk management, legal, procurement, human resources, information technology support and other administrative support. In addition, for the periods presented, QHC participated in certain CHS insurance, benefit and incentive plans. Many of these expenses benefited multiple CHS subsidiaries, including QHC, and were allocated to QHC using methods based on proportionate formulas involving total expenses, net revenues, number of licensed beds or other allocation methods that management believes are consistent and reasonable. These costs are included in other operating expenses in the condensed combined statements of income, except for $26.1 million and $27.7 million of health insurance and other employee related benefits, which are included in salaries and benefits expense, and $0.3 million and $0.9 million included in rent expense for the three months ended March 31, 2016 and 2015, respectively. Allocated corporate expenses provided to QHC by CHS were as follows (in thousands): Three Months Ended March 31, 2016 2015 Insurance $ 33,760 $ 34,478 Management fees 8,825 8,859 Other corporate allocations 19,716 17,645 Total corporate allocations $ 62,301 $ 60,982 Due to Parent, net Due to Parent, net in the accompanying condensed combined balance sheets represents CHS’ historical investment in QHC, cost allocations from CHS to QHC, the net effect of transactions with CHS, including capital expenditures, and cash transferred from QHC to CHS under CHS’ cash management program. These related amounts were funded by CHS principally under long-term borrowing arrangements with the individual hospital facilities. The long-term borrowing arrangements represent QHC’s historical commitment to provide payment in full to CHS for this intercompany indebtedness. The intercompany indebtedness of QHC with CHS was extinguished through additional paid-in capital concurrent with the Spin-off in April 2016. Historically, QHC was charged interest on the amounts due to CHS at various rates ranging from 4% to 7%, and the interest computations were based on the outstanding balance at the end of each month. Interest expense, net related to amounts due to CHS for the intercompany indebtedness and receivables facility (see below) was $26.9 million and $25.4 million for the three months ended March 31, 2016 and 2015, respectively. Receivables Facility On March 21, 2012, certain subsidiaries of CHS entered into an asset-backed securitization program (the “Receivables Facility”) with a group of conduit lenders and liquidity banks, The Bank of Nova Scotia, as a managing agent, and Credit Agricolé Corporate and Investment Bank (“Credit Agricolé”) as managing agent and as the administrative agent. The Bank of Tokyo-Mitsubishi UFJ, Ltd. was added as a managing agent in March 2013. The existing and future patient-related accounts receivable (non-self-pay) for certain of CHS’ affiliated hospitals serve as collateral for the outstanding borrowings. The structure of the securitization program at CHS follows a three-tiered transfer of the financial interest in these receivables, documented through three separate agreements. In the first tier of the transaction, the patient receivables are sold to CHS/Community Health Systems, Inc. (“CHS/CHS”), a subsidiary of CHS, in exchange for a combination of cash and a subordinated intercompany note receivable. In the second tier of the transaction, those same receivables are either sold for cash or contributed to CHS Receivables Funding, LLC (a wholly-owned, special-purpose entity created for the sole purpose of entering into the securitization borrowing, or “CHS Rec Funding”) in exchange for equity. Finally, CHS Rec Funding provides to Credit Agricolé a participating security interest in the receivables in exchange for advances from the conduit lender and liquidity banks of up to $700 million outstanding from time to time based on the availability of eligible receivables and other customary factors. The liquidity banks have provided a liquidity facility that will step in to purchase commercial paper backed by the underlying receivables in such a case as there are no buyers of the commercial paper. Except for certain limited obligations set forth in a Collection Agreement Performance Undertaking, the group of third-party conduit lenders and liquidity banks does not have recourse to CHS beyond the assets of the wholly-owned special-purpose entity that securitizes the loan. Certain QHC hospitals were included in the Receivables Facility until November 13, 2015, when all QHC entities were removed from the securitization program in preparation for the Spin-off. Accordingly, there are no outstanding balances related to the Receivables Facility included in the accompanying condensed combined balance sheets as of March 31, 2016 and December 31, 2015. For the three months ended March 31, 2015, the Company recorded $1.7 million of net income related to its participation in the securitization program for accounts receivable processing fees earned and net interest income on the notes receivable with CHS/CHS. Agreements with CHS Related to the Spin-off In connection with the Spin-off, on April 29, 2016, the Company entered into certain agreements with CHS that allocate between the Company and CHS the various assets, employees, liabilities and obligations (including investments, property, employee benefits and tax-related assets and liabilities) that comprise the separate companies and govern certain relationships between, and activities of, the Company and CHS for a period of time after the Spin-off, including the following: · A Separation and Distribution Agreement with CHS that sets forth, among other things, agreements with CHS regarding the principal actions needed to be taken in connection with the Spin-off. It also sets forth other agreements that govern certain aspects of the Company’s relationship with CHS following the Spin-off; · A Tax Matters Agreement with CHS that governs the respective rights, responsibilities and obligations of the Company and CHS after the Spin-off with respect to tax liabilities and benefits, tax attributes, tax contests and other tax sharing regarding U.S. federal, state, local and foreign income taxes, other tax matters and related tax returns; and · An Employee Matters Agreement with CHS that governs certain compensation and employee benefit obligations with respect to the current and former employees and non-employee directors of each company. It also allocates liabilities and responsibilities relating to employment matters, employee compensation and benefit plans and programs. In addition to the agreements referenced above, the Company entered into certain transition services agreements with CHS, under which CHS or its affiliates will provide QHC with certain services, and QHC or certain of its affiliates will provide CHS certain services, for a limited time to help ensure an orderly transition for each of QHC and CHS following the Spin-off. These transition services will include, among other services, information technology services and support, payroll processing and other human resources related services and support, patient eligibility screening services, as well as receivables, billing and collection and other revenue cycle management services and support. |
Goodwill and Other Intangible A
Goodwill and Other Intangible Assets | 3 Months Ended |
Mar. 31, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Other Intangible Assets Disclosure | 4. GOODWILL AND OTHER INTANGIBLE ASSETS The changes in the carrying amount of goodwill for the three months ended March 31, 2016 were as follows (in thousands): Balance as of December 31, 2015 $ 541,704 Goodwill acquired as part of acquisitions during current year 81 Balance as of March 31, 2016 $ 541,785 Goodwill is allocated to each identified reporting unit, which is defined as an operating segment or one level below the operating segment (referred to as a component of the entity). Management has determined that QHC’s hospital operations and hospital management advisory and consulting services operations meet the criteria to be classified as reporting units. Goodwill related to QHC’s hospital operations reporting unit was $508.5 million and $508.4 million as of March 31, 2016 and December 31, 2015, respectively. Goodwill related to QHC’s hospital management advisory and consulting services reporting unit was $33.3 million at both March 31, 2016 and December 31, 2015. Goodwill is evaluated for impairment at the same time every year and when an event occurs or circumstances change that, more likely than not, reduce the fair value of the reporting unit below its carrying value. There is a two-step method for determining goodwill impairment. Step one is to compare the fair value of the reporting unit with the unit’s carrying amount, including goodwill. If this test indicates the fair value is less than the carrying value, then step two is required to compare the implied fair value of the reporting unit’s goodwill with the carrying value of the reporting unit’s goodwill. The Company performed its last annual goodwill evaluation during the fourth quarter of 2015. No impairment was indicated by this evaluation. The next annual goodwill evaluation will be performed during the fourth quarter of 2016. The fair value of the related reporting units is estimated using both a discounted cash flow model as well as a multiple model based on earnings before interest, taxes, depreciation and amortization (“EBITDA”). The cash flow forecasts are adjusted by an appropriate discount rate based on the Company’s best estimate of a market participant’s weighted-average cost of capital. Both models are based on the Company’s best estimate of future revenues and operating costs. Other Intangible Assets No intangible assets other than goodwill were acquired during the three months ended March 31, 2016. The gross carrying amount of the Company’s other intangible assets subject to amortization was $43.3 million at both March 31, 2016 and December 31, 2015, and the net carrying amount was $13.2 million at March 31, 2016 and $13.9 million at December 31, 2015. The carrying amount of the Company’s other intangible assets not subject to amortization was $11.4 million at both March 31, 2016 and December 31, 2015. Other intangible assets are included in other assets, net in the condensed combined balance sheets. Substantially all of the intangible assets are contract-based intangible assets related to operating licenses, management contracts, or non-compete agreements entered into in connection with prior acquisitions. The weighted-average remaining amortization period for the intangible assets subject to amortization is approximately six years. There are no expected residual values related to these intangible assets. Amortization expense on these intangible assets was $0.8 million during the three month periods ended March 31, 2016 and 2015. Amortization expense on intangible assets is estimated to be $2.3 million for the remainder of 2016, $2.2 million in 2017, $2.0 million in 2018, $1.9 million in 2019, $1.7 million in 2020 and $3.1 million thereafter. The gross carrying amount of capitalized software for internal use was $196.1 million and $194.9 million at March 31, 2016 and December 31, 2015, respectively, and the net carrying amount considering accumulated amortization was $91.8 million and $96.9 million at March 31, 2016 and December 31, 2015, respectively. The estimated amortization period for capitalized internal-use software is generally three years, except for capitalized costs related to significant system conversions, which is generally eight to ten years. There is no expected residual value for capitalized internal-use software. At March 31, 2016, there was $3.3 million of capitalized costs for internal-use software that is currently in the development stage and will begin amortization once the software project is complete and ready for its intended use. Amortization expense on capitalized internal-use software was $6.6 million and $6.7 million during the three months ended March 31, 2016 and 2015, respectively. Amortization expense on capitalized internal-use software is estimated to be $20.0 million for the remainder of 2016, $20.6 million in 2017, $11.8 million in 2018, $10.6 million in 2019, $10.5 million in 2020 and $18.3 million thereafter. |
Income Taxes
Income Taxes | 3 Months Ended |
Mar. 31, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes Disclosure | 5. INCOME TAXES Although QHC was historically included in the consolidated income tax returns of CHS, QHC’s income taxes are computed and reported herein under the “separate return method.” Use of the separate return method may result in differences when the sum of the amounts allocated to stand-alone tax provisions are compared with amounts presented in consolidated financial statements. In that event, the related deferred tax assets and liabilities could be significantly different from those presented herein. Certain tax attributes, such as net operating loss carryforwards, which were actually reflected in the consolidated financial statements of CHS, may or may not exist at the stand-alone QHC level. The Company’s effective tax rates were 26.3% and 31.7% for the three months ended March 31, 2016 and 2015, respectively. The decrease in the Company’s effective tax rate for the three months ended March 31, 2016, when compared to the three months ended March 31, 2015, was primarily related to a decrease in pre-tax income as well as an increase in the valuation allowance attributable to state net operating losses in these periods. The Company is not aware of any unrecognized tax benefit and has therefore not recorded any such amounts related to QHC for the three months ended March 31, 2016 and 2015. The Company’s condensed combined balance sheets as of March 31, 2016 and December 31, 2015 reflect amounts due to CHS for income tax related matters, as it is assumed that all such amounts due to CHS are deemed unsettled at the end of the financial statement reporting periods. |
Equity
Equity | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Equity Disclosure | 6. EQUITY The following schedule presents the changes in total equity, Parent’s equity and equity attributable to the noncontrolling Redeemable Noncontrolling Parent's Noncontrolling Total Interests Equity Interests Equity Balance, December 31, 2015 $ 8,958 $ 3,184 $ 12,759 $ 15,943 Net (loss) income (392 ) (5,002 ) 707 (4,295 ) Transfers to Parent — 5,002 — 5,002 Distributions to noncontrolling interests, net of contributions (92 ) — (2,392 ) (2,392 ) Purchase of subsidiary shares from noncontrolling interests — 19 — 19 Redemption of subsidiary shares from noncontrolling interests (31 ) — — — Adjustment to redemption value of redeemable noncontrolling interests 66 (66 ) — (66 ) Noncontrolling interests in acquired entity (174 ) — — — Balance, March 31, 2016 $ 8,335 $ 3,137 $ 11,074 $ 14,211 |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments Disclosure | 7. FAIR VALUE OF FINANCIAL INSTRUMENTS The fair value of financial instruments has been estimated by the Company using available market information as of March 31, 2016 and December 31, 2015, and valuation methodologies considered appropriate. The estimates presented below are not necessarily indicative of amounts the Company could realize in a current market exchange (in thousands): March 31, 2016 December 31, 2015 Carrying Estimated Fair Carrying Estimated Fair Amount Value Amount Value Assets: Cash and cash equivalents $ 996 $ 996 $ 1,106 $ 1,106 Liabilities: Long-term debt 24,369 24,369 23,415 23,415 The estimated fair value is determined using the methodologies discussed below in accordance with accounting standards related to the determination of fair value. Cash and cash equivalents. The carrying amount approximates fair value due to the short-term maturity of these instruments (less than three months). Long-term debt. The carrying amount of long-term debt approximates fair value due to the nature of these obligations. Fair Value Hierarchy Fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions the market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, the Company utilizes the U.S. GAAP fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumption about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). The inputs used to measure fair value are classified into the following fair value hierarchy: Level 1: Quoted market prices in active markets for identical assets and liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities. Level 3 includes values determined using pricing models, discounted cash flow methodologies, or similar techniques reflecting the Company’s own assumptions. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Segment Information Disclosure | 8. SEGMENT INFORMATION The Company operates in two distinct operating segments, represented by hospital operations (which includes its general acute care hospitals and related healthcare entities that provide inpatient and outpatient healthcare services) and hospital management advisory and consulting services (which includes QHR). Only the hospital operations segment meets the criteria as a separate reportable segment. The financial information for the hospital management advisory and consulting services segment does not meet the quantitative thresholds for a separate identifiable reportable segment and is combined into the all other reportable segment. The distribution between reportable segments of the Company’s net operating revenues and Adjusted EBITDA is summarized in the following tables (in thousands): Three Months Ended March 31, 2016 2015 Net operating revenues: Hospital operations $ 527,424 $ 524,193 All other 22,127 23,424 Total $ 549,551 $ 547,617 Adjusted EBITDA: Hospital operations $ 52,156 $ 62,692 All other 3,827 3,337 Total $ 55,983 $ 66,029 Reconciliation of Adjusted EBITDA to (loss) income before income taxes: Adjusted EBITDA $ 55,983 $ 66,029 Depreciation and amortization (31,157 ) (31,698 ) Interest expense, net (27,452 ) (25,802 ) Transaction costs related to Spin-off (3,735 ) — (Loss) income before income taxes $ (6,361 ) $ 8,529 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments And Contingencies Disclosure | 9. COMMITMENTS AND CONTINGENCIES Construction and Capital Commitments. The Company is building a new patient tower and expanding its surgical capacity at its hospital in Springfield, Oregon. As of March 31, 2016, the Company has incurred a total of $17.3 million of related costs, of which $6.9 million was incurred during the three months ended March 31, 2016. The total estimated construction costs, including equipment costs, could be up to $88 million. Additionally, during the third quarter of 2015, CHS entered into an agreement with a developer to construct the Company’s future corporate headquarters. The Company recorded this lease as a direct financing obligation. The Company has recorded a total of $16.4 million of costs related to this project, of which $2.0 million was recorded during the three months ended March 31, 2016. These project costs are included as additions to property and equipment and long-term debt in the condensed combined balance sheets. The costs are additionally reflected on the condensed combined statement of cash flows for the three months ended March 31, 2016 in assets acquired under capital leases. Professional and General Liability Claims. As part of the business of owning and operating hospitals, the Company is subject to legal actions alleging liability on its part. CHS provided professional and general liability insurance to QHC prior to the Spin-off and QHC is indemnified against losses under this insurance arrangement. The liability for claims related to QHC was determined based on an actuarial study of QHC’s operations. A corresponding receivable from CHS exists to reflect the indemnification of this liability. This liability was adjusted for new claims information in the period such information became known. The Company’s estimated liability for professional and general liability claims was $98.4 million and $98.6 million as of March 31, 2016 and December 31, 2015, respectively. The current portion of the liability for professional and general liability claims was $22.0 million and $21.1 million as of March 31, 2016 and December 31, 2015, respectively, and is included in other accrued liabilities in the condensed combined balance sheets, with the long-term portion recorded in other long-term liabilities. Corresponding amounts due from CHS related to the indemnification of these liabilities are included in other current assets and other assets in the condensed combined balance sheets. Professional and general liability expense includes an allocation from CHS of the losses resulting from professional and general liability claims and loss adjustment expense, as well as paid excess insurance premiums, and is presented within other operating expenses in the condensed combined statements of income. Workers’ Compensation Claims . CHS provided workers’ compensation insurance to QHC prior to the Spin-off, and QHC is indemnified against losses under this insurance arrangement. The liability for claims related to QHC was determined based on an actuarial study of QHC’s operations. A corresponding receivable from CHS exists to reflect the indemnification of this liability. The Company’s estimated liability for workers’ compensation claims was $29.3 million and $28.8 million as of March 31, 2016 and December 31, 2015, respectively. The current portion of the liability was $7.4 million and $8.3 million as of March 31, 2016 and December 31, 2015, respectively, and is included in employee compensation liabilities in the condensed combined balance sheets, with the long-term portion recorded in other long-term liabilities. Legal Matters. The Company is a party to various legal, regulatory and governmental proceedings incidental to its business. Based on current knowledge, management does not believe that loss contingencies arising from pending legal, regulatory and governmental proceedings, including the matters described herein, will have a material adverse effect on the combined financial position or liquidity of the Company. However, in light of the inherent uncertainties involved in these matters, some of which are beyond the Company’s control, and the very large or indeterminate damages sought in some of these matters, an adverse outcome in one or more of these matters could occur. In connection with the Spin-off, CHS has agreed to indemnify QHC for certain liabilities relating to outcomes or events occurring prior to the closing of the Spin-off, including (i) certain claims and proceedings known to be outstanding on or prior to the closing date of the Spin-off and (ii) certain claims, proceedings and investigations by governmental authorities or private plaintiffs related to activities occurring at or related to our healthcare facilities prior to the closing date of the Spin-off, but only to the extent, in the case of clause (ii), that such claims are covered by insurance policies maintained by CHS, including professional and general liability and employer practices. In this regard, CHS will continue to be responsible for certain Health Management Associates, Inc. legal matters covered by its contingent value rights agreement that relate to the portion of CHS’ business now held by QHC. Notwithstanding the foregoing, CHS will not indemnify QHC in respect of any claims or proceedings arising out of or related to the business operations of QHR at any time or our compliance with the Company’s Corporate Integrity Agreement with the United States Department of Health and Human Services Office of the Inspector General (the “CIA”). With respect to all legal, regulatory and governmental proceedings, the Company considers the likelihood of a negative outcome. If the Company determines the likelihood of a negative outcome with respect to any such matter is probable and the amount of the loss can be reasonably estimated, the Company records an accrual for the estimated loss for the expected outcome of the matter. If the likelihood of a negative outcome with respect to material matters is reasonably possible and the Company is able to determine an estimate of the possible loss or a range of loss, whether in excess of a related accrued liability or where there is no accrued liability, the Company discloses the estimate of the possible loss or range of loss. However, the Company is unable to estimate a possible loss or range of loss in some instances based on the significant uncertainties involved in, and/or the preliminary nature of, certain legal, regulatory and governmental matters. The following are matters for which certain Quorum Health entities have been named as defendants or are under regulatory proceedings: Matters for which an Outcome Cannot be Assessed Government Investigations Tooele, Utah – Physician Compensation Blue Island, Illinois – Patient Status Commercial Litigation and Other Lawsuits Quorum Health Resources, LLC v. Hancock Medical Center . Arbitration claim and counterclaim are currently pending for breach of contract and negligence arising out of a Management Services Agreement between QHR and the hospital. Arbitration in this case began on April 11, 2016. The Company believes this claim is without merit and will vigorously defend the case. |
Subsequent Events
Subsequent Events | 3 Months Ended |
Mar. 31, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events Disclosure | 10. SUBSEQUENT EVENTS The Company evaluated events subsequent to the balance sheet date for disclosure or recognition in the condensed combined financial statements. On April 29, 2016, CHS completed the Spin-off of QHC and distributed, on a pro rata basis, all of the 28.4 million shares of QHC common stock to CHS’ stockholders of record as of April 22, 2016. These stockholders of record as of April 22, 2016 received a distribution of one share of QHC common stock for every four shares of CHS common stock held as of the Record Date plus cash in lieu of any fractional shares. Immediately following the completion of the Spin-off, CHS’ stockholders owned 100% of the outstanding shares of QHC common stock. Following the Spin-off, QHC became an independent public company with its common stock listed for trading under the symbol “QHC” on the NYSE. In connection with the Spin-off, CHS and QHC entered into a Separation and Distribution Agreement as well as certain ancillary agreements on April 29, 2016. These agreements allocate between CHS and QHC the various assets, employees, liabilities and obligations (including investments, property, employee benefits and tax-related assets and liabilities) that comprise the separate companies and govern certain relationships between, and activities of, CHS and QHC for a period of time after the Spin-off. Pursuant to a special distribution paid by QHC to CHS as part of the series of transactions engaged in to complete the Spin-off, QHC distributed approximately $1.2 billion in cash generated from the net proceeds of certain financing arrangements entered into by the Company as part of the separation. See Note 1 for further discussion of the financing arrangements entered into by the Company in connection with the Spin-off. On May 3, 2016, the Compensation Committee (the “Compensation Committee”) of the Board of Directors (the “Board”) of the Company met and approved grants of performance-based restricted stock to the Company’s executive officers totaling 521,332 shares of restricted stock. All such equity grants were made pursuant to the Quorum Health Corporation 2016 Stock Award Plan (the “2016 Stock Award Plan”) and a performance-based restricted stock award agreement. In addition, on May 3, 2016, the Compensation Committee approved grants of time-vested restricted stock to certain other employees of the Company totaling 471,653 shares of restricted stock. All such equity grants were made pursuant to the 2016 Stock Award Plan and a restricted stock award agreement (the “Restricted Stock Award Agreement”). Pursuant to the Restricted Stock Award Agreement, one-third of the number of shares of restricted stock will vest on each of the first three anniversaries of the date of grant. On May 3, 2016, the Board, upon recommendation of the Compensation Committee and the Governance and Nominating Committee of the Board, met and approved a grant of 10,000 shares of restricted stock to each of its non-employee directors. All such equity grants were made pursuant to the 2016 Stock Award Plan and a director restricted stock award agreement (the “Director Restricted Stock Award Agreement”). Pursuant to the Director Restricted Stock Award Agreement, 100% of the number of shares of restricted stock will vest on the first anniversary of the date of grant. |
Basis of Presentation and Sig16
Basis of Presentation and Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2016 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Basis of Accounting (Policies) | The unaudited condensed combined financial statements of Quorum Health as of March 31, 2016 and December 31, 2015 and for the three month periods ended March 31, 2016 and 2015 have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). The financial data presented herein should be read in conjunction with the combined financial statements and accompanying notes as of December 31, 2015 and 2014 and for the three years ended December 31, 2015, 2014 and 2013 presented in the Company’s Registration Statement on Form 10, as amended, initially filed with the Securities and Exchange Commission on September 4, 2015 and declared effective on April 4, 2016 (“Form 10”). In the opinion of management, the financial data presented includes all adjustments necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented. Results for interim periods should not be considered indicative of results for the full year. Certain information and disclosures normally included in the notes to condensed combined financial statements have been condensed or omitted as permitted by the rules and regulations of the Securities and Exchange Commission (the “SEC”). The Company believes the disclosures are adequate to make the information presented not misleading. Throughout the periods covered by the condensed combined financial statements, QHC did not operate as a separate entity and stand-alone financial statements were not historically prepared. QHC is comprised of certain stand-alone legal entities for which discrete financial information is available. The accompanying condensed combined financial statements have been prepared on a stand-alone basis and are derived from the consolidated financial statements and accounting records of CHS. The condensed combined financial statements represent QHC’s financial position, results of operations and cash flows as its business was operated as part of CHS prior to the Spin-off, in conformity with U.S. GAAP. The condensed combined financial statements included herein may not necessarily be indicative of the results of operations, financial position and cash flows of QHC in the future or had it operated as a separate, independent company during the periods presented. The condensed combined financial statements included herein do not reflect any changes that occurred in the financing and operations of QHC, or any such changes that may occur in the future, as a result of the Spin-off. The condensed combined statements of income include expense allocations for certain corporate functions historically provided by CHS, including, but not limited to, employee benefits administration, treasury, risk management, audit, legal, information technology support, and other shared services. These expenses were allocated to QHC based on direct usage or benefit where identifiable, with the remainder allocated to QHC using methods based on proportionate formulas involving total costs, net operating revenues, number of licensed beds or other various allocation methods. Management believes the assumptions and methodologies underlying the allocation of general corporate overhead expenses from CHS are reasonable. However, such expenses may not be indicative of the actual level of expense that would have been incurred by the Company if it had operated as an independent, publicly traded company or of the costs expected to be incurred in the future. CHS uses a centralized approach to cash management and to financing its operations, including the operations of QHC for the periods presented. Accordingly, none of the cash and cash equivalents swept to the CHS corporate accounts were allocated to QHC in the condensed combined financial statements. Prior to the Spin-off, transactions between QHC and CHS were accounted for through Due to Parent, net. See Note 3 for a further description of related party transactions between QHC and CHS. |
Use of Estimates (Policies) | Use of Estimates . The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the condensed combined financial statements. Actual results could differ from those estimates under different assumptions or conditions. |
Principles of Combination (Policies) | Principles of Combination . All significant transactions with CHS have been included in the condensed combined balance sheets within Due to Parent, net, and all intra-company accounts, profits and transactions have been eliminated. Included in the Company’s results of operations is the Company’s equity in pre-tax earnings from all of its investments in unconsolidated affiliates. Noncontrolling interests in less-than-wholly-owned combined entities of QHC are presented as a component of total equity to distinguish between the interests of QHC and the interests of the noncontrolling owners. Revenues and expenses from these subsidiaries are included in the combined amounts as presented on the condensed combined statements of income, along with a net income measure that separately presents the amounts attributable to the controlling interests and the amounts attributable to the noncontrolling interests for each of the periods presented. Noncontrolling interests that are redeemable or may become redeemable at a fixed or determinable price at the option of the holder or upon the occurrence of an event outside of the control of the Company are presented in mezzanine equity on the condensed combined balance sheets. |
Cost of Revenue (Policies) | Cost of Revenue . Substantially all of the Company’s operating costs and expenses are “cost of revenue” items. Operating costs that could be classified as general and administrative by the Company include, among other things, corporate management fees allocated to QHC from CHS for a portion of CHS’ corporate office costs. These charges are in addition to other direct expense allocations from CHS. The corporate management fees are calculated based on the Company’s proportion of CHS’s total licensed beds and are included as a component of other operating expenses in the accompanying condensed combined statements of income. Total corporate management fees were $8.8 million and $8.9 million for the three months ended March 31, 2016 and 2015, respectively. |
Third-Party Reimbursement (Policies) | Third-Party Reimbursement . Net patient service revenues are reported at the estimated net realizable amount from patients, third-party payors and others for services rendered. Operating revenues include amounts estimated by management to be reimbursable by Medicare and Medicaid under prospective payment systems, provisions of cost-reimbursement and other payment methods. Amounts received by the Company for treatment of patients covered by such programs are generally less than the standard billing rates. The differences between the estimated program reimbursement rates and the standard billing rates are accounted for as contractual adjustments, which are deducted from gross revenues to arrive at operating revenues (net of contractual allowances and discounts). These operating revenues are an estimate of the net realizable amount due from these payors. The process of estimating contractual allowances requires the Company to estimate the amount expected to be received based on payor contract provisions. The key assumption in this process is the estimated contractual reimbursement percentage, which is based on payor classification and historical paid claims data. Due to the complexities involved in these estimates , actual payments the Company receives could be different from the amounts it estimates and records. Final settlements under some of these programs are subject to adjustment based on administrative review and audit by third parties. Adjustments to previous program reimbursement estimates are accounted for as contractual allowance adjustments and reported in the periods that such adjustments become known. Contractual allowance adjustments related to final settlements and previous program reimbursement estimates unfavorably impacted net operating revenues by $1.8 million and $0.5 million during the three months ended March 31, 2016 and 2015, respectively. Amounts due to third-party payors were $33.2 million and $21.0 million as of March 31, 2016 and December 31, 2015, respectively, and are included in other accrued liabilities in the condensed combined balance sheets. Amounts due from third-party payors were $35.4 million and $33.7 million as of March 31, 2016 and December 31, 2015, respectively, and are included in other current assets in the condensed combined balance sheets. |
Allowance for Doubtful Accounts (Policies) | Allowance for Doubtful Accounts . Accounts receivable are reduced by an allowance for amounts that could become uncollectible in the future. Substantially all of the Company’s receivables are related to providing healthcare services to patients at its hospitals and affiliated businesses. The Company estimates the allowance for doubtful accounts by reserving a percentage of all self-pay accounts receivable without regard to aging category, based on collection history, adjusted for expected recoveries and any anticipated changes in trends. The Company’s ability to estimate the allowance for doubtful accounts is not impacted by not utilizing an aging of net accounts receivable, as management believes that substantially all of the risk exists at the point in time such accounts are identified as self-pay. The percentage used to reserve for all self-pay accounts is based on the Company’s collection history. For all other non-self-pay payor categories, the Company reserves an estimated amount on historical collection rates for the uncontractualized portion of all accounts aging over 365 days from the date of discharge. These amounts represent an immaterial percentage of the Company’s outstanding accounts receivable. The Company collects substantially all of its third-party insured receivables, which include receivables from governmental agencies. Collections are impacted by the economic ability of patients to pay and the effectiveness of the Company’s collection efforts. Significant changes in payor mix, business office operations, economic conditions or trends in federal and state governmental healthcare coverage could affect the Company’s collection of accounts receivable and the estimates of the collectability of future accounts receivable and are considered in the Company’s estimates of accounts receivable collectability. The Company also continually reviews its overall reserve adequacy by monitoring historical cash collections as a percentage of trailing net revenue less provision for bad debts, as well as by analyzing current period net revenue and admissions by payor classification, aged accounts receivable by payor, days revenue outstanding, the composition of self-pay receivables between pure self-pay patients and the patient responsibility portion of third-party insured receivables and the impact of recent acquisitions and dispositions. |
Electronic Health Records Incentive Reimbursement (Policies) | Electronic Health Records Incentive Reimbursement. The federal government has implemented a number of regulations and programs designed to promote the use of electronic health records (“EHR”) technology and, pursuant to the Health Information Technology for Economic and Clinical Health Act (“HITECH”), established requirements for a Medicare and Medicaid incentive payments program for eligible hospitals and professionals that adopt and meaningfully use certified EHR technology. The Company utilizes a gain contingency model to recognize EHR incentive payments. Recognition occurs when the eligible hospitals adopt or demonstrate meaningful use of certified EHR technology for the applicable payment period and have available the Medicare cost report information for the relevant full cost report year used to determine the final incentive payment. Medicaid EHR incentive payments are calculated based on prior period Medicare cost report information available at the time when eligible hospitals adopt, implement, upgrade or demonstrate meaningful use of certified EHR technology. Since the information for the relevant full Medicare cost report year is available at the time of attestation, the incentive income from resolving the gain contingency is recognized when eligible hospitals adopt, implement, upgrade or demonstrate meaningful use of certified EHR technology. Medicare EHR incentive payments are calculated based on the Medicare cost report information for the full cost report year that began during the federal fiscal year in which meaningful use is demonstrated. Since the necessary information is only available at the end of the relevant full Medicare cost report year and after the cost report is settled, the incentive income from resolving the gain contingency is recognized when eligible hospitals demonstrate meaningful use of certified EHR technology and the information for the applicable full Medicare cost report year to determine the final incentive payment is available. In some instances, the Company may receive estimated Medicare EHR incentive payments prior to when the Medicare cost report information used to determine the final incentive payment is available. In these instances, recognition of the gain for EHR incentive payments is deferred until all recognition criteria described above are met. Eligibility for annual Medicare incentive payments is dependent on providers successfully attesting to the meaningful use of EHR technology. Medicaid incentive payments are available to providers in the first payment year that they adopt, implement or upgrade certified EHR technology; however, providers must demonstrate meaningful use of such technology in any subsequent payment years to qualify for additional incentive payments. Medicaid EHR incentive payments are fully funded by the federal government and administered by the states; however, the states are not required to offer EHR incentive payments to providers. The Company recognized $4.2 million and $7.7 million during the three months ended March 31, 2016 and 2015, respectively, of incentive reimbursement for HITECH incentives from Medicare and Medicaid related to certain of the Company’s hospitals and for certain of the Company’s employed physicians that have demonstrated meaningful use of certified EHR technology or have completed attestations to their adoption or implementation of certified EHR technology. These incentive reimbursements are presented as a reduction of operating costs and expenses in the condensed combined statements of income. The Company received cash related to the incentive reimbursement for HITECH incentives of $12.3 million and $6.8 million during the three months ended March, 31, 2016 and 2015, respectively. The Company recorded $4.7 million as deferred revenue at March 31, 2016, as all criteria for gain recognition had not been met, which is included in other accrued liabilities in the condensed combined balance sheet. The Company had no deferred revenue at December 31, 2015. The Company had receivables for incentive reimbursements for which the recognition criteria had been met, but payment was not yet received, of $5.9 million and $11.2 million as of March 31, 2016 and December 31, 2015, respectively. These receivables are included in other current assets in the condensed combined balance sheets. |
Due To Parent, Net (Policies) | Due to Parent, net. Due to Parent, net in the condensed combined balance sheets represents CHS’ historical investment in QHC, cost allocations from CHS to QHC, the net effect of transactions with QHC, including capital expenditures, and cash transferred from QHC to CHS under CHS’ cash management program. These related amounts were funded by CHS principally under long-term borrowing arrangements with the individual hospital facilities. The long-term borrowing arrangements represent QHC’s historical commitment to provide payment in full to CHS for this intercompany indebtedness. The intercompany indebtedness of QHC with CHS was extinguished concurrent with the Spin-off. See Note 3 for a description of related party transactions with CHS. |
New Accounting Pronouncements (Policies) | New Accounting Pronouncements. In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2014-09, which outlines a single comprehensive model for recognizing revenue and supersedes most existing revenue recognition guida nce, including guidance applicable to the healthcare industry. This ASU provides companies the option of applying a full or modified retrospective approach upon adoption. In August 2015, the FASB issued ASU 2015-14, which defers the effective date until fiscal years beginning after December 15, 2017 with early adoption permitted for annual periods beginning after December 15, 2016. The Company expects to adopt this ASU on January 1, 2018 and is currently evaluating its plan for adoption and the impact on its revenue recognition policies, procedures and control framework and the resulting impact on its combined financial position, results of operations and cash flows. In April 2015, the FASB issued ASU 2015-03, which requires debt issuance costs related to a recognized debt liability be presented in the balance sheet as a direct reduction from the carrying amount of that debt liability, consistent with the accounting for debt discounts. The ASU did not change the measurement or recognition guidance for debt issuance costs, only the classification. This ASU is effective for fiscal years beginning after December 15, 2015, with early adoption permitted. The Company adopted this ASU on January 1, 2016; however, there are no debt issuance costs on the Company’s condensed combined balance sheets for the periods presented. The Company began recognizing the debt issuance costs associated with its new indebtedness entered into in April 2016 in connection with the Spin-off in accordance with ASU 2015-03. In November 2015, the FASB issued ASU 2015-17, which amended the balance sheet classification requirements for deferred income taxes to simplify their presentation in the statement of financial position. The ASU requires that deferred tax liabilities and assets be classified as noncurrent in a classified statement of financial position. This ASU is effective for fiscal years beginning after December 31, 2016, with early adoption permitted. The Company early adopted the provisions of this ASU for the presentation and classification of its deferred tax assets and liabilities at December 31, 2015. The effect of this change primarily resulted in the current portion of deferred income taxes at December 31, 2015 being included in the noncurrent deferred income tax liability. In January 2016, the FASB issued ASU 2016-01, which amends the measurement, presentation and disclosure requirements for equity investments, other than those accounted for under the equity method or that require consolidation of the investee. The ASU eliminates the classification of equity investments as available-for-sale with any changes in fair value of such investments recognized in other comprehensive income, and requires entities to measure equity investments at fair value, with any changes in fair value recognized in net income. This ASU is effective for fiscal years beginning after December 15, 2017, with early adoption permitted. The Company expects to adopt this ASU on January 1, 2018, and is currently evaluating the impact that adoption of this ASU will have on its combined financial position and results of operations. In February 2016, the FASB issued ASU 2016-02, which amends the accounting for leases, requiring lessees to recognize most leases on their balance sheet with a right-of-use asset and a lease liability. Leases will be classified as either finance or operating leases, which will impact the expense recognition of such leases over the lease term. The ASU also modifies the lease classification criteria for lessors and eliminates some of the real estate leasing guidance previously applied for certain leasing transactions. This ASU is effective for fiscal years beginning after December 15, 2018, with early adoption permitted. The Company expects to adopt this ASU on January 1, 2019. Because of the number of leases the Company utilizes to support its operations, the adoption of this ASU is expected to have a material impact on the Company’s combined financial position and results of operations. Management is currently evaluating the extent of this anticipated impact on the Company’s combined financial position and results of operations, and the quantitative and qualitative factors that will impact the Company as part of the adoption of this ASU, as well as any changes to its leasing strategy that may occur because of the changes to the accounting and recognition of leases. In March 2016, the FASB issued ASU 2016-09, which was issued to simplify some of the accounting guidance for share-based compensation. Among the areas impacted by the amendments in this ASU is the accounting for income taxes related to share-based payments, accounting for forfeitures, classification of awards as equity or liabilities, and classification on the statement of cash flows. This ASU is effective for fiscal years beginning after December 15, 2016, with early adoption permitted. The Company expects to adopt this ASU on January 1, 2017. Management is evaluating the impact that the adoption of this ASU will have on its combined financial position, results of operations and cash flows. |
Goodwill and Intangible Assets, Goodwill (Policies) | Goodwill is allocated to each identified reporting unit, which is defined as an operating segment or one level below the operating segment (referred to as a component of the entity). Management has determined that QHC’s hospital operations and hospital management advisory and consulting services operations meet the criteria to be classified as reporting units. Goodwill related to QHC’s hospital operations reporting unit was $508.5 million and $508.4 million as of March 31, 2016 and December 31, 2015, respectively. Goodwill related to QHC’s hospital management advisory and consulting services reporting unit was $33.3 million at both March 31, 2016 and December 31, 2015. Goodwill is evaluated for impairment at the same time every year and when an event occurs or circumstances change that, more likely than not, reduce the fair value of the reporting unit below its carrying value. There is a two-step method for determining goodwill impairment. Step one is to compare the fair value of the reporting unit with the unit’s carrying amount, including goodwill. If this test indicates the fair value is less than the carrying value, then step two is required to compare the implied fair value of the reporting unit’s goodwill with the carrying value of the reporting unit’s goodwill. The Company performed its last annual goodwill evaluation during the fourth quarter of 2015. No impairment was indicated by this evaluation. The next annual goodwill evaluation will be performed during the fourth quarter of 2016. The fair value of the related reporting units is estimated using both a discounted cash flow model as well as a multiple model based on earnings before interest, taxes, depreciation and amortization (“EBITDA”). The cash flow forecasts are adjusted by an appropriate discount rate based on the Company’s best estimate of a market participant’s weighted-average cost of capital. Both models are based on the Company’s best estimate of future revenues and operating costs. |
Income Taxes (Policies) | Although QHC was historically included in the consolidated income tax returns of CHS, QHC’s income taxes are computed and reported herein under the “separate return method.” Use of the separate return method may result in differences when the sum of the amounts allocated to stand-alone tax provisions are compared with amounts presented in consolidated financial statements. In that event, the related deferred tax assets and liabilities could be significantly different from those presented herein. Certain tax attributes, such as net operating loss carryforwards, which were actually reflected in the consolidated financial statements of CHS, may or may not exist at the stand-alone QHC level. |
Fair Value of Financial Instruments (Policies) | The estimated fair value is determined using the methodologies discussed below in accordance with accounting standards related to the determination of fair value. Cash and cash equivalents. The carrying amount approximates fair value due to the short-term maturity of these instruments (less than three months). Long-term debt. The carrying amount of long-term debt approximates fair value due to the nature of these obligations. |
Fair Value Measurement (Policies) | Fair Value Hierarchy Fair value is a market-based measurement, not an entity-specific measurement. Therefore, a fair value measurement should be determined based on the assumptions the market participants would use in pricing the asset or liability. As a basis for considering market participant assumptions in fair value measurements, the Company utilizes the U.S. GAAP fair value hierarchy that distinguishes between market participant assumptions based on market data obtained from sources independent of the reporting entity (observable inputs that are classified within Levels 1 and 2 of the hierarchy) and the reporting entity’s own assumption about market participant assumptions (unobservable inputs classified within Level 3 of the hierarchy). The inputs used to measure fair value are classified into the following fair value hierarchy: Level 1: Quoted market prices in active markets for identical assets and liabilities. Level 2: Observable market-based inputs or unobservable inputs that are corroborated by market data. Level 3: Unobservable inputs that are supported by little or no market activity and are significant to the fair value of the assets or liabilities. Level 3 includes values determined using pricing models, discounted cash flow methodologies, or similar techniques reflecting the Company’s own assumptions. |
Professional and General Liability Claims (Policies) | Professional and General Liability Claims. As part of the business of owning and operating hospitals, the Company is subject to legal actions alleging liability on its part. CHS provided professional and general liability insurance to QHC prior to the Spin-off and QHC is indemnified against losses under this insurance arrangement. The liability for claims related to QHC was determined based on an actuarial study of QHC’s operations. A corresponding receivable from CHS exists to reflect the indemnification of this liability. This liability was adjusted for new claims information in the period such information became known. The Company’s estimated liability for professional and general liability claims was $98.4 million and $98.6 million as of March 31, 2016 and December 31, 2015, respectively. The current portion of the liability for professional and general liability claims was $22.0 million and $21.1 million as of March 31, 2016 and December 31, 2015, respectively, and is included in other accrued liabilities in the condensed combined balance sheets, with the long-term portion recorded in other long-term liabilities. Corresponding amounts due from CHS related to the indemnification of these liabilities are included in other current assets and other assets in the condensed combined balance sheets. Professional and general liability expense includes an allocation from CHS of the losses resulting from professional and general liability claims and loss adjustment expense, as well as paid excess insurance premiums, and is presented within other operating expenses in the condensed combined statements of income. |
Legal Costs (Policies) | Legal Matters. The Company is a party to various legal, regulatory and governmental proceedings incidental to its business. Based on current knowledge, management does not believe that loss contingencies arising from pending legal, regulatory and governmental proceedings, including the matters described herein, will have a material adverse effect on the combined financial position or liquidity of the Company. However, in light of the inherent uncertainties involved in these matters, some of which are beyond the Company’s control, and the very large or indeterminate damages sought in some of these matters, an adverse outcome in one or more of these matters could occur. In connection with the Spin-off, CHS has agreed to indemnify QHC for certain liabilities relating to outcomes or events occurring prior to the closing of the Spin-off, including (i) certain claims and proceedings known to be outstanding on or prior to the closing date of the Spin-off and (ii) certain claims, proceedings and investigations by governmental authorities or private plaintiffs related to activities occurring at or related to our healthcare facilities prior to the closing date of the Spin-off, but only to the extent, in the case of clause (ii), that such claims are covered by insurance policies maintained by CHS, including professional and general liability and employer practices. In this regard, CHS will continue to be responsible for certain Health Management Associates, Inc. legal matters covered by its contingent value rights agreement that relate to the portion of CHS’ business now held by QHC. Notwithstanding the foregoing, CHS will not indemnify QHC in respect of any claims or proceedings arising out of or related to the business operations of QHR at any time or our compliance with the Company’s Corporate Integrity Agreement with the United States Department of Health and Human Services Office of the Inspector General (the “CIA”). With respect to all legal, regulatory and governmental proceedings, the Company considers the likelihood of a negative outcome. If the Company determines the likelihood of a negative outcome with respect to any such matter is probable and the amount of the loss can be reasonably estimated, the Company records an accrual for the estimated loss for the expected outcome of the matter. If the likelihood of a negative outcome with respect to material matters is reasonably possible and the Company is able to determine an estimate of the possible loss or a range of loss, whether in excess of a related accrued liability or where there is no accrued liability, the Company discloses the estimate of the possible loss or range of loss. However, the Company is unable to estimate a possible loss or range of loss in some instances based on the significant uncertainties involved in, and/or the preliminary nature of, certain legal, regulatory and governmental matters. |
Basis of Presentation and Sig17
Basis of Presentation and Significant Accounting Policies (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Schedule of Operating Revenues, Net of Contractual Allowances and Discounts (Before Provision for Bad Debts) by Payor Source | Operating revenues, net of contractual allowances and discounts (before provision for bad debts), were as follows (in thousands): Three Months Ended March 31, 2016 2015 Medicare $ 133,868 $ 138,116 Medicaid 103,068 104,334 Managed care and commercial 285,950 272,377 Self-pay 64,754 62,914 Non-patient 26,844 28,731 Total $ 614,484 $ 606,472 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Related Party Transactions [Abstract] | |
Schedule of Allocated Corporate Expenses | Allocated corporate expenses provided to QHC by CHS were as follows (in thousands): Three Months Ended March 31, 2016 2015 Insurance $ 33,760 $ 34,478 Management fees 8,825 8,859 Other corporate allocations 19,716 17,645 Total corporate allocations $ 62,301 $ 60,982 |
Goodwill and Other Intangible19
Goodwill and Other Intangible Assets (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | The changes in the carrying amount of goodwill for the three months ended March 31, 2016 were as follows (in thousands): Balance as of December 31, 2015 $ 541,704 Goodwill acquired as part of acquisitions during current year 81 Balance as of March 31, 2016 $ 541,785 |
Equity (Tables)
Equity (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Equity [Abstract] | |
Schedule of Equity | The following schedule presents the changes in total equity, Parent’s equity and equity attributable to the noncontrolling Redeemable Noncontrolling Parent's Noncontrolling Total Interests Equity Interests Equity Balance, December 31, 2015 $ 8,958 $ 3,184 $ 12,759 $ 15,943 Net (loss) income (392 ) (5,002 ) 707 (4,295 ) Transfers to Parent — 5,002 — 5,002 Distributions to noncontrolling interests, net of contributions (92 ) — (2,392 ) (2,392 ) Purchase of subsidiary shares from noncontrolling interests — 19 — 19 Redemption of subsidiary shares from noncontrolling interests (31 ) — — — Adjustment to redemption value of redeemable noncontrolling interests 66 (66 ) — (66 ) Noncontrolling interests in acquired entity (174 ) — — — Balance, March 31, 2016 $ 8,335 $ 3,137 $ 11,074 $ 14,211 |
Fair Value of Financial Instr21
Fair Value of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Fair Value Disclosures [Abstract] | |
Schedule of Estimated Fair Value of Financial Instruments, by Balance Sheet Grouping | The fair value of financial instruments has been estimated by the Company using available market information as of March 31, 2016 and December 31, 2015, and valuation methodologies considered appropriate. The estimates presented below are not necessarily indicative of amounts the Company could realize in a current market exchange (in thousands): March 31, 2016 December 31, 2015 Carrying Estimated Fair Carrying Estimated Fair Amount Value Amount Value Assets: Cash and cash equivalents $ 996 $ 996 $ 1,106 $ 1,106 Liabilities: Long-term debt 24,369 24,369 23,415 23,415 |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2016 | |
Segment Reporting [Abstract] | |
Schedule of Segment Reporting Information by Segment | Only the hospital operations segment meets the criteria as a separate reportable segment. The financial information for the hospital management advisory and consulting services segment does not meet the quantitative thresholds for a separate identifiable reportable segment and is combined into the all other reportable segment. The distribution between reportable segments of the Company’s net operating revenues and Adjusted EBITDA is summarized in the following tables (in thousands): Three Months Ended March 31, 2016 2015 Net operating revenues: Hospital operations $ 527,424 $ 524,193 All other 22,127 23,424 Total $ 549,551 $ 547,617 Adjusted EBITDA: Hospital operations $ 52,156 $ 62,692 All other 3,827 3,337 Total $ 55,983 $ 66,029 |
Schedule Showing Reconciliation of Adjusted EBITDA to Net Income (Loss) Before Income Taxes | Reconciliation of Adjusted EBITDA to (loss) income before income taxes: Adjusted EBITDA $ 55,983 $ 66,029 Depreciation and amortization (31,157 ) (31,698 ) Interest expense, net (27,452 ) (25,802 ) Transaction costs related to Spin-off (3,735 ) — (Loss) income before income taxes $ (6,361 ) $ 8,529 |
Spin-Off From Community Healt23
Spin-Off From Community Health Systems, Inc. (Spin-Off Narrative) (Details) $ / shares in Units, $ in Billions | Apr. 29, 2016USD ($)$ / sharesshares | Aug. 03, 2015Hospital | Mar. 31, 2016Hospital |
Subsequent Event [Line Items] | |||
Number of hospitals owned or leased | Hospital | 38 | ||
Spin-off from CHS [Member] | |||
Subsequent Event [Line Items] | |||
Announcement date by the parent of intent to spin-off hospitals | Aug. 3, 2015 | ||
Number of hospitals owned or leased | Hospital | 38 | ||
Spin-off from CHS [Member] | Subsequent Event [Member] | |||
Subsequent Event [Line Items] | |||
Percentage ownership of number of stock shares held by the parent | 100.00% | ||
Common stock, par value per share | $ / shares | $ 0.0001 | ||
Record date for stockholders of the parent to be eligible to receive share distribution in spin-off transaction | Apr. 22, 2016 | ||
Number of shares distributed to each stockholder in spin-off transaction | shares | 1 | ||
Number of shares held by each stockholder of the parent used to determine share distribution in spin-off transaction | shares | 4 | ||
Distribution of proceeds to the parent | $ | $ 1.2 |
Spin-Off From Community Healt24
Spin-Off From Community Health Systems, Inc. (Stand-Alone Public Company Costs Narrative) (Details) - Subsequent Event [Member] $ in Millions | Apr. 29, 2016USD ($) |
Subsequent Event [Line Items] | |
Incremental annual operating costs related to being stand-alone public company | $ 3 |
Incremental annual operating costs related to transition services agreements post spin-off | $ 5 |
Spin-Off From Community Healt25
Spin-Off From Community Health Systems, Inc. (Senior Notes Narrative) (Details) - Subsequent Event [Member] - Debt Instrument Name, Eleven Point Six Two Five Percent Senior Notes Due Twenty Twenty-Three [Member] - Senior Notes [Member] | Apr. 22, 2016USD ($) |
Subsequent Event [Line Items] | |
Debt Instrument, Face Amount | $ 400,000,000 |
Debt Instrument, Interest Rate, Stated Percentage | 11.625% |
Debt Instrument, Maturity Date | Apr. 15, 2023 |
Debt Instrument, Payment Terms | Payable semi-annually in arrears on April 15 and October 15 of each year, beginning on October 15, 2016. |
Debt Instrument, Frequency of Periodic Payment | semi-annually |
Debt Instrument, Date of First Required Payment | Oct. 15, 2016 |
Spin-Off From Community Healt26
Spin-Off From Community Health Systems, Inc. (Senior Facilities Narrative) (Details) - Subsequent Event [Member] | Apr. 29, 2016USD ($) |
Senior Facilities, Term Facility [Member] | Senior Secured Debt [Member] | |
Subsequent Event [Line Items] | |
Debt Instrument, Face Amount | $ 880,000,000 |
Debt Instrument, Maturity Date | Apr. 29, 2022 |
Senior Facilities, Term Facility [Member] | Senior Secured Debt [Member] | London Interbank Offered Rate (LIBOR) [Member] | |
Subsequent Event [Line Items] | |
Debt Instrument, Basis Spread on Variable Rate | 5.75% |
Senior Facilities, Term Facility [Member] | Senior Secured Debt [Member] | Alternate Base Rate [Member] | |
Subsequent Event [Line Items] | |
Debt Instrument, Basis Spread on Variable Rate | 4.75% |
Senior Facilities, Revolving Facility [Member] | Line of Credit [Member] | |
Subsequent Event [Line Items] | |
Line of Credit Facility, Maximum Borrowing Capacity | $ 100,000,000 |
Debt Instrument, Maturity Date | Apr. 29, 2021 |
Senior Facilities, Revolving Facility [Member] | Line of Credit [Member] | London Interbank Offered Rate (LIBOR) [Member] | |
Subsequent Event [Line Items] | |
Debt Instrument, Basis Spread on Variable Rate | 2.75% |
Senior Facilities, Revolving Facility [Member] | Line of Credit [Member] | Alternate Base Rate [Member] | |
Subsequent Event [Line Items] | |
Debt Instrument, Basis Spread on Variable Rate | 1.75% |
Spin-Off From Community Healt27
Spin-Off From Community Health Systems, Inc. (ABL Facility and Other Disclosures Narrative) (Details) - Subsequent Event [Member] - USD ($) | Apr. 29, 2016 | Apr. 22, 2016 |
Spin-off from CHS [Member] | ||
Subsequent Event [Line Items] | ||
Distribution of proceeds to the parent | $ 1,200,000,000 | |
ABL Facility [Member] | Line of Credit [Member] | ||
Subsequent Event [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 125,000,000 | |
Debt Instrument, Maturity Date | Apr. 29, 2021 | |
ABL Facility [Member] | Line of Credit [Member] | London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | ||
Subsequent Event [Line Items] | ||
Debt Instrument, Basis Spread on Variable Rate | 1.75% | |
ABL Facility [Member] | Line of Credit [Member] | London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | ||
Subsequent Event [Line Items] | ||
Debt Instrument, Basis Spread on Variable Rate | 2.25% | |
ABL Facility [Member] | Line of Credit [Member] | Base Rate [Member] | Minimum [Member] | ||
Subsequent Event [Line Items] | ||
Debt Instrument, Basis Spread on Variable Rate | 0.75% | |
ABL Facility [Member] | Line of Credit [Member] | Base Rate [Member] | Maximum [Member] | ||
Subsequent Event [Line Items] | ||
Debt Instrument, Basis Spread on Variable Rate | 1.25% | |
Debt Instrument Name, Eleven Point Six Two Five Percent Senior Notes Due Twenty Twenty-Three [Member] | Senior Notes [Member] | ||
Subsequent Event [Line Items] | ||
Debt Instrument, Maturity Date | Apr. 15, 2023 | |
Debt Instrument, Initial Discount, Percentage | 1.734% | |
Senior Facilities, Term Facility [Member] | Senior Secured Debt [Member] | ||
Subsequent Event [Line Items] | ||
Debt Instrument, Maturity Date | Apr. 29, 2022 | |
Term Facility Issued Percentage on Par Value | 98.00% | |
Senior Facilities, Term Facility [Member] | Senior Secured Debt [Member] | London Interbank Offered Rate (LIBOR) [Member] | ||
Subsequent Event [Line Items] | ||
Debt Instrument, Basis Spread on Variable Rate | 5.75% |
Basis of Presentation and Sig28
Basis of Presentation and Significant Accounting Policies (Narrative) (Details) | 3 Months Ended | ||
Mar. 31, 2016USD ($)Hospitalitemstate | Mar. 31, 2015USD ($) | Dec. 31, 2015USD ($) | |
Business Description [Abstract] | |||
Number of hospitals owned or leased | Hospital | 38 | ||
Number of licensed beds | item | 3,577 | ||
Number of States in which Entity Operates | state | 16 | ||
Third-Party Reimbursement [Abstract] | |||
Increase (decrease) in net operating revenues during period for contractual adjustments related to final settlements on previous program reimbursements | $ (1,800,000) | $ (500,000) | |
Amounts due to third party payors | 33,200,000 | $ 21,000,000 | |
Amounts due from third party payors | 35,400,000 | 33,700,000 | |
Other Operating Expenses [Abstract] | |||
Property taxes and insurance | 35,300,000 | 27,800,000 | |
Repairs and maintenance expense | 11,200,000 | 11,700,000 | |
Electronic Health Records Incentive Reimbursement, Policy [Abstract] | |||
Electronic Health Records Incentive Reimbursement | 4,208,000 | 7,707,000 | |
Electronic Health Records Incentive Reimbursement Cash Received | 12,300,000 | 6,800,000 | |
Electronic Health Records Incentive Reimbursement Receivable | 5,900,000 | 11,200,000 | |
Electronic Health Records Incentive Reimbursement [Member] | |||
Electronic Health Records Incentive Reimbursement, Policy [Abstract] | |||
Deferred Revenue | $ 4,700,000 | $ 0 | |
Minimum [Member] | |||
Allowance For Doubtful Accounts, Policy [Abstract] | |||
Number of days from date of discharge in which company establishes doubtful accounts reserve on non-self pay payor receivables | 365 days | ||
Medical Specialist Fees [Member] | |||
Other Operating Expenses [Abstract] | |||
Professional fees | $ 86,100,000 | 77,100,000 | |
Community Health Systems, Inc [Member] | Management fees [Member] | |||
Cost of Revenue, Policy [Abstract] | |||
Total corporate allocations | 8,825,000 | 8,859,000 | |
Other Operating Expenses [Abstract] | |||
Total corporate allocations | $ 8,825,000 | $ 8,859,000 |
Basis of Presentation and Sig29
Basis of Presentation and Significant Accounting Policies (Schedule of Operating Revenues, Net of Contractual Allowances and Discounts (But Before Provision for Bad Debts) by Payor Source) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | ||
Operating revenues (net of contractual allowances and discounts) | $ 614,484 | $ 606,472 |
Medicare [Member] | ||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | ||
Operating revenues (net of contractual allowances and discounts) | 133,868 | 138,116 |
Medicaid [Member] | ||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | ||
Operating revenues (net of contractual allowances and discounts) | 103,068 | 104,334 |
Managed Care and Commercial [Member] | ||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | ||
Operating revenues (net of contractual allowances and discounts) | 285,950 | 272,377 |
Self-Pay [Member] | ||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | ||
Operating revenues (net of contractual allowances and discounts) | 64,754 | 62,914 |
Non-Patient [Member] | ||
Health Care Organization, Receivable and Revenue Disclosures [Line Items] | ||
Operating revenues (net of contractual allowances and discounts) | $ 26,844 | $ 28,731 |
Related Party Transactions (Nar
Related Party Transactions (Narrative) (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Related Party Transaction [Line Items] | |||
Rent | $ 12,549,000 | $ 12,437,000 | |
Net (loss) income | (4,687,000) | 5,824,000 | |
Community Health Systems, Inc [Member] | |||
Related Party Transaction [Line Items] | |||
Rent | 300,000 | 900,000 | |
Interest expense, net | 26,900,000 | 25,400,000 | |
Community Health Systems, Inc [Member] | Receivables Facility [Member] | Securitization Program [Member] | |||
Related Party Transaction [Line Items] | |||
Line of Credit Facility, Maximum Borrowing Capacity | 700,000,000 | ||
Line of credit, outstanding balance | $ 0 | $ 0 | |
Net (loss) income | 1,700,000 | ||
Community Health Systems, Inc [Member] | Minimum [Member] | |||
Related Party Transaction [Line Items] | |||
Related party transaction, rate | 4.00% | ||
Community Health Systems, Inc [Member] | Maximum [Member] | |||
Related Party Transaction [Line Items] | |||
Related party transaction, rate | 7.00% | ||
Community Health Systems, Inc [Member] | Salaries And Benefits Expense [Member] | |||
Related Party Transaction [Line Items] | |||
Health insurance and other employee related benefits | $ 26,100,000 | $ 27,700,000 |
Related Party Transactions (Sch
Related Party Transactions (Schedule of Allocated Corporate Expenses) (Details) - Community Health Systems, Inc [Member] - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Insurance [Member] | ||
Related Party Transaction [Line Items] | ||
Total corporate allocations | $ 33,760 | $ 34,478 |
Management fees [Member] | ||
Related Party Transaction [Line Items] | ||
Total corporate allocations | 8,825 | 8,859 |
Other corporate allocations [Member] | ||
Related Party Transaction [Line Items] | ||
Total corporate allocations | 19,716 | 17,645 |
Total corporate allocations [Member] | ||
Related Party Transaction [Line Items] | ||
Total corporate allocations | $ 62,301 | $ 60,982 |
Goodwill and Other Intangible32
Goodwill and Other Intangible Assets (Schedule of Goodwill) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill, beginning balance | $ 541,704 |
Goodwill acquired as part of acquisitions during current year | 81 |
Goodwill, ending balance | $ 541,785 |
Goodwill and Other Intangible33
Goodwill and Other Intangible Assets (Goodwill Narrative) (Details) - USD ($) | 3 Months Ended | |
Dec. 31, 2015 | Mar. 31, 2016 | |
Goodwill [Line Items] | ||
Goodwill | $ 541,704,000 | $ 541,785,000 |
Goodwill, impairment loss | 0 | |
Hospital Operations Reporting Unit [Member] | ||
Goodwill [Line Items] | ||
Goodwill | 508,400,000 | 508,500,000 |
Hospital Management Advisory and Consulting Services Reporting Unit [Member] | ||
Goodwill [Line Items] | ||
Goodwill | $ 33,300,000 | $ 33,300,000 |
Goodwill and Other Intangible34
Goodwill and Other Intangible Assets (Other Finite-lived Intangible Assets Narrative) (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets acquired during the period | $ 0 | ||
Finite-lived intangible assets, gross | 43,300,000 | $ 43,300,000 | |
Finite-lived intangible assets, net | 13,200,000 | 13,900,000 | |
Capitalized computer software, gross | 196,100,000 | 194,900,000 | |
Capitalized computer software, net | 91,800,000 | $ 96,900,000 | |
Capitalized computer software, development stage costs | $ 3,300,000 | ||
Finite-Lived Intangible Assets, Except Capitalized Internal-Use Software [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, weighted-average useful life | 6 years | ||
Acquired finite-lived intangible asset, residual value | $ 0 | ||
Amortization expense | 800,000 | $ 800,000 | |
Amortization expense for remainder 2016 | 2,300,000 | ||
Amortization expense for 2017 | 2,200,000 | ||
Amortization expense for 2018 | 2,000,000 | ||
Amortization expense for 2019 | 1,900,000 | ||
Amortization expense for 2020 | 1,700,000 | ||
Amortization expense thereafter | 3,100,000 | ||
Capitalized Internal Use Software [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Acquired finite-lived intangible asset, residual value | 0 | ||
Amortization expense | 6,600,000 | $ 6,700,000 | |
Amortization expense for remainder 2016 | 20,000,000 | ||
Amortization expense for 2017 | 20,600,000 | ||
Amortization expense for 2018 | 11,800,000 | ||
Amortization expense for 2019 | 10,600,000 | ||
Amortization expense for 2020 | 10,500,000 | ||
Amortization expense thereafter | $ 18,300,000 | ||
Capitalized Internal Use Software, Except Significant System Conversions [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, weighted-average useful life | 3 years | ||
Capitalized Internal Use Software, Significant System Conversions [Member] | Minimum [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, weighted-average useful life | 8 years | ||
Capitalized Internal Use Software, Significant System Conversions [Member] | Maximum [Member] | |||
Finite-Lived Intangible Assets [Line Items] | |||
Finite-lived intangible assets, weighted-average useful life | 10 years |
Goodwill and Other Intangible35
Goodwill and Other Intangible Assets (Other Indefinite Lived Intangible Assets Narrative) (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Dec. 31, 2015 | |
Indefinite-Lived Intangible Assets (Excluding Goodwill) [Abstract] | ||
Indefinite-lived intangible assets acquired during the period | $ 0 | |
Indefinite-lived intangible assets (excluding goodwill) | $ 11,400,000 | $ 11,400,000 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Income Tax Disclosure [Abstract] | ||
Effective Income Tax Rate, Continuing Operations | 26.30% | 31.70% |
Unrecognized Tax Benefit | $ 0 | $ 0 |
Equity (Schedule of Equity) (De
Equity (Schedule of Equity) (Details) $ in Thousands | 3 Months Ended |
Mar. 31, 2016USD ($) | |
Equity, beginning balance | $ 15,943 |
Redeemable noncontrolling interests, beginning balance | 8,958 |
Net income (loss), including portion attributable to nonredeemable noncontrolling interests | (4,295) |
Transfers to Parent | 5,002 |
Distributions to noncontrolling interests, net of contributions | (2,392) |
Purchase of subsidiary shares from noncontrolling interests | 19 |
Adjustment to redemption value of redeemable noncontrolling interests | (66) |
Redeemable noncontrolling interests, ending balance | 8,335 |
Equity, ending balance | 14,211 |
Redeemable Noncontrolling Interests [Member] | |
Redeemable noncontrolling interests, beginning balance | 8,958 |
Net (loss) income attributable to redeemable noncontrolling interests | (392) |
Distributions to noncontrolling interests, net of contributions | (92) |
Redemption of subsidiary shares from noncontrolling interests | (31) |
Adjustment to redemption value of redeemable noncontrolling interests | 66 |
Noncontrolling interests in acquired entity | (174) |
Redeemable noncontrolling interests, ending balance | 8,335 |
Parent's Equity [Member] | |
Equity, beginning balance | 3,184 |
Net income (loss), including portion attributable to nonredeemable noncontrolling interests | (5,002) |
Transfers to Parent | 5,002 |
Purchase of subsidiary shares from noncontrolling interests | 19 |
Adjustment to redemption value of redeemable noncontrolling interests | (66) |
Equity, ending balance | 3,137 |
Noncontrolling Interests [Member] | |
Equity, beginning balance | 12,759 |
Net income (loss), including portion attributable to nonredeemable noncontrolling interests | 707 |
Distributions to noncontrolling interests, net of contributions | (2,392) |
Equity, ending balance | $ 11,074 |
Fair Value of Financial Instr38
Fair Value of Financial Instruments (Schedule of Estimated Fair Value of Financial Instruments) (Details) - USD ($) $ in Thousands | Mar. 31, 2016 | Dec. 31, 2015 |
Carrying Amount Measurement [Member] | ||
Assets: | ||
Cash and cash equivalents | $ 996 | $ 1,106 |
Liabilities: | ||
Long-term debt | 24,369 | 23,415 |
Estimate of Fair Value Measurement [Member] | ||
Assets: | ||
Cash and cash equivalents | 996 | 1,106 |
Liabilities: | ||
Long-term debt | $ 24,369 | $ 23,415 |
Segment Information (Narrative)
Segment Information (Narrative) (Details) | 3 Months Ended |
Mar. 31, 2016segment | |
Segment Reporting [Abstract] | |
Number of Operating Segments | 2 |
Segment Information (Schedule o
Segment Information (Schedule of Segment Reporting Information by Segment) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Segment Reporting Information [Line Items] | ||
Net operating revenues | $ 549,551 | $ 547,617 |
Adjusted EBITDA | 55,983 | 66,029 |
Hospital Operations [Member] | ||
Segment Reporting Information [Line Items] | ||
Net operating revenues | 527,424 | 524,193 |
Adjusted EBITDA | 52,156 | 62,692 |
All Other Segments [Member] | ||
Segment Reporting Information [Line Items] | ||
Net operating revenues | 22,127 | 23,424 |
Adjusted EBITDA | $ 3,827 | $ 3,337 |
Segment Information (Schedule S
Segment Information (Schedule Showing Reconciliation of Adjusted EBITDA to Income (Loss) Before Income Taxes) (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2016 | Mar. 31, 2015 | |
Segment Reporting [Abstract] | ||
Adjusted EBITDA | $ 55,983 | $ 66,029 |
Depreciation and amortization | (31,157) | (31,698) |
Interest expense, net | (27,452) | (25,802) |
Transaction costs related to Spin-off | (3,735) | |
(Loss) income before income taxes | $ (6,361) | $ 8,529 |
Commitments and Contingencies (
Commitments and Contingencies (Commitments Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2016 | Mar. 31, 2015 | Dec. 31, 2015 | |
Other Commitments [Line Items] | |||
Property and equipment | $ 1,619,496 | $ 1,603,653 | |
Purchases of property and equipment | 12,840 | $ 9,939 | |
Assets acquired under capital leases | 2,023 | ||
Property Name, Patient Tower Construction, Springfield, Oregon Hospital [Member] | Construction in Progress [Member] | Capital Expenditures Commitment [Member] | |||
Other Commitments [Line Items] | |||
Property and equipment | 17,300 | ||
Purchases of property and equipment | 6,900 | ||
Property Name, Corporate Office Construction [Member] | Construction in Progress [Member] | Capital Expenditures Commitment [Member] | Lessee, Direct Financing Obligation Lease Type [Member] | |||
Other Commitments [Line Items] | |||
Property and equipment | 16,400 | ||
Assets acquired under capital leases | 2,000 | ||
Property Name, Corporate Office Construction [Member] | Maximum [Member] | Construction in Progress [Member] | Capital Expenditures Commitment [Member] | |||
Other Commitments [Line Items] | |||
Total estimated construction cost related to an individual project | $ 88,000 |
Commitments and Contingencies43
Commitments and Contingencies (Professional and General Liability Claims Narrative) (Details) - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Malpractice Insurance [Line Items] | ||
Malpractice Loss Contingency, Accrual, Discounted | $ 98.4 | $ 98.6 |
Malpractice Loss Contingency, Accrual, Discounted, Current | 22 | 21.1 |
Community Health Systems, Inc [Member] | ||
Malpractice Insurance [Line Items] | ||
Insurance Receivable for Malpractice | 98.4 | 98.6 |
Insurance Receivable for Malpractice, Current | $ 22 | $ 21.1 |
Commitments and Contingencies44
Commitments and Contingencies (Workers' Compensation Claims Narrative) (Details) - Insurance Claims, Workers' Compensation Liability [Member] - USD ($) $ in Millions | Mar. 31, 2016 | Dec. 31, 2015 |
Loss Contingencies [Line Items] | ||
Loss Contingency, Accrual, Total | $ 29.3 | $ 28.8 |
Loss Contingency, Accrual, Current | 7.4 | 8.3 |
Community Health Systems, Inc [Member] | ||
Loss Contingencies [Line Items] | ||
Loss Contingency, Receivable | 29.3 | 28.8 |
Loss Contingency, Receivable, Current | $ 7.4 | $ 8.3 |
Subsequent Events (Narrative) (
Subsequent Events (Narrative) (Details) - Subsequent Event [Member] - USD ($) $ in Billions | May. 03, 2016 | Apr. 29, 2016 |
2016 Stock Award Plan [Member] | Award Date, May 3, 2016 [Member] | Restricted Stock [Member] | Performance-Based Vesting [Member] | Executive Officers [Member] | ||
Subsequent Event [Line Items] | ||
Restricted stock units, shares granted | 521,332 | |
Share-based compensation arrangement by share-based payment award, award vesting rights | All such equity grants were made pursuant to the Quorum Health Corporation 2016 Stock Award Plan (the “2016 Stock Award Plan”) and a performance-based restricted stock award agreement. | |
2016 Stock Award Plan [Member] | Award Date, May 3, 2016 [Member] | Restricted Stock [Member] | Time-Based Vesting [Member] | Certain Employees, in Total [Member] | ||
Subsequent Event [Line Items] | ||
Restricted stock units, shares granted | 471,653 | |
Share-based compensation arrangement by share-based payment award, award vesting rights | Pursuant to the Restricted Stock Award Agreement, one-third of the number of shares of restricted stock will vest on each of the first three anniversaries of the date of grant. | |
Share-based compensation, vesting period | 3 years | |
2016 Stock Award Plan [Member] | Award Date, May 3, 2016 [Member] | Restricted Stock [Member] | Time-Based Vesting [Member] | Non-Employee Director, Individual [Member] | ||
Subsequent Event [Line Items] | ||
Restricted stock units, shares granted | 10,000 | |
Share-based compensation arrangement by share-based payment award, award vesting rights | Pursuant to the Director Restricted Stock Award Agreement, 100% of the number of shares of restricted stock will vest on the first anniversary of the date of grant. | |
Share-based compensation, vesting period | 1 year | |
Share-based compensation, vesting percentage | 100.00% | |
Spin-off from CHS [Member] | ||
Subsequent Event [Line Items] | ||
Stock Issued During Period, Shares, New Issues | 28,400,000 | |
Record date for stockholders of the parent to be eligible to receive share distribution in spin-off transaction | Apr. 22, 2016 | |
Number of shares distributed to each stockholder in spin-off transaction | 1 | |
Number of shares held by each stockholder of the parent used to determine share distribution in spin-off transaction | 4 | |
Percentage ownership of number of stock shares held by the parent | 100.00% | |
Distribution of proceeds to the parent | $ 1.2 |