Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2016 | Nov. 07, 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 | Sep. 30, 2016 | |
Document Fiscal Year Focus | 2,016 | |
Document Fiscal Period Focus | Q3 | |
Current Fiscal Year End Date | --12-31 | |
Trading Symbol | QHC | |
Amendment Flag | false | |
Entity Filer Category | Non-accelerated Filer | |
Entity Common Stock, Shares Outstanding | 29,485,075 |
CONDENSED CONSOLIDATED AND COMB
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Income Statement [Abstract] | ||||
Operating revenues, net of contractual allowances and discounts | $ 612,551 | $ 605,886 | $ 1,825,198 | $ 1,820,994 |
Provision for bad debts | 68,612 | 62,743 | 201,971 | 191,882 |
Net operating revenues | 543,939 | 543,143 | 1,623,227 | 1,629,112 |
Operating costs and expenses: | ||||
Salaries and benefits | 266,812 | 252,168 | 788,560 | 766,046 |
Supplies | 64,013 | 63,277 | 191,810 | 189,492 |
Other operating expenses | 154,878 | 161,186 | 482,526 | 472,237 |
Depreciation and amortization | 28,234 | 31,488 | 90,854 | 95,327 |
Rent | 12,823 | 12,338 | 37,917 | 36,840 |
Electronic health records incentives earned | (1,336) | (6,121) | (9,791) | (21,452) |
Legal and settlement costs | 488 | 0 | 6,176 | 0 |
Impairment of long-lived assets and goodwill | 0 | 0 | 250,400 | 0 |
Transaction costs related to the spin-off | 532 | 9,054 | 5,444 | 9,054 |
Total operating costs and expenses | 526,444 | 523,390 | 1,843,896 | 1,547,544 |
Income (loss) from operations | 17,495 | 19,753 | (220,669) | 81,568 |
Interest expense, net | 28,028 | 24,549 | 84,756 | 74,179 |
Income (loss) before income taxes | (10,533) | (4,796) | (305,425) | 7,389 |
Provision for (benefit from) income taxes | (4,081) | (721) | (50,320) | 3,435 |
Net income (loss) | (6,452) | (4,075) | (255,105) | 3,954 |
Less: Net income attributable to noncontrolling interests | 507 | 1,638 | 1,917 | 2,038 |
Net income (loss) attributable to Quorum Health Corporation | $ (6,959) | $ (5,713) | $ (257,022) | $ 1,916 |
Earnings (loss) per share attributable to Quorum Health Corporation stockholders: | ||||
Basic and diluted | $ (0.24) | $ (0.20) | $ (9.05) | $ 0.07 |
Weighted-average shares outstanding: | ||||
Basic and diluted | 28,413,532 | 28,412,054 | 28,412,552 | 28,412,054 |
CONDENSED CONSOLIDATED AND COM3
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Statement Of Income And Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (6,452) | $ (4,075) | $ (255,105) | $ 3,954 |
Amortization and recognition of unrecognized pension cost components, net of income taxes | 100 | 0 | (3,710) | 0 |
Comprehensive income (loss) | (6,352) | (4,075) | (258,815) | 3,954 |
Less: Comprehensive income attributable to noncontrolling interests | 507 | 1,638 | 1,917 | 2,038 |
Comprehensive income (loss) attributable to Quorum Health Corporation | $ (6,859) | $ (5,713) | $ (260,732) | $ 1,916 |
CONDENSED CONSOLIDATED AND COM4
CONDENSED CONSOLIDATED AND COMBINED BALANCE SHEETS (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Current assets: | ||
Cash and cash equivalents | $ 25,078 | $ 1,106 |
Patient accounts receivable, net of allowance for doubtful accounts of $342,263 and $346,507 at September 30, 2016 and December 31, 2015, respectively | 407,687 | 390,890 |
Inventories | 58,045 | 60,542 |
Prepaid expenses | 25,261 | 16,030 |
Due from third-party payors | 127,073 | 110,806 |
Current assets of hospitals held for sale | 4,090 | 0 |
Other current assets | 65,647 | 59,011 |
Total current assets | 712,881 | 638,385 |
Property and equipment, at cost | 1,571,275 | 1,603,653 |
Less: Accumulated depreciation and amortization | (750,932) | (723,404) |
Total property and equipment, net | 820,343 | 880,249 |
Goodwill | 336,812 | 541,704 |
Intangible assets, net | 106,306 | 129,250 |
Long-term assets of hospitals held for sale | 22,230 | 0 |
Other long-term assets | 100,628 | 105,268 |
Total assets | 2,099,200 | 2,294,856 |
Current liabilities: | ||
Current maturities of long-term debt | 10,493 | 7,915 |
Accounts payable | 147,126 | 138,483 |
Accrued liabilities: | ||
Accrued salaries and benefits | 100,806 | 82,620 |
Accrued interest | 31,046 | 0 |
Due to third-party payors | 45,102 | 30,103 |
Current liabilities of hospitals held for sale | 558 | 0 |
Other current liabilities | 54,694 | 45,255 |
Total current liabilities | 389,825 | 304,376 |
Long-term debt | 1,241,301 | 15,500 |
Due to Parent, net | 0 | 1,800,908 |
Deferred income tax liabilities, net | 51,216 | 41,030 |
Other long-term liabilities | 118,671 | 108,141 |
Total liabilities | 1,801,013 | 2,269,955 |
Redeemable noncontrolling interests | 7,754 | 8,958 |
Quorum Health Corporation stockholders' equity: | ||
Preferred stock, $0.0001 par value per share, 100,000,000 shares authorized, none issued at September 30, 2016 | 0 | 0 |
Common stock, $0.0001 par value per share, 300,000,000 shares authorized; 29,486,215 shares issued and outstanding at September 30, 2016 | 3 | 0 |
Additional paid-in capital | 523,168 | 0 |
Accumulated other comprehensive loss | (3,710) | 0 |
Accumulated deficit | (241,910) | 0 |
Total Quorum Health Corporation stockholders' equity | 277,551 | 0 |
Parent's equity | 0 | 3,184 |
Nonredeemable noncontrolling interests | 12,882 | 12,759 |
Total equity | 290,433 | 15,943 |
Total liabilities and equity | $ 2,099,200 | $ 2,294,856 |
CONDENSED CONSOLIDATED AND COM5
CONDENSED CONSOLIDATED AND COMBINED BALANCE SHEETS (Parenthetical) (Unaudited) - USD ($) $ in Thousands | Sep. 30, 2016 | Apr. 29, 2016 | Dec. 31, 2015 |
Statement Of Financial Position [Abstract] | |||
Allowance for doubtful patient accounts | $ 342,263 | $ 346,507 | |
Preferred stock, par value | $ 0.0001 | ||
Preferred stock, shares authorized | 100,000,000 | ||
Preferred stock, shares issued | 0 | ||
Common stock, par value | $ 0.0001 | ||
Common stock, shares authorized | 300,000,000 | ||
Common stock, shares issued | 29,486,215 | ||
Common stock, shares outstanding | 29,486,215 | 28,412,054 |
CONDENSED CONSOLIDATED AND COM6
CONDENSED CONSOLIDATED AND COMBINED STATEMENT OF EQUITY (Unaudited) - 9 months ended Sep. 30, 2016 - USD ($) $ in Thousands | Total | Redeemable Noncontrolling Interests [Member] | Common Stock [Member] | Additional Paid-In Capital [Member] | Accumulated Other Comprehensive Loss [Member] | Accumulated Deficit [Member] | Parent [Member] | Nonredeemable Noncontrolling Interests [Member] |
Redeemable noncontrolling interests, beginning balance at Dec. 31, 2015 | $ 8,958 | $ 8,958 | ||||||
Stockholders' equity, beginning balance at Dec. 31, 2015 | 15,943 | $ 3,184 | $ 12,759 | |||||
Comprehensive income (loss) | (258,086) | (729) | $ (3,710) | $ (241,910) | (15,112) | 2,646 | ||
Transfers to Parent (prior to Spin-off Transaction) | 15,112 | 15,112 | ||||||
Changes in equity on Spin-off Transaction date | 515,384 | $ 3 | $ 518,518 | (3,137) | ||||
Changes in equity on spin-off transaction date, shares | 28,412,054 | |||||||
Stock-based compensation expense | 4,678 | 4,678 | ||||||
Stock-based compensation expense, shares | 1,075,737 | |||||||
Cancellation of restricted stock awards for payroll tax withholdings on vesting shares | (12) | (12) | ||||||
Cancellation of restricted stock awards for payroll tax withholdings on vesting shares, shares | (1,576) | |||||||
Cash distributions to noncontrolling investors | (2,511) | (317) | (2,511) | |||||
Purchases of shares from noncontrolling investors | 7 | (108) | 19 | (12) | ||||
Adjustments to redemption value of redeemable noncontrolling interests investments | (82) | 82 | (16) | $ (66) | ||||
Reclassifications of noncontrolling interests investments | (132) | |||||||
Redeemable noncontrolling interests, ending balance at Sep. 30, 2016 | 7,754 | $ 7,754 | ||||||
Stockholders' equity, ending balance at Sep. 30, 2016 | $ 290,433 | $ 3 | $ 523,168 | $ (3,710) | $ (241,910) | $ 12,882 | ||
Stockholders' equity, ending balance, shares at Sep. 30, 2016 | 29,486,215 | 29,486,215 |
CONDENSED CONSOLIDATED AND COM7
CONDENSED CONSOLIDATED AND COMBINED STATEMENTS OF CASH FLOWS (Unaudited) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Cash flows from operating activities: | ||||
Net income (loss) | $ (6,452) | $ (4,075) | $ (255,105) | $ 3,954 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: | ||||
Depreciation and amortization | 28,234 | 31,488 | 90,854 | 95,327 |
Non-cash interest expense | 1,257 | 0 | 1,986 | 0 |
Benefit from deferred income taxes | (4,081) | 0 | (51,532) | 0 |
Stock-based compensation expense | 2,781 | 0 | 4,678 | 0 |
Impairment of long-lived assets and goodwill | 0 | 0 | 250,400 | 0 |
Other non-cash expense (income), net | 54 | 705 | (533) | (803) |
Changes in reserves for self-insurance claims, net of payments | 11,208 | 0 | 28,099 | 0 |
Changes in reserves for legal and settlement costs, net of payments | 0 | 0 | 4,642 | 0 |
Changes in operating assets and liabilities, net of acquisitions: | ||||
Patient accounts receivable, net | (9,586) | (23,639) | (16,797) | (6,809) |
Due from and due to third-party payors, net | (7,528) | (14,365) | (2,173) | (18,295) |
Inventories, prepaid expenses and other current assets | (14,689) | 12,794 | (12,412) | 20,379 |
Accounts payable and accrued liabilities | (2,505) | (20,540) | 26,624 | (88,764) |
Long-term assets and liabilities, net | 880 | 371 | (7,965) | 446 |
Net cash provided by (used in) operating activities | (427) | (17,261) | 60,766 | 5,435 |
Cash flows from investing activities: | ||||
Capital expenditures for property and equipment | (23,241) | (13,351) | (56,448) | (33,761) |
Capital expenditures for software | (1,454) | (2,802) | (5,258) | (5,463) |
Acquisitions, net of cash acquired | (26) | (4,854) | (26) | (6,866) |
Proceeds from sale of property and equipment | 217 | 0 | 1,075 | 3,014 |
Other investing activities | (563) | (70) | (19) | (3,359) |
Net cash used in investing activities | (25,067) | (21,077) | (60,676) | (46,435) |
Cash flows from financing activities: | ||||
Borrowings of long-term debt | 36 | 150 | 1,255,556 | 285 |
Repayments of long-term debt | (3,165) | (259) | (7,442) | (995) |
Increase in Due to Parent, net | 0 | 37,488 | 25,183 | 46,749 |
Increase (decrease) in receivables facility, net | 0 | 951 | 0 | (4,236) |
Payments of debt issuance costs | (1,136) | 0 | (29,139) | 0 |
Cash paid to Parent in Spin-off Transaction | 0 | 0 | (1,217,336) | 0 |
Cancellation of restricted stock awards for payroll tax withholdings on vesting shares | (39) | 0 | (12) | 0 |
Cash distributions to noncontrolling investors | (181) | (100) | (2,828) | (1,522) |
Purchases of shares from noncontrolling investors | (88) | (214) | (100) | (936) |
Net cash provided by (used in) financing activities | (4,573) | 38,016 | 23,882 | 39,345 |
Net change in cash and cash equivalents | (30,067) | (322) | 23,972 | (1,655) |
Cash and cash equivalents at beginning of period | 55,145 | 1,226 | 1,106 | 2,559 |
Cash and cash equivalents at end of period | 25,078 | 904 | 25,078 | 904 |
Supplemental cash flow information: | ||||
Interest payments, net | 15,432 | 24,549 | 51,779 | 74,179 |
Income tax payments, net of refunds (after Spin-off Transaction) | $ 0 | $ 0 | $ 0 | $ 0 |
Description of the Business and
Description of the Business and Spin-Off Transaction | 9 Months Ended |
Sep. 30, 2016 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Description of the Business and Spin-off Transaction | NOTE 1 – DESCRIPTION OF THE BUSINESS AND SPIN-OFF TRANSACTION Description of the Business The principal business of Quorum Health Corporation (“QHC” or the “Company”) is to provide general hospital healthcare and other outpatient services in its markets across the United States. As of September 30, 2016, the Company owned or leased 38 hospitals with 3,578 licensed beds in 16 states. The Company provides outpatient healthcare services through its hospitals and affiliated facilities, including urgent care centers, diagnostic and imaging centers, physician clinics and surgery centers. The Company’s wholly-owned subsidiary, Quorum Health Resources, LLC (“QHR”), provides management advisory and consulting services to non-affiliated hospitals located throughout the United States. Over 95% of the Company’s net operating revenues are attributable to its hospital operations business. Description of the Spin-off Transaction On April 29, 2016, Community Health Systems, Inc. (“CHS” or “Parent” when referring to the carve-out period prior to April 29, 2016) completed the spin-off of 38 hospitals, including their affiliated facilities, and QHR to form Quorum Health Corporation through the distribution of 100% of the common stock of QHC, issued at a par value of $0.0001 per share, to CHS stockholders of record as of the close of business on April 22, 2016 (the “Record Date”) and cash proceeds to CHS of $1.2 billion (the “Spin-off Transaction”). Each CHS stockholder 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. Quorum Health Corporation began regular-way trading on the New York Stock Exchange (“NYSE”) under the ticker symbol “QHC” on May 2, 2016. In connection with the Spin-off Transaction, QHC and CHS entered into a Separation and Distribution Agreement, a Tax Matters Agreement and an Employee Matters Agreement (“EMA”) on April 29, 2016, which, collectively, governed or continue to govern the allocation of employees, assets and liabilities that were transferred to QHC from CHS, including but not limited to investments, working capital, property and equipment, employee benefits and deferred tax assets and liabilities. In addition, QHC and CHS entered into various transition services agreements and other ancillary agreements that govern certain relationships and activities of QHC and CHS for a period of five years following the Spin-off Transaction. See Note 16 – Related Party Transactions for additional information on the agreements that exist between QHC and CHS after the Spin-off Transaction. In connection with the Spin-off Transaction, QHC issued $400 million in aggregate principal amount of 11.625% Senior Notes due 2023 (the “Senior Notes”) on April 22, 2016, pursuant to an indenture (the “Indenture”) by and between the Company and Regions Bank, as Trustee. The Senior Notes were issued at a discount of $6.9 million, or 1.734%. The gross offering proceeds of the Senior Notes were deposited into a segregated escrow account at the closing of the offering on April 22, 2016. On April 29, 2016, the Company entered into a credit agreement (the “Senior Credit Facility”) consisting of an $880 million senior secured term loan facility (the “Term Loan Facility”), which was issued at a discount of $17.6 million, or 98% of par value, and a $100 million senior secured revolving credit facility (the “Revolving Credit Facility”). In addition, the Company entered into a $125 million senior secured asset-based revolving credit facility (the “ABL Credit Facility”) on April 29, 2016. The net offering proceeds of the Senior Notes were released to QHC from the escrow account on April 29, 2016. The net offering proceeds of the Senior Notes, together with the net borrowings under the Term Loan Facility, were used to pay $1.2 billion of the cash proceeds to CHS, as mentioned above, and to pay the Company’s fees and expenses related to the Spin-off Transaction. The cash proceeds paid to CHS were characterized as a one-time, tax-free cash distribution. In connection with the Spin-off Transaction, CHS contributed $518.5 million of additional paid-in capital to QHC and made a $13.5 million cash contribution to QHC, pursuant to the Separation and Distribution Agreement. This contribution consisted of $20.0 million of cash contributed to fund a portion of QHC’s initial working capital, reduced by $6.5 million for the difference in estimated and actual financing transaction fees related to the Spin-off Transaction. A summary of the major transactions that occurred on April 29, 2016 to effect the spin-off of QHC as a newly formed, independent company were as follows (dollars in thousands): Additional Long-Term Due to Common Stock Paid-in Parent's Debt Parent, Net Shares Amount Capital Equity Balance at April 29, 2016 (prior to Spin-off Transaction) $ 24,179 $ 1,811,034 — $ — $ — $ 3,137 Borrowings of long-term debt, net of debt issuance costs and discounts 1,230,819 — — — — — Cash proceeds paid to Parent — (1,217,336 ) — — — — Transfer of liabilities from Parent — (16,596 ) — — — — Net deferred tax liability resulting from Spin-off Transaction — (61,718 ) — — — — Non-cash capital contribution from Parent — (515,384 ) — — 518,521 (3,137 ) Distribution of common stock — — 27,719,645 3 (3 ) — Distribution of restricted stock awards — — 692,409 — — — Balance at April 29, 2016 (after Spin-off Transaction) $ 1,254,998 $ — 28,412,054 $ 3 $ 518,518 $ — A summary of the liabilities transferred to QHC from CHS just prior to the consummation of the Spin-off Transaction, previously included in Due to Parent, net, were as follows (in thousands): April 29, 2016 Accounts payable for capital expenditures $ 8,422 Benefit plan liabilities 5,964 Other liabilities 2,210 Total liabilities transferred from Parent $ 16,596 |
Basis of Presentation and Signi
Basis of Presentation and Significant Accounting Policies | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation and Significant Accounting Policies | NOTE 2 - BASIS OF PRESENTATION AND SIGNIFICANT ACCOUNTING POLICIES Basis of Presentation The condensed consolidated and combined financial statements and accompanying notes of the Company presented herein have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). These financial statements should be read in conjunction with the Company’s Registration Statement on Form 10, as amended, initially filed with the Securities and Exchange Commission (“SEC”) on September 4, 2015 and declared effective on April 4, 2016 (the “Form 10”), which includes combined financial statements and accompanying notes as of December 31, 2015 and 2014 and for each of the three years ended December 31, 2015, 2014 and 2013. In the opinion of the Company’s management, the consolidated and combined financial information presented herein includes all adjustments necessary to present fairly the results of operations, financial position and cash flows of the Company for the interim periods presented. Results of operations for interim periods should not be considered indicative of the results of operations expected for the full year. Certain information and disclosures have been condensed or omitted as presented herein and as permitted by the rules and regulations of the SEC for interim period presentation. The Company’s management believes the financial statements and disclosures presented herein are adequate in order to make the information not misleading. Prior to its separation from CHS on April 29, 2016, QHC did not operate as a separate company and stand-alone financial statements were not historically prepared; however, QHC was comprised of certain stand-alone legal entities for which discrete financial information was available under CHS’ ownership. The accompanying consolidated and combined financial statements include amounts and disclosures for QHC that have been derived from the consolidated financial statements and accounting records of CHS for the periods prior to the Spin-off Transaction in combination with the amounts and disclosures related to the stand-alone financial statements and accounting records of QHC after the Spin-off Transaction. The accompanying consolidated and combined financial statements may not necessarily be indicative of the results of operations, financial position and cash flows of QHC in the future or those that would have occurred had the Company operated on a stand-alone basis during the entirety of the periods presented herein. See Note 16 – Related Party Transactions for additional information on the carve-out of financial information from CHS. Principles of Consolidation and Combination The consolidated and combined financial statements include the accounts of the Company and its subsidiaries in which it holds either a direct or indirect ownership of a majority voting interest. Investments in less-than-wholly-owned consolidated subsidiaries of QHC are presented separately in the equity component of the consolidated and combined balance sheets to distinguish between the interests of QHC and the interests of the noncontrolling investors. Revenues and expenses from these subsidiaries are included in the respective individual line items of the Company’s consolidated and combined statements of income, and net income is presented both in total and separately to distinguish the amounts attributable to the Company and the amounts attributable to the interests of the noncontrolling investors. 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 in the consolidated and combined balance sheets. All significant intercompany transactions and accounts of the Company are eliminated in consolidation. Additionally, all significant transactions with CHS that occurred prior to the Spin-off Transaction have been included in the consolidated and combined balance sheets within Due to Parent, net. This liability to CHS was settled in the Spin-off Transaction. Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. In the third quarter of 2016, the Company reclassified and separately presented certain items in its statements of cash flows. Specifically, changes in self-insurance reserves related to employee health and professional and general and workers’ compensation liabilities were reclassified to changes in reserves for self-insurance claims, net of payments, and changes in reserves for legal and settlement costs were reclassified to changes in reserves for legal and settlement costs, net of payments. The Company believes the current presentation more accurately distinguishes the changes in these liabilities from changes in operating assets and liabilities considered to be part of its normal business operations. Both items are included in cash flows from operating activities. Beginning in the second quarter of 2016, the Company began classifying third-party final cost report settlement receivables and state supplemental payment program receivables as amounts due from and due to third-party payors on its consolidated and combined balance sheets. Third-party final cost report settlement receivables were previously classified as other current assets, and the cost report settlement liabilities were previously classified as other current liabilities. Accounts receivable from state supplemental payment programs were previously classified as patient accounts receivable, and the amounts owed related to these programs were previously classified as other current liabilities. The Company believes the current presentation helps distinguish between amounts due to the Company related to a specific patient service and amounts due from or owed by the Company related to state supplemental payment programs. Beginning in the second quarter of 2016, the Company began classifying intangible assets as a separate line item on its consolidated and combined balance sheets. Previously, intangible assets were included as a component of other long-term assets. The Company believes the current presentation helps distinguish the significant portion of other long-term assets that are comprised of intangible assets. Beginning in the second quarter of 2016, the Company began classifying equity in earnings of unconsolidated subsidiaries as other operating expenses in the consolidated and combined statements of income. Previously, these amounts were classified as non-operating income. These amounts are immaterial to the Company. This change in classification has no effect on the Company’s results of operations or cash flows included in previously issued consolidated and combined financial statements. 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 consolidated and combined financial statements and accompanying notes. Actual results could differ from those estimates under different assumptions or conditions. Revenues and Accounts Receivable Revenue Recognition The Company recognizes revenues from patient services at its hospitals and affiliated facilities in the period services are performed and reports these revenues at the net realizable amount expected to be collected from patients and third-party payors. Billings and collections are outsourced to CHS under the transition services agreements that were entered into in connection with the Spin-off Transaction. See Note 16 – Related Party Transactions for additional information on these agreements. The amounts that are collected for patient services are generally less than established billing rates, or standard billing charges, due to contractual agreements with third-party payors, governmental programs that require reduced billing rates, discounts offered as incentives for payment, and a portion related to bad debts. The Company recognizes revenues related to its QHR business when management advisory and consulting services are provided and reports these revenues at the net realizable amount expected to be collected from the non-affiliated hospital clients. A summary of the components of operating revenues before the provision for bad debts follows (in thousands): Three Months Ended September Nine Months Ended September 2016 2015 2016 2015 Operating revenues $ 3,016,603 $ 2,912,062 $ 9,140,041 $ 8,683,671 Less: Contractual allowances (2,289,702 ) (2,202,984 ) (6,986,290 ) (6,586,713 ) Less: Discounts (114,350 ) (103,192 ) (328,553 ) (275,964 ) Total operating revenues, net of contractual allowances and discounts $ 612,551 $ 605,886 $ 1,825,198 $ 1,820,994 Payor Sources The primary sources of payment for patient healthcare services are third-party payors, including federal and state agencies administering the Medicare and Medicaid programs, other governmental agencies, managed care health plans, commercial insurance companies, workers’ compensation carriers and employers. Self-pay revenues are the portion of patient service revenues derived from patients who do not have health insurance coverage and the patient responsibility portion of services that are not covered by health insurance plans. Non-patient revenues primarily include revenues from QHR’s hospital management advisory and consulting services business, rental income and hospital cafeteria sales. A summary of operating revenues by payor source follows (dollars in thousands): Three Months Ended September 30, 2016 2015 $ Amount % of Total $ Amount % of Total Medicare $ 162,753 26.6 % $ 162,678 26.9 % Medicaid 125,679 20.5 % 113,678 18.8 % Managed care and commercial 239,461 39.1 % 230,498 38.0 % Self-pay 60,079 9.8 % 71,785 11.8 % Non-patient 24,579 4.0 % 27,247 4.5 % Total operating revenues, net of contractual allowances and discounts $ 612,551 100.0 % $ 605,886 100.0 % Nine Months Ended September 30, 2016 2015 $ Amount % of Total $ Amount % of Total Medicare $ 505,836 27.7 % $ 494,051 27.1 % Medicaid 342,030 18.7 % 321,984 17.7 % Managed care and commercial 714,340 39.2 % 726,250 39.9 % Self-pay 184,004 10.1 % 191,880 10.5 % Non-patient 78,988 4.3 % 86,829 4.8 % Total operating revenues, net of contractual allowances and discounts $ 1,825,198 100.0 % $ 1,820,994 100.0 % Beginning in the second quarter of 2016, the Company began classifying its revenues related to Medicare Managed Care Advantage Plans as Medicare revenues. As a result, the Company retroactively reclassified these amounts from managed care and commercial revenues to Medicare revenues for all periods presented in the tables above. The revenues from Medicare Managed Care Advantage Plans that were reclassified were $42.1 million and $34.5 million for the three months ended September 30, 2016 and 2015, respectively, and $127.2 million and $106.6 million for the nine months ended September 30, 2016 and 2015, respectively. Contractual Allowances and Discounts The net realizable amount of patient service revenues due from third-party payors is subject to complexities and interpretations of payor-specific contractual agreements and governmental regulations that are frequently changing. The Medicare and Medicaid programs, which represent a large portion of the Company’s operating revenues, are highly complex programs to administer and are subject to interpretation of federal and state-specific reimbursement rates, new legislation and final cost report settlements. Contractual allowances, or differences in standard billing rates and the payments derived from contractual terms with governmental and non-governmental third–party payors, are recorded based on management’s best estimates in the period in which services are performed and a payment methodology is established with the patient. Recorded estimates for past contractual allowances are subject to change, in large part, due to ongoing contract negotiations and regulation changes, which are typical in the healthcare industry. Revisions to estimates are recorded in the periods in which they become known and may be subject to further revisions. Self-pay and other payor discounts are incentives offered to uninsured or underinsured payors to reduce their costs of healthcare services with the purpose of maximizing the Company’s collection efforts. Third-Party Program Reimbursements Cost report settlements under reimbursement programs with Medicare, Medicaid and other managed care plans are estimated and recorded in the period the related services are performed and are adjusted in future periods, as needed, until the final cost report settlements are determined. Currently, several states utilize supplemental payment programs, including disproportionate share programs, for the purpose of providing reimbursement to providers to offset a portion of the cost of providing care to Medicaid and indigent patients. These programs are designed with input from Centers for Medicare and Medicaid Services (“CMS”) and are funded with a combination of federal and state resources, including, in certain instances, taxes, fees or other program expenses (collectively, “provider taxes”) levied on the providers. Similar programs are also currently being considered by other states. These amounts are included in due from and due to third-party payors in the consolidated and combined balance sheets. Previously, amounts due from third party payors related to these programs were included in patient accounts receivable, and the provider taxes owed were included in other current liabilities in the consolidated and combined balance sheets. The following table summarizes the components of amounts due from and due to third-party payors, as presented in the consolidated and combined balance sheets (in thousands): September 30, December 31, 2016 2015 Amounts due from third-party payors: Previous program reimbursements and final cost report settlements $ 22,091 $ 33,732 State supplemental payment programs 104,982 77,074 Total amounts due from third-party payors $ 127,073 $ 110,806 Amounts due to third-party payors: Previous program reimbursements and final cost report settlements $ 33,440 $ 21,015 State supplemental payment programs 11,662 9,088 Total amounts due to third-party payors $ 45,102 $ 30,103 After a state supplemental payment program is approved and fully authorized by the appropriate state legislative or governmental agency, the Company recognizes revenue and related expenses based on the terms of the program in the period in which amounts are estimable and revenue collection is reasonably assured. The revenues earned by the Company under these programs are included in net operating revenues and the expenses associated with these programs are included in other operating expenses in the consolidated and combined statements of income. The table below provides a summary of the portion of Medicaid reimbursements attributable to state supplemental payment programs (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 State supplemental payment programs: Medicaid revenues $ 54,688 $ 54,517 $ 162,009 $ 159,734 Provider taxes and other expenses 19,559 18,438 57,590 56,931 Reimbursements attributable to state supplemental payment programs, net of expenses $ 35,129 $ 36,079 $ 104,419 $ 102,803 Charity Care In the ordinary course of business, the Company provides services to patients who are financially unable to pay for hospital care. The related charges for those patients who are financially unable to pay that otherwise do not qualify for reimbursement from a governmental program are classified as charity care. The Company determines amounts that qualify for charity care primarily based on the patient’s household income relative to the poverty level guidelines established by the federal government. The Company’s policy is to not pursue collections for such amounts; therefore, the related charges are recorded in operating revenues at the standard billing rates and fully offset in contractual allowances. The gross amounts of charity care revenues were $10.1 million and $9.5 million for the three months ended September 30, 2016 and 2015, respectively, and $24.9 million and $22.7 million for the nine months ended September 30, 2016 and 2015, respectively. The estimated cost of providing charity care services is determined using a ratio of cost to gross charges and applying this ratio to the gross charges associated with providing care to charity patients for the period. The Company recorded charity care costs of $1.6 million for both the three month periods ended September 30, 2016 and 2015, and $4.0 million and $3.9 million for the nine months ended September 30, 2016 and 2015, respectively. To the extent the Company receives reimbursement from any of the various governmental assistance programs to subsidize its care of indigent patients, the Company excludes the charges for such patients from the cost of care provided under its charity care program. Accounts Receivable and Allowance for Doubtful Accounts Substantially all of the Company’s receivables are related to providing healthcare services to patients at its hospitals and affiliated businesses. Beginning in the second quarter of 2016, the Company began classifying receivables related to state supplemental payment programs from patient accounts receivable to due from and due to third-party payors in the consolidated and combined balance sheets. The net amounts reclassified were $93.3 million and $68.0 million as of September 30, 2016 and December 31, 2015, respectively. See the Reclassifications accounting policy above for additional information on reclassification adjustments made by the Company. A summary of the components of accounts receivable before contractual allowances, discounts and allowance for doubtful accounts follows (dollars in thousands): September 30, 2016 December 31, 2015 $ Amount % of Total $ Amount % of Total Third-parties $ 1,947,231 75.1 % $ 1,688,138 72.6 % Self-pay 646,047 24.9 % 638,694 27.4 % Total accounts receivable, gross $ 2,593,278 100.0 % $ 2,326,832 100.0 % Accounts receivable are reduced by an allowance for amounts that could become uncollectible in the future. 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 significantly impacted by the aging of 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 self-pay accounts receivable is based on the Company’s collection history. For insured receivables, which are the non-self-pay receivables, the Company estimates the allowance for doubtful accounts based on historical collection rates for the uncontractualized portion of all accounts aging over 365 days from the date of patient discharge. In general, allowances for insured receivables are an immaterial percentage of the Company’s total accounts receivable. The Company collects substantially all of its third-party insured receivables, which include receivables from governmental agencies. A summary of the changes in the allowance for doubtful accounts follows (in thousands): Nine Months Ended September 30, 2016 Balance at beginning of period $ 346,507 Provision for bad debts 201,971 Amounts written off, net of recoveries (206,215 ) Balance at end of period $ 342,263 Collections are impacted by the economic ability of patients to pay and the effectiveness of CHS’ billing and collection efforts, including their current policies on collections, and the ability of the Company to further attempt collection efforts. Billings and collections are outsourced to CHS under the transition services agreements that were put in place with the Spin-off Transaction. See Note 16 – Related Party Transactions for additional information on these agreements. Significant changes in payor mix, centralized business office operations, economic conditions or trends in federal and state governmental healthcare coverage, among others, could affect the Company’s estimates of accounts receivable collectability. The Company also continually reviews its overall allowance adequacy by monitoring historical cash collections as a percentage of trailing net operating revenues after the provision for bad debts, as well as by analyzing current period net operating revenues 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. Concentration of Credit Risk The Company grants unsecured credit to its patients, most of whom reside in the service area of the Company’s hospitals and affiliated facilities and are insured under third-party payor agreements. Because of the economic diversity of the Company’s markets and non-governmental third-party payors, Medicare represents the only significant concentration of credit risk from payors. Accounts receivable, net of contractual allowances, from Medicare were $78.7 million and $67.7 million, or 10.5% and 9.2% of total patient accounts receivable, net, as of September 30, 2016 and December 31, 2015, respectively. The Company’s revenues are particularly sensitive to regulatory and economic changes in certain states where the Company generates significant revenues. Accordingly, any changes in the current demographic, economic, competitive or regulatory conditions in certain states in which revenues are significant could have an adverse effect on the Company’s results of operations, financial condition or cash flows. Changes to the Medicaid and other government-managed payor programs in these states, including reductions in reimbursement rates or delays in reimbursement payments under state supplemental payment or other programs, could also have a similar adverse effect. A summary of the states in which the Company generates more than 5% of total net patient revenues, before the provision for bad debts, as determined based on the nine months ended September 30, 2016 and 2015, follows (dollars in thousands): Nine Months Ended September 30, Number of 2016 2015 Hospitals $ Amount % of Total $ Amount % of Total Illinois 9 $ 609,091 34.9 % $ 611,569 35.3 % Georgia 4 163,127 9.3 % 168,930 9.7 % Oregon 1 156,397 9.0 % 144,607 8.3 % California 2 151,278 8.7 % 156,128 9.0 % Kentucky 3 89,278 5.1 % 96,653 5.6 % Other Operating Expenses A summary of the major components of other operating expenses follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Purchased services $ 44,242 $ 44,251 $ 133,316 $ 129,898 Taxes and insurance 24,690 32,019 94,257 91,357 Medical specialist fees 27,811 22,182 77,343 62,449 Transition services agreements and allocations from Parent 18,094 15,797 52,192 46,556 Repairs and maintenance 9,611 12,728 31,576 36,024 Utilities 8,369 8,179 22,526 22,546 Management fees from Parent — 8,797 11,792 26,762 Other miscellaneous operating expenses 22,061 17,233 59,524 56,645 Total other operating expenses $ 154,878 $ 161,186 $ 482,526 $ 472,237 The Company began recording costs associated with the transition services agreements and other ancillary agreements with CHS following the Spin-off Transaction in accordance with the terms of these agreements. These costs, which primarily include the costs of providing information technology, patient billing and collections and payroll services, are included in “Transition services agreements and allocations from Parent” in the table above. Amounts allocated to the Company by CHS for periods prior to the Spin-off Transaction are also included in “Transition services agreements and allocations from Parent” in the table above. Prior to the Spin-off Transaction, QHC recorded a monthly corporate management fee from CHS that represented a portion of CHS’ corporate office costs and was included in other operating expenses. Following the Spin-off Transaction, the costs for corporate office functions are primarily included in salaries and benefits expenses. See Note 16 – Related Party Transactions for additional information on the allocated costs from CHS. General and Administrative Costs Substantially all of the Company’s operating costs and expenses are “cost of revenues” items. Operating expenses that could be classified as general and administrative by the Company are costs related to corporate office functions, including, but not limited to tax, treasury, audit, risk management, legal, investor relations and human resources. These costs are primarily salaries and benefits expenses associated with these corporate office functions. General and administrative costs of the Company were $14.1 million and $10.9 million during the three months ended September 30, 2016 and 2015, respectively, and $37.8 million and $32.9 million during the nine months ended September 30, 2016 and 2015, respectively. Prior to the Spin-off Transaction, the majority of these costs were allocations from CHS. See Note 16 – Related Party Transactions for additional information on the allocated costs from CHS. Electronic Health Records Incentives Earned Pursuant to the Health Information Technology for Economic and Clinical Health Act (“HITECH”), the Company is eligible to receive incentive payments under the Medicare and Medicaid programs for its eligible hospitals and physician clinics that demonstrate meaningful use of certified Electronic Health Records (“EHR”) technology. Each of the Company’s eligible hospitals and physician clinics has completed the initial adoption phase of EHR implementation and is currently in the process of implementing the remaining two phases. EHR incentive payments are subject to audit and potential recoupment if it is determined that the applicable meaningful use standards were not met. EHR incentive payments are also subject to retrospective adjustment because the cost report data upon which the incentive payments are based are further subject to audit. The Company utilizes a gain contingency model to recognize EHR incentive payments. When the recognition criteria have been fully met, the Company recognizes the income from EHR incentives payments as a part of other operating costs and expenses in the consolidated and combined statements of income. Medicaid EHR incentive payments are calculated based on prior period Medicare cost report information available at the time when eligible hospitals demonstrate meaningful use of certified EHR technology. Medicare EHR incentive payments are calculated when eligible hospitals demonstrate meaningful use of certified EHR technology and the information for the applicable full Medicare cost report year used 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 income from EHR incentive payments is deferred until all recognition criteria are met. The Company recognizes r eceivables for EHR incentive payments that have been earned, but are uncollected at period end, as other current assets in the consolidated and combined balance sheets. The receivables are adjusted for any known audit or retrospective adjustments related to prior periods. Deferred revenue from EHR incentive payments is recorded in other current liabilities in the consolidated and combined balance sheets. The Company incurs both capital expenditures and operating expenses in connection with the implementation of EHR technology initiatives. The amounts and timing of these expenditures does not directly correlate with the timing of the Company’s receipt or recognition of EHR incentive payments as earned. As the Company completes its full implementation of certified EHR technology in accordance with all three phases of the program, its EHR incentive payments will decline and ultimately end. A summary of activity related to EHR incentives follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Electronic health records incentives receivable at beginning of period $ 1,973 $ 5,848 $ 11,227 $ 12,204 Electronic health records incentives earned 1,336 2,326 6,152 7,101 Cash incentive payments received (367 ) (1,237 ) (13,116 ) (9,457 ) Adjustments to receivable based on final cost report settlement or audit 458 990 (863 ) (1,921 ) Electronic health records incentives receivable at end of period $ 3,400 $ 7,927 $ 3,400 $ 7,927 Deferred revenue related to electronic health records incentives at beginning of period $ (1,054 ) $ (3,795 ) $ — $ (14,351 ) Cash received and deferred during period 1,054 — (3,639 ) — Recognition of deferred incentives as earned — 3,795 3,639 14,351 Deferred revenue related to electronic health records incentives at end of period $ — $ — $ — $ — Total electronic health records incentives earned during period $ 1,336 $ 6,121 $ 9,791 $ 21,452 Total cash incentive payments received during period 687 (1,237 ) (16,755 ) (9,457 ) The Company received a Medicare EHR cash incentive payment of $1.8 million during the second quarter of 2016 that was recorded as deferred revenue. The Company subsequently determined the payment was a duplicate and refunded the payment during the third quarter. Legal and Settlement Costs Legal and settlement costs in the consolidated and combined statements of income primarily includes legal costs and related settlements, if any, related to regulatory claims, government investigations into reimbursement payments and claims associated with QHR’s hospital management contracts. Transaction Costs Related to the Spin-off Transaction costs related to the spin-off consists of QHC’s portion of the costs to effect the Spin-off Transaction and the costs associated with forming a new company. These costs include audit, management advisory and consulting costs, investment advisory costs, legal expenses and other miscellaneous costs. Income Taxes The Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company assesses the likelihood that deferred tax assets will be recovered from future taxable income. To the extent the Company believes that recovery is not likely, a valuation allowance is established. To the extent the Company establishes a valuation allowance or increases this allowance, the related expense is included in the provision for income taxes in the consolidated and combined statements of income. The Company classifies interest and penalties, if any, related to its tax positions as a component of income tax expense. See Note 10 – Income Taxes for information on the separate return method of accounting for income taxes that was used by the Company during the carve-out period and the impact of the consummation of the Spin-off Transaction on income taxes. Comprehensive Income (Loss) The Company’s only sources of other comprehensive income (loss) consist of pension costs related to an acquired defined benefit pension plan at one of its hospitals and a supplemental employee retirement plan. Cash and Cash Equivalents Cash includes cash on hand and cash with banks. Cash equivalents are short-term, highly liquid investments with a maturity of three months or less from the date acquired and are subject to an insignificant risk of change in value. Inventories Inventories, primarily consisting of medical supplies and drugs, are stated at the lower of cost or market on a first-in |
Hospitals Held for Sale and Imp
Hospitals Held for Sale and Impairment of Long-Lived Assets | 9 Months Ended |
Sep. 30, 2016 | |
Assets Held For Sale [Abstract] | |
Hospitals Held for Sale and Impairment of Long-Lived Assets | NOTE 3 – HOSPITALS HELD FOR SALE AND IMPAIRMENT OF LONG-LIVED ASSETS The Company’s business strategy includes an ongoing strategic review of its hospitals for possible divestitures based on an analysis of financial performance, current competitive conditions, expected demographic trends, joint venture opportunities and capital allocation requirements. Beginning in the second quarter of 2016, the Company reclassified certain assets and liabilities of certain hospitals it plans to divest as held for sale on its consolidated and combined balance sheet. As a result of management’s decision to divest these hospitals and evaluate other hospitals for divestiture, during the second quarter of 2016, the Company analyzed the long-lived assets of all of its hospitals to test for impairment. The Company recorded $45.4 million of impairment charges in the consolidated and combined statements of income during the second quarter of 2016. These impairment charges included $9.8 million for property and equipment and $4.4 million for capitalized software costs related to hospitals held for sale and $31.2 million for property and equipment related to hospitals held and used. The carrying amounts of long-lived assets, including those classified as held for sale, are reported net of impairment charges in the consolidated and combined balance sheet as of September 30, 2016. Additionally, during the second quarter of 2016, the Company evaluated the estimated relative fair value of the hospitals held for sale in relation to the overall fair value of its hospital operations reporting unit as of September 30, 2015, the date of its last goodwill impairment analysis, and recorded a goodwill impairment charge of $5.0 million related to hospitals held for sale. See Note 5 – Goodwill and Intangible Assets for additional information on goodwill impairment. |
Property and Equipment
Property and Equipment | 9 Months Ended |
Sep. 30, 2016 | |
Property Plant And Equipment [Abstract] | |
Property and Equipment | NOTE 4 – PROPERTY AND EQUIPMENT A summary of property and equipment follows (in thousands): September 30, December 31, 2016 2015 Property and equipment, at cost: Land and improvements $ 95,652 $ 100,053 Building and improvements 820,356 853,853 Equipment and fixtures 604,790 616,667 Construction in progress 50,477 33,080 Total property and equipment, at cost 1,571,275 1,603,653 Less: Accumulated depreciation and amortization (750,932 ) (723,404 ) Total property and equipment, net $ 820,343 $ 880,249 Depreciation expense was $19.7 million and $22.5 million for the three months ended September 30, 2016 and 2015, respectively, and $64.7 million and $67.9 million for the nine months ended September 30, 2016 and 2015, respectively. See Note 5 – Goodwill and Intangible Assets for information on amortization expense recorded for property and equipment held under capital lease obligations. The total amount of assets held under capital lease obligations, at cost, was $29.9 million and $23.4 million at September 30, 2016 and December 31, 2015, respectively, and $27.8 million and $22.4 million, net of accumulated amortization, at September 30, 2016 and December 31, 2015, respectively. During the second quarter of 2016, the Company reduced the carrying value of property and equipment at certain hospitals it is currently marketing for sale and at certain underperforming hospitals that are part of its ongoing hospital operations business. See Note 3 – Hospitals Held for Sale and Impairment of Long-Lived Assets for additional information on the impairment recorded in the consolidated and combined statements of income for the nine months ended September 30, 2016. Purchases of property and equipment accrued in accounts payable were $8.5 million as of September 30, 2016. |
Goodwill and Intangible Assets
Goodwill and Intangible Assets | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets | NOTE 5– GOODWILL AND INTANGIBLE ASSETS Goodwill A summary of changes in goodwill follows (in thousands): Nine Months Ended September 30, 2016 Balance at beginning of period $ 541,704 Acquisitions 108 Impairment (205,000 ) Balance at end of period $ 336,812 Goodwill related to the hospital operations reporting unit, after giving effect to the impairment charges discussed below, was $303.5 million and $508.4 million as of September 30, 2016 and December 31, 2015, respectively. Goodwill related to the hospital management advisory and consulting services reporting unit was $33.3 million at both September 30, 2016 and December 31, 2015. During the second quarter of 2016, the Company identified certain of its hospitals as held for sale and, accordingly, reclassified certain assets and liabilities as held for sale on its consolidated and combined balance sheet. As a result, the Company evaluated the estimated relative fair value of hospitals held for sale in relation to the overall fair value of its hospital operations reporting unit as of September 30, 2015, the date of its last goodwill impairment analysis, and recognized goodwill impairment of $5.0 million. See Note 3 – Hospitals Held for Sale and Impairment of Long-Lived Assets for additional information related to the hospitals held for sale. In addition, during the second quarter of 2016, the Company identified certain indicators of goodwill impairment related to the entirety of its hospital operations reporting unit and concluded that such indicators necessitated an interim goodwill impairment evaluation. The primary impairment indicators were the Company’s declining market capitalization, as compared to the carrying value of its equity, and a decrease in the Company’s estimated future earnings. The Company performed a calculation of fair value in step one of the impairment test and concluded that the carrying value of the hospital operations reporting unit exceeded its fair value. A preliminary step two calculation was subsequently performed to determine the implied value of goodwill of the hospital operations reporting unit in a hypothetical purchase price allocation. Based on this preliminary analysis, the Company estimated and recorded an additional impairment charge of $200.0 million to goodwill. As permitted under U.S. GAAP, this amount represented an estimate of the impairment until such time the step two evaluation could be finalized. Due to the complexity of the calculation, including forecasting future financial results and performing long-lived asset valuations on each of its hospitals, the Company has not finalized Step 2 of its impairment assessment prior to filing its quarterly report on Form 10-Q for the quarter ended September 30, 2016. The Company expects to complete this evaluation during the fourth quarter of 2016 and notes that the effect of any change to its previous estimate may be material to the financial statements. Intangible Assets A summary of intangible assets follows (in thousands): September 30, December 31, 2016 2015 Finite-lived intangible assets: Capitalized software costs: Cost $ 193,085 $ 194,941 Accumulated amortization (113,061 ) (98,004 ) Capitalized software costs, net 80,024 96,937 Physician guarantee contracts: Cost 11,356 16,594 Accumulated amortization (5,611 ) (9,560 ) Physician guarantee contracts, net 5,745 7,034 Other finite-lived intangible assets: Cost 44,339 43,275 Accumulated amortization (32,392 ) (29,351 ) Other finite-lived intangible assets, net 11,947 13,924 Total finite-lived intangible assets Cost 248,780 254,810 Accumulated amortization (151,064 ) (136,915 ) Total finite-lived intangible assets, net $ 97,716 $ 117,895 Indefinite-lived intangible assets: Tradenames $ 4,000 $ 4,000 Medical licenses and other indefinite-lived intangible assets 4,590 7,355 Total indefinite-lived intangible assets $ 8,590 $ 11,355 Total intangible assets: Cost $ 257,370 $ 266,165 Accumulated amortization (151,064 ) (136,915 ) Total intangible assets, net $ 106,306 $ 129,250 As of September 30, 2016, the Company had $2.1 million of capitalized software costs that are currently in the development stage. Amortization of these capitalized costs will begin once the software projects are complete and ready for their intended use. Amortization Expense A summary of amortization expense follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Amortization of finite-lived intangible assets: Capitalized software costs $ 6,214 $ 6,670 $ 19,539 $ 20,134 Physician guarantee contracts 770 913 2,383 2,904 Other finite-lived intangible assets 675 825 2,191 2,470 Total amortization expense related to finite-lived intangible assets 7,659 8,408 24,113 25,508 Amortization of leasehold improvements and property and equipment assets held under capital lease obligations 812 623 2,105 1,858 Total amortization expense $ 8,471 $ 9,031 $ 26,218 $ 27,366 As of September 30, 2016, the weighted-average remaining amortization period of the Company’s intangible assets subject to amortization, except for capitalized software costs and physician guarantee contracts, was approximately 5.6 years. Total estimated future amortization expense for the next five years and thereafter related to intangible assets follows (in thousands): September 30, 2016 Remainder of 2016 $ 6,842 2017 26,758 2018 17,185 2019 14,218 2020 11,699 Thereafter 21,014 Total estimated future amortization expense $ 97,716 |
Long-Term Debt
Long-Term Debt | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Long-Term Debt | NOTE 6 – LONG-TERM DEBT A summary of long-term debt follows (in thousands): September 30, December 31, 2016 2015 Senior Credit Facility: Revolving Credit Facility, maturing 2021 $ — $ — Term Loan Facility, maturing 2022 875,600 — ABL Credit Facility, maturing 2021 — — Senior Notes, maturing 2023 400,000 — Unamortized debt issuance costs and discounts (50,792 ) — Capital lease obligations 26,044 22,323 Other debt 942 1,092 Total debt 1,251,794 23,415 Less: Current maturities of long-term debt (10,493 ) (7,915 ) Total long-term debt $ 1,241,301 $ 15,500 Due to Parent, net $ — $ 1,800,908 In connection with the Spin-off Transaction, the Company entered into two credit agreements and issued senior notes. In addition, the previous indebtedness with CHS, which was classified on the consolidated and combined balance sheets as Due to Parent, net, was fully settled. See Note 1 – Description of the Business and Spin-off Transaction and Note 16 – Related Party Transactions for additional information on the use of proceeds from the new debt instruments and the settlement of Due to Parent, net. Senior Credit Facility 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 Loan Facility”) and a $100 million senior secured revolving credit facility (the “Revolving Credit Facility” and, together with the Term Loan Facility, the “Senior Credit Facility”). The available borrowings from the Revolving Credit Facility will be used for working capital and general corporate purposes. As of September 30, 2016, the Company had no borrowings outstanding on the Revolving Credit Facility and had $3.1 million of letters of credit outstanding that were primarily related to the self-insured retention levels of professional and general liability and workers’ compensation insurance as security for the payment of claims. The Term Loan Facility was issued at a discount of $17.6 million, or 98% of par value, and has a maturity date of April 29, 2022, subject to customary acceleration events and repayment, extension or refinancing. Interest under the Term Loan Facility accrues, at the option of the Company, at adjusted LIBOR, subject to statutory reserves and a floor of 1%, plus 5.75% or the alternate base rate plus 4.75%. Interest under the Revolving Credit Facility accrues, at the option of the Company, at adjusted LIBOR, subject to statutory reserves and a floor of 0%, plus 2.75% or the alternate base rate plus 1.75%. The Revolving Credit Facility has a maturity date of April 29, 2021, subject to certain customary acceleration events and repayment, extension or refinancing. The effective interest rate on the Term Loan Facility was 7.66% as of September 30, 2016. The maximum Secured Net Leverage Ratio permitted under the CS Agreement, as determined based on 12 month trailing Consolidated EBITDA, as defined in the CS Agreement, follows: Maximum Secured Net Period Leverage Ratio Period from April 29, 2016 to June 30, 2017 4.50 to 1.00 Period from July 1, 2017 to June 30, 2018 4.25 to 1.00 Period from July 1, 2018 and thereafter 4.00 to 1.00 As of September 30, 3016, the Company had a Secured Net Leverage Ratio of 3.54 to 1.00, implying additional borrowing capacity of $239.5 million. ABL Credit Facility On April 29, 2016, the Company entered into an ABL Credit Agreement (the “UBS 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 Agreement provides for a $125 million senior secured asset-based revolving credit facility (the “ABL Credit Facility”). The available borrowings from the ABL Credit Facility will be used for working capital and general corporate purposes. As of September 30, 2016, the Company had no borrowings outstanding on the ABL Credit Facility. The ABL Credit Facility has a maturity date of April 29, 2021, subject to customary acceleration events and repayment, extension or refinancing. Interest under the ABL Credit Facility accrues, at the option of the Company, at a base rate or LIBOR, subject to statutory reserves The ABL Credit Facility has a “Covenant Trigger Event” definition that requires the Company to maintain excess availability under the ABL Credit Facility equal to or greater than the greater of (i) $12.5 million and (ii) 10% of the aggregate commitments under the ABL Credit Facility. At September 30, 2016, the Company had excess availability of $115.4 million. If a Covenant Trigger Event occurs, then the Company is required to maintain a minimum Consolidated Fixed Charge Ratio of 1.10 to 1.00 until such time that a Covenant Trigger Event is no longer continuing. In addition, if excess availability under the ABL Credit Facility were to fall below the greater of (i) 12.5% of the aggregate commitments under the ABL Credit Facility and (ii) $15.0 million, then a “Cash Dominion Event” would be triggered upon which the lenders could assume control of the Company’s cash. Credit Agreement Covenants In addition to the specific covenants described above, the Credit Agreements contain customary negative covenants which limit the Company’s ability to, among other things, incur additional indebtedness, create liens, make investments, transfer assets, merge or acquire assets, and make restricted payments, including dividends, distributions and specified payments on other indebtedness. They include customary events of default, including payment defaults, material breaches of representations and warranties, covenant defaults, default on other material indebtedness, customary Employee Retirement Income Security Act (“ERISA”) Senior Notes On April 22, 2016, QHC issued $400 million aggregate principal amount of 11.625% Senior Notes due 2023, pursuant to the Indenture. The Senior Notes were issued at a discount of $6.9 million, or 1.734%, in a private placement and are senior unsecured obligations of the Company guaranteed on a senior basis by certain of the Company’s subsidiaries (the “Guarantors”). The Senior 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. Interest on the Senior Notes accrues from the date of original issuance and is calculated on the basis of a 360-day year comprised of twelve 30-day months. The effective interest rate on the Senior Notes was 12.463% as of September 30, 2016. The Indenture 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 its assets or enter into merger or consolidation transactions. On April 22, 2016, in connection with the issuance of the Senior Notes, the Company entered into a Registration Rights Agreement. The terms of the Registration Rights Agreement require the Company to (i) file with the Securities and Exchange Commission a registration statement with respect to an offer to exchange the Senior Notes for a new issue of debt securities registered under the Securities Act of 1933, as amended (the “Exchange Offer”), with terms identical to those of the Senior Notes (except for provisions relating to the transfer restrictions and payment of additional interest), and cause the Exchange Offer to be completed within 365 days following the closing of the issuance of the Senior Notes, (ii) keep the Exchange Offer open for at least 30 business days (or longer if required by applicable law) and (iii) in certain circumstances, file a shelf registration statement for the resale of the Senior Notes by some or all of the holders thereof, in lieu of an exchange offer to such holders. If the Company and the Guarantors fail to satisfy their registration obligations, the Company will be required to pay additional interest to the holders of Senior Notes, the transfer of which remains restricted, reflecting typical market terms. On and after April 15, 2019, the Company is entitled, at its option, to redeem all or a portion of the Senior Notes upon not less than 30 nor more than 60 days notice, at the following redemption prices, plus accrued and unpaid interest, if any, to the redemption date. The redemption prices are expressed as a percentage of the principal amount on the redemption date. Holders of record on the relevant record date have the right to receive interest due on the relevant interest payment date. In addition, prior to April 15, 2019, the Company may redeem some or all of the Senior Notes at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, plus a “make whole” premium, as set forth in the Indenture. The Company is entitled to redeem up to 35% of the aggregate principal amount of the Senior Notes until April 15, 2019 with the net proceeds from certain equity offerings at the redemption price set forth in the Indenture. A summary of the redemption dates and prices follows: Redemption Period Prices Period from April 15, 2019 to April 14, 2020 108.719 % Period from April 15, 2020 to April 14, 2021 105.813 % Period from April 15, 2021 to April 14, 2022 102.906 % Period from April 15, 2022 to April 14, 2023 100.000 % Debt Issuance Costs and Discounts A summary of debt issuance costs and discounts follows (in thousands): September 30, December 31, 2016 2015 Debt issuance costs $ 29,139 $ — Debt discounts 24,536 — Total debt issuance costs and discounts at origination 53,675 — Less: Amortization of debt issuance costs and discounts (2,883 ) — Total unamortized debt issuance costs and discounts $ 50,792 $ — Prior to the Spin-off Transaction, the Company had no capitalized costs for debt issuance, discounts or premiums. Capital Lease Obligations and Other Debt The Company’s debt arising from capital lease obligations primarily relates to its new corporate office in Brentwood, Tennessee. As of September 30, 2016, this capital lease obligation was $18.9 million. The remainder of the Company’s capital lease obligations relate to property and equipment at its hospitals and corporate office. Other debt consists of physician loans and miscellaneous notes payable to banks. See Note 17 – Commitments and Contingencies for additional information on the corporate office lease. Debt Maturities A summary of debt maturities for the next five years and thereafter follows (in thousands): September 30, 2016 Remainder of 2016 $ 2,770 2017 10,284 2018 10,425 2019 10,058 2020 10,151 Thereafter 1,258,898 Total debt, excluding debt issuance costs and discounts $ 1,302,586 Interest Expense, Net A summary of the components of interest expense, net follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Senior Credit Facility: Revolving Credit Facility $ 124 $ — $ 209 $ — Term Loan Facility 15,179 — 25,611 — ABL Credit Facility 120 — 202 — Senior Notes 11,626 — 20,540 — Amortization of debt issuance costs and discounts 1,692 — 2,883 — All other interest expense (income), net (713 ) 124 (503 ) 361 Total interest expense, net, from long-term debt 28,028 124 48,942 361 Due to Parent, net — 24,425 35,814 73,818 Total interest expense, net $ 28,028 $ 24,549 $ 84,756 $ 74,179 |
Other Long-Term Liabilities
Other Long-Term Liabilities | 9 Months Ended |
Sep. 30, 2016 | |
Other Liabilities Disclosure [Abstract] | |
Other Long-Term Liabilities | NOTE 7 – OTHER LONG-TERM LIABILITIES A summary of other long-term liabilities follows (in thousands): September 30, December 31, 2016 2015 Professional and general liability insurance reserves $ 81,083 $ 77,423 Workers' compensation liability insurance reserves 17,578 20,507 Benefit plan liabilities 13,293 3,376 Deferred rent 3,969 3,770 Other miscellaneous long-term liabilities 2,748 3,065 Total other long-term liabilities $ 118,671 $ 108,141 See Note 17 – Commitments and Contingencies for additional information about the Company’s insurance reserves. |
Fair Value of Financial Instrum
Fair Value of Financial Instruments | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Fair Value of Financial Instruments | NOTE 8 – FAIR VALUE OF FINANCIAL INSTRUMENTS The carrying amounts of the Company’s cash and cash equivalents, patient accounts receivable, amounts due from and due to third-party payors, and accounts payable approximate their fair values due to the short-term maturity of these financial instruments. The Company recorded impairment charges related to property and equipment, capitalized software and goodwill in the second quarter of 2016. See Note 3 – Hospitals Held for Sale and Impairment of Long-Lived Assets and Note 5 – Goodwill and Intangible Assets. The assessment of fair value was based on Level 3 inputs, as the valuation methodologies used to determine impairment were based on internal projections and unobservable inputs. The portion of impairment related to hospital assets held for sale was determined based on Level 2 inputs, as the valuation methodologies used to determine impairment considered letters of intent received on these hospitals. A summary of the carrying amounts and estimated fair values of the Company’s long-term debt follows (in thousands): September 30, 2016 December 31, 2015 Carrying Estimated Carrying Estimated Amount Fair Value Amount Fair Value Revolving Credit Facility $ — $ — $ — $ — Term Loan Facility 875,600 850,978 — — ABL Credit Facility — — — — Senior Notes 400,000 334,384 — — Other debt 26,986 26,986 23,415 23,415 Total long-term debt, excluding debt issuance costs and discounts $ 1,302,586 $ 1,212,348 $ 23,415 $ 23,415 The Company considers its long-term debt instruments to be measured based on Level 2 inputs. Information about the valuation methodologies used in the determination of the fair values for the Company’s long-term debt instruments follows: • Credit facilities . • Senior notes . • All other debt . |
Equity
Equity | 9 Months Ended |
Sep. 30, 2016 | |
Equity [Abstract] | |
Equity | NOTE 9 – EQUITY Preferred Stock In connection with the Spin-off Transaction, the Company authorized 100,000,000 shares of preferred stock, par value of $0.0001 per share. No shares have been issued as of September 30, 2016. The Company’s Board of Directors (the “Board”) has the discretion, subject to limitations prescribed by Delaware law and by its amended and restated certificate of incorporation, to determine the rights, preferences, privileges and restrictions, including voting rights, dividend rights, conversion rights, redemption privileges and liquidation preferences, of each series of preferred stock, when and if issued. Common Stock In connection with the Spin-off Transaction, the Company authorized 300,000,000 shares of common stock, par value of $0.0001 per share, and issued 28,412,054 shares of common stock on April 29, 2016 to CHS stockholders of record on the Record Date, or April 22, 2016. The common stock began “regular-way” trading on the NYSE on May 2, 2016 under the ticker symbol “QHC.” As of September 30, 2016, the Company had 29,486,215 shares of common stock issued and outstanding. Holders of the Company’s common stock are entitled to one vote for each share held of record on all matters for which stockholders may vote. Holders of the Company’s common stock will not have cumulative voting rights in the election of directors. There are no preemptive rights, conversion, redemption or sinking fund provisions applicable to the common stock. In the event of liquidation, dissolution or winding up, holders of common stock are entitled to share ratably in the assets available for distribution. Delaware law prohibits the Company from paying any dividends unless it has capital surplus or net profits available for this purpose. In addition, the Company’s Credit Agreements impose restrictions on its ability to pay dividends. Additional Paid-in Capital In connection with the Spin-off Transaction, the Company issued common stock, as described above, to CHS stockholders. In addition, pursuant to the Separation and Distribution Agreement, CHS contributed capital in excess of par value of common stock of $518.5 million, in lieu of a cash settlement payment, related to the remaining intercompany indebtedness with CHS and the Parent’s equity attributable to CHS. See Note 1 – Description of the Business and Spin-off Transaction for a summary of the transactions that occurred on April 29, 2016 to effect the Spin-off Transaction. Accumulated Deficit Accumulated deficit of the Company, as shown on the consolidated and combined balance sheet as of September 30, 2016, represents the Company’s cumulative net losses since the Spin-off Transaction date. The cumulative earnings and losses of the Company prior to the Spin-off Transaction were included in Due to Parent, net, in the consolidated and combined balance sheets. Parent’s Equity Prior to the Spin-off Transaction, the purchase of shares from non-controlling interest partners and the changes in valuation of redeemable shares of noncontrolling interests investments were accounted for as Parent’s equity in the consolidated and combined balance sheets. Parent’s equity was reclassified as additional paid-in capital in connection with the Spin-off Transaction. |
Income Taxes
Income Taxes | 9 Months Ended |
Sep. 30, 2016 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | NOTE 10 – INCOME TAXES The Company, or one of its subsidiaries, is subject to U.S. federal income tax and income tax of multiple state jurisdictions. The Company provides for income taxes based on the enacted tax laws and rates in jurisdictions in which it conducts its operations. Prior to the Spin-off Transaction, the Company was included in the consolidated federal, state and local income tax returns filed by CHS and calculated income taxes for the purpose of carve-out financial statements using the “separate return method.” The Company deemed the amounts that it would have paid to or received from the U.S. Internal Revenue Service and certain state jurisdictions, had QHC not been a member of CHS’ consolidated tax group, to be immediately settled with CHS through Due to Parent, net in the consolidated and combined balance sheets. The Company is filing its own consolidated federal, state and local income tax returns after the Spin-off Transaction. The Company’s effective tax rates were 38.7% and 15.0% for the three months ended September 30, 2016 and 2015, respectively, and 16.5% and 46.5% for the nine months ended September 30, 2016 and 2015, respectively. The increase in the Company’s effective tax rate for the three months ended September 30, 2016, when compared to the three months ended September 30, 2015, was primarily due to an increase in the projected tax benefit in certain state jurisdictions where tax expense was projected in the 2015 period. The decrease in the Company’s effective tax rate for the nine months ended September 30, 2016, when compared to the nine months ended September 30, 2015, was primarily due to the pre-tax loss and the impact of the non-deductible goodwill impairment in the 2016 period, with no comparable non-deductible expenses in the 2015 period. The Company’s deferred income tax liabilities, net were $51.2 million as of September 30, 2016, compared to $41.0 million as of December 31, 2015, a $10.2 million increase. This increase was primarily due to $61.7 million of adjustments to deferred tax assets and liabilities related to the Spin-off Transaction. The Spin-off Transaction adjustments included changes in estimates to amounts that will be realized by the Company on a stand-alone basis compared to those calculated under the separate return method, including an increase of $39.5 million attributable to net operating loss and credit carryforwards not realizable by QHC, and changes in estimates for the impact of other assets or liabilities that were transferred to the Company from CHS through Due to Parent, net on or just prior to the Spin-off Transaction date. The adjustments related to the Spin-off Transaction were offset by $51.5 million of deferred tax benefit recorded on the Company’s pre-tax loss for the period following the Spin-off Transaction. In the ordinary course of business there is inherent uncertainty in quantifying the Company’s income tax positions. The Company assesses its income tax positions and records tax benefits for all tax years subject to examination based on management’s evaluation of the facts, circumstances, and information available at the reporting date. The Company is not aware of any unrecognized tax benefits; therefore it has not recorded any such amounts for the three and nine months ended September 30, 2016 and 2015. |
Earnings Per Share
Earnings Per Share | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Earnings Per Share | NOTE 11 – EARNINGS PER SHARE A summary of the computation of basic and diluted earnings per share follows (dollars in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Numerator: Net income (loss) $ (6,452 ) $ (4,075 ) $ (255,105 ) $ 3,954 Less: Net income attributable to noncontrolling interests 507 1,638 1,917 2,038 Net income (loss) attributable to Quorum Health Corporation $ (6,959 ) $ (5,713 ) $ (257,022 ) $ 1,916 Denominator: Weighted-average shares outstanding - basic and diluted 28,413,532 28,412,054 28,412,552 28,412,054 Basic and diluted earnings (loss) per share attributable to Quorum Health Corporation stockholders $ (0.24 ) $ (0.20 ) $ (9.05 ) $ 0.07 For comparative purposes, the Company used 28,412,054 shares as the number of basic and diluted shares outstanding for all periods prior to the Spin-off Transaction, including the period from January 1, 2016 to April 28, 2016, in calculating basic and diluted earnings per share. This number of shares represents the number of shares issued on the Spin-off Transaction date. Due to the net loss attributable to Quorum Health Corporation in the three and nine months ended September 30, 2016, no incremental shares are included in diluted earnings per share for these periods because the effect of the shares would be anti-dilutive. No incremental shares were considered for any periods prior to the Spin-off Transaction. |
Additional Cash Flow Informatio
Additional Cash Flow Information | 9 Months Ended |
Sep. 30, 2016 | |
Significant Non Cash Transactions [Abstract] | |
Additional Cash Flow Information | NOTE 12 – ADDITIONAL CASH FLOW INFORMATION A summary of significant non-cash transactions related to the consolidated and combined balance sheets follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Transfer of liabilities from Parent $ — $ — $ 16,596 $ — Non-cash capital contribution from Parent — — 518,518 — Property and equipment acquired under capital leases and deferred financing obligations 1,401 4,286 6,521 4,944 See Note 1 – Description of the Business and Spin-off Transaction for additional information on the spin-off related transactions in the table above. |
Segments
Segments | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Segments | NOTE 13 – SEGMENTS The Company operates in two distinct operating segments, its hospital operations business and its management advisory and consulting services business. The hospital operations segment includes the operations of the Company’s general acute care hospitals and affiliated healthcare entities that provide inpatient and outpatient healthcare services. The hospital management advisory and consulting services segment includes the operations of QHR. Only the hospital operations segment meets the criteria as a separate reportable segment. The financial information for QHR has been combined with the Company’s corporate functions and reported below as part of the all other reportable segment. A summary of financial information related to segments follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Net operating revenues: Hospital operations $ 522,957 $ 521,007 $ 1,559,274 $ 1,560,628 All other 20,982 22,136 63,953 68,484 Total net operating revenues $ 543,939 $ 543,143 $ 1,623,227 $ 1,629,112 Adjusted EBITDA: Hospital operations $ 41,618 $ 57,422 $ 117,014 $ 176,067 All other 5,131 2,873 15,191 9,882 Total Adjusted EBITDA $ 46,749 $ 60,295 $ 132,205 $ 185,949 September 30, December 31, 2016 2015 Assets: Hospital operations $ 1,916,067 $ 2,256,557 All other 183,133 38,299 Total assets $ 2,099,200 $ 2,294,856 A reconciliation of Adjusted EBITDA to net income (loss) follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Adjusted EBITDA $ 46,749 $ 60,295 $ 132,205 $ 185,949 Interest expense, net (28,028 ) (24,549 ) (84,756 ) (74,179 ) (Provision for) benefit from income taxes 4,081 721 50,320 (3,435 ) Depreciation and amortization (28,234 ) (31,488 ) (90,854 ) (95,327 ) Legal and settlement costs (488 ) — (6,176 ) — Impairment of-long-lived assets and goodwill — — (250,400 ) — Transaction costs related to the spin-off (532 ) (9,054 ) (5,444 ) (9,054 ) Net income (loss) $ (6,452 ) $ (4,075 ) $ (255,105 ) $ 3,954 |
Stock-Based Compensation
Stock-Based Compensation | 9 Months Ended |
Sep. 30, 2016 | |
Disclosure Of Compensation Related Costs Sharebased Payments [Abstract] | |
Stock-Based Compensation | NOTE 14 – STOCK-BASED COMPENSATION On April 1, 2016, the Company adopted the Quorum Health Corporation 2016 Stock Award Plan (“2016 Stock Award Plan”). The Company filed a Registration Statement on Form S-8 on April 29, 2016 to register 4,700,000 shares of QHC common stock that may be issued under the plan. On May 3, 2016, the Compensation Committee of the Board of Directors (the “Compensation Committee”) granted 460,000 performance-based restricted stock awards to the Company’s executive officers. The grants were made pursuant to the 2016 Stock Award Plan and a performance-based restricted stock award agreement. If the performance-based objectives are attained in accordance with the targets set forth in the performance-based restricted stock award agreement, the restrictions on the restricted stock awards will lapse on each of the first three anniversaries of the grant date. On May 3, 2016, the Compensation Committee granted 551,005 time-vested restricted stock awards to certain employees of the Company. The grants were made pursuant to the 2016 Stock Award Plan and a restricted stock award agreement. The restrictions on the time-vested restricted stock awards will lapse on each of the first three anniversaries of the grant date, except for 106,005 restricted stock awards, referred to by the Company as recoupment awards, which have a different vesting period. The recoupment awards were issued to a select group of QHC employees that were granted restricted stock awards by CHS on March 1, 2016. Pursuant to the Separation and Distribution Agreement, two-thirds of the shares granted to the QHC employee group on this grant date were canceled by CHS in connection with the Spin-off Transaction. The recoupment awards were issued by QHC and included in the May 3, 2016 grant of QHC restricted stock awards for the purpose of restoring the benefit previously provided by CHS to this employee group. Restrictions on the recoupment awards lapse in equal installments on the second and third anniversaries of the grant date. On May 3, 2016, the Board, upon recommendation of its Compensation Committee and its Governance and Nominating Committee, granted 10,000 time-vested restricted stock awards to each of its seven non-employee directors. The grants were made pursuant to the 2016 Stock Award Plan and a director restricted stock award agreement. The restrictions on the time-vested restricted stock awards will lapse on the first anniversary of the grant date. As defined in the Separation and Distribution Agreement, QHC and CHS employees who held CHS restricted stock awards on the Record Date received QHC restricted stock awards for the number of whole shares, rounded down, of QHC common stock that they would have received as a shareholder of CHS as if the underlying CHS stock were unrestricted on the Record Date, except, that with respect to a portion of CHS restricted stock awards granted to any QHC employees on March 1, 2016, as discussed above, that were cancelled and forfeited on the Spin-off Transaction date. The QHC restricted stock awards received by QHC and CHS employees in connection with the Spin-off Transaction vest on the same terms as the CHS restricted stock awards to which they relate, through the continued service by such employees with their respective employer. CHS restricted stock awards were adjusted by increasing the number of shares of CHS stock subject to restricted stock awards by an amount of whole shares, rounded down, necessary to preserve the intrinsic value of such awards at the spin-off date. QHC did not issue any stock options as part of the distribution of shares to holders of CHS stock options. Following the Spin-off Transaction, the Company began recording stock-based compensation expense related to the vesting of QHC restricted stock awards issued to QHC employees on the Spin-off Transaction date, CHS restricted stock awards held by QHC employees on the Spin-off Transaction date, and restricted stock awards granted by QHC on May 3, 2016. Stock-based compensation expense is recorded in salaries and benefits for periods following the Spin-off Transaction. Prior to the Spin-off Transaction, an estimated portion of CHS’ stock-based compensation expense was allocated to QHC through the monthly corporate management fee from CHS, which was recorded in other operating expenses in the consolidated and combined statements of income, and therefore is not included in stock-based compensation expense in the table below. The estimated costs allocated to QHC from CHS were $1.8 million for the three months ended September 30, 2015 and $2.3 million and $5.6 million for the nine months ended September 30, 2016 and 2015, respectively. The Company accounts for stock-based compensation in accordance with Accounting Standards Codification Topic 718, “Compensation – Stock Compensation.” Under the fair value recognition provisions of this standard, stock-based compensation cost is measured at the grant date based on the fair value of the award and is recognized as an expense over the requisite service periods. Determining the fair value of stock-based awards at the grant date requires the exercise of judgment, including the number of stock-based awards that are expected to be forfeited. If actual forfeitures differ from our estimates, stock-based compensation expense and the Company’s results of operations would be impacted. A summary of stock-based compensation expense follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Stock-based compensation resulting from the Spin-off Transaction $ 1,149 $ — $ 1,958 $ — Stock-based compensation related to grants following the Spin-off Transaction 1,632 — 2,720 — Total stock-based compensation expense $ 2,781 $ — $ 4,678 $ — As of September 30, 2016, the Company had unrecognized stock-based compensation expense related to the outstanding unvested QHC and CHS restricted stock awards held by QHC employees as of the Spin-off Transaction date and the QHC restricted stock awards granted subsequent to the Spin-off Transaction of $3.7 million and $10.6 million, respectively. A summary of the activity related to unvested QHC restricted stock awards held by QHC and CHS employees from the Spin-off Transaction date through September 30, 2016 follows: QHC Awards Distributed in Spin-off Transaction QHC Employees CHS Employees Total Unvested restricted stock awards at Spin-off Transaction date 54,321 638,088 692,409 Vested (336 ) (1,684 ) (2,020 ) Forfeited (164 ) (3,648 ) (3,812 ) Unvested restricted stock awards at June 30, 2016 53,821 632,756 686,577 Vested (557 ) (1,010 ) (1,567 ) Forfeited (704 ) (2,224 ) (2,928 ) Unvested restricted stock awards at September 30, 2016 52,560 629,522 682,082 A summary of the activity related to QHC unvested restricted stock awards granted subsequent to the Spin-off Transaction date follows: QHC Awards Granted Subsequent to Spin-off Transaction Weighted- Average Grant Date Shares Fair Value Unvested restricted stock awards at Spin-off Transaction date — $ — Granted 1,081,005 12.77 Vested — — Forfeited — — Unvested restricted stock awards at June 30, 2016 1,081,005 $ 12.77 Granted — — Vested — — Forfeited — — Unvested restricted stock awards at September 30, 2016 1,081,005 $ 12.77 |
Employee Benefit Plans
Employee Benefit Plans | 9 Months Ended |
Sep. 30, 2016 | |
Compensation And Retirement Disclosure [Abstract] | |
Employee Benefit Plans | NOTE 15 – EMPLOYEE BENEFIT PLANS Following the Spin-off Transaction, the Company maintains various benefit plans, including defined contribution plans, a defined benefit plan and deferred compensation plans, of which certain of the Company’s subsidiaries are the plan sponsors. The rights and obligations of these plans were transferred from CHS in connection with the Spin-off Transaction, pursuant to the Separation and Distribution Agreement. The Quorum Health Retirement Savings Plan (the “RSP”) is a defined contribution plan established on January 1, 2016 by CHS in anticipation of the Spin-off Transaction. Prior to the Spin-off Transaction, the cumulative liability for these benefit costs was recorded in Due to Parent, net in the combined balance sheets. The assets and liabilities under this plan were transferred to QHC in connection with the Spin-off Transaction. The RSP covers the majority of the employees at the Company’s subsidiaries. Total expense to the Company under all defined contribution plans was $3.2 million for both the three months ended September 30, 2016 and 2015, and $10.2 million and $10.0 million for the nine months ended September 30, 2016 and 2015, respectively. The benefit costs associated with the RSP are recorded as salaries and benefits expense in the consolidated and combined statements of income for all periods. Certain of the Company’s employees participate in CHS’ unfunded deferred compensation plans that allow participants to defer receipt of a portion of their compensation. The current election period for those employees will continue under the CHS plan through December 31, 2016, at which time, the corresponding plan assets and liabilities will be transferred to a new plan to be established by QHC, pursuant to the EMA. The estimated liability under these plans at September 30, 2016 was approximately $23 million. On August 18, 2016, the Compensation Committee of the Board adopted the Executive Nonqualified Excess Plan Adoption Agreement (the “Adoption Agreement”) and the Executive Nonqualified Excess Plan Document (the “Plan Document”), that together, the Adoption Agreement names as the QHCCS, LLC Nonqualified Deferred Compensation Plan (the “NQDCP”). The NQDCP is an unfunded, nonqualified deferred compensation plan that provides deferred compensation benefits for a select group of management, highly compensated employees and independent contractors of the Company’s wholly-owned subsidiary, QHCCS, LLC, a Delaware limited liability company (“QHCCS”), including the Company’s named executive officers. The NQDCP permits participants to defer a portion of their annual base salary, service bonus and performance-based compensation, as well as up to 100% of their incentive compensation in any calendar year. In addition to participant deferrals, QHCCS and/or its affiliates may make discretionary credits to participants’ accounts for any year. No employee deferrals or discretionary credits had been made into the NQDCP as of September 30, 2016. On April 1, 2016, the Board adopted the Quorum Health Corporation Supplemental Executive Retirement Plan (the “Original SERP Plan”). Pursuant to the EMA between the Company and CHS, the Company assumed all liabilities for all obligations under the Original SERP Plan for the benefits of QHC employees, as defined in the EMA, except that no additional benefits were to accrue under the Original SERP Plan following the Spin-off Transaction. The accrued benefit liability for the Original SERP Plan that was transferred to the Company in connection with the Spin-off Transaction was $6.0 million and is included in other long-term liabilities in the consolidated and combined balance sheet. There were no assets transferred to the Company related to the Original SERP Plan in connection with the Spin-off Transaction. On May 24, 2016, the Board, upon recommendation of the Compensation Committee, approved the Company’s Amended and Restated Supplemental Executive Retirement Plan (the “Amended and Restated SERP”), in order to accrue additional benefits with respect to QHC Employees who otherwise qualify as “Participants” under the Amended and Restated SERP. The Amended and Restated SERP is a noncontributory non-qualified deferred compensation plan under Section 409A of the Internal Revenue Code. The Company uses a December 31 measurement date for the benefit obligations and a January 1 measurement date for the net periodic costs of the Amended and Restated SERP. The benefit costs under both SERP plans were $0.6 million and $1.1 million for the three and nine months ended September 30, 2016, respectively, and are included in salaries and benefits in the consolidated and combined statements of income. The accrued benefit liability for the Amended and Restated SERP was $9.8 million as of September 30, 2016 and is included in other long-term liabilities in the consolidated and combined balance sheet. The weighted-average assumptions used to determine net periodic benefit costs were a discount rate of 3.2% and an annual compensation increase of 3.0%. On September 16, 2016, the Board adopted the Quorum Health Corporation Director’s Fees Deferral Plan (the “Director’s Plan”). Pursuant to the Director’s Plan, members of the Board may elect to defer and accumulate fees, including retainer fees and fees for attendance at Board meetings and Board committees. A director may elect that all or any specified portion of the director’s fees to be earned during a calendar year be credited to a director’s cash account and/or a director’s stock unit account maintained on the individual director’s behalf in lieu of payment. Payment of amounts credited to a director’s cash account and stock unit account will be made upon a payment commencement event, as defined in the Director’s Plan, in accordance with the payment method elected by the individual director, either in lump sum or in a number of annual installments, not to exceed 15 installments. The Director’s Plan extends to directors of the Board not employed by the Company or any of its subsidiaries. Pursuant to the Director’s Plan, the Company registered and made available for issue under the Director’s Plan a maximum of 150,000 shares of QHC common stock. QHC provides benefits to employees at one of its hospitals through a defined benefit plan (the “Pension Plan”). The Pension Plan provides benefits to covered individuals satisfying certain age and service requirements. Employer contributions to the Pension Plan are in accordance with the minimum funding requirements of the Employee Retirement Income Security Act of 1974 (“ERISA”), as amended. The Company expects to make contributions to the Pension Plan for the full year 2016 of $0.2 million. The Company uses a December 31 measurement date for the benefit obligations and a January 1 measurement date for the net periodic benefit costs of the Pension Plan. Variances from actuarially assumed rates will result in increases or decreases in benefit obligations, net periodic cost and funding requirements in future periods. The weighted-average assumptions used for determining the net periodic benefit costs for the year ended December 31, 2015 were a discount rate of 3.95%, an annual salary increase of 3.5% and the expected long-term rate of return on assets of 7.0%. Benefits expense related to the Pension Plan was $0.1 million for both the three months ended September 30, 2016 and 2015 and $0.2 million for both the nine months ended September 30, 2016 and 2015. QHC recognizes |
Related Party Transactions
Related Party Transactions | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | NOTE 16 – RELATED PARTY TRANSACTIONS CHS was a related party to QHC prior to the Spin-off Transaction. The significant transactions and balances with CHS prior to the Spin-off Transaction and the agreements between QHC and CHS as of and subsequent to the Spin-off Transaction are described below. Carve-Out from Parent Prior to the Spin-off Transaction, QHC did not operate as a separate company and stand-alone financial statements were not prepared. Historically, QHC was managed and operated in the normal course of business with all other hospitals and affiliates of CHS. Accordingly, for the purposes of the carve-out financial statements related to the Spin-off Transaction, a combined opening balance sheet for the QHC hospitals and QHR was established. The combined opening balance sheet included the assets and liabilities of QHC hospitals and QHR, as reported by CHS, and a net liability to CHS, referred to as Due to Parent, net, for the net investment held by CHS related to its contribution of these net assets. The operating results of the QHC hospitals and QHR prior to the Spin-off Transaction were derived from the CHS operating results for these entities. In addition, certain corporate overhead costs were allocated to QHC from CHS during the carve-out period for the purpose of estimating QHC’s share of these expenses. Allocated Costs from CHS during the Carve-Out Period CHS allocated costs to QHC during the carve-out period for a portion of its corporate overhead costs and any other costs related to QHC hospitals and QHR that were paid by CHS or covered by an agreement, policy or contract owned by CHS. A summary of allocated costs to QHC from CHS follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Insurance costs $ — $ 35,108 $ 44,246 $ 101,629 Management fees from Parent — 8,797 11,792 26,762 All other allocated costs — 25,106 25,021 54,280 Total related party operating costs and expenses $ — $ 69,011 $ 81,059 $ 182,671 The allocation of insurance costs from CHS primarily included costs for self-insurance estimates and third-party policies related to employee health, professional and general liability and workers’ compensation coverage. Insurance costs were primarily allocated to QHC based on claims history of the QHC hospitals, as determined on an individual hospital level. Corporate management fees were allocated to QHC for certain corporate functions of CHS, including services such as, among others, executive and divisional management, treasury, accounting, risk management, legal, procurement, human resources, information technology support and other administrative support services. These corporate overhead costs were allocated to QHC using a ratio based on the number of licensed beds at each QHC hospital in proportion to CHS’ total licensed beds. This methodology is comparable to how CHS allocates corporate overhead costs to all of its hospitals through a management fee charge that eliminates in consolidation. All other allocated costs included any other costs allocated to QHC hospitals or QHR and that were not part of management fees. These costs were allocated to QHC using ratios based on revenues, expenses or licensed beds. If possible, allocations were made on a specific identification basis. Following the Spin-off Transaction, the Company began performing corporate functions using internal resources or purchased services, certain of which are being provided by CHS pursuant to the transition services agreements and other ancillary agreements. See the section on Agreements with CHS Related to the Spin-off Transaction below. Due to Parent, Net Prior to the Spin-off Transaction, Due to Parent, net, in the consolidated and combined balance sheets represented the Company’s cumulative liability to CHS for the net assets of QHC hospitals and QHR, as well as an allocation of costs for corporate functions. See Note 1 – Description of the Business and Spin-off Transaction and the Due to Parent, net accounting policy in Note 2 – Basis of Presentation and Significant Accounting Policies for additional information on the types of transactions settled through Due to Parent, net during the carve-out period and the transactions that occurred to settle the liability in connection with the Spin-off Transaction. During the carve-out period, QHC was charged interest on a monthly basis by CHS on the amount of Due to Parent, net, outstanding at the end of each month. Interest rates were variable and ranged from 4% to 7% during the carve-out period. Interest expense incurred on Due to Parent, net was recorded as an increase in the Due to Parent, net, liability and was deemed settled each month. The total amount of related party interest expense arising from the liability with CHS was $24.8 million for the three months ended September 30, 2015 and $35.8 million and $74.2 million for the nine months ended September 30, 2016 and 2015, respectively. Agreements with CHS Related to the Spin-off Transaction On April 29, 2016, the Company entered into certain agreements with CHS that allocated 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 governed or govern certain relationships between and activities of the Company and CHS for a period of time after the Spin-off Transaction. The agreements were as follows: • Separation and Distribution Agreement. • Tax Matters Agreement • Employee Matters Agreement. In addition to the agreements referenced above, the Company entered into certain transition services agreements and other ancillary agreements with CHS defining agreed upon services to be provided by CHS to certain or all QHC hospitals, as determined by each agreement, to begin immediately following the Spin-off Transaction date. A summary of the major provisions of the transition services agreements follows: • Shared Services Centers Transition Services Agreement. • Computer and Data Processing Transition Services Agreement. • Receivables Collection Agreement (PASI). • Billing and Collection Agreement (PPSI). • Employee Service Center Agreement (HRIS). • Eligibility Screening Services Agreement. The total amount of expenses incurred by the Company under transition services agreements with CHS following the Spin-off Transaction combined with the allocations from CHS for these same services prior to the Spin-off Transaction were $18.1 million and $15.8 million for the three months ended September 30, 2016 and 2015, respectively, and $52.2 million and $46.6 million for the nine months ended September 30, 2016 and 2015, respectively. The agreements each have terms of five years. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | NOTE 17 - COMMITMENTS AND CONTINGENCIES 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 operating results, 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 Transaction, CHS agreed to indemnify QHC for certain liabilities relating to outcomes or events occurring prior to the closing of the Spin-off Transaction, including (i) certain claims and proceedings known to be outstanding on or prior to the closing date of the Spin-off Transaction and (ii) certain claims, proceedings and investigations by governmental authorities or private plaintiffs related to activities occurring at or related to the Company’s healthcare facilities prior to the closing date of the Spin-off Transaction, 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 workers’ compensation liability. 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 is not indemnifying QHC in respect of any claims or proceedings arising out of, or related to, the business operations of QHR at any time or its compliance with the Corporate Integrity Agreement (“CIA”) . Subsequent to the Spin-off Transaction, the OIG entered into an “Assumption of CIA Liability Letter” with the Company reiterating the applicability of the CIA to certain of the Company’s hospitals, although the OIG declined to enter into a separate agreement with the Company. 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, or the preliminary nature of, certain legal, regulatory and governmental matters. Government Investigations For the legal matters below, the Company cannot at this time assess what the outcome may be and is further unable to determine any estimate of loss or range of loss. The matters below are at a preliminary stage. Because of this and other factors, there are not sufficient facts available to make these assessments. • Tooele, Utah – Physician Compensation • Blue Island, Illinois – Patient Status Commercial Litigation and Other Lawsuits • Aparna Rao, Individually and On Behalf of All Others Similarly Situated v. Quorum Health Corporation, Thomas D. Miller and Michael J. Culotta • 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 and concluded on April 22, 2016. On July 28, 2016, the arbitrator returned an Interim Award in favor of Hancock Medical Center on various claims at issue in the arbitration. The net total award was $9.4 million payable by QHR to Hancock Medical Center. The Company accrued for this Interim Award in other current liabilities on its consolidated and combined balance sheet as of September 30, 2016. Both parties filed a motion for reconsideration of the Interim Award. In addition, the parties may seek attorney’s fees and costs prior to the arbitrator issuing a Final Award. The award is subject to a self-insured retention and excess insurance arrangements. Insurance Reserves As part of the business of owning and operating hospitals, the Company is subject to potential professional and general liability and workers’ compensation liability claims or other legal actions alleging liability on its part. The Company is also subject to similar liabilities related to its QHR business. Prior to the Spin-off Transaction, CHS provided professional and general liability insurance and workers’ compensation insurance to QHC and indemnified QHC from losses under these insurance arrangements related to its hospital operations business. The liabilities for claims related to QHC’s hospital operations business were determined based on an actuarial study of QHC’s operations and historical claims experience at its hospitals. Corresponding receivables from CHS were established to reflect the indemnification by CHS for each of these liabilities for claims that related to events and circumstances that occurred prior to the Spin-off Transaction date. After the Spin-off Transaction, QHC entered its own professional and general liability insurance and workers’ compensation insurance arrangements to mitigate the risk for claims exceeding its self-insured retention levels. The Company maintains a self-insured retention level for professional and general liability claims of $5 million per claim and maintains a $0.5 million per claim, high deductible program for workers’ compensation. Due to the differing nature of its business, the Company maintains separate insurance arrangements related to its subsidiary, QHR. The self-insured retention level for QHR is $6 million for professional and general liability insurance. A summary of the Company’s insurance reserves related to professional and general liability claims and workers’ compensation claims, distinguished between those indemnified by CHS and those that relate to the Company’s self-insurance risks, follows (in thousands): September 30, 2016 Current Long-Term Current Long-Term Receivable Receivable Liability Liability Professional and general liability: Insurance reserves indemnified by CHS, Inc. $ 22,137 $ 66,401 $ 22,137 $ 66,401 All other self-insurance reserves 4,487 4,077 9,128 14,682 Total insurance reserves for professional and general liability 26,624 70,478 31,265 81,083 Workers' compensation liability: Insurance reserves indemnified by CHS, Inc. 5,529 16,405 5,529 16,405 All other self-insurance reserves — — 1,241 1,173 Total insurance reserves for workers' compensation liability 5,529 16,405 6,770 17,578 Total self-insurance reserves $ 32,153 $ 86,883 $ 38,035 $ 98,661 December 31, 2015 Current Long-Term Current Long-Term Receivable Receivable Liability Liability Professional and general liability: Insurance reserves indemnified by CHS, Inc. $ 21,120 $ 72,412 $ 21,120 $ 72,412 All other self-insurance reserves — 4,077 — 5,011 Total insurance reserves for professional and general liability 21,120 76,489 21,120 77,423 Workers' compensation liability: Insurance reserves indemnified by CHS, Inc. 8,314 20,507 8,314 20,507 All other self-insurance reserves — — — — Total insurance reserves for workers' compensation liability 8,314 20,507 8,314 20,507 Total self-insurance reserves $ 29,434 $ 96,996 $ 29,434 $ 97,930 The receivables from CHS are included in other current assets and other long-term assets on the consolidated and combined balance sheets. The liabilities for the current portion of professional and general liability claims are included in other current liabilities, while the current portion of workers’ compensation claims are recorded in accrued salaries and benefits. The long-term portions of both claims liabilities are recorded in other long-term liabilities. Physician Recruiting Commitments As part of its physician recruitment strategy, the Company provides income guarantee agreements to certain physicians who agree to relocate to its communities and commit to remain in practice there. Under such agreements, the Company is required to make payments to a physician in excess of the amount earned in his or her practice, up to the amount of the income guarantee. The income guarantee period over which the Company agrees to subsidize a physician’s income is typically one year and the commitment period over which the physician agrees to practice in the designated community is typically three years. Under the terms of the agreements, such payments are recoverable by the Company from physicians who do not fulfill their commitment periods. The Company’s recorded liabilities related to these income guarantee agreements were $2.5 million and $2.7 million at September 30, 2016 and December 31, 2015, respectively. At September 30, 2016, the maximum potential amount of future payments under these guarantees in excess of the liabilities recorded was $3.2 million. Construction and Capital Commitments Springfield, Oregon Patient Tower . QHC Corporate Office . |
Subsequent Events
Subsequent Events | 9 Months Ended |
Sep. 30, 2016 | |
Subsequent Events [Abstract] | |
Subsequent Events | NOTE 18 - SUBSEQUENT EVENTS On October 3, 2016, the Company announced that subsidiaries of the Company signed a definitive agreement to sell 56-bed Barrow Regional Medical Center in Winder, Georgia, and its associated assets, to Northeast Georgia Health System, Inc. The divestiture is expected to close approximately December 31, 2016, subject to customary regulatory approvals and closing conditions. On October 19, 2016, the Company announced that subsidiaries of the Company signed a definitive agreement to sell 64-bed Sandhills Regional Medical Center in Hamlet, North Carolina, and its associated assets, to FirstHealth of the Carolinas, Inc. The divestiture is expected to close approximately December 1, 2016, subject to customary regulatory approvals and closing conditions. |
Basis of Presentation and Sig26
Basis of Presentation and Significant Accounting Policies (Policies) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Basis of Presentation (Policies) | Basis of Presentation The condensed consolidated and combined financial statements and accompanying notes of the Company presented herein have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). These financial statements should be read in conjunction with the Company’s Registration Statement on Form 10, as amended, initially filed with the Securities and Exchange Commission (“SEC”) on September 4, 2015 and declared effective on April 4, 2016 (the “Form 10”), which includes combined financial statements and accompanying notes as of December 31, 2015 and 2014 and for each of the three years ended December 31, 2015, 2014 and 2013. In the opinion of the Company’s management, the consolidated and combined financial information presented herein includes all adjustments necessary to present fairly the results of operations, financial position and cash flows of the Company for the interim periods presented. Results of operations for interim periods should not be considered indicative of the results of operations expected for the full year. Certain information and disclosures have been condensed or omitted as presented herein and as permitted by the rules and regulations of the SEC for interim period presentation. The Company’s management believes the financial statements and disclosures presented herein are adequate in order to make the information not misleading. Prior to its separation from CHS on April 29, 2016, QHC did not operate as a separate company and stand-alone financial statements were not historically prepared; however, QHC was comprised of certain stand-alone legal entities for which discrete financial information was available under CHS’ ownership. The accompanying consolidated and combined financial statements include amounts and disclosures for QHC that have been derived from the consolidated financial statements and accounting records of CHS for the periods prior to the Spin-off Transaction in combination with the amounts and disclosures related to the stand-alone financial statements and accounting records of QHC after the Spin-off Transaction. The accompanying consolidated and combined financial statements may not necessarily be indicative of the results of operations, financial position and cash flows of QHC in the future or those that would have occurred had the Company operated on a stand-alone basis during the entirety of the periods presented herein. See Note 16 – Related Party Transactions for additional information on the carve-out of financial information from CHS. |
Principles of Consolidation and Combination (Policies) | Principles of Consolidation and Combination The consolidated and combined financial statements include the accounts of the Company and its subsidiaries in which it holds either a direct or indirect ownership of a majority voting interest. Investments in less-than-wholly-owned consolidated subsidiaries of QHC are presented separately in the equity component of the consolidated and combined balance sheets to distinguish between the interests of QHC and the interests of the noncontrolling investors. Revenues and expenses from these subsidiaries are included in the respective individual line items of the Company’s consolidated and combined statements of income, and net income is presented both in total and separately to distinguish the amounts attributable to the Company and the amounts attributable to the interests of the noncontrolling investors. 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 in the consolidated and combined balance sheets. All significant intercompany transactions and accounts of the Company are eliminated in consolidation. Additionally, all significant transactions with CHS that occurred prior to the Spin-off Transaction have been included in the consolidated and combined balance sheets within Due to Parent, net. This liability to CHS was settled in the Spin-off Transaction. |
Reclassifications (Policies) | Reclassifications Certain prior period amounts have been reclassified to conform to the current period presentation. |
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 consolidated and combined financial statements and accompanying notes. Actual results could differ from those estimates under different assumptions or conditions. |
Revenue Recognition (Policies) | Revenue Recognition The Company recognizes revenues from patient services at its hospitals and affiliated facilities in the period services are performed and reports these revenues at the net realizable amount expected to be collected from patients and third-party payors. Billings and collections are outsourced to CHS under the transition services agreements that were entered into in connection with the Spin-off Transaction. See Note 16 – Related Party Transactions for additional information on these agreements. The amounts that are collected for patient services are generally less than established billing rates, or standard billing charges, due to contractual agreements with third-party payors, governmental programs that require reduced billing rates, discounts offered as incentives for payment, and a portion related to bad debts. The Company recognizes revenues related to its QHR business when management advisory and consulting services are provided and reports these revenues at the net realizable amount expected to be collected from the non-affiliated hospital clients. Payor Sources The primary sources of payment for patient healthcare services are third-party payors, including federal and state agencies administering the Medicare and Medicaid programs, other governmental agencies, managed care health plans, commercial insurance companies, workers’ compensation carriers and employers. Self-pay revenues are the portion of patient service revenues derived from patients who do not have health insurance coverage and the patient responsibility portion of services that are not covered by health insurance plans. Non-patient revenues primarily include revenues from QHR’s hospital management advisory and consulting services business, rental income and hospital cafeteria sales. Beginning in the second quarter of 2016, the Company began classifying its revenues related to Medicare Managed Care Advantage Plans as Medicare revenues. As a result, the Company retroactively reclassified these amounts from managed care and commercial revenues to Medicare revenues for all periods presented in the tables above. The revenues from Medicare Managed Care Advantage Plans that were reclassified were $42.1 million and $34.5 million for the three months ended September 30, 2016 and 2015, respectively, and $127.2 million and $106.6 million for the nine months ended September 30, 2016 and 2015, respectively. Contractual Allowances and Discounts The net realizable amount of patient service revenues due from third-party payors is subject to complexities and interpretations of payor-specific contractual agreements and governmental regulations that are frequently changing. The Medicare and Medicaid programs, which represent a large portion of the Company’s operating revenues, are highly complex programs to administer and are subject to interpretation of federal and state-specific reimbursement rates, new legislation and final cost report settlements. Contractual allowances, or differences in standard billing rates and the payments derived from contractual terms with governmental and non-governmental third–party payors, are recorded based on management’s best estimates in the period in which services are performed and a payment methodology is established with the patient. Recorded estimates for past contractual allowances are subject to change, in large part, due to ongoing contract negotiations and regulation changes, which are typical in the healthcare industry. Revisions to estimates are recorded in the periods in which they become known and may be subject to further revisions. Self-pay and other payor discounts are incentives offered to uninsured or underinsured payors to reduce their costs of healthcare services with the purpose of maximizing the Company’s collection efforts. Third-Party Program Reimbursements Cost report settlements under reimbursement programs with Medicare, Medicaid and other managed care plans are estimated and recorded in the period the related services are performed and are adjusted in future periods, as needed, until the final cost report settlements are determined. Currently, several states utilize supplemental payment programs, including disproportionate share programs, for the purpose of providing reimbursement to providers to offset a portion of the cost of providing care to Medicaid and indigent patients. These programs are designed with input from Centers for Medicare and Medicaid Services (“CMS”) and are funded with a combination of federal and state resources, including, in certain instances, taxes, fees or other program expenses (collectively, “provider taxes”) levied on the providers. Similar programs are also currently being considered by other states. These amounts are included in due from and due to third-party payors in the consolidated and combined balance sheets. Previously, amounts due from third party payors related to these programs were included in patient accounts receivable, and the provider taxes owed were included in other current liabilities in the consolidated and combined balance sheets. After a state supplemental payment program is approved and fully authorized by the appropriate state legislative or governmental agency, the Company recognizes revenue and related expenses based on the terms of the program in the period in which amounts are estimable and revenue collection is reasonably assured. The revenues earned by the Company under these programs are included in net operating revenues and the expenses associated with these programs are included in other operating expenses in the consolidated and combined statements of income. Charity Care In the ordinary course of business, the Company provides services to patients who are financially unable to pay for hospital care. The related charges for those patients who are financially unable to pay that otherwise do not qualify for reimbursement from a governmental program are classified as charity care. The Company determines amounts that qualify for charity care primarily based on the patient’s household income relative to the poverty level guidelines established by the federal government. The Company’s policy is to not pursue collections for such amounts; therefore, the related charges are recorded in operating revenues at the standard billing rates and fully offset in contractual allowances. The gross amounts of charity care revenues were $10.1 million and $9.5 million for the three months ended September 30, 2016 and 2015, respectively, and $24.9 million and $22.7 million for the nine months ended September 30, 2016 and 2015, respectively. The estimated cost of providing charity care services is determined using a ratio of cost to gross charges and applying this ratio to the gross charges associated with providing care to charity patients for the period. The Company recorded charity care costs of $1.6 million for both the three month periods ended September 30, 2016 and 2015, and $4.0 million and $3.9 million for the nine months ended September 30, 2016 and 2015, respectively. To the extent the Company receives reimbursement from any of the various governmental assistance programs to subsidize its care of indigent patients, the Company excludes the charges for such patients from the cost of care provided under its charity care program. |
Accounts Receivable and Allowance for Doubtful Accounts (Policies) | Accounts Receivable and Allowance for Doubtful Accounts Substantially all of the Company’s receivables are related to providing healthcare services to patients at its hospitals and affiliated businesses. Beginning in the second quarter of 2016, the Company began classifying receivables related to state supplemental payment programs from patient accounts receivable to due from and due to third-party payors in the consolidated and combined balance sheets. The net amounts reclassified were $93.3 million and $68.0 million as of September 30, 2016 and December 31, 2015, respectively. See the Reclassifications accounting policy above for additional information on reclassification adjustments made by the Company. Accounts receivable are reduced by an allowance for amounts that could become uncollectible in the future. 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 significantly impacted by the aging of 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 self-pay accounts receivable is based on the Company’s collection history. For insured receivables, which are the non-self-pay receivables, the Company estimates the allowance for doubtful accounts based on historical collection rates for the uncontractualized portion of all accounts aging over 365 days from the date of patient discharge. In general, allowances for insured receivables are an immaterial percentage of the Company’s total 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 CHS’ billing and collection efforts, including their current policies on collections, and the ability of the Company to further attempt collection efforts. Billings and collections are outsourced to CHS under the transition services agreements that were put in place with the Spin-off Transaction. See Note 16 – Related Party Transactions for additional information on these agreements. Significant changes in payor mix, centralized business office operations, economic conditions or trends in federal and state governmental healthcare coverage, among others, could affect the Company’s estimates of accounts receivable collectability. The Company also continually reviews its overall allowance adequacy by monitoring historical cash collections as a percentage of trailing net operating revenues after the provision for bad debts, as well as by analyzing current period net operating revenues 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. |
Concentration of Credit Risk (Policies) | Concentration of Credit Risk The Company grants unsecured credit to its patients, most of whom reside in the service area of the Company’s hospitals and affiliated facilities and are insured under third-party payor agreements. Because of the economic diversity of the Company’s markets and non-governmental third-party payors, Medicare represents the only significant concentration of credit risk from payors. Accounts receivable, net of contractual allowances, from Medicare were $78.7 million and $67.7 million, or 10.5% and 9.2% of total patient accounts receivable, net, as of September 30, 2016 and December 31, 2015, respectively. The Company’s revenues are particularly sensitive to regulatory and economic changes in certain states where the Company generates significant revenues. Accordingly, any changes in the current demographic, economic, competitive or regulatory conditions in certain states in which revenues are significant could have an adverse effect on the Company’s results of operations, financial condition or cash flows. Changes to the Medicaid and other government-managed payor programs in these states, including reductions in reimbursement rates or delays in reimbursement payments under state supplemental payment or other programs, could also have a similar adverse effect. |
Other Operating Expenses (Policies) | Other Operating Expenses The Company began recording costs associated with the transition services agreements and other ancillary agreements with CHS following the Spin-off Transaction in accordance with the terms of these agreements. These costs, which primarily include the costs of providing information technology, patient billing and collections and payroll services, are included in “Transition services agreements and allocations from Parent” in the table above. Amounts allocated to the Company by CHS for periods prior to the Spin-off Transaction are also included in “Transition services agreements and allocations from Parent” in the table above. Prior to the Spin-off Transaction, QHC recorded a monthly corporate management fee from CHS that represented a portion of CHS’ corporate office costs and was included in other operating expenses. Following the Spin-off Transaction, the costs for corporate office functions are primarily included in salaries and benefits expenses. See Note 16 – Related Party Transactions for additional information on the allocated costs from CHS. |
General and Administrative Costs (Policies) | General and Administrative Costs Substantially all of the Company’s operating costs and expenses are “cost of revenues” items. Operating expenses that could be classified as general and administrative by the Company are costs related to corporate office functions, including, but not limited to tax, treasury, audit, risk management, legal, investor relations and human resources. These costs are primarily salaries and benefits expenses associated with these corporate office functions. General and administrative costs of the Company were $14.1 million and $10.9 million during the three months ended September 30, 2016 and 2015, respectively, and $37.8 million and $32.9 million during the nine months ended September 30, 2016 and 2015, respectively. Prior to the Spin-off Transaction, the majority of these costs were allocations from CHS. See Note 16 – Related Party Transactions for additional information on the allocated costs from CHS. |
Electronic Health Records Incentives Earned (Policies) | Electronic Health Records Incentives Earned Pursuant to the Health Information Technology for Economic and Clinical Health Act (“HITECH”), the Company is eligible to receive incentive payments under the Medicare and Medicaid programs for its eligible hospitals and physician clinics that demonstrate meaningful use of certified Electronic Health Records (“EHR”) technology. Each of the Company’s eligible hospitals and physician clinics has completed the initial adoption phase of EHR implementation and is currently in the process of implementing the remaining two phases. EHR incentive payments are subject to audit and potential recoupment if it is determined that the applicable meaningful use standards were not met. EHR incentive payments are also subject to retrospective adjustment because the cost report data upon which the incentive payments are based are further subject to audit. The Company utilizes a gain contingency model to recognize EHR incentive payments. When the recognition criteria have been fully met, the Company recognizes the income from EHR incentives payments as a part of other operating costs and expenses in the consolidated and combined statements of income. Medicaid EHR incentive payments are calculated based on prior period Medicare cost report information available at the time when eligible hospitals demonstrate meaningful use of certified EHR technology. Medicare EHR incentive payments are calculated when eligible hospitals demonstrate meaningful use of certified EHR technology and the information for the applicable full Medicare cost report year used 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 income from EHR incentive payments is deferred until all recognition criteria are met. The Company recognizes r eceivables for EHR incentive payments that have been earned, but are uncollected at period end, as other current assets in the consolidated and combined balance sheets. The receivables are adjusted for any known audit or retrospective adjustments related to prior periods. Deferred revenue from EHR incentive payments is recorded in other current liabilities in the consolidated and combined balance sheets. The Company incurs both capital expenditures and operating expenses in connection with the implementation of EHR technology initiatives. The amounts and timing of these expenditures does not directly correlate with the timing of the Company’s receipt or recognition of EHR incentive payments as earned. As the Company completes its full implementation of certified EHR technology in accordance with all three phases of the program, its EHR incentive payments will decline and ultimately end. The Company received a Medicare EHR cash incentive payment of $1.8 million during the second quarter of 2016 that was recorded as deferred revenue. The Company subsequently determined the payment was a duplicate and refunded the payment during the third quarter. |
Legal Costs (Policies) | Legal and Settlement Costs Legal and settlement costs in the consolidated and combined statements of income primarily includes legal costs and related settlements, if any, related to regulatory claims, government investigations into reimbursement payments and claims associated with QHR’s hospital management contracts. |
Transaction Costs Related to the Spin-off (Policies) | Transaction Costs Related to the Spin-off Transaction costs related to the spin-off consists of QHC’s portion of the costs to effect the Spin-off Transaction and the costs associated with forming a new company. These costs include audit, management advisory and consulting costs, investment advisory costs, legal expenses and other miscellaneous costs. |
Income Taxes (Policies) | Income Taxes The Company accounts for income taxes using the asset and liability method. Under this method, deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date. The Company assesses the likelihood that deferred tax assets will be recovered from future taxable income. To the extent the Company believes that recovery is not likely, a valuation allowance is established. To the extent the Company establishes a valuation allowance or increases this allowance, the related expense is included in the provision for income taxes in the consolidated and combined statements of income. The Company classifies interest and penalties, if any, related to its tax positions as a component of income tax expense. See Note 10 – Income Taxes for information on the separate return method of accounting for income taxes that was used by the Company during the carve-out period and the impact of the consummation of the Spin-off Transaction on income taxes. |
Comprehensive Income (Loss) (Policies) | Comprehensive Income (Loss) The Company’s only sources of other comprehensive income (loss) consist of pension costs related to an acquired defined benefit pension plan at one of its hospitals and a supplemental employee retirement plan. |
Cash and Cash Equivalents (Policies) | Cash and Cash Equivalents Cash includes cash on hand and cash with banks. Cash equivalents are short-term, highly liquid investments with a maturity of three months or less from the date acquired and are subject to an insignificant risk of change in value. |
Inventories (Policies) | Inventories Inventories, primarily consisting of medical supplies and drugs, are stated at the lower of cost or market on a first-in, first-out basis. |
Property and Equipment (Policies) | Property and Equipment Purchases of property and equipment are recorded at cost. Property and equipment acquired in a business combination are recorded at estimated fair value. Routine maintenance and repairs are expensed as incurred. Expenditures that increase capacities or extend useful lives are capitalized. The Company capitalizes interest related to financing of major capital additions with the respective asset. Depreciation is recognized using the straight-line method over the estimated useful life of an asset. The Company depreciates land improvements over 3 to 20 years, buildings and improvements over 5 to 40 years, and equipment and fixtures over 3 to 18 years. The Company also leases certain facilities and equipment under capital lease obligations. These assets are amortized on a straight-line basis over the lesser of the lease term or the remaining useful life of the asset. Property and equipment assets that are held for sale are not depreciated. |
Goodwill (Policies) | Goodwill The Company’s hospital operations and QHR’s hospital management advisory and consulting services operations meet the criteria to be classified as reporting units for goodwill. Goodwill was initially determined for QHC’s hospital operations reporting unit based on a relative fair value approach as of September 30, 2013 (CHS’ goodwill impairment testing date). Additional goodwill was allocated on a similar basis for four hospitals acquired by CHS in 2014 and included in the group of hospitals spun-off to QHC. For the QHR reporting unit, goodwill was allocated based on the amount recorded by CHS at the time of its acquisition in 2007. All subsequent goodwill generated from hospital, physician practice or other ancillary business acquisitions was recorded at fair value at the time of acquisition. Goodwill arising from business combinations is not amortized. 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. See Note 5 – Goodwill and Intangible Assets, which includes a discussion of the impairment charges recorded in the consolidated and combined statements of income during the nine months ended September 30, 2016. The Company performs its annual testing of impairment for goodwill in the fourth quarter of each year. 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. 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 and are reconciled to the Company’s consolidated market capitalization, with consideration of the amount a potential acquirer would be required to pay, in the form of a control premium, in order to gain sufficient ownership to set policies, direct operations and control management decisions of the Company. |
Intangible Assets (Policies) | Intangible Assets The Company’s intangible assets primarily consist of purchase and development costs of software for internal use and contract-based intangible assets, including physician guarantee contracts, medical licenses, hospital management contracts, non-compete agreements and certificates of need. There are no expected residual values related to the Company’s intangible assets. Capitalized software costs are generally amortized over three years, except for software costs for significant system conversions, which are amortized over 8 to 10 years. Capitalized software costs that are in the development stage are not amortized until the related projects are complete. Assets for physician guarantee contracts, hospital management contracts, non-compete agreements and certificates of need are amortized over the life of the individual contracts. Tradenames, medical licenses and intangible assets held for sale are not amortized. The Company may, in the future, elect to incur costs to renew or extend the useful lives of certain of its intangible assets. Costs incurred to extend the useful life of capitalized software would be recognized as an intangible asset and amortized over the anticipated extension period. Costs incurred to renew certain contract-based intangibles, such as hospital management contracts and certificates of need, would be recognized as intangible assets and amortized over the respective renewed contract periods. The Company does not expect to extend or renew any of its physician guarantee contracts or non-compete agreements. |
Impairment of Long-Lived Assets (Policies) | Impairment of Long-Lived Assets Whenever an event occurs or changes in circumstances indicate that the carrying values of certain long-lived assets may be impaired, the Company projects the undiscounted cash flows expected to be generated by these assets. If the projections indicate that the carrying values are not expected to be recovered, such amounts are reduced to their estimated fair value based on a quoted market price, if available, or an estimated fair value based on valuation techniques available in the circumstances. See Note 3 – Hospitals Held for Sale and Impairment of Long-Lived Assets for additional information related to impairment charges recorded in the consolidated and combined statements of income for the nine months ended September 30, 2016. |
Insurance Reserves (Policies) | Insurance Reserves As part of the business of owning and operating hospitals, the Company is subject to legal actions alleging liability on its part. To mitigate a portion of this risk, the Company maintains insurance exceeding a self-insured retention level for these types of claims. The Company’s self-insurance reserves reflect the current estimate of all outstanding losses, including incurred but not reported losses, based on actuarial calculations as of period end. The loss estimates included in the actuarial calculations may change in the future based on updated facts and circumstances. The Company’s insurance expense includes the actuarially determined estimate of losses for the current year, including claims incurred but not reported, the change in the estimate of losses for prior years based upon actual claims development experience as compared to prior actuarial projections, the insurance premiums for losses in excess of the Company’s self-insured retention levels, the administrative costs of the insurance programs, and interest expense related to the discounted portion of the liability. The Company’s reserves for professional and general liability claims are based on semi-annual actuarial calculations, which are discounted to present value and consider historical claims data, demographic factors, severity factors and other actuarial assumptions. The reserves for self-insured claims are discounted based on the Company’s risk-free interest rate that corresponds to the period when the self-insured claims are incurred and projected to be paid. See Note 17 – Commitments and Contingencies for information related to the portion of the Company’s insurance reserves for professional and general liability and workers’ compensation liability that are indemnified by CHS and the related accounting treatment and presentation in the consolidated and combined financial statements. Self-Insured Employee Health Benefits The Company is self-insured for substantially all of the medical benefits of its employees. The Company maintains a liability for its current estimate of incurred but not reported employee health claims based on an annual actuarial calculation. The undiscounted reserve for self-insured employee health benefits was $16.0 million as of September 30, 2016 and is included in accrued salaries and benefits in the consolidated and combined balance sheets. Expense each period is based on the actual claims received during the period plus any adjustment to the liability. Prior to the Spin-off Transaction, QHC was allocated employee health expense as part of the monthly corporate overhead charges from CHS. The allocation was determined based on claims made by QHC employees during the period plus an estimate for the change in liability related to QHC employee health claims incurred but not reported. The liability was included in Due to Parent, net in the consolidated and combined balance sheets, as the related employee health insurance policy was owned by CHS. Employee health expense is included in salaries and benefits expenses in the consolidated and combined statements of income for all periods. See Note 16 – Related Party Transactions for additional information on all corporate overhead costs from CHS prior to the Spin-off Transaction. |
Debt Issuance Costs and Discounts (Policies) | Debt Issuance Costs and Discounts On January 1, 2016, the Company adopted Accounting Standards Update 2015-03, which requires the presentation of debt issuance costs as a reduction of the debt liability on the balance sheet, consistent with the accounting for debt discounts. Amortization of debt issuance costs and debt discounts are each recorded as non-cash interest expense over the life of the respective debt instrument. |
Due to Parent, Net (Policies) | Due to Parent, Net Prior to the Spin-off Transaction, Due to Parent, net, in the consolidated and combined balance sheets represented the Company’s liability to CHS for the accumulation of (1) CHS’ historical investment in QHC, (2) liabilities related to the cost allocations from CHS to QHC, (3) interest charged by CHS on the monthly outstanding Due to Parent, net balance, (4) the net effect of transactions between CHS and QHC, and (5) the net effect of cash transfers from QHC to CHS under CHS’ centralized cash management program. In connection with the Spin-off Transaction, certain liabilities were transferred through Due to Parent, net to the Company, pursuant to the Separation and Distribution Agreement, and the remaining balance was settled in the form of a non-cash capital contribution to the Company. See Note 1 – Description of the Business and Spin-off Transaction and Note 16 – Related Party Transactions for additional information on the Spin-off Transaction and related party transactions with CHS. |
Assets and Liabilities of Hospitals Held for Sale (Policies) | Assets and Liabilities of Hospitals Held for Sale The Company reports assets that meet the criteria for classification as held for sale separately from other assets on the consolidated and combined balance sheets. Generally, assets that meet the criteria include those for which the carrying amount will be settled principally through a sale transaction rather than through continuing use. The asset must be available for immediate sale in its present condition, subject to usual or customary terms, and the sale must be probable to occur in the next 12 months. Similarly, the liabilities of a disposal group are classified as held for sale upon meeting these criteria. Immediately following classification as held for sale, the Company remeasures these assets and liabilities and adjusts the value to the lesser of the carrying amount or fair value less costs to sell. The assets and liabilities classified as held for sale are no longer depreciated or amortized into expense. See Note 3 – Hospitals Held for Sale and Impairment of Long-Lived Assets related to certain hospitals classified as held for sale as of September 30, 2016. |
Stock-Based Compensation (Policies) | Stock-Based Compensation In connection with the Spin-off Transaction, the Company issued QHC restricted stock awards to all CHS restricted stock award holders as of the Record Date. Each holder of CHS restricted stock awards received one QHC restricted stock award for every four CHS restricted stock awards held. In addition, QHC employees that held CHS restricted stock awards were allowed to continue to hold the CHS awards under the same terms and conditions that existed prior to the Spin-off Transaction, excluding certain shares granted on March 1, 2016 that were canceled in connection with the Spin-off Transaction. The unrecognized compensation expense related to the vesting of the CHS restricted stock awards held by QHC employees was transferred to QHC with the Spin-off Transaction. As a result, the Company is responsible for recording stock-based compensation expense attributable to the unvested portion of CHS restricted stock awards held by QHC employees and the unvested portion of all QHC restricted stock awards held by its employees, consisting of both QHC awards issued on the Record Date and additional awards granted under the Quorum Health Corporation 2016 Stock Award Plan (the “2016 Stock Award Plan”) following the Spin-off Transaction. See Note 14 – Stock-Based Compensation. |
Benefit Plans (Policies) | Benefit Plans Following the Spin-off Transaction, the Company maintains various benefit plans, including defined contribution plans, a defined benefit plan and deferred compensation plans, for which certain of the Company’s subsidiaries are the plan sponsors. In connection with the Spin-off Transaction, the rights and obligations of these plans were transferred from CHS to the Company, pursuant to the Separation and Distribution Agreement. Prior to the Spin-off Transaction, QHC was allocated a portion of CHS’ benefit costs under its defined contribution plans. The allocation was based on specific identification for plans associated exclusively with QHC hospitals and on QHC’s proportional share of employees covered under all other applicable plans. The expense was recorded as salaries and benefits in the consolidated and combined statements of income, and the cumulative liability for these benefit costs, which was transferred to the Company in the Spin-off Transaction, was recorded in Due to Parent, net in the consolidated and combined balance sheets. QHC recognizes the unfunded liability of its defined benefit plan in other long-term liabilities in the consolidated and combined balance sheets. Unrecognized gains (losses) and prior service credits (costs) are recorded as changes in other comprehensive income (loss). The measurement date of the plan’s assets and liabilities coincides with the Company’s year end. The Company’s pension benefit obligation is measured using actuarial calculations that incorporate discount rates, rate of compensation increases and expected long-term returns on plan assets. The calculations additionally consider expectations related to the retirement age and mortality of plan participants. The Company records pension benefit costs related to all of its plans as salaries and benefits expenses in the consolidated and combined statements of income. |
Fair Value of Financial Instruments (Policies) | Fair Value of Financial Instruments The Company utilizes the U.S. GAAP fair value hierarchy to measure the fair value of its financial instruments. The fair value hierarchy 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 • Level 2 • Level 3 |
Segment Reporting (Policies) | Segment Reporting The principal business of the Company is to provide healthcare services through its hospitals and affiliated facilities. The Company’s only other line of business is the hospital management advisory and consulting services it provides through QHR. The Company has determined that its hospital operations business meets the criteria for separate segment reporting. The financial information for QHR’s business does not meet the quantitative thresholds for separate segment reporting, and therefore has been combined with the Company’s corporate functions into the all other reportable segment. See Note 13 – Segments. |
Accounting Standards Not Yet Adopted (Policies) | Accounting Standards Not Yet Adopted 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 specific to the healthcare industry. This ASU provides companies the option of applying a full or modified retrospective approach upon adoption. This ASU is effective for 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 internal control framework, and the resulting impact on its consolidated and combined results of operations, financial position and cash flows. 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. The Company utilizes a number of leases to support its operations. As such, the adoption of this ASU is expected to have a significant impact on the Company’s consolidated and combined results of operations, financial position and cash flows. The Company is currently evaluating the quantitative and qualitative impact the adoption of this ASU will have on its operations, policies and procedures. The Company is additionally evaluating any modifications to its leasing strategy in response to the requirements of this standard. 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 are 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 consolidated and combined results of operations, financial position and cash flows. In August 2016, the FASB issued ASU 2016-15, which addresses eight specific cash receipt and cash payment classification issues related to the statement of cash flows. 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. Management is evaluating the impact that the adoption of this ASU will have on its consolidated and combined results of operations, financial position and cash flows. |
Description of the Business a27
Description of the Business and Spin-Off Transaction (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Organization Consolidation And Presentation Of Financial Statements [Abstract] | |
Summary of Transactions to Effect the Spin-Off Transaction | A summary of the major transactions that occurred on April 29, 2016 to effect the spin-off of QHC as a newly formed, independent company were as follows (dollars in thousands): Additional Long-Term Due to Common Stock Paid-in Parent's Debt Parent, Net Shares Amount Capital Equity Balance at April 29, 2016 (prior to Spin-off Transaction) $ 24,179 $ 1,811,034 — $ — $ — $ 3,137 Borrowings of long-term debt, net of debt issuance costs and discounts 1,230,819 — — — — — Cash proceeds paid to Parent — (1,217,336 ) — — — — Transfer of liabilities from Parent — (16,596 ) — — — — Net deferred tax liability resulting from Spin-off Transaction — (61,718 ) — — — — Non-cash capital contribution from Parent — (515,384 ) — — 518,521 (3,137 ) Distribution of common stock — — 27,719,645 3 (3 ) — Distribution of restricted stock awards — — 692,409 — — — Balance at April 29, 2016 (after Spin-off Transaction) $ 1,254,998 $ — 28,412,054 $ 3 $ 518,518 $ — |
Summary of Liabilities Transferred from Parent | A summary of the liabilities transferred to QHC from CHS just prior to the consummation of the Spin-off Transaction, previously included in Due to Parent, net, were as follows (in thousands): April 29, 2016 Accounts payable for capital expenditures $ 8,422 Benefit plan liabilities 5,964 Other liabilities 2,210 Total liabilities transferred from Parent $ 16,596 |
Basis of Presentation and Sig28
Basis of Presentation and Significant Accounting Policies (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Accounting Policies [Abstract] | |
Summary of Components of Operating Revenues Before Provision for Bad Debts | A summary of the components of operating revenues before the provision for bad debts follows (in thousands): Three Months Ended September Nine Months Ended September 2016 2015 2016 2015 Operating revenues $ 3,016,603 $ 2,912,062 $ 9,140,041 $ 8,683,671 Less: Contractual allowances (2,289,702 ) (2,202,984 ) (6,986,290 ) (6,586,713 ) Less: Discounts (114,350 ) (103,192 ) (328,553 ) (275,964 ) Total operating revenues, net of contractual allowances and discounts $ 612,551 $ 605,886 $ 1,825,198 $ 1,820,994 |
Summary of Operating Revenues by Payor Source | A summary of operating revenues by payor source follows (dollars in thousands): Three Months Ended September 30, 2016 2015 $ Amount % of Total $ Amount % of Total Medicare $ 162,753 26.6 % $ 162,678 26.9 % Medicaid 125,679 20.5 % 113,678 18.8 % Managed care and commercial 239,461 39.1 % 230,498 38.0 % Self-pay 60,079 9.8 % 71,785 11.8 % Non-patient 24,579 4.0 % 27,247 4.5 % Total operating revenues, net of contractual allowances and discounts $ 612,551 100.0 % $ 605,886 100.0 % Nine Months Ended September 30, 2016 2015 $ Amount % of Total $ Amount % of Total Medicare $ 505,836 27.7 % $ 494,051 27.1 % Medicaid 342,030 18.7 % 321,984 17.7 % Managed care and commercial 714,340 39.2 % 726,250 39.9 % Self-pay 184,004 10.1 % 191,880 10.5 % Non-patient 78,988 4.3 % 86,829 4.8 % Total operating revenues, net of contractual allowances and discounts $ 1,825,198 100.0 % $ 1,820,994 100.0 % |
Summary of Components of Amounts Due from and Due to Third-Party Payors | The following table summarizes the components of amounts due from and due to third-party payors, as presented in the consolidated and combined balance sheets (in thousands): September 30, December 31, 2016 2015 Amounts due from third-party payors: Previous program reimbursements and final cost report settlements $ 22,091 $ 33,732 State supplemental payment programs 104,982 77,074 Total amounts due from third-party payors $ 127,073 $ 110,806 Amounts due to third-party payors: Previous program reimbursements and final cost report settlements $ 33,440 $ 21,015 State supplemental payment programs 11,662 9,088 Total amounts due to third-party payors $ 45,102 $ 30,103 |
Summary of Portion of Medicaid Reimbursements Attributable to State Supplemental Payment Programs | The table below provides a summary of the portion of Medicaid reimbursements attributable to state supplemental payment programs (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 State supplemental payment programs: Medicaid revenues $ 54,688 $ 54,517 $ 162,009 $ 159,734 Provider taxes and other expenses 19,559 18,438 57,590 56,931 Reimbursements attributable to state supplemental payment programs, net of expenses $ 35,129 $ 36,079 $ 104,419 $ 102,803 |
Summary of Components of Accounts Receivable Before Contractual Allowances Discounts and Allowance for Doubtful Accounts | A summary of the components of accounts receivable before contractual allowances, discounts and allowance for doubtful accounts follows (dollars in thousands): September 30, 2016 December 31, 2015 $ Amount % of Total $ Amount % of Total Third-parties $ 1,947,231 75.1 % $ 1,688,138 72.6 % Self-pay 646,047 24.9 % 638,694 27.4 % Total accounts receivable, gross $ 2,593,278 100.0 % $ 2,326,832 100.0 % |
Summary of Changes in Allowance for Doubtful Accounts | A summary of the changes in the allowance for doubtful accounts follows (in thousands): Nine Months Ended September 30, 2016 Balance at beginning of period $ 346,507 Provision for bad debts 201,971 Amounts written off, net of recoveries (206,215 ) Balance at end of period $ 342,263 |
Summary of States in Which Company Generates More Than 5% of its Total Revenues | A summary of the states in which the Company generates more than 5% of total net patient revenues, before the provision for bad debts, as determined based on the nine months ended September 30, 2016 and 2015, follows (dollars in thousands): Nine Months Ended September 30, Number of 2016 2015 Hospitals $ Amount % of Total $ Amount % of Total Illinois 9 $ 609,091 34.9 % $ 611,569 35.3 % Georgia 4 163,127 9.3 % 168,930 9.7 % Oregon 1 156,397 9.0 % 144,607 8.3 % California 2 151,278 8.7 % 156,128 9.0 % Kentucky 3 89,278 5.1 % 96,653 5.6 % |
Summary of Major Components of Other Operating Expenses | A summary of the major components of other operating expenses follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Purchased services $ 44,242 $ 44,251 $ 133,316 $ 129,898 Taxes and insurance 24,690 32,019 94,257 91,357 Medical specialist fees 27,811 22,182 77,343 62,449 Transition services agreements and allocations from Parent 18,094 15,797 52,192 46,556 Repairs and maintenance 9,611 12,728 31,576 36,024 Utilities 8,369 8,179 22,526 22,546 Management fees from Parent — 8,797 11,792 26,762 Other miscellaneous operating expenses 22,061 17,233 59,524 56,645 Total other operating expenses $ 154,878 $ 161,186 $ 482,526 $ 472,237 |
Summary of Activity Related to Electronic Health Records Incentives | A summary of activity related to EHR incentives follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Electronic health records incentives receivable at beginning of period $ 1,973 $ 5,848 $ 11,227 $ 12,204 Electronic health records incentives earned 1,336 2,326 6,152 7,101 Cash incentive payments received (367 ) (1,237 ) (13,116 ) (9,457 ) Adjustments to receivable based on final cost report settlement or audit 458 990 (863 ) (1,921 ) Electronic health records incentives receivable at end of period $ 3,400 $ 7,927 $ 3,400 $ 7,927 Deferred revenue related to electronic health records incentives at beginning of period $ (1,054 ) $ (3,795 ) $ — $ (14,351 ) Cash received and deferred during period 1,054 — (3,639 ) — Recognition of deferred incentives as earned — 3,795 3,639 14,351 Deferred revenue related to electronic health records incentives at end of period $ — $ — $ — $ — Total electronic health records incentives earned during period $ 1,336 $ 6,121 $ 9,791 $ 21,452 Total cash incentive payments received during period 687 (1,237 ) (16,755 ) (9,457 ) |
Property and Equipment (Tables)
Property and Equipment (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Property Plant And Equipment [Abstract] | |
Summary of Property and Equipment | A summary of property and equipment follows (in thousands): September 30, December 31, 2016 2015 Property and equipment, at cost: Land and improvements $ 95,652 $ 100,053 Building and improvements 820,356 853,853 Equipment and fixtures 604,790 616,667 Construction in progress 50,477 33,080 Total property and equipment, at cost 1,571,275 1,603,653 Less: Accumulated depreciation and amortization (750,932 ) (723,404 ) Total property and equipment, net $ 820,343 $ 880,249 |
Goodwill and Intangible Assets
Goodwill and Intangible Assets (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Summary of Changes in Goodwill | A summary of changes in goodwill follows (in thousands): Nine Months Ended September 30, 2016 Balance at beginning of period $ 541,704 Acquisitions 108 Impairment (205,000 ) Balance at end of period $ 336,812 |
Summary of Intangible Assets | A summary of intangible assets follows (in thousands): September 30, December 31, 2016 2015 Finite-lived intangible assets: Capitalized software costs: Cost $ 193,085 $ 194,941 Accumulated amortization (113,061 ) (98,004 ) Capitalized software costs, net 80,024 96,937 Physician guarantee contracts: Cost 11,356 16,594 Accumulated amortization (5,611 ) (9,560 ) Physician guarantee contracts, net 5,745 7,034 Other finite-lived intangible assets: Cost 44,339 43,275 Accumulated amortization (32,392 ) (29,351 ) Other finite-lived intangible assets, net 11,947 13,924 Total finite-lived intangible assets Cost 248,780 254,810 Accumulated amortization (151,064 ) (136,915 ) Total finite-lived intangible assets, net $ 97,716 $ 117,895 Indefinite-lived intangible assets: Tradenames $ 4,000 $ 4,000 Medical licenses and other indefinite-lived intangible assets 4,590 7,355 Total indefinite-lived intangible assets $ 8,590 $ 11,355 Total intangible assets: Cost $ 257,370 $ 266,165 Accumulated amortization (151,064 ) (136,915 ) Total intangible assets, net $ 106,306 $ 129,250 |
Summary of Amortization Expense | A summary of amortization expense follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Amortization of finite-lived intangible assets: Capitalized software costs $ 6,214 $ 6,670 $ 19,539 $ 20,134 Physician guarantee contracts 770 913 2,383 2,904 Other finite-lived intangible assets 675 825 2,191 2,470 Total amortization expense related to finite-lived intangible assets 7,659 8,408 24,113 25,508 Amortization of leasehold improvements and property and equipment assets held under capital lease obligations 812 623 2,105 1,858 Total amortization expense $ 8,471 $ 9,031 $ 26,218 $ 27,366 |
Summary of Future Estimated Amortization Expense | Total estimated future amortization expense for the next five years and thereafter related to intangible assets follows (in thousands): September 30, 2016 Remainder of 2016 $ 6,842 2017 26,758 2018 17,185 2019 14,218 2020 11,699 Thereafter 21,014 Total estimated future amortization expense $ 97,716 |
Long-Term Debt (Tables)
Long-Term Debt (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Debt Disclosure [Abstract] | |
Summary of Long Term Debt | A summary of long-term debt follows (in thousands): September 30, December 31, 2016 2015 Senior Credit Facility: Revolving Credit Facility, maturing 2021 $ — $ — Term Loan Facility, maturing 2022 875,600 — ABL Credit Facility, maturing 2021 — — Senior Notes, maturing 2023 400,000 — Unamortized debt issuance costs and discounts (50,792 ) — Capital lease obligations 26,044 22,323 Other debt 942 1,092 Total debt 1,251,794 23,415 Less: Current maturities of long-term debt (10,493 ) (7,915 ) Total long-term debt $ 1,241,301 $ 15,500 Due to Parent, net $ — $ 1,800,908 |
Summary of Maximum Secured Net Leverage Ratio Permitted Under Credit Facility | The maximum Secured Net Leverage Ratio permitted under the CS Agreement, as determined based on 12 month trailing Consolidated EBITDA, as defined in the CS Agreement, follows: Maximum Secured Net Period Leverage Ratio Period from April 29, 2016 to June 30, 2017 4.50 to 1.00 Period from July 1, 2017 to June 30, 2018 4.25 to 1.00 Period from July 1, 2018 and thereafter 4.00 to 1.00 |
Summary of Redemption Dates and Prices of Senior Notes | A summary of the redemption dates and prices follows: Redemption Period Prices Period from April 15, 2019 to April 14, 2020 108.719 % Period from April 15, 2020 to April 14, 2021 105.813 % Period from April 15, 2021 to April 14, 2022 102.906 % Period from April 15, 2022 to April 14, 2023 100.000 % |
Summary of Debt Issuance Costs and Discounts | A summary of debt issuance costs and discounts follows (in thousands): September 30, December 31, 2016 2015 Debt issuance costs $ 29,139 $ — Debt discounts 24,536 — Total debt issuance costs and discounts at origination 53,675 — Less: Amortization of debt issuance costs and discounts (2,883 ) — Total unamortized debt issuance costs and discounts $ 50,792 $ — |
Summary of Debt Maturities for Next Five Years and Thereafter | A summary of debt maturities for the next five years and thereafter follows (in thousands): September 30, 2016 Remainder of 2016 $ 2,770 2017 10,284 2018 10,425 2019 10,058 2020 10,151 Thereafter 1,258,898 Total debt, excluding debt issuance costs and discounts $ 1,302,586 |
Summary of Components of Interest Expense, Net | A summary of the components of interest expense, net follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Senior Credit Facility: Revolving Credit Facility $ 124 $ — $ 209 $ — Term Loan Facility 15,179 — 25,611 — ABL Credit Facility 120 — 202 — Senior Notes 11,626 — 20,540 — Amortization of debt issuance costs and discounts 1,692 — 2,883 — All other interest expense (income), net (713 ) 124 (503 ) 361 Total interest expense, net, from long-term debt 28,028 124 48,942 361 Due to Parent, net — 24,425 35,814 73,818 Total interest expense, net $ 28,028 $ 24,549 $ 84,756 $ 74,179 |
Other Long-Term Liabilities (Ta
Other Long-Term Liabilities (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Other Liabilities Disclosure [Abstract] | |
Summary of Other Long-Term Liabilities | A summary of other long-term liabilities follows (in thousands): September 30, December 31, 2016 2015 Professional and general liability insurance reserves $ 81,083 $ 77,423 Workers' compensation liability insurance reserves 17,578 20,507 Benefit plan liabilities 13,293 3,376 Deferred rent 3,969 3,770 Other miscellaneous long-term liabilities 2,748 3,065 Total other long-term liabilities $ 118,671 $ 108,141 |
Fair Value of Financial Instr33
Fair Value of Financial Instruments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Fair Value Disclosures [Abstract] | |
Summary of Carrying Amounts and Estimated Fair Values of Long-Term Debt Instruments | A summary of the carrying amounts and estimated fair values of the Company’s long-term debt follows (in thousands): September 30, 2016 December 31, 2015 Carrying Estimated Carrying Estimated Amount Fair Value Amount Fair Value Revolving Credit Facility $ — $ — $ — $ — Term Loan Facility 875,600 850,978 — — ABL Credit Facility — — — — Senior Notes 400,000 334,384 — — Other debt 26,986 26,986 23,415 23,415 Total long-term debt, excluding debt issuance costs and discounts $ 1,302,586 $ 1,212,348 $ 23,415 $ 23,415 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Earnings Per Share [Abstract] | |
Summary of Computation of Basic and Diluted Earnings Per Share | A summary of the computation of basic and diluted earnings per share follows (dollars in thousands, except per share amounts): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Numerator: Net income (loss) $ (6,452 ) $ (4,075 ) $ (255,105 ) $ 3,954 Less: Net income attributable to noncontrolling interests 507 1,638 1,917 2,038 Net income (loss) attributable to Quorum Health Corporation $ (6,959 ) $ (5,713 ) $ (257,022 ) $ 1,916 Denominator: Weighted-average shares outstanding - basic and diluted 28,413,532 28,412,054 28,412,552 28,412,054 Basic and diluted earnings (loss) per share attributable to Quorum Health Corporation stockholders $ (0.24 ) $ (0.20 ) $ (9.05 ) $ 0.07 |
Additional Cash Flow Informat35
Additional Cash Flow Information (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Significant Non Cash Transactions [Abstract] | |
Summary of Significant Non-Cash Transactions Related to Consolidated and Combined Balance Sheets | A summary of significant non-cash transactions related to the consolidated and combined balance sheets follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Transfer of liabilities from Parent $ — $ — $ 16,596 $ — Non-cash capital contribution from Parent — — 518,518 — Property and equipment acquired under capital leases and deferred financing obligations 1,401 4,286 6,521 4,944 |
Segments (Tables)
Segments (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Segment Reporting [Abstract] | |
Summary of Financial Information Related to Segments | A summary of financial information related to segments follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Net operating revenues: Hospital operations $ 522,957 $ 521,007 $ 1,559,274 $ 1,560,628 All other 20,982 22,136 63,953 68,484 Total net operating revenues $ 543,939 $ 543,143 $ 1,623,227 $ 1,629,112 Adjusted EBITDA: Hospital operations $ 41,618 $ 57,422 $ 117,014 $ 176,067 All other 5,131 2,873 15,191 9,882 Total Adjusted EBITDA $ 46,749 $ 60,295 $ 132,205 $ 185,949 September 30, December 31, 2016 2015 Assets: Hospital operations $ 1,916,067 $ 2,256,557 All other 183,133 38,299 Total assets $ 2,099,200 $ 2,294,856 |
Summary of Reconciliation of Adjusted EBITDA to Net Income (Loss) | A reconciliation of Adjusted EBITDA to net income (loss) follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Adjusted EBITDA $ 46,749 $ 60,295 $ 132,205 $ 185,949 Interest expense, net (28,028 ) (24,549 ) (84,756 ) (74,179 ) (Provision for) benefit from income taxes 4,081 721 50,320 (3,435 ) Depreciation and amortization (28,234 ) (31,488 ) (90,854 ) (95,327 ) Legal and settlement costs (488 ) — (6,176 ) — Impairment of-long-lived assets and goodwill — — (250,400 ) — Transaction costs related to the spin-off (532 ) (9,054 ) (5,444 ) (9,054 ) Net income (loss) $ (6,452 ) $ (4,075 ) $ (255,105 ) $ 3,954 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Summary of Stock-Based Compensation Expense | A summary of stock-based compensation expense follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Stock-based compensation resulting from the Spin-off Transaction $ 1,149 $ — $ 1,958 $ — Stock-based compensation related to grants following the Spin-off Transaction 1,632 — 2,720 — Total stock-based compensation expense $ 2,781 $ — $ 4,678 $ — |
QHC Awards Distributed in Spin-off Transaction [Member] | |
Summary of Activity Related to Unvested Restricted Stock Awards | A summary of the activity related to unvested QHC restricted stock awards held by QHC and CHS employees from the Spin-off Transaction date through September 30, 2016 follows: QHC Awards Distributed in Spin-off Transaction QHC Employees CHS Employees Total Unvested restricted stock awards at Spin-off Transaction date 54,321 638,088 692,409 Vested (336 ) (1,684 ) (2,020 ) Forfeited (164 ) (3,648 ) (3,812 ) Unvested restricted stock awards at June 30, 2016 53,821 632,756 686,577 Vested (557 ) (1,010 ) (1,567 ) Forfeited (704 ) (2,224 ) (2,928 ) Unvested restricted stock awards at September 30, 2016 52,560 629,522 682,082 |
QHC Restricted Stock Awards Granted Following Spin-off Transaction [Member] | |
Summary of Activity Related to Unvested Restricted Stock Awards | A summary of the activity related to QHC unvested restricted stock awards granted subsequent to the Spin-off Transaction date follows: QHC Awards Granted Subsequent to Spin-off Transaction Weighted- Average Grant Date Shares Fair Value Unvested restricted stock awards at Spin-off Transaction date — $ — Granted 1,081,005 12.77 Vested — — Forfeited — — Unvested restricted stock awards at June 30, 2016 1,081,005 $ 12.77 Granted — — Vested — — Forfeited — — Unvested restricted stock awards at September 30, 2016 1,081,005 $ 12.77 |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Related Party Transactions [Abstract] | |
Summary of Allocated Costs from Parent | A summary of allocated costs to QHC from CHS follows (in thousands): Three Months Ended September 30, Nine Months Ended September 30, 2016 2015 2016 2015 Insurance costs $ — $ 35,108 $ 44,246 $ 101,629 Management fees from Parent — 8,797 11,792 26,762 All other allocated costs — 25,106 25,021 54,280 Total related party operating costs and expenses $ — $ 69,011 $ 81,059 $ 182,671 |
Commitments and Contingencies (
Commitments and Contingencies (Tables) | 9 Months Ended |
Sep. 30, 2016 | |
Commitments And Contingencies Disclosure [Abstract] | |
Summary of Insurance Reserves Related to Professional and General Liability Claims and Workers' Compensation Claims | A summary of the Company’s insurance reserves related to professional and general liability claims and workers’ compensation claims, distinguished between those indemnified by CHS and those that relate to the Company’s self-insurance risks, follows (in thousands): September 30, 2016 Current Long-Term Current Long-Term Receivable Receivable Liability Liability Professional and general liability: Insurance reserves indemnified by CHS, Inc. $ 22,137 $ 66,401 $ 22,137 $ 66,401 All other self-insurance reserves 4,487 4,077 9,128 14,682 Total insurance reserves for professional and general liability 26,624 70,478 31,265 81,083 Workers' compensation liability: Insurance reserves indemnified by CHS, Inc. 5,529 16,405 5,529 16,405 All other self-insurance reserves — — 1,241 1,173 Total insurance reserves for workers' compensation liability 5,529 16,405 6,770 17,578 Total self-insurance reserves $ 32,153 $ 86,883 $ 38,035 $ 98,661 December 31, 2015 Current Long-Term Current Long-Term Receivable Receivable Liability Liability Professional and general liability: Insurance reserves indemnified by CHS, Inc. $ 21,120 $ 72,412 $ 21,120 $ 72,412 All other self-insurance reserves — 4,077 — 5,011 Total insurance reserves for professional and general liability 21,120 76,489 21,120 77,423 Workers' compensation liability: Insurance reserves indemnified by CHS, Inc. 8,314 20,507 8,314 20,507 All other self-insurance reserves — — — — Total insurance reserves for workers' compensation liability 8,314 20,507 8,314 20,507 Total self-insurance reserves $ 29,434 $ 96,996 $ 29,434 $ 97,930 |
Description of the Business a40
Description of the Business and Spin-Off Transaction (Narrative) (Details) | Apr. 29, 2016USD ($)Hospital$ / sharesshares | Apr. 22, 2016USD ($) | Sep. 30, 2016USD ($)Hospitalbedstate$ / shares | Dec. 31, 2015USD ($) |
Description Of Business And Spin Off Transaction [Line Items] | ||||
Number of hospitals owned or leased | Hospital | 38 | |||
Number of licensed beds | bed | 3,578 | |||
Number of States in which Entity Operates | state | 16 | |||
Common stock, par value | $ / shares | $ 0.0001 | |||
Cash proceeds paid to Parent | $ 1,217,336,000 | |||
Debt Instrument, Unamortized Discount | $ 24,536,000 | $ 0 | ||
Additional Paid-In Capital [Member] | ||||
Description Of Business And Spin Off Transaction [Line Items] | ||||
Non-cash capital contribution from Parent | 518,521,000 | |||
Senior Notes, maturing 2023 [Member] | ||||
Description Of Business And Spin Off Transaction [Line Items] | ||||
Debt Instrument, Face Amount | $ 400,000,000 | |||
Debt Instrument, Interest Rate, Stated Percentage | 11.625% | |||
Debt Instrument, Unamortized Discount | $ 6,900,000 | |||
Debt instrument issue discount percentage | 1.734% | |||
ABL Credit Facility, maturing 2021 [Member] | ||||
Description Of Business And Spin Off Transaction [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | 125,000,000 | |||
Senior Credit Facility [Member] | Term Loan Facility, maturing 2022 [Member] | ||||
Description Of Business And Spin Off Transaction [Line Items] | ||||
Debt Instrument, Face Amount | 880,000,000 | |||
Debt Instrument, Unamortized Discount | $ 17,600,000 | |||
Term Facility Issued Percentage on Par Value | 98.00% | |||
Senior Credit Facility [Member] | Revolving Credit Facility, maturing 2021 [Member] | ||||
Description Of Business And Spin Off Transaction [Line Items] | ||||
Line of Credit Facility, Maximum Borrowing Capacity | $ 100,000,000 | |||
Spin-off from CHS [Member] | ||||
Description Of Business And Spin Off Transaction [Line Items] | ||||
Number of hospitals owned or leased | Hospital | 38 | |||
Percentage ownership of number of stock shares held by the parent | 100.00% | |||
Common stock, par value | $ / 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 | |||
Non-cash capital contribution from Parent | $ 518,521,000 | |||
Cash contribution from parent | 13,500,000 | |||
Cash contribution from parent for initial working capital | 20,000,000 | |||
Differences in estimated and actual financing transaction fees for the Spin-off Transaction | $ 6,500,000 | |||
Sales Revenue, Segment [Member] | Segment Concentration Risk [Member] | Hospital Operations Reporting Unit [Member] | ||||
Description Of Business And Spin Off Transaction [Line Items] | ||||
Concentration risk, percentage | 95.00% |
Description of the Business a41
Description of the Business and Spin-Off Transaction - Summary of Transactions to Effect the Spin-Off Transaction (Details) - USD ($) $ in Thousands | Apr. 29, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 |
Description Of Business And Spin Off Transaction [Line Items] | |||||
Long-Term Debt, balance at April 29, 2016 (prior to spin-off transaction) | $ 24,179 | $ 15,500 | |||
Borrowings of long-term debt, net of debt issuance costs and discounts | 1,230,819 | ||||
Long-Term Debt, balance at April 29, 2016 (after spin-off transaction) | 1,254,998 | $ 1,241,301 | 1,241,301 | ||
Due to Parent, Net, balance at April 29, 2016 (prior to spin-off transaction) | 1,811,034 | 1,800,908 | |||
Cash proceeds paid to Parent | (1,217,336) | ||||
Transfer of liabilities from Parent | (16,596) | 0 | $ 0 | (16,596) | $ 0 |
Net deferred tax liability resulting from Spin-off Transaction | (61,718) | ||||
Non-cash capital contribution from Parent | (515,384) | ||||
Due to Parent, Net, balance at April 29, 2016 (after spin-off transaction) | $ 0 | 0 | 0 | ||
Stockholders' equity, beginning balance | 15,943 | ||||
Stockholders' equity, ending balance | $ 290,433 | $ 290,433 | |||
Stockholders' equity, ending balance, shares | 28,412,054 | 29,486,215 | 29,486,215 | ||
Common Stock [Member] | |||||
Description Of Business And Spin Off Transaction [Line Items] | |||||
Stockholders' equity, beginning balance | $ 0 | ||||
Stockholders' equity, beginning balance, shares | 0 | ||||
Distribution of common stock | $ 3 | ||||
Distribution of common stock, shares | 27,719,645 | ||||
Distribution of restricted stock awards | $ 0 | ||||
Distribution of restricted stock awards, shares | 692,409 | ||||
Stockholders' equity, ending balance | $ 3 | $ 3 | $ 3 | ||
Stockholders' equity, ending balance, shares | 28,412,054 | 29,486,215 | 29,486,215 | ||
Additional Paid-In Capital [Member] | |||||
Description Of Business And Spin Off Transaction [Line Items] | |||||
Non-cash capital contribution from Parent | $ 0 | $ 0 | $ 518,518 | $ 0 | |
Stockholders' equity, beginning balance | $ 0 | ||||
Non-cash capital contribution from Parent | 518,521 | ||||
Distribution of common stock | (3) | ||||
Stockholders' equity, ending balance | 518,518 | $ 523,168 | 523,168 | ||
Parent [Member] | |||||
Description Of Business And Spin Off Transaction [Line Items] | |||||
Stockholders' equity, beginning balance | 3,137 | $ 3,184 | |||
Non-cash capital contribution from Parent | (3,137) | ||||
Stockholders' equity, ending balance | $ 0 |
Description of the Business a42
Description of the Business and Spin-Off Transaction - Summary of Liabilities Transferred from Parent (Details) - Spin-off from CHS [Member] $ in Thousands | Apr. 29, 2016USD ($) |
Description Of Business And Spin Off Transaction [Line Items] | |
Total liabilities transferred from Parent | $ 16,596 |
Accounts Payable for Capital Expenditures [Member] | |
Description Of Business And Spin Off Transaction [Line Items] | |
Total liabilities transferred from Parent | 8,422 |
Benefit Plan Liabilities [Member] | |
Description Of Business And Spin Off Transaction [Line Items] | |
Total liabilities transferred from Parent | 5,964 |
Other Liabilities [Member] | |
Description Of Business And Spin Off Transaction [Line Items] | |
Total liabilities transferred from Parent | $ 2,210 |
Basis of Presentation and Sig43
Basis of Presentation and Significant Accounting Policies (Summary of Components of Operating Revenues Before Provision for Bad Debts) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Health Care Organizations [Abstract] | ||||
Operating revenues | $ 3,016,603 | $ 2,912,062 | $ 9,140,041 | $ 8,683,671 |
Less: Contractual allowances | (2,289,702) | (2,202,984) | (6,986,290) | (6,586,713) |
Less: Discounts | (114,350) | (103,192) | (328,553) | (275,964) |
Total operating revenues, net of contractual allowances and discounts | $ 612,551 | $ 605,886 | $ 1,825,198 | $ 1,820,994 |
Basis of Presentation and Sig44
Basis of Presentation and Significant Accounting Policies (Summary of Operating Revenues by Payor Source) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Health Care Organization Receivable And Revenue Disclosures [Line Items] | ||||
Total operating revenues, net of contractual allowances and discounts, Amount | $ 612,551 | $ 605,886 | $ 1,825,198 | $ 1,820,994 |
Sales Revenue, Net [Member] | Payor Concentration Risk [Member] | ||||
Health Care Organization Receivable And Revenue Disclosures [Line Items] | ||||
Concentration risk, percentage | 100.00% | 100.00% | 100.00% | 100.00% |
Medicare [Member] | ||||
Health Care Organization Receivable And Revenue Disclosures [Line Items] | ||||
Total operating revenues, net of contractual allowances and discounts, Amount | $ 162,753 | $ 162,678 | $ 505,836 | $ 494,051 |
Medicare [Member] | Sales Revenue, Net [Member] | Payor Concentration Risk [Member] | ||||
Health Care Organization Receivable And Revenue Disclosures [Line Items] | ||||
Concentration risk, percentage | 26.60% | 26.90% | 27.70% | 27.10% |
Medicaid [Member] | ||||
Health Care Organization Receivable And Revenue Disclosures [Line Items] | ||||
Total operating revenues, net of contractual allowances and discounts, Amount | $ 125,679 | $ 113,678 | $ 342,030 | $ 321,984 |
Medicaid [Member] | Sales Revenue, Net [Member] | Payor Concentration Risk [Member] | ||||
Health Care Organization Receivable And Revenue Disclosures [Line Items] | ||||
Concentration risk, percentage | 20.50% | 18.80% | 18.70% | 17.70% |
Managed Care and Commercial [Member] | ||||
Health Care Organization Receivable And Revenue Disclosures [Line Items] | ||||
Total operating revenues, net of contractual allowances and discounts, Amount | $ 239,461 | $ 230,498 | $ 714,340 | $ 726,250 |
Managed Care and Commercial [Member] | Sales Revenue, Net [Member] | Payor Concentration Risk [Member] | ||||
Health Care Organization Receivable And Revenue Disclosures [Line Items] | ||||
Concentration risk, percentage | 39.10% | 38.00% | 39.20% | 39.90% |
Self-Pay [Member] | ||||
Health Care Organization Receivable And Revenue Disclosures [Line Items] | ||||
Total operating revenues, net of contractual allowances and discounts, Amount | $ 60,079 | $ 71,785 | $ 184,004 | $ 191,880 |
Self-Pay [Member] | Sales Revenue, Net [Member] | Payor Concentration Risk [Member] | ||||
Health Care Organization Receivable And Revenue Disclosures [Line Items] | ||||
Concentration risk, percentage | 9.80% | 11.80% | 10.10% | 10.50% |
Non-Patient [Member] | ||||
Health Care Organization Receivable And Revenue Disclosures [Line Items] | ||||
Total operating revenues, net of contractual allowances and discounts, Amount | $ 24,579 | $ 27,247 | $ 78,988 | $ 86,829 |
Non-Patient [Member] | Sales Revenue, Net [Member] | Payor Concentration Risk [Member] | ||||
Health Care Organization Receivable And Revenue Disclosures [Line Items] | ||||
Concentration risk, percentage | 4.00% | 4.50% | 4.30% | 4.80% |
Basis of Presentation and Sig45
Basis of Presentation and Significant Accounting Policies (Narrative) (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2016USD ($) | Jun. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)Hospital | Sep. 30, 2015USD ($) | Dec. 31, 2015USD ($) | Dec. 31, 2014Hospital | Apr. 29, 2016shares | |
Revenues and Accounts Receivable [Abstract] | ||||||||
Operating revenues, net of contractual allowances and discounts | $ 612,551,000 | $ 605,886,000 | $ 1,825,198,000 | $ 1,820,994,000 | ||||
Increase (decrease) in net operating revenues during period for contractual adjustments related to final cost report settlements on previous program reimbursements | (800,000) | (1,100,000) | (5,200,000) | (13,200,000) | ||||
Operating revenues | 3,016,603,000 | 2,912,062,000 | 9,140,041,000 | 8,683,671,000 | ||||
Charity care costs | 1,600,000 | 1,600,000 | 4,000,000 | 3,900,000 | ||||
Concentration of Credit Risk [Abstract] | ||||||||
Accounts receivable, net of contractual allowances | 407,687,000 | 407,687,000 | $ 390,890,000 | |||||
General and Administrative Costs [Abstract] | ||||||||
General and administrative costs | 14,100,000 | 10,900,000 | $ 37,800,000 | $ 32,900,000 | ||||
Goodwill [Abstract] | ||||||||
New date of annual goodwill impairment test | The Company performs its annual testing of impairment for goodwill in the fourth quarter of each year. | |||||||
Intangible Assets [Abstract] | ||||||||
Acquired finite-lived intangible asset, residual value | 0 | $ 0 | ||||||
Assets and Liabilities of Hospitals Held for Sale [Abstract] | ||||||||
Maximum period during which assets held for sale sold | 12 months | |||||||
Spin-off from CHS [Member] | ||||||||
Stock-Based Compensation [Abstract] | ||||||||
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 | |||||||
Restricted Stock [Member] | Spin-off from CHS [Member] | ||||||||
Stock-Based Compensation [Abstract] | ||||||||
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 | |||||||
Accrued Salaries and Benefits [Member] | ||||||||
Self-Insured Medical Benefits [Abstract] | ||||||||
Undiscounted reserve for self-insured employee health benefits | 16,000,000 | $ 16,000,000 | ||||||
Capitalized Internal Use Software, Except Significant System Conversions [Member] | ||||||||
Intangible Assets [Abstract] | ||||||||
Finite-lived intangible assets, useful life | 3 years | |||||||
Community Health Systems, Inc [Member] | ||||||||
Long-Lived Assets [Abstract] | ||||||||
Number of Hospitals | Hospital | 4 | |||||||
Accounts Receivable [Member] | Credit Concentration Risk [Member] | ||||||||
Concentration of Credit Risk [Abstract] | ||||||||
Concentration risk, percentage | 100.00% | 100.00% | ||||||
Sales Revenue, Net [Member] | Credit Concentration Risk [Member] | ||||||||
Concentration of Credit Risk [Abstract] | ||||||||
Concentration risk, percentage | 5.00% | 5.00% | ||||||
Minimum [Member] | ||||||||
Revenues and Accounts Receivable [Abstract] | ||||||||
Number of days from date of discharge in which company establishes doubtful accounts reserve on non-self pay payor receivables | 365 days | |||||||
Minimum [Member] | Capitalized Internal Use Software, Significant System Conversions [Member] | ||||||||
Intangible Assets [Abstract] | ||||||||
Finite-lived intangible assets, useful life | 8 years | |||||||
Minimum [Member] | Land Improvements [Member] | ||||||||
Long-Lived Assets [Abstract] | ||||||||
Estimated useful life of asset | 3 years | |||||||
Minimum [Member] | Buildings and Improvements [Member] | ||||||||
Long-Lived Assets [Abstract] | ||||||||
Estimated useful life of asset | 5 years | |||||||
Minimum [Member] | Equipment and Fixtures [Member] | ||||||||
Long-Lived Assets [Abstract] | ||||||||
Estimated useful life of asset | 3 years | |||||||
Maximum [Member] | Capitalized Internal Use Software, Significant System Conversions [Member] | ||||||||
Intangible Assets [Abstract] | ||||||||
Finite-lived intangible assets, useful life | 10 years | |||||||
Maximum [Member] | Land Improvements [Member] | ||||||||
Long-Lived Assets [Abstract] | ||||||||
Estimated useful life of asset | 20 years | |||||||
Maximum [Member] | Buildings and Improvements [Member] | ||||||||
Long-Lived Assets [Abstract] | ||||||||
Estimated useful life of asset | 40 years | |||||||
Maximum [Member] | Equipment and Fixtures [Member] | ||||||||
Long-Lived Assets [Abstract] | ||||||||
Estimated useful life of asset | 18 years | |||||||
Illinois [Member] | ||||||||
Revenues and Accounts Receivable [Abstract] | ||||||||
Increase (decrease) in net operating revenues during period for contractual adjustments related to final cost report settlements on previous program reimbursements | $ (11,100,000) | |||||||
Long-Lived Assets [Abstract] | ||||||||
Number of Hospitals | Hospital | 9 | |||||||
Medicare Managed Care Advantage Plans [Member] | ||||||||
Revenues and Accounts Receivable [Abstract] | ||||||||
Operating revenues, net of contractual allowances and discounts | 42,100,000 | 34,500,000 | $ 127,200,000 | 106,600,000 | ||||
Charity Care [Member] | ||||||||
Revenues and Accounts Receivable [Abstract] | ||||||||
Operating revenues | 10,100,000 | 9,500,000 | 24,900,000 | 22,700,000 | ||||
Medicaid State Supplemental Payment Program [Member] | ||||||||
Revenues and Accounts Receivable [Abstract] | ||||||||
Operating revenues, net of contractual allowances and discounts | 93,300,000 | $ 68,000,000 | ||||||
Medicare [Member] | ||||||||
Revenues and Accounts Receivable [Abstract] | ||||||||
Operating revenues, net of contractual allowances and discounts | 162,753,000 | $ 162,678,000 | 505,836,000 | $ 494,051,000 | ||||
Concentration of Credit Risk [Abstract] | ||||||||
Accounts receivable, net of contractual allowances | 78,700,000 | $ 78,700,000 | $ 67,700,000 | |||||
Electronic Health Records Incentives Earned [Abstract] | ||||||||
Cash received and deferred during period | $ 1,800,000 | |||||||
Cash Incentive Refund | $ 1,800,000 | |||||||
Medicare [Member] | Accounts Receivable [Member] | Credit Concentration Risk [Member] | ||||||||
Concentration of Credit Risk [Abstract] | ||||||||
Concentration risk, percentage | 10.50% | 9.20% |
Basis of Presentation and Sig46
Basis of Presentation and Significant Accounting Policies (Summary of Components of Amounts Due from and Due to Third-Party Payors) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Health Care Organization Receivable And Revenue Disclosures [Line Items] | ||
Due from third-party payors | $ 127,073 | $ 110,806 |
Due to third-party payors | 45,102 | 30,103 |
Previous Program Reimbursements and Final Cost Report Settlements [Member] | ||
Health Care Organization Receivable And Revenue Disclosures [Line Items] | ||
Due from third-party payors | 22,091 | 33,732 |
Due to third-party payors | 33,440 | 21,015 |
State Supplemental Payment Programs [Member] | ||
Health Care Organization Receivable And Revenue Disclosures [Line Items] | ||
Due from third-party payors | 104,982 | 77,074 |
Due to third-party payors | $ 11,662 | $ 9,088 |
Basis of Presentation and Sig47
Basis of Presentation and Significant Accounting Policies (Summary of Portion of Medicaid Reimbursements Attributable to State Supplemental Payment Programs) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Health Care Organization Receivable And Revenue Disclosures [Line Items] | ||||
Medicaid revenues | $ 3,016,603 | $ 2,912,062 | $ 9,140,041 | $ 8,683,671 |
Provider taxes and other expenses | 526,444 | 523,390 | 1,843,896 | 1,547,544 |
State Supplemental Payment Programs [Member] | ||||
Health Care Organization Receivable And Revenue Disclosures [Line Items] | ||||
Medicaid revenues | 54,688 | 54,517 | 162,009 | 159,734 |
Provider taxes and other expenses | 19,559 | 18,438 | 57,590 | 56,931 |
Reimbursements attributable to state supplemental payment programs, net of expenses | $ 35,129 | $ 36,079 | $ 104,419 | $ 102,803 |
Basis of Presentation and Sig48
Basis of Presentation and Significant Accounting Policies (Summary of Components of Accounts Receivable Before Contractual Allowances Discounts and Allowance for Doubtful Accounts) (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2016 | Dec. 31, 2015 | |
Accounts Notes And Loans Receivable [Line Items] | ||
Total accounts receivable gross, Amount | $ 2,593,278 | $ 2,326,832 |
Accounts Receivable [Member] | Credit Concentration Risk [Member] | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Concentration risk, percentage | 100.00% | 100.00% |
Third-Parties [Member] | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Total accounts receivable gross, Amount | $ 1,947,231 | $ 1,688,138 |
Third-Parties [Member] | Accounts Receivable [Member] | Credit Concentration Risk [Member] | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Concentration risk, percentage | 75.10% | 72.60% |
Self-Pay [Member] | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Total accounts receivable gross, Amount | $ 646,047 | $ 638,694 |
Self-Pay [Member] | Accounts Receivable [Member] | Credit Concentration Risk [Member] | ||
Accounts Notes And Loans Receivable [Line Items] | ||
Concentration risk, percentage | 24.90% | 27.40% |
Basis of Presentation and Sig49
Basis of Presentation and Significant Accounting Policies (Summary of Changes in Allowance for Doubtful Accounts) (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Accounting Policies [Abstract] | |
Balance at beginning of period | $ 346,507 |
Provision for bad debts | 201,971 |
Amounts written off, net of recoveries | (206,215) |
Balance at end of period | $ 342,263 |
Basis of Presentation and Sig50
Basis of Presentation and Significant Accounting Policies (Summary of States in Which Company Generates More Than 5% of its Total Revenues) (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)Hospital | Sep. 30, 2015USD ($) | |
Concentration Risk [Line Items] | ||||
Total net operating revenues before the provision for bad debts, Amount | $ 543,939 | $ 543,143 | $ 1,623,227 | $ 1,629,112 |
Illinois [Member] | ||||
Concentration Risk [Line Items] | ||||
Number of Hospitals | Hospital | 9 | |||
Total net operating revenues before the provision for bad debts, Amount | $ 609,091 | 611,569 | ||
Oregon [Member] | ||||
Concentration Risk [Line Items] | ||||
Number of Hospitals | Hospital | 1 | |||
Total net operating revenues before the provision for bad debts, Amount | $ 156,397 | 144,607 | ||
Georgia [Member] | ||||
Concentration Risk [Line Items] | ||||
Number of Hospitals | Hospital | 4 | |||
Total net operating revenues before the provision for bad debts, Amount | $ 163,127 | 168,930 | ||
California [Member] | ||||
Concentration Risk [Line Items] | ||||
Number of Hospitals | Hospital | 2 | |||
Total net operating revenues before the provision for bad debts, Amount | $ 151,278 | 156,128 | ||
Kentucky [Member] | ||||
Concentration Risk [Line Items] | ||||
Number of Hospitals | Hospital | 3 | |||
Total net operating revenues before the provision for bad debts, Amount | $ 89,278 | $ 96,653 | ||
Sales Revenue, Net [Member] | Illinois [Member] | Geographic Concentration Risk [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 34.90% | 35.30% | ||
Sales Revenue, Net [Member] | Oregon [Member] | Geographic Concentration Risk [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 9.00% | 8.30% | ||
Sales Revenue, Net [Member] | Georgia [Member] | Geographic Concentration Risk [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 9.30% | 9.70% | ||
Sales Revenue, Net [Member] | California [Member] | Geographic Concentration Risk [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 8.70% | 9.00% | ||
Sales Revenue, Net [Member] | Kentucky [Member] | Geographic Concentration Risk [Member] | ||||
Concentration Risk [Line Items] | ||||
Concentration risk, percentage | 5.10% | 5.60% |
Basis of Presentation and Sig51
Basis of Presentation and Significant Accounting Policies (Summary of Major Components of Other Operating Expenses) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Other Operating Expenses [Line Items] | ||||
Taxes and insurance | $ 24,690 | $ 32,019 | $ 94,257 | $ 91,357 |
Transition services agreements and allocations from Parent | 18,094 | 15,797 | 52,192 | 46,556 |
Repairs and maintenance | 9,611 | 12,728 | 31,576 | 36,024 |
Utilities | 8,369 | 8,179 | 22,526 | 22,546 |
Other miscellaneous operating expenses | 22,061 | 17,233 | 59,524 | 56,645 |
Total other operating expenses | 154,878 | 161,186 | 482,526 | 472,237 |
Purchased Services [Member] | ||||
Other Operating Expenses [Line Items] | ||||
Professional fees | 44,242 | 44,251 | 133,316 | 129,898 |
Medical Specialist Fees [Member] | ||||
Other Operating Expenses [Line Items] | ||||
Professional fees | 27,811 | 22,182 | 77,343 | 62,449 |
Management Fees From Parent [Member] | ||||
Other Operating Expenses [Line Items] | ||||
Other operating expenses | $ 0 | $ 8,797 | $ 11,792 | $ 26,762 |
Basis of Presentation and Sig52
Basis of Presentation and Significant Accounting Policies (Summary of Activity Related to Electronic Health Records Incentives) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Electronic Health Records Incentives Earned [Abstract] | ||||
Electronic health records incentives receivable at beginning of period | $ 1,973 | $ 5,848 | $ 11,227 | $ 12,204 |
Electronic health records incentives earned | 1,336 | 2,326 | 6,152 | 7,101 |
Cash incentive payments received | (367) | (1,237) | (13,116) | (9,457) |
Adjustments to receivable based on final cost report settlement or audit | 458 | 990 | (863) | (1,921) |
Electronic health records incentives receivable at end of period | 3,400 | 7,927 | 3,400 | 7,927 |
Deferred revenue related to electronic health records incentives at beginning of period | (1,054) | (3,795) | 0 | (14,351) |
Cash received and deferred during period | 1,054 | 0 | (3,639) | 0 |
Recognition of deferred incentives as earned | 0 | 3,795 | 3,639 | 14,351 |
Deferred revenue related to electronic health records incentives at end of period | 0 | 0 | 0 | 0 |
Total electronic health records incentives earned during period | 1,336 | 6,121 | 9,791 | 21,452 |
Total cash incentive payments received during period | $ 687 | $ (1,237) | $ (16,755) | $ (9,457) |
Hospitals Held for Sale and I53
Hospitals Held for Sale and Impairment of Long-Lived Assets (Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended |
Jun. 30, 2016 | Sep. 30, 2016 | |
Long Lived Assets Held For Sale [Line Items] | ||
Impairment of long-lived assets | $ 45,400 | |
Goodwill impairment charge | $ 205,000 | |
Hospitals Held for Sale [Member] | ||
Long Lived Assets Held For Sale [Line Items] | ||
Goodwill impairment charge | 5,000 | |
Hospitals Held for Sale [Member] | Property and Equipment [Member] | ||
Long Lived Assets Held For Sale [Line Items] | ||
Impairment of long-lived assets | 9,800 | |
Hospitals Held for Sale [Member] | Capitalized Software Costs [Member] | ||
Long Lived Assets Held For Sale [Line Items] | ||
Impairment of long-lived assets | 4,400 | |
Hospitals Held and Used [Member] | Property and Equipment [Member] | ||
Long Lived Assets Held For Sale [Line Items] | ||
Impairment of long-lived assets | $ 31,200 |
Property and Equipment (Summary
Property and Equipment (Summary of Property and Equipment) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Property Plant And Equipment [Line Items] | ||
Total property and equipment, at cost | $ 1,571,275 | $ 1,603,653 |
Less: Accumulated depreciation and amortization | (750,932) | (723,404) |
Total property and equipment, net | 820,343 | 880,249 |
Land and Improvements [Member] | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment, at cost | 95,652 | 100,053 |
Building and improvements [Member] | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment, at cost | 820,356 | 853,853 |
Equipment and Fixtures [Member] | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment, at cost | 604,790 | 616,667 |
Construction in progress [Member] | ||
Property Plant And Equipment [Line Items] | ||
Total property and equipment, at cost | $ 50,477 | $ 33,080 |
Property and Equipment (Narrati
Property and Equipment (Narrative) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Property Plant And Equipment [Abstract] | |||||
Depreciation expense | $ 19.7 | $ 22.5 | $ 64.7 | $ 67.9 | |
Assets held under capital lease obligations, at cost | 29.9 | 29.9 | $ 23.4 | ||
Assets held under capital lease obligations, net of accumulated amortization | $ 27.8 | 27.8 | $ 22.4 | ||
Purchases of property and equipment accrued in accounts payable | $ 8.5 |
Goodwill and Intangible Asset56
Goodwill and Intangible Assets (Summary of Changes in Goodwill) (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2016USD ($) | |
Goodwill And Intangible Assets Disclosure [Abstract] | |
Goodwill, beginning balance | $ 541,704 |
Acquisitions | 108 |
Impairment | (205,000) |
Goodwill, ending balance | $ 336,812 |
Goodwill and Intangible Asset57
Goodwill and Intangible Assets (Goodwill Narrative) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |
Jun. 30, 2016 | Sep. 30, 2016 | Dec. 31, 2015 | |
Goodwill [Line Items] | |||
Goodwill | $ 336,812 | $ 541,704 | |
Goodwill impairment charge | 205,000 | ||
Hospitals Held for Sale [Member] | |||
Goodwill [Line Items] | |||
Goodwill impairment charge | $ 5,000 | ||
Hospital Operations Reporting Unit [Member] | |||
Goodwill [Line Items] | |||
Goodwill | 303,500 | 508,400 | |
Goodwill impairment charge | $ 200,000 | ||
Hospital Management Advisory and Consulting Services Reporting Unit [Member] | |||
Goodwill [Line Items] | |||
Goodwill | $ 33,300 | $ 33,300 |
Goodwill and Intangible Asset58
Goodwill and Intangible Assets (Summary of Intangible Assets ) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | ||
Cost | $ 248,780 | $ 254,810 |
Accumulated amortization | (151,064) | (136,915) |
Total finite-lived intangible assets, net | 97,716 | 117,895 |
Total indefinite-lived intangible assets | 8,590 | 11,355 |
Total intangible assets, gross | 257,370 | 266,165 |
Total intangible assets, net | 106,306 | 129,250 |
Trade Names [Member] | ||
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | ||
Total indefinite-lived intangible assets | 4,000 | 4,000 |
Medical Licenses and Other Indefinite-Lived Intangible Assets [Member] | ||
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | ||
Total indefinite-lived intangible assets | 4,590 | 7,355 |
Capitalized Software Costs [Member] | ||
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | ||
Cost | 193,085 | 194,941 |
Accumulated amortization | (113,061) | (98,004) |
Total finite-lived intangible assets, net | 80,024 | 96,937 |
Physician Income Guarantee Contracts [Member] | ||
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | ||
Cost | 11,356 | 16,594 |
Accumulated amortization | (5,611) | (9,560) |
Total finite-lived intangible assets, net | 5,745 | 7,034 |
Other Finite-Lived Intangible Assets [Member] | ||
Finite-Lived and Indefinite-Lived Intangible Assets [Line Items] | ||
Cost | 44,339 | 43,275 |
Accumulated amortization | (32,392) | (29,351) |
Total finite-lived intangible assets, net | $ 11,947 | $ 13,924 |
Goodwill and Intangible Asset59
Goodwill and Intangible Assets (Intangible Assets Narrative) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | $ 248,780 | $ 254,810 |
Capitalized Software Costs in Development Stage [Member] | ||
Finite-Lived Intangible Assets [Line Items] | ||
Finite-lived intangible assets, gross | $ 2,100 |
Goodwill and Intangible Asset60
Goodwill and Intangible Assets (Summary of Amortization Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Total amortization expense related to finite-lived intangible assets | $ 7,659 | $ 8,408 | $ 24,113 | $ 25,508 |
Amortization of leasehold improvements and property and equipment assets held under capital lease obligations | 812 | 623 | 2,105 | 1,858 |
Total amortization expense | 8,471 | 9,031 | 26,218 | 27,366 |
Capitalized Software Costs [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Total amortization expense related to finite-lived intangible assets | 6,214 | 6,670 | 19,539 | 20,134 |
Physician Income Guarantee Contracts [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Total amortization expense related to finite-lived intangible assets | 770 | 913 | 2,383 | 2,904 |
Other Finite-Lived Intangible Assets [Member] | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Total amortization expense related to finite-lived intangible assets | $ 675 | $ 825 | $ 2,191 | $ 2,470 |
Goodwill and Intangible Asset61
Goodwill and Intangible Assets (Amortization Expense Narrative) (Details) | 9 Months Ended |
Sep. 30, 2016 | |
Intangible Assets Except Software Costs and Physician Income Guarantee Contracts [Member] | |
Finite-Lived Intangible Assets [Line Items] | |
Finite-lived intangible assets, weighted-average useful life | 5 years 7 months 6 days |
Goodwill and Intangible Asset62
Goodwill and Intangible Assets (Summary of Future Estimated Amortization Expense) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Goodwill And Intangible Assets Disclosure [Abstract] | ||
Remainder of 2016 | $ 6,842 | |
2,017 | 26,758 | |
2,018 | 17,185 | |
2,019 | 14,218 | |
2,020 | 11,699 | |
Thereafter | 21,014 | |
Total finite-lived intangible assets, net | $ 97,716 | $ 117,895 |
Long-Term Debt (Summary of Long
Long-Term Debt (Summary of Long-Term Debt (Details) - USD ($) | Sep. 30, 2016 | Apr. 29, 2016 | Apr. 28, 2016 | Apr. 27, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | |||||
Total debt, excluding debt issuance costs and discounts | $ 1,302,586,000 | $ 23,415,000 | |||
Unamortized debt issuance costs and discounts | (50,792,000) | $ 0 | 0 | ||
Capital lease obligations | 26,044,000 | 22,323,000 | |||
Other debt | 942,000 | 1,092,000 | |||
Total debt | 1,251,794,000 | 23,415,000 | |||
Less: Current maturities of long-term debt | (10,493,000) | (7,915,000) | |||
Long-term debt | 1,241,301,000 | $ 1,254,998,000 | $ 24,179,000 | 15,500,000 | |
Due to Parent, net | 0 | $ 0 | $ 1,811,034,000 | 1,800,908,000 | |
Senior Notes, maturing 2023 [Member] | |||||
Debt Instrument [Line Items] | |||||
Total debt, excluding debt issuance costs and discounts | 400,000,000 | 0 | |||
ABL Credit Facility, maturing 2021 [Member] | |||||
Debt Instrument [Line Items] | |||||
Total debt, excluding debt issuance costs and discounts | 0 | 0 | |||
Senior Credit Facility [Member] | Revolving Credit Facility, maturing 2021 [Member] | |||||
Debt Instrument [Line Items] | |||||
Total debt, excluding debt issuance costs and discounts | 0 | 0 | |||
Senior Credit Facility [Member] | Term Loan Facility, maturing 2022 [Member] | |||||
Debt Instrument [Line Items] | |||||
Total debt, excluding debt issuance costs and discounts | $ 875,600,000 | $ 0 |
Long-Term Debt (Narrative) (Det
Long-Term Debt (Narrative) (Details) | Apr. 29, 2016Agreement | Sep. 30, 2016USD ($) | Apr. 28, 2016USD ($) | Dec. 31, 2015USD ($) |
Debt Disclosure [Abstract] | ||||
Number of credit agreement | Agreement | 2 | |||
Capitalized costs for debt issuance, discounts or premium | $ | $ (50,792,000) | $ 0 | $ 0 |
Long-Term Debt (Senior Credit F
Long-Term Debt (Senior Credit Facility Narrative) (Details) - USD ($) | Apr. 29, 2016 | Sep. 30, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | |||
Debt Instrument, Unamortized Discount | $ 24,536,000 | $ 0 | |
Senior Credit Facility [Member] | |||
Debt Instrument [Line Items] | |||
Letters of credit outstanding | 3,100,000 | ||
Additional borrowing capacity | $ 239,500,000 | ||
Senior Credit Facility [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Secured net leverage ratio | 3.54 | ||
Senior Credit Facility [Member] | Term Loan Facility, maturing 2022 [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 880,000,000 | ||
Debt Instrument, Unamortized Discount | $ 17,600,000 | ||
Term Facility Issued Percentage on Par Value | 98.00% | ||
Debt Instrument, Maturity Date | Apr. 29, 2022 | ||
Debt Instrument, Interest Rate, Effective Percentage | 7.66% | ||
Senior Credit Facility [Member] | Term Loan Facility, maturing 2022 [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 5.75% | ||
Derivative, Floor Interest Rate | 1.00% | ||
Senior Credit Facility [Member] | Term Loan Facility, maturing 2022 [Member] | Alternate Base Rate [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 4.75% | ||
Senior Credit Facility [Member] | Revolving Credit Facility, maturing 2021 [Member] | |||
Debt Instrument [Line Items] | |||
Line of Credit Facility, Maximum Borrowing Capacity | $ 100,000,000 | ||
Line of credit, outstanding balance | $ 0 | ||
Line of Credit Facility, Maturity Date | Apr. 29, 2021 | ||
Senior Credit Facility [Member] | Revolving Credit Facility, maturing 2021 [Member] | London Interbank Offered Rate (LIBOR) [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 2.75% | ||
Derivative, Floor Interest Rate | 0.00% | ||
Senior Credit Facility [Member] | Revolving Credit Facility, maturing 2021 [Member] | Alternate Base Rate [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Basis Spread on Variable Rate | 1.75% |
Long-Term Debt (Maximum Secured
Long-Term Debt (Maximum Secured Net Leverage Ratio Permitted) (Details) - Senior Credit Facility [Member] - Maximum [Member] | Sep. 30, 2016 |
Debt Instrument [Line Items] | |
Secured net leverage ratio | 3.54 |
Period from April 29, 2016 to June 30, 2017 [Member] | |
Debt Instrument [Line Items] | |
Secured net leverage ratio | 4.50 |
Period from July 1, 2017 to June 30, 2018 [Member] | |
Debt Instrument [Line Items] | |
Secured net leverage ratio | 4.25 |
Period from July 1, 2018 and thereafter [Member] | |
Debt Instrument [Line Items] | |
Secured net leverage ratio | 4 |
Long-Term Debt (ABL Credit Faci
Long-Term Debt (ABL Credit Facility Narrative) (Details) - ABL Credit Facility, maturing 2021 [Member] - USD ($) | Apr. 29, 2016 | Sep. 30, 2016 |
Debt Instrument [Line Items] | ||
Line of Credit Facility, Maximum Borrowing Capacity | $ 125,000,000 | |
Line of credit, outstanding balance | $ 0 | |
Line of Credit Facility, Maturity Date | Apr. 29, 2021 | |
Covenant Trigger Event, minimum required excess availability amount | $ 12,500,000 | |
Covenant Trigger Event, minimum required excess availability as percentage of aggregate commitments | 10.00% | |
Credit facility, excess availability amount | $ 115,400,000 | |
Minimum Consolidated Fixed Charge Ratio required to be maintained if covenant trigger event occurs | 1.10 | |
Cash Dominion Trigger Event, minimum required excess availability as percentage of aggregate commitments | 12.50% | |
Cash Dominion Trigger Event, minimum required excess availability amount | $ 15,000,000 | |
London Interbank Offered Rate (LIBOR) [Member] | ||
Debt Instrument [Line Items] | ||
Derivative, Floor Interest Rate | 0.00% | |
London Interbank Offered Rate (LIBOR) [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Basis Spread on Variable Rate | 1.75% | |
London Interbank Offered Rate (LIBOR) [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Basis Spread on Variable Rate | 2.25% | |
Base Rate [Member] | Minimum [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Basis Spread on Variable Rate | 0.75% | |
Base Rate [Member] | Maximum [Member] | ||
Debt Instrument [Line Items] | ||
Debt Instrument, Basis Spread on Variable Rate | 1.25% |
Long-Term Debt (Senior Notes Na
Long-Term Debt (Senior Notes Narrative) (Details) - USD ($) | Apr. 22, 2016 | Sep. 30, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | |||
Debt Instrument, Unamortized Discount | $ 24,536,000 | $ 0 | |
Senior Notes, maturing 2023 [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Face Amount | $ 400,000,000 | ||
Debt Instrument, Interest Rate, Stated Percentage | 11.625% | ||
Debt Instrument, Unamortized Discount | $ 6,900,000 | ||
Debt instrument issue discount percentage | 1.734% | ||
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 | ||
Debt Instrument, Interest Rate, Effective Percentage | 12.463% | ||
Debt Instrument, Redemption Price Percentage | 100.00% | ||
Senior Notes, maturing 2023 [Member] | Maximum [Member] | |||
Debt Instrument [Line Items] | |||
Debt Instrument, Redemption Price Percentage | 35.00% |
Long-Term Debt (Summary of Rede
Long-Term Debt (Summary of Redemption Dates and Prices of Senior Notes) (Details) - Senior Notes, maturing 2023 [Member] | Apr. 22, 2016 | Sep. 30, 2016 |
Debt Instrument Redemption [Line Items] | ||
Debt Instrument, Redemption Price Percentage | 100.00% | |
Period from April 15, 2019 to April 14, 2020 [Member] | ||
Debt Instrument Redemption [Line Items] | ||
Debt Instrument, Redemption Price Percentage | 108.719% | |
Period from April 15, 2020 to April 14, 2021 [Member] | ||
Debt Instrument Redemption [Line Items] | ||
Debt Instrument, Redemption Price Percentage | 105.813% | |
Period from April 15, 2021 to April 14, 2022 [Member] | ||
Debt Instrument Redemption [Line Items] | ||
Debt Instrument, Redemption Price Percentage | 102.906% | |
Period from April 15, 2022 to April 14, 2023 [Member] | ||
Debt Instrument Redemption [Line Items] | ||
Debt Instrument, Redemption Price Percentage | 100.00% |
Long-Term Debt (Summary of Re70
Long-Term Debt (Summary of Redemption Dates and Prices of Senior Notes) (Parenthetical) (Details) - Senior Notes, maturing 2023 [Member] | 9 Months Ended |
Sep. 30, 2016 | |
Period from April 15, 2019 to April 14, 2020 [Member] | |
Debt Instrument Redemption [Line Items] | |
Debt Instrument, Redemption Period, Start Date | Apr. 15, 2019 |
Debt Instrument, Redemption Period, End Date | Apr. 14, 2020 |
Period from April 15, 2020 to April 14, 2021 [Member] | |
Debt Instrument Redemption [Line Items] | |
Debt Instrument, Redemption Period, Start Date | Apr. 15, 2020 |
Debt Instrument, Redemption Period, End Date | Apr. 14, 2021 |
Period from April 15, 2021 to April 14, 2022 [Member] | |
Debt Instrument Redemption [Line Items] | |
Debt Instrument, Redemption Period, Start Date | Apr. 15, 2021 |
Debt Instrument, Redemption Period, End Date | Apr. 14, 2022 |
Period from April 15, 2022 to April 14, 2023 [Member] | |
Debt Instrument Redemption [Line Items] | |
Debt Instrument, Redemption Period, Start Date | Apr. 15, 2022 |
Debt Instrument, Redemption Period, End Date | Apr. 14, 2023 |
Long-Term Debt (Summary of Debt
Long-Term Debt (Summary of Debt Issuance Costs and Discounts) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Long Term Debt And Capital Lease Obligations [Abstract] | ||
Debt issuance costs | $ 29,139 | $ 0 |
Debt discounts | 24,536 | 0 |
Total debt issuance costs and discounts at origination | 53,675 | 0 |
Less: Amortization of debt issuance costs and discounts | (2,883) | 0 |
Total unamortized debt issuance costs and discounts | $ 50,792 | $ 0 |
Long-Term Debt (Capital Lease O
Long-Term Debt (Capital Lease Obligations and Other Debt Narrative) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Debt Instrument [Line Items] | ||
Capital lease obligations | $ 26,044 | $ 22,323 |
New Corporate Office [Member] | Brentwood, Tennessee [Member] | ||
Debt Instrument [Line Items] | ||
Capital lease obligations | $ 18,900 |
Long-Term Debt (Summary of De73
Long-Term Debt (Summary of Debt Maturities for Next Five Years and Thereafter) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Long Term Debt And Capital Lease Obligations [Abstract] | ||
Remainder of 2016 | $ 2,770 | |
2,017 | 10,284 | |
2,018 | 10,425 | |
2,019 | 10,058 | |
2,020 | 10,151 | |
Thereafter | 1,258,898 | |
Total debt, excluding debt issuance costs and discounts | $ 1,302,586 | $ 23,415 |
Long-Term Debt (Summary of Comp
Long-Term Debt (Summary of Components of Interest Expense, Net) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Debt Instrument [Line Items] | ||||
Amortization of debt issuance costs and discounts | $ 1,692 | $ 0 | $ 2,883 | $ 0 |
All other interest expense (income), net | (713) | 124 | (503) | 361 |
Total interest expense, net | 28,028 | 24,549 | 84,756 | 74,179 |
Due to Parent, net | 0 | 24,425 | 35,814 | 73,818 |
Senior Notes, maturing 2023 [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest expense | 11,626 | 0 | 20,540 | 0 |
ABL Credit Facility, maturing 2021 [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest expense | 120 | 0 | 202 | 0 |
Senior Credit Facility [Member] | Revolving Credit Facility, maturing 2021 [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest expense | 124 | 0 | 209 | 0 |
Senior Credit Facility [Member] | Term Loan Facility, maturing 2022 [Member] | ||||
Debt Instrument [Line Items] | ||||
Interest expense | 15,179 | 0 | 25,611 | 0 |
Interest Expense Portion From Long Term Debt [Member] | ||||
Debt Instrument [Line Items] | ||||
Total interest expense, net | $ 28,028 | $ 124 | $ 48,942 | $ 361 |
Other Long-Term Liabilities (Su
Other Long-Term Liabilities (Summary of Other Long-Term Liabilities) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Other Liabilities Noncurrent [Line Items] | ||
Insurance reserves for professional and general liability, long-term liability | $ 81,083 | $ 77,423 |
Insurance reserve for workers' compensation liability, long-term liability | 17,578 | 20,507 |
Benefit plan liabilities | 13,293 | 3,376 |
Deferred rent | 3,969 | 3,770 |
Other miscellaneous long-term liabilities | 2,748 | 3,065 |
Total other long-term liabilities | 118,671 | 108,141 |
Professional and General Liability Insurance [Member] | ||
Other Liabilities Noncurrent [Line Items] | ||
Insurance reserves for professional and general liability, long-term liability | 81,083 | 77,423 |
Workers Compensation Liability Insurance [Member] | ||
Other Liabilities Noncurrent [Line Items] | ||
Insurance reserve for workers' compensation liability, long-term liability | $ 17,578 | $ 20,507 |
Fair Value Of Financial Instr76
Fair Value Of Financial Instruments (Summary of Carrying Amounts and Estimated Fair Values of Debt Instruments) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total long-term debt, excluding debt issuance costs and discounts, Carrying Amount | $ 1,302,586 | $ 23,415 |
Total long-term debt, excluding debt issuance costs and discounts, Estimated Fair Value | 1,212,348 | 23,415 |
ABL Credit Facility, maturing 2021 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total long-term debt, excluding debt issuance costs and discounts, Carrying Amount | 0 | 0 |
Total long-term debt, excluding debt issuance costs and discounts, Estimated Fair Value | 0 | 0 |
Senior Notes, maturing 2023 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total long-term debt, excluding debt issuance costs and discounts, Carrying Amount | 400,000 | 0 |
Total long-term debt, excluding debt issuance costs and discounts, Estimated Fair Value | 334,384 | 0 |
Other debt [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total long-term debt, excluding debt issuance costs and discounts, Carrying Amount | 26,986 | 23,415 |
Total long-term debt, excluding debt issuance costs and discounts, Estimated Fair Value | 26,986 | 23,415 |
Senior Credit Facility [Member] | Revolving Credit Facility, maturing 2021 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total long-term debt, excluding debt issuance costs and discounts, Carrying Amount | 0 | 0 |
Total long-term debt, excluding debt issuance costs and discounts, Estimated Fair Value | 0 | 0 |
Senior Credit Facility [Member] | Term Loan Facility, maturing 2022 [Member] | ||
Fair Value Balance Sheet Grouping Financial Statement Captions [Line Items] | ||
Total long-term debt, excluding debt issuance costs and discounts, Carrying Amount | 875,600 | 0 |
Total long-term debt, excluding debt issuance costs and discounts, Estimated Fair Value | $ 850,978 | $ 0 |
Equity (Narrative) (Details)
Equity (Narrative) (Details) $ / shares in Units, $ in Thousands | Apr. 29, 2016USD ($)vote$ / sharesshares | Sep. 30, 2016$ / sharesshares |
Class Of Stock [Line Items] | ||
Preferred stock, shares authorized | 100,000,000 | |
Preferred stock, par value | $ / shares | $ 0.0001 | |
Preferred stock, shares issued | 0 | |
Common stock, shares authorized | 300,000,000 | |
Common stock, shares issued | 29,486,215 | |
Common stock, shares outstanding | 28,412,054 | 29,486,215 |
Common stock, par value | $ / shares | $ 0.0001 | |
Spin-off from CHS [Member] | ||
Class Of Stock [Line Items] | ||
Preferred stock, shares authorized | 100,000,000 | |
Preferred stock, par value | $ / shares | $ 0.0001 | |
Preferred stock, shares issued | 0 | |
Number of vote | vote | 1 | |
Common stock, shares authorized | 300,000,000 | |
Common stock, shares issued | 28,412,054 | |
Common stock, par value | $ / shares | $ 0.0001 | |
Contributed capital, in excess of par value of common stock | $ | $ 518,521 |
Income Taxes (Narrative) (Detai
Income Taxes (Narrative) (Details) - USD ($) | Apr. 29, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 |
Income Taxes [Line Items] | ||||||
Effective Income Tax Rate, Continuing Operations | 38.70% | 15.00% | 16.50% | 46.50% | ||
Deferred income tax liabilities, net | $ 51,216,000 | $ 51,216,000 | $ 41,030,000 | |||
Increase (decrease) in deferred income taxes | 10,200,000 | |||||
Adjustments to deferred tax assets and liabilities related to Spin-off Transaction | $ 61,718,000 | |||||
Deferred tax benefit | 4,081,000 | $ 0 | 51,532,000 | $ 0 | ||
Increase ( decrease) in unrecognized tax benefit | $ 0 | $ 0 | $ 0 | $ 0 | ||
Spin-off from CHS [Member] | ||||||
Income Taxes [Line Items] | ||||||
Adjustments to deferred tax assets and liabilities related to Spin-off Transaction | 61,718,000 | |||||
Change in estimates of deferred tax assets and liabilities as a result of the spin-off transaction | $ 39,500,000 |
Earnings Per Share (Summary of
Earnings Per Share (Summary of Computation of Basic and Diluted Earnings Per Share) (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Numerator: | ||||
Net income (loss) | $ (6,452) | $ (4,075) | $ (255,105) | $ 3,954 |
Less: Net income attributable to noncontrolling interests | 507 | 1,638 | 1,917 | 2,038 |
Net income (loss) attributable to Quorum Health Corporation | $ (6,959) | $ (5,713) | $ (257,022) | $ 1,916 |
Denominator: | ||||
Weighted-average shares outstanding - basic and diluted | 28,413,532 | 28,412,054 | 28,412,552 | 28,412,054 |
Basic and diluted earnings (loss) per share attributable to Quorum Health Corporation stockholders | $ (0.24) | $ (0.20) | $ (9.05) | $ 0.07 |
Earnings Per Share (Narrative)
Earnings Per Share (Narrative) (Details) - shares | Apr. 27, 2016 | Sep. 30, 2016 | Sep. 30, 2016 | Apr. 29, 2016 |
Earnings Per Share [Abstract] | ||||
Common stock, shares outstanding | 29,486,215 | 29,486,215 | 28,412,054 | |
Dilutive Shares | 0 | 0 | 0 |
Additional Cash Flow Informat81
Additional Cash Flow Information (Summary of Significant NonCash Transactions Related to Consolidated and Combined Balance Sheets) (Details) - USD ($) $ in Thousands | Apr. 29, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 |
Other Significant Noncash Transactions [Line Items] | |||||
Transfer of liabilities from Parent | $ 16,596 | $ 0 | $ 0 | $ 16,596 | $ 0 |
Non-cash capital contribution from Parent | $ (515,384) | ||||
Property and equipment acquired under capital leases and deferred financing obligations | 1,401 | 4,286 | 6,521 | 4,944 | |
Additional Paid-In Capital [Member] | |||||
Other Significant Noncash Transactions [Line Items] | |||||
Non-cash capital contribution from Parent | $ 0 | $ 0 | $ 518,518 | $ 0 |
Segments (Narrative) (Details)
Segments (Narrative) (Details) | 9 Months Ended |
Sep. 30, 2016segment | |
Segment Reporting [Abstract] | |
Number of operating segments | 2 |
Segments (Summary of Financial
Segments (Summary of Financial Information Related to Segments) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | Dec. 31, 2015 | |
Segment Reporting Information [Line Items] | |||||
Total net operating revenues | $ 543,939 | $ 543,143 | $ 1,623,227 | $ 1,629,112 | |
Total adjusted EBITDA | 46,749 | 60,295 | 132,205 | 185,949 | |
Total assets | 2,099,200 | 2,099,200 | $ 2,294,856 | ||
Hospital Operations Reporting Unit [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total net operating revenues | 522,957 | 521,007 | 1,559,274 | 1,560,628 | |
Total adjusted EBITDA | 41,618 | 57,422 | 117,014 | 176,067 | |
Total assets | 1,916,067 | 1,916,067 | 2,256,557 | ||
All Other Operations [Member] | |||||
Segment Reporting Information [Line Items] | |||||
Total net operating revenues | 20,982 | 22,136 | 63,953 | 68,484 | |
Total adjusted EBITDA | 5,131 | $ 2,873 | 15,191 | $ 9,882 | |
Total assets | $ 183,133 | $ 183,133 | $ 38,299 |
Segments (Summary of Reconcilia
Segments (Summary of Reconciliation of Adjusted EBITDA to Net Income (Loss)) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Segment Reporting [Abstract] | ||||
Total adjusted EBITDA | $ 46,749 | $ 60,295 | $ 132,205 | $ 185,949 |
Interest expense, net | (28,028) | (24,549) | (84,756) | (74,179) |
(Provision for) benefit from income taxes | 4,081 | 721 | 50,320 | (3,435) |
Depreciation and amortization | (28,234) | (31,488) | (90,854) | (95,327) |
Legal and settlement costs | (488) | 0 | (6,176) | 0 |
Impairment of-long-lived assets and goodwill | 0 | 0 | (250,400) | 0 |
Transaction costs related to the spin-off | (532) | (9,054) | (5,444) | (9,054) |
Net income (loss) | $ (6,452) | $ (4,075) | $ (255,105) | $ 3,954 |
Stock-Based Compensation (Narra
Stock-Based Compensation (Narrative) (Details) $ in Thousands | May 03, 2016Directorshares | Apr. 29, 2016shares | Jun. 30, 2016shares | Sep. 30, 2016USD ($)shares | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) |
Community Health Systems, Inc [Member] | Corporate Allocations [Member] | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Share based compensation expense included in corporate management fee | $ | $ 0 | $ 69,011 | $ 81,059 | $ 182,671 | |||
Community Health Systems, Inc [Member] | Corporate Allocations [Member] | Share-based Compensation Expense Included in Corporate Management Fee [Member] | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Share based compensation expense included in corporate management fee | $ | $ 1,800 | 2,300 | $ 5,600 | ||||
Spin-off from CHS [Member] | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Percentage of cancelled shares in connection with the Spin-off transaction | 66.67% | ||||||
QHC and CHS Restricted Stock Awards Held By QHC Employees as of Spin-off Transaction Date [Member] | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Unrecognized stock-based compensation expense | $ | $ 3,700 | 3,700 | |||||
QHC Restricted Stock Awards Granted Following Spin-off Transaction [Member] | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Restricted stock units, shares granted | 1,081,005 | 0 | |||||
Unrecognized stock-based compensation expense | $ | $ 10,600 | $ 10,600 | |||||
2016 Stock Award Plan [Member] | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Common stock that may be issued under stock award plan | 4,700,000 | ||||||
2016 Stock Award Plan [Member] | Restricted Stock [Member] | Performance-Based Vesting [Member] | Executive Officers [Member] | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Restricted stock units, shares granted | 460,000 | ||||||
Share-based compensation, vesting period | 3 years | ||||||
2016 Stock Award Plan [Member] | Restricted Stock [Member] | Time-Based Vesting [Member] | Certain Employees [Member] | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Restricted stock units, shares granted | 551,005 | ||||||
Share-based compensation, vesting period | 3 years | ||||||
2016 Stock Award Plan [Member] | Restricted Stock [Member] | Time-Based Vesting [Member] | Non-Employee Director, Individual [Member] | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Restricted stock units, shares granted | 10,000 | ||||||
Share-based compensation, vesting description | The restrictions on the time-vested restricted stock awards will lapse on the first anniversary of the grant date. | ||||||
Number of directors | Director | 7 | ||||||
2016 Stock Award Plan [Member] | Restricted Stock, Recoupment Awards [Member] | Time-Based Vesting [Member] | Certain Employees [Member] | |||||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | |||||||
Restricted stock units, shares granted | 106,005 | ||||||
Share-based compensation, vesting description | Restrictions on the recoupment awards lapse in equal installments on the second and third anniversaries of the grant date. |
Stock-Based Compensation (Summa
Stock-Based Compensation (Summary of Stock-Based Compensation Expense) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 2,781 | $ 0 | $ 4,678 | $ 0 |
Resulting from Spin-off Transaction [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total stock-based compensation expense | 1,149 | 0 | 1,958 | 0 |
Related to Grants Following Spin-off Transaction [Member] | ||||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||||
Total stock-based compensation expense | $ 1,632 | $ 0 | $ 2,720 | $ 0 |
Stock-Based Compensation (Sum87
Stock-Based Compensation (Summary of Activity Related to Unvested Restricted Stock Awards) (Details) - $ / shares | 2 Months Ended | 3 Months Ended |
Jun. 30, 2016 | Sep. 30, 2016 | |
QHC Awards Distributed in Spin-off Transaction [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Unvested restricted stock awards at beginning of period, Shares | 692,409 | 686,577 |
Vested, Shares | (2,020) | (1,567) |
Forfeited, Shares | (3,812) | (2,928) |
Unvested restricted stock awards at end of period, Shares | 686,577 | 682,082 |
QHC Awards Distributed in Spin-off Transaction [Member] | QHC Employees [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Unvested restricted stock awards at beginning of period, Shares | 54,321 | 53,821 |
Vested, Shares | (336) | (557) |
Forfeited, Shares | (164) | (704) |
Unvested restricted stock awards at end of period, Shares | 53,821 | 52,560 |
QHC Awards Distributed in Spin-off Transaction [Member] | CHS Employees [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Unvested restricted stock awards at beginning of period, Shares | 638,088 | 632,756 |
Vested, Shares | (1,684) | (1,010) |
Forfeited, Shares | (3,648) | (2,224) |
Unvested restricted stock awards at end of period, Shares | 632,756 | 629,522 |
QHC Restricted Stock Awards Granted Following Spin-off Transaction [Member] | ||
Share Based Compensation Arrangement By Share Based Payment Award [Line Items] | ||
Unvested restricted stock awards at beginning of period, Shares | 0 | 1,081,005 |
Granted, Shares | 1,081,005 | 0 |
Vested, Shares | 0 | 0 |
Forfeited, Shares | 0 | 0 |
Unvested restricted stock awards at end of period, Shares | 1,081,005 | 1,081,005 |
Unvested restricted stock awards at beginning of period, Weighted Average Grant Date Fair Value | $ 0 | $ 12.77 |
Granted, Weighted Average Grant Date Fair Value | 12.77 | 0 |
Vested, Weighted Average Grant Date Fair Value | 0 | 0 |
Forfeited, Weighted Average Grant Date Fair Value | 0 | 0 |
Unvested restricted stock awards at end of period, Weighted Average Grant Date Fair Value | $ 12.77 | $ 12.77 |
Employee Benefit Plans (Narrati
Employee Benefit Plans (Narrative) (Details) | Sep. 16, 2016Installmentshares | Aug. 18, 2016 | Apr. 29, 2016USD ($) | Sep. 30, 2016USD ($) | Sep. 30, 2015USD ($) | Sep. 30, 2016USD ($)Hospital | Sep. 30, 2015USD ($) | Dec. 31, 2015 |
Defined Benefit Plan Disclosure [Line Items] | ||||||||
Defined contribution plan, total expense | $ 3,200,000 | $ 3,200,000 | $ 10,200,000 | $ 10,000,000 | ||||
Estimated deferred compensation liability | 23,000,000 | 23,000,000 | ||||||
Pension Plan [Member] | ||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||
Benefits expense | 100,000 | $ 100,000 | $ 200,000 | $ 200,000 | ||||
Weighted- average assumptions used in determining net periodic cost, discount rate | 3.95% | |||||||
Weighted- average assumptions used in determining net periodic cost, annual compensation increase | 3.50% | |||||||
Number of Hospitals | Hospital | 1 | |||||||
Defined benefit plan, expected contributions by employer | $ 200,000 | |||||||
Weighted- average assumptions used in determining net periodic cost, expected long-term rate on return on assets | 7.00% | |||||||
Accrued benefit liability | 1,000,000 | 1,000,000 | ||||||
Original SERP Plan [Member] | ||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||
Benefits expense | 600,000 | $ 1,100,000 | ||||||
Defined benefit plan, assets transferred | $ 0 | |||||||
Weighted- average assumptions used in determining net periodic cost, discount rate | 3.20% | |||||||
Weighted- average assumptions used in determining net periodic cost, annual compensation increase | 3.00% | |||||||
Original SERP Plan [Member] | Other long-term liabilities [Member] | ||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||
Accrued benefit liability | $ 5,964,000 | |||||||
Amended and Restated SERP Plan [Member] | ||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||
Benefits expense | 600,000 | $ 1,100,000 | ||||||
Weighted- average assumptions used in determining net periodic cost, discount rate | 3.20% | |||||||
Weighted- average assumptions used in determining net periodic cost, annual compensation increase | 3.00% | |||||||
Amended and Restated SERP Plan [Member] | Other long-term liabilities [Member] | ||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||
Accrued benefit liability | 9,800,000 | $ 9,800,000 | ||||||
Maximum [Member] | Director's Plan [Member] | ||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||
Number of annual installments | Installment | 15 | |||||||
Common stock shares available for issue | shares | 150,000 | |||||||
QHCCS, LLC Nonqualified Deferred Compensation Plan [Member] | ||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||
Employee deferrals or discretionary credits | $ 0 | $ 0 | ||||||
QHCCS, LLC Nonqualified Deferred Compensation Plan [Member] | Maximum [Member] | ||||||||
Defined Benefit Plan Disclosure [Line Items] | ||||||||
Percentage of incentive compensation participants are permitted to defer | 100.00% |
Related Party Transactions (Sum
Related Party Transactions (Summary of Allocated Costs from Parent) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 | |
Management Fees From Parent [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related party operating costs and expenses | $ 0 | $ 8,797 | $ 11,792 | $ 26,762 |
Community Health Systems, Inc [Member] | Allocated Costs from CHS during the Carve-Out Period [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related party operating costs and expenses | 0 | 69,011 | 81,059 | 182,671 |
Community Health Systems, Inc [Member] | Allocated Costs from CHS during the Carve-Out Period [Member] | Insurance Costs [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related party operating costs and expenses | 0 | 35,108 | 44,246 | 101,629 |
Community Health Systems, Inc [Member] | Allocated Costs from CHS during the Carve-Out Period [Member] | Management Fees From Parent [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related party operating costs and expenses | 0 | 8,797 | 11,792 | 26,762 |
Community Health Systems, Inc [Member] | Allocated Costs from CHS during the Carve-Out Period [Member] | All Other Allocated Costs [Member] | ||||
Related Party Transaction [Line Items] | ||||
Related party operating costs and expenses | $ 0 | $ 25,106 | $ 25,021 | $ 54,280 |
Related Party Transactions (Nar
Related Party Transactions (Narrative) (Details) - USD ($) $ in Thousands | Apr. 29, 2016 | Sep. 30, 2016 | Sep. 30, 2015 | Sep. 30, 2016 | Sep. 30, 2015 |
Related Party Transaction [Line Items] | |||||
Interest Expense, Related Party | $ 0 | $ 24,425 | $ 35,814 | $ 73,818 | |
Community Health Systems, Inc [Member] | |||||
Related Party Transaction [Line Items] | |||||
Interest Expense, Related Party | 24,800 | 35,800 | 74,200 | ||
Community Health Systems, Inc [Member] | Transition Services Agreements and Allocation from Parent Prior to Spin-Off [Member] | |||||
Related Party Transaction [Line Items] | |||||
Total expenses incurred and allocation from parent | $ 18,094 | $ 15,797 | $ 52,192 | $ 46,556 | |
Community Health Systems, Inc [Member] | Transition Services Agreements | |||||
Related Party Transaction [Line Items] | |||||
Terms of transitional service agreements | 5 years | ||||
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% |
Commitments and Contingencies91
Commitments and Contingencies (Narrative) (Details) $ in Thousands | Jul. 28, 2016USD ($) | Sep. 30, 2016USD ($)AgreementPhase | Sep. 30, 2016USD ($)AgreementPhase | Dec. 31, 2015USD ($) |
Other Commitments [Line Items] | ||||
Property and equipment, at cost | $ 1,571,275 | $ 1,571,275 | $ 1,603,653 | |
Property Name, Patient Tower in Springfield, Oregon Hospital [Member] | Asset Under Construction [Member] | Construction and Capital Commitments [Member] | ||||
Other Commitments [Line Items] | ||||
Property and equipment, at cost | 37,400 | 37,400 | ||
Construction costs incurred during the period | 9,800 | 27,000 | ||
Total estimated construction costs, including equipment costs | 88,000 | $ 88,000 | ||
Expected project to be completed period | Late 2017 or early 2018 | |||
Property Name, Corporate Office [Member] | Asset Under Construction [Member] | Construction and Capital Commitments [Member] | ||||
Other Commitments [Line Items] | ||||
Cost recorded related to direct financing obligation | 20,700 | $ 20,700 | ||
Cost recorded during the period related to direct financing obligation | $ 1,400 | $ 6,300 | ||
Number of separate lease agreements | Agreement | 3 | 3 | ||
Number of project phases | Phase | 3 | 3 | ||
Physician Recruiting Commitments, Income Guarantee [Member] | ||||
Other Commitments [Line Items] | ||||
Maximum potential amount of future payments in excess of liabilities recorded | $ 3,200 | $ 3,200 | ||
Guarantee period | 1 year | |||
Commitment periods over which physician agrees to practice in designated community | 3 years | |||
Liabilities related to income guarantee agreements | 2,500 | $ 2,500 | $ 2,700 | |
Professional and General Liability Insurance [Member] | ||||
Other Commitments [Line Items] | ||||
Self-insured retention level | 5,000 | 5,000 | ||
Workers Compensation Liability Insurance [Member] | ||||
Other Commitments [Line Items] | ||||
Self-insured retention level | 500 | 500 | ||
Quorum Health Resources [Member] | Professional and General Liability Insurance [Member] | ||||
Other Commitments [Line Items] | ||||
Self-insured retention level | $ 6,000 | $ 6,000 | ||
Quorum Health Resources [Member] | Hancock Medical Center [Member] | ||||
Other Commitments [Line Items] | ||||
Total litigation award payable | $ 9,400 |
Commitments and Contingencies -
Commitments and Contingencies - (Summary of Insurance Reserves Related to Professional and General Liability Claims and Workers Compensation Claims) (Details) - USD ($) $ in Thousands | Sep. 30, 2016 | Dec. 31, 2015 |
Loss Contingencies [Line Items] | ||
Insurance reserves for professional and general liability, current receivable | $ 26,624 | $ 21,120 |
Insurance reserve for workers' compensation liability, current receivable | 5,529 | 8,314 |
Total self-insurance reserves, current receivable | 32,153 | 29,434 |
Insurance reserves for professional and general liability, long-term receivable | 70,478 | 76,489 |
Insurance reserve for workers' compensation liability, long-term receivable | 16,405 | 20,507 |
Total self-insurance reserves, long-term receivable | 86,883 | 96,996 |
Insurance reserves for professional and general liability, current liability | 31,265 | 21,120 |
Insurance reserve for workers' compensation liability, current liability | 6,770 | 8,314 |
Total self-insurance reserves, current liability | 38,035 | 29,434 |
Insurance reserves for professional and general liability, long-term liability | 81,083 | 77,423 |
Insurance reserve for workers' compensation liability, long-term liability | 17,578 | 20,507 |
Total self-insurance reserves, long-term liability | 98,661 | 97,930 |
Insurance Reserves Indemnified By CHS, Inc. [Member] | ||
Loss Contingencies [Line Items] | ||
Insurance reserves for professional and general liability, current receivable | 22,137 | 21,120 |
Insurance reserve for workers' compensation liability, current receivable | 5,529 | 8,314 |
Insurance reserves for professional and general liability, long-term receivable | 66,401 | 72,412 |
Insurance reserve for workers' compensation liability, long-term receivable | 16,405 | 20,507 |
Insurance reserves for professional and general liability, current liability | 22,137 | 21,120 |
Insurance reserve for workers' compensation liability, current liability | 5,529 | 8,314 |
Insurance reserves for professional and general liability, long-term liability | 66,401 | 72,412 |
Insurance reserve for workers' compensation liability, long-term liability | 16,405 | 20,507 |
All Other Self-insurance Reserves [Member] | ||
Loss Contingencies [Line Items] | ||
Insurance reserves for professional and general liability, current receivable | 4,487 | 0 |
Insurance reserve for workers' compensation liability, current receivable | 0 | 0 |
Insurance reserves for professional and general liability, long-term receivable | 4,077 | 4,077 |
Insurance reserve for workers' compensation liability, long-term receivable | 0 | 0 |
Insurance reserves for professional and general liability, current liability | 9,128 | 0 |
Insurance reserve for workers' compensation liability, current liability | 1,241 | 0 |
Insurance reserves for professional and general liability, long-term liability | 14,682 | 5,011 |
Insurance reserve for workers' compensation liability, long-term liability | $ 1,173 | $ 0 |
Subsequent Events (Narrative) (
Subsequent Events (Narrative) (Details) - Subsequent Event [Member] - bed | Oct. 19, 2016 | Oct. 03, 2016 |
Definitive Agreement to Barrow Regional Medical Center [Member] | Winder, Georgia | ||
Subsequent Event [Line Items] | ||
Number of beds in hospital being sold | 56 | |
Definitive Agreement to Sandhills Regional Medical Center [Member] | Hamlet, North Carolina [Member] | ||
Subsequent Event [Line Items] | ||
Number of beds in hospital being sold | 64 |