Change Healthcare (CHNG) 10-Q 14 Aug 19 2020 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Jun. 30, 2019	Aug. 12, 2019
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Jun. 30, 2019
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q1
Entity Registrant Name	Change Healthcare Inc.
Entity Central Index Key	0001756497
Current Fiscal Year End Date	--03-31
Entity Current Reporting Status	No
Entity Interactive Data Current	Yes
Entity Filer Category	Non-accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	true
Entity Ex Transition Period	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding		124,850,450
Common Stock [Member]
Title of 12(b) Security	Common Stock, par value $.001 per share
Trading Symbol	CHNG
Security Exchange Name	NASDAQ
Tangible Equity Units [Member]
Title of 12(b) Security	6.00% Tangible Equity Units
Trading Symbol	CHNGU
Security Exchange Name	NASDAQ

Condensed Statements of Operati

Condensed Statements of Operations - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Condensed Statements of Operations [Abstract]
Revenue
Operating expenses
General and administrative	251	31
Total operating expenses	251	31
Operating income (loss)	(251)	(31)
Non-operating (income) expense
Loss from Equity Method Investment in the Joint Venture	39,554	22,766
(Gain) Loss on Sale of Interest in the Joint Venture		(464)
Management fee income	(104)	(31)
Total non-operating (income) expense	39,450	22,271
Income (loss) before income tax provision (benefit)	(39,701)	(22,302)
Income tax provision (benefit)	(2,184)	(4,801)
Net income (loss)	$ (37,517)	$ (17,501)
Net income (loss) per share:
Basic	$ (0.50)	$ (0.23)
Diluted	$ (0.50)	$ (0.23)
Weighted average common shares outstanding:
Basic	75,474,654	75,604,775
Diluted	75,474,654	75,604,775

Condensed Statements of Compreh

Condensed Statements of Comprehensive Income (Loss) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Condensed Statements of Comprehensive Income (Loss) [Abstract]
Net income (loss)	$ (37,517)	$ (17,501)
Other comprehensive income (loss):
Change in fair value of interest rate cap, net of taxes of the Joint Venture	(5,431)	782
Foreign currency translation adjustment of the Joint Venture	226	(2,593)
Other comprehensive income (loss)	(5,205)	(1,811)
Total comprehensive income (loss)	$ (42,722)	$ (19,312)

Condensed Balance Sheets

Condensed Balance Sheets - USD ($) $ in Thousands	Jun. 30, 2019	Mar. 31, 2019
Current Assets:
Cash	$ 3,409	$ 3,409
Due from the Joint Venture	574	373
Income taxes receivable	1,601	1,781
Total current assets	5,584	5,563
Dividend receivable	48,807	81,264
Investment in the Joint Venture	1,253,535	1,211,996
Total assets	1,307,926	1,298,823
Current liabilities:
Accrued expenses	343	176
Due to the Joint Venture	6,167	6,167
Total current liabilities	6,510	6,343
Deferred income tax liabilities	169,992	159,993
Commitments and contingencies (see Note 4)
Stockholders' Equity:
Common Stock	75	75
Preferred stock (par value, $.001), 900,000,000 and 0 shares authorized and no shares issued and outstanding at June 30, 2019 and March 31, 2019, respectively
Additional paid-in capital	1,159,371	1,153,509
Accumulated other comprehensive income (loss)	(8,039)	(3,256)
Retained earnings (deficit)	(19,983)	(17,841)
Total stockholders' equity	1,131,424	1,132,487
Total liabilities and stockholders' equity	1,307,926	1,298,823
Common Class X [Member]
Stockholders' Equity:
Common Stock

Condensed Balance Sheets (Paren

Condensed Balance Sheets (Parenthetical) - $ / shares	Jun. 30, 2019	Mar. 31, 2019
Common Stock, par value	$ 0.001	$ 0.001
Common Stock, shares authorized	9,000,000,000	252,800,000
Common Stock, shares issued	75,474,654	75,474,654
Common Stock, shares outstanding	75,474,654	75,474,654
Preferred stock, par value	$ 0.001	$ 0.001
Preferred stock, shares authorized	900,000,000	0
Preferred stock, shares issued	0	0
Preferred stock, shares outstanding	0	0
Common Class X [Member]
Common Stock, par value	$ 0.001	$ 0.001
Common Stock, shares authorized	1	1
Common Stock, shares issued	0	0
Common Stock, shares outstanding	0	0

Condensed Statements of Stockho

Condensed Statements of Stockholders' Equity - USD ($) $ in Thousands	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings (Deficit) [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Total
Cumulative effect of accounting change of the Joint Venture | ASU 2017-12 [Member]			$ (490)	$ 490
Balance at Mar. 31, 2018	$ 75	$ 1,139,300	34,661	2,536	$ 1,176,572
Balance, shares at Mar. 31, 2018	75,749,118
Equity compensation expense		5,300			5,300
Repurchase of Change Healthcare Inc. common stock		(4,782)			(4,782)
Repurchase of Change Healthcare Inc. common stock, shares	(251,789)
Issuance of Change Healthcare Inc. common stock upon exercise of equity awards, shares	4,045
Net income (loss)			(17,501)		(17,501)
Foreign currency translation adjustment of the Joint Venture				(2,593)	(2,593)
Change in fair value of interest rate cap, net of taxes of the Joint Venture				782	782
Balance at Jun. 30, 2018	$ 75	1,139,818	16,670	1,215	1,157,778
Balance, shares at Jun. 30, 2018	75,501,374
Cumulative effect of accounting change of the Joint Venture | ASC 606 [Member]			35,797		35,797
Cumulative effect of accounting change of the Joint Venture | ASU 2018-02 [Member]			(422)	422
Balance at Mar. 31, 2019	$ 75	1,153,509	(17,841)	(3,256)	1,132,487
Balance, shares at Mar. 31, 2019	75,474,654
Equity compensation expense		5,862			5,862
Net income (loss)			(37,517)		(37,517)
Foreign currency translation adjustment of the Joint Venture				226	226
Change in fair value of interest rate cap, net of taxes of the Joint Venture				(5,431)	(5,431)
Balance at Jun. 30, 2019	$ 75	$ 1,159,371	$ (19,983)	$ (8,039)	$ 1,131,424
Balance, shares at Jun. 30, 2019	75,474,654

Condensed Statements of Cash Fl

Condensed Statements of Cash Flows - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Cash flows from operating activities:
Net income (loss)	$ (37,517)	$ (17,501)
Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities:
Loss from Equity Method Investment in the Joint Venture	39,554	22,766
Deferred income tax expense (benefit)	(2,184)	(4,801)
(Gain) Loss on Sale of Interests in the Joint Venture		(464)
Changes in operating assets and liabilities:
Due from the Joint Venture	(201)	(31)
Income taxes receivable	180	(208)
Accrued expenses	168	31
Due to the Joint Venture		208
Net cash provided by (used in) operating activities
Cash flows from investing activities:
Proceeds from sale of interests in Joint Venture		4,782
Net cash provided by (used in) investing activities		4,782
Cash flows from financing activities:
Payments to acquire common stock		(4,782)
Net cash provided by (used in) financing activities		(4,782)
Net increase (decrease) in cash, cash equivalents and restricted cash
Cash, cash equivalents and restricted cash at beginning of period	3,409
Cash, cash equivalents and restricted cash at end of period	$ 3,409

Nature of Business and Organiza

Nature of Business and Organization	3 Months Ended
	Jun. 30, 2019
Nature of Business and Organization [Abstract]
Nature of Business and Organization	1. Nature of Business and Organization Organization Change Healthcare Inc. (the “Company”), a Delaware corporation, was formed on June 22, 2016 to hold an equity investment in Change Healthcare LLC (the “Joint Venture”), a joint venture between the Company and McKesson Corporation (“McKesson”). As of June 30, 2019, the Company and McKesson each owned approximately 30% and 70% , respectively, of the membership interest in the Joint Venture, subject to adjustment based on exercise of equity-based awards or other changes in the number of the Joint Venture’s membership units outstanding. The Transactions In June 2016, the Company, the Joint Venture, Change Healthcare Holdings, LLC, Change Healthcare Intermediate Holdings, LLC, Change Healthcare Performance, Inc. (“Legacy CHC”) and its stockholders—including affiliates of The Blackstone Group, Inc. (formerly known as the Blackstone Group L.P.) (“Blackstone”) and Hellman & Friedman LLC entered into an Agreement of Contribution and Sale (the “Contribution Agreement”) with McKesson (together with the Company, the “Members”). Under the terms of the Contribution Agreement, the parties agreed to form the Joint Venture, a joint venture that combined the majority of the McKesson Technology Solutions businesses, excluding McKesson’s Enterprise Information Solutions business and RelayHealth Pharmacy Network (such contributed businesses, “Core MTS”), with substantially all of the assets and operations of Legacy CHC, but excluding Legacy CHC’s pharmacy claims switching and prescription routing businesses (such excluded business, the “eRx Network” and the businesses contributed by Legacy CHC, together with Core MTS, the “Contributed Businesses”). The creation of the Joint Venture, including the contribution of the Contributed Businesses and related transactions, is collectively referred to as the “Transactions”. The Transactions closed on March 1, 2017. Amendment of Certificate of Incorporation Effective June 26, 2019 and in contemplation of its initial public offering of common stock, the Company amended its certificate of incorporation to effect a 126.4 for 1 stock split for all previously issued shares of common stock, to increase the authorized number of common stock, and to authorize shares of preferred stock. Following this amendment, the authorized shares include 9,000,000,000 shares of common stock (par value $.001 per share), 1 share of Class X stock (par value $.001 per share), and 900,000,000 shares of preferred stock (par value $.001 per share). All issued or outstanding shares or related share-based payment arrangement disclosures included herein have been retrospectively adjusted for the stock split.

Basis of Presentation

Basis of Presentation	3 Months Ended
	Jun. 30, 2019
Basis of Presentation [Abstract]
Basis of Presentation	2. Basis of Presentation Principles of Consolidation The accompanying unaudited condensed financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X of the Securities and Exchange Commission (“SEC”) Guidelines, Rules and Regulations and, in the opinion of management, reflect all normal recurring adjustments necessary for a fair presentation of results for the unaudited interim periods presented. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted. The results of operations for the interim period are not necessarily indicative of the results to be obtained for the full fiscal year. All intercompany accounts and transactions have been eliminated in the unaudited condensed financial statements. Accounting Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company bases its estimates on historical experience, current business factors and various other assumptions that the Company believes are necessary to consider in order to form a basis for making judgments about the carrying values of assets and liabilities, the recorded amounts of expenses and disclosure of contingent assets and liabilities. The Company is subject to uncertainties such as the impact of future events, economic, environmental and political factors and changes in the Company’s business environment; therefore, actual results could differ from these estimates. Accordingly, the accounting estimates used in the preparation of the Company’s financial statements will change as new events occur, as more experience is acquired, as additional information is obtained and as the Company’s operating environment changes. Changes in estimates are made when circumstances warrant. Such changes in estimates and refinements in estimation methodologies are reflected in the reported results of operations; and if material, the effects of changes in estimates are disclosed in the notes to the financial statements. Estimates and assumptions by management affect: the carrying value of the Company’s investment; the provision and benefit for income taxes and related deferred tax accounts; contingencies; and the value attributed to equity awards. Recently Adopted Accounting Pronouncements In April 2019, the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2018-07 on a modified retrospective basis, which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. Among other provisions, the measurement date for awards to nonemployees was changed from the earlier of the date at which a commitment for performance by the counterparty was reached or the date at which performance was complete under the previous guidance to the grant date under this update. Because the Company’s equity-based compensation was previously subject to remeasurement at fair value each quarter under previous authoritative literature, the adoption of this update had no material direct effect on the Company’s consolidated financial statements. As described in Note 7, however, the adoption of this update changed the relationship between the equity-based compensation and the accounting for the freestanding option (i.e. the Dividend receivable). In April 2019, the Joint Venture adopted Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers , which replaces most prior general and industry specific revenue recognition guidance with a principles-based comprehensive revenue recognition framework on a modified retrospective basis. Under this revised framework, a company will recognize revenue to depict the transfer of promised goods and services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods and services. As the Company’s operations consists principally of an investment in the Joint Venture, its financial statements reflect no revenue and, accordingly, the Company recognized no direct impact on its financial statements from the adoption of this update. However, upon adoption, the Joint Venture recognized a cumulative effect adjustment to its Members’ deficit. As a result of the impact of the adoption of ASC 606 to the Joint Venture’s Members’ deficit, the Company was required to recognize a proportionate amount of this cumulative effect adjustment to its April 1, 2019 retained earnings as well. The effect is disclosed within a separate caption of the accompanying condensed statement of stockholders’ equity. 

Equity Method Investment in Cha

Equity Method Investment in Change Healthcare LLC	3 Months Ended
	Jun. 30, 2019
Equity Method Investment in Change Healthcare LLC [Abstract]
Equity Method Investment in Change Healthcare LLC	3. Equity Method Investment in Change Healthcare LLC Exchange of Equity Method Investments In connection with the Transactions, the Company exchanged its 45.615% investment in Legacy CHC for 30% of the membership units of the Joint Venture. The Joint Venture used proceeds from the issuance of debt to acquire the remaining 54.385% of Legacy CHC. The Company accounted for this exchange of investments as a non-monetary transaction at their respective carrying values. Prior to the Transactions, the investors of Legacy CHC accounted for their investments at fair value. As a result, the book basis and fair value of the Company’s investment in Legacy CHC were generally the same such that no gain was recognized as a result of the Transactions. The fair value of the Joint Venture was determined at March 1, 2017 using a combination of the income and the market valuation approaches. Under the income approach, a discounted cash flow model (“DCF”) was used in which cash flows anticipated over several periods, plus a terminal value at the end of that time horizon, are discounted to their present value using an appropriate expected rate of return. The discount rate used for cash flows reflects capital market conditions and the specific risks associated with the business. Under the market approach, valuation multiples of reasonably similar publicly traded companies or guideline companies are applied to the operating data of the subject business to derive the estimated fair value. These valuation approaches are considered a Level 3 fair value measurement. Fair value determination requires complex assumptions and judgment by management in projecting future operating results, selecting guideline companies for comparisons, determining appropriate market value multiples, selecting the discount rate to measure the risks inherent in the future cash flows and assessing the business’s life cycle and the competitive trends impacting the business, including considering technical, legal, regulatory, or economic barriers to entry. Any material changes in key assumptions, including failure to meet business plans, deterioration in the financial market, an increase in interest rate or an increase in the cost of equity financing by market participants within the industry or other unanticipated events and circumstances, may affect such estimates. Equity Method Investment in Change Healthcare LLC The Company accounts for its investment in the Joint Venture using the equity method of accounting. During the three months ended June 30, 2019 and 2018 , the Company recorded a proportionate share of the earnings from this investment, which included transaction and integration related expenses incurred by the joint venture and the Company’s portion of basis adjustments including amortization expenses associated with equity method intangible assets. These amounts are aggregated and recorded under the caption, “Loss from Equity Method Investment in the Joint Venture” in the accompanying condensed statements of operations. Summarized financial information of the Joint Venture is as follows:           Three Months Ended  June 30,  2019 2018  Statement of Operations Data:  Total revenue $ 855,556 $ 823,263  Cost of operations (exclusive of depreciation and amortization) $ 326,947 $ 337,430  Customer postage $ 58,484 $ 65,558  Net income (loss) $ 71,915 $ 12,506    Subsequent to the Company’s initial public offering of common stock, it now has a publicly available indication of the value of its investment in the Joint Venture. The fair value that was derived from trading prices of the Company’s common stock indicated a potential impairment to the carrying value of its investment in the Joint Venture. Accordingly, the Company evaluated its equity method investment for an other-than-temporary impairment (“OTTI”). The Company considered various factors in determining whether an OTTI has occurred, including the limited trading history available, the Company’s ability and intent to hold the investment until its fair value recovers, the implied EBITDA valuation multiples compared to public guideline companies, the Joint Venture’s ability to achieve milestones and any notable operational and strategic changes by the Joint Venture. After the evaluation, the Company determined that an OTTI had not occurred as of June 30, 2019 nor as of the date of this quarterly report on Form 10-Q. However, the Company may experience declines in the fair value of its investment in the Joint Venture, and it may determine an impairment loss will be required to be recognized in a future reporting period. Such determination will be based on the prevailing facts and circumstances, including those related to the reported results and disclosures of the Joint Venture as well as from changes in the market price of the Company’s common stock. 

Legal Proceedings

Legal Proceedings	3 Months Ended
	Jun. 30, 2019
Legal Proceedings [Abstract]
Legal Proceedings	4. Legal Proceedings In the ordinary course of business, the Company may become subject to various claims and legal proceedings. The Company is not currently a defendant in any pending litigation. 

Net Income (Loss) Per Share

Net Income (Loss) Per Share	3 Months Ended
	Jun. 30, 2019
Net Income (Loss) Per Share [Abstract]
Net Income (Loss) Per Share	 5. Net Income (Loss) Per Share The following table sets forth the computation of basic net income (loss) per share of common stock:       Three Months Ended  June 30,  2019 2018  Basic net income (loss) per share:  Numerator:  Net income (loss) $ (37,517) $ (17,501)  Denominator:  Weighted average common shares outstanding 75,474,654 75,604,775  Basic net income (loss) per share $ (0.50) $ (0.23)   The calculation of diluted net income (loss) per share has not been presented due to the presence of a net loss for each period. Due to their antidilutive effect, the following securities have been excluded from diluted net income (loss) per share:        Three Months Ended  June 30,  2019 2018  Replacement Time-Vesting Options 1,654,632 1,847,560  

Income Taxes

Income Taxes	3 Months Ended
	Jun. 30, 2019
Income Taxes [Abstract]
Income Taxes	6. Income Taxes The income tax benefit for the three months ended June 30, 2019 and 2018 was $2,184 and $4,801 , respectively, which represents an effective tax rate of 5.5% and 21.5% , respectively. Fluctuations in our reported income tax rates from the statutory rate are primarily due to benefits recognized as a result of certain incentive tax credits resulting from research and experimental expenditures and discrete items recognized in the quarters.  McKesson Tax Receivable Agreement In connection with the closing of the Transactions, the Joint Venture, subsidiaries of McKesson that serve as members of the Joint Venture ( the “ McK Members ”) , McKesson and the Company entered into a tax receivable agreement (the “McKesson Tax Receivable Agreement”). The McKesson Tax Receivable Agreement generally provides for the payment by the Joint Venture to the McK Members and it assigns of 85% of the net cash tax savings realized (or, in certain circumstances, deemed to be realized) by the Company in periods ending on or after the date on which McKesson ceases to own at least 20% of the outstanding units of the Joint Venture (the “ LLC Units ”) as a result of (i) certain amortizable tax basis in assets transferred to the Joint Venture at the closing of the Transactions and (ii) imputed interest deductions and certain other tax attributes arising from payments under the McKesson Tax Receivable Agreement. Additionally, upon the occurrence of the first exchange of LLC Units by McKesson (or its permitted transferees), if any, the Company has agreed to enter into an additional tax receivable agreement with the McK Members, pursuant to which the Company would be required to pay to the relevant McK Member 85% of the net cash tax savings, if any, arising from the Company’s utilization of (i) certain tax basis increases resulting from the relevant exchange and payments under such additional tax receivable agreement and (ii) imputed interest deductions. We may also be required to enter into and make payments under an additional tax receivable agreement with McKesson in certain circumstances. Because payments under the McKesson Tax Receivable Agreement are contingent upon McKesson’s ceasing to own at least 20% of the Company and such an event was not probable at the inception of the McKesson Tax Receivable Agreement or as of June 30, 2019, no related obligation has been reflected on the accompanying condensed balance sheet.  Letter Agreement The Company, the Joint Venture, McKesson and certain of McKesson’s affiliates have entered into a letter agreement relating to the Contribution Agreement (the “Letter Agreement”). The Letter Agreement addresses miscellaneous tax-related matters, including (i) technical clarifications and modifications to the manner in which the Joint Venture allocates certain items of taxable income, loss and deduction among, and calculates and makes required tax distributions to, its members, (ii) the sharing of certain contingent tax benefits and expenses not addressed by the McKesson Tax Receivable Agreement or the tax matters agreement that the Company will enter into with McKesson in connection with a spin-off or split-off transaction (or a combination of the foregoing) that McKesson may, at its election, initiate and complete that would result, among other things, in the acquisition by the Company of all of McKesson’s LLC Units and the issuance by the Company to McKesson and/or McKesson’s securityholders of an equal number of shares of its common stock and (iii) procedures applicable in the case of certain tax proceedings. In particular, pursuant to the terms of the Letter Agreement, McKesson may adjust the manner in which depreciation or amortization deductions in respect of assets transferred to the Joint Venture at the closing of the Transactions are allocated among the Company, McKesson and certain of McKesson’s affiliates beyond minimum amounts provided in the LLC Agreement. If an amount of deductions is allocated to the Company in excess of a specified minimum threshold, the Company will be required to make cash payments to McKesson equal to 100% of the tax savings of the Company attributable to such excess deductions for any tax period ending prior to the date on which McKesson ceases to own at least 20% of the outstanding LLC Units of the Joint Venture, after which the terms of the McKesson Tax Receivable Agreement will control. The determination of whether any amount of deductions will be allocated to the Company is, in part, dependent on a future initial public offering. No obligation has been reflected on the accompanying condensed consolidated balance sheet. 

Fair Value Measurements

Fair Value Measurements	3 Months Ended
	Jun. 30, 2019
Fair Value Measurements [Abstract]
Fair Value Measurements	7. Fair Value Measurements  The Company is entitled to receive an additional unit of the Joint Venture for each share of stock issued by the Company. In the case of equity-based awards, the requirement to receive an additional unit of the Joint Venture upon exercise of such awards represents a freestanding derivative. Because the fair value measurement of this derivative involves significant unobservable inputs, the most significant of which is the use of a levered volatility calculation of a peer group of companies , the Company has determined that it represents a Level 3 fair value measurement. Because the freestanding derivative is directly related to the Company’s equity-based compensation awards, the valuation of the derivative is determined to be consistent with the valuation of the underlying equity-based awards (although we use a current period measurement date). As with the equity-based awards, changes in the value of the derivative are generally expected to fluctuate with changes in the value of the Company’s stock. The following table summarizes the fair value of the freestanding derivative at June 30, 2019 and March 31, 2019 , respectively:      Fair Values of Derivative Financial Instruments  Asset (Liability)  Derivative financial instruments not designated as hedging instruments: Balance Sheet Location June 30, 2019 March 31, 2019    Freestanding Option Dividend receivable $ 48,807 $ 81,264 The following table presents a reconciliation of the fair value of the derivative for which the Company uses significant unobservable inputs:      Three Months Ended  June 30,  2019 2018  Balance at beginning of period $ 81,264 $ 59,116  Increase in fair value based on ASC 505 equity-based compensation — 5,300  Settlements due to exercise of awards — (78)  Change in fair value of equity-based awards (32,457) —  Balance at end of period $ 48,807 $ 64,338    As the dividend receivable was initially received in connection with the contribution of assets to the Joint Venture, the initial fair value was treated as a component of the Company ’ s contribution of assets and receipt of its Investment in Change Healthcare. During the three months ended June 30, 2018, the Company recognized an increase in the Dividend Receivable, which was equal to the amount of equity-based compensation recognized and was recorded as a component of Loss from Equity Method Investment in the Joint Venture. The result was that no net equity-based compensation related to employees of the Joint Venture was recognized in the financial statements of the Company for the three months ended June 30, 2018. Following the adoption of FASB ASU No. 2018-07, however, the measurement of equity-based compensation generally becomes fixed at the date of grant such that the fair value of the dividend receivable is no longer correlated with the amount of equity compensation recognized. As a result, following the adoption of FASB ASU No. 2018-07, the Loss from Equity Method Investment in the Joint Venture is subject to variability associated with changes in the fair value of the equity-based awards. 

Accumulated Other Comprehensive

Accumulated Other Comprehensive Income (Loss)	3 Months Ended
	Jun. 30, 2019
Accumulated Other Comprehensive Income (Loss) [Abstract]
Accumulated Other Comprehensive Income (Loss)	8. Accumulated Other Comprehensive Income (Loss) The following is a summary of the Company’s proportionate share of the Joint Venture’s accumulated other comprehensive income (loss) balances, net of taxes, as of and for the three months ended June 30, 2019 and 2018 .     Foreign Accumulated  Currency Other  Translation Cash Flow Comprehensive  Adjustment Hedge Income (Loss)   Balance at March 31, 2018 $ 1,268 $ 1,268 $ 2,536  Cumulative effect of accounting change of the Joint Venture-ASU 2017-12 — 490 490  Change associated with foreign currency translation (2,593) — (2,593)  Change associated with current period hedging — 1,206 1,206  Reclassification into earnings — (424) (424)  Balance at June 30, 2018 $ (1,325) $ 2,540 $ 1,215    Balance at March 31, 2019 $ (1,565) $ (1,691) $ (3,256)  Cumulative effect of accounting change of the Joint Venture-ASU 2018-02 — 422 422  Change associated with foreign currency translation 226 — 226  Change associated with current period hedging — (5,117) (5,117)  Reclassification into earnings — (314) (314)  Balance at June 30, 2019 $ (1,339) $ (6,700) $ (8,039)     Effective April 1, 2018, the Joint Venture adopted FASB ASU No. 2017-12, which significantly changed the framework by which hedge accounting is recognized, presented and disclosed in the Joint Venture’s financial statements. The adoption of this update by the Joint Venture resulted in a reclassification between its accumulated other comprehensive income (loss) and accumulated earnings (deficit). Effective April 1, 2019, the Joint Venture adopted FASB ASU No. 2018-02, which allows a reclassification from accumulated other comprehensive income to retained earnings for stranded tax effects resulting from the Tax Cuts and Jobs Act of 2017. The adoption of this update resulted in a reclassification between accumulative other comprehensive income (loss) and accumulated earnings (deficit). As an investor in the Joint Venture, the Company has recognized its proportionate amount of these reclassifications as presented in the table above. 

Subsequent Events

Subsequent Events	3 Months Ended
	Jun. 30, 2019
Subsequent Events [Abstract]
Subsequent Events	9. Subsequent Events In July 2019, the Company completed its initial offering of 49,285,713 of common stock and the concurrent offering of 5,750,000 of tangible equity units (“TEUs”) for net proceeds of $608,679 and $278,875 respectively, before consideration of offering costs paid subsequent to the offerings from available cash . The proceeds of the offering of common stock were subsequently contributed to the Joint Venture in exchange for 49,285,713 additional units of the Joint Venture, which together with the Company’s existing holdings represents an approximately 41% interest in the Joint Venture. The proceeds of the offering of TEUs were used to acquire TEUs of the Joint Venture that substantially mirror the terms of the TEUs included in the offering. The Joint Venture, in turn, used the proceeds received from Change Healthcare Inc. to repay $805,000 of its indebtedness under the Term Loan Facility without penalty. However, due to the presence of unamortized discounts, the Joint Venture expects to recognize a loss on extinguishment of debt of approximately $14,300 for which the Company will recognize a proportionate amount within its loss from equity method investment in the Joint Venture. In addition to the effects of the Joint Venture’s partial extinguishment of debt on the Company’s loss from equity method investment in the Joint Venture, the Company also expects other direct and indirect effects of the offerings. Some of the more significant expected effects include the following: · As a direct result of the additional ownership interest acquired in the Joint Venture, the Company expects to recognize a greater proportion of the earnings or loss of the Joint Venture when measuring its loss from equity method investment in the Joint Venture each period. · The purchase of additional interests in the Joint Venture results in a difference in the cost of the Company’s investment in the Joint Venture and the amount of the underlying equity in the Joint Venture (i.e. “basis difference”). In accordance with GAAP, such basis differences must be accounted for as if the investee were a consolidated subsidiary. As a result, the Company is required to prepare a valuation of the Joint Venture’s assets and liabilities as of the purchase date and perform an allocation of the purchase price among the underlying assets and liabilities of the Joint Venture as if the Company had gained control of the Joint Venture. The effect is that the Company will be required to recognize the effect of these additional basis differences on its periodic measurement of the loss from equity method investment in the Joint Venture. Due to the recent timing of the acquisition of this interest and the time necessary to complete such a valuation exercise, the Company cannot yet quantify the effects of these basis differences on the loss from equity method investment in the Joint Venture. · The investment in the mirror TEUs (which include both an amortizing debt component and a prepaid equity forward purchase contract) of the Joint Venture is expected to result in the Company recognizing separate investments in a debt security and a prepaid equity forward purchase contract. In each case, the Company expects these investments to be subject to periodic measurement to their respective fair values. · As a result of the offering of TEUs, the Company expects to recognize interest expense associated with the amortizing note component of the TEUs as well as interest income associated with the amounts expected to be received from the mirror TEUs issued by the Joint Venture to the Company. 

Basis of Presentation (Policy)

Basis of Presentation (Policy)	3 Months Ended
	Jun. 30, 2019
Basis of Presentation [Abstract]
Principles of Consolidation	Principles of Consolidation The accompanying unaudited condensed financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X of the Securities and Exchange Commission (“SEC”) Guidelines, Rules and Regulations and, in the opinion of management, reflect all normal recurring adjustments necessary for a fair presentation of results for the unaudited interim periods presented. Certain information and footnote disclosures normally included in annual financial statements prepared in accordance with GAAP have been condensed or omitted. The results of operations for the interim period are not necessarily indicative of the results to be obtained for the full fiscal year. All intercompany accounts and transactions have been eliminated in the unaudited condensed financial statements.
Accounting Estimates	Accounting Estimates The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company bases its estimates on historical experience, current business factors and various other assumptions that the Company believes are necessary to consider in order to form a basis for making judgments about the carrying values of assets and liabilities, the recorded amounts of expenses and disclosure of contingent assets and liabilities. The Company is subject to uncertainties such as the impact of future events, economic, environmental and political factors and changes in the Company’s business environment; therefore, actual results could differ from these estimates. Accordingly, the accounting estimates used in the preparation of the Company’s financial statements will change as new events occur, as more experience is acquired, as additional information is obtained and as the Company’s operating environment changes. Changes in estimates are made when circumstances warrant. Such changes in estimates and refinements in estimation methodologies are reflected in the reported results of operations; and if material, the effects of changes in estimates are disclosed in the notes to the financial statements. Estimates and assumptions by management affect: the carrying value of the Company’s investment; the provision and benefit for income taxes and related deferred tax accounts; contingencies; and the value attributed to equity awards.
Recently Adopted Accounting Pronouncements	Recently Adopted Accounting Pronouncements In April 2019, the Company adopted Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) No. 2018-07 on a modified retrospective basis, which expands the scope of Topic 718 to include share-based payment transactions for acquiring goods and services from nonemployees. Among other provisions, the measurement date for awards to nonemployees was changed from the earlier of the date at which a commitment for performance by the counterparty was reached or the date at which performance was complete under the previous guidance to the grant date under this update. Because the Company’s equity-based compensation was previously subject to remeasurement at fair value each quarter under previous authoritative literature, the adoption of this update had no material direct effect on the Company’s consolidated financial statements. As described in Note 7, however, the adoption of this update changed the relationship between the equity-based compensation and the accounting for the freestanding option (i.e. the Dividend receivable). In April 2019, the Joint Venture adopted Accounting Standards Codification (“ASC”) 606, Revenue from Contracts with Customers , which replaces most prior general and industry specific revenue recognition guidance with a principles-based comprehensive revenue recognition framework on a modified retrospective basis. Under this revised framework, a company will recognize revenue to depict the transfer of promised goods and services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods and services. As the Company’s operations consists principally of an investment in the Joint Venture, its financial statements reflect no revenue and, accordingly, the Company recognized no direct impact on its financial statements from the adoption of this update. However, upon adoption, the Joint Venture recognized a cumulative effect adjustment to its Members’ deficit. As a result of the impact of the adoption of ASC 606 to the Joint Venture’s Members’ deficit, the Company was required to recognize a proportionate amount of this cumulative effect adjustment to its April 1, 2019 retained earnings as well. The effect is disclosed within a separate caption of the accompanying condensed statement of stockholders’ equity.

Equity Method Investment in C_2

Equity Method Investment in Change Healthcare LLC (Tables)	3 Months Ended
	Jun. 30, 2019
Equity Method Investment in Change Healthcare LLC [Abstract]
Summarized Financial Information of the Joint Venture	   Three Months Ended  June 30,  2019 2018  Statement of Operations Data:  Total revenue $ 855,556 $ 823,263  Cost of operations (exclusive of depreciation and amortization) $ 326,947 $ 337,430  Customer postage $ 58,484 $ 65,558  Net income (loss) $ 71,915 $ 12,506  

Net Income (Loss) Per Share (Ta

Net Income (Loss) Per Share (Tables)	3 Months Ended
	Jun. 30, 2019
Net Income (Loss) Per Share [Abstract]
Computation of Basic Net Income (Loss) Per Share of Common Stock	   Three Months Ended  June 30,  2019 2018  Basic net income (loss) per share:  Numerator:  Net income (loss) $ (37,517) $ (17,501)  Denominator:  Weighted average common shares outstanding 75,474,654 75,604,775  Basic net income (loss) per share $ (0.50) $ (0.23)   
Antidilutive Securities Excluded from Diluted Net Income (Loss) Per Share	   Three Months Ended  June 30,  2019 2018  Replacement Time-Vesting Options 1,654,632 1,847,560 

Fair Value Measurements (Tables

Fair Value Measurements (Tables)	3 Months Ended
	Jun. 30, 2019
Fair Value Measurements [Abstract]
Summary of Fair Value of Freestanding Derivative	   Fair Values of Derivative Financial Instruments  Asset (Liability)  Derivative financial instruments not designated as hedging instruments: Balance Sheet Location June 30, 2019 March 31, 2019    Freestanding Option Dividend receivable $ 48,807 $ 81,264 
Reconciliation of Fair Value Derivative Using Unobservable Inputs	    Three Months Ended  June 30,  2019 2018  Balance at beginning of period $ 81,264 $ 59,116  Increase in fair value based on ASC 505 equity-based compensation — 5,300  Settlements due to exercise of awards — (78)  Change in fair value of equity-based awards (32,457) —  Balance at end of period $ 48,807 $ 64,338 

Accumulated Other Comprehensi_2

Accumulated Other Comprehensive Income (Loss) (Tables)	3 Months Ended
	Jun. 30, 2019
Accumulated Other Comprehensive Income (Loss) [Abstract]
Summary of Accumulated Other Comprehensive Income (Loss)	   Foreign Accumulated  Currency Other  Translation Cash Flow Comprehensive  Adjustment Hedge Income (Loss)   Balance at March 31, 2018 $ 1,268 $ 1,268 $ 2,536  Cumulative effect of accounting change of the Joint Venture-ASU 2017-12 — 490 490  Change associated with foreign currency translation (2,593) — (2,593)  Change associated with current period hedging — 1,206 1,206  Reclassification into earnings — (424) (424)  Balance at June 30, 2018 $ (1,325) $ 2,540 $ 1,215    Balance at March 31, 2019 $ (1,565) $ (1,691) $ (3,256)  Cumulative effect of accounting change of the Joint Venture-ASU 2018-02 — 422 422  Change associated with foreign currency translation 226 — 226  Change associated with current period hedging — (5,117) (5,117)  Reclassification into earnings — (314) (314)  Balance at June 30, 2019 $ (1,339) $ (6,700) $ (8,039)  

Nature of Business and Organi_2

Nature of Business and Organization (Narrative) (Details)	Jun. 26, 2019$ / sharesshares	Jun. 30, 2019$ / sharesshares	Mar. 31, 2019$ / sharesshares
Organization, Consolidation and Presentation of Financial Statements [Line Items]
Ownership percentage in Joint Venture		30.00%
Stock split conversion ratio	126.4
Common Stock, shares authorized | shares	9,000,000,000	9,000,000,000	252,800,000
Common Stock, par value | $ / shares	$ 0.001	$ 0.001	$ 0.001
Preferred stock, shares authorized | shares	900,000,000	900,000,000	0
Preferred stock, par value | $ / shares	$ 0.001	$ 0.001	$ 0.001
McKesson Corporation [Member]
Organization, Consolidation and Presentation of Financial Statements [Line Items]
Ownership percentage in Joint Venture		70.00%
Common Class X [Member]
Organization, Consolidation and Presentation of Financial Statements [Line Items]
Common Stock, shares authorized | shares	1	1	1
Common Stock, par value | $ / shares	$ 0.001	$ 0.001	$ 0.001

Equity Method Investment in C_3

Equity Method Investment in Change Healthcare LLC (Narrative) (Details)	3 Months Ended
	Jun. 30, 2019
Schedule of Equity Method Investments [Line Items]
Ownership percentage in Joint Venture	30.00%
Legacy CHC [Member]
Schedule of Equity Method Investments [Line Items]
Percentage investment exchanged for membership interest in Joint Venture	45.615%
Joint Venture [Member] | Legacy CHC [Member]
Schedule of Equity Method Investments [Line Items]
Ownership percentage in Joint Venture	54.385%

Equity Method Investment in C_4

Equity Method Investment in Change Healthcare LLC (Summarized Financial Information of the Joint Venture) (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Equity Method Investment in Change Healthcare LLC [Abstract]
Total revenue	$ 855,556	$ 823,263
Cost of operations (exclusive of depreciation and amortization)	326,947	337,430
Customer postage	58,484	65,558
Net income (loss)	$ 71,915	$ 12,506

Net Income (Loss) Per Share (Co

Net Income (Loss) Per Share (Computation of Basic Net Income (Loss) Per Share of Common Stock) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Net Income (Loss) Per Share [Abstract]
Net income (loss)	$ (37,517)	$ (17,501)
Weighted average common shares outstanding	75,474,654	75,604,775
Basic net income (loss) per share	$ (0.50)	$ (0.23)

Net Income (Loss) Per Share (An

Net Income (Loss) Per Share (Antidilutive Securities Excluded from Diluted Net Income (Loss) Per Share) (Details) - shares	3 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Replacement Time-Vesting Options [Member]
Antidilutive securities excluded from diluted net income (loss) per share	1,654,632	1,847,560

Income Taxes (Narrative) (Detai

Income Taxes (Narrative) (Details) - USD ($)	3 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Income Taxes [Abstract]
Income tax benefit	$ 2,184,000	$ 4,801,000
Effective income tax rate	5.50%	21.50%
Tax receivable agreement, percentage of net cash saving realized assigned	85.00%
Tax receivable agreement, minimum percentage of the Joint Venture outstanding units required to be owned	20.00%
Additional tax receivable agreement, percentage net cash tax savings Company required to pay arising from certain tax basis increases and imputed interest deductions	85.00%
Net cash tax savings, obligation	$ 0
Letter agreement, percentage of tax savings required to pay if amount of deductions allocated to Company are in excess of specified minimum threshold	100.00%

Fair Value Measurements (Summar

Fair Value Measurements (Summary of Fair Value of Freestanding Derivative) (Details) - USD ($) $ in Thousands	Jun. 30, 2019	Mar. 31, 2019
Not Designated as Hedging Instrument [Member] | Dividend Receivable [Member]
Derivatives Fair Value [Line Items]
Fair Values of Derivative Financial Instruments Asset (Liability)	$ 48,807	$ 81,264

Fair Value Measurements (Reconc

Fair Value Measurements (Reconciliation of Fair Value Derivative Using Unobservable Inputs) (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2019	Jun. 30, 2018
Fair Value Measurements [Abstract]
Balance at beginning of period	$ 81,264	$ 59,116
Increase in fair value based on ASC 505 equity-based compensation		5,300
Settlements due to exercise of awards		(78)
Change in fair value of equity-based awards	(32,457)
Balance at end of period	$ 48,807	$ 64,338

Accumulated Other Comprehensi_3

Accumulated Other Comprehensive Income (Loss) (Summary Of Accumulated Other Comprehensive Income (Loss)) (Details) - USD ($) $ in Thousands	3 Months Ended
	Jun. 30, 2019	Jun. 30, 2018	Mar. 31, 2019	Mar. 31, 2018
Accumulated Other Comprehensive Income Loss [Line Items]
Balance	$ 1,132,487	$ 1,176,572
Foreign currency translation adjustment of the Joint Venture	226	(2,593)
Balance	1,131,424	1,157,778
Foreign Currency Translation Adjustment [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Balance	(1,565)	1,268
Foreign currency translation adjustment of the Joint Venture	226	(2,593)
Balance	(1,339)	(1,325)
Cash Flow Hedge [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Balance	(1,691)	1,268
Change associated with current period hedging	(5,117)	1,206
Reclassification into earnings	(314)	(424)
Balance	(6,700)	2,540
Accumulated Other Comprehensive Income (Loss) [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Balance	(3,256)	2,536
Foreign currency translation adjustment of the Joint Venture	226	(2,593)
Change associated with current period hedging	(5,117)	1,206
Reclassification into earnings	(314)	(424)
Balance	$ (8,039)	$ 1,215
ASU 2017-12 [Member] | Cash Flow Hedge [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Cumulative effect of accounting change of the Joint Venture				$ 490
ASU 2017-12 [Member] | Accumulated Other Comprehensive Income (Loss) [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Cumulative effect of accounting change of the Joint Venture				$ 490
ASU 2018-02 [Member] | Cash Flow Hedge [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Cumulative effect of accounting change of the Joint Venture			$ 422
ASU 2018-02 [Member] | Accumulated Other Comprehensive Income (Loss) [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Cumulative effect of accounting change of the Joint Venture			$ 422

Subsequent Events (Narrative) (

Subsequent Events (Narrative) (Details) - USD ($)	1 Months Ended	3 Months Ended
	Jul. 31, 2019	Jun. 30, 2019
Subsequent Event [Line Items]
Ownership percentage in Joint Venture		30.00%
Subsequent Event [Member]
Subsequent Event [Line Items]
Shares received from Joint Venture	49,285,713
Ownership percentage in Joint Venture	41.00%
Common Stock [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Share offering	49,285,713
Proceeds from initial public offering	$ 608,679
Tangible Equity Units [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Share offering	5,750,000
Proceeds from tangible equity units	$ 278,875
Joint Venture [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Repayment of debt	805,000
Loss on extinguishment of debt	$ 14,300