Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Feb. 23, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
Current Fiscal Year End Date | --12-31 | ||
Document Transition Report | false | ||
Entity File Number | 001-41428 | ||
Entity Registrant Name | R1 RCM Inc. /DE | ||
Entity Incorporation, State or Country Code | DE | ||
Entity Tax Identification Number | 87-4340782 | ||
Entity Address, Address Line One | 433 W. Ascension Way | ||
Entity Address, Address Line Two | Suite 200 | ||
Entity Address, City or Town | Murray | ||
Entity Address, State or Province | UT | ||
Entity Address, Postal Zip Code | 84123 | ||
City Area Code | 312 | ||
Local Phone Number | 324-7820 | ||
Title of 12(b) Security | Common stock, par value $0.01 per share | ||
Trading Symbol | RCM | ||
Security Exchange Name | NASDAQ | ||
Entity Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Large Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
ICFR Auditor Attestation Flag | true | ||
Document Financial Statement Error Correction [Flag] | true | ||
Document Financial Statement Restatement Recovery Analysis [Flag] | false | ||
Entity Shell Company | false | ||
Entity Public Float | $ 2,855,117,556 | ||
Entity Common Stock, Shares Outstanding (in shares) | 420,280,234 | ||
Documents Incorporated by Reference | Portions of the registrant’s definitive proxy statement for its 2024 Annual Meeting of Stockholders are incorporated by reference into Part III of this Annual Report on Form 10-K. | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001910851 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2023 | |
Audit Information [Abstract] | |
Auditor Firm ID | 42 |
Auditor Name | Ernst & Young LLP |
Auditor Location | Chicago, Illinois |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 173.6 | $ 110.1 |
Accounts receivable, net | 269.4 | 260.2 |
Current portion of contract assets, net | 94.4 | 83.9 |
Prepaid expenses and other current assets | 95.9 | 110.3 |
Total current assets | 633.3 | 564.5 |
Property, equipment and software, net | 173.7 | 164.8 |
Operating lease right-of-use assets | 62.5 | 80.5 |
Non-current portion of contract assets, net | 37.7 | 32 |
Non-current portion of deferred contract costs | 30.4 | 26.7 |
Intangible assets, net | 1,310.7 | 1,514.5 |
Goodwill | 2,629.4 | 2,640.3 |
Non-current deferred tax assets | 10.9 | 10.4 |
Other assets | 71.6 | 88.1 |
Total assets | 4,960.2 | 5,121.8 |
Current liabilities: | ||
Accounts payable | 22.7 | 33.4 |
Accrued compensation and benefits | 126.3 | 109 |
Current portion of operating lease liabilities | 19.3 | 18 |
Current portion of long-term debt | 67 | 53.9 |
Accrued expenses and other current liabilities | 65.9 | 70.5 |
Total current liabilities | 346.2 | 349.7 |
Non-current portion of operating lease liabilities | 77.8 | 94.4 |
Long-term debt | 1,570.5 | 1,732.6 |
Non-current deferred tax liabilities | 176.6 | 200.8 |
Other non-current liabilities | 23.2 | 23.1 |
Total liabilities | 2,208.8 | 2,419.3 |
Stockholders’ equity: | ||
Common stock, $0.01 par value, 750,000,000 shares authorized, 445,436,482 shares issued and 420,201,507 shares outstanding at December 31, 2023; 750,000,000 shares authorized, 439,950,125 shares issued and 416,597,885 shares outstanding at December 31, 2022 | 4.5 | 4.4 |
Additional paid-in capital | 3,197.4 | 3,123.3 |
Accumulated deficit | (136.7) | (140) |
Accumulated other comprehensive loss | (5.9) | (3.4) |
Treasury stock, at cost, 25,234,975 shares as of December 31, 2023; 23,352,240 shares as of December 31, 2022 | (307.9) | (281.8) |
Total stockholders’ equity | 2,751.4 | 2,702.5 |
Total liabilities and stockholders’ equity | 4,960.2 | 5,121.8 |
Nonrelated party | ||
Current assets: | ||
Accounts receivable, net | 243.3 | 235.2 |
Current liabilities: | ||
Current portion of customer liabilities | 39.8 | 57.5 |
Non-current portion of customer liabilities - related party | 2.7 | 5 |
Related party | ||
Current assets: | ||
Accounts receivable, net | 26.1 | 25 |
Current liabilities: | ||
Current portion of customer liabilities | 5.2 | 7.4 |
Non-current portion of customer liabilities - related party | $ 11.8 | $ 13.7 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Accounts receivable, allowance | $ 48.3 | $ 15.2 |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 |
Common stock, shares authorized (in shares) | 750,000,000 | 750,000,000 |
Common stock, shares issued (in shares) | 445,436,482 | 439,950,125 |
Common stock, shares outstanding (in shares) | 420,201,507 | 416,597,885 |
Treasury stock, shares (in shares) | 25,234,975 | 23,352,240 |
Nonrelated party | ||
Accounts receivable, allowance | $ 48.2 | $ 15.1 |
Related party | ||
Accounts receivable, allowance | $ 0.1 | $ 0.1 |
Consolidated Statements of Oper
Consolidated Statements of Operations and Comprehensive Income (Loss) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | |||
Net services revenue ($891.3 million, $881.0 million and $893.5 million from related party for the years ended December 31, 2023, 2022, and 2021, respectively) | $ 2,254.2 | $ 1,806.4 | $ 1,474.6 |
Operating expenses: | |||
Cost of services | 1,769.7 | 1,446.9 | 1,160.9 |
Selling, general and administrative | 220 | 172.5 | 122 |
Other expenses | 116.6 | 189.8 | 55.5 |
Total operating expenses | 2,106.3 | 1,809.2 | 1,338.4 |
Income (loss) from operations | 147.9 | (2.8) | 136.2 |
Net interest expense | 126.9 | 64 | 18.9 |
Income (loss) before income tax provision (benefit) | 21 | (66.8) | 117.3 |
Income tax provision (benefit) | 17.7 | (3.5) | 30 |
Net income (loss) | $ 3.3 | $ (63.3) | $ 87.3 |
Net income (loss) per common share: | |||
Basic (in dollars per share) | $ 0.01 | $ (0.18) | $ (1.90) |
Diluted (in dollars per share) | $ 0.01 | $ (0.18) | $ (1.90) |
Weighted average shares used in calculating net income (loss) per common share: | |||
Basic (in shares) | 418,587,390 | 352,337,767 | 266,183,565 |
Diluted (in shares) | 454,094,374 | 352,337,767 | 266,183,565 |
Consolidated statements of comprehensive income (loss) | |||
Net income (loss) | $ 3.3 | $ (63.3) | $ 87.3 |
Other comprehensive income (loss): | |||
Net change on derivatives designated as cash flow hedges, net of tax | (2.4) | 9.2 | 2.1 |
Foreign currency translation adjustment | (0.1) | (7.3) | (0.9) |
Total other comprehensive income (loss), net of tax | (2.5) | 1.9 | 1.2 |
Comprehensive income (loss) | 0.8 | (61.4) | 88.5 |
Basic: | |||
Net income (loss) | 3.3 | (63.3) | 87.3 |
Less dividends on preferred shares | 0 | 0 | (592.3) |
Net income (loss) available/allocated to common shareholders - basic | 3.3 | (63.3) | (505) |
Diluted: | |||
Net income (loss) | 3.3 | (63.3) | 87.3 |
Less dividends on preferred shares | 0 | 0 | (592.3) |
Net income (loss) available/allocated to common shareholders - diluted | $ 3.3 | $ (63.3) | $ (505) |
Consolidated Statements of Op_2
Consolidated Statements of Operations and Comprehensive Income (Loss) (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Net services revenue | $ 2,254.2 | $ 1,806.4 | $ 1,474.6 |
Related party | |||
Net services revenue | $ 891.3 | $ 881 | $ 893.5 |
Consolidated Statements of Stoc
Consolidated Statements of Stockholders' Equity - USD ($) $ in Millions | Total | CoyCo 2 | Common Stock | Treasury Stock | Additional Paid-In Capital | Additional Paid-In Capital CoyCo 2 | Accumulated Deficit | Accumulated Other Comprehensive Loss |
Beginning Balance (in shares) at Dec. 31, 2020 | 137,812,559 | |||||||
Beginning Balance at Dec. 31, 2020 | $ 85.4 | $ 1.4 | $ (139.2) | $ 393.7 | $ (164) | $ (6.5) | ||
Beginning Balance (in shares) at Dec. 31, 2020 | (16,668,521) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Share-based compensation expense | 77.3 | 77.3 | ||||||
Issuance of common stock related to share-based compensation plans (in shares) | 2,325,918 | |||||||
Issuance of common stock (in shares) | 324,212 | |||||||
Issuance of common stock | $ 7 | 7 | ||||||
Exercise of vested stock options (in shares) | 1,819,039 | 1,819,039 | ||||||
Exercise of vested stock options | $ 8 | 8 | ||||||
Acquisition of treasury stock related to share-based compensation plans (in shares) | (796,908) | |||||||
Acquisition of treasury stock related to share-based compensation plans | (19.1) | $ (19.1) | ||||||
Repurchases of common stock (in shares) | (2,629,257) | |||||||
Repurchases of common stock | (56.9) | $ (56.9) | ||||||
Net change on derivatives designated as cash flow hedges, net of tax | 2.1 | 2.1 | ||||||
Foreign currency translation adjustment | (0.9) | (0.9) | ||||||
Conversion of preferred shares (in shares) | 117,706,400 | |||||||
Conversion of preferred shares | 251.5 | $ 1.2 | 250.3 | |||||
Inducement dividend | (592.3) | (592.3) | ||||||
Issuance of common stock related to inducement (in shares) | 21,582,800 | |||||||
Issuance of common stock related to inducement | 487.3 | $ 0.2 | 487.1 | |||||
Exercise of warrants pursuant to cashless provisions (in shares) | 16,750,000 | |||||||
Exercise of warrants pursuant to cashless provisions | 0 | $ 0.2 | (0.2) | |||||
Net income (loss) | 87.3 | 87.3 | ||||||
Ending Balance (in shares) at Dec. 31, 2021 | 298,320,928 | |||||||
Ending Balance at Dec. 31, 2021 | 336.7 | $ 3 | $ (215.2) | 630.9 | (76.7) | (5.3) | ||
Ending Balance (in shares) at Dec. 31, 2021 | (20,094,686) | |||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net change on derivatives designated as cash flow hedges, net of tax | 0.7 | |||||||
Share-based compensation expense | 60 | $ 5.1 | 60 | $ 5.1 | ||||
Issuance of common stock related to share-based compensation plans (in shares) | 2,954,694 | |||||||
Issuance of common stock (in shares) | 137,389,275 | |||||||
Issuance of common stock | 2,412.8 | $ 1.4 | 2,411.4 | |||||
Replacement awards issued in conjunction with acquisitions | $ 11.3 | 11.3 | ||||||
Exercise of vested stock options (in shares) | 1,285,228 | 1,285,228 | 2,282 | |||||
Exercise of vested stock options | $ 4.5 | $ (0.1) | 4.6 | |||||
Acquisition of treasury stock related to share-based compensation plans (in shares) | (1,174,754) | |||||||
Acquisition of treasury stock related to share-based compensation plans | (27.6) | $ (27.6) | ||||||
Repurchases of common stock (in shares) | (2,080,518) | |||||||
Repurchases of common stock | (38.9) | $ (38.9) | ||||||
Net change on derivatives designated as cash flow hedges, net of tax | 9.2 | 9.2 | ||||||
Foreign currency translation adjustment | (7.3) | (7.3) | ||||||
Net income (loss) | $ (63.3) | |||||||
Ending Balance (in shares) at Dec. 31, 2022 | 439,950,125 | 439,950,125 | ||||||
Ending Balance at Dec. 31, 2022 | $ 2,702.5 | $ 4.4 | $ (281.8) | 3,123.3 | (140) | (3.4) | ||
Ending Balance (in shares) at Dec. 31, 2022 | (23,352,240) | (23,352,240) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net change on derivatives designated as cash flow hedges, net of tax | 3.1 | |||||||
Share-based compensation expense | $ 65.6 | $ 7.3 | 65.6 | $ 7.3 | ||||
Issuance of common stock related to share-based compensation plans (in shares) | 5,075,011 | |||||||
Issuance of common stock related to share-based compensation plans | 0 | $ 0.1 | (0.1) | |||||
Issuance of common stock | $ 3.3 | |||||||
Exercise of vested stock options (in shares) | 411,346 | 411,346 | 4,118 | |||||
Exercise of vested stock options | $ 1.2 | $ (0.1) | 1.3 | |||||
Acquisition of treasury stock related to share-based compensation plans (in shares) | (1,878,617) | |||||||
Acquisition of treasury stock related to share-based compensation plans | (26) | $ (26) | ||||||
Net change on derivatives designated as cash flow hedges, net of tax | (2.4) | (2.4) | ||||||
Foreign currency translation adjustment | (0.1) | (0.1) | ||||||
Net income (loss) | $ 3.3 | |||||||
Ending Balance (in shares) at Dec. 31, 2023 | 445,436,482 | 445,436,482 | ||||||
Ending Balance at Dec. 31, 2023 | $ 2,751.4 | $ 4.5 | $ (307.9) | $ 3,197.4 | $ (136.7) | (5.9) | ||
Ending Balance (in shares) at Dec. 31, 2023 | (25,234,975) | (25,234,975) | ||||||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||||
Net change on derivatives designated as cash flow hedges, net of tax | $ (0.8) |
Consolidated Statements of St_2
Consolidated Statements of Stockholders' Equity (Parenthetical) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Accumulated Other Comprehensive Loss | |||
Net change on derivatives designated as cash flow hedges, net of tax | $ (0.8) | $ 3.1 | $ 0.7 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Operating activities | |||
Net income (loss) | $ 3.3 | $ (63.3) | $ 87.3 |
Adjustments to reconcile net income (loss) to net cash provided by (used in) operations: | |||
Depreciation and amortization | 278.3 | 172 | 77.5 |
Amortization of debt issuance costs | 5.7 | 3.6 | 1.2 |
Share-based compensation | 64.2 | 59.8 | 76.6 |
CoyCo 2 share-based compensation | 7.3 | 5.1 | 0 |
Loss/(gain) on disposal and right-of-use asset write-downs | 10 | 21.1 | (0.4) |
Provision for credit losses | 34.6 | 11.8 | 0.7 |
Deferred income taxes | (14.6) | (6.8) | 23.3 |
Non-cash lease expense | 11.5 | 14 | 9.7 |
Other | 12.3 | 6.5 | (1.9) |
Changes in operating assets and liabilities: | |||
Accounts receivable and related party accounts receivable | (44) | (51.8) | (33.2) |
Contract assets | (15.2) | (24.1) | 0 |
Prepaid expenses and other assets | 3.9 | (40.5) | (17.8) |
Accounts payable | (10.9) | (16) | 0.1 |
Accrued compensation and benefits | 17.4 | (69.5) | 41.6 |
Operating lease liabilities | (18) | (18.9) | (12.7) |
Other liabilities | 17.9 | (1.7) | (13.5) |
Customer liabilities and customer liabilities - related party | (23.6) | (11.2) | 18 |
Net cash provided by (used in) operating activities | 340.1 | (9.9) | 256.5 |
Investing activities | |||
Purchases of property, equipment, and software | (102.5) | (93.5) | (51.7) |
Payment for business acquisitions, net of cash acquired | 0 | (847.7) | (286.4) |
Other | (0.3) | (8.3) | 6 |
Net cash used in investing activities | (102.8) | (949.5) | (332.1) |
Financing activities | |||
Payment of debt issuance costs | 0 | (1) | (1.9) |
Payment of contingent consideration liability | 0 | 0 | (4.8) |
Deferred payment related to acquisition of RevWorks | 0 | 0 | (12.5) |
Inducement of preferred stock conversion | 0 | 0 | (105) |
Payment of equity issuance costs | 0 | (2) | 0 |
Exercise of vested stock options | 1.3 | 4.6 | 8.9 |
Purchase of treasury stock | 0 | (39.3) | (56.5) |
Shares withheld for taxes | (26.5) | (30.2) | (16.3) |
Other | 5.2 | (0.2) | (0.2) |
Net cash (used in) provided by financing activities | (173.9) | 943 | 31.4 |
Effect of exchange rate changes in cash | 0.1 | (3.6) | (0.5) |
Net increase (decrease) in cash, cash equivalents, and restricted cash | 63.5 | (20) | (44.7) |
Cash, cash equivalents, and restricted cash at beginning of period | 110.1 | 130.1 | 174.8 |
Cash, cash equivalents, and restricted cash at end of period | 173.6 | 110.1 | 130.1 |
Supplemental disclosures of cash flow information | |||
Property, equipment and software purchases not paid | 18.4 | 26.9 | 19.5 |
Assets obtained in exchange for common stock | 0 | 24.3 | 7 |
Interest paid | 126.5 | 61 | 17.3 |
Income taxes paid | 34.4 | 8.6 | 5.2 |
Income taxes refunded | 0.4 | 0 | 0.2 |
Senior Term Loan | |||
Financing activities | |||
Issuance of senior secured debt, net of discount and issuance costs and borrowings on revolver | 0 | 1,016.6 | 698.6 |
Repayment of senior secured debt and revolver | (53.9) | (25.5) | (488.9) |
Senior Revolver | |||
Financing activities | |||
Issuance of senior secured debt, net of discount and issuance costs and borrowings on revolver | 30 | 50 | 120 |
Repayment of senior secured debt and revolver | $ (130) | $ (30) | $ (110) |
Description of Business
Description of Business | 12 Months Ended |
Dec. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business | Description of Business R1 RCM Inc. (the “Company”) is a leading provider of technology-driven solutions that transform the financial performance and patient experience for health systems, hospitals, and physician groups. The Company’s scalable operating models complement a healthcare organization’s infrastructure, driving sustainable improvements to net patient revenue and cash flows while driving revenue yield, reducing operating costs, and enhancing the patient experience. The Company delivers solutions to customers through leading-edge technology, proprietary expertise, intellectual property, global scale, and operational excellence – key elements to driving durable financial performance across the revenue cycle, which encompass patient registration, insurance and benefit verification, scheduling, medical treatment documentation and coding, bill preparation, and collections from patients and payers. The Company assists its revenue cycle management (“RCM”) customers in managing their revenue cycle operating costs while simultaneously increasing the portion of the maximum potential services revenue they receive. Together, these benefits can generate significant and sustainable improvements in operating margins and cash flows for the Company’s customers. The Company’s flexible partnership models are intentionally designed to meet the unique needs of the providers it serves. The Company’s commitment as an accountability partner with the ability to deliver multiple integrated solutions at scale allows it to engage with customers in a manner that aligns with the customers’ objectives. • Operating Partnership/End-to-End Solutions : For organizations seeking comprehensive support across the entire revenue cycle, the Company’s operating partnership model manages multiple aspects of the revenue cycle allowing hospital and physician customers to realize financial leverage and revenue improvement. Under this partnership model, the Company assumes full responsibility of all or select revenue cycle phases to deliver scalable, accelerated, and sustainable financial results across all settings of care and payment models, customized for health systems and physician groups. • Modular Solutions : For organizations looking to accelerate, optimize, and navigate revenue recovery, the Company offers modular solutions, which can be purchased individually or bundled and are designed to deliver results in key revenue cycle areas. Under this focused and flexible partnership approach, the Company addresses specific challenges of the revenue cycle. This customized approach promotes cost reduction and enhanced revenue performance in areas that matter most for health systems, hospitals, and physician groups. For the years ended December 31, 2023, 2022, and 2021, substantially all of the Company’s net operating and incentive fees from end-to-end RCM services were generated under the operating partner model. Once implemented, the Company’s technology solutions, processes, and services are deeply embedded in its customers’ day-to-day revenue cycle operations. The Company believes its service offerings are adaptable to meet an evolving healthcare regulatory environment, technology standards, and market trends. Acclara Acquisition On January 17, 2024, the Company completed the acquisition of the RCM business (“Acclara”) of Providence Health & Services – Washington (“Providence”) and certain of its affiliates (the “Acclara Acquisition”) in exchange for $675.0 million cash and a warrant to acquire up to 12,192,000 shares of common stock, par value $0.01 per share, of the Company to Providence (the “Providence Warrant”), subject to customary adjustments for working capital, cash, and debt. The Company acquired 100% of the equity interests in Acclara. The Company funded the cash consideration for the Acclara Acquisition and related fees and expenses with cash on hand, borrowings of $80 million under the senior secured revolving credit facility (the “Senior Revolver”), and incremental borrowings of $575.0 million from the senior secured term loan B facility (such incremental borrowings, the “Incremental Term B Loans”). For more information on the additional borrowings, see Note 23, Subsequent Events. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies Basis of Presentation The consolidated financial statements include the assets, liabilities and results of operations of the Company and its wholly owned subsidiaries. All material intercompany transactions and balances have been eliminated in consolidation. The preparation of financial statements in conformity with the generally accepted accounting principles in the U.S. (“GAAP”) requires management to make estimates and assumptions that affect the amounts reported in these consolidated financial statements and accompanying notes. Actual results can differ from those estimates. Revenue Recognition The Company’s earns revenue from the provision of RCM services to healthcare providers. The operating partnership arrangements are large scale outsourcing contracts where the Company takes over the management of all or most of the revenue cycle operation of the customer. Modular and other services are contracted on a smaller scale and include the outsourcing of specific RCM tasks or services focused on opportunities to accelerate and optimize revenue, reduce costs, or improve performance. Revenue Cycle Management RCM services fees are primarily variable and performance related. The performance obligation is generally viewed as a series of distinct services in which there are identifiable increments of time within a long-term service contract. The variable consideration for end-to-end RCM services is allocated to and recognized over the related time period as the amounts reflect the consideration the Company is entitled to and relate specifically to the Company’s efforts to satisfy its performance obligation. Fees for physician group RCM services include variable consideration contingent on customer collections, and inputs to the Company’s revenue estimates typically include historical service fees and historical customer collection amounts. RCM services fees consist of net operating fees and incentive fees. In some cases, there may be certain services that are provided under a separate fee similar to a modular service. The typical length of an end-to-end RCM contract is seven Net Operating Fees The Company’s net operating fees consist of: i. gross base fees, a contractually agreed upon cost-to-collect percentage applied to a customer’s contractually defined patient collections, invoiced to customers; less ii. corresponding costs of customers’ revenue cycle operations which the Company pays pursuant to its RCM agreements, including salaries and benefits for the customers’ RCM personnel, and related third-party vendor costs; plus iii. fees accrued for physician group RCM services. The Company recognizes revenue related to net operating fees ratably as the performance obligation for the RCM services is satisfied. Base fees are typically billed in advance of the quarter and paid in three monthly payments as the entity performs and the customer simultaneously receives and consumes the benefits of the services provided. The costs of customers’ revenue cycle operations, which the Company pays pursuant to its RCM agreements, are accrued based on the service period. Net operating fees for physician groups are invoiced on a monthly basis and payment terms are typically 30 days. Incentive Fees Incentive fees are structured to reflect quarterly or annual performance and are evaluated on a contract-by-contract basis. The Company estimates incentive fee revenue based on contractually agreed-upon financial or operating metrics and confirms the unbilled incentive fee directly with the customer at year end. The Company recognizes revenue related to incentive fees ratably as the performance obligation for RCM services is satisfied, to the extent that it is probable that a significant reversal of cumulative revenue will not occur once the uncertainty is resolved. Incentive fees are typically billed and paid on a quarterly basis. Modular and Other Fees The Company recognizes revenue related to modular and other RCM fees as performance obligations are completed. This can vary by service line, but the predominant fee arrangements are described below. Modular service agreements generally vary in length between one 1. For certain modular revenue services, fees are contingent and variable in nature and estimated revenue is recognized as services are provided resulting in the recognition of a contract asset. Revenues and contract assets are recognized when control of the promised services is transferred to the customer and reflects the estimated amount of consideration the Company expects to be entitled in exchange for transferring those services. We estimate the variable consideration for which we expect to be entitled from our service arrangements with each customer using assumptions based on historical information at the customer and service line level, which are regularly reviewed and updated. We also apply our best judgment at the time based on available internal and customer-specific information. The estimate of variable consideration included in the transaction price typically involves the application of an assumption regarding the expected realization rate to estimate the total amount that the Company’s customers are likely to collect from their payers after the services have been provided. The assumptions are developed using historic incremental reimbursements collected by customers, a portfolio of similar contracts, or the service line level. We allocate variable consideration to each distinct period to which it relates since this reflects the consideration to which we expect to be entitled in exchange for the services we have performed to date. Billing occurs once the customer collects additional revenue from payers based on services provided. 2. To the extent that certain service fees are fixed and not subject to refund, adjustment, or concession, these fees are generally recognized into revenue ratably as the performance obligation is satisfied. 3. Fees for services with a fixed rate applied to a variable volumetric measure are recognized into revenue ratably as the performance obligation is satisfied or recognized in the period performance is completed. Payment terms are generally 30 to 60 days. Bundled Services While we do have many modular customers that have contracts for more than one service, each service is contracted separately under an overall master services agreement and the individual service offerings are priced at or near stand-alone selling price. End-to-end RCM services are typically sold separately. Cost of Services Cost of services consist of (i) on-site personnel and technology costs, (ii) global business services costs, and (iii) other costs. On-site personnel and technology costs consist primarily of wages, bonuses, benefits, share-based compensation, travel, and other costs associated with employees who are assigned to customer sites to help manage the Company’s customers’ revenue cycle operations. The other significant portion of such expenses is an allocation of the costs associated with maintaining, improving, and deploying our integrated proprietary technology suite. Global business services costs relate to the Company’s global business services centers in the U.S., India, and the Philippines that perform patient scheduling and pre-registration, medical transcription, cash posting, reconciliation of payments to billing records, patient follow-up, and Medicaid eligibility determination for our customers. The Company incurs expenses related to salaries and benefits for employees in its global business services centers and non-payroll costs associated with operating its global business services centers. Other costs include amortization of acquired intangible assets and internally developed software used in operations, vendor costs for contracts assigned to our customers or for support services that are outsourced, and compensation costs of personnel who directly support employees serving customers (e.g., human resources and IT). Costs associated with generating the Company’s net services revenue are expensed as incurred, with the exception of deferred contract costs, which are certain costs associated with the initial phases of customer contracts and the related transition of customer hospitals and physician groups that are deferred. These fulfillment costs relate directly to the Company’s responsibilities under the corresponding customer contracts, generate or enhance resources of the Company that will be used in satisfying its performance obligations in the future, and are expected to be recovered through the margins realized. The following table summarizes the breakout of deferred contract costs: December 31, 2023 December 31, 2022 Prepaid expenses and other current assets $ 6.5 $ 5.1 Non-current portion of deferred contract costs 30.4 26.7 Total deferred contract costs $ 36.9 $ 31.8 The associated assets are amortized as services are transferred to the customer over the remaining life of the contracts. For the years ended December 31, 2023 and 2022, total amortization was $8.1 million and $8.3 million, respectively, and there were no associated impairment losses. Comprehensive Income (Loss) Comprehensive income (loss) is the net income (loss) of the Company combined with other changes in stockholders’ equity not involving ownership interest changes. For the Company, such changes are foreign currency translation adjustments and changes in derivatives designated as cash flow hedges. Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. Cloud Computing Arrangements The Company capitalizes qualifying set-up and implementation costs related to the Company’s cloud computing arrangements. The deferred costs are amortized over the term of the associated cloud computing arrangement on a straight-line basis unless another systematic and rational basis is more representative of the pattern in which the Company expects to benefit from access to the cloud computing arrangement. Capitalized cloud computing implementation costs are presented in prepaid expenses and other current assets and other assets on the Consolidated Balance Sheets. As of December 31, 2023 and 2022, the Company had net capitalized cloud computing implementation costs of $6.9 million and $6.8 million, respectively. Property, Equipment and Software Property, equipment and software are stated at cost, and related depreciation and amortization are calculated on the straight-line method over the estimated useful lives of the assets. The Company capitalizes qualifying internal and third-party costs and hardware and software costs related to the Company’s software development activities. The Company amortizes the capitalized software development costs over their estimated life on a straight-line basis. The major classifications of property, equipment and software and their expected useful lives are as follows: Buildings and land 30 years and indefinite Computers and other equipment 3 years Leasehold improvements Shorter of 10 years or lease term Office furniture 5 years Software 3 to 5 years Property, equipment and software consist of the following: December 31, 2023 December 31, 2022 Buildings and land $ 15.6 $ 24.3 Computer and other equipment 86.4 75.6 Leasehold improvements 27.4 24.1 Software 320.0 243.2 Office furniture 12.3 12.4 Property, equipment and software, gross 461.7 379.6 Less accumulated depreciation and amortization (288.0) (214.8) Property, equipment and software, net $ 173.7 $ 164.8 Property, equipment and software, net, located internationally was $23.4 million and $20.3 million as of December 31, 2023 and 2022, respectively. The remaining property, equipment and software was located in the U.S. The following table summarizes the allocation of depreciation and amortization expense between cost of services and selling, general and administrative expenses: Year Ended December 31, 2023 2022 2021 Cost of services $ 73.6 $ 53.4 $ 51.8 Selling, general and administrative 1.2 1.2 2.8 Total depreciation and amortization $ 74.8 $ 54.6 $ 54.6 Impairment of Long-Lived Assets Property, equipment, software, right-of-use (“ROU”) assets, deferred contract costs, and other acquired intangible assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of the asset may not be recoverable. If circumstances require a long-lived asset or asset group be reviewed for possible impairment, the Company first compares undiscounted cash flows expected to be generated by each asset or asset group to its carrying value. If the carrying value of the long-lived asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment charge is recognized to the extent that the carrying value exceeds the fair value. During the fourth quarter of 2023, the Company recorded an impairment loss of $8.7 million, which was included in other expenses on the Consolidated Statements of Operations, related to land and buildings which as of that period are no longer used in operations and for which it is more likely than not that they will be sold significantly before the end of their assigned useful life and current real estate market conditions indicate a decline in value. The Company obtained an independent appraisal and engaged a real estate broker to assess the potential sales price based on market comparables to support the estimated fair value measurement. For the years ended December 31, 2023, 2022, and 2021, we also impaired ROU assets and related leasehold improvements related to leased facilities which we exited. See Note 8, Leases, and Note 14, Other Expenses, for more information. Other than as described above, there was no material impairment of property, equipment, software, deferred contract costs, or other acquired intangible assets for the years ended December 31, 2023, 2022, and 2021. Accrued Compensation and Benefits Accrued compensation and benefits consists of accrued payroll, bonus, paid time off, health benefits, severance, and compensation and benefits related taxes. Fair Value of Financial Instruments The Company records its financial assets and liabilities at fair value. The accounting standard for fair value (i) defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date, (ii) establishes a framework for measuring fair value, (iii) establishes a hierarchy of fair value measurements based upon the ability to observe inputs used to value assets and liabilities, (iv) requires consideration of nonperformance risk, and (v) expands disclosures about the methods used to measure fair value. The accounting standard establishes a three-level hierarchy of measurements based upon the reliability of observable and unobservable inputs used to arrive at fair value. Observable inputs are independent market data, while unobservable inputs reflect the Company’s assumptions about valuation. The three levels of the hierarchy are defined as follows: • Level 1: Observable inputs such as quoted prices in active markets for identical assets and liabilities; • Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and • Level 3: Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. The carrying amounts of the Company’s financial instruments, which include financial assets and liabilities such as cash and cash equivalents, restricted cash equivalents, accounts receivable, net, accounts payable, accrued service costs, accrued compensation and benefits, and certain other current assets and accrued expenses, approximate their fair values, due to their short-term nature. See Note 11, Derivative Financial Instruments, for a discussion of the fair value of the Company’s forward currency derivative contracts and interest rate swaps. The Company believes the carrying value of the Senior Revolver and term loans (see Note 10, Debt) approximates fair value as they are variable rate bank debt. Other than the items discussed above, the Company does not have any financial assets or liabilities that are required to be measured at fair value on a recurring basis. Income Taxes Income taxes are accounted for under the asset and liability 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 basis and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using current tax laws and enacted tax rates in effect for 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 records a valuation allowance for deferred tax assets if, based upon the weight of all available evidence, both positive and negative, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the relevant tax authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest amount of benefit that has a greater than 50% percent likelihood of being realized upon ultimate settlement. Interest and penalties relating to income taxes are recognized in our income tax provision in the consolidated statements of operations and comprehensive income. Legal and Other Contingencies In the normal course of business, the Company is subject to regulatory investigations or legal proceedings, as well as demands, claims and threatened litigation. The Company records an estimated loss for any claim, lawsuit, investigation or proceeding when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Judgment is required in both the determination of the probability and whether the loss can be reasonably estimated. Actual expenses could differ from such estimates. Foreign Currency Translation and Transaction Gains (Losses) Assets and liabilities of non-U.S. subsidiaries that operate in a local currency environment, where such local currency is the functional currency, are translated to U.S. dollars at exchange rates in effect at the balance sheet date. As of December 31, 2023 and 2022, the Company had net assets of $104.8 million and $81.5 million in foreign entities, respectively. Income and expense accounts are translated at average exchange rates during the year which approximates the rates in effect at the transaction dates. The resulting translation adjustments are recorded as a separate component of accumulated other comprehensive income (loss). Share-Based Compensation Expense The Company determines the expense for all employee share-based compensation awards by estimating their fair value and recognizing such value as an expense, on a ratable basis, in the consolidated financial statements over the requisite service period in which the employees earn the awards. Performance-based stock awards are recognized in expense when the performance metrics are probable to be achieved. Changes in the estimate of achievement of the performance metrics are recognized in the period of the change through a cumulative catch-up. The Company assesses the performance metrics in its awards on a quarterly basis to determine if a cumulative catch-up is necessary. The fair value of stock options is calculated using the Black-Scholes option pricing model. For the year ended December 31, 2023, there were no options granted. As part of the transactions contemplated by the Transaction Agreement, equity awards held by certain employees of Cloudmed (“Former Class P Units”) were modified, through a series of transactions, into awards (“Management Units”) of CoyCo 2, L.P. (“CoyCo 2”). Certain Former Class P Units that were subject to performance-based vesting conditions did not become vested upon the closing of the Cloudmed acquisition (“Unvested Units”). The Management Units issued by CoyCo 2 are treated as share-based compensation under ASC 718, Compensation - Stock Compensation. The Unvested Units are not awards of the Company and the participants will receive no additional shares of the Company upon satisfaction of the vesting criteria described in Note 13, Share-Based Compensation. However, GAAP requires the Company recognize the cost of share-based compensation granted by an investor (CoyCo 2) to the Company’s employees and service providers for services that benefit the Company’s operations (hereafter, “CoyCo 2 share-based compensation expense”), and a corresponding capital contribution because the costs are incurred on the Company’s behalf. A Monte Carlo simulation was used to estimate the fair value of the Unvested Units. The Company recognizes compensation expense using a straight-line method over the applicable service or performance period. During each quarter, the share-based compensation expense is adjusted to reflect forfeitures during the period. Treasury Stock The Company records treasury stock at the cost to acquire such shares, including commissions paid to brokers. Treasury stock is included as a component of stockholders’ equity. Earnings (Loss) Per Share Basic net income per share is computed by dividing net income, less any dividends, accretion or decretion, redemption or induced conversion on the preferred stock, by the weighted average number of common shares outstanding during the period. As the preferred stock formerly but no longer in issue (as defined in Note 12) participates in dividends alongside the Company’s common stock (per their participating dividends), the preferred stock would constitute participating securities under ASC 260-10, Earnings Per Share, and are applied to earnings per share using the two-class method. Under this method, all earnings (distributed and undistributed) are allocated to common shares and participating securities based on their respective rights to receive dividends. Diluted net income per share is calculated by adjusting the denominator used in the basic net income per share computation by potentially dilutive securities outstanding during the period plus, when their effect is dilutive, incremental shares consisting of shares subject to stock options, restricted stock units (“RSUs”), performance-based RSUs (“PBRSUs”), and shares issuable upon conversion of preferred stock. Recently Issued Accounting Standards and Disclosures In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”). ASU 2021-08 requires companies to apply Topic 606, Revenue from Contracts with Customers, to recognize and measure contract assets and contract liabilities obtained in a business combination. The ASU amendments will generally result in the recognition of contract assets and contract liabilities by the acquirer at amounts consistent with those recorded by the acquiree immediately before the acquisition date. The Company prospectively adopted ASU 2021-08 effective April 1, 2022 and recognized contract assets of $92.4 million and contract liabilities of $3.3 million as part of the Cloudmed acquisition. In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”). ASU 2022-03 clarifies that a contractual sale restriction on an equity security should not be considered in measuring the security’s fair value. The Company will adopt ASU 2022-03 prospectively effective January 1, 2024 and does not expect the impact on its consolidated financial statements to be material. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. The Company is currently in the process of determining the impact that ASU 2023-07 will have on its consolidated financial statement disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 expands the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. The Company is currently in the process of determining the impact that ASU 2023-09 will have on its consolidated financial statement disclosures. |
Acquisitions
Acquisitions | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Acquisitions | Acquisitions Assets acquired and liabilities assumed in a business combination are recorded at their estimated fair value on the date of the acquisition. The difference between the purchase price amount and the net fair value of assets acquired and liabilities assumed is recognized as goodwill on the balance sheet if the purchase price exceeds the estimated net fair value or as a bargain purchase gain on the income statement if the purchase price is less than the estimated net fair value. The allocation of the purchase price may be modified up to one year after the acquisition date as more information is obtained about the fair value of assets acquired and liabilities assumed. Costs relating to acquiree compensation arrangements that are considered separate transactions and do not qualify for inclusion as part of the business combination are expensed on the date of the acquisition and recorded as a component of other expenses. Cloudmed During 2022, the Company acquired all outstanding equity interests in Revint Holdings, LLC (“Cloudmed”), a provider of revenue intelligence solutions, in exchange for shares of the Company’s common stock and cash. The shares of common stock received by the Cloudmed sellers were subject to an 18-month lock-up period that expired on December 21, 2023. In addition, the Company replaced certain pre-acquisition awards held by certain Cloudmed sellers with RSUs of the Company. The final value of assets acquired and liabilities assumed is: Purchase Price Allocation Total purchase consideration $ 3,281.6 Allocation of consideration to assets acquired and liabilities assumed: Cash and cash equivalents $ 32.1 Accounts receivable 61.8 Current portion of contract assets 70.9 Property, equipment and software 5.0 Operating lease right-of-use assets 25.3 Non-current portion of contract assets 22.2 Intangible assets 1,366.5 Goodwill 2,085.0 Other assets 6.7 Accounts payable (31.9) Customer liabilities (2.8) Accrued compensation and benefits (85.6) Operating lease liabilities (25.4) Deferred income tax liabilities (236.0) Other liabilities (12.2) Net assets acquired $ 3,281.6 Measurement period adjustments In 2023, the Company performed various measurement period adjustments due to additional information received since December 31, 2022. The significant adjustments included a reduction to deferred income tax liabilities and a corresponding decrease to goodwill of $9.4 million related to updated tax return information. The measurement period for the Cloudmed acquisition ended during the second quarter of 2023. VisitPay During 2021, the Company purchased all outstanding equity interests in iVinci Partners, LLC d/b/a VisitPay (“VisitPay”) for $297.1 million. VisitPay is a provider of digital payment solutions. The Company funded the VisitPay acquisition and related transaction costs with cash on hand and the incurrence of additional indebtedness. The purchase price allocation was finalized during 2022 and included the recognition of goodwill of $170.9 million attributable to synergies related to the integration. For additional information regarding the VisitPay acquisition, refer to the Annual Report on Form 10-K for the year ended December 31, 2022 filed on February 16, 2023, as amended by Amendment No. 1 filed on December 4, 2023. Revworks In 2020, the Company purchased certain assets related to the RevWorks services business from Cerner Corporation. In accordance with the purchase agreement, the Company paid the first deferred payment of $12.5 million in the third quarter of 2021 and was required to make a second deferred payment of $12.5 million. The two deferred payments related to the RevWorks acquisition were contractual obligations of the Company; however, they were refundable, in whole or in part, to the Company if certain RevWorks customer revenue targets defined in the purchase agreement for the first two years following the acquisition were not achieved. Consistent with the contract requirements, the parties engaged in arbitration to finalize the remaining deferred payment and contingently refundable consideration amounts. These amounts were settled during the year ended December 31, 2023 in amounts that are materially consistent with the amounts recorded by the Company at December 31, 2022. Pro Forma Results (Unaudited) The following table summarizes, on a pro forma basis, the combined results of the Company as though the Cloudmed acquisition had occurred as of January 1, 2021 and the VisitPay acquisition had occurred as of January 1, 2020. These pro forma results are not necessarily indicative of the actual consolidated results had the acquisitions occurred as of those dates or of the future consolidated operating results for any period. Pro forma results are: Year Ended December 31, 2022 2021 Net services revenue $ 2,009.7 $ 1,813.5 Net loss $ (52.8) $ (187.0) Adjustments were made to earnings to adjust depreciation and amortization to reflect the fair value of identified assets acquired, to adjust share-based compensation expense for awards granted in connection with the acquisitions, to record the effects of extinguishing the debt of the acquired companies and replacing it with the debt of the Company, to adjust timing of acquisition related costs incurred by the Company, and to record the income tax effect of these adjustments. |
Intangible Assets
Intangible Assets | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets | Intangible Assets The following table provides the gross carrying value and accumulated amortization for each major class of definite-lived intangible assets at December 31, 2023 and December 31, 2022: December 31, 2023 December 31, 2022 Gross Carrying Value Accumulated Amortization Net Book Value Gross Carrying Value Accumulated Amortization Net Book Value Customer relationships $ 417.9 $ (60.5) $ 357.4 $ 418.0 $ (36.3) $ 381.7 Technology 1,238.8 (299.5) 939.3 1,240.5 (129.3) 1,111.2 Trade name 23.5 (9.5) 14.0 24.5 (3.0) 21.5 Favorable leasehold interests — — — 0.1 — 0.1 Total intangible assets $ 1,680.2 $ (369.5) $ 1,310.7 $ 1,683.1 $ (168.6) $ 1,514.5 The fair value of the identifiable intangible assets was derived utilizing an income approach to derive the present value of future cash flows from developed technology, customer relationships, trade name, and favorable leasehold interests. Intangible asset amortization expense was $203.5 million, $117.4 million, and $22.9 million for the years ended December 31, 2023, 2022, and 2021 respectively. Amortization expense for intangible assets is included in cost of services on the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss). The Company has no indefinite-lived intangible assets. Estimated annual amortization expense related to intangible assets with definite lives as of December 31, 2023 is as follows: 2024 $ 204.7 2025 188.9 2026 188.2 2027 188.2 2028 188.1 Thereafter 352.6 Total $ 1,310.7 |
Goodwill
Goodwill | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill | Goodwill Goodwill represents the difference between the purchase price of acquired companies and the related fair value of the net assets acquired, which applies the acquisition method of accounting. Changes in the carrying amount of goodwill for the year ended December 31, 2023 were: Goodwill Balance as of December 31, 2022 $ 2,640.3 Measurement period adjustments (10.9) Balance as of December 31, 2023 $ 2,629.4 The Company annually tests goodwill for impairment on the first day of its fiscal fourth quarter, or more frequently if an event occurs or circumstances change that would more likely than not reduce the fair value below its carrying value. The goodwill impairment test consists of a qualitative assessment of impairment indicators, followed by, if necessary, a quantitative assessment comparing the carrying amount to the reporting unit’s fair value. To the extent that the carrying value exceeds the fair value, an impairment charge would be recorded. The Company has determined there to be one reporting unit, consistent with its single operating and reportable segment. As part of its annual impairment analysis, the Company performed a qualitative assessment and determined there was no impairment of goodwill as of its annual measurement date or for the year ended December 31, 2023. |
Revenue Recognition
Revenue Recognition | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Revenue Recognition | Revenue Recognition Disaggregation of Revenue In the following table, revenue is disaggregated by source of revenue: Year Ended December 31, 2023 2022 2021 Net operating fees $ 1,455.9 $ 1,309.7 $ 1,211.8 Incentive fees 108.4 106.8 143.8 Modular and other fees (1) 689.9 389.9 119.0 Net services revenue $ 2,254.2 $ 1,806.4 $ 1,474.6 (1) Modular and other revenue is comprised of service fees related to solutions focused on revenue recovery, clinical integrity, revenue optimization, and regulatory navigation as well as functional outsourcing solutions focused on driving revenue cycle improvements. Contract Balances The following table provides information about contract assets, net and contract liabilities from contracts with customers: December 31, 2023 December 31, 2022 Contract assets, net Current $ 94.4 $ 83.9 Non-current 37.7 32.0 Total contract assets, net $ 132.1 $ 115.9 Contract liabilities Current (1) $ 9.1 $ 9.7 Non-current (2) 14.5 18.7 Total contract liabilities $ 23.6 $ 28.4 (1) Current contract liabilities include $6.7 million and $7.6 million classified in the current portion of customer liabilities and $2.4 million and $2.1 million classified in the current portion of customer liabilities - related party as of December 31, 2023 and 2022, respectively. (2) Non-current contract liabilities include $2.7 million and $5.0 million classified in the non-current portion of customer liabilities and $11.8 million and $13.7 million classified in the non-current portion of customer liabilities - related party as of December 31, 2023 and 2022, respectively. Significant changes in the carrying amount of contract assets, net for the year ended December 31, 2023 were as follows: Contract Assets Balance as of December 31, 2022 $ 115.9 Revenue recognized 374.1 Amounts billed (356.7) Other (1) (1.2) Balance as of December 31, 2023 $ 132.1 (1) Other primarily includes purchase price allocation adjustments and changes to the allowance for credit losses. Contract Liabilities Balance as of December 31, 2022 $ (28.4) Advanced billings as of January 1, 2023 (1) (85.0) Advanced billings recognized 85.0 Additions (13.8) Revenue recognized 18.6 Balance as of December 31, 2023 $ (23.6) (1) The Company records advanced billings to contract liabilities and accounts receivable on the first day of the respective service period, which are earned during the year. Transaction Price Allocated to the Remaining Performance Obligation The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period. The estimated revenue does not include amounts of variable consideration that are constrained. Net operating fees Incentive fees 2024 90.5 18.8 2025 61.9 — 2026 12.5 — 2027 6.8 — 2028 3.0 — Thereafter 4.3 — Total $ 179.0 $ 18.8 The amounts presented in the table above include variable fee estimates of the Company’s physician groups RCM services contracts, fixed fees, and forecasted incentive fees. Fixed fees are typically recognized ratably as the performance obligation is satisfied and forecasted incentive fees are measured cumulatively over the contractually defined performance period. The Company does not disclose information about remaining performance obligations with an original expected duration of one year or less. The Company has elected certain of the optional exemptions from the disclosure requirement for remaining performance obligations for specific situations in which an entity need not estimate variable consideration to recognize revenue. Accordingly, the Company applies a practical expedient to its modular RCM solutions and does not disclose information about variable consideration from remaining performance obligations when the Company has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the entity’s performance completed to date. Modular RCM solutions performance obligations for variable consideration are of short duration with fees corresponding to the value the customer has realized, for example, patient accounts collected on behalf of the customer or medical record lines transcribed. For end-to-end RCM contracts, the Company does not disclose information about remaining, wholly unsatisfied performance obligations for variable consideration that the Company is able to allocate to one or more, but not all, of the performance obligations in its contracts. The Company’s end-to-end RCM services performance obligations are satisfied over time and are substantially the same from period to period under the operating partner model. Fees are variable and consist of net operating fees and incentive fees, with the uncertainty related to net operating fees and certain incentive fees being resolved quarterly, and with the uncertainty of other incentive fees being resolved annually. The information presented in the table above includes estimates for incentive fees where the uncertainty related to the final fee is resolved on longer than a quarterly basis and to the extent the Company does not believe the associated consideration is constrained. |
Accounts Receivable and Allowan
Accounts Receivable and Allowance for Credit Losses | 12 Months Ended |
Dec. 31, 2023 | |
Receivables [Abstract] | |
Accounts Receivable and Allowance for Credit Losses | Accounts Receivable and Allowance for Credit Losses Accounts receivable is comprised of invoiced and unbilled balances due from modular services and end-to-end RCM customers, which are presented net after considering cost reimbursements owed to end-to-end RCM customers. As of December 31, 2023 2022 Billed receivables $ 218.5 $ 184.7 Unbilled receivables $ 99.2 $ 90.7 Allowance for credit losses $ (48.3) $ (15.2) Total accounts receivable, net (1) $ 269.4 $ 260.2 (1) Includes $26.1 million and $25.0 million for accounts receivable - related party, net as of December 31, 2023, and 2022, respectively. The Company evaluates its accounts receivable for expected credit losses monthly. Accounts receivable due from end-to-end RCM customers are evaluated individually as it was determined that the unique nature and scope of our operating partner agreements make the circumstances around credit losses dissimilar. Accounts receivable due from modular service customers are evaluated using the pooling approach due to the homogeneous population of the receivables. The Company maintains an estimated allowance for credit losses to reduce its accounts receivable to the amount that it believes will be collected. This allowance is based on the Company’s historical experience, the length of time a balance has been outstanding, and the Company’s assessment of each customer’s ability to pay, which is based on input from key Company personnel assigned to the customer, the status of ongoing operations with the customer, and business and industry factors, such as significant shifts in the healthcare environment that could impact the customer’s financial health. Changes in the allowance for credit losses on a consolidated basis related to accounts receivable are as follows: Year Ended December 31, 2023 2022 Beginning balance $ 15.2 $ 2.5 Cumulative effect of Cloudmed ASC 326 adoption — 1.8 Provision (1) 34.6 11.1 Write-offs (1.5) (0.2) Ending balance $ 48.3 $ 15.2 (1) During the year ended December 31, 2023,the Company’s expense for credit losses was $34.6 million on customer accounts receivable, an increase of $23.5 million over the prior year. The primary drivers of the increase were $11.5 million related to a physician RCM customer that ceased operations and filed for bankruptcy in the third quarter of 2023, $8.4 million for a physician-led for-profit healthcare system customer of modular services, and $7.0 million for an end-to-end RCM customer, of which the latter two are experiencing overall financial challenges and became delinquent in their payments for services during the year. |
Leases
Leases | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Leases | Leases The Company determines if an arrangement is a lease at inception. The Company has operating leases for corporate offices, operational facilities, global business services centers, and certain equipment. Operating leases with terms greater than one year at commencement are included in operating lease ROU assets and operating lease liabilities (current and non-current) on the Consolidated Balance Sheets. Operating ROU assets and liabilities are recognized at the lease commencement date based on the present value of lease payments over the lease term. As the Company’s leases do not provide an implicit rate, the incremental borrowing rate, determined based on the information available at the lease commencement date, is used in calculating the present value of lease payments. ROU assets also include any lease prepayments made and excludes any lease incentives. The Company’s leases may include options to extend the lease term and the Company’s determination of the likely lease term incorporates these options when it is reasonably certain that they will be exercised. The Company elected to not separate lease and non-lease components for building and equipment leases. The Company will account for the lease and non-lease components, such as fixed service charges, as a single lease component. For leases with an initial term of 12 months or less, expense is recognized on a straight-line basis over the lease term. Leases have remaining lease terms of up to 10 years, some of which include options to extend the leases for up to 10 years. In circumstances where there are significant foreign tax incentives, the Company has determined it to be reasonably certain to exercise the renewal options. The Company subleases certain office spaces to third parties. The components of lease costs are as follows: Year Ended December 31, 2023 2022 Operating lease cost $ 18.4 $ 22.1 Sublease income (1.1) (1.6) Total lease cost $ 17.3 $ 20.5 The following table summarizes the supplemental information related to operating leases: Year Ended December 31, 2023 2022 Weighted average remaining lease term 6 years 7 years Weighted average incremental borrowing rate 6.83 % 6.52 % Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 25.1 $ 27.0 ROU assets obtained or acquired in exchange for operating lease obligations (1) 3.6 67.7 (1) This amount includes ROU assets acquired from the Cloudmed acquisition. For details on the final ROU assets acquired and liabilities assumed, refer to Note 3, Acquisitions. The Company presents all non-cash charges related to any modification or reassessment events triggering remeasurement, and obtaining new leases for non-cash consideration that result in adjustments to the lease liability or ROU asset as non-cash transactions. As part of evaluating its real estate footprint, the Company exited certain leased facilities. During the year ended December 31, 2023, the Company recorded ROU asset and related leasehold improvement impairments of $11.1 million. Maturities of lease liabilities as of December 31, 2023 are as follows: Operating Leases 2024 $ 25.1 2025 23.4 2026 17.6 2027 12.0 2028 10.5 Thereafter 30.5 Total 119.1 Less: Imputed interest 22.0 Present value of lease liabilities $ 97.1 |
Customer Liabilities
Customer Liabilities | 12 Months Ended |
Dec. 31, 2023 | |
Other Liabilities Disclosure [Abstract] | |
Customer Liabilities | Customer Liabilities Customer liabilities include (i) accrued service costs (amounts due and accrued for cost reimbursements), (ii) collections payable to customers (consisting primarily of amounts collected on behalf of the Company’s physician group customers to be remitted within twelve months), (iii) customer deposits and refund liabilities (consisting of amounts due or potentially due as a refund to the Company’s customers on base fees and incentive fees), and (iv) deferred revenue (contract liabilities) (fixed or variable fees amortized to revenue over the service period). Customer liabilities consist of the following: December 31, 2023 December 31, 2022 Accrued service costs, current $ 20.0 $ 21.9 Collections payable to customers, current 12.8 29.1 Customer deposits and refund liabilities, current 3.1 4.2 Deferred revenue (contract liabilities), current 9.1 9.7 Current portion of customer liabilities (1) 45.0 64.9 Deferred revenue (contract liabilities), non-current 14.5 18.7 Non-current portion of customer liabilities (1) 14.5 18.7 Total customer liabilities $ 59.5 $ 83.6 (1) Current and non-current portion of customer liabilities include amounts for a related party. See Note 19, Related Party Transactions, for further discussion. |
Debt
Debt | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | Debt The carrying amounts of debt consist of the following: December 31, 2023 December 31, 2022 Senior Revolver (1) $ — $ 100.0 Term A Loans 1,162.5 1,211.4 Term B Loan 493.8 498.7 Unamortized discount and issuance costs (18.8) (23.6) Total debt 1,637.5 1,786.5 Less: Current maturities (67.0) (53.9) Total long-term debt $ 1,570.5 $ 1,732.6 (1) As of December 31, 2023, the Company had no outstanding borrowings, $1.2 million letters of credit outstanding, and $598.8 million of availability under the Senior Revolver. Second Amended and Restated Senior Secured Credit Facilities On June 21, 2022, the Company and certain of its subsidiaries entered into a second amended and restated senior credit agreement (the “Second A&R Credit Agreement”) with Bank of America, N.A., as administrative agent, and the lenders named therein, governing the Company’s second amended and restated senior secured credit facilities (the “Senior Secured Credit Facilities”), and consisted of the $691.3 million existing senior secured term loan A facility (the “Existing Term A Loan”), a $540.0 million senior secured incremental term loan A facility (together with the Existing Term A Loan, the “Term A Loans”) with a five-year maturity, a $500.0 million senior secured term loan B facility (the “Term B Loan,” and together with the Term A Loans, the “Senior Term Loans”) with a seven-year maturity, and a $600.0 million Senior Revolver. The Existing Term A Loan and Senior Revolver mature on July 1, 2026. In conjunction with entering into the Second A&R Credit Agreement, the Company incurred $7.2 million and capitalized $6.4 million of debt issuance costs. Borrowings under the Senior Secured Credit Facilities bear interest, at the Company’s option, at: (i) an Alternate Base Rate equal to the greater of (a) the prime rate of Bank of America, N.A., (b) the federal funds rate plus 0.50% per annum, and (c) the Term Secured Overnight Financing Rate (“SOFR”) for an interest period of one-month beginning on such day plus 100 basis points, plus between 0.25% and 1.50% dependent on the Company’s total net leverage ratio (provided that the Term SOFR rate applicable to the Term A Loans shall not be less than 0.00% per annum, and the Term SOFR rate applicable to the Term B Loan shall not be less than 0.50% per annum); or (ii) the Term SOFR rate (provided that the Term SOFR rate applicable to the Term A Loans shall not be less than 0.00% per annum, and the Term SOFR rate applicable to the Term B Loan shall not be less than 0.50% per annum), plus between 1.25% and 2.50%, dependent on the Company’s total net leverage ratio. The interest rate as of December 31, 2023 was 7.61% for the Term A Loans and Senior Revolver and 8.36% for the Term B Loan. The Company is also required to pay an unused commitment fee to the lenders under the Senior Revolver at a rate between 0.20% and 0.40% of the average daily unutilized commitments thereunder dependent on the Company’s total net leverage ratio. The Second A&R Credit Agreement requires the Company to make mandatory prepayments, subject to certain exceptions, with: (i) beginning with fiscal year ended December 31, 2023, 50% (which percentage will be reduced upon the Company’s achievement of certain total net leverage ratios) of the Company’s annual excess cash flow, (ii) 100% of net cash proceeds of all non-ordinary course asset sales or other dispositions of property or casualty events, subject to certain exceptions and thresholds, and (iii) 100% of the net cash proceeds of any debt incurrence, other than debt permitted under the Second A&R Credit Agreement. None of these were required in 2023. The Second A&R Credit Agreement contains several financial and non-financial covenants. The Company was in compliance with all of the covenants in the Second A&R Credit Agreement as of December 31, 2023. The obligations under the Second A&R Credit Agreement are secured by a pledge of 100% of the capital stock of certain domestic subsidiaries owned by the Company and a security interest in substantially all of the Company’s tangible and intangible assets and the tangible and intangible assets of certain domestic subsidiaries. The proceeds from the new Senior Secured Credit Facilities were used, in addition to cash on hand, (1) to refinance, in full, all existing indebtedness under the A&R Credit Agreement, and amend and restate all commitments thereunder (the “Refinancing”), (2) to pay certain fees and expenses incurred in connection with the entry into the Second A&R Credit Agreement and the Refinancing, (3) to fund the Cloudmed acquisition, and to pay the fees, premiums, expenses, and other transaction costs incurred in connection therewith, and (4) to finance working capital needs of the Company and its subsidiaries for general corporate purposes. Debt Maturities Scheduled maturities of the Company’s long-term debt for each of the five years succeeding December 31, 2023 and thereafter are summarized as follows: Scheduled Maturities 2024 $ 67.0 2025 67.0 2026 618.3 2027 430.3 2028 5.0 Thereafter 468.7 Total $ 1,656.3 |
Derivative Financial Instrument
Derivative Financial Instruments | 12 Months Ended |
Dec. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Financial Instruments | Derivative Financial Instruments The Company actively manages the risk of changes in foreign currency exchange rates and change in interest rates through non-deliverable foreign currency forward contracts and interest rate swap contracts traded in over-the-counter markets governed by International Swaps and Derivatives Association, Inc. (ISDA) agreements. Positions are monitored using techniques such as market value and sensitivity analyses. The Company does not enter into derivative transactions for speculative purposes. The change in fair value of a hedging instrument is recorded in accumulated other comprehensive loss as a separate component of stockholders’ equity and is reclassified into either cost of services or interest expense in the consolidated statement of operations and comprehensive income during the period in which the hedged transaction impacts earnings. Fair values for derivative financial instruments are based on prices computed using third-party valuation models and are classified as Level 2 in accordance with the three-level hierarchy of fair value measurements. The Company utilizes cash flow hedges to manage its currency risk arising from its global business services centers. As of December 31, 2023, the Company has recorded $0.5 million of unrealized gains in accumulated other comprehensive income related to foreign currency hedges. The Company estimates that $0.5 million of gains reported in accumulated other comprehensive income are expected to be reclassified into earnings within the next 12 months. Amounts reclassified into cost of services were a net gain of $1.7 million and a net loss of $1.4 million for the years ended December 31, 2023 and 2022, respectively. As of December 31, 2023, the Company’s foreign currency forward contracts have maturities extending no later than December 31, 2024, and had total notional value of $128.6 million. As of December 31, 2022, the total notional amount of the Company’s foreign currency forward contracts was $126.4 million. The Company also utilizes cash flow hedges to reduce variability in interest cash flows from its outstanding debt. As of December 31, 2023, the Company has recorded $9.6 million of unrealized gains in accumulated other comprehensive income related to interest rate swaps. The Company estimates that $8.7 million of gains reported in accumulated other comprehensive income are expected to be reclassified into earnings within the next 12 months. Amounts reclassified into interest expense were a net gain of $10.1 million and a net loss of $0.2 million for the years ended December 31, 2023 and 2022. As of December 31, 2023, the Company’s interest rate swaps extend no later than June 30, 2025 and had total notional amounts of $500.0 million. As of December 31, 2022, the total notional amount of the Company’s interest rate swaps was $500.0 million. The location and fair value of derivative instruments designated as hedges in the Consolidated Balance Sheets as of December 31, 2023 and December 31, 2022 are as follows: December 31, 2023 December 31, 2022 Foreign currency forward contracts Prepaid expenses and other current assets $ 0.5 $ 0.1 Other accrued expenses — 0.5 Total foreign current forward contracts $ 0.5 $ 0.6 Interest rate swaps Prepaid expenses and other current assets $ 8.7 $ 8.7 Other assets 0.9 5.0 Total interest rate swaps $ 9.6 $ 13.7 As of December 31, 2023 and December 31, 2022, the accumulated gain, net of tax, recognized in accumulated other comprehensive loss was $7.5 million and $9.9 million, respectively. The Company classifies cash flows from its derivative programs as cash flows from operating activities in the Consolidated Statements of Cash Flows. As of December 31, 2023, the Company held no derivatives, or non-derivative hedging instruments, that were designated in fair value or net investment hedges. On July 5, 2022, the Company and Sutter Health entered into a put right agreement regarding the potential purchase of a business that would expand the Company’s service capabilities. This agreement expired unexercised on January 5, 2024. |
Stockholders' Equity
Stockholders' Equity | 12 Months Ended |
Dec. 31, 2023 | |
Equity [Abstract] | |
Stockholders' Equity | Stockholders’ Equity Preferred Stock and Warrants As of December 31, 2023 and 2022, the Company had 5,000,000 shares of authorized preferred stock, with a par value of $0.01. The preferred stock may be issued from time to time in one or more series. The Board of Directors of the Company (the “Board”) is authorized to determine the rights, preferences, privileges, and restrictions of the Company’s authorized but unissued shares of preferred stock. On February 16, 2016, the Company entered into a long-term strategic partnership with Ascension Health Alliance, the parent of Ascension Health (“Ascension”), the Company’s largest customer and the nation’s largest Catholic and non-profit health system, and TowerBrook Capital Partners (“TowerBrook”), an investment management firm (the “2016 Transaction”). On February 16, 2016, at the close of the 2016 Transaction, the Company issued to TCP-ASC ACHI Series LLLP (“TCP-ASC”), a limited liability limited partnership jointly owned by Ascension Health Alliance and investment funds affiliated with TowerBrook: (i) 200,000 shares of its 8.00% Series A Convertible Preferred Stock, par value $0.01 per share (the “Series A Preferred Stock” or “Preferred Stock”), for an aggregate price of $200 million and (ii) an exercisable warrant to acquire up to 60 million shares of its common stock with an exercise price of $3.50 per common share and a term of ten years. The Series A Preferred Stock was immediately convertible into shares of common stock. As of December 31, 2023 and 2022, the Company had zero shares of Series A Preferred Stock outstanding. The Series A Preferred Stock was converted to common stock on January 15, 2021. See Note 16, 8.00% Series A Convertible Preferred Stock, for additional information. On January 23, 2018, the Company issued an exercisable warrant to acquire up to 1.5 million shares of its common stock with an exercise price of $6.00 per common share to IHC Health Services, Inc (“Intermountain”). As of December 31, 2023 and 2022, 42.0 million total warrants were outstanding for TCP-ASC and Intermountain. Refer to Note 23, Subsequent Events, for warrants issued as part of the Acclara Acquisition in January 2024. Common Stock Each outstanding share of the Company’s common stock, par value $0.01 per share, is entitled to one vote per share on all matters submitted to a vote by shareholders. Subject to the rights of any preferred stock which may from time to time be outstanding, the holders of outstanding shares of common stock are entitled to receive dividends and, upon liquidation or dissolution, are entitled to receive pro rata all assets legally available for distribution to stockholders. No dividends were declared or paid on the common stock during 2023 or 2022. Treasury Stock On November 13, 2013, the Board authorized a repurchase of up to $50.0 million of the Company’s common stock in the open market or in privately negotiated transactions (the “2013 Repurchase Program”). Between October 1, 2021 and October 27, 2021, the Company finalized authorized repurchases under the 2013 Repurchase Program. On October 22, 2021, the Board adopted a new repurchase program and authorized the repurchase of up to $200.0 million of our common stock from time to time in the open market or in privately negotiated transactions (the “2021 Repurchase Program”). On January 9, 2022, the Board increased the authorization under the 2021 Repurchase Program to an aggregate amount of up to $500.0 million. The timing and amount of any shares repurchased under the 2021 Repurchase Program will be determined by the Company’s management based on its evaluation of market conditions and other factors. The 2021 Repurchase Program may be suspended or discontinued at any time at the sole discretion of the Board. Any repurchased shares will be available for use in connection with the Company’s stock plans and for other corporate purposes. The Company funds the repurchases from cash on hand. During the years ended December 31, 2023 and 2022, 0 and 2,080,518 shares were repurchased, respectively. No shares have been retired. As of December 31, 2023 and 2022, the Company held in treasury 10,031,168 and 10,031,168 shares of repurchased stock, respectively. Treasury stock also includes repurchases of Company stock related to employees’ tax withholding upon vesting of restricted shares. For the years ended December 31, 2023 and 2022, the Company repurchased 1,878,617 and 1,174,754 shares related to employees’ tax withholding upon vesting of restricted shares, respectively. See Note 13, Share-Based Compensation, for additional information. |
Share-Based Compensation
Share-Based Compensation | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-Based Compensation | Share-Based Compensation The Company maintains three stock incentive plans: • Amended and Restated Stock Option Plan (the “2006 Plan”) • Fourth Amended and Restated Stock 2010 Incentive Plan (the “2010 Amended Plan” and together with the 2006 Plan, the “Plans”), which was amended to authorize the additional issuance of 17 million shares, 9.6 million shares, and 4.0 million shares of the Company’s common stock pursuant to awards in December 2016, May 2021, and May 2023, respectively. • R1 RCM Inc. 2022 Inducement Plan (the “Inducement Plan”), which was adopted in June 2022 to accommodate equity grants to new employees hired in connection with the Cloudmed acquisition and under which up to a total of 6,225,000 shares of common stock may be granted in the form of RSUs (including PBRSUs). Under the Plans, the Company is authorized to issue up to a maximum of 59,974,756 shares of common stock. The Company will not make any further grants under the 2006 Plan. The 2010 Amended Plan provides for the grant of incentive stock options, non-statutory stock options, stock appreciation rights, restricted stock awards, RSUs, and other share-based awards. As of December 31, 2023, 7,456,142 shares were available for future grants of awards under the 2010 Amended Plan. To the extent that previously granted awards under the 2006 Plan or 2010 Amended Plan expire, terminate or are otherwise surrendered, canceled or forfeited, the number of shares available for future awards under the 2010 Amended Plan will increase. Under the terms of the Plans, all stock options will expire if they are not exercised within ten years of their grant date. Generally, employee options and RSUs vest ratably between one Pursuant to Rule 5635(c)(4) of the NASDAQ Listing Rules, the Inducement Plan was adopted without stockholder approval. The Inducement Plan only provides for the grant of RSUs (including PBRSUs), and its terms are otherwise substantially similar to the 2010 Amended Plan, including with respect to treatment of equity awards in the event of a “change in control” as defined under the Inducement Plan. In accordance with Rule 5635(c)(4) of the NASDAQ Listing Rules, awards under the Inducement Plan can only be made to individuals not previously employees or non-employee directors of the Company (or following such individuals’ bona fide period of non-employment with the Company), as an inducement material to the individuals’ entry into employment with the Company or in connection with a merger or acquisition, to the extent permitted by Rule 5635(c)(3) of the NASDAQ Listing Rules. As of December 31, 2023, 519,830 shares were available for future grants of awards under the Inducement Plan. However, to the extent that previously granted awards under the Inducement Plan expire, terminate or are otherwise surrendered, canceled or forfeited, the number of shares available for future awards under the Inducement Plan will increase. For the year ended December 31, 2023, the Company recognized $0.2 million of income tax expense from shortfalls associated with vesting and exercises of equity awards. For the years ended December 31, 2022 and 2021, the Company recognized $9.8 million, and $12.7 million, respectively, of income tax benefit from windfalls associated with vesting and exercises of equity awards. The Company used the Black-Scholes option pricing model to estimate the fair value of its service-based options as of their grant dates. The volatility for the options was calculated based on an analysis of historical volatility. The Company assesses progress and achievement on performance-based PBRSUs by reviewing historical performance to date, along with any approved adjustments, and latest projections to determine the probable outcome of the awards. The current estimates are then compared to the scoring metrics and any necessary adjustments are reflected in the current period to update share-based compensation expense to the current performance expectations. A Monte Carlo simulation was used to estimate the fair value of the Unvested Units, which are being amortized over a period of 4 years on a straight-line basis. The volatility for the Unvested Units was calculated based on an analysis of historical and implied volatility. The following table sets forth the significant assumptions used in the calculation of share-based compensation expense during 2022 and 2021: Year Ended December 31, 2022 2021 Expected dividend yield —% —% Risk-free interest rate 1.4% to 3.3% 0.4% to 1.0% Expected volatility 43% to 50% 43% Expected term (in years) 4.0 to 5.5 5.5 There were no options granted during the year ended December 31, 2023. Year Ended December 31, 2022 2021 Weighted-average grant date fair value per share $ 9.55 $ 9.34 Total share-based compensation expense that has been included in the Company’s consolidated statements of operations were as follows: Year Ended December 31, 2023 2022 2021 Share-Based Compensation Expense Allocation Details: Cost of services $ 43.4 $ 28.8 $ 44.2 Selling, general and administrative 28.1 36.0 32.4 Other — 0.1 — Total share-based compensation expense (1) $ 71.5 $ 64.9 $ 76.6 Related tax benefits $ 15.3 $ 11.8 $ 14.5 (1) Included in the share-based compensation expense above is $7.3 million and $5.1 million of CoyCo 2 share-based compensation expense for the years ended December 31, 2023 and 2022, respectively. See further discussion below. In addition to the share-based compensation expense recorded above, $1.4 million, $0.2 million, and $0.7 million of share-based compensation expense was recorded to deferred contract costs for the years ended December 31, 2023, 2022, and 2021, respectively. See Note 2, Summary of Significant Accounting Policies, for further discussion. Stock options The following table sets forth a summary of all option activity under all plans for the years ended December 31, 2023, 2022, and 2021: Shares Weighted- Weighted- Aggregate Outstanding at January 1, 2021 6,220,971 $ 3.68 5.7 $ 126.5 Granted 6,424 23.33 Exercised (1,819,039) 4.39 Canceled/forfeited (15,151) 5.98 Expired (7,000) 27.08 Outstanding at December 31, 2021 4,386,205 $ 3.37 4.9 $ 97.0 Granted 24,344 22.19 Exercised (1,285,228) 3.67 Canceled/forfeited (13,408) 4.59 Expired (7,500) 8.71 Outstanding at December 31, 2022 3,104,413 $ 3.38 4.0 $ 23.9 Granted — — Exercised (411,346) 3.26 Canceled/forfeited (45,865) 2.59 Expired — — Outstanding at December 31, 2023 2,647,202 $ 3.41 3.1 $ 19.4 Outstanding, vested and exercisable December 31, 2021 4,365,759 $ 3.33 4.9 $ 96.7 December 31, 2022 3,080,069 $ 3.23 4.0 $ 23.9 December 31, 2023 2,647,202 $ 3.41 3.1 $ 19.4 The total intrinsic value of the options exercised in the years ended December 31, 2023, 2022, and 2021 was $5.0 million, $26.5 million, and $38.2 million, respectively. The total fair value of options vested during the years ended December 31, 2023, 2022, and 2021 was $0.2 million, $0.1 million, and $1.4 million, respectively. Restricted stock units and performance-based restricted stock units The following table sets forth a summary of all RSU and PBRSU activity during the years ended December 31, 2023, 2022, and 2021: Weighted- RSUs PBRSUs RSU PBRSU Outstanding and unvested at January 1, 2021 2,108,447 2,917,071 $ 9.87 $ 11.35 Granted 2,251,167 1,071,431 24.35 25.36 Performance factor adjustment — 101,937 — 9.81 Vested (1,739,847) (586,071) 19.14 7.67 Forfeited (401,116) (301,355) 15.48 13.55 Outstanding and unvested at December 31, 2021 2,218,651 3,203,013 $ 16.28 $ 16.45 Granted 2,306,897 5,230,483 20.56 19.83 Performance factor adjustment — 876,109 — 10.46 Vested (1,029,491) (1,925,203) 16.61 11.05 Forfeited (264,055) (507,605) 18.22 20.38 Outstanding and unvested at December 31, 2022 3,232,002 6,876,797 $ 19.07 $ 19.48 Granted 3,259,227 1,526,096 15.12 15.59 Performance factor adjustment — 792,189 — 15.95 Vested (2,788,125) (2,286,886) 16.30 15.95 Forfeited (372,868) (779,375) 17.90 19.56 Outstanding and unvested at December 31, 2023 3,330,236 6,128,821 $ 17.66 $ 19.36 Shares surrendered for taxes for year ended December 31, 2023 974,959 903,658 Cost of shares surrendered for taxes for the year ended December 31, 2023 (in millions) 13.0 13.1 Shares surrendered for taxes for the year ended December 31, 2022 369,900 804,854 Cost of shares surrendered for taxes for the year ended December 31, 2022 (in millions) 7.4 20.2 Shares surrendered for taxes for the year ended December 31, 2021 571,182 225,726 Cost of shares surrendered for taxes for the year ended December 31, 2021 (in millions) 13.5 5.6 On June 21, 2022, Project Roadrunner Merger Sub Inc., formerly a wholly-owned subsidiary of the Company, merged with and into R1 RCM Holdco Inc. (f/k/a R1 RCM Inc.), now a wholly-owned subsidiary of the Company (“Old R1 RCM”) with Old R1 RCM as the surviving entity, which resulted in Old R1 RCM becoming a wholly-owned subsidiary of the Company (the “Holding Company Reorganization”). Upon consummation of the Holding Company Reorganization, outstanding restricted units of Cloudmed were replaced by an aggregate 1,536,220 RSUs of the Company. The Company also issued an aggregate of 3,173,184 inducement RSUs and PBRSUs to certain employees of Cloudmed under Nasdaq Listing Rule 5635(c)(4) pursuant to its newly adopted 2022 Inducement Plan. The Company’s RSU and PBRSU agreements allow employees to surrender to the Company shares of common stock upon vesting of their RSUs and PBRSUs in lieu of their payment of the required personal employment-related taxes. Shares surrendered for payment of personal employment-related taxes are held in treasury. Outstanding PBRSUs vest upon satisfaction of both time-based and performance-based conditions. Depending on the award, performance condition targets may include cumulative adjusted EBITDA, end-to-end RCM agreement growth, modular sales revenue, or other specific performance factors. Depending on the percentage level at which the performance-based conditions are satisfied, the number of shares vesting could be between 0% and 200% of the number of PBRSUs originally granted. Based on the established targets, the maximum number of shares that could vest for all outstanding PBRSUs is 12,257,642. CoyCo 2, L.P. Limited Partnership Units Former Class P Units were originally issued to employees of Cloudmed and its affiliates (“Participants”) in connection with and as a part of the compensation and incentive arrangements between Cloudmed and such Participants prior to the consummation of the Cloudmed acquisition. A portion of the Former Class P Units immediately vested upon the closing of the Cloudmed acquisition. In connection with the Cloudmed acquisition, Cloudmed caused the Former Class P Units, including the Unvested Units, to be converted into Management Units. At the time of the closing of the Cloudmed acquisition, 97,875 Unvested Units were converted into 514,986 Management Units. |
Other Expenses
Other Expenses | 12 Months Ended |
Dec. 31, 2023 | |
Other Income and Expenses [Abstract] | |
Other Expenses | Other Expenses Other expenses are incurred in connection with acquisition and integration costs, various exit activities, transformation initiatives, and organizational changes to improve our business alignment and cost structure. The following table summarizes the other expenses (income) recognized for the years ended December 31, 2023, 2022, and 2021: Year Ended December 31, 2023 2022 2021 Business acquisition costs (1) 8.7 80.5 13.7 Integration costs (2) 35.7 40.2 2.6 Technology transformation (3) 19.2 1.7 — Strategic initiatives (4) 24.0 22.7 11.3 Global business services center expansion project in the Philippines (5) — 26.7 1.8 Customer employee transition and restructuring expenses (6) — — 4.5 Facility-related charges (7) 25.4 7.9 3.4 Other (8) 3.6 10.1 18.2 Total other expenses $ 116.6 $ 189.8 $ 55.5 (1) Costs, including legal, consulting, insurance premiums, and bank fees, that directly relate to the due diligence and closing of business acquisitions and include changes to contingent consideration, if applicable. Costs also include compensation expenses associated with the close of the transactions. (2) Costs reflect efforts to integrate acquisitions from a systems, processes, and people perspective and to achieve synergies expected from business acquisitions. Costs include consulting fees, IT vendor spend, severance, early lease termination of Cloudmed facilities, and certain payroll costs. (3) Costs relate to projects underway to create a new platform that consolidates the Cloudmed and R1 customer solutions and migrates them to a cloud environment to reduce onboarding costs and accelerate the delivery of value to the Company’s customers. These projects are expected to be completed in 2025. Certain of these costs incurred qualify for capitalization and have been recorded on the Consolidated Balance Sheet. (4) Costs primarily relate to business restructuring activities as part of the Company’s growth strategy and include consulting costs, compensation costs of employees dedicated to the Company’s growth strategy efforts, and severance. These costs include changes in contingent consideration and retention costs related to acquisitions completed by Cloudmed prior to being acquired by R1. (5) These costs include legal and consulting fees related to the establishment of the Company’s inaugural global business services center in the Philippines as well as severance costs for personnel whose roles are being relocated. The entry into the Philippines is the first new organic global business services center country expansion by the Company in approximately 15 years. The Company completed the expansion project in 2022. (6) As part of the transition of customer personnel to the Company under certain operating partner model contracts, the Company agreed to reimburse the customer, or directly pay affected employees, for severance and retention costs related to certain employees who were not transitioned to the Company, or whose jobs were relocated after the employee transitioned to the Company. (7) As part of evaluating its real estate footprint, the Company has exited certain leased facilities. Costs include asset impairment charges, early termination fees, and other costs related to exited leased facilities (excluding early lease termination of Cloudmed facilities, which is included in (2) above). For the year ended December 31, 2023, costs include an impairment charge of $8.7 million related to land and buildings. See Note 2, Summary of Significant Accounting Policies, for more information. (8) For the year ended December 31, 2023, costs primarily include $4.3 million of net expense related to the Company’s stockholder litigation. For the year ended December 31, 2022, costs primarily include $5.7 million of expenses related to the Company’s stockholder litigation. For further detail, refer to Note 18, Commitments and Contingencies. For the years ended December 31, 2022 and 2021, other includes $2.5 million, and $11.3 million, respectively, of expenses related to the COVID-19 pandemic. For the year ended December 31, 2023, no expense related to the COVID-19 pandemic was recorded to other expense. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes The domestic and foreign components of income (loss) before income taxes consist of the following: Year Ended December 31, 2023 2022 2021 Domestic $ (6.2) $ (86.8) $ 100.6 Foreign 27.2 20.0 16.7 Total income (loss) before income taxes $ 21.0 $ (66.8) $ 117.3 For the years ended December 31, 2023, 2022, and 2021, the Company’s current and deferred income tax expense (benefit) attributable to income from operations are as follows: Current Deferred Total Year Ended December 31, 2021 U.S. Federal $ (0.1) $ 22.0 $ 21.9 State & Local 3.5 — 3.5 Foreign 3.0 1.6 4.6 $ 6.4 $ 23.6 $ 30.0 Year Ended December 31, 2022 U.S. Federal $ 0.9 $ (11.6) $ (10.7) State & Local 3.8 (4.9) (1.1) Foreign 3.2 5.1 8.3 $ 7.9 $ (11.4) $ (3.5) Year Ended December 31, 2023 U.S. Federal $ 16.0 $ (14.2) $ 1.8 State & Local 11.8 (3.6) 8.2 Foreign 3.9 3.8 7.7 $ 31.7 $ (14.0) $ 17.7 Reconciliation of the difference between the effective tax rate and the statutory U.S. federal income tax rate is as follows: Year Ended December 31, 2023 2022 2021 Federal statutory tax rate 21 % 21 % 21 % Change in income tax rate resulting from: State and local income taxes, net of federal tax benefits 31 % 1 % 2 % Tax on foreign income 9 % (15) % 3 % Share-based compensation 4 % 18 % (9) % Non-deductible expenses 15 % (15) % 4 % Other 4 % (5) % 5 % Effective tax rate 84 % 5 % 26 % The following table sets forth the Company’s net deferred tax as of December 31, 2023 and 2022: As of December 31, 2023 2022 Deferred tax assets and liabilities: Net operating loss carryforwards $ 23.7 $ 49.8 Share-based compensation 18.2 16.6 Accrued bonus 15.7 13.7 Deferred revenue 5.3 6.7 Alternative minimum tax 5.6 6.2 Interest expense limitation 18.2 11.1 Operating lease liabilities 23.5 29.1 Property, equipment, and software 7.3 1.0 Other 20.4 13.1 Total deferred tax assets 137.9 147.3 Less valuation allowances (7.6) (7.1) Net deferred tax assets 130.3 140.2 Intangible assets (258.9) (292.4) Deferred contract costs (9.3) (8.0) Foreign withholding tax (13.9) (10.2) Operating lease right-of-use assets (13.9) (20.0) Total deferred tax liabilities (296.0) (330.6) Net deferred tax $ (165.7) $ (190.4) At December 31, 2023, the Company had cumulative U.S. federal and state net operating loss (“NOL”) carryforwards of approximately $71.9 million and $163.3 million, respectively, which are available to offset U.S. federal and state taxable income in future periods. These amounts include NOLs acquired through acquisitions which are subject to Section 382 of the Internal Revenue Code. The general limitation rules allow the Company to utilize the NOLs subject to an annual limitation that is determined by multiplying the federal long-term tax-exempt rate by the Company’s value immediately before the ownership change. The federal NOLs will start to expire in 2031. For the tax period ended December 31, 2023, the Company expects to utilize $149.9 million in federal net operating losses due to higher taxable income. 2017 Tax Reform subjects a U.S. shareholder to tax on Global Intangible Low-Taxed Income (“GILTI”) earned by certain foreign subsidiaries. An entity can make an accounting policy election to either recognize deferred taxes for temporary basis differences expected to reverse as GILTI in future years or to provide for the tax expense related to GILTI in the year the tax is incurred. The Company has elected to recognize the tax on GILTI as a period expense in the period the tax is incurred. A valuation allowance is required to be established when, based on currently available information, it is more likely than not that all or a portion of a deferred tax asset will not be realized. The guidance on accounting for income taxes provides important factors in determining whether a deferred tax asset will be realized, including whether there has been sufficient taxable income in recent years and whether sufficient income can reasonably be expected in future years in order to utilize the deferred tax asset. Consideration is given to the weight of all available evidence, both positive and negative. The Company estimates its already contracted business growth will be profitable and allow the Company to utilize its NOL carryforwards and other deferred tax assets. Accordingly, the Company believes that it is more likely than not that the remaining deferred tax assets will be realized. Should the Company not operationally execute as expected, and the growth in business not be as profitable as expected, such realizability assessment may change. The Company has recorded valuation allowances at December 31, 2023 and 2022 of $7.6 million and $7.1 million, respectively. Based on the Company’s assessment, it is more likely than not that a portion of the Company’s state NOLs, capital loss carryforward, and research and development tax credits will not be realizable. The December 31, 2023 valuation allowance includes $3.3 million attributable to research and development credits and $2.2 million for a capital loss. The 2023, 2022, and 2021 foreign current tax provision includes $3.9 million, $3.2 million, and $3.0 million, respectively, for income taxes arising from the income of the Company’s India subsidiaries. The tax provisions are net of the impact of a tax holiday in India. The Company’s benefits from this tax holiday were $4.4 million, $4.9 million, and $4.7 million for the years ended December 31, 2023, 2022, and 2021, respectively. The tax holidays are set to expire between March 31, 2024 and March 31, 2027. At December 31, 2023, undistributed earnings in certain subsidiaries outside the U.S. totaled approximately $5.7 million for which no deferred tax liability has been recorded because such earnings are indefinitely reinvested. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by taxing authorities, based on the technical merits of the position. The tax benefits recognized in the financial statements are measured based on the largest benefit that has a greater than fifty percent likelihood of being realized upon ultimate settlement. The Company’s unrecognized tax benefits as of December 31, 2023, 2022, and 2021 were not material. In connection with tax return examinations, contingencies can arise that generally result from different interpretations of tax laws and regulations as they pertain to the amount, timing or inclusion of revenues and expenses in taxable income, or the ability to utilize tax credits to reduce income taxes payable. While it is probable, based on the potential outcome of the Company’s federal and state tax examinations or the expiration of the statute of limitations for specific jurisdictions, that the liability for unrecognized tax benefits may increase or decrease within the next 12 months, the Company does not expect any such change would have a material effect on its financial condition, results of operations or cash flow. The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax of multiple state and foreign jurisdictions. U.S. federal income tax returns for 2020 and all subsequent years are currently open for examination. State jurisdictions vary for open tax years. The statute of limitations for most states ranges from three |
8.00% Series A Convertible Pref
8.00% Series A Convertible Preferred Stock | 12 Months Ended |
Dec. 31, 2023 | |
Temporary Equity Disclosure [Abstract] | |
8.00% Series A Convertible Preferred Stock | 8.00% Series A Convertible Preferred Stock At the close of the 2016 Transaction on February 16, 2016 (as described in Note 12), the Company issued to TCP-ASC: (i) 200,000 shares of Preferred Stock, for an aggregate price of $200 million, and (ii) a warrant with a term of ten years to acquire up to 60 million shares of common stock at an exercise price of $3.50 per share, on the terms and subject to the conditions set forth in the warrant agreement (the “TCP-ASC Warrant”). On January 15, 2021, TCP-ASC converted all of its 294,266 shares of Preferred Stock into 117,706,400 shares of common stock of the Company into which the shares were convertible pursuant to the Certificate of Designation of the Preferred Stock, and, in consideration therefor, the Company (i) issued 21,582,800 additional shares of common stock to TCP-ASC, and (ii) paid TCP-ASC $105.0 million in cash. On January 19, 2021, the Company filed a Certificate of Elimination of 8.00% Series A Convertible Preferred Stock with the Secretary of State of the State of Delaware to eliminate the Certificate of Designations of the 8.00% Series A Convertible Preferred Stock. The consideration paid to induce the conversion was recorded as a dividend of $592.3 million and reduced income available to common shareholders in our earnings per share calculation. The dividend was calculated as the cash paid of $105.0 million plus the fair value on the conversion date of the additional 21,582,800 shares of common stock issued as consideration for the conversion. Dividend Rights The holders of the Preferred Stock were entitled to receive cumulative dividends January 1, April 1, July 1, and October 1 of each year (dividend payment dates), which commenced on April 1, 2016, at a rate equal to 8% per annum (preferred dividend) multiplied by the liquidation preference per share, initially $1,000 per share adjusted for any unpaid cumulative preferred dividends. As of December 31, 2020, the Company had accrued dividends of $5.8 million associated with the Preferred Stock, of which $5.8 million was paid in additional shares and $940 was paid in cash in January 2021. The following summarizes the Preferred Stock activity for the year ended December 31, 2021: Preferred Stock Shares Issued and Outstanding Carrying Value Balance at December 31, 2020 288,497 $ 251.5 Dividends paid/accrued dividends 5,769 — Conversion of Preferred Stock (294,266) (251.5) Balance at December 31, 2021 — $ — |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic net income (loss) per share is computed by dividing net income (loss), less any dividends, accretion or decretion, redemption or induced conversion on the preferred stock, by the weighted average number of common shares outstanding during the period. As the preferred stock participated in dividends alongside the Company’s common stock (per their participating dividends), the preferred stock constituted participating securities under ASC 260-10, Earnings Per Share, and was applied to earnings per share using the two-class method. Under this method, all earnings (distributed and undistributed) were allocated to common shares and participating securities based on their respective rights to receive dividends. Diluted net income (loss) per share is calculated by adjusting the denominator used in the basic net income (loss) per share computation by potentially dilutive securities outstanding during the period plus, when their effect is dilutive, incremental shares consisting of shares subject to stock options, shares issuable upon vesting of RSUs and PBRSUs, and shares issuable upon conversion of preferred stock. Basic and diluted net income (loss) per common share are calculated as follows: Year Ended December 31, 2023 2022 2021 Basic EPS: Net income (loss) $ 3.3 $ (63.3) $ 87.3 Less dividends on preferred shares (1) — — (592.3) Net income (loss) available/(allocated) to common shareholders - basic $ 3.3 $ (63.3) $ (505.0) Diluted EPS: Net income (loss) $ 3.3 $ (63.3) $ 87.3 Less dividends on preferred shares (1) — — (592.3) Net income (loss) available/(allocated) to common shareholders - diluted $ 3.3 $ (63.3) $ (505.0) Basic weighted-average common shares 418,587,390 352,337,767 266,183,565 Add: Effect of dilutive equity awards 3,916,803 — — Add: Effect of dilutive warrants 31,590,181 — — Diluted weighted average common shares 454,094,374 352,337,767 266,183,565 Net income (loss) per common share (basic) $ 0.01 $ (0.18) $ (1.90) Net income (loss) per common share (diluted) $ 0.01 $ (0.18) $ (1.90) (1) The 2021 dividend on preferred shares includes amounts related to the conversion of the preferred shares. See Note 16, 8.00% Series A Convertible Preferred Stock, for more information. Because of their anti-dilutive effect, 634,540, 20,090,009, 12,875,730 common share equivalents comprised of stock options, PBRSUs, and RSUs have been excluded from the diluted earnings per share calculation for the years ended December 31, 2023, 2022, and 2021, respectively. Additionally, for the years ended December 31, 2022 and 2021, warrants to acquire up to 42.0 million shares of the Company’s common stock have been excluded from the diluted earnings per share calculation because they were anti-dilutive. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Legal Proceedings Other than as described below, the Company is not presently a party to any material litigation or regulatory proceeding and is not aware of any pending or threatened litigation or regulatory proceeding against the Company which, individually or in the aggregate, could have a material adverse effect on its business, operating results, financial condition or cash flows. In re R1 RCM Inc. Stockholders Litigation On April 13, 2021 and April 19, 2021, respectively, certain purported stockholders of the Company filed two complaints in the Delaware Court of Chancery (the “Court”) against TCP-ASC, Ascension and TowerBrook regarding the Company’s January 15, 2021 recapitalization transaction with TCP-ASC. On February 18, 2022, plaintiffs filed a supplement to their complaint, naming the Company directors at the time of the Cloudmed acquisition (“Individual Defendants”) and the Cloudmed stockholders as additional defendants and asserting additional claims related to the Company’s agreement to acquire Cloudmed, which was announced on January 10, 2022. Plaintiffs also alleged that certain provisions in the Amended and Restated Investor Rights Agreement with TCP-ASC (the “TCP-ASC Investor Rights Agreement”) and the Investor Rights Agreement with Coyco 1, L.P. and Coyco 2 (the “Cloudmed Investor Rights Agreement”) were void under the Company’s charter and bylaws and the Delaware General Corporation law. Defendants have denied, and continue to deny, any and all liability or wrongdoing. The parties agreed to settle all claims in the lawsuit pursuant to a Stipulation of Settlement (“Stipulation”), entered into on September 27, 2023, publicly filed with the Court on September 29, 2023, and approved by the Court without modification on December 14, 2023. The settlement was effective on January 15, 2024. TCP-ASC, Ascension, and TowerBrook collectively contributed $39.8 million to the settlement, and Cloudmed’s stockholders contributed $2.1 million. The Individual Defendants contributed $3.6 million, funded entirely by D&O insurance maintained by the Company. The Company did not contribute any additional monetary amount to the settlement. On January 30, 2024, the Company received approximately $16.4 million from the settlement for the derivative claims in the lawsuit. The remainder of the amounts to be paid under the Stipulation (less allocated attorneys’ fees and notice and administrative costs) will be distributed to the settlement class, as defined in the Stipulation. In addition, under the terms of the Stipulation, the parties agreed to eliminate the board size approval right under the TCP-ASC Investor Rights Agreement and the Cloudmed Investor Rights Agreement. Amendments to those Investor Agreements were entered into on February 5, 2024. The Company will record the impact of the settlement in the first quarter of 2024 in conjunction with the effective date of and cash receipt from the settlement. Graziosi v R1 RCM Inc. In May 2016, the Company was served with a False Claims Act (“FCA”) case brought by a former emergency department service associate who worked at a hospital of one of the Company’s customers, MedStar Inc.’s Washington Hospital Center (“WHC”), along with WHC and three other hospitals that were PAS customers and a place holder, John Doe hospital, representing all PAS customers (U.S. ex rel. Graziosi vs. Accretive Health, Inc. et. al.), and seeking money damages, FCA penalties, and attorneys’ fees. The Third Amended Complaint alleges that the Company’s PAS business violates the federal FCA. The case was originally filed under seal in 2013 in the federal district court in Chicago and was presented to the U.S. Attorney in Chicago, and the U.S. Attorney declined to intervene. Both the Company’s and plaintiff’s motions for summary judgment were denied in December 2020, and the parties have completed damage and expert discovery. Additional dispositive motions are expected to extend into 2024, with trial, if necessary, likely to be scheduled in 2025. The Company believes it has meritorious defenses to all claims in the case and is vigorously defending itself against these claims. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions As a result of the closing of the 2016 Transaction with Ascension Health Alliance on February 16, 2016 and Ascension Health Alliance’s ownership interest in TCP-ASC, Ascension became a related party to the Company. This note, encompasses transactions between Ascension and its affiliates and the Company pursuant to the A&R MPSA, including all supplements, amendments, and other documents entered into in connection therewith. See Note 1, Description of Business, and Note 16, 8.00% Series A Convertible Preferred Stock, for further discussion about the agreements with Ascension. In conjunction with the Cloudmed acquisition, New Mountain became a new related party. There were no material transactions with New Mountain subsequent to the Cloudmed acquisition. Net services revenue from services provided to Ascension, as well as corresponding accounts receivable and customer liabilities are presented in the Consolidated Statements of Operations and Comprehensive Income (Loss) and the Consolidated Balance Sheets. Customer liabilities for Ascension consist of the following: December 31, 2023 December 31, 2022 Accrued service costs, current $ 2.4 $ 4.3 Collections payable to customers, current 0.4 0.3 Refund liabilities, current — 0.7 Deferred revenue (contract liabilities), current 2.4 2.1 Current portion of customer liabilities 5.2 7.4 Deferred revenue (contract liabilities), non-current 11.8 13.7 Non-current portion of customer liabilities 11.8 13.7 Total customer liabilities $ 17.0 $ 21.1 Since Ascension is the Company’s largest customer, a significant percentage of the Company’s cost of services is associated with providing services to Ascension. However, due to the nature of the Company’s global business services and information technology operations, it is impractical to assign the dollar amount associated with services provided to Ascension. On May 27, 2021 and May 28, 2021, the Company issued 16,750,000 shares of common stock to TCP-ASC upon the cashless exercise of a portion of the TCP-ASC Warrant to purchase 19,535,145 shares of common stock at an exercise price of $3.50 per share based upon a market value of $24.54 to $24.64 per share as determined under the terms of the TCP-ASC Warrant. |
Segments and Customer Concentra
Segments and Customer Concentrations | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Segments and Customer Concentrations | Segments and Customer Concentrations The Company has determined that it has a single operating segment in accordance with the way that management operates and views the business. All of the Company’s significant operations are organized around the single business of providing management services of revenue cycle operations for U.S.-based healthcare providers. Accordingly, for purposes of segment disclosures, the Company has only one operating and reportable segment. Customers comprising greater than 10% of net services revenue are as follows: Year Ended December 31, Customer Name 2023 2022 2021 Ascension and its affiliates 40% 49% 61% Intermountain Healthcare 11% 12% 14% The loss of customers within the Ascension health system or Intermountain network would have a material adverse impact on the Company’s operations. As of December 31, 2023 and 2022, the Company had a concentration of credit risk with Ascension, representing 10% and 10% of accounts receivable, respectively. See Note 19, Related Party Transactions, for more information about the Company’s relationship with Ascension. |
Retirement Plan
Retirement Plan | 12 Months Ended |
Dec. 31, 2023 | |
Retirement Benefits [Abstract] | |
Retirement Plan | Retirement Plan The Company maintains 401(k) retirement plans that are intended to be tax-qualified defined contribution plans under Section 401(k) of the Internal Revenue Code. In general, all employees are eligible to participate. In conjunction with acquisitions, the Company may integrate or maintain the acquiree’s 401(k) plan. |
Supplemental Financial Informat
Supplemental Financial Information | 12 Months Ended |
Dec. 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Supplemental Financial Information | Supplemental Financial Information Prepaid expenses and other current assets is comprised of the following: December 31, 2023 December 31, 2022 Prepaid expenses $ 42.5 $ 35.1 Acquisition and disposition contingent assets — 20.0 Notes receivable 7.1 12.0 Derivative assets 9.2 8.8 Healthcare rebates receivable 8.6 5.9 Deferred contract costs 6.5 5.1 Other current assets 22.0 23.4 Total prepaid expenses and other current assets $ 95.9 $ 110.3 Accrued expenses and other current liabilities is comprised of the following: December 31, 2023 December 31, 2022 Accrued expenses $ 52.2 $ 36.3 Notes payable 5.8 15.5 Acquisition deferred payments — 12.5 Other current liabilities 7.9 6.2 Total accrued expenses and other current liabilities $ 65.9 $ 70.5 |
Subsequent Events
Subsequent Events | 12 Months Ended |
Dec. 31, 2023 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events Acclara Acquisition On January 17, 2024, the Company completed the Acclara Acquisition in exchange for $675.0 million cash and the Providence Warrant, subject to customary adjustments for working capital, cash, and debt. The Company acquired 100% of the equity interests in Acclara. The Company funded the cash consideration for the Acclara Acquisition and related fees and expenses with cash on hand, borrowings of $80 million under the Senior Revolver, and additional borrowings of Incremental Term B Loans in an aggregate principal amount equal to $575.0 million. Second Amendment to the Second A&R Credit Agreement In conjunction with the closing of the Acclara Acquisition, the Company entered into Amendment No. 2 (the “Second Amendment”) to the Second A&R Credit Agreement. Pursuant to the Second Amendment, among certain other amendments, the lenders named in the Second Amendment agreed, severally and not jointly, to extend Incremental Term B Loans to the Company under the Second A&R Credit Agreement in an aggregate principal amount equal to $575.0 million. The Company used the proceeds of the Incremental Term B Loans, together with cash on hand and borrowings of $80 million under the Senior Revolver, to finance (i) the cash consideration for the Acclara Acquisition and (ii) fees and costs incurred in connection with the acquisition and related transactions. |
Pay vs Performance Disclosure
Pay vs Performance Disclosure - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Pay vs Performance Disclosure | |||
Net income (loss) | $ 3.3 | $ (63.3) | $ 87.3 |
Insider Trading Arrangements
Insider Trading Arrangements | 3 Months Ended |
Dec. 31, 2023 | |
Trading Arrangements, by Individual | |
Rule 10b5-1 Arrangement Adopted | false |
Non-Rule 10b5-1 Arrangement Adopted | false |
Rule 10b5-1 Arrangement Terminated | false |
Non-Rule 10b5-1 Arrangement Terminated | false |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation |
Revenue Recognition | Revenue Recognition The Company’s earns revenue from the provision of RCM services to healthcare providers. The operating partnership arrangements are large scale outsourcing contracts where the Company takes over the management of all or most of the revenue cycle operation of the customer. Modular and other services are contracted on a smaller scale and include the outsourcing of specific RCM tasks or services focused on opportunities to accelerate and optimize revenue, reduce costs, or improve performance. Revenue Cycle Management RCM services fees are primarily variable and performance related. The performance obligation is generally viewed as a series of distinct services in which there are identifiable increments of time within a long-term service contract. The variable consideration for end-to-end RCM services is allocated to and recognized over the related time period as the amounts reflect the consideration the Company is entitled to and relate specifically to the Company’s efforts to satisfy its performance obligation. Fees for physician group RCM services include variable consideration contingent on customer collections, and inputs to the Company’s revenue estimates typically include historical service fees and historical customer collection amounts. RCM services fees consist of net operating fees and incentive fees. In some cases, there may be certain services that are provided under a separate fee similar to a modular service. The typical length of an end-to-end RCM contract is seven Net Operating Fees The Company’s net operating fees consist of: i. gross base fees, a contractually agreed upon cost-to-collect percentage applied to a customer’s contractually defined patient collections, invoiced to customers; less ii. corresponding costs of customers’ revenue cycle operations which the Company pays pursuant to its RCM agreements, including salaries and benefits for the customers’ RCM personnel, and related third-party vendor costs; plus iii. fees accrued for physician group RCM services. The Company recognizes revenue related to net operating fees ratably as the performance obligation for the RCM services is satisfied. Base fees are typically billed in advance of the quarter and paid in three monthly payments as the entity performs and the customer simultaneously receives and consumes the benefits of the services provided. The costs of customers’ revenue cycle operations, which the Company pays pursuant to its RCM agreements, are accrued based on the service period. Net operating fees for physician groups are invoiced on a monthly basis and payment terms are typically 30 days. Incentive Fees Incentive fees are structured to reflect quarterly or annual performance and are evaluated on a contract-by-contract basis. The Company estimates incentive fee revenue based on contractually agreed-upon financial or operating metrics and confirms the unbilled incentive fee directly with the customer at year end. The Company recognizes revenue related to incentive fees ratably as the performance obligation for RCM services is satisfied, to the extent that it is probable that a significant reversal of cumulative revenue will not occur once the uncertainty is resolved. Incentive fees are typically billed and paid on a quarterly basis. Modular and Other Fees The Company recognizes revenue related to modular and other RCM fees as performance obligations are completed. This can vary by service line, but the predominant fee arrangements are described below. Modular service agreements generally vary in length between one 1. For certain modular revenue services, fees are contingent and variable in nature and estimated revenue is recognized as services are provided resulting in the recognition of a contract asset. Revenues and contract assets are recognized when control of the promised services is transferred to the customer and reflects the estimated amount of consideration the Company expects to be entitled in exchange for transferring those services. We estimate the variable consideration for which we expect to be entitled from our service arrangements with each customer using assumptions based on historical information at the customer and service line level, which are regularly reviewed and updated. We also apply our best judgment at the time based on available internal and customer-specific information. The estimate of variable consideration included in the transaction price typically involves the application of an assumption regarding the expected realization rate to estimate the total amount that the Company’s customers are likely to collect from their payers after the services have been provided. The assumptions are developed using historic incremental reimbursements collected by customers, a portfolio of similar contracts, or the service line level. We allocate variable consideration to each distinct period to which it relates since this reflects the consideration to which we expect to be entitled in exchange for the services we have performed to date. Billing occurs once the customer collects additional revenue from payers based on services provided. 2. To the extent that certain service fees are fixed and not subject to refund, adjustment, or concession, these fees are generally recognized into revenue ratably as the performance obligation is satisfied. 3. Fees for services with a fixed rate applied to a variable volumetric measure are recognized into revenue ratably as the performance obligation is satisfied or recognized in the period performance is completed. Payment terms are generally 30 to 60 days. Bundled Services While we do have many modular customers that have contracts for more than one service, each service is contracted separately under an overall master services agreement and the individual service offerings are priced at or near stand-alone selling price. End-to-end RCM services are typically sold separately. Cost of Services Cost of services consist of (i) on-site personnel and technology costs, (ii) global business services costs, and (iii) other costs. On-site personnel and technology costs consist primarily of wages, bonuses, benefits, share-based compensation, travel, and other costs associated with employees who are assigned to customer sites to help manage the Company’s customers’ revenue cycle operations. The other significant portion of such expenses is an allocation of the costs associated with maintaining, improving, and deploying our integrated proprietary technology suite. Global business services costs relate to the Company’s global business services centers in the U.S., India, and the Philippines that perform patient scheduling and pre-registration, medical transcription, cash posting, reconciliation of payments to billing records, patient follow-up, and Medicaid eligibility determination for our customers. The Company incurs expenses related to salaries and benefits for employees in its global business services centers and non-payroll costs associated with operating its global business services centers. Other costs include amortization of acquired intangible assets and internally developed software used in operations, vendor costs for contracts assigned to our customers or for support services that are outsourced, and compensation costs of personnel who directly support employees serving customers (e.g., human resources and IT). Costs associated with generating the Company’s net services revenue are expensed as incurred, with the exception of deferred contract costs, which are certain costs associated with the initial phases of customer contracts and the related transition of customer hospitals and physician groups that are deferred. These fulfillment costs relate directly to the Company’s responsibilities under the corresponding customer contracts, generate or enhance resources of the Company that will be used in satisfying its performance obligations in the future, and are expected to be recovered through the margins realized. The following table summarizes the breakout of deferred contract costs: December 31, 2023 December 31, 2022 Prepaid expenses and other current assets $ 6.5 $ 5.1 Non-current portion of deferred contract costs 30.4 26.7 Total deferred contract costs $ 36.9 $ 31.8 |
Comprehensive Income (Loss) | Comprehensive Income (Loss) Comprehensive income (loss) is the net income (loss) of the Company combined with other changes in stockholders’ equity not involving ownership interest changes. For the Company, such changes are foreign currency translation adjustments and changes in derivatives designated as cash flow hedges. |
Cash and Cash Equivalents | Cash and Cash Equivalents The Company considers all highly liquid investments with a maturity of three months or less when purchased to be cash equivalents. |
Cloud Computing Arrangements | Cloud Computing Arrangements The Company capitalizes qualifying set-up and implementation costs related to the Company’s cloud computing arrangements. The deferred costs are amortized over the term of the associated cloud computing arrangement on a straight-line basis unless another systematic and rational basis is more representative of the pattern in which the Company expects to benefit from access to the cloud computing arrangement. |
Property, Equipment and Software | Property, Equipment and Software Property, equipment and software are stated at cost, and related depreciation and amortization are calculated on the straight-line method over the estimated useful lives of the assets. The Company capitalizes qualifying internal and third-party costs and hardware and software costs related to the Company’s software development activities. The Company amortizes the capitalized software development costs over their estimated life on a straight-line basis. |
Impairment of Long-Lived Assets | Impairment of Long-Lived Assets |
Accrued Compensation and Benefits | Accrued Compensation and Benefits |
Fair Value of Financial Instruments | Fair Value of Financial Instruments The Company records its financial assets and liabilities at fair value. The accounting standard for fair value (i) defines fair value as the price that would be received to sell an asset or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date, (ii) establishes a framework for measuring fair value, (iii) establishes a hierarchy of fair value measurements based upon the ability to observe inputs used to value assets and liabilities, (iv) requires consideration of nonperformance risk, and (v) expands disclosures about the methods used to measure fair value. The accounting standard establishes a three-level hierarchy of measurements based upon the reliability of observable and unobservable inputs used to arrive at fair value. Observable inputs are independent market data, while unobservable inputs reflect the Company’s assumptions about valuation. The three levels of the hierarchy are defined as follows: • Level 1: Observable inputs such as quoted prices in active markets for identical assets and liabilities; • Level 2: Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly. These include quoted prices for similar assets or liabilities in active markets, quoted prices for identical or similar assets or liabilities in markets that are not active, and model-derived valuations in which all significant inputs and significant value drivers are observable in active markets; and • Level 3: Valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. |
Income Taxes | Income Taxes Income taxes are accounted for under the asset and liability 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 basis and operating loss and tax credit carry forwards. Deferred tax assets and liabilities are measured using current tax laws and enacted tax rates in effect for 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 records a valuation allowance for deferred tax assets if, based upon the weight of all available evidence, both positive and negative, it is more likely than not that some or all of the deferred tax assets will not be realized. The Company recognizes the tax benefit from an uncertain tax position only if it is more likely than not that the tax position will be sustained upon examination by the relevant tax authorities, based on the technical merits of the position. The tax benefits recognized in the consolidated financial statements from such a position are measured based on the largest amount of benefit that has a greater than 50% percent likelihood of being realized upon ultimate settlement. Interest and penalties relating to income taxes are recognized in our income tax provision in the consolidated statements of operations and comprehensive income. |
Legal and Other Contingencies | Legal and Other Contingencies In the normal course of business, the Company is subject to regulatory investigations or legal proceedings, as well as demands, claims and threatened litigation. The Company records an estimated loss for any claim, lawsuit, investigation or proceeding when it is probable that a liability has been incurred and the amount of the loss can be reasonably estimated. Judgment is required in both the determination of the probability and whether the loss can be reasonably estimated. Actual expenses could differ from such estimates. |
Foreign Currency Translation and Transaction Gains (Losses) | Foreign Currency Translation and Transaction Gains (Losses) |
Share-Based Compensation Expense | Share-Based Compensation Expense The Company determines the expense for all employee share-based compensation awards by estimating their fair value and recognizing such value as an expense, on a ratable basis, in the consolidated financial statements over the requisite service period in which the employees earn the awards. Performance-based stock awards are recognized in expense when the performance metrics are probable to be achieved. Changes in the estimate of achievement of the performance metrics are recognized in the period of the change through a cumulative catch-up. The Company assesses the performance metrics in its awards on a quarterly basis to determine if a cumulative catch-up is necessary. The fair value of stock options is calculated using the Black-Scholes option pricing model. For the year ended December 31, 2023, there were no options granted. As part of the transactions contemplated by the Transaction Agreement, equity awards held by certain employees of Cloudmed (“Former Class P Units”) were modified, through a series of transactions, into awards (“Management Units”) of CoyCo 2, L.P. (“CoyCo 2”). Certain Former Class P Units that were subject to performance-based vesting conditions did not become vested upon the closing of the Cloudmed acquisition (“Unvested Units”). The Management Units issued by CoyCo 2 are treated as share-based compensation under ASC 718, Compensation - Stock Compensation. The Unvested Units are not awards of the Company and the participants will receive no additional shares of the Company upon satisfaction of the vesting criteria described in Note 13, Share-Based Compensation. However, GAAP requires the Company recognize the cost of share-based compensation granted by an investor (CoyCo 2) to the Company’s employees and service providers for services that benefit the Company’s operations (hereafter, “CoyCo 2 share-based compensation expense”), and a corresponding capital contribution because the costs are incurred on the Company’s behalf. A Monte Carlo simulation was used to estimate the fair value of the Unvested Units. The Company recognizes compensation expense using a straight-line method over the applicable service or performance period. During each quarter, the share-based compensation expense is adjusted to reflect forfeitures during the period. |
Treasury Stock | Treasury Stock The Company records treasury stock at the cost to acquire such shares, including commissions paid to brokers. Treasury stock is included as a component of stockholders’ equity. |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic net income per share is computed by dividing net income, less any dividends, accretion or decretion, redemption or induced conversion on the preferred stock, by the weighted average number of common shares outstanding during the period. As the preferred stock formerly but no longer in issue (as defined in Note 12) participates in dividends alongside the Company’s common stock (per their participating dividends), the preferred stock would constitute participating securities under ASC 260-10, Earnings Per Share, and are applied to earnings per share using the two-class method. Under this method, all earnings (distributed and undistributed) are allocated to common shares and participating securities based on their respective rights to receive dividends. Diluted net income per share is calculated by adjusting the denominator used in the basic net income per share computation by potentially dilutive securities outstanding during the period plus, when their effect is dilutive, incremental shares consisting of shares subject to stock options, restricted stock units (“RSUs”), performance-based RSUs (“PBRSUs”), and shares issuable upon conversion of preferred stock. |
Recently Issued Accounting Standards and Disclosures | Recently Issued Accounting Standards and Disclosures In October 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) 2021-08, Business Combinations (Topic 805): Accounting for Contract Assets and Contract Liabilities from Contracts with Customers (“ASU 2021-08”). ASU 2021-08 requires companies to apply Topic 606, Revenue from Contracts with Customers, to recognize and measure contract assets and contract liabilities obtained in a business combination. The ASU amendments will generally result in the recognition of contract assets and contract liabilities by the acquirer at amounts consistent with those recorded by the acquiree immediately before the acquisition date. The Company prospectively adopted ASU 2021-08 effective April 1, 2022 and recognized contract assets of $92.4 million and contract liabilities of $3.3 million as part of the Cloudmed acquisition. In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”). ASU 2022-03 clarifies that a contractual sale restriction on an equity security should not be considered in measuring the security’s fair value. The Company will adopt ASU 2022-03 prospectively effective January 1, 2024 and does not expect the impact on its consolidated financial statements to be material. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 expands annual and interim disclosure requirements for reportable segments, primarily through enhanced disclosures about significant segment expenses. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and for interim periods within fiscal years beginning after December 15, 2024. The Company is currently in the process of determining the impact that ASU 2023-07 will have on its consolidated financial statement disclosures. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 expands the disclosure requirements for income taxes, specifically related to the rate reconciliation and income taxes paid. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024. The Company is currently in the process of determining the impact that ASU 2023-09 will have on its consolidated financial statement disclosures. |
Goodwill | GoodwillGoodwill represents the difference between the purchase price of acquired companies and the related fair value of the net assets acquired, which applies the acquisition method of accounting. |
Derivative Financial Instruments | Derivative Financial Instruments The Company actively manages the risk of changes in foreign currency exchange rates and change in interest rates through non-deliverable foreign currency forward contracts and interest rate swap contracts traded in over-the-counter markets governed by International Swaps and Derivatives Association, Inc. (ISDA) agreements. Positions are monitored using techniques such as market value and sensitivity analyses. The Company does not enter into derivative transactions for speculative purposes. The change in fair value of a hedging instrument is recorded in accumulated other comprehensive loss as a separate component of stockholders’ equity and is reclassified into either cost of services or interest expense in the consolidated statement of operations and comprehensive income during the period in which the hedged transaction impacts earnings. Fair values for derivative financial instruments are based on prices computed using third-party valuation models and are classified as Level 2 in accordance with the three-level hierarchy of fair value measurements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Summary of Deferred Contract Costs | The following table summarizes the breakout of deferred contract costs: December 31, 2023 December 31, 2022 Prepaid expenses and other current assets $ 6.5 $ 5.1 Non-current portion of deferred contract costs 30.4 26.7 Total deferred contract costs $ 36.9 $ 31.8 |
Schedule of Property, Equipment and Software Useful Lives | The major classifications of property, equipment and software and their expected useful lives are as follows: Buildings and land 30 years and indefinite Computers and other equipment 3 years Leasehold improvements Shorter of 10 years or lease term Office furniture 5 years Software 3 to 5 years |
Schedule of Property, Equipment and Software | Property, equipment and software consist of the following: December 31, 2023 December 31, 2022 Buildings and land $ 15.6 $ 24.3 Computer and other equipment 86.4 75.6 Leasehold improvements 27.4 24.1 Software 320.0 243.2 Office furniture 12.3 12.4 Property, equipment and software, gross 461.7 379.6 Less accumulated depreciation and amortization (288.0) (214.8) Property, equipment and software, net $ 173.7 $ 164.8 |
Summary Depreciation and Amortization Expense | The following table summarizes the allocation of depreciation and amortization expense between cost of services and selling, general and administrative expenses: Year Ended December 31, 2023 2022 2021 Cost of services $ 73.6 $ 53.4 $ 51.8 Selling, general and administrative 1.2 1.2 2.8 Total depreciation and amortization $ 74.8 $ 54.6 $ 54.6 |
Acquisitions (Tables)
Acquisitions (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Business Combination and Asset Acquisition [Abstract] | |
Schedule of Final Value of Assets Acquired and Liabilities Assumed | The final value of assets acquired and liabilities assumed is: Purchase Price Allocation Total purchase consideration $ 3,281.6 Allocation of consideration to assets acquired and liabilities assumed: Cash and cash equivalents $ 32.1 Accounts receivable 61.8 Current portion of contract assets 70.9 Property, equipment and software 5.0 Operating lease right-of-use assets 25.3 Non-current portion of contract assets 22.2 Intangible assets 1,366.5 Goodwill 2,085.0 Other assets 6.7 Accounts payable (31.9) Customer liabilities (2.8) Accrued compensation and benefits (85.6) Operating lease liabilities (25.4) Deferred income tax liabilities (236.0) Other liabilities (12.2) Net assets acquired $ 3,281.6 |
Schedule of Pro Forma Results | The following table summarizes, on a pro forma basis, the combined results of the Company as though the Cloudmed acquisition had occurred as of January 1, 2021 and the VisitPay acquisition had occurred as of January 1, 2020. These pro forma results are not necessarily indicative of the actual consolidated results had the acquisitions occurred as of those dates or of the future consolidated operating results for any period. Pro forma results are: Year Ended December 31, 2022 2021 Net services revenue $ 2,009.7 $ 1,813.5 Net loss $ (52.8) $ (187.0) |
Intangible Assets (Tables)
Intangible Assets (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Intangible Assets | The following table provides the gross carrying value and accumulated amortization for each major class of definite-lived intangible assets at December 31, 2023 and December 31, 2022: December 31, 2023 December 31, 2022 Gross Carrying Value Accumulated Amortization Net Book Value Gross Carrying Value Accumulated Amortization Net Book Value Customer relationships $ 417.9 $ (60.5) $ 357.4 $ 418.0 $ (36.3) $ 381.7 Technology 1,238.8 (299.5) 939.3 1,240.5 (129.3) 1,111.2 Trade name 23.5 (9.5) 14.0 24.5 (3.0) 21.5 Favorable leasehold interests — — — 0.1 — 0.1 Total intangible assets $ 1,680.2 $ (369.5) $ 1,310.7 $ 1,683.1 $ (168.6) $ 1,514.5 |
Schedule of Estimated Annual Amortization Expense | Estimated annual amortization expense related to intangible assets with definite lives as of December 31, 2023 is as follows: 2024 $ 204.7 2025 188.9 2026 188.2 2027 188.2 2028 188.1 Thereafter 352.6 Total $ 1,310.7 |
Goodwill (Tables)
Goodwill (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Changes in Carrying Amount of Goodwill | Changes in the carrying amount of goodwill for the year ended December 31, 2023 were: Goodwill Balance as of December 31, 2022 $ 2,640.3 Measurement period adjustments (10.9) Balance as of December 31, 2023 $ 2,629.4 |
Revenue Recognition (Tables)
Revenue Recognition (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregated Revenue By Source | In the following table, revenue is disaggregated by source of revenue: Year Ended December 31, 2023 2022 2021 Net operating fees $ 1,455.9 $ 1,309.7 $ 1,211.8 Incentive fees 108.4 106.8 143.8 Modular and other fees (1) 689.9 389.9 119.0 Net services revenue $ 2,254.2 $ 1,806.4 $ 1,474.6 |
Schedule of Contract Assets, Net and Contract Liabilities | The following table provides information about contract assets, net and contract liabilities from contracts with customers: December 31, 2023 December 31, 2022 Contract assets, net Current $ 94.4 $ 83.9 Non-current 37.7 32.0 Total contract assets, net $ 132.1 $ 115.9 Contract liabilities Current (1) $ 9.1 $ 9.7 Non-current (2) 14.5 18.7 Total contract liabilities $ 23.6 $ 28.4 (1) Current contract liabilities include $6.7 million and $7.6 million classified in the current portion of customer liabilities and $2.4 million and $2.1 million classified in the current portion of customer liabilities - related party as of December 31, 2023 and 2022, respectively. Significant changes in the carrying amount of contract assets, net for the year ended December 31, 2023 were as follows: Contract Assets Balance as of December 31, 2022 $ 115.9 Revenue recognized 374.1 Amounts billed (356.7) Other (1) (1.2) Balance as of December 31, 2023 $ 132.1 (1) Other primarily includes purchase price allocation adjustments and changes to the allowance for credit losses. Contract Liabilities Balance as of December 31, 2022 $ (28.4) Advanced billings as of January 1, 2023 (1) (85.0) Advanced billings recognized 85.0 Additions (13.8) Revenue recognized 18.6 Balance as of December 31, 2023 $ (23.6) (1) The Company records advanced billings to contract liabilities and accounts receivable on the first day of the respective service period, which are earned during the year. |
Schedule of Transaction Price Allocated to the Remaining Performance Obligation | The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period. The estimated revenue does not include amounts of variable consideration that are constrained. Net operating fees Incentive fees 2024 90.5 18.8 2025 61.9 — 2026 12.5 — 2027 6.8 — 2028 3.0 — Thereafter 4.3 — Total $ 179.0 $ 18.8 |
Accounts Receivable and Allow_2
Accounts Receivable and Allowance for Credit Losses (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Receivables [Abstract] | |
Components of Account Receivable | Accounts receivable is comprised of invoiced and unbilled balances due from modular services and end-to-end RCM customers, which are presented net after considering cost reimbursements owed to end-to-end RCM customers. As of December 31, 2023 2022 Billed receivables $ 218.5 $ 184.7 Unbilled receivables $ 99.2 $ 90.7 Allowance for credit losses $ (48.3) $ (15.2) Total accounts receivable, net (1) $ 269.4 $ 260.2 (1) Includes $26.1 million and $25.0 million for accounts receivable - related party, net as of December 31, 2023, and 2022, respectively. |
Schedule of Allowance for Credit Losses Related to Accounts Receivable | Changes in the allowance for credit losses on a consolidated basis related to accounts receivable are as follows: Year Ended December 31, 2023 2022 Beginning balance $ 15.2 $ 2.5 Cumulative effect of Cloudmed ASC 326 adoption — 1.8 Provision (1) 34.6 11.1 Write-offs (1.5) (0.2) Ending balance $ 48.3 $ 15.2 (1) During the year ended December 31, 2023,the Company’s expense for credit losses was $34.6 million on customer accounts receivable, an increase of $23.5 million over the prior year. The primary drivers of the increase were $11.5 million related to a physician RCM customer that ceased operations and filed for bankruptcy in the third quarter of 2023, $8.4 million for a physician-led for-profit healthcare system customer of modular services, and $7.0 million for an end-to-end RCM customer, of which the latter two are experiencing overall financial challenges and became delinquent in their payments for services during the year. |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Schedules of Components of Lease Costs and Supplemental Information Related to Operating Leases | The components of lease costs are as follows: Year Ended December 31, 2023 2022 Operating lease cost $ 18.4 $ 22.1 Sublease income (1.1) (1.6) Total lease cost $ 17.3 $ 20.5 The following table summarizes the supplemental information related to operating leases: Year Ended December 31, 2023 2022 Weighted average remaining lease term 6 years 7 years Weighted average incremental borrowing rate 6.83 % 6.52 % Cash paid for amounts included in the measurement of lease liabilities: Operating cash flows for operating leases $ 25.1 $ 27.0 ROU assets obtained or acquired in exchange for operating lease obligations (1) 3.6 67.7 |
Schedule of Operating Lease Maturity | Maturities of lease liabilities as of December 31, 2023 are as follows: Operating Leases 2024 $ 25.1 2025 23.4 2026 17.6 2027 12.0 2028 10.5 Thereafter 30.5 Total 119.1 Less: Imputed interest 22.0 Present value of lease liabilities $ 97.1 |
Customer Liabilities (Tables)
Customer Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Other Liabilities Disclosure [Abstract] | |
Schedule of Customer Liabilities | Customer liabilities consist of the following: December 31, 2023 December 31, 2022 Accrued service costs, current $ 20.0 $ 21.9 Collections payable to customers, current 12.8 29.1 Customer deposits and refund liabilities, current 3.1 4.2 Deferred revenue (contract liabilities), current 9.1 9.7 Current portion of customer liabilities (1) 45.0 64.9 Deferred revenue (contract liabilities), non-current 14.5 18.7 Non-current portion of customer liabilities (1) 14.5 18.7 Total customer liabilities $ 59.5 $ 83.6 (1) Current and non-current portion of customer liabilities include amounts for a related party. See Note 19, Related Party Transactions, for further discussion. |
Debt (Tables)
Debt (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Debt Disclosure [Abstract] | |
Schedule of Carrying Values Long-Term Debt | The carrying amounts of debt consist of the following: December 31, 2023 December 31, 2022 Senior Revolver (1) $ — $ 100.0 Term A Loans 1,162.5 1,211.4 Term B Loan 493.8 498.7 Unamortized discount and issuance costs (18.8) (23.6) Total debt 1,637.5 1,786.5 Less: Current maturities (67.0) (53.9) Total long-term debt $ 1,570.5 $ 1,732.6 (1) As of December 31, 2023, the Company had no outstanding borrowings, $1.2 million letters of credit outstanding, and $598.8 million of availability under the Senior Revolver. |
Schedule of Maturities of Long-term Debt | Scheduled maturities of the Company’s long-term debt for each of the five years succeeding December 31, 2023 and thereafter are summarized as follows: Scheduled Maturities 2024 $ 67.0 2025 67.0 2026 618.3 2027 430.3 2028 5.0 Thereafter 468.7 Total $ 1,656.3 |
Derivative Financial Instrume_2
Derivative Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position, Location | The location and fair value of derivative instruments designated as hedges in the Consolidated Balance Sheets as of December 31, 2023 and December 31, 2022 are as follows: December 31, 2023 December 31, 2022 Foreign currency forward contracts Prepaid expenses and other current assets $ 0.5 $ 0.1 Other accrued expenses — 0.5 Total foreign current forward contracts $ 0.5 $ 0.6 Interest rate swaps Prepaid expenses and other current assets $ 8.7 $ 8.7 Other assets 0.9 5.0 Total interest rate swaps $ 9.6 $ 13.7 |
Share-Based Compensation (Table
Share-Based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Valuation Assumptions | The following table sets forth the significant assumptions used in the calculation of share-based compensation expense during 2022 and 2021: Year Ended December 31, 2022 2021 Expected dividend yield —% —% Risk-free interest rate 1.4% to 3.3% 0.4% to 1.0% Expected volatility 43% to 50% 43% Expected term (in years) 4.0 to 5.5 5.5 |
Schedule of Options Granted | There were no options granted during the year ended December 31, 2023. Year Ended December 31, 2022 2021 Weighted-average grant date fair value per share $ 9.55 $ 9.34 |
Schedule of Share-based Compensation Expense | Total share-based compensation expense that has been included in the Company’s consolidated statements of operations were as follows: Year Ended December 31, 2023 2022 2021 Share-Based Compensation Expense Allocation Details: Cost of services $ 43.4 $ 28.8 $ 44.2 Selling, general and administrative 28.1 36.0 32.4 Other — 0.1 — Total share-based compensation expense (1) $ 71.5 $ 64.9 $ 76.6 Related tax benefits $ 15.3 $ 11.8 $ 14.5 |
Schedule of Stock Option Activity | The following table sets forth a summary of all option activity under all plans for the years ended December 31, 2023, 2022, and 2021: Shares Weighted- Weighted- Aggregate Outstanding at January 1, 2021 6,220,971 $ 3.68 5.7 $ 126.5 Granted 6,424 23.33 Exercised (1,819,039) 4.39 Canceled/forfeited (15,151) 5.98 Expired (7,000) 27.08 Outstanding at December 31, 2021 4,386,205 $ 3.37 4.9 $ 97.0 Granted 24,344 22.19 Exercised (1,285,228) 3.67 Canceled/forfeited (13,408) 4.59 Expired (7,500) 8.71 Outstanding at December 31, 2022 3,104,413 $ 3.38 4.0 $ 23.9 Granted — — Exercised (411,346) 3.26 Canceled/forfeited (45,865) 2.59 Expired — — Outstanding at December 31, 2023 2,647,202 $ 3.41 3.1 $ 19.4 Outstanding, vested and exercisable December 31, 2021 4,365,759 $ 3.33 4.9 $ 96.7 December 31, 2022 3,080,069 $ 3.23 4.0 $ 23.9 December 31, 2023 2,647,202 $ 3.41 3.1 $ 19.4 |
Schedule of Restricted Stock Units and Performance-based Restricted Stock Units Activity | The following table sets forth a summary of all RSU and PBRSU activity during the years ended December 31, 2023, 2022, and 2021: Weighted- RSUs PBRSUs RSU PBRSU Outstanding and unvested at January 1, 2021 2,108,447 2,917,071 $ 9.87 $ 11.35 Granted 2,251,167 1,071,431 24.35 25.36 Performance factor adjustment — 101,937 — 9.81 Vested (1,739,847) (586,071) 19.14 7.67 Forfeited (401,116) (301,355) 15.48 13.55 Outstanding and unvested at December 31, 2021 2,218,651 3,203,013 $ 16.28 $ 16.45 Granted 2,306,897 5,230,483 20.56 19.83 Performance factor adjustment — 876,109 — 10.46 Vested (1,029,491) (1,925,203) 16.61 11.05 Forfeited (264,055) (507,605) 18.22 20.38 Outstanding and unvested at December 31, 2022 3,232,002 6,876,797 $ 19.07 $ 19.48 Granted 3,259,227 1,526,096 15.12 15.59 Performance factor adjustment — 792,189 — 15.95 Vested (2,788,125) (2,286,886) 16.30 15.95 Forfeited (372,868) (779,375) 17.90 19.56 Outstanding and unvested at December 31, 2023 3,330,236 6,128,821 $ 17.66 $ 19.36 Shares surrendered for taxes for year ended December 31, 2023 974,959 903,658 Cost of shares surrendered for taxes for the year ended December 31, 2023 (in millions) 13.0 13.1 Shares surrendered for taxes for the year ended December 31, 2022 369,900 804,854 Cost of shares surrendered for taxes for the year ended December 31, 2022 (in millions) 7.4 20.2 Shares surrendered for taxes for the year ended December 31, 2021 571,182 225,726 Cost of shares surrendered for taxes for the year ended December 31, 2021 (in millions) 13.5 5.6 |
Other Expenses (Tables)
Other Expenses (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Other Income and Expenses [Abstract] | |
Schedule of Other Expenses | The following table summarizes the other expenses (income) recognized for the years ended December 31, 2023, 2022, and 2021: Year Ended December 31, 2023 2022 2021 Business acquisition costs (1) 8.7 80.5 13.7 Integration costs (2) 35.7 40.2 2.6 Technology transformation (3) 19.2 1.7 — Strategic initiatives (4) 24.0 22.7 11.3 Global business services center expansion project in the Philippines (5) — 26.7 1.8 Customer employee transition and restructuring expenses (6) — — 4.5 Facility-related charges (7) 25.4 7.9 3.4 Other (8) 3.6 10.1 18.2 Total other expenses $ 116.6 $ 189.8 $ 55.5 (1) Costs, including legal, consulting, insurance premiums, and bank fees, that directly relate to the due diligence and closing of business acquisitions and include changes to contingent consideration, if applicable. Costs also include compensation expenses associated with the close of the transactions. (2) Costs reflect efforts to integrate acquisitions from a systems, processes, and people perspective and to achieve synergies expected from business acquisitions. Costs include consulting fees, IT vendor spend, severance, early lease termination of Cloudmed facilities, and certain payroll costs. (3) Costs relate to projects underway to create a new platform that consolidates the Cloudmed and R1 customer solutions and migrates them to a cloud environment to reduce onboarding costs and accelerate the delivery of value to the Company’s customers. These projects are expected to be completed in 2025. Certain of these costs incurred qualify for capitalization and have been recorded on the Consolidated Balance Sheet. (4) Costs primarily relate to business restructuring activities as part of the Company’s growth strategy and include consulting costs, compensation costs of employees dedicated to the Company’s growth strategy efforts, and severance. These costs include changes in contingent consideration and retention costs related to acquisitions completed by Cloudmed prior to being acquired by R1. (5) These costs include legal and consulting fees related to the establishment of the Company’s inaugural global business services center in the Philippines as well as severance costs for personnel whose roles are being relocated. The entry into the Philippines is the first new organic global business services center country expansion by the Company in approximately 15 years. The Company completed the expansion project in 2022. (6) As part of the transition of customer personnel to the Company under certain operating partner model contracts, the Company agreed to reimburse the customer, or directly pay affected employees, for severance and retention costs related to certain employees who were not transitioned to the Company, or whose jobs were relocated after the employee transitioned to the Company. (7) As part of evaluating its real estate footprint, the Company has exited certain leased facilities. Costs include asset impairment charges, early termination fees, and other costs related to exited leased facilities (excluding early lease termination of Cloudmed facilities, which is included in (2) above). For the year ended December 31, 2023, costs include an impairment charge of $8.7 million related to land and buildings. See Note 2, Summary of Significant Accounting Policies, for more information. (8) For the year ended December 31, 2023, costs primarily include $4.3 million of net expense related to the Company’s stockholder litigation. For the year ended December 31, 2022, costs primarily include $5.7 million of expenses related to the Company’s stockholder litigation. For further detail, refer to Note 18, Commitments and Contingencies. For the years ended December 31, 2022 and 2021, other includes $2.5 million, and $11.3 million, respectively, of expenses related to the COVID-19 pandemic. For the year ended December 31, 2023, no expense related to the COVID-19 pandemic was recorded to other expense. |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Domestic and Foreign Components of Income (Loss) | The domestic and foreign components of income (loss) before income taxes consist of the following: Year Ended December 31, 2023 2022 2021 Domestic $ (6.2) $ (86.8) $ 100.6 Foreign 27.2 20.0 16.7 Total income (loss) before income taxes $ 21.0 $ (66.8) $ 117.3 |
Schedule of Current and Deferred Income Tax Expense (Benefit) | For the years ended December 31, 2023, 2022, and 2021, the Company’s current and deferred income tax expense (benefit) attributable to income from operations are as follows: Current Deferred Total Year Ended December 31, 2021 U.S. Federal $ (0.1) $ 22.0 $ 21.9 State & Local 3.5 — 3.5 Foreign 3.0 1.6 4.6 $ 6.4 $ 23.6 $ 30.0 Year Ended December 31, 2022 U.S. Federal $ 0.9 $ (11.6) $ (10.7) State & Local 3.8 (4.9) (1.1) Foreign 3.2 5.1 8.3 $ 7.9 $ (11.4) $ (3.5) Year Ended December 31, 2023 U.S. Federal $ 16.0 $ (14.2) $ 1.8 State & Local 11.8 (3.6) 8.2 Foreign 3.9 3.8 7.7 $ 31.7 $ (14.0) $ 17.7 |
Schedule of Reconciliation of Effective Income Tax Rate | Reconciliation of the difference between the effective tax rate and the statutory U.S. federal income tax rate is as follows: Year Ended December 31, 2023 2022 2021 Federal statutory tax rate 21 % 21 % 21 % Change in income tax rate resulting from: State and local income taxes, net of federal tax benefits 31 % 1 % 2 % Tax on foreign income 9 % (15) % 3 % Share-based compensation 4 % 18 % (9) % Non-deductible expenses 15 % (15) % 4 % Other 4 % (5) % 5 % Effective tax rate 84 % 5 % 26 % |
Schedule of Net Deferred Tax | The following table sets forth the Company’s net deferred tax as of December 31, 2023 and 2022: As of December 31, 2023 2022 Deferred tax assets and liabilities: Net operating loss carryforwards $ 23.7 $ 49.8 Share-based compensation 18.2 16.6 Accrued bonus 15.7 13.7 Deferred revenue 5.3 6.7 Alternative minimum tax 5.6 6.2 Interest expense limitation 18.2 11.1 Operating lease liabilities 23.5 29.1 Property, equipment, and software 7.3 1.0 Other 20.4 13.1 Total deferred tax assets 137.9 147.3 Less valuation allowances (7.6) (7.1) Net deferred tax assets 130.3 140.2 Intangible assets (258.9) (292.4) Deferred contract costs (9.3) (8.0) Foreign withholding tax (13.9) (10.2) Operating lease right-of-use assets (13.9) (20.0) Total deferred tax liabilities (296.0) (330.6) Net deferred tax $ (165.7) $ (190.4) |
8.00% Series A Convertible Pr_2
8.00% Series A Convertible Preferred Stock (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Temporary Equity Disclosure [Abstract] | |
Summary of Preferred Stock Activity | The following summarizes the Preferred Stock activity for the year ended December 31, 2021: Preferred Stock Shares Issued and Outstanding Carrying Value Balance at December 31, 2020 288,497 $ 251.5 Dividends paid/accrued dividends 5,769 — Conversion of Preferred Stock (294,266) (251.5) Balance at December 31, 2021 — $ — |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Basic and Diluted Net Income (Loss) Per Common Share | Basic and diluted net income (loss) per common share are calculated as follows: Year Ended December 31, 2023 2022 2021 Basic EPS: Net income (loss) $ 3.3 $ (63.3) $ 87.3 Less dividends on preferred shares (1) — — (592.3) Net income (loss) available/(allocated) to common shareholders - basic $ 3.3 $ (63.3) $ (505.0) Diluted EPS: Net income (loss) $ 3.3 $ (63.3) $ 87.3 Less dividends on preferred shares (1) — — (592.3) Net income (loss) available/(allocated) to common shareholders - diluted $ 3.3 $ (63.3) $ (505.0) Basic weighted-average common shares 418,587,390 352,337,767 266,183,565 Add: Effect of dilutive equity awards 3,916,803 — — Add: Effect of dilutive warrants 31,590,181 — — Diluted weighted average common shares 454,094,374 352,337,767 266,183,565 Net income (loss) per common share (basic) $ 0.01 $ (0.18) $ (1.90) Net income (loss) per common share (diluted) $ 0.01 $ (0.18) $ (1.90) (1) The 2021 dividend on preferred shares includes amounts related to the conversion of the preferred shares. See Note 16, 8.00% Series A Convertible Preferred Stock, for more information. |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | Net services revenue from services provided to Ascension, as well as corresponding accounts receivable and customer liabilities are presented in the Consolidated Statements of Operations and Comprehensive Income (Loss) and the Consolidated Balance Sheets. Customer liabilities for Ascension consist of the following: December 31, 2023 December 31, 2022 Accrued service costs, current $ 2.4 $ 4.3 Collections payable to customers, current 0.4 0.3 Refund liabilities, current — 0.7 Deferred revenue (contract liabilities), current 2.4 2.1 Current portion of customer liabilities 5.2 7.4 Deferred revenue (contract liabilities), non-current 11.8 13.7 Non-current portion of customer liabilities 11.8 13.7 Total customer liabilities $ 17.0 $ 21.1 |
Segments and Customer Concent_2
Segments and Customer Concentrations (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Customer Concentration, Net Services Revenue | Customers comprising greater than 10% of net services revenue are as follows: Year Ended December 31, Customer Name 2023 2022 2021 Ascension and its affiliates 40% 49% 61% Intermountain Healthcare 11% 12% 14% |
Supplemental Financial Inform_2
Supplemental Financial Information (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | |
Schedule of Prepaid Expenses and Other Current Assets | Prepaid expenses and other current assets is comprised of the following: December 31, 2023 December 31, 2022 Prepaid expenses $ 42.5 $ 35.1 Acquisition and disposition contingent assets — 20.0 Notes receivable 7.1 12.0 Derivative assets 9.2 8.8 Healthcare rebates receivable 8.6 5.9 Deferred contract costs 6.5 5.1 Other current assets 22.0 23.4 Total prepaid expenses and other current assets $ 95.9 $ 110.3 |
Schedule of Accrued Expenses and Other Current Liabilities | Accrued expenses and other current liabilities is comprised of the following: December 31, 2023 December 31, 2022 Accrued expenses $ 52.2 $ 36.3 Notes payable 5.8 15.5 Acquisition deferred payments — 12.5 Other current liabilities 7.9 6.2 Total accrued expenses and other current liabilities $ 65.9 $ 70.5 |
Description of Business - Narra
Description of Business - Narrative (Details) - USD ($) $ / shares in Units, $ in Millions | Jan. 17, 2024 | Dec. 31, 2023 | Dec. 31, 2022 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Common stock, shares outstanding (in shares) | 420,201,507 | 416,597,885 | |
Common stock, par value (in dollars per share) | $ 0.01 | $ 0.01 | |
Senior Revolver | Senior Revolving Cred Facility | Line of credit | Subsequent event | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Credit agreement, maximum borrowing capacity | $ 80 | ||
Incremental Term B Loans | Credit Agreement | Line of credit | Subsequent event | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Incremental borrowings | 575 | ||
Acclara | Subsequent event | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Cash consideration | $ 675 | ||
Common stock, shares outstanding (in shares) | 12,192,000 | ||
Common stock, par value (in dollars per share) | $ 0.01 | ||
Percentage of voting interest acquired | 100% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies - Narrative (Details) | 3 Months Ended | 12 Months Ended | |||
Dec. 31, 2023 USD ($) | Dec. 31, 2023 USD ($) payment shares | Dec. 31, 2022 USD ($) shares | Dec. 31, 2021 USD ($) shares | Apr. 01, 2022 USD ($) | |
Revenue from External Customer [Line Items] | |||||
Base fees, number of monthly payments | payment | 3 | ||||
Contract amortization | $ 8,100,000 | $ 8,300,000 | |||
Impairment losses | 0 | 0 | |||
Net capitalized cloud computing implementation costs | $ 6,900,000 | 6,900,000 | 6,800,000 | ||
Impairment of property, equipment, software, deferred contract costs, or other intangible assets | 8,700,000 | $ 0 | $ 0 | $ 0 | |
Granted (in shares) | shares | 0 | 24,344 | 6,424 | ||
Contract assets | 132,100,000 | $ 132,100,000 | $ 115,900,000 | ||
Contract liabilities | 23,600,000 | 23,600,000 | 28,400,000 | ||
Accounting Standards Update 2021-08 | Cloudmed | |||||
Revenue from External Customer [Line Items] | |||||
Contract assets | $ 92,400,000 | ||||
Contract liabilities | $ 3,300,000 | ||||
Foreign Entities | |||||
Revenue from External Customer [Line Items] | |||||
Net assets | 104,800,000 | 104,800,000 | 81,500,000 | ||
Fair Value, Measurements, Recurring | |||||
Revenue from External Customer [Line Items] | |||||
Financial liabilities required to be measured at fair value | 0 | 0 | |||
Financial assets required to be measured at fair value | 0 | 0 | |||
Located Internationally | |||||
Revenue from External Customer [Line Items] | |||||
Property, equipment and software, net | $ 23,400,000 | $ 23,400,000 | $ 20,300,000 | ||
Minimum | |||||
Revenue from External Customer [Line Items] | |||||
Service agreement term | 1 year | ||||
Minimum | End-To-End Services | |||||
Revenue from External Customer [Line Items] | |||||
Revenue, contract term | 7 years | ||||
Maximum | |||||
Revenue from External Customer [Line Items] | |||||
Service agreement term | 3 years | ||||
Maximum | End-To-End Services | |||||
Revenue from External Customer [Line Items] | |||||
Revenue, contract term | 10 years |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies - Summary of Deferred Contract Costs (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Capitalized Contract Cost [Line Items] | ||
Prepaid expenses and other current assets | $ 6.5 | $ 5.1 |
Non-current portion of deferred contract costs | 30.4 | 26.7 |
Total deferred contract costs | 36.9 | 31.8 |
Prepaid expenses and other current assets | ||
Capitalized Contract Cost [Line Items] | ||
Prepaid expenses and other current assets | 6.5 | 5.1 |
Non-current portion of deferred contract costs | ||
Capitalized Contract Cost [Line Items] | ||
Non-current portion of deferred contract costs | $ 30.4 | $ 26.7 |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies - Property, Equipment and Software Useful Lives (Details) | Dec. 31, 2023 |
Buildings and land | |
Property, Plant and Equipment [Line Items] | |
Useful lives | 30 years |
Computers and other equipment | |
Property, Plant and Equipment [Line Items] | |
Useful lives | 3 years |
Leasehold improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful lives | 10 years |
Office furniture | |
Property, Plant and Equipment [Line Items] | |
Useful lives | 5 years |
Software | Minimum | |
Property, Plant and Equipment [Line Items] | |
Useful lives | 3 years |
Software | Maximum | |
Property, Plant and Equipment [Line Items] | |
Useful lives | 5 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies - Schedule of Property, Equipment and Software (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Property, equipment and software, gross | $ 461.7 | $ 379.6 |
Less accumulated depreciation and amortization | (288) | (214.8) |
Property, equipment and software, net | 173.7 | 164.8 |
Buildings and land | ||
Property, Plant and Equipment [Line Items] | ||
Property, equipment and software, gross | 15.6 | 24.3 |
Computer and other equipment | ||
Property, Plant and Equipment [Line Items] | ||
Property, equipment and software, gross | 86.4 | 75.6 |
Leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Property, equipment and software, gross | 27.4 | 24.1 |
Software | ||
Property, Plant and Equipment [Line Items] | ||
Property, equipment and software, gross | 320 | 243.2 |
Office furniture | ||
Property, Plant and Equipment [Line Items] | ||
Property, equipment and software, gross | $ 12.3 | $ 12.4 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies - Allocation of Depreciation and Amortization Expense between Cost of Services and Selling, General and Administrative Expenses (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||
Total depreciation and amortization | $ 74.8 | $ 54.6 | $ 54.6 |
Cost of services | |||
Property, Plant and Equipment [Line Items] | |||
Total depreciation and amortization | 73.6 | 53.4 | 51.8 |
Selling, general and administrative | |||
Property, Plant and Equipment [Line Items] | |||
Total depreciation and amortization | $ 1.2 | $ 1.2 | $ 2.8 |
Acquisitions - Narrative (Detai
Acquisitions - Narrative (Details) $ in Millions | 1 Months Ended | 3 Months Ended | 7 Months Ended | 12 Months Ended | ||||
Jun. 21, 2022 USD ($) | Aug. 31, 2022 USD ($) | Aug. 31, 2020 payment | Sep. 30, 2021 USD ($) | Jun. 30, 2023 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Business Acquisition [Line Items] | ||||||||
Goodwill | $ 2,629.4 | $ 2,640.3 | ||||||
Payments to acquire business | $ 0 | 0 | $ 12.5 | |||||
Cloudmed | ||||||||
Business Acquisition [Line Items] | ||||||||
Decrease in deferred income tax liability | $ 9.4 | |||||||
Decrease in goodwill | $ 9.4 | |||||||
Purchase price | $ 3,281.6 | |||||||
Goodwill | $ 2,085 | |||||||
RevWorks | ||||||||
Business Acquisition [Line Items] | ||||||||
Payments to acquire business | $ 12.5 | $ 12.5 | ||||||
Number of deferred payments | payment | 2 | |||||||
Payments to acquire business, number of payments, refund period, if circumstances met (in years) | 2 years | |||||||
VisitPay | ||||||||
Business Acquisition [Line Items] | ||||||||
Purchase price | $ 297.1 | |||||||
Goodwill | $ 170.9 | |||||||
Cloudmed | Cloudmed | ||||||||
Business Acquisition [Line Items] | ||||||||
Lock-up period | 18 months |
Acquisitions - Fair Value of As
Acquisitions - Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions | Jun. 21, 2022 | Dec. 31, 2023 | Dec. 31, 2022 |
Allocation of consideration to assets acquired and liabilities assumed: | |||
Goodwill | $ 2,629.4 | $ 2,640.3 | |
Cloudmed | |||
Business Acquisition [Line Items] | |||
Total purchase consideration | $ 3,281.6 | ||
Allocation of consideration to assets acquired and liabilities assumed: | |||
Cash and cash equivalents | 32.1 | ||
Accounts receivable | 61.8 | ||
Current portion of contract assets | 70.9 | ||
Property, equipment and software | 5 | ||
Operating lease right-of-use assets | 25.3 | ||
Non-current portion of contract assets | 22.2 | ||
Intangible assets | 1,366.5 | ||
Goodwill | 2,085 | ||
Other assets | 6.7 | ||
Accounts payable | (31.9) | ||
Customer liabilities | (2.8) | ||
Accrued compensation and benefits | (85.6) | ||
Operating lease liabilities | (25.4) | ||
Deferred income tax liabilities | (236) | ||
Other liabilities | (12.2) | ||
Net assets acquired | $ 3,281.6 |
Acquisitions - Pro Forma Result
Acquisitions - Pro Forma Results (Details) - Cloudmed Acquisition and VisitPay Acquisition - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Business Acquisition [Line Items] | ||
Net services revenue | $ 2,009.7 | $ 1,813.5 |
Net loss | $ (52.8) | $ (187) |
Intangible Assets - Components
Intangible Assets - Components of Intangible Assets (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | $ 1,680.2 | $ 1,683.1 |
Accumulated Amortization | (369.5) | (168.6) |
Net Book Value | 1,310.7 | 1,514.5 |
Customer relationships | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 417.9 | 418 |
Accumulated Amortization | (60.5) | (36.3) |
Net Book Value | 357.4 | 381.7 |
Technology | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 1,238.8 | 1,240.5 |
Accumulated Amortization | (299.5) | (129.3) |
Net Book Value | 939.3 | 1,111.2 |
Trade name | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 23.5 | 24.5 |
Accumulated Amortization | (9.5) | (3) |
Net Book Value | 14 | 21.5 |
Favorable leasehold interests | ||
Finite-Lived Intangible Assets [Line Items] | ||
Gross Carrying Value | 0 | 0.1 |
Accumulated Amortization | 0 | 0 |
Net Book Value | $ 0 | $ 0.1 |
Intangible Assets - Narrative (
Intangible Assets - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |||
Intangible asset amortization expense | $ 203.5 | $ 117.4 | $ 22.9 |
Intangible Assets - Future Amor
Intangible Assets - Future Amortization (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract] | ||
2024 | $ 204.7 | |
2025 | 188.9 | |
2026 | 188.2 | |
2027 | 188.2 | |
2028 | 188.1 | |
Thereafter | 352.6 | |
Net Book Value | $ 1,310.7 | $ 1,514.5 |
Goodwill - Carrying Amount of G
Goodwill - Carrying Amount of Goodwill (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Goodwill [Roll Forward] | |
Beginning Balance | $ 2,640.3 |
Measurement period adjustments | (10.9) |
Ending Balance | $ 2,629.4 |
Goodwill - Narrative (Details)
Goodwill - Narrative (Details) | 12 Months Ended |
Dec. 31, 2023 USD ($) reporting_unit | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Number of reporting units | reporting_unit | 1 |
Impairment of goodwill | $ | $ 0 |
Revenue Recognition - Schedule
Revenue Recognition - Schedule of Disaggregated Revenue by Source (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Disaggregation of Revenue [Line Items] | |||
Net services revenue | $ 2,254.2 | $ 1,806.4 | $ 1,474.6 |
Net operating fees | |||
Disaggregation of Revenue [Line Items] | |||
Net services revenue | 1,455.9 | 1,309.7 | 1,211.8 |
Incentive fees | |||
Disaggregation of Revenue [Line Items] | |||
Net services revenue | 108.4 | 106.8 | 143.8 |
Modular and other fees | |||
Disaggregation of Revenue [Line Items] | |||
Net services revenue | $ 689.9 | $ 389.9 | $ 119 |
Revenue Recognition - Schedul_2
Revenue Recognition - Schedule of Contract Balances (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Contract assets, net | ||
Current | $ 94.4 | $ 83.9 |
Non-current | 37.7 | 32 |
Total contract assets, net | 132.1 | 115.9 |
Contract liabilities | ||
Current | 9.1 | 9.7 |
Non-current | 14.5 | 18.7 |
Total contract liabilities | 23.6 | 28.4 |
Related party | ||
Contract liabilities | ||
Current | 2.4 | 2.1 |
Non-current | 11.8 | 13.7 |
Nonrelated party | ||
Contract liabilities | ||
Current | 6.7 | 7.6 |
Non-current | $ 2.7 | $ 5 |
Revenue Recognition - Changes t
Revenue Recognition - Changes to Contract Assets and Liabilities (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Contract Assets | |
Balance as of December 31, 2022 | $ 115.9 |
Revenue recognized | 374.1 |
Amounts billed | (356.7) |
Other | (1.2) |
Balance as of December 31, 2023 | 132.1 |
Contract with Customer, Liabilities [Roll Forward] | |
Balance as of December 31, 2022 | (28.4) |
Advanced billings | (85) |
Advanced billings recognized | 85 |
Additions | (13.8) |
Revenue recognized | 18.6 |
Balance as of December 31, 2023 | $ (23.6) |
Revenue Recognition - Transacti
Revenue Recognition - Transaction Price Allocated to the Remaining Performance Obligation (Details) $ in Millions | Dec. 31, 2023 USD ($) |
Net operating fees | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue expected to be recognized in the future related to unsatisfied performance obligations | $ 179 |
Incentive fees | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue expected to be recognized in the future related to unsatisfied performance obligations | $ 18.8 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue expected to be recognized in the future related to unsatisfied performance obligations, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | Net operating fees | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue expected to be recognized in the future related to unsatisfied performance obligations | $ 90.5 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | Incentive fees | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue expected to be recognized in the future related to unsatisfied performance obligations | $ 18.8 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue expected to be recognized in the future related to unsatisfied performance obligations, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | Net operating fees | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue expected to be recognized in the future related to unsatisfied performance obligations | $ 61.9 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | Incentive fees | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue expected to be recognized in the future related to unsatisfied performance obligations | $ 0 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue expected to be recognized in the future related to unsatisfied performance obligations, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | Net operating fees | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue expected to be recognized in the future related to unsatisfied performance obligations | $ 12.5 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | Incentive fees | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue expected to be recognized in the future related to unsatisfied performance obligations | $ 0 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue expected to be recognized in the future related to unsatisfied performance obligations, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01 | Net operating fees | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue expected to be recognized in the future related to unsatisfied performance obligations | $ 6.8 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01 | Incentive fees | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue expected to be recognized in the future related to unsatisfied performance obligations | $ 0 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue expected to be recognized in the future related to unsatisfied performance obligations, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-01-01 | Net operating fees | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue expected to be recognized in the future related to unsatisfied performance obligations | $ 3 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-01-01 | Incentive fees | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue expected to be recognized in the future related to unsatisfied performance obligations | $ 0 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2029-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue expected to be recognized in the future related to unsatisfied performance obligations, period | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2029-01-01 | Net operating fees | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue expected to be recognized in the future related to unsatisfied performance obligations | $ 4.3 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2029-01-01 | Incentive fees | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Revenue expected to be recognized in the future related to unsatisfied performance obligations | $ 0 |
Accounts Receivable and Allow_3
Accounts Receivable and Allowance for Credit Losses - Components of Receivables, Net (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Billed receivables | $ 218.5 | $ 184.7 |
Unbilled receivables | 99.2 | 90.7 |
Allowance for credit losses | (48.3) | (15.2) |
Total accounts receivable, net | 269.4 | 260.2 |
Related party | ||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||
Allowance for credit losses | (0.1) | (0.1) |
Total accounts receivable, net | $ 26.1 | $ 25 |
Accounts Receivable and Allow_4
Accounts Receivable and Allowance for Credit Losses - Schedule of Allowance for Credit Losses Related to Accounts Receivable (Details) - USD ($) $ in Millions | 3 Months Ended | 12 Months Ended | |
Sep. 30, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Beginning balance | $ 15.2 | $ 2.5 | |
Provision | 34.6 | 11.1 | |
Write-offs | (1.5) | (0.2) | |
Ending balance | 48.3 | 15.2 | |
Increase in expense for credit losses | 23.5 | ||
Increase in allowance for credit loss | 7 | ||
Physician Customer | |||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Provision | $ 11.5 | ||
Increase in allowance for credit loss | 8.4 | ||
ASC 326 | Cloudmed | |||
Accounts Receivable, Allowance for Credit Loss [Roll Forward] | |||
Beginning balance | $ 0 | 1.8 | |
Ending balance | $ 0 |
Leases - Narrative (Details)
Leases - Narrative (Details) $ in Millions | 12 Months Ended |
Dec. 31, 2023 USD ($) | |
Lessee, Lease, Description [Line Items] | |
Right of use asset impairments | $ 11.1 |
Maximum | |
Lessee, Lease, Description [Line Items] | |
Operating lease, term (up to) | 10 years |
Operating lease, renewal term (up to) | 10 years |
Leases - Schedule of Lease Cost
Leases - Schedule of Lease Costs (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Leases [Abstract] | ||
Operating lease cost | $ 18.4 | $ 22.1 |
Sublease income | (1.1) | (1.6) |
Total lease cost | $ 17.3 | $ 20.5 |
Leases - Schedule of Supplement
Leases - Schedule of Supplemental Information Related to Operating Leases (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Leases [Abstract] | ||
Weighted average remaining lease term | 6 years | 7 years |
Weighted average incremental borrowing rate | 6.83% | 6.52% |
Cash paid for amounts included in the measurement of lease liabilities: | ||
Operating cash flows for operating leases | $ 25.1 | $ 27 |
ROU assets obtained or acquired in exchange for operating lease obligations | $ 3.6 | $ 67.7 |
Leases - Schedule of Operating
Leases - Schedule of Operating Lease Maturity (Details) $ in Millions | Dec. 31, 2023 USD ($) |
Operating Leases | |
2024 | $ 25.1 |
2025 | 23.4 |
2026 | 17.6 |
2027 | 12 |
2028 | 10.5 |
Thereafter | 30.5 |
Total | 119.1 |
Less: | |
Imputed interest | 22 |
Present value of lease liabilities | $ 97.1 |
Customer Liabilities - Schedule
Customer Liabilities - Schedule of Customer Liabilities (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Other Liabilities Disclosure [Abstract] | ||
Accrued service costs, current | $ 20 | $ 21.9 |
Collections payable to customers, current | 12.8 | 29.1 |
Customer deposits and refund liabilities, current | 3.1 | 4.2 |
Deferred revenue (contract liabilities), current | 9.1 | 9.7 |
Current portion of customer liabilities | 45 | 64.9 |
Deferred revenue (contract liabilities), non-current | 14.5 | 18.7 |
Non-current portion of customer liabilities | 14.5 | 18.7 |
Total customer liabilities | $ 59.5 | $ 83.6 |
Debt - Carrying Amounts of Debt
Debt - Carrying Amounts of Debt (Details) - USD ($) | Dec. 31, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | ||
Long-term debt | $ 1,656,300,000 | |
Unamortized discount and issuance costs | (18,800,000) | $ (23,600,000) |
Total debt | 1,637,500,000 | 1,786,500,000 |
Less: Current maturities | (67,000,000) | (53,900,000) |
Total long-term debt | 1,570,500,000 | 1,732,600,000 |
Senior Revolver | Line of credit | ||
Debt Instrument [Line Items] | ||
Long-term debt | 0 | 100,000,000 |
Borrowing availability | 598,800,000 | |
Term A Loans | Line of credit | ||
Debt Instrument [Line Items] | ||
Long-term debt | 1,162,500,000 | 1,211,400,000 |
Term B Loan | Line of credit | ||
Debt Instrument [Line Items] | ||
Long-term debt | 493,800,000 | $ 498,700,000 |
Letter of Credit | Line of credit | ||
Debt Instrument [Line Items] | ||
Long-term debt | $ 1,200,000 |
Debt - Narrative (Details)
Debt - Narrative (Details) - USD ($) | Jun. 21, 2022 | Dec. 31, 2023 |
Debt Instrument [Line Items] | ||
Debt covenant, secured obligation pledged, capital stock of certain domestic subsidiaries, percent | 100% | |
Line of credit | ||
Debt Instrument [Line Items] | ||
Mandatory prepayments, percentage of non-ordinary course asset sales or other dispositions | 100% | |
Mandatory prepayments, percentage of net cash proceeds of debt incurrence | 100% | |
Line of credit | Second A&R Credit Agreement | ||
Debt Instrument [Line Items] | ||
Interest rate | 7.61% | |
Mandatory prepayments, percentage of annual excess cash flow | 50% | |
Line of credit | Second A&R Credit Agreement | Minimum | ||
Debt Instrument [Line Items] | ||
Commitment fee | 0.20% | |
Line of credit | Second A&R Credit Agreement | Maximum | ||
Debt Instrument [Line Items] | ||
Commitment fee | 0.40% | |
Line of credit | Second A&R Credit Agreement | Federal Funds Rate | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate basis | 0.50% | |
Line of credit | Second A&R Credit Agreement | SOFR | Interest Rate Option - Basis Spread One | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate basis | 1% | |
Line of credit | Second A&R Credit Agreement | SOFR | Interest Rate Option - Basis Spread One | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate basis | 0.25% | |
Line of credit | Second A&R Credit Agreement | SOFR | Interest Rate Option - Basis Spread One | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate basis | 1.50% | |
Senior Revolver | Line of credit | Second A&R Credit Agreement | ||
Debt Instrument [Line Items] | ||
Credit agreement, maximum borrowing capacity | $ 600,000,000 | |
Debt issuance costs incurred | 7,200,000 | |
Debt issuance costs, capitalized | 6,400,000 | |
Existing Senior Secured Term Loan A | Line of credit | Second A&R Credit Agreement | ||
Debt Instrument [Line Items] | ||
Credit agreement, maximum borrowing capacity | 691,300,000 | |
Incremental Senior Secured Term Loan A | Line of credit | Second A&R Credit Agreement | ||
Debt Instrument [Line Items] | ||
Credit agreement, maximum borrowing capacity | $ 540,000,000 | |
Debt maturity | 5 years | |
Term B Loan | Line of credit | Second A&R Credit Agreement | ||
Debt Instrument [Line Items] | ||
Credit agreement, maximum borrowing capacity | $ 500,000,000 | |
Debt maturity | 7 years | |
Interest rate | 8.36% | |
Term B Loan | Line of credit | Second A&R Credit Agreement | SOFR | Interest Rate Option - Basis Spread One | ||
Debt Instrument [Line Items] | ||
Variable rate basis, minimum (not less than) | 0.50% | |
Term B Loan | Line of credit | Second A&R Credit Agreement | SOFR | Interest Rate Option - Basis Spread Two | ||
Debt Instrument [Line Items] | ||
Variable rate basis, minimum (not less than) | 0.50% | |
Term B Loan | Line of credit | Second A&R Credit Agreement | SOFR | Interest Rate Option - Basis Spread Two | Minimum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate basis | 1.25% | |
Term B Loan | Line of credit | Second A&R Credit Agreement | SOFR | Interest Rate Option - Basis Spread Two | Maximum | ||
Debt Instrument [Line Items] | ||
Basis spread on variable rate basis | 2.50% | |
Term A Loans | Line of credit | Second A&R Credit Agreement | SOFR | Interest Rate Option - Basis Spread One | ||
Debt Instrument [Line Items] | ||
Variable rate basis, minimum (not less than) | 0% | |
Term A Loans | Line of credit | Second A&R Credit Agreement | SOFR | Interest Rate Option - Basis Spread Two | ||
Debt Instrument [Line Items] | ||
Variable rate basis, minimum (not less than) | 0% |
Debt - Schedule of Maturities o
Debt - Schedule of Maturities of Long-term Debt (Details) $ in Millions | Dec. 31, 2023 USD ($) |
Debt Disclosure [Abstract] | |
2024 | $ 67 |
2025 | 67 |
2026 | 618.3 |
2027 | 430.3 |
2028 | 5 |
Thereafter | 468.7 |
Total | $ 1,656.3 |
Derivative Financial Instrume_3
Derivative Financial Instruments - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Derivative [Line Items] | ||
Accumulated gain (loss), net of tax, recognized in other comprehensive loss | $ 7.5 | $ 9.9 |
Designated as Hedging Instrument | Cash Flow Hedging | Foreign Currency Forward Contracts | ||
Derivative [Line Items] | ||
Gain reported in accumulated other comprehensive income | 0.5 | |
Gain to be reclassified within next 12 months | 0.5 | |
Derivatives, net gain (loss) reclassified into cost of services | 1.7 | (1.4) |
Notional amount | 128.6 | 126.4 |
Designated as Hedging Instrument | Cash Flow Hedging | Interest rate swaps | ||
Derivative [Line Items] | ||
Gain reported in accumulated other comprehensive income | 9.6 | |
Gain to be reclassified within next 12 months | 8.7 | |
Derivatives, net gain (loss) reclassified into cost of services | 10.1 | (0.2) |
Notional amount | $ 500 | $ 500 |
Derivative Financial Instrume_4
Derivative Financial Instruments- Schedule Of Derivative Instruments as Hedged on Consolidated Balance Sheets (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Derivative [Line Items] | ||
Derivative assets | $ 9.2 | $ 8.8 |
Foreign currency forward contracts | Cash Flow Hedging | Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Derivative assets | 0.5 | 0.1 |
Derivative liability | 0 | 0.5 |
Derivative, fair value, net | 0.5 | 0.6 |
Interest rate swaps | Cash Flow Hedging | Designated as Hedging Instrument | ||
Derivative [Line Items] | ||
Derivative assets | 8.7 | 8.7 |
Derivative asset, noncurrent | 0.9 | 5 |
Derivative, fair value, net | $ 9.6 | $ 13.7 |
Stockholders' Equity - Narrativ
Stockholders' Equity - Narrative (Details) | 12 Months Ended | |||||||||
Jan. 19, 2021 | Feb. 16, 2016 USD ($) $ / shares shares | Dec. 31, 2023 USD ($) vote $ / shares shares | Dec. 31, 2022 USD ($) $ / shares shares | Jan. 09, 2022 USD ($) | Dec. 31, 2021 shares | Oct. 22, 2021 USD ($) | Dec. 31, 2020 shares | Jan. 23, 2018 $ / shares shares | Nov. 13, 2013 USD ($) | |
Class of Stock [Line Items] | ||||||||||
Preferred stock, shares authorized (in shares) | 5,000,000 | 5,000,000 | ||||||||
Preferred stock, par or stated value per share (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | ||||||||
Common stock, par value (in dollars per share) | $ / shares | $ 0.01 | $ 0.01 | ||||||||
Common stock, vote per share | vote | 1 | |||||||||
Dividends declared or paid on common stock | $ | $ 0 | $ 0 | ||||||||
Stock repurchase program, authorized amount | $ | $ 500,000,000 | $ 200,000,000 | $ 50,000,000 | |||||||
Stock repurchased during period, shares (in shares) | 0 | 2,080,518 | ||||||||
Treasury stock, shares retired (in shares) | 0 | 0 | ||||||||
Treasury stock, shares (in shares) | 25,234,975 | 23,352,240 | ||||||||
Restricted Stock Awards and Restricted Stock Units | ||||||||||
Class of Stock [Line Items] | ||||||||||
Shares paid for tax withholding for share-based compensation (in shares) | 1,878,617 | 1,174,754 | ||||||||
Common Stock Repurchase Programs | ||||||||||
Class of Stock [Line Items] | ||||||||||
Treasury stock, shares (in shares) | 10,031,168 | 10,031,168 | ||||||||
Redeemable Convertible Preferred Stock | ||||||||||
Class of Stock [Line Items] | ||||||||||
Temporary equity, shares outstanding (in shares) | 0 | 0 | 0 | 288,497 | ||||||
TCP-ASC ACHI Series LLLP and Intermountain | Common Stock | ||||||||||
Class of Stock [Line Items] | ||||||||||
Warrants, shares outstanding (in shares) | 42,000,000 | 42,000,000 | ||||||||
TCP-ASC ACHI Series LLLP | ||||||||||
Class of Stock [Line Items] | ||||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 3.50 | |||||||||
TCP-ASC ACHI Series LLLP | Redeemable Convertible Preferred Stock | ||||||||||
Class of Stock [Line Items] | ||||||||||
Preferred stock, shares issued (in shares) | 200,000 | |||||||||
Preferred stock, dividend rate | 8% | 8% | ||||||||
Preferred stock, par value (in dollars per share) | $ / shares | $ 0.01 | |||||||||
Preferred stock, issued, value | $ | $ 200,000,000 | |||||||||
Long-term purchase commitment, period | 10 years | |||||||||
TCP-ASC ACHI Series LLLP | Redeemable Convertible Preferred Stock | Investor | ||||||||||
Class of Stock [Line Items] | ||||||||||
Preferred stock, dividend rate | 8% | |||||||||
TCP-ASC ACHI Series LLLP | Common Stock | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of securities called by warrants (in shares) (up to) | 60,000,000 | |||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 3.50 | |||||||||
Long-term purchase commitment, period | 10 years | |||||||||
Intermountain | Common Stock | ||||||||||
Class of Stock [Line Items] | ||||||||||
Number of securities called by warrants (in shares) (up to) | 1,500,000 | |||||||||
Warrant exercise price (in dollars per share) | $ / shares | $ 6 |
Share-Based Compensation - Narr
Share-Based Compensation - Narrative (Details) $ in Millions | 1 Months Ended | 12 Months Ended | |||||
Jun. 21, 2022 shares | May 31, 2023 shares | May 31, 2021 shares | Dec. 31, 2016 shares | Dec. 31, 2023 USD ($) plan shares | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of stock incentive plans | plan | 3 | ||||||
Maximum number of shares issuable under plan (in shares) (up to) | 59,974,756 | ||||||
Income tax benefit, vesting and exercises of equity awards | $ | $ 0.2 | $ 9.8 | $ 12.7 | ||||
Total intrinsic value of options exercised | $ | 5 | 26.5 | 38.2 | ||||
Total fair value of options vested | $ | $ 0.2 | $ 0.1 | $ 1.4 | ||||
Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 1 year | ||||||
Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award vesting period | 4 years | ||||||
Employee Stock Option | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Award expiration period | 10 years | ||||||
Restricted Stock Units (RSUs) | Cloudmed | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Replacement awards issued to Cloudmed equity award holders, shares (in shares) | 1,536,220 | ||||||
Restricted Stock Units (RSUs) And Performance Shares | Cloudmed | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Replacement awards issued to Cloudmed equity award holders, shares (in shares) | 3,173,184 | ||||||
Performance-Based Restricted Stock Units (PBRSUs) | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Maximum number of shares that could vest (in shares) | 12,257,642 | ||||||
Performance-Based Restricted Stock Units (PBRSUs) | Minimum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares vesting if price targets met, potential percentage of the number originally granted | 0% | ||||||
Performance-Based Restricted Stock Units (PBRSUs) | Maximum | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of shares vesting if price targets met, potential percentage of the number originally granted | 200% | ||||||
Former Class P Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of units converted in Transaction Agreement (in shares) | 97,875 | ||||||
Management Units | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Nonvested award, cost not yet recognized, period for recognition | 4 years | ||||||
Number of units converted in Transaction Agreement (in shares) | 514,986 | ||||||
Amended and Restated 2010 Stock Incentive Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Number of additional shares authorized (in shares) | 4,000,000 | 9,600,000 | 17,000,000 | ||||
Stock Incentive Plan 2010 | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Available for future grant (in shares) | 7,456,142 | ||||||
Inducement Plan | |||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||
Common stock, granted (in shares) | 6,225,000 | ||||||
Available for future grant (in shares) | 519,830 |
Share-Based Compensation - Assu
Share-Based Compensation - Assumptions (Details) | 12 Months Ended | |
Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected dividend yield | 0% | 0% |
Risk-free interest rate, minimum | 1.40% | 0.40% |
Risk-free interest rate, maximum | 3.30% | 1% |
Expected volatility, minimum | 43% | |
Expected volatility, maximum | 50% | |
Expected volatility | 43% | |
Expected term (in years) | 5 years 6 months | |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (in years) | 4 years | |
Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expected term (in years) | 5 years 6 months |
Share-Based Compensation - Opti
Share-Based Compensation - Options Granted (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Payment Arrangement [Abstract] | |||
Granted (in shares) | 0 | 24,344 | 6,424 |
Weighted-average grant date fair value per share (in dollars per share) | $ 9.55 | $ 9.34 |
Share-Based Compensation - Comp
Share-Based Compensation - Compensation Expense Allocation (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total share-based compensation expense | $ 71.5 | $ 64.9 | $ 76.6 |
Share-Based Payment Arrangement, Expense, Tax Benefit | 15.3 | 11.8 | 14.5 |
Share-based compensation expense capitalized to deferred contract costs | 1.4 | 0.2 | 0.7 |
CoyCo 2 | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Share-based compensation expense capitalized to deferred contract costs | 7.3 | 5.1 | |
Cost of services | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total share-based compensation expense | 43.4 | 28.8 | 44.2 |
Selling, general and administrative | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total share-based compensation expense | 28.1 | 36 | 32.4 |
Other | |||
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items] | |||
Total share-based compensation expense | $ 0 | $ 0.1 | $ 0 |
Share-Based Compensation - Stoc
Share-Based Compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | |
Shares | ||||
Outstanding at beginning of period (in shares) | 3,104,413 | 4,386,205 | 6,220,971 | |
Granted (in shares) | 0 | 24,344 | 6,424 | |
Exercised (in shares) | (411,346) | (1,285,228) | (1,819,039) | |
Canceled/forfeited (in shares) | (45,865) | (13,408) | (15,151) | |
Expired (in shares) | 0 | (7,500) | (7,000) | |
Outstanding at end of period (in shares) | 2,647,202 | 3,104,413 | 4,386,205 | 6,220,971 |
Outstanding, vested and exercisable (in shares) | 2,647,202 | 3,080,069 | 4,365,759 | |
Weighted- Average Exercise Price | ||||
Outstanding at beginning of period (in dollars per share) | $ 3.38 | $ 3.37 | $ 3.68 | |
Granted (in dollars per share) | 0 | 22.19 | 23.33 | |
Exercised (in dollars per share) | 3.26 | 3.67 | 4.39 | |
Canceled/forfeited (in dollars per share) | 2.59 | 4.59 | 5.98 | |
Expired (in dollars per share) | 0 | 8.71 | 27.08 | |
Outstanding at end of period (in dollars per share) | 3.41 | 3.38 | 3.37 | $ 3.68 |
Outstanding, vested and exercisable (in dollars per share) | $ 3.41 | $ 3.23 | $ 3.33 | |
Weighted- Average Remaining Contractual Term (in years) | ||||
Outstanding at end of period | 3 years 1 month 6 days | 4 years | 4 years 10 months 24 days | 5 years 8 months 12 days |
Outstanding, vested and exercisable | 3 years 1 month 6 days | 4 years | 4 years 10 months 24 days | |
Aggregate Intrinsic Value (in millions) | ||||
Outstanding at end of period | $ 19.4 | $ 23.9 | $ 97 | $ 126.5 |
Outstanding, vested and exercisable | $ 19.4 | $ 23.9 | $ 96.7 |
Share-Based Compensation - Rest
Share-Based Compensation - Restricted Stock Unit and Performance-Based Restricted Stock Unit Activity (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Restricted Stock Units (RSUs) | |||
RSUs | |||
Outstanding and unvested at beginning of period (in shares) | 3,232,002 | 2,218,651 | 2,108,447 |
Granted (in shares) | 3,259,227 | 2,306,897 | 2,251,167 |
Performance factor adjustment (in shares) | 0 | 0 | 0 |
Vested (in shares) | (2,788,125) | (1,029,491) | (1,739,847) |
Forfeited (in shares) | (372,868) | (264,055) | (401,116) |
Outstanding and unvested at end of period (in shares) | 3,330,236 | 3,232,002 | 2,218,651 |
Weighted- Average Grant Date Fair Value | |||
Outstanding and unvested at beginning of period (in dollars per share) | $ 19.07 | $ 16.28 | $ 9.87 |
Granted (in dollars per share) | 15.12 | 20.56 | 24.35 |
Performance factor adjustment (in dollars per share) | 0 | 0 | 0 |
Vested (in dollars per share) | 16.30 | 16.61 | 19.14 |
Forfeited (in dollars per share) | 17.90 | 18.22 | 15.48 |
Outstanding and unvested at end of period (in dollars per share) | $ 17.66 | $ 19.07 | $ 16.28 |
Shares surrendered for taxes for the year ended (in shares) | 974,959 | 369,900 | 571,182 |
Cost of shares surrendered for taxes for the year ended | $ 13 | $ 7.4 | $ 13.5 |
Performance-Based Restricted Stock Units (PBRSUs) | |||
RSUs | |||
Outstanding and unvested at beginning of period (in shares) | 6,876,797 | 3,203,013 | 2,917,071 |
Granted (in shares) | 1,526,096 | 5,230,483 | 1,071,431 |
Performance factor adjustment (in shares) | 792,189 | 876,109 | 101,937 |
Vested (in shares) | (2,286,886) | (1,925,203) | (586,071) |
Forfeited (in shares) | (779,375) | (507,605) | (301,355) |
Outstanding and unvested at end of period (in shares) | 6,128,821 | 6,876,797 | 3,203,013 |
Weighted- Average Grant Date Fair Value | |||
Outstanding and unvested at beginning of period (in dollars per share) | $ 19.48 | $ 16.45 | $ 11.35 |
Granted (in dollars per share) | 15.59 | 19.83 | 25.36 |
Performance factor adjustment (in dollars per share) | 15.95 | 10.46 | 9.81 |
Vested (in dollars per share) | 15.95 | 11.05 | 7.67 |
Forfeited (in dollars per share) | 19.56 | 20.38 | 13.55 |
Outstanding and unvested at end of period (in dollars per share) | $ 19.36 | $ 19.48 | $ 16.45 |
Shares surrendered for taxes for the year ended (in shares) | 903,658 | 804,854 | 225,726 |
Cost of shares surrendered for taxes for the year ended | $ 13.1 | $ 20.2 | $ 5.6 |
Other Expenses - Other Costs (D
Other Expenses - Other Costs (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Other Income and Expenses [Abstract] | |||
Business acquisition costs | $ 8.7 | $ 80.5 | $ 13.7 |
Integration costs | 35.7 | 40.2 | 2.6 |
Technology transformation | 19.2 | 1.7 | 0 |
Strategic initiatives | 24 | 22.7 | 11.3 |
Global business services center expansion project in the Philippines | 0 | 26.7 | 1.8 |
Customer employee transition and restructuring expenses | 0 | 0 | 4.5 |
Facility-related charges | 25.4 | 7.9 | 3.4 |
Other | 3.6 | 10.1 | 18.2 |
Total other expenses | $ 116.6 | 189.8 | 55.5 |
Number of years since new country entry | 15 years | ||
Litigation expenses | $ 4.3 | 5.7 | |
COVID-19 related costs, included in Other | $ 2.5 | $ 11.3 |
Income Taxes - Schedule of Dome
Income Taxes - Schedule of Domestic and Foreign Components of Income (Loss) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Domestic | $ (6.2) | $ (86.8) | $ 100.6 |
Foreign | 27.2 | 20 | 16.7 |
Income (loss) before income tax provision (benefit) | $ 21 | $ (66.8) | $ 117.3 |
Income Taxes - Schedule of Curr
Income Taxes - Schedule of Current and Deferred Income Tax Expense (Benefit) (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Current | |||
U.S. Federal | $ 16 | $ 0.9 | $ (0.1) |
State & Local | 11.8 | 3.8 | 3.5 |
Foreign | 3.9 | 3.2 | 3 |
Current Income Tax Expense (Benefit) | 31.7 | 7.9 | 6.4 |
Deferred | |||
U.S. Federal | (14.2) | (11.6) | 22 |
State & Local | (3.6) | (4.9) | 0 |
Foreign | 3.8 | 5.1 | 1.6 |
Deferred Income Tax Expense (Benefit) | (14) | (11.4) | 23.6 |
Total | |||
U.S. Federal | 1.8 | (10.7) | 21.9 |
State & Local | 8.2 | (1.1) | 3.5 |
Foreign | 7.7 | 8.3 | 4.6 |
Total Current and Deferred Income Tax Expense (Benefit) | $ 17.7 | $ (3.5) | $ 30 |
Income Taxes - Schedule of Effe
Income Taxes - Schedule of Effective Income Tax Rate Reconciliation (Details) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Federal statutory tax rate | 21% | 21% | 21% |
Change in income tax rate resulting from: | |||
State and local income taxes, net of federal tax benefits | 31% | 1% | 2% |
Tax on foreign income | 9% | (15.00%) | 3% |
Share-based compensation | 4% | 18% | (9.00%) |
Non-deductible expenses | 15% | (15.00%) | 4% |
Other | 4% | (5.00%) | 5% |
Effective tax rate | 84% | 5% | 26% |
Income Taxes - Schedule of Net
Income Taxes - Schedule of Net Deferred Tax (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred tax assets and liabilities: | ||
Net operating loss carryforwards | $ 23.7 | $ 49.8 |
Share-based compensation | 18.2 | 16.6 |
Accrued bonus | 15.7 | 13.7 |
Deferred revenue | 5.3 | 6.7 |
Alternative minimum tax | 5.6 | 6.2 |
Interest expense limitation | 18.2 | 11.1 |
Operating lease liabilities | 23.5 | 29.1 |
Property, equipment, and software | 7.3 | 1 |
Other | 20.4 | 13.1 |
Total deferred tax assets | 137.9 | 147.3 |
Less valuation allowances | (7.6) | (7.1) |
Net deferred tax assets | 130.3 | 140.2 |
Intangible assets | (258.9) | (292.4) |
Deferred contract costs | (9.3) | (8) |
Foreign withholding tax | (13.9) | (10.2) |
Operating lease right-of-use assets | (13.9) | (20) |
Total deferred tax liabilities | (296) | (330.6) |
Net deferred tax | $ (165.7) | $ (190.4) |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Examination [Line Items] | |||
Operating loss carryforwards | $ 149,900,000 | ||
Valuation allowance | 7,600,000 | $ 7,100,000 | |
Current tax provision | 31,700,000 | 7,900,000 | $ 6,400,000 |
Undistributed foreign earnings | 5,700,000 | ||
Unrecognized tax benefits | $ 0 | 0 | 0 |
Statute of limitations minimum | 3 years | ||
Statute of limitations maximum | 6 years | ||
SCI Acquisition | Deferred Tax Assets, Tax Credit Carryforwards, Research and Development | |||
Income Tax Examination [Line Items] | |||
Valuation allowance | $ 3,300,000 | ||
SCI Acquisition | Deferred Tax Assets, Tax Credit Carryforwards, Capital Loss | |||
Income Tax Examination [Line Items] | |||
Valuation allowance | 2,200,000 | ||
U.S. Federal | |||
Income Tax Examination [Line Items] | |||
Operating loss carryforwards | 71,900,000 | ||
State | |||
Income Tax Examination [Line Items] | |||
Operating loss carryforwards | 163,300,000 | ||
Valuation allowance | 7,600,000 | 7,100,000 | |
India | |||
Income Tax Examination [Line Items] | |||
Current tax provision | 3,900,000 | 3,200,000 | 3,000,000 |
Benefit from tax holiday | $ 4,400,000 | $ 4,900,000 | $ 4,700,000 |
8.00% Series A Convertible Pr_3
8.00% Series A Convertible Preferred Stock - Narrative (Details) - USD ($) | 1 Months Ended | 12 Months Ended | |||||
Jan. 19, 2021 | Jan. 15, 2021 | Feb. 16, 2016 | Jan. 31, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Temporary Equity [Line Items] | |||||||
Cash paid, stock conversion | $ 0 | $ 0 | $ 105,000,000 | ||||
Dividends | $ 0 | $ 0 | $ 592,300,000 | ||||
Dividends paid in cash | $ 940 | ||||||
TCP-ASC ACHI Series LLLP | |||||||
Temporary Equity [Line Items] | |||||||
Warrant exercise price (in dollars per share) | $ 3.50 | ||||||
Cash paid, stock conversion | $ 105,000,000 | ||||||
Dividends | $ 592,300,000 | ||||||
Redeemable Convertible Preferred Stock | |||||||
Temporary Equity [Line Items] | |||||||
Number of shares converted (in shares) | 294,266 | ||||||
Liquidation preference per share (in dollars per share) | $ 1,000 | ||||||
Accrued dividends | $ 5,800,000 | ||||||
Dividends paid in additional shares of Preferred Stock | $ 5,800,000 | ||||||
Redeemable Convertible Preferred Stock | TCP-ASC ACHI Series LLLP | |||||||
Temporary Equity [Line Items] | |||||||
Preferred stock, dividend rate | 8% | 8% | |||||
Preferred stock, shares issued (in shares) | 200,000 | ||||||
Preferred stock, issued, value | $ 200,000,000 | ||||||
Long-term purchase commitment, period | 10 years | ||||||
Number of shares converted (in shares) | 294,266 | ||||||
Common Stock | TCP-ASC ACHI Series LLLP | |||||||
Temporary Equity [Line Items] | |||||||
Long-term purchase commitment, period | 10 years | ||||||
Number of securities called by warrants (in shares) (up to) | 60,000,000 | ||||||
Warrant exercise price (in dollars per share) | $ 3.50 | ||||||
Number of shares issued in stock conversion (in shares) | 117,706,400 | ||||||
Additional shares issued (in shares) | 21,582,800 |
8.00% Series A Convertible Pr_4
8.00% Series A Convertible Preferred Stock - Schedule of Preferred Stock Activity (Details) - Redeemable Convertible Preferred Stock $ in Millions | 12 Months Ended |
Dec. 31, 2021 USD ($) shares | |
Shares Issued and Outstanding | |
Beginning Balance (in shares) | shares | 288,497 |
Dividends paid/accrued dividends (in shares) | shares | 5,769 |
Conversion of Preferred Stock (in shares) | shares | (294,266) |
Ending Balance (in shares) | shares | 0 |
Carrying Value | |
Beginning Balance | $ | $ 251.5 |
Dividends paid/accrued dividends | $ | 0 |
Conversion of Preferred Stock | $ | (251.5) |
Ending Balance | $ | $ 0 |
Earnings (Loss) Per Share - Com
Earnings (Loss) Per Share - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions | 12 Months Ended | |||
Jan. 19, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Basic EPS: | ||||
Net income (loss) | $ 3.3 | $ (63.3) | $ 87.3 | |
Less dividends on preferred shares | 0 | 0 | (592.3) | |
Net income (loss) available/allocated to common shareholders - basic | 3.3 | (63.3) | (505) | |
Diluted EPS: | ||||
Net income (loss) available/allocated to common shareholders - diluted | $ 3.3 | $ (63.3) | $ (505) | |
Basic weighted-average common shares (in shares) | 418,587,390 | 352,337,767 | 266,183,565 | |
Add: Effect of dilutive equity awards (in shares) | 3,916,803 | 0 | 0 | |
Add: Effect of dilutive warrants (in shares) | 31,590,181 | 0 | 0 | |
Diluted weighted average common shares (in shares) | 454,094,374 | 352,337,767 | 266,183,565 | |
Net income (loss) per common share (basic) (in dollars per share) | $ 0.01 | $ (0.18) | $ (1.90) | |
Net income (loss) per common share (diluted) (in dollars per share) | $ 0.01 | $ (0.18) | $ (1.90) | |
TCP-ASC ACHI Series LLLP | ||||
Basic EPS: | ||||
Less dividends on preferred shares | $ (592.3) | |||
TCP-ASC ACHI Series LLLP | Redeemable Convertible Preferred Stock | ||||
Diluted EPS: | ||||
Preferred stock, dividend rate, percentage | 8% | 8% |
Earnings (Loss) Per Share - Nar
Earnings (Loss) Per Share - Narrative (Details) - shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 634,540 | 20,090,009 | 12,875,730 |
Warrant | |||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | |||
Antidilutive securities excluded from computation of earnings per share (in shares) | 42,000,000 | 42,000,000 |
Commitments and Contingencies -
Commitments and Contingencies - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | |||
Jan. 30, 2024 | Sep. 27, 2023 | Dec. 31, 2023 | Dec. 31, 2022 | |
Loss Contingencies [Line Items] | ||||
Litigation expenses | $ 4.3 | $ 5.7 | ||
TCP-ASC Recapitalization Litigation | Pending Litigation | ||||
Loss Contingencies [Line Items] | ||||
Settlement amount contributed | $ 39.8 | |||
TCP-ASC Recapitalization Litigation | Pending Litigation | Cloudmed | ||||
Loss Contingencies [Line Items] | ||||
Settlement amount contributed | 2.1 | |||
TCP-ASC Recapitalization Litigation | Pending Litigation | Individual Defendants | ||||
Loss Contingencies [Line Items] | ||||
Settlement amount contributed | $ 3.6 | |||
TCP-ASC Recapitalization Litigation | Pending Litigation | TCP-ASC, Acension, And Towebrook | Subsequent event | ||||
Loss Contingencies [Line Items] | ||||
Litigation expenses | $ 16.4 |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) - $ / shares | 12 Months Ended | ||||
May 28, 2021 | Jan. 19, 2021 | Dec. 31, 2023 | Dec. 31, 2021 | Feb. 16, 2016 | |
Common Stock | |||||
Related Party Transaction [Line Items] | |||||
Exercise of warrants pursuant to cashless provisions (in shares) | 16,750,000 | ||||
TCP-ASC ACHI Series LLLP | |||||
Related Party Transaction [Line Items] | |||||
Warrant exercise price (in dollars per share) | $ 3.50 | ||||
TCP-ASC ACHI Series LLLP | Related party | |||||
Related Party Transaction [Line Items] | |||||
Warrant exercise price (in dollars per share) | $ 3.50 | ||||
TCP-ASC ACHI Series LLLP | Related party | Minimum | |||||
Related Party Transaction [Line Items] | |||||
Warrant market value price (in dollars per share) | 24.54 | ||||
TCP-ASC ACHI Series LLLP | Related party | Maximum | |||||
Related Party Transaction [Line Items] | |||||
Warrant market value price (in dollars per share) | $ 24.64 | ||||
TCP-ASC ACHI Series LLLP | Related party | Common Stock | |||||
Related Party Transaction [Line Items] | |||||
Exercise of warrants pursuant to cashless provisions (in shares) | 16,750,000 | ||||
Number of securities called by warrants (in shares) | 19,535,145 | ||||
Redeemable Convertible Preferred Stock | TCP-ASC ACHI Series LLLP | |||||
Related Party Transaction [Line Items] | |||||
Preferred stock, dividend rate, percentage | 8% | 8% |
Related Party Transactions - Su
Related Party Transactions - Summary Amounts Included in Balance Sheet (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Related Party Transaction [Line Items] | ||
Collections payable to customers, current | $ 12.8 | $ 29.1 |
Deferred revenue (contract liabilities), current | 9.1 | 9.7 |
Deferred revenue (contract liabilities), non-current | 14.5 | 18.7 |
Total customer liabilities | 59.5 | 83.6 |
Related party | ||
Related Party Transaction [Line Items] | ||
Current portion of customer liabilities | 5.2 | 7.4 |
Non-current portion of customer liabilities | 11.8 | 13.7 |
Related party | Ascension | ||
Related Party Transaction [Line Items] | ||
Accrued service costs, current | 2.4 | 4.3 |
Collections payable to customers, current | 0.4 | 0.3 |
Refund liabilities, current | 0 | 0.7 |
Deferred revenue (contract liabilities), current | 2.4 | 2.1 |
Current portion of customer liabilities | 5.2 | 7.4 |
Deferred revenue (contract liabilities), non-current | 11.8 | 13.7 |
Non-current portion of customer liabilities | 11.8 | 13.7 |
Total customer liabilities | $ 17 | $ 21.1 |
Segments and Customer Concent_3
Segments and Customer Concentrations - Narrative (Details) - segment | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Segment Reporting Information [Line Items] | ||
Number of operating segments | 1 | |
Number of reportable segments | 1 | |
Customer Concentration Risk | Accounts Receivable | Ascension and its affiliates | ||
Segment Reporting Information [Line Items] | ||
Concentration percentage | 10% | 10% |
Segments and Customer Concent_4
Segments and Customer Concentrations - Concentration Risk by Customer (Details) - Sales Revenue - Customer Concentration Risk | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Ascension and its affiliates | |||
Concentration Risk [Line Items] | |||
Concentration percentage | 40% | 49% | 61% |
Intermountain Healthcare | |||
Concentration Risk [Line Items] | |||
Concentration percentage | 11% | 12% | 14% |
Retirement Plan - Narrative (De
Retirement Plan - Narrative (Details) - USD ($) $ in Millions | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Retirement Benefits [Abstract] | |||
Company contributions to the plan | $ 22.8 | $ 13.3 | $ 9.1 |
Supplemental Financial Inform_3
Supplemental Financial Information - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Prepaid expenses | $ 42.5 | $ 35.1 |
Acquisition and disposition contingent assets | 0 | 20 |
Notes receivable | 7.1 | 12 |
Derivative assets | 9.2 | 8.8 |
Healthcare rebates receivable | 8.6 | 5.9 |
Deferred contract costs | 6.5 | 5.1 |
Other current assets | 22 | 23.4 |
Total prepaid expenses and other current assets | $ 95.9 | $ 110.3 |
Supplemental Financial Inform_4
Supplemental Financial Information - Schedule of Accrued Compensation and Benefits (Details) - USD ($) $ in Millions | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract] | ||
Accrued expenses | $ 52.2 | $ 36.3 |
Notes payable | 5.8 | 15.5 |
Acquisition deferred payments | 0 | 12.5 |
Other current liabilities | 7.9 | 6.2 |
Total accrued expenses and other current liabilities | $ 65.9 | $ 70.5 |
Subsequent Events (Details)
Subsequent Events (Details) - Subsequent event $ in Millions | Jan. 17, 2024 USD ($) |
Senior Revolver | Senior Revolving Cred Facility | Line of credit | |
Subsequent Event [Line Items] | |
Credit agreement, maximum borrowing capacity | $ 80 |
Incremental Term B Loans | Credit Agreement | Line of credit | |
Subsequent Event [Line Items] | |
Principal amount | 575 |
Acclara | |
Subsequent Event [Line Items] | |
Cash consideration | $ 675 |
Percentage of voting interest acquired | 100% |