Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2020 | Oct. 28, 2020 | |
Document Information [Line Items] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Transition Report | false | |
Entity File Number | 1-7293 | |
Entity Registrant Name | TENET HEALTHCARE CORP | |
Entity Incorporation, State or Country Code | NV | |
Entity Tax Identification Number | 95-2557091 | |
Entity Address, Address Line One | 14201 Dallas Parkway | |
Entity Address, City or Town | Dallas | |
Entity Address, State or Province | TX | |
Entity Address, Postal Zip Code | 75254 | |
City Area Code | 469 | |
Local Phone Number | 893-2200 | |
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 | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 105,517,046 | |
Entity Central Index Key | 0000070318 | |
Current Fiscal Year End Date | --12-31 | |
Document Period End Date | Sep. 30, 2020 | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Amendment Flag | false | |
Common stock, | New York Stock Exchange | ||
Document Information [Line Items] | ||
Title of 12(b) Security | Common stock, | |
Trading Symbol | THC | |
Security Exchange Name | NYSE | |
6.875% Senior Notes due 2031 | New York Stock Exchange | ||
Document Information [Line Items] | ||
Title of 12(b) Security | 6.875% Senior Notes due 2031 | |
Trading Symbol | THC31 | |
Security Exchange Name | NYSE |
CONDENSED CONSOLIDATED BALANCE
CONDENSED CONSOLIDATED BALANCE SHEETS - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Current assets: | ||
Cash and cash equivalents | $ 3,300 | $ 262 |
Accounts receivable | 2,479 | 2,743 |
Inventories of supplies, at cost | 349 | 310 |
Income tax receivable | 2 | 10 |
Assets held for sale | 386 | 387 |
Other current assets | 1,292 | 1,369 |
Total current assets | 7,808 | 5,081 |
Investments and other assets | 2,445 | 2,369 |
Deferred income taxes | 436 | 183 |
Property and equipment, at cost, less accumulated depreciation and amortization ($5,906 at September 30, 2020 and $5,498 at December 31, 2019) | 6,618 | 6,878 |
Goodwill | 7,302 | 7,252 |
Other intangible assets, at cost, less accumulated amortization ($1,207 at September 30, 2020 and $1,092 at December 31, 2019) | 1,578 | 1,602 |
Total assets | 26,187 | 23,365 |
Current liabilities: | ||
Current portion of long-term debt | 155 | 171 |
Accounts payable | 1,025 | 1,204 |
Accrued compensation and benefits | 834 | 877 |
Professional and general liability reserves | 285 | 330 |
Accrued interest payable | 218 | 245 |
Liabilities held for sale | 91 | 44 |
Contract liabilities | 1,500 | 61 |
Other current liabilities | 1,735 | 1,273 |
Total current liabilities | 5,843 | 4,205 |
Long-term debt, net of current portion | 15,561 | 14,580 |
Professional and general liability reserves | 666 | 635 |
Defined benefit plan obligations | 525 | 560 |
Deferred income taxes | 27 | 27 |
Other long-term liabilities | 1,564 | 1,415 |
Total liabilities | 24,186 | 21,422 |
Commitments and contingencies | ||
Redeemable noncontrolling interests in equity of consolidated subsidiaries | 1,479 | 1,506 |
Shareholders’ equity: | ||
Common stock, $0.05 par value; authorized 262,500,000 shares; 153,745,411 shares issued at September 30, 2020 and 152,540,815 shares issued at December 31, 2019 | 7 | 7 |
Additional paid-in capital | 4,826 | 4,760 |
Accumulated other comprehensive loss | (251) | (257) |
Accumulated deficit | (2,542) | (2,513) |
Common stock in treasury, at cost, 48,337,999 shares at September 30, 2020 and 48,344,195 shares at December 31, 2019 | (2,414) | (2,414) |
Total shareholders’ deficit | (374) | (417) |
Noncontrolling interests | 896 | 854 |
Total equity | 522 | 437 |
Total liabilities and equity | $ 26,187 | $ 23,365 |
CONDENSED CONSOLIDATED BALANC_2
CONDENSED CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Property and equipment, accumulated depreciation and amortization | $ 5,906 | $ 5,498 |
Other intangible assets, accumulated amortization | $ 1,207 | $ 1,092 |
Common stock, par value (in dollars per share) | $ 0.05 | $ 0.05 |
Common stock, authorized shares (in shares) | 262,500,000 | 262,500,000 |
Common stock, shares issued (in shares) | 153,745,411 | 152,540,815 |
Common stock in treasury (in shares) | 48,337,999 | 48,344,195 |
CONDENSED CONSOLIDATED STATEMEN
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Statement [Abstract] | ||||
Net operating revenues | $ 4,557 | $ 4,568 | $ 12,725 | $ 13,673 |
Grant income | (66) | 0 | 445 | 0 |
Equity in earnings of unconsolidated affiliates | 44 | 38 | 103 | 114 |
Operating expenses: | ||||
Salaries, wages and benefits | 2,142 | 2,172 | 6,193 | 6,468 |
Supplies | 784 | 760 | 2,158 | 2,254 |
Other operating expenses, net | 1,058 | 1,036 | 3,054 | 3,136 |
Depreciation and amortization | 215 | 205 | 624 | 627 |
Impairment and restructuring charges, and acquisition-related costs | 57 | 46 | 166 | 101 |
Litigation and investigation costs | 9 | 84 | 13 | 115 |
Net losses (gains) on sales, consolidation and deconsolidation of facilities | (1) | 1 | (4) | 3 |
Operating income | 271 | 302 | 1,069 | 1,083 |
Interest expense | (263) | (244) | (761) | (742) |
Other non-operating income (expense), net | 0 | (3) | 3 | (3) |
Loss from early extinguishment of debt | (312) | (180) | (316) | (227) |
Income (loss) from continuing operations, before income taxes | (304) | (125) | (5) | 111 |
Income tax benefit (expense) | 197 | (22) | 227 | (75) |
Income (loss) from continuing operations, before discontinued operations | (107) | (147) | 222 | 36 |
Discontinued operations: | ||||
Income from operations | 1 | 1 | 0 | 13 |
Income tax expense | 0 | 0 | 0 | (2) |
Income from discontinued operations | 1 | 1 | 0 | 11 |
Net income (loss) | (106) | (146) | 222 | 47 |
Less: Net income available to noncontrolling interests | 90 | 80 | 237 | 259 |
Net loss attributable to Tenet Healthcare Corporation common shareholders | (196) | (226) | (15) | (212) |
Amounts available (attributable) to Tenet Healthcare Corporation common shareholders | ||||
Loss from continuing operations, net of tax | (197) | (227) | (15) | (223) |
Income from discontinued operations, net of tax | 1 | 1 | 0 | 11 |
Net loss attributable to Tenet Healthcare Corporation common shareholders | $ (196) | $ (226) | $ (15) | $ (212) |
Basic | ||||
Continuing operations (in dollars per share) | $ (1.87) | $ (2.19) | $ (0.14) | $ (2.16) |
Discontinued operations (in dollars per share) | 0.01 | 0.01 | 0 | 0.11 |
Total earnings (loss) per share, Basic (in dollars per share) | (1.86) | (2.18) | (0.14) | (2.05) |
Diluted | ||||
Continuing operations (in dollars per share) | (1.87) | (2.19) | (0.14) | (2.16) |
Discontinued operations (in dollars per share) | 0.01 | 0.01 | 0 | 0.11 |
Total earnings (loss) per share, Diluted (in dollars per share) | $ (1.86) | $ (2.18) | $ (0.14) | $ (2.05) |
Weighted average shares and dilutive securities outstanding (in thousands): | ||||
Basic (in shares) | 105,263 | 103,558 | 104,803 | 103,181 |
Diluted (in shares) | 105,263 | 103,558 | 104,803 | 103,181 |
CONDENSED CONSOLIDATED STATEM_2
CONDENSED CONSOLIDATED STATEMENTS OF OTHER COMPREHENSIVE INCOME - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ (106) | $ (146) | $ 222 | $ 47 |
Other comprehensive income: | ||||
Amortization of net actuarial loss included in other non-operating expense, net | 2 | 3 | 6 | 9 |
Unrealized gains on debt securities held as available-for-sale | 0 | 0 | 1 | 0 |
Other comprehensive income before income taxes | 2 | 3 | 7 | 9 |
Income tax benefit (expense) related to items of other comprehensive income | 2 | 0 | (1) | (2) |
Total other comprehensive income, net of tax | 4 | 3 | 6 | 7 |
Comprehensive net income (loss) | (102) | (143) | 228 | 54 |
Less: Comprehensive income attributable to noncontrolling interests | 90 | 80 | 237 | 259 |
Comprehensive loss attributable to Tenet Healthcare Corporation common shareholders | $ (192) | $ (223) | $ (9) | $ (205) |
CONDENSED CONSOLIDATED STATEM_3
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Statement of Cash Flows [Abstract] | ||
Net income | $ 222 | $ 47 |
Adjustments to reconcile net income to net cash provided by operating activities: | ||
Depreciation and amortization | 624 | 627 |
Deferred income tax (benefit) expense | (246) | 65 |
Stock-based compensation expense | 38 | 34 |
Impairment and restructuring charges, and acquisition-related costs | 166 | 101 |
Litigation and investigation costs | 13 | 115 |
Net losses (gains) on sales, consolidation and deconsolidation of facilities | (4) | 3 |
Loss from early extinguishment of debt | 316 | 227 |
Equity in earnings of unconsolidated affiliates, net of distributions received | (11) | (6) |
Amortization of debt discount and debt issuance costs | 30 | 25 |
Pre-tax income from discontinued operations | 0 | (13) |
Other items, net | (4) | (14) |
Changes in cash from operating assets and liabilities: | ||
Accounts receivable | 280 | (174) |
Inventories and other current assets | 30 | (98) |
Income taxes | 9 | (4) |
Accounts payable, accrued expenses and other current liabilities | 1,546 | (67) |
Other long-term liabilities | 205 | (15) |
Payments for restructuring charges, acquisition-related costs, and litigation costs and settlements | (252) | (136) |
Net cash used in operating activities from discontinued operations, excluding income taxes | (1) | (4) |
Net cash provided by operating activities | 2,961 | 713 |
Cash flows from investing activities: | ||
Purchases of property and equipment — continuing operations | (374) | (492) |
Purchases of businesses or joint venture interests, net of cash acquired | (61) | (23) |
Proceeds from sales of facilities and other assets — continuing operations | 13 | 44 |
Proceeds from sales of facilities and other assets — discontinued operations | 0 | 17 |
Proceeds from sales of marketable securities, long-term investments and other assets | 44 | 52 |
Purchases of marketable securities and equity investments | (41) | (25) |
Other long-term assets | (4) | |
Other long-term assets | 1 | |
Other items, net | 17 | 0 |
Net cash used in investing activities | (406) | (426) |
Cash flows from financing activities: | ||
Repayments of borrowings under credit facility | (740) | (1,880) |
Proceeds from borrowings under credit facility | 740 | 2,155 |
Repayments of other borrowings | (3,244) | (6,084) |
Proceeds from other borrowings | 3,815 | 5,718 |
Debt issuance costs | (48) | (63) |
Distributions paid to noncontrolling interests | (184) | (223) |
Proceeds from sale of noncontrolling interests | 7 | 15 |
Purchases of noncontrolling interests | (34) | (8) |
Proceeds from exercise of stock options and employee stock purchase plan | 13 | 4 |
Other items, net | 158 | (18) |
Net cash provided by (used in) financing activities | 483 | (384) |
Net increase (decrease) in cash and cash equivalents | 3,038 | (97) |
Cash and cash equivalents at beginning of period | 262 | 411 |
Cash and cash equivalents at end of period | 3,300 | 314 |
Supplemental disclosures: | ||
Interest paid, net of capitalized interest | (757) | (705) |
Income tax payments, net | $ (10) | $ (18) |
BASIS OF PRESENTATION
BASIS OF PRESENTATION | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
BASIS OF PRESENTATION | BASIS OF PRESENTATION Description of Business and Basis of Presentation Tenet Healthcare Corporation (together with our subsidiaries, referred to herein as “Tenet,” “we” or “us”) is a diversified healthcare services company headquartered in Dallas, Texas. Through an expansive care network that includes USPI Holding Company, Inc. (“USPI”), at September 30, 2020 we operated 65 hospitals and approximately 520 other healthcare facilities, including surgical hospitals, ambulatory surgery centers, urgent care and imaging centers, and other care sites and clinics. We also operate Conifer Health Solutions, LLC through our Conifer Holdings, Inc. (“Conifer”) subsidiary, which provides revenue cycle management and value-based care services to hospitals, health systems, physician practices, employers and other clients. This quarterly report supplements our Annual Report on Form 10-K for the year ended December 31, 2019 (“Annual Report”). As permitted by the Securities and Exchange Commission for interim reporting, we have omitted certain notes and disclosures that substantially duplicate those in our Annual Report. For further information, refer to the audited Consolidated Financial Statements and notes included in our Annual Report. Unless otherwise indicated, all financial and statistical data included in these notes to our Condensed Consolidated Financial Statements relate to our continuing operations, with dollar amounts expressed in millions (except per-share amounts). Effective January 1, 2020, we adopted the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments—Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”) using the modified retrospective transition approach as of the period of adoption. Upon adoption of ASU 2016-13 Certain prior-year amounts have been reclassified to conform to the current year presentation. In the accompanying Condensed Consolidated Balance Sheets, contract liabilities, primarily related to Medicare advance payments we received, are now presented separately due to the fact that the balances increased substantially in 2020. In the accompanying Condensed Consolidated Statements of Operations, electronic health record incentives have been reclassified to other operating expenses, net, as they are no longer significant enough to present separately. In the accompanying Condensed Consolidated Statements of Cash Flows, purchases of marketable securities have been reclassified from other items, net within cash flows from investing activities to purchases of marketable securities and equity investments. Additionally, our financial statements and corresponding footnotes for prior periods have been recast to reflect retrospective application of the change in accounting principle discussed in the Professional and General Liability Reserves section of this note. Although the Condensed Consolidated Financial Statements and related notes within this document are unaudited, we believe all adjustments considered necessary for a fair presentation have been included and are of a normal recurring nature. In preparing our financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”), we are required to make estimates and assumptions that affect the amounts reported in our Condensed Consolidated Financial Statements and these accompanying notes. We regularly evaluate the accounting policies and estimates we use. In general, we base the estimates on historical experience and on assumptions that we believe to be reasonable given the particular circumstances in which we operate. Actual results may vary from those estimates. Financial and statistical information we report to other regulatory agencies may be prepared on a basis other than GAAP or using different assumptions or reporting periods and, therefore, may vary from amounts presented herein. Although we make every effort to ensure that the information we report to those agencies is accurate, complete and consistent with applicable reporting guidelines, we cannot be responsible for the accuracy of the information they make available to the public. Operating results for the three and nine-month periods ended September 30, 2020 are not necessarily indicative of the results that may be expected for the full year. Reasons for this include, but are not limited to: the impact of the COVID-19 pandemic on our operations, business, financial condition and cash flows; overall revenue and cost trends, particularly the timing and magnitude of price changes; fluctuations in contractual allowances and cost report settlements and valuation allowances; managed care contract negotiations, settlements or terminations and payer consolidations; trends in patient accounts receivable collectability and associated implicit price concessions; fluctuations in interest rates; levels of malpractice insurance expense and settlement trends; impairment of long-lived assets and goodwill; restructuring charges; losses, costs and insurance recoveries related to natural disasters and other weather-related occurrences; litigation and investigation costs; acquisitions and dispositions of facilities and other assets; gains (losses) on sales, consolidation and deconsolidation of facilities; income tax rates and deferred tax asset valuation allowance activity; changes in estimates of accruals for annual incentive compensation; the timing and amounts of stock option and restricted stock unit grants to employees and directors; gains (losses) from early extinguishment of debt; and changes in occupancy levels and patient volumes. Factors that affect service mix, revenue mix, patient volumes and, thereby, the results of operations at our hospitals and related healthcare facilities include, but are not limited to: changes in federal, state and local healthcare and business regulations, including mandated closures and other operating restrictions; the business environment, economic conditions and demographics of local communities in which we operate; the number of uninsured and underinsured individuals in local communities treated at our hospitals; disease hotspots and seasonal cycles of illness; climate and weather conditions; physician recruitment, satisfaction, retention and attrition; advances in technology and treatments that reduce length of stay; local healthcare competitors; utilization pressure by managed care organizations, as well as managed care contract negotiations or terminations; hospital performance data on quality measures and patient satisfaction, as well as standard charges for services; any unfavorable publicity about us, or our joint venture partners, that impacts our relationships with physicians and patients; and changing consumer behavior, including with respect to the timing of elective procedures. These considerations apply to year-to-year comparisons as well. Professional and General Liability Reserves We accrue for estimated professional and general liability claims when they are probable and can be reasonably estimated. The accrual, which includes an estimate for incurred but not reported claims, is updated each quarter based on a model of projected payments using case-specific facts and circumstances and our historical loss reporting, development and settlement patterns. To the extent that subsequent claims information varies from our estimates, the liability is adjusted in the period such information becomes available. Malpractice expense is presented within other operating expenses in the accompanying Condensed Consolidated Statements of Operations. In the three months ended March 31, 2020, we changed our method of accounting for our estimated professional and general liability claims. Under the new method of accounting, the liabilities are reported on an undiscounted basis whereas, previously, the liabilities were reported on a discounted basis. We believe that the undiscounted presentation is preferable because it simplifies the accounting for the liabilities, thereby increasing understandability of our financial results and financial condition, is consistent with the manner in which management evaluates our business, and results in an accounting method and financial statement presentation that is consistent with our key peers. Accordingly, our financial statements and corresponding footnotes for the respective prior periods have been recast to reflect retrospective application of the change in accounting principle. We recorded the cumulative effect for the change in accounting principle as an increase of $44 million to accumulated deficit as of January 1, 2017. This change increased our accumulated deficit by $46 million, $41 million and $63 million at December 31, 2019, September 30, 2019 and December 31, 2018, respectively. The following tables present the effects of the change in accounting principle to our financial statements: Condensed Consolidated Balance Sheet: As Reported Effect of Change in Accounting Principle As Adjusted At December 31, 2019: Deferred income taxes $ 169 $ 14 $ 183 Professional and general liability reserves $ 585 $ 50 $ 635 Other long-term liabilities $ 1,405 $ 10 $ 1,415 Accumulated deficit $ (2,467) $ (46) $ (2,513) Condensed Consolidated Statements of Operations (in millions, except for per-share amounts): Three Months Ended September 30, 2020 Nine Months Ended September 30, 2020 Prior to Change in Accounting Principle Effect of Change in Accounting Principle As Reported Prior to Change in Accounting Principle Effect of Change in Accounting Principle As Reported Salaries, wages and benefits $ 2,142 $ — $ 2,142 $ 6,200 $ (7) $ 6,193 Other operating expenses, net $ 1,058 $ — $ 1,058 $ 3,088 $ (34) $ 3,054 Operating income $ 271 $ — $ 271 $ 1,028 $ 41 $ 1,069 Income tax benefit $ 197 $ — $ 197 $ 237 $ (10) $ 227 Net income (loss) $ (106) $ — $ (106) $ 191 $ 31 $ 222 Net loss from continuing operations attributable to Tenet Healthcare Corporation common shareholders $ (197) $ — $ (197) $ (46) $ 31 $ (15) Loss per share attributable to Tenet Healthcare Corporation common shareholders from continuing operations: Basic $ (1.87) $ — $ (1.87) $ (0.44) $ 0.30 $ (0.14) Diluted $ (1.87) $ — $ (1.87) $ (0.44) $ 0.30 $ (0.14) Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 As Reported Effect of Change in Accounting Principle As Adjusted As Reported Effect of Change in Accounting Principle As Adjusted Salaries, wages and benefits $ 2,174 $ (2) $ 2,172 $ 6,475 $ (7) $ 6,468 Other operating expenses, net $ 1,042 $ (6) $ 1,036 $ 3,159 $ (23) $ 3,136 Operating income $ 294 $ 8 $ 302 $ 1,053 $ 30 $ 1,083 Income tax expense $ (20) $ (2) $ (22) $ (67) $ (8) $ (75) Net income (loss) $ (152) $ 6 $ (146) $ 25 $ 22 $ 47 Net loss from continuing operations attributable to Tenet Healthcare Corporation common shareholders $ (233) $ 6 $ (227) $ (245) $ 22 $ (223) Loss per share attributable to Tenet Healthcare Corporation common shareholders from continuing operations: Basic $ (2.25) $ 0.06 $ (2.19) $ (2.37) $ 0.21 $ (2.16) Diluted $ (2.25) $ 0.06 $ (2.19) $ (2.37) $ 0.21 $ (2.16) Condensed Consolidated Statements of Cash Flows: Prior to Change in Accounting Principle Effect of Change in Accounting Principle As Reported Nine Months Ended September 30, 2020: Net income $ 191 $ 31 $ 222 Deferred income tax benefit $ (256) $ 10 $ (246) Accounts payable, accrued expenses and other current liabilities $ 1,587 $ (41) $ 1,546 Net cash provided by operating activities $ 2,961 $ — $ 2,961 As Reported Effect of Change in Accounting Principle As Adjusted Nine Months Ended September 30, 2019: Net income $ 25 $ 22 $ 47 Deferred income tax expense $ 57 $ 8 $ 65 Accounts payable, accrued expenses and other current liabilities $ (37) $ (30) $ (67) Net cash provided by operating activities $ 713 $ — $ 713 Net Operating Revenues We recognize net operating revenues in the period in which we satisfy our performance obligations under contracts by transferring services to our customers. Net operating revenues are recognized in the amounts we expect to be entitled to, which are the transaction prices allocated for the distinct services. Our business consists of our Hospital Operations and other (“Hospital Operations”) segment, our Ambulatory Care segment and our Conifer segment. Net operating revenues for our Hospital Operations and Ambulatory Care segments primarily consist of net patient service revenues, principally for patients covered by Medicare, Medicaid, managed care and other health plans, as well as certain uninsured patients under our Compact with Uninsured Patients (“ Compact ”) and other uninsured discount and charity programs. Net operating revenues for our Conifer segment primarily consist of revenues from providing revenue cycle management services to healthcare systems, as well as individual hospitals, physician practices, self-insured organizations, health plans and other entities. Net Patient Service Revenues— We report net patient service revenues at the amounts that reflect the consideration we expect to be entitled to in exchange for providing patient care. These amounts are due from patients, third-party payers (including managed care payers and government programs) and others, and they include variable consideration for retroactive revenue adjustments due to settlement of audits, reviews and investigations. Generally, we bill our patients and third-party payers several days after the services are performed or shortly after discharge. Revenues are recognized as performance obligations are satisfied. Conifer Revenues— Our Conifer segment recognizes revenue from its contracts when Conifer’s performance obligations are satisfied, which is generally as services are rendered. Revenue is recognized in an amount that reflects the consideration to which Conifer expects to be entitled. Grant Income Through the Coronavirus Aid, Relief, and Economic Security Act (the “CARES Act”), which was signed into law on March 27, 2020, and the Paycheck Protection Program and Health Care Enhancement Act, which was signed into law on April 24, 2020, the federal government has authorized $175 billion in payments to be distributed through the Public Health and Social Services Emergency Fund (“Provider Relief Fund” or “PRF”). In the three and nine months ended September 30, 2020, we received cash payments of $178 million and $890 million, respectively, from the Provider Relief Fund and state grant programs. Payments from the PRF are not loans and, therefore, they are not subject to repayment. However, as a condition to receiving distributions, providers must agree to certain terms and conditions, including, among other things, that the funds are being u sed for lost revenues and COVID-related costs as defined by the U.S. Department of Health and Human Services (“HHS”), and that the providers will not seek collection of out‑of‑pocket payments from a COVID-19 patient that are greater than what the patient would have otherwise been required to pay if the care had been provided by an in-network provider. We recognize grant payments as income when there is reasonable assurance that we have complied with the conditions associated with the grant. Our estimates could change materially in the future based on our operating performance or COVID-19 activities at individual locations, as well as the government’s evolving grant compliance guidance. In September 2020, HHS released revised guidance for the reporting requirements for providers that accepted funding from the Provider Relief Fund (“September 2020 PRF Guidance”). In addition to other changes, the September 2020 PRF Guidance significantly modified the methodology for determining lost revenues and COVID-related costs in connection with the grants. In the three months ended September 30, 2020, we recognized negative grant income reported in previous periods to comply with these revised guidelines. During the three and nine months ended September 30, 2020, we recognized net grant income of $(57) million and $417 million, respectively, in our Hospital Operations segment, and $(13) million and $36 million, respectively, in our Ambulatory Care segment. Income recognized under the Provider Relief Fund and other state grant programs is reported as grant income in our Condensed Consolidated Statements of Operations, except $(4) million and $8 million for the three and nine months ended September 30, 2020, respectively, for our Ambulatory Care segment that is included in equity in earnings of unconsolidated affiliates. We have deferred $403 million of payments, which amount is recorded in other current liabilities on our Condensed Consolidated Balance Sheet at September 30, 2020. In October 2020, HHS further revised its guidance for reporting requirements for providers that accepted funding from the Provider Relief Fund (“October 2020 PRF Guidance”). In addition to other changes, this guidance revised the policy for transferring certain categories of grant funds among providers within a hospital system and significantly modified the methodology for determining lost revenues in connection with the grants. Cash and Cash Equivalents We treat highly liquid investments with original maturities of three months or less as cash equivalents. Cash and cash equivalents were $3.300 billion and $262 million at September 30, 2020 and December 31, 2019, respectively. At September 30, 2020 and December 31, 2019, our book overdrafts were $134 million and $246 million, respectively, which were classified as accounts payable. At September 30, 2020 and December 31, 2019, $161 million and $176 million, respectively, of total cash and cash equivalents in the accompanying Condensed Consolidated Balance Sheets were intended for the operations of our captive insurance subsidiaries. At September 30, 2020 and December 31, 2019, $1 million and $2 million, respectively, of total cash and cash equivalents in the accompanying Condensed Consolidated Balance Sheets were intended for the operations of our health plan-related businesses. Also at September 30, 2020 and December 31, 2019, we had $43 million and $136 million, respectively, of property and equipment purchases accrued for items received but not yet paid. Of these amounts, $33 million and $119 million, respectively, were included in accounts payable. During the nine months ended September 30, 2020 and 2019, we recorded right-of-use assets related to non‑cancellable finance leases of $75 million and $91 million, respectively, and related to non-cancellable operating leases of $135 million and $208 million, respectively. Other Intangible Assets The following tables provide information regarding other intangible assets, which are included in the accompanying Condensed Consolidated Balance Sheets at September 30, 2020 and December 31, 2019: Gross Accumulated Net Book At September 30, 2020: Capitalized software costs $ 1,696 $ (1,012) $ 684 Trade names 102 — 102 Contracts 879 (107) 772 Other 108 (88) 20 Total $ 2,785 $ (1,207) $ 1,578 Gross Accumulated Net Book At December 31, 2019: Capitalized software costs $ 1,616 $ (912) $ 704 Trade names 102 — 102 Contracts 869 (94) 775 Other 107 (86) 21 Total $ 2,694 $ (1,092) $ 1,602 Estimated future amortization of intangibles with finite useful lives at September 30, 2020 is as follows: Three Months Years Ending Later Years December 31, Total 2020 2021 2022 2023 2024 Amortization of intangible assets $ 890 $ 48 $ 134 $ 118 $ 106 $ 90 $ 394 We recognized amortization expense of $127 million and $138 million in the accompanying Condensed Consolidated Statements of Operations for the nine months ended September 30, 2020 and 2019, respectively. Investments in Unconsolidated Affiliates We control 244 of the facilities within our Ambulatory Care segment and, therefore, consolidate their results. We account for many of the facilities our Ambulatory Care segment operates (108 of 352 at September 30, 2020), as well as additional companies in which our Hospital Operations segment holds ownership interests, under the equity method as investments in unconsolidated affiliates and report only our share of net income as equity in earnings of unconsolidated affiliates in the accompanying Condensed Consolidated Statements of Operations. In the three and nine months ended September 30, 2020, equity in earnings of unconsolidated affiliates included $(4) million and $8 million, respectively, from PRF grants recognized by our Ambulatory Care segment’s unconsolidated affiliates. Summarized financial information for these equity method investees is included in the following table. For investments acquired during the reporting periods, amounts reflect 100% of the investee’s results beginning on the date of our acquisition of the investment. Three Months Ended Nine Months Ended 2020 2019 2020 2019 Net operating revenues $ 697 $ 622 $ 1,731 $ 1,809 Net income $ 167 $ 156 $ 414 $ 447 Net income available to the investees $ 101 $ 97 $ 253 $ 290 |
ACCOUNTS RECEIVABLE
ACCOUNTS RECEIVABLE | 9 Months Ended |
Sep. 30, 2020 | |
Accounts Receivable Additional Disclosures [Abstract] | |
ACCOUNTS RECEIVABLE | ACCOUNTS RECEIVABLE The principal components of accounts receivable are shown in the table below: September 30, 2020 December 31, 2019 Continuing operations: Patient accounts receivable $ 2,278 $ 2,567 Estimated future recoveries 158 162 Net cost reports and settlements receivable and valuation allowances 42 12 2,478 2,741 Discontinued operations 1 2 Accounts receivable, net $ 2,479 $ 2,743 Accounts that are pursued for collection through Conifer’s business offices are maintained on our hospitals’ books and reflected in patient accounts receivable. Patient accounts receivable, including billed accounts and certain unbilled accounts, as well as estimated amounts due from third-party payers for retroactive adjustments, are recognized as receivables if our right to consideration is unconditional and only the passage of time is required before payment of that consideration is due. Estimated uncollectable amounts are generally considered implicit price concessions that are a direct reduction to patient accounts receivable rather than allowance for doubtful accounts. We had $325 million and $256 million of receivables recorded in other current assets and investments and other assets, respectively, and $147 million and $43 million of payables recorded in other current liabilities and other long-term liabilities, respectively, in the accompanying Condensed Consolidated Balance Sheet at September 30, 2020 related to California’s provider fee program. We had $316 million and $213 million of receivables recorded in other current assets and investments and other assets, respectively, and $115 million and $57 million of payables recorded in other current liabilities and other long‑term liabilities, respectively, in the accompanying Condensed Consolidated Balance Sheet at December 31, 2019 related to California’s provider fee program. We also provide financial assistance through our charity and uninsured discount programs to uninsured patients who are unable to pay for the healthcare services they receive. Our policy is not to pursue collection of amounts determined to qualify for financial assistance; therefore, we do not report these amounts in net operating revenues. Most states include an estimate of the cost of charity care in the determination of a hospital’s eligibility for Medicaid disproportionate share hospital (“DSH”) payments. These payments are intended to mitigate our cost of uncompensated care. Some states have also developed provider fee or other supplemental payment programs to mitigate the shortfall of Medicaid reimbursement compared to the cost of caring for Medicaid patients. The following table shows our estimated costs (based on selected operating expenses, which include salaries, wages and benefits, supplies and other operating expenses) of caring for our uninsured and charity patients in the three and nine months ended September 30, 2020 and 2019: Three Months Ended Nine Months Ended 2020 2019 2020 2019 Estimated costs for: Uninsured patients $ 165 $ 171 $ 466 $ 493 Charity care patients 30 41 113 116 Total $ 195 $ 212 $ 579 $ 609 |
CONTRACT BALANCES
CONTRACT BALANCES | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
CONTRACT BALANCES | CONTRACT BALANCES Hospital Operations Segment Amounts related to services provided to patients for which we have not billed and that do not meet the conditions of unconditional right to payment at the end of the reporting period are contract assets. For our Hospital Operations segment, our contract assets consist primarily of services that we have provided to patients who are still receiving inpatient care in our facilities at the end of the reporting period. Our Hospital Operations segment’s contract assets are included in other current assets in the accompanying Condensed Consolidated Balance Sheets at September 30, 2020 and December 31, 2019. Approximately 85% of our Hospital Operations segment’s contract assets meet the conditions for unconditional right to payment and are reclassified to patient receivables within 90 days. In certain circumstances, when a hospital is experiencing financial difficulty due to delays in receiving payment for the Medicare services it provided, it may be eligible for an accelerated or advance payment pursuant to the Medicare accelerated payment program. The CARES Act revised the Medicare accelerated payment program in an attempt to disburse payments to hospitals more quickly to mitigate shortfalls due to delays in non-essential procedures, as well as staffing and billing disruptions. In the nine months ended September 30, 2020 , ou r Hospital Operations segment received advance payments from the Medicare accelerated payment program following expansion of the program under the CARES Act. These advance payments are recorded as contract liabilities in the accompanying Condensed Consolidated Balance Sheet at September 30, 2020, except for $49 million related to our hospitals and other operations in the Memphis area, which payments are recorded as liabilities held for sale. As further discussed in Note 19, the repayment terms for Medicare advance payments were modified through the passage of the Continuing Appropriations Act, 2021 and Other Extensions Act on October 1, 2020. The opening and closing balances of contract assets and contract liabilities for our Hospital Operations segment are as follows: Contract Liability – Current Contract Assets Advances from Medicare December 31, 2019 $ 170 $ — September 30, 2020 171 1,270 Increase $ 1 $ 1,270 December 31, 2018 $ 169 $ — September 30, 2019 163 — Decrease $ (6) $ — Ambulatory Care Segment In the nine months ended September 30, 2020, our Ambulatory Care segment also received advance payments from the Medicare accelerated payment program follo wing expansion of the program under the CARES Act. The opening and closing balances of contract liabilities for our Ambulatory Care segment are as follows: Contract Liability – Current Advances from Medicare December 31, 2019 $ — September 30, 2020 172 Increase $ 172 December 31, 2018 $ — September 30, 2019 — Increase $ — Conifer Segment Conifer enters into contracts with customers to provide revenue cycle management and other services, such as value‑based care, consulting and project services. The payment terms and conditions in our customer contracts vary. In some cases, customers are invoiced in advance and (for other than fixed-price fee arrangements) a true-up to the actual fee is included on a subsequent invoice. In other cases, payment is due in arrears. In addition, some contracts contain performance incentives, penalties and other forms of variable consideration. When the timing of Conifer’s delivery of services is different from the timing of payments made by the customers, Conifer recognizes either unbilled revenue (performance precedes contractual right to invoice the customer) or deferred revenue (customer payment precedes Conifer service performance). In the following table, customers that prepay prior to obtaining control/benefit of the service are represented by deferred contract revenue until the performance obligations are satisfied. Unbilled revenue represents arrangements in which Conifer has provided services to and the customer has obtained control/benefit of services prior to the contractual invoice date. Contracts with payment in arrears are recognized as receivables in the month the service is performed. The opening and closing balances of Conifer’s receivables, contract asset, and current and long-term contract liabilities are as follows: Contract Liability – Contract Liability – Contract Asset – Current Long-Term Receivables Unbilled Revenue Deferred Revenue Deferred Revenue December 31, 2019 $ 26 $ 11 $ 61 $ 18 September 30, 2020 29 13 58 17 Increase/(decrease) $ 3 $ 2 $ (3) $ (1) December 31, 2018 $ 42 $ 11 $ 61 $ 20 September 30, 2019 86 11 72 19 Increase/(decrease) $ 44 $ — $ 11 $ (1) The difference between the opening and closing balances of Conifer’s contract assets and contract liabilities are primarily related to prepayments for those customers who are billed in advance, changes in estimates related to metric-based services, and up-front integration services that are typically not distinct and are, therefore, recognized over the performance obligation period to which they relate. Our Conifer segment’s receivables and contract assets are reported as part of other current assets in our accompanying Condensed Consolidated Balance Sheets, and our Conifer segment’s current and long-term contract liabilities are reported as part of contract liabilities and other long-term liabilities, respectively, in our accompanying Condensed Consolidated Balance Sheets. The amount of revenue Conifer recognized in the nine months ended September 30, 2020 and 2019 that was included in the opening current deferred revenue liability was $61 million and $57 million, respectively. This revenue consists primarily of prepayments for those customers who are billed in advance, changes in estimates related to metric-based services, and up‑front integration services that are recognized over the services period. Net operating revenues for our Hospital Operations and Ambulatory Care segments primarily consist of net patient service revenues, principally for patients covered by Medicare, Medicaid, managed care and other health plans, as well as certain uninsured patients under our Compact and other uninsured discount and charity programs. Net operating revenues for our Conifer segment primarily consist of revenues from providing revenue cycle management services to healthcare systems, as well as individual hospitals, physician practices, self-insured organizations, health plans and other entities. The table below shows our sources of net operating revenues from continuing operations: Three Months Ended Nine Months Ended 2020 2019 2020 2019 Hospital Operations: Net patient service revenues from hospitals and related outpatient facilities: Medicare $ 662 $ 697 $ 1,964 $ 2,176 Medicaid 251 284 791 914 Managed care 2,374 2,357 6,519 7,041 Uninsured 50 44 112 56 Indemnity and other 171 184 491 508 Total 3,508 3,566 9,877 10,695 Other revenues (1) 295 284 848 844 Hospital Operations total prior to inter-segment eliminations 3,803 3,850 10,725 11,539 Ambulatory Care 565 522 1,423 1,526 Conifer 325 336 962 1,040 Inter-segment eliminations (136) (140) (385) (432) Net operating revenues $ 4,557 $ 4,568 $ 12,725 $ 13,673 (1) Primarily physician practices revenues. Adjustments for prior-year cost reports and related valuation allowances, principally related to Medicare and Medicaid, increased revenues in the nine months ended September 30, 2020 and 2019 by $3 million and $24 million, respectively. Estimated cost report settlements and valuation allowances are included in accounts receivable in the accompanying Condensed Consolidated Balance Sheets (see Note 2). We believe that we have made adequate provision for any adjustments that may result from final determination of amounts earned under all the above arrangements with Medicare and Medicaid. The table below shows the composition of net operating revenues for our Ambulatory Care segment: Three Months Ended Nine Months Ended 2020 2019 2020 2019 Net patient service revenues $ 532 $ 490 $ 1,345 $ 1,437 Management fees 23 23 60 69 Revenue from other sources 10 9 18 20 Net operating revenues $ 565 $ 522 $ 1,423 $ 1,526 The table below shows the composition of net operating revenues for our Conifer segment: Three Months Ended Nine Months Ended 2020 2019 2020 2019 Revenue cycle services – Tenet $ 132 $ 136 $ 375 $ 420 Revenue cycle services – other customers 170 175 518 542 Other services – Tenet 4 4 10 12 Other services – other customers 19 21 59 66 Net operating revenues $ 325 $ 336 $ 962 $ 1,040 Other services represent approximately 7% of Conifer’s revenue and include value-based care services, consulting services and other client-defined projects. Performance Obligations The following table includes Conifer’s revenue that is 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 amounts in the table primarily consist of revenue cycle management fixed fees, which are typically recognized ratably as the performance obligation is satisfied. The estimated revenue does not include volume or contingency based contracts, performance incentives, penalties or other variable consideration that is considered constrained. Conifer’s contract with Catholic Health Initiatives (“CHI”), a minority interest owner of Conifer Health Solutions, LLC, represents the majority of the fixed-fee revenue related to remaining performance obligations. Conifer’s contract term with CHI ends December 31, 2032. Three Months Years Ending Later Years December 31, Total 2020 2021 2022 2023 2024 Performance obligations $ 6,685 $ 147 $ 585 $ 583 $ 583 $ 532 $ 4,255 |
ASSETS AND LIABILITIES HELD FOR
ASSETS AND LIABILITIES HELD FOR SALE | 9 Months Ended |
Sep. 30, 2020 | |
Discontinued Operation, Additional Disclosures [Abstract] | |
ASSETS AND LIABILITIES HELD FOR SALE | ASSETS AND LIABILITIES HELD FOR SALE In the three months ended September 30, 2020, a building we own in the Philadelphia area met the criteria to be classified as held for sale. As a result, we have classified the building and related assets totaling $14 million as “assets held for sale” in current assets in the accompanying Condensed Consolidated Balance Sheet at September 30, 2020. In the three months ended December 31, 2019, two of our hospitals and other operations in the Memphis area met the criteria to be classified as held for sale. As a result, we have classified these assets totaling $372 million as “assets held for sale” in current assets and the related liabilities of $91 million classified as “liabilities held for sale” in current liabilities in the accompanying Condensed Consolidated Balance Sheet at September 30, 2020. Assets and liabilities classified as held for sale at September 30, 2020 were comprised of the following: Accounts receivable $ 85 Other current assets 24 Investments and other long-term assets 7 Property and equipment 206 Other intangible assets 22 Goodwill 42 Contract liabilities (49) Other current liabilities (34) Long-term liabilities (8) Net assets held for sale $ 295 The following table provides information on significant components of our business that have been recently disposed of or are classified as held for sale at September 30, 2020: Three Months Ended Nine Months Ended 2020 2019 2020 2019 Significant disposals: Income (loss) from continuing operations, before income taxes Chicago area (includes a $5 million loss and a $6 million loss on sale in the 2020 and 2019 periods, respectively) $ 2 $ — $ — $ (11) Total $ 2 $ — $ — $ (11) Significant planned divestitures classified as held for sale: Income (loss) from continuing operations, before income taxes Memphis area $ (5) $ 4 $ 23 $ 9 Total $ (5) $ 4 $ 23 $ 9 |
IMPAIRMENT AND RESTRUCTURING CH
IMPAIRMENT AND RESTRUCTURING CHARGES, AND ACQUISITION-RELATED COSTS | 9 Months Ended |
Sep. 30, 2020 | |
Restructuring Costs and Asset Impairment Charges [Abstract] | |
IMPAIRMENT AND RESTRUCTURING CHARGES, AND ACQUISITION-RELATED COSTS | IMPAIRMENT AND RESTRUCTURING CHARGES, AND ACQUISITION-RELATED COSTS During the nine months ended September 30, 2020, we recorded impairment and restructuring charges and acquisition‑related costs of $166 million, consisting of $8 million of impairment charges, $155 million of restructuring charges and $3 million of acquisition-related costs. Restructuring charges consisted of $53 million of employee severance costs, $40 million related to our Global Business Center in the Philippines, $23 million of charges due to the termination of the USPI management equity plan, $15 million of contract and lease termination fees, and $24 million of other restructuring costs. Acquisition-related costs consisted of $3 million of transaction costs. Our impairment charges for the nine months ended September 30, 2020 were comprised of $2 million from our Hospital Operations segment, $5 million from our Ambulatory Care segment and $1 million from our Conifer segment. During the nine months ended September 30, 2019, we recorded impairment and restructuring charges and acquisition‑related costs of $101 million, consisting of $7 million of impairment charges, $90 million of restructuring charges and $4 million of acquisition-related costs. Restructuring charges consisted of $38 million of employee severance costs, $3 million of contract and lease termination fees, and $49 million of other restructuring costs. Acquisition-related costs consisted of $4 million of transaction costs. Our impairment charges for the nine months ended September 30, 2019 were comprised of $4 million from our Hospital Operations segment and $3 million from our Ambulatory Care segment. Our impairment tests presume stable, improving or, in some cases, declining operating results in our facilities, which are based on programs and initiatives being implemented that are designed to achieve each facility’s most recent projections. If these projections are not met, or if in the future negative trends occur that impact our future outlook, impairments of long-lived assets and goodwill may occur, and we may incur additional restructuring charges, which could be material. At September 30, 2020, our continuing operations consisted of three reportable segments, Hospital Operations, Ambulatory Care and Conifer. Our segments are reporting units used to perform our goodwill impairment analysis. |
LONG-TERM DEBT
LONG-TERM DEBT | 9 Months Ended |
Sep. 30, 2020 | |
Long-term Debt and Lease Obligation [Abstract] | |
LONG-TERM DEBT | LONG-TERM DEBT The table below shows our long-term debt at September 30, 2020 and December 31, 2019: September 30, 2020 December 31, 2019 Senior unsecured notes: 8.125% due 2022 $ — $ 2,800 6.750% due 2023 1,872 1,872 7.000% due 2025 478 478 6.125% due 2028 2,500 — 6.875% due 2031 362 362 Senior secured first lien notes: 4.625% due 2024 1,870 1,870 4.625% due 2024 600 600 7.500% due 2025 700 — 4.875% due 2026 2,100 2,100 5.125% due 2027 1,500 1,500 4.625% due 2028 600 — Senior secured second lien notes: 5.125% due 2025 1,410 1,410 6.250% due 2027 1,500 1,500 Finance leases and mortgage notes 408 445 Unamortized issue costs and note discounts (184) (186) Total long-term debt 15,716 14,751 Less current portion 155 171 Long-term debt, net of current portion $ 15,561 $ 14,580 Senior Unsecured and Senior Secured Notes On September 16, 2020, we sold $2.500 billion aggregate principal amount of 6.125% senior notes, which will mature on October 1, 2028 (the “2028 Senior Notes”). We will pay interest on the 2028 Senior Notes semi-annually in arrears on April 1 and October 1 of each year, commencing on April 1, 2021. The proceeds from the sale of the 2028 Senior Notes were used, after payment of fees and expenses, together with cash on hand, to finance the redemption of all $2.556 billion aggregate principal amount then outstanding of our 8.125% senior unsecured notes due 2022 (the “2022 Senior Notes”) for approximately $2.843 billion. In connection with the redemption, we recorded a loss from early extinguishment of debt of approximately $305 million in the three months ended September 30, 2020, primarily related to the difference between the purchase price and the par value of the 2022 Senior Notes, as well as the write-off of associated unamortized issuance costs. In August and July 2020, we purchased approximately $109 million aggregate principal amount of our 2022 Senior Notes for approximately $114 million. In connection with the purchases, we recorded losses from early extinguishment of debt totaling $7 million in the three months ended September 30, 2020, primarily related to the differences between the purchase prices and the par values of the 2022 Senior Notes, as well as the write-offs of associated unamortized issuance costs. In June 2020, we purchased approximately $135 million aggregate principal amount of our 2022 Senior Notes for approximately $142 million. In connection with the purchase, we recorded a loss from early extinguishment of debt of approximately $8 million in the three months ended June 30, 2020, primarily related to the difference between the purchase price and the par value of the 2022 Senior Notes, as well as the write-off of associated unamortized issuance costs. On June 16, 2020, we sold $600 million aggregate principal amount of 4.625% senior secured first lien notes, which will mature on June 15, 2028 (the “2028 Senior Secured First Lien Notes”). We will pay interest on the 2028 Senior Secured First Lien Notes semi-annually in arrears on June 15 and December 15 of each year, commencing on December 15, 2020. On April 7, 2020, we sold $700 million aggregate principal amount of 7.500% senior secured first lien notes, which will mature on April 1, 2025 (the “2025 Senior Secured First Lien Notes”). We will pay interest on the 2025 Senior Secured First Lien Notes semi-annually in arrears on April 1 and October 1 of each year, which payments commenced on October 1, 2020. A portion of the proceeds from the sale of the 2025 Senior Secured First Lien Notes was used, after payment of fees and expenses, to repay the $500 million aggregate principal amount of borrowings outstanding under our Credit Agreement as of March 31, 2020. Credit Agreement We have a senior secured revolving credit facility that provides for revolving loans in an aggregate principal amount of up to $1.9 billion with a $200 million subfacility for standby letters of credit. We amended our credit agreement (as amended, the “Credit Agreement”) in April 2020 to, among other things, (i) increase the aggregate revolving credit commitments from the previous limit of $1.5 billion to $1.9 billion, subject to borrowing availability, and (ii) increase the advance rate and raise limits on certain eligible accounts receivable in the calculation of the borrowing base, in each case, for an incremental period of 364 days (the “incremental period”). At September 30, 2020, we had no cash borrowings outstanding under the Credit Agreement , and we had less than $1 million of standby letters of credit outstanding. Based on our eligible receivables, $1.777 billion was available for borrowing under the revolving credit facility at September 30, 2020. The Credit Agreement continues to have a scheduled maturity date of September 12, 2024, and obligations under the Credit Agreement continue to be guaranteed by substantially all of our domestic wholly owned hospital subsidiaries and secured by a first-priority lien on the eligible inventory and accounts receivable owned by us and the subsidiary guarantors, including receivables for Medicaid supplemental payments. Outstanding revolving loans accrued interest during a one-month initial period following the April 2020 amendment at the rate of either (i) a base rate plus a margin of 0.75% per annum or (ii) the London Interbank Offered Rate (“LIBOR”) plus a margin of 1.75% per annum. Thereafter, outstanding revolving loans accrue interest at either (i) a base rate plus a margin ranging from 0.50% to 1.00% per annum during the incremental period and 0.25% to 0.75% per annum thereafter, or (ii) LIBOR plus a margin ranging from 1.50% to 2.00% per annum during the incremental period and 1.25% to 1.75% per annum thereafter, in each case based on available credit. An unused commitment fee payable on the undrawn portion of the revolving loans ranges from 0.25% to 0.375% per annum based on available credit. Our borrowing availability is based on a specified percentage of eligible inventory and accounts receivable, including self-pay accounts. Letter of Credit Facility In March 2020, we amended our letter of credit facility (as amended, the “LC Facility”) to extend the scheduled maturity date of the LC Facility from March 7, 2021 to September 12, 2024 and to increase the aggregate principal amount of standby and documentary letters of credit that from time to time may be issued thereunder from $180 million to $200 million. On July 29, 2020, we further amended the LC Facility to increase the maximum secured debt covenant from 4.00 to 1.00 on a quarterly basis up to 6.00 to 1.00 for the quarter ending March 31, 2021, which maximum ratio will step down on a quarterly basis through the quarter ending December 31, 2021. Obligations under the LC Facility are guaranteed and secured by a first‑priority pledge of the capital stock and other ownership interests of certain of our wholly owned domestic hospital subsidiaries on an equal ranking basis with our senior secured first lien notes. |
GUARANTEES
GUARANTEES | 9 Months Ended |
Sep. 30, 2020 | |
Guarantees [Abstract] | |
GUARANTEES | GUARANTEES At September 30, 2020, the maximum potential amount of future payments under our income guarantees to certain physicians who agree to relocate and revenue collection guarantees to hospital-based physician groups providing certain services at our hospitals was $146 million. We had a total liability of $110 million recorded for these guarantees included in other current liabilities at September 30, 2020. At September 30, 2020, we also had issued guarantees of the indebtedness and other obligations of our investees to third parties, the maximum potential amount of future payments under which was approximately $24 million. Of the total, $10 million relates to the obligations of consolidated subsidiaries, which obligations are recorded in the accompanying Condensed Consolidated Balance Sheet at September 30, 2020. |
EMPLOYEE BENEFIT PLANS
EMPLOYEE BENEFIT PLANS | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
EMPLOYEE BENEFIT PLANS | EMPLOYEE BENEFIT PLANS Share-Based Compensation Plans We have granted options and restricted stock units to certain of our employees and directors pursuant to our stock incentive plans. Options have an exercise price equal to the fair market value of the shares on the date of grant and generally expire 10 years from the date of grant. A restricted stock unit is a contractual right to receive one share of our common stock in the future, and the fair value of the restricted stock unit is based on our share price on the grant date. Typically, options and time-based restricted stock units vest one-third on each of the first three We also grant performance-based options and performance-based restricted stock units that vest subject to the achievement of specified performance goals within a specified time frame. These awards generally vest and are settled on the third anniversary of the grant date with payouts ranging from 0% to 200% of the target value depending upon the level of achievement. For certain of our performance-based awards, the number of options or restricted stock units that ultimately vest is subject to adjustment based on the achievement of a market-based condition. The fair value of these awards is estimated using a discrete model to analyze the fair value of the subject shares. The discrete model utilizes multiple stock paths, through the use of a Monte Carlo simulation, which paths are then analyzed to determine the fair value of the subject shares. At September 30, 2020, assuming outstanding performance-based restricted stock units and options for which performance has not yet been determined will achieve target performance, approximately 6.1 million shares of common stock were available under our 2019 Stock Incentive Plan for future stock option grants and other equity incentive awards, including restricted stock units. The accompanying Condensed Consolidated Statements of Operations for the nine months ended September 30, 2020 and 2019 include $38 million and $34 million, respectively, of pre-tax compensation costs related to our stock-based compensation arrangements. Stock Options The following table summarizes stock option activity during the nine months ended September 30, 2020: Options Weighted Average Aggregate Weighted Average (In Millions) Outstanding at December 31, 2019 1,960,992 $ 20.24 Exercised (472,304) 19.02 Forfeited/Expired (11,326) 20.60 Outstanding at September 30, 2020 1,477,362 $ 20.63 $ 7 5.4 years Vested and expected to vest at September 30, 2020 1,477,362 $ 20.63 $ 7 5.4 years Exercisable at September 30, 2020 797,819 $ 17.98 $ 5 3.9 years There were 472,304 and 76,159 stock options exercised during the nine months ended September 30, 2020 and 2019, respectively, with aggregate intrinsic values of $3 million and $1 million , respectively. At September 30, 2020, there were $2 million of total unrecognized compensation costs related to stock options. These costs are expected to be recognized over a weighted average period of 1.1 years. The following table summarizes information about our outstanding stock options at September 30, 2020: Options Outstanding Options Exercisable Range of Exercise Prices Number of Weighted Average Weighted Average Number of Weighted Average $16.43 to $19.759 756,152 4.0 years $ 17.61 756,152 $ 17.61 $19.76 to $35.430 721,210 6.8 years 23.80 41,667 24.83 1,477,362 5.4 years $ 20.63 797,819 $ 17.98 Restricted Stock Units The following table summarizes restricted stock unit activity during the nine months ended September 30, 2020: Restricted Stock Units Weighted Average Grant Unvested at December 31, 2019 1,463,499 $ 25.08 Granted 1,720,004 27.61 Vested (713,627) 25.57 Forfeited (263,077) 32.96 Unvested at September 30, 2020 2,206,799 $ 25.80 In the nine months ended September 30, 2020, we granted an aggregate of 1,720,004 restricted stock units. Of these, 583,335 will vest and be settled ratably over a three-year period from the grant date, 104,167 will vest and be settled ratably over a four-year period from the grant date, 359,713 will vest and be settled ratably over 11 quarterly periods from the grant date, and 13,805 will vest and be settled on the third anniversary of the grant date. The vesting of 555,550 performance-based restricted stock units we granted in the nine months ended September 30, 2020 is contingent on our achievement of specified performance goals for the years 2020 to 2023. In addition, in May 2020, we made an annual grant of 103,434 restricted stock units to our non-employee directors for the 2020-2021 board service year. In the nine months ended September 30, 2019, we granted an aggregate of 1,460,753 restricted stock units. Of these, 337,848 will vest and be settled ratably over a three-year period from the grant date, 566,172 will vest and be settled ratably over nine quarterly periods from the grant date, and 340,931 will vest and be settled on the third anniversary of the grant date. Also during the nine months ended September 30, 2019, we made an annual grant of 100,444 restricted stock units to our non‑employee directors for the 2019-2020 board service year. In addition, because the board of directors appointed one new member in August 2019, we made an initial grant totaling 3,003 restricted stock units, as well as an annual grant totaling 7,978 restricted stock units. We also granted 7,427 additional restricted stock units that vested and settled immediately as a result of our level of achievement with respect to a performance goal on a 2013 grant and 96,950 additional restricted stock units as a result of our level of achievement with respect to a performance goal on 2014 grant. At September 30, 2020, there were $37 million of total unrecognized compensation costs related to restricted stock units. These costs are expected to be recognized over a weighted average period of 1.9 years. USPI Management Equity Plan In February 2020, USPI’s previous management equity plan and all unvested options granted under the plan were terminated in accordance with the terms of the plan as previously disclosed. USPI repurchased all vested options and all shares of USPI stock acquired upon exercise of an option for approximately $35 million. USPI then adopted a new restricted stock plan whereby USPI granted 2,444,049 shares of restricted non-voting common stock to eligible plan participants in the three months ended March 31, 2020. The restricted stock units vest 20% in each of the first three years on the anniversary of the grant date with the remaining 40% vesting on the fourth anniversary of the grant date. At September 30, 2020, 2,294,330 shares of restricted stock units were outstanding, all of which are expected to vest. The first vesting of these shares, which includes 441,062 shares, is expected to occur in February 2021. Once the requisite holding period is met, during specified times the participant can sell the underlying shares to USPI at their estimated fair market value. Our purchase of any non-voting common shares can be made in cash or in shares of Tenet ’ s common stock. Employee Retirement Plans In the nine months ended September 30, 2020 and 2019, we recognized (i) service cost related to one of our frozen nonqualified defined benefit pension plans of less than $1 million for both periods in salaries, wages and benefits expense, and (ii) other components of net periodic pension cost and net periodic postretirement benefit cost related to our frozen qualified and nonqualified defined benefit plans of $6 million and $16 million, respectively, in other non-operating income (expense), net, in the accompanying Condensed Consolidated Statements of Operations. |
EQUITY
EQUITY | 9 Months Ended |
Sep. 30, 2020 | |
Stockholders' Equity Note [Abstract] | |
EQUITY | EQUITY Changes in Shareholders’ Equity The following tables show the changes in consolidated equity during the nine months ended September 30, 2020 and 2019 (dollars in millions, share amounts in thousands): Common Stock Additional Accumulated Accumulated Treasury Noncontrolling Total Equity Shares Issued Par Balances at December 31, 2019 104,197 $ 7 $ 4,760 $ (257) $ (2,513) $ (2,414) $ 854 $ 437 Net income — — — — 93 — 32 125 Distributions paid to noncontrolling interests — — — — — — (40) (40) Other comprehensive income — — — 1 — — — 1 Accretion of redeemable noncontrolling interests — — (1) — — — — (1) Purchases (sales) of businesses and noncontrolling interests — — (30) — — — 15 (15) Cumulative effect of accounting change — — — — (14) — — (14) Stock-based compensation expense, tax benefit and issuance of common stock 331 — 10 — — — — 10 Balances at March 31, 2020 104,528 $ 7 $ 4,739 $ (256) $ (2,434) $ (2,414) $ 861 $ 503 Net income — — — — 88 — 35 123 Distributions paid to noncontrolling interests — — — — — — (8) (8) Other comprehensive income — — — 1 — — — 1 Accretion of redeemable noncontrolling interests — — (2) — — — — (2) Purchases (sales) of businesses and noncontrolling interests — — (2) — — — 2 — Stock-based compensation expense, tax benefit and issuance of common stock 374 — 16 — — — — 16 Balances at June 30, 2020 104,902 $ 7 $ 4,751 $ (255) $ (2,346) $ (2,414) $ 890 $ 633 Net income (loss) — — — — (196) — 48 (148) Distributions paid to noncontrolling interests — — — — — — (46) (46) Other comprehensive income — — — 4 — — — 4 Accretion of redeemable noncontrolling interests — — (1) — — — — (1) Purchases of businesses and noncontrolling interests — — 58 — — — 4 62 Stock-based compensation expense, tax benefit and issuance of common stock 505 — 18 — — — — 18 Balances at September 30, 2020 105,407 $ 7 $ 4,826 $ (251) $ (2,542) $ (2,414) $ 896 $ 522 Common Stock Additional Accumulated Accumulated Treasury Noncontrolling Total Equity Shares Issued Par Balances at December 31, 2018 102,537 $ 7 $ 4,747 $ (223) $ (2,299) $ (2,414) $ 806 $ 624 Net income (loss) — — — — (12) — 37 25 Distributions paid to noncontrolling interests — — — — — — (37) (37) Other comprehensive income — — — 2 — — — 2 Accretion of redeemable noncontrolling interests — — (5) — — — — (5) Purchases (sales) of businesses and noncontrolling interests — — (2) — — — 2 — Cumulative effect of accounting change — — — — 1 — — 1 Stock-based compensation expense, tax benefit and issuance of common stock 543 — 8 — — — — 8 Balances at March 31, 2019 103,080 $ 7 $ 4,748 $ (221) $ (2,310) $ (2,414) $ 808 $ 618 Net income — — — — 26 — 47 73 Distributions paid to noncontrolling interests — — — — — — (35) (35) Other comprehensive income — — — 2 — — — 2 Accretion of redeemable noncontrolling interests — — (4) — — — — (4) Purchases of businesses and noncontrolling interests — — — — — — 5 5 Stock-based compensation expense, tax benefit and issuance of common stock 256 — 11 — — — — 11 Balances at June 30, 2019 103,336 $ 7 $ 4,755 $ (219) $ (2,284) $ (2,414) $ 825 $ 670 Net income (loss) — — — — (226) — 45 (181) Distributions paid to noncontrolling interests — — — — — — (46) (46) Other comprehensive income — — — 3 — — — 3 Accretion of redeemable noncontrolling interests — — (4) — — — — (4) Purchases (sales) of businesses and noncontrolling interests — — (5) — — — 6 1 Stock-based compensation expense, tax benefit and issuance of common stock 436 — 5 — — — — 5 Balances at September 30, 2019 103,772 $ 7 $ 4,751 $ (216) $ (2,510) $ (2,414) $ 830 $ 448 Our noncontrolling interests balances at September 30, 2020 and December 31, 2019 were comprised of $120 million and $114 million, respectively, from our Hospital Operations segment, and $776 million and $740 million, respectively, from our Ambulatory Care segment. Our net income available to noncontrolling interests for the nine months ended September 30, 2020 and 2019 in the table above were comprised of $9 million and $10 million, respectively, from our Hospital Operations segment, and $106 million and $119 million, respectively, from our Ambulatory Care segment. |
NET OPERATING REVENUES
NET OPERATING REVENUES | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
NET OPERATING REVENUES | CONTRACT BALANCES Hospital Operations Segment Amounts related to services provided to patients for which we have not billed and that do not meet the conditions of unconditional right to payment at the end of the reporting period are contract assets. For our Hospital Operations segment, our contract assets consist primarily of services that we have provided to patients who are still receiving inpatient care in our facilities at the end of the reporting period. Our Hospital Operations segment’s contract assets are included in other current assets in the accompanying Condensed Consolidated Balance Sheets at September 30, 2020 and December 31, 2019. Approximately 85% of our Hospital Operations segment’s contract assets meet the conditions for unconditional right to payment and are reclassified to patient receivables within 90 days. In certain circumstances, when a hospital is experiencing financial difficulty due to delays in receiving payment for the Medicare services it provided, it may be eligible for an accelerated or advance payment pursuant to the Medicare accelerated payment program. The CARES Act revised the Medicare accelerated payment program in an attempt to disburse payments to hospitals more quickly to mitigate shortfalls due to delays in non-essential procedures, as well as staffing and billing disruptions. In the nine months ended September 30, 2020 , ou r Hospital Operations segment received advance payments from the Medicare accelerated payment program following expansion of the program under the CARES Act. These advance payments are recorded as contract liabilities in the accompanying Condensed Consolidated Balance Sheet at September 30, 2020, except for $49 million related to our hospitals and other operations in the Memphis area, which payments are recorded as liabilities held for sale. As further discussed in Note 19, the repayment terms for Medicare advance payments were modified through the passage of the Continuing Appropriations Act, 2021 and Other Extensions Act on October 1, 2020. The opening and closing balances of contract assets and contract liabilities for our Hospital Operations segment are as follows: Contract Liability – Current Contract Assets Advances from Medicare December 31, 2019 $ 170 $ — September 30, 2020 171 1,270 Increase $ 1 $ 1,270 December 31, 2018 $ 169 $ — September 30, 2019 163 — Decrease $ (6) $ — Ambulatory Care Segment In the nine months ended September 30, 2020, our Ambulatory Care segment also received advance payments from the Medicare accelerated payment program follo wing expansion of the program under the CARES Act. The opening and closing balances of contract liabilities for our Ambulatory Care segment are as follows: Contract Liability – Current Advances from Medicare December 31, 2019 $ — September 30, 2020 172 Increase $ 172 December 31, 2018 $ — September 30, 2019 — Increase $ — Conifer Segment Conifer enters into contracts with customers to provide revenue cycle management and other services, such as value‑based care, consulting and project services. The payment terms and conditions in our customer contracts vary. In some cases, customers are invoiced in advance and (for other than fixed-price fee arrangements) a true-up to the actual fee is included on a subsequent invoice. In other cases, payment is due in arrears. In addition, some contracts contain performance incentives, penalties and other forms of variable consideration. When the timing of Conifer’s delivery of services is different from the timing of payments made by the customers, Conifer recognizes either unbilled revenue (performance precedes contractual right to invoice the customer) or deferred revenue (customer payment precedes Conifer service performance). In the following table, customers that prepay prior to obtaining control/benefit of the service are represented by deferred contract revenue until the performance obligations are satisfied. Unbilled revenue represents arrangements in which Conifer has provided services to and the customer has obtained control/benefit of services prior to the contractual invoice date. Contracts with payment in arrears are recognized as receivables in the month the service is performed. The opening and closing balances of Conifer’s receivables, contract asset, and current and long-term contract liabilities are as follows: Contract Liability – Contract Liability – Contract Asset – Current Long-Term Receivables Unbilled Revenue Deferred Revenue Deferred Revenue December 31, 2019 $ 26 $ 11 $ 61 $ 18 September 30, 2020 29 13 58 17 Increase/(decrease) $ 3 $ 2 $ (3) $ (1) December 31, 2018 $ 42 $ 11 $ 61 $ 20 September 30, 2019 86 11 72 19 Increase/(decrease) $ 44 $ — $ 11 $ (1) The difference between the opening and closing balances of Conifer’s contract assets and contract liabilities are primarily related to prepayments for those customers who are billed in advance, changes in estimates related to metric-based services, and up-front integration services that are typically not distinct and are, therefore, recognized over the performance obligation period to which they relate. Our Conifer segment’s receivables and contract assets are reported as part of other current assets in our accompanying Condensed Consolidated Balance Sheets, and our Conifer segment’s current and long-term contract liabilities are reported as part of contract liabilities and other long-term liabilities, respectively, in our accompanying Condensed Consolidated Balance Sheets. The amount of revenue Conifer recognized in the nine months ended September 30, 2020 and 2019 that was included in the opening current deferred revenue liability was $61 million and $57 million, respectively. This revenue consists primarily of prepayments for those customers who are billed in advance, changes in estimates related to metric-based services, and up‑front integration services that are recognized over the services period. Net operating revenues for our Hospital Operations and Ambulatory Care segments primarily consist of net patient service revenues, principally for patients covered by Medicare, Medicaid, managed care and other health plans, as well as certain uninsured patients under our Compact and other uninsured discount and charity programs. Net operating revenues for our Conifer segment primarily consist of revenues from providing revenue cycle management services to healthcare systems, as well as individual hospitals, physician practices, self-insured organizations, health plans and other entities. The table below shows our sources of net operating revenues from continuing operations: Three Months Ended Nine Months Ended 2020 2019 2020 2019 Hospital Operations: Net patient service revenues from hospitals and related outpatient facilities: Medicare $ 662 $ 697 $ 1,964 $ 2,176 Medicaid 251 284 791 914 Managed care 2,374 2,357 6,519 7,041 Uninsured 50 44 112 56 Indemnity and other 171 184 491 508 Total 3,508 3,566 9,877 10,695 Other revenues (1) 295 284 848 844 Hospital Operations total prior to inter-segment eliminations 3,803 3,850 10,725 11,539 Ambulatory Care 565 522 1,423 1,526 Conifer 325 336 962 1,040 Inter-segment eliminations (136) (140) (385) (432) Net operating revenues $ 4,557 $ 4,568 $ 12,725 $ 13,673 (1) Primarily physician practices revenues. Adjustments for prior-year cost reports and related valuation allowances, principally related to Medicare and Medicaid, increased revenues in the nine months ended September 30, 2020 and 2019 by $3 million and $24 million, respectively. Estimated cost report settlements and valuation allowances are included in accounts receivable in the accompanying Condensed Consolidated Balance Sheets (see Note 2). We believe that we have made adequate provision for any adjustments that may result from final determination of amounts earned under all the above arrangements with Medicare and Medicaid. The table below shows the composition of net operating revenues for our Ambulatory Care segment: Three Months Ended Nine Months Ended 2020 2019 2020 2019 Net patient service revenues $ 532 $ 490 $ 1,345 $ 1,437 Management fees 23 23 60 69 Revenue from other sources 10 9 18 20 Net operating revenues $ 565 $ 522 $ 1,423 $ 1,526 The table below shows the composition of net operating revenues for our Conifer segment: Three Months Ended Nine Months Ended 2020 2019 2020 2019 Revenue cycle services – Tenet $ 132 $ 136 $ 375 $ 420 Revenue cycle services – other customers 170 175 518 542 Other services – Tenet 4 4 10 12 Other services – other customers 19 21 59 66 Net operating revenues $ 325 $ 336 $ 962 $ 1,040 Other services represent approximately 7% of Conifer’s revenue and include value-based care services, consulting services and other client-defined projects. Performance Obligations The following table includes Conifer’s revenue that is 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 amounts in the table primarily consist of revenue cycle management fixed fees, which are typically recognized ratably as the performance obligation is satisfied. The estimated revenue does not include volume or contingency based contracts, performance incentives, penalties or other variable consideration that is considered constrained. Conifer’s contract with Catholic Health Initiatives (“CHI”), a minority interest owner of Conifer Health Solutions, LLC, represents the majority of the fixed-fee revenue related to remaining performance obligations. Conifer’s contract term with CHI ends December 31, 2032. Three Months Years Ending Later Years December 31, Total 2020 2021 2022 2023 2024 Performance obligations $ 6,685 $ 147 $ 585 $ 583 $ 583 $ 532 $ 4,255 |
PROPERTY AND PROFESSIONAL AND G
PROPERTY AND PROFESSIONAL AND GENERAL LIABILITY INSURANCE | 9 Months Ended |
Sep. 30, 2020 | |
Property and Professional and General Liablity Insurance [Abstract] | |
PROPERTY AND PROFESSIONAL AND GENERAL LIABILITY INSURANCE | PROPERTY AND PROFESSIONAL AND GENERAL LIABILITY INSURANCE Property Insurance We have property, business interruption and related insurance coverage to mitigate the financial impact of catastrophic events or perils that is subject to deductible provisions based on the terms of the policies. These policies are on an occurrence basis. For the policy period April 1, 2020 through March 31, 2021, we have coverage totaling $850 million per occurrence, after deductibles and exclusions, with annual aggregate sub-limits of $100 million for floods, $200 million for earthquakes and a per-occurrence sub-limit of $200 million for named windstorms with no annual aggregate. With respect to fires and other perils, excluding floods, earthquakes and named windstorms, the total $850 million limit of coverage per occurrence applies. Deductibles are 5% of insured values up to a maximum of $40 million for California earthquakes, $25 million for floods and named windstorms, and 2% of insured values for New Madrid fault earthquakes, with a maximum per claim deductible of $25 million. Floods and certain other covered losses, including fires and other perils, have a minimum deductible of $1 million. Professional and General Liability Reserves We are self-insured for the majority of our professional and general liability claims and purchase insurance from third‑parties to cover catastrophic claims. At September 30, 2020 and December 31, 2019, the aggregate current and long-term professional and general liability reserves in the accompanying Condensed Consolidated Balance Sheets were $951 million and $965 million, respectively. These reserves include the reserves recorded by our captive insurance subsidiaries and our self‑insured retention reserves recorded based on modeled estimates for the portion of our professional and general liability risks, including incurred but not reported claims, for which we do not have insurance coverage. As discussed in Note 1, in the three months ended March 31, 2020, we changed our method of accounting for our estimated professional and general liability claims, as well as other claims-related liabilities. Under the new method of accounting, the liabilities are reported on an undiscounted basis whereas, previously, the liabilities were reported on a discounted basis. If the aggregate limit of any of our professional and general liability policies is exhausted, in whole or in part, it could deplete or reduce the limits available to pay any other material claims applicable to that policy period. Included in other operating expenses, net, in the accompanying Condensed Consolidated Statements of Operations is malpractice expense of $233 million and $272 million for the nine months ended September 30, 2020 and 2019, respectively. |
CLAIMS AND LAWSUITS
CLAIMS AND LAWSUITS | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
CLAIMS AND LAWSUITS | CLAIMS AND LAWSUITS We operate in a highly regulated and litigious industry. Healthcare companies are subject to numerous investigations by various governmental agencies. Further, private parties have the right to bring qui tam or “whistleblower” lawsuits against companies that allegedly submit false claims for payments to, or improperly retain overpayments from, the government and, in some states, private payers. We and our subsidiaries have received inquiries in recent years from government agencies, and we may receive similar inquiries in future periods. We are also subject to class action lawsuits, employment-related claims and other legal actions in the ordinary course of business. Some of these actions may involve large demands, as well as substantial defense costs. We cannot predict the outcome of current or future legal actions against us or the effect that judgments or settlements in such matters may have on us. We are also subject to a non-prosecution agreement that is scheduled to expire on November 1, 2020, as described in our Annual Report. If we fail to comply with this agreement, we could be subject to criminal prosecution, substantial penalties and exclusion from participation in federal healthcare programs, any of which could adversely impact our business, financial condition, results of operations or cash flows. We record accruals for estimated losses relating to claims and lawsuits when available information indicates that a loss is probable and we can reasonably estimate the amount of the loss or a range of loss. Significant judgment is required in both the determination of the probability of a loss and the determination as to whether a loss is reasonably estimable. These determinations are updated at least quarterly and are adjusted to reflect the effects of negotiations, settlements, rulings, advice of legal counsel and technical experts, and other information and events pertaining to a particular matter, but are subject to significant uncertainty regarding numerous factors that could affect the ultimate loss levels. If a loss on a material matter is reasonably possible and estimable, we disclose an estimate of the loss or a range of loss. In cases where we have not disclosed an estimate, we have concluded that the loss is either not reasonably possible or the loss, or a range of loss, is not reasonably estimable, based on available information. Given the inherent uncertainties associated with these matters, especially those involving governmental agencies, and the indeterminate damages sought in some cases, there is significant uncertainty as to the ultimate liability we may incur from these matters, and an adverse outcome in one or more of these matters could be material to our results of operations or cash flows for any particular reporting period. Shareholder Derivative Litigation In January 2017, the Dallas County District Court consolidated two previously disclosed shareholder derivative lawsuits filed on behalf of the Company by purported shareholders of the Company’s common stock against current and former officers and directors into a single matter captioned In re Tenet Healthcare Corporation Shareholder Derivative Litigation . The plaintiffs filed a consolidated shareholder derivative petition in February 2017. The consolidated shareholder derivative petition alleged that false or misleading statements or omissions concerning the Company’s financial performance and compliance policies, specifically with respect to the previously disclosed civil qui tam litigation and parallel criminal investigation of the Company and certain of its subsidiaries (together, the “Clinica de la Mama matters”), caused the price of the Company’s common stock to be artificially inflated. In addition, the plaintiffs alleged that the defendants violated GAAP by failing to disclose an estimate of the possible loss or a range of loss related to the Clinica de la Mama matters. The plaintiffs claimed that they did not make demand on the Company’s board of directors to bring the lawsuit because such a demand would have been futile. In May 2018, the judge in the consolidated shareholder derivative litigation entered an order lifting the previous year‑long stay of the matter and, in July 2018, the defendants filed pleadings seeking dismissal of the lawsuit. In October 2018, the judge granted defendants’ motion to dismiss, but also agreed to give the plaintiffs 30 days to replead their complaint. In January 2019, the court issued a final judgment and order of dismissal after the plaintiffs elected not to replead. In February 2019, the plaintiffs filed an appeal of the court’s ruling that dismissal was appropriate because the plaintiffs failed to adequately plead that a pre-suit demand on the Company’s board of directors, a precondition to their action, should be excused as futile. Following the filing of the parties’ appellate briefs, oral arguments were held in February 2020. On September 28, 2020, the Dallas Court of Appeals affirmed the lower court’s dismissal. If the plaintiffs file further appeals, the defendants intend to continue to vigorously contest the plaintiffs’ allegations in this matter. Government Investigation of Detroit Medical Center Detroit Medical Center (“DMC”) is subject to an ongoing investigation commenced in October 2017 by the U.S. Attorney’s Office for the Eastern District of Michigan and the Civil Division of the U.S. Department of Justice (“DOJ”) for potential violations of the Stark law, the Medicare and Medicaid anti-kickback and anti-fraud and abuse amendments codified under Section 1128B(b) of the Social Security Act, and the federal False Claims Act related to DMC’s employment of nurse practitioners and physician assistants (“Mid-Level Practitioners”) from 2006 through 2017. As previously disclosed, a media report was published in August 2017 alleging that 14 Mid-Level Practitioners were terminated by DMC earlier in 2017 due to compliance concerns. We are cooperating with the investigation; however, we are unable to determine the potential exposure, if any, at this time. Oklahoma Surgical Hospital Qui Tam Action On July 7, 2020, certain of the parties to a previously disclosed qui tam lawsuit filed under seal in May 2016 in the Western District of Oklahoma entered into a settlement agreement with the DOJ to resolve the matter. The parties to the settlement agreement include (i) Oklahoma Center for Orthopaedic & Multispecialty Surgery (“OCOM”), a surgical hospital jointly owned by USPI, a healthcare system partner and physicians, (ii) Southwest Orthopaedic Specialists, an independent physician practice group, and (iii) USPI. Also on July 7, 2020, OCOM entered into a corporate integrity agreement with the Office of Inspector General of HHS. USPI and Tenet are not parties to OCOM’s corporate integrity agreement. As previously reported, an agreement in principle was reached with the DOJ in October 2019 to resolve the qui tam lawsuit and related investigations against USPI and OCOM for approximately $66 million, subject at that time to further approvals by the DOJ and other government agencies. In the three months ended September 30, 2019, we established a reserve of $68 million for this matter, which included an estimate of the relator’s attorney’s fees and certain other costs to be paid by USPI. In the three months ended December 31, 2019, we increased the reserve for this matter by an additional $1 million to reflect updated information on the other costs to be paid by USPI. USPI paid the full settlement amount in July 2020 and will pay the relator’s attorney’s fees and other costs when approved by the court. The claims in the qui tam lawsuit against the OCOM, USPI, Tenet and their affiliated entities, among others, were dismissed on August 3, 2020. Other Matters On July 1, 2019, certain of the entities that purchased the operations of Hahnemann University Hospital and St. Christopher’s Hospital for Children in Philadelphia from us commenced Chapter 11 bankruptcy proceedings. As previously disclosed in our Form 8-K filed September 1, 2017, the purchasers assumed our funding obligations under the Pension Fund for Hospital and Health Care Employees of Philadelphia and Vicinity (the “Fund”), a pension plan related to the operations at Hahnemann University Hospital and, pursuant to rules under the Employee Retirement Income Security Act of 1974, as amended (“ERISA”), under certain circumstances we could become liable for withdrawal liability in the event a withdrawal is triggered with respect to the Fund. In July 2019, the Fund notified us of a withdrawal liability assessment of approximately $63 million. In February 2020, the Fund notified us that the prior assessment against us had been withdrawn. As previously disclosed, pursuant to applicable ERISA rules, we could become secondarily liable if the purchasers fail to satisfy their obligations to the Fund. We are also subject to claims and lawsuits arising in the ordinary course of business, including potential claims related to, among other things, the care and treatment provided at our hospitals and outpatient facilities, the application of various federal and state labor laws, tax audits and other matters. Although the results of these claims and lawsuits cannot be predicted with certainty, we believe that the ultimate resolution of these ordinary course claims and lawsuits will not have a material effect on our business or financial condition. New claims or inquiries may be initiated against us from time to time, including lawsuits from patients, employees and others exposed to COVID-19 at our facilities. These matters could (1) require us to pay substantial damages or amounts in judgments or settlements, which, individually or in the aggregate, could exceed amounts, if any, that may be recovered under our insurance policies where coverage applies and is available, (2) cause us to incur substantial expenses, (3) require significant time and attention from our management, and (4) cause us to close or sell hospitals or otherwise modify the way we conduct business. The following table presents reconciliations of the beginning and ending liability balances in connection with legal settlements and related costs recorded in continuing operations during the nine months ended September 30, 2020 and 2019. No amounts were recorded in discontinued operations in those periods. Balances at Litigation and Cash Balances at Nine Months Ended September 30, 2020 $ 86 $ 13 $ (84) $ 15 Nine Months Ended September 30, 2019 $ 8 $ 115 $ (37) $ 86 For the nine months ended September 30, 2020 and 2019, we recorded costs of $13 million and $115 million, respectively, in continuing operations in connection with significant legal proceedings and governmental investigations. |
REDEEMABLE NONCONTROLLING INTER
REDEEMABLE NONCONTROLLING INTERESTS IN EQUITY OF CONSOLIDATED SUBSIDIARIES | 9 Months Ended |
Sep. 30, 2020 | |
Noncontrolling Interest [Abstract] | |
REDEEMABLE NONCONTROLLING INTERESTS IN EQUITY OF CONSOLIDATED SUBSIDIARIES | REDEEMABLE NONCONTROLLING INTERESTS IN EQUITY OF CONSOLIDATED SUBSIDIARIES The following table shows the changes in redeemable noncontrolling interests in equity of consolidated subsidiaries during the nine months ended September 30, 2020 and 2019: Nine Months Ended 2020 2019 Balances at beginning of period $ 1,506 $ 1,420 Net income 122 130 Distributions paid to noncontrolling interests (90) (105) Accretion of redeemable noncontrolling interests 4 13 Purchases and sales of businesses and noncontrolling interests, net (63) 17 Balances at end of period $ 1,479 $ 1,475 The following tables show the composition by segment of our redeemable noncontrolling interests balances at September 30, 2020 and December 31, 2019, as well as our net income available to redeemable noncontrolling interests for the nine months ended September 30, 2020 and 2019: September 30, 2020 December 31, 2019 Hospital Operations $ 283 $ 383 Ambulatory Care 805 777 Conifer 391 346 Redeemable noncontrolling interests $ 1,479 $ 1,506 Nine Months Ended 2020 2019 Hospital Operations $ (17) $ (26) Ambulatory Care 94 100 Conifer 45 56 Net income available to redeemable noncontrolling interests $ 122 $ 130 |
INCOME TAXES
INCOME TAXES | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
INCOME TAXES | INCOME TAXES During the three months ended September 30, 2020, we recorded an income tax benefit of $197 million in continuing operations on a pre-tax loss of $304 million compared to income tax expense of $22 million on a pre-tax loss of $125 million during the three months ended September 30, 2019. During the nine months ended September 30, 2020, we recorded an income tax benefit of $227 million in continuing operations on a pre-tax loss of $5 million compared to income tax expense of $75 million on pre-tax income of $111 million during the nine months ended September 30, 2019. For the nine months ended September 30, 2020, we utilized the discrete effective tax rate method, as allowed by the FASB ASC 740-270-30-18, “Income Taxes–Interim Reporting,” to calculate the interim income tax provision. The discrete method is applied when application of the estimated annual effective tax rate is impractical because it is not possible to reliably estimate the annual effective tax rate. The discrete method treats the year-to-date period as if it were the annual period and determines the income tax expense or benefit on that basis. We believe that, at this time, the use of this discrete method is more appropriate than the annual effective tax rate method as the estimated annual effective tax rate method is not reliable due to the high degree of uncertainty in estimating annual pre-tax income due to the impact of the COVID-19 pandemic and the evolving guidance by the government on utilization of grant funds. For the nine months ended September 30, 2019, the provision for income taxes was calculated by applying an estimate of the annual effective tax rate for the full year to “ordinary” income or loss (pre-tax income or loss excluding unusual or infrequently occurring discrete items) for the reporting period. In calculating “ordinary” income, non‑taxable income or loss attributable to noncontrolling interests was deducted from pre-tax income or loss in the determination of the annualized effective tax rate used to calculate income taxes for the quarter. The reconciliation between the amount of recorded income tax expense and the amount calculated at the statutory federal tax rate is shown in the following table: Three Months Ended Nine Months Ended 2020 2019 2020 2019 Tax expense (benefit) at statutory federal rate of 21% $ (64) $ (26) $ (1) $ 24 State income taxes, net of federal income tax benefit (6) (3) 9 6 Tax benefit attributable to noncontrolling interests (18) (17) (48) (53) Nontaxable gains — — 3 (1) Nondeductible litigation costs — 7 — 7 Stock-based compensation 1 4 1 4 Change in valuation allowance (113) 53 (201) 88 Change in tax contingency reserves, including interest — (3) — (3) Other items 3 7 10 3 Income tax expense (benefit) $ (197) $ 22 $ (227) $ 75 The CARES Act includes a significant number of tax provisions applicable to individuals and businesses. For businesses, the CARES Act makes changes to the U.S. tax code relating to, among other things: (1) the business interest expense disallowance rules for 2019 and 2020; (2) net operating loss rules; (3) charitable contribution limitations; and (4) the realization of corporate alternative minimum tax credits. As a result of the change in the business interest expense disallowance rules, we recorded an income tax benefit of $88 million during the nine months ended September 30, 2020 to decrease the valuation allowance for interest expense carryforwards due to the additional deduction of interest expense. In September 2020, we filed a request with the U.S. Internal Revenue Service to change our method of accounting for certain capitalized costs on our 2019 tax return. This change in tax accounting method resulted in additional interest expense being allowed in the 2019 and 2020 tax returns. We reduced our valuation allowance by an additional $113 million in the nine months ended September 30, 2020, including a reduction of $119 million related to the change in tax accounting method and an increase of $6 million related to the state interest expense and charitable contribution carryforwards. During the nine months ended September 30, 2020, there were no adjustments to our estimated liabilities for uncertain tax positions. The total amount of unrecognized tax benefits at September 30, 2020 was $31 million, of which $29 million, if recognized, would impact our effective tax rate and income tax expense (benefit) from continuing operations. Our practice is to recognize interest and penalties related to income tax matters in income tax expense in our consolidated statements of operations. There were no accrued interest and penalties on unrecognized tax benefits at September 30, 2020. At September 30, 2020, no significant changes in unrecognized federal and state tax benefits are expected in the next 12 months as a result of the settlement of audits, the filing of amended tax returns or the expiration of statutes of limitations. |
LOSS PER COMMON SHARE
LOSS PER COMMON SHARE | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
LOSS PER COMMON SHARE | LOSS PER COMMON SHARE The following table is a reconciliation of the numerators and denominators of our basic and diluted loss per common share calculations for our continuing operations for three and nine months ended September 30, 2020 and 2019. Net loss attributable to our common shareholders is expressed in millions and weighted average shares are expressed in thousands. Net Loss Attributable Weighted Per-Share Three Months Ended September 30, 2020: Net loss attributable to Tenet Healthcare Corporation common shareholders for basic loss per share $ (197) 105,263 $ (1.87) Effect of dilutive stock options, restricted stock units and deferred compensation units — — — Net loss attributable to Tenet Healthcare Corporation common shareholders for diluted loss per share $ (197) 105,263 $ (1.87) Three Months Ended September 30, 2019: Net loss attributable to Tenet Healthcare Corporation common shareholders for basic loss per share $ (227) 103,558 $ (2.19) Effect of dilutive stock options, restricted stock units and deferred compensation units — — — Net loss attributable to Tenet Healthcare Corporation common shareholders for diluted loss per share $ (227) 103,558 $ (2.19) Nine Months Ended September 30, 2020: Net loss attributable to Tenet Healthcare Corporation common shareholders for basic loss per share $ (15) 104,803 $ (0.14) Effect of dilutive stock options, restricted stock units and deferred compensation units — — — Net loss attributable to Tenet Healthcare Corporation common shareholders for diluted loss per share $ (15) 104,803 $ (0.14) Nine Months Ended September 30, 2019: Net loss attributable to Tenet Healthcare Corporation common shareholders for basic loss per share $ (223) 103,181 $ (2.16) Effect of dilutive stock options, restricted stock units and deferred compensation units — — — Net loss attributable to Tenet Healthcare Corporation common shareholders for diluted loss per share $ (223) 103,181 $ (2.16) |
FAIR VALUE MEASUREMENTS
FAIR VALUE MEASUREMENTS | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
FAIR VALUE MEASUREMENTS | FAIR VALUE MEASUREMENTS Our non-financial assets and liabilities not permitted or required to be measured at fair value on a recurring basis typically relate to long-lived assets held and used, long-lived assets held for sale and goodwill. We are required to provide additional disclosures about fair value measurements as part of our financial statements for each major category of assets and liabilities measured at fair value on a non-recurring basis. The following tables present this information and indicate the fair value hierarchy of the valuation techniques we utilized to determine such fair values. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities, which generally are not applicable to non-financial assets and liabilities. Fair values determined by Level 2 inputs utilize data points that are observable, such as definitive sales agreements, appraisals or established market values of comparable assets. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability and include situations where there is little, if any, market activity for the asset or liability, such as internal estimates of future cash flows. September 30, 2020 Quoted Prices Significant Other Significant Long-lived assets held for sale $ 386 $ — $ 386 $ — December 31, 2019 Quoted Prices Significant Other Significant Long-lived assets held for sale $ 387 $ — $ 387 $ — The fair value of our long-term debt (except for borrowings under the Credit Agreement) is based on quoted market prices (Level 1). The inputs used to establish the fair value of the borrowings outstanding under the Credit Agreement are considered to be Level 2 inputs, which include inputs other than quoted prices included in Level 1 that are observable, either directly or indirectly. At September 30, 2020 and December 31, 2019, the estimated fair value of our long-term debt was approximately 102.7% and 106.4%, respectively, of the carrying value of the debt. |
ACQUISITIONS
ACQUISITIONS | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
ACQUISITIONS | ACQUISITIONS Preliminary purchase price allocations (representing the fair value of the consideration conveyed) for all acquisitions made during the nine months ended September 30, 2020 and 2019 are as follows: Nine Months Ended 2020 2019 Current assets $ 7 $ 5 Property and equipment 15 15 Other intangible assets 8 4 Goodwill 78 34 Other long-term assets, including previously held equity method investments 6 6 Current liabilities (4) (4) Long-term liabilities (6) (10) Redeemable noncontrolling interests in equity of consolidated subsidiaries (30) (16) Noncontrolling interests (13) (6) Cash paid, net of cash acquired (61) (23) Gains on consolidations $ — $ 5 The goodwill generated from these transactions, the majority of which will be deductible for income tax purposes, can be attributed to the benefits that we expect to realize from operating efficiencies and growth strategies. The goodwill total of $78 million from acquisitions completed during the nine months ended September 30, 2020 was recorded in our Ambulatory Care segment. Approximately $3 million and $4 million in transaction costs related to prospective and closed acquisitions were expensed during the nine-month periods ended September 30, 2020 and 2019, respectively, and are included in impairment and restructuring charges, and acquisition-related costs in the accompanying Condensed Consolidated Statements of Operations. We are required to allocate the purchase prices of acquired businesses to assets acquired or liabilities assumed and, if applicable, noncontrolling interests based on their fair values. The excess of the purchase price allocation over those fair values is recorded as goodwill. We are in process of finalizing the purchase price allocations, including valuations of the acquired property and equipment, other intangible assets and noncontrolling interests for some of our 2020 and 2019 acquisitions; therefore, those purchase price allocations are subject to adjustment once the valuations are completed. During the nine months ended September 30, 2019, we recognized gains totaling $5 million associated with stepping up our ownership interests in previously held equity method investments, which we began consolidating after we acquired controlling interests. |
SEGMENT INFORMATION
SEGMENT INFORMATION | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
SEGMENT INFORMATION | SEGMENT INFORMATION Our business consists of our Hospital Operations segment, our Ambulatory Care segment and our Conifer segment. The factors for determining the reportable segments include the manner in which management evaluates operating performance combined with the nature of the individual business activities. Our Hospital Operations segment is comprised of our acute care and specialty hospitals, ancillary outpatient facilities, urgent care centers, micro-hospitals and physician practices. As described in Note 4, certain of these facilities are classified as held for sale in the accompanying Condensed Consolidated Balance Sheets at September 30, 2020 and December 31, 2019. At September 30, 2020, our subsidiaries operated 65 hospitals serving primarily urban and suburban communities in nine states. Our Ambulatory Care segment is comprised of the operations of USPI. At September 30, 2020, USPI had interests in 263 ambulatory surgery centers, 40 urgent care centers operated under the CareSpot brand, 24 imaging centers and 25 surgical hospitals in 28 states. At September 30, 2020, we owned 95% of USPI. Our Conifer segment provides revenue cycle management and value-based care services to hospitals, health systems, physician practices, employers and other clients. At September 30, 2020, Conifer provided services to approximately 640 Tenet and non-Tenet hospitals and other clients nationwide. In 2012, we entered into agreements documenting the terms and conditions of various services Conifer provides to Tenet hospitals, as well as certain administrative services our Hospital Operations segment provides to Conifer. The pricing terms for the services provided by each party to the other under these contracts were based on estimated third-party pricing terms in effect at the time the agreements were signed. At September 30, 2020, we owned 76.2% of Conifer Health Solutions, LLC, which is the principal subsidiary of Conifer Holdings, Inc. The following tables include amounts for each of our reportable segments and the reconciling items necessary to agree to amounts reported in the accompanying Condensed Consolidated Balance Sheets and in the Condensed Consolidated Statements of Operations, as applicable: September 30, December 31, Assets: Hospital Operations $ 18,726 $ 16,196 Ambulatory Care 6,487 6,195 Conifer 974 974 Total $ 26,187 $ 23,365 Three Months Ended Nine Months Ended 2020 2019 2020 2019 Capital expenditures: Hospital Operations $ 71 $ 135 $ 328 $ 423 Ambulatory Care 11 16 32 57 Conifer 4 5 14 12 Total $ 86 $ 156 $ 374 $ 492 Net operating revenues: Hospital Operations total prior to inter-segment eliminations $ 3,803 $ 3,850 $ 10,725 $ 11,539 Ambulatory Care 565 522 1,423 1,526 Conifer Tenet 136 140 385 432 Other clients 189 196 577 608 Total Conifer revenues 325 336 962 1,040 Inter-segment eliminations (136) (140) (385) (432) Total $ 4,557 $ 4,568 $ 12,725 $ 13,673 Equity in earnings of unconsolidated affiliates: Hospital Operations $ 3 $ 1 $ 1 $ 12 Ambulatory Care 41 37 102 102 Total $ 44 $ 38 $ 103 $ 114 Adjusted EBITDA: Hospital Operations $ 240 $ 342 $ 1,074 $ 1,048 Ambulatory Care 215 207 538 591 Conifer 96 90 256 292 Total $ 551 $ 639 $ 1,868 $ 1,931 Depreciation and amortization: Hospital Operations $ 184 $ 175 $ 536 $ 539 Ambulatory Care 21 19 60 55 Conifer 10 11 28 33 Total $ 215 $ 205 $ 624 $ 627 Three Months Ended Nine Months Ended 2020 2019 2020 2019 Adjusted EBITDA $ 551 $ 639 $ 1,868 $ 1,931 Loss from divested and closed businesses — (1) — (2) Depreciation and amortization (215) (205) (624) (627) Impairment and restructuring charges, and acquisition-related costs (57) (46) (166) (101) Litigation and investigation costs (9) (84) (13) (115) Interest expense (263) (244) (761) (742) Loss from early extinguishment of debt (312) (180) (316) (227) Other non-operating income (expense), net — (3) 3 (3) Net gains (losses) on sales, consolidation and deconsolidation of facilities 1 (1) 4 (3) Income (loss) from continuing operations, before income taxes $ (304) $ (125) $ (5) $ 111 |
SUBSEQUENT EVENTS
SUBSEQUENT EVENTS | 9 Months Ended |
Sep. 30, 2020 | |
Subsequent Events [Abstract] | |
SUBSEQUENT EVENTS | SUBSEQUENT EVENTS Amendment of Repayment Terms of Medicare Advances On October 1, 2020, the Continuing Appropriations Act, 2021 and Other Extensions Act (the “CA Act”) was signed into law. Among other things, the CA Act significantly changed the repayment terms for Medicare advance payments made under the Medicare Fee-for-Service accelerated and advanced payment program. As originally structured, advance payments made under the program would have been recouped by offsetting 100% of the recipient’s Medicare claim payments beginning 120 days after the advance payment was made, with interest beginning to accrue as soon as 210 days after the date of the advance at a rate of 10.25%. The CA Act amended these repayment terms as follows: • allows recipients to extend repayment for a full year before recoupment of the advance payments begins; • limits the claim payment offset to 25% of the recipient’s full Medicare payments for 11 months, followed by six months with claim offset limited to 50%; and • lowers the interest rate on balances still outstanding after the 29-month recoupment period to 4.00%. At September 30, 2020, we had received Medicare advance payments of approximately $1.5 billion, which were included in current liabilities in our Condensed Consolidated Balance Sheet. In October 2020, we will reclassify more than $1 billion of these advance payments to long-term liabilities as a result of the extended recoupment period under the CA Act. Revised Guidance for Provider Relief Fund Grants On October 22, 2020, HHS further revised its guidance for reporting requirements for providers that accepted funding from the Provider Relief Fund through the issuance of the October 2020 PRF Guidance. In addition to other changes, this guidance revised the policy for transferring certain categories of grant funds among providers within a hospital system and significantly modified the methodology for determining lost revenues in connection with the grants. The October 2020 PRF Guidance will result in an increase of grant income during the three months ending December 31, 2020 based on our revised estimate of lost revenues through September 30, 2020. |
BASIS OF PRESENTATION (Policies
BASIS OF PRESENTATION (Policies) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Description of Business and Basis of Presentation | Description of Business and Basis of Presentation Tenet Healthcare Corporation (together with our subsidiaries, referred to herein as “Tenet,” “we” or “us”) is a diversified healthcare services company headquartered in Dallas, Texas. Through an expansive care network that includes USPI Holding Company, Inc. (“USPI”), at September 30, 2020 we operated 65 hospitals and approximately 520 other healthcare facilities, including surgical hospitals, ambulatory surgery centers, urgent care and imaging centers, and other care sites and clinics. We also operate Conifer Health Solutions, LLC through our Conifer Holdings, Inc. (“Conifer”) subsidiary, which provides revenue cycle management and value-based care services to hospitals, health systems, physician practices, employers and other clients. This quarterly report supplements our Annual Report on Form 10-K for the year ended December 31, 2019 (“Annual Report”). As permitted by the Securities and Exchange Commission for interim reporting, we have omitted certain notes and disclosures that substantially duplicate those in our Annual Report. For further information, refer to the audited Consolidated Financial Statements and notes included in our Annual Report. Unless otherwise indicated, all financial and statistical data included in these notes to our Condensed Consolidated Financial Statements relate to our continuing operations, with dollar amounts expressed in millions (except per-share amounts). Effective January 1, 2020, we adopted the Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2016-13, “Financial Instruments—Credit Losses (Topic 326) Measurement of Credit Losses on Financial Instruments” (“ASU 2016-13”) using the modified retrospective transition approach as of the period of adoption. Upon adoption of ASU 2016-13 Certain prior-year amounts have been reclassified to conform to the current year presentation. In the accompanying Condensed Consolidated Balance Sheets, contract liabilities, primarily related to Medicare advance payments we received, are now presented separately due to the fact that the balances increased substantially in 2020. In the accompanying Condensed Consolidated Statements of Operations, electronic health record incentives have been reclassified to other operating expenses, net, as they are no longer significant enough to present separately. In the accompanying Condensed Consolidated Statements of Cash Flows, purchases of marketable securities have been reclassified from other items, net within cash flows from investing activities to purchases of marketable securities and equity investments. Additionally, our financial statements and corresponding footnotes for prior periods have been recast to reflect retrospective application of the change in accounting principle discussed in the Professional and General Liability Reserves section of this note. Although the Condensed Consolidated Financial Statements and related notes within this document are unaudited, we believe all adjustments considered necessary for a fair presentation have been included and are of a normal recurring nature. In preparing our financial statements in conformity with accounting principles generally accepted in the United States (“GAAP”), we are required to make estimates and assumptions that affect the amounts reported in our Condensed Consolidated Financial Statements and these accompanying notes. We regularly evaluate the accounting policies and estimates we use. In general, we base the estimates on historical experience and on assumptions that we believe to be reasonable given the particular circumstances in which we operate. Actual results may vary from those estimates. Financial and statistical information we report to other regulatory agencies may be prepared on a basis other than GAAP or using different assumptions or reporting periods and, therefore, may vary from amounts presented herein. Although we make every effort to ensure that the information we report to those agencies is accurate, complete and consistent with applicable reporting guidelines, we cannot be responsible for the accuracy of the information they make available to the public. Operating results for the three and nine-month periods ended September 30, 2020 are not necessarily indicative of the results that may be expected for the full year. Reasons for this include, but are not limited to: the impact of the COVID-19 pandemic on our operations, business, financial condition and cash flows; overall revenue and cost trends, particularly the timing and magnitude of price changes; fluctuations in contractual allowances and cost report settlements and valuation allowances; managed care contract negotiations, settlements or terminations and payer consolidations; trends in patient accounts receivable collectability and associated implicit price concessions; fluctuations in interest rates; levels of malpractice insurance expense and settlement trends; impairment of long-lived assets and goodwill; restructuring charges; losses, costs and insurance recoveries related to natural disasters and other weather-related occurrences; litigation and investigation costs; acquisitions and dispositions of facilities and other assets; gains (losses) on sales, consolidation and deconsolidation of facilities; income tax |
Net Operating Revenues | Net Operating Revenues We recognize net operating revenues in the period in which we satisfy our performance obligations under contracts by transferring services to our customers. Net operating revenues are recognized in the amounts we expect to be entitled to, which are the transaction prices allocated for the distinct services. Our business consists of our Hospital Operations and other (“Hospital Operations”) segment, our Ambulatory Care segment and our Conifer segment. Net operating revenues for our Hospital Operations and Ambulatory Care segments primarily consist of net patient service revenues, principally for patients covered by Medicare, Medicaid, managed care and other health plans, as well as certain uninsured patients under our Compact with Uninsured Patients (“ Compact ”) and other uninsured discount and charity programs. Net operating revenues for our Conifer segment primarily consist of revenues from providing revenue cycle management services to healthcare systems, as well as individual hospitals, physician practices, self-insured organizations, health plans and other entities. Net Patient Service Revenues— We report net patient service revenues at the amounts that reflect the consideration we expect to be entitled to in exchange for providing patient care. These amounts are due from patients, third-party payers (including managed care payers and government programs) and others, and they include variable consideration for retroactive revenue adjustments due to settlement of audits, reviews and investigations. Generally, we bill our patients and third-party payers several days after the services are performed or shortly after discharge. Revenues are recognized as performance obligations are satisfied. |
Cash and Cash Equivalents | Cash and Cash Equivalents We treat highly liquid investments with original maturities of three months or less as cash equivalents. Cash and cash equivalents were $3.300 billion and $262 million at September 30, 2020 and December 31, 2019, respectively. At September 30, 2020 and December 31, 2019, our book overdrafts were $134 million and $246 million, respectively, which were classified as accounts payable. At September 30, 2020 and December 31, 2019, $161 million and $176 million, respectively, of total cash and cash equivalents in the accompanying Condensed Consolidated Balance Sheets were intended for the operations of our captive insurance subsidiaries. At September 30, 2020 and December 31, 2019, $1 million and $2 million, respectively, of total cash and cash equivalents in the accompanying Condensed Consolidated Balance Sheets were intended for the operations of our health plan-related businesses. Also at September 30, 2020 and December 31, 2019, we had $43 million and $136 million, respectively, of property and equipment purchases accrued for items received but not yet paid. Of these amounts, $33 million and $119 million, respectively, were included in accounts payable. |
Investments in Unconsolidated Affiliates | Investments in Unconsolidated AffiliatesWe control 244 of the facilities within our Ambulatory Care segment and, therefore, consolidate their results. We account for many of the facilities our Ambulatory Care segment operates (108 of 352 at September 30, 2020), as well as additional companies in which our Hospital Operations segment holds ownership interests, under the equity method as investments in unconsolidated affiliates and report only our share of net income as equity in earnings of unconsolidated affiliates in the accompanying Condensed Consolidated Statements of Operations. |
BASIS OF PRESENTATION (Tables)
BASIS OF PRESENTATION (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of change in accounting estimate | The following tables present the effects of the change in accounting principle to our financial statements: Condensed Consolidated Balance Sheet: As Reported Effect of Change in Accounting Principle As Adjusted At December 31, 2019: Deferred income taxes $ 169 $ 14 $ 183 Professional and general liability reserves $ 585 $ 50 $ 635 Other long-term liabilities $ 1,405 $ 10 $ 1,415 Accumulated deficit $ (2,467) $ (46) $ (2,513) Condensed Consolidated Statements of Operations (in millions, except for per-share amounts): Three Months Ended September 30, 2020 Nine Months Ended September 30, 2020 Prior to Change in Accounting Principle Effect of Change in Accounting Principle As Reported Prior to Change in Accounting Principle Effect of Change in Accounting Principle As Reported Salaries, wages and benefits $ 2,142 $ — $ 2,142 $ 6,200 $ (7) $ 6,193 Other operating expenses, net $ 1,058 $ — $ 1,058 $ 3,088 $ (34) $ 3,054 Operating income $ 271 $ — $ 271 $ 1,028 $ 41 $ 1,069 Income tax benefit $ 197 $ — $ 197 $ 237 $ (10) $ 227 Net income (loss) $ (106) $ — $ (106) $ 191 $ 31 $ 222 Net loss from continuing operations attributable to Tenet Healthcare Corporation common shareholders $ (197) $ — $ (197) $ (46) $ 31 $ (15) Loss per share attributable to Tenet Healthcare Corporation common shareholders from continuing operations: Basic $ (1.87) $ — $ (1.87) $ (0.44) $ 0.30 $ (0.14) Diluted $ (1.87) $ — $ (1.87) $ (0.44) $ 0.30 $ (0.14) Three Months Ended September 30, 2019 Nine Months Ended September 30, 2019 As Reported Effect of Change in Accounting Principle As Adjusted As Reported Effect of Change in Accounting Principle As Adjusted Salaries, wages and benefits $ 2,174 $ (2) $ 2,172 $ 6,475 $ (7) $ 6,468 Other operating expenses, net $ 1,042 $ (6) $ 1,036 $ 3,159 $ (23) $ 3,136 Operating income $ 294 $ 8 $ 302 $ 1,053 $ 30 $ 1,083 Income tax expense $ (20) $ (2) $ (22) $ (67) $ (8) $ (75) Net income (loss) $ (152) $ 6 $ (146) $ 25 $ 22 $ 47 Net loss from continuing operations attributable to Tenet Healthcare Corporation common shareholders $ (233) $ 6 $ (227) $ (245) $ 22 $ (223) Loss per share attributable to Tenet Healthcare Corporation common shareholders from continuing operations: Basic $ (2.25) $ 0.06 $ (2.19) $ (2.37) $ 0.21 $ (2.16) Diluted $ (2.25) $ 0.06 $ (2.19) $ (2.37) $ 0.21 $ (2.16) Condensed Consolidated Statements of Cash Flows: Prior to Change in Accounting Principle Effect of Change in Accounting Principle As Reported Nine Months Ended September 30, 2020: Net income $ 191 $ 31 $ 222 Deferred income tax benefit $ (256) $ 10 $ (246) Accounts payable, accrued expenses and other current liabilities $ 1,587 $ (41) $ 1,546 Net cash provided by operating activities $ 2,961 $ — $ 2,961 As Reported Effect of Change in Accounting Principle As Adjusted Nine Months Ended September 30, 2019: Net income $ 25 $ 22 $ 47 Deferred income tax expense $ 57 $ 8 $ 65 Accounts payable, accrued expenses and other current liabilities $ (37) $ (30) $ (67) Net cash provided by operating activities $ 713 $ — $ 713 |
Schedule of other intangible assets | The following tables provide information regarding other intangible assets, which are included in the accompanying Condensed Consolidated Balance Sheets at September 30, 2020 and December 31, 2019: Gross Accumulated Net Book At September 30, 2020: Capitalized software costs $ 1,696 $ (1,012) $ 684 Trade names 102 — 102 Contracts 879 (107) 772 Other 108 (88) 20 Total $ 2,785 $ (1,207) $ 1,578 Gross Accumulated Net Book At December 31, 2019: Capitalized software costs $ 1,616 $ (912) $ 704 Trade names 102 — 102 Contracts 869 (94) 775 Other 107 (86) 21 Total $ 2,694 $ (1,092) $ 1,602 |
Schedule of estimated future amortization of intangibles with finite useful lives | Estimated future amortization of intangibles with finite useful lives at September 30, 2020 is as follows: Three Months Years Ending Later Years December 31, Total 2020 2021 2022 2023 2024 Amortization of intangible assets $ 890 $ 48 $ 134 $ 118 $ 106 $ 90 $ 394 |
Schedule of equity method investments | Summarized financial information for these equity method investees is included in the following table. For investments acquired during the reporting periods, amounts reflect 100% of the investee’s results beginning on the date of our acquisition of the investment. Three Months Ended Nine Months Ended 2020 2019 2020 2019 Net operating revenues $ 697 $ 622 $ 1,731 $ 1,809 Net income $ 167 $ 156 $ 414 $ 447 Net income available to the investees $ 101 $ 97 $ 253 $ 290 |
ACCOUNTS RECEIVABLE (Tables)
ACCOUNTS RECEIVABLE (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Accounts Receivable Additional Disclosures [Abstract] | |
Schedule of components of accounts receivable | The principal components of accounts receivable are shown in the table below: September 30, 2020 December 31, 2019 Continuing operations: Patient accounts receivable $ 2,278 $ 2,567 Estimated future recoveries 158 162 Net cost reports and settlements receivable and valuation allowances 42 12 2,478 2,741 Discontinued operations 1 2 Accounts receivable, net $ 2,479 $ 2,743 |
Schedule of estimated costs for charity care and self-pay patients | The following table shows our estimated costs (based on selected operating expenses, which include salaries, wages and benefits, supplies and other operating expenses) of caring for our uninsured and charity patients in the three and nine months ended September 30, 2020 and 2019: Three Months Ended Nine Months Ended 2020 2019 2020 2019 Estimated costs for: Uninsured patients $ 165 $ 171 $ 466 $ 493 Charity care patients 30 41 113 116 Total $ 195 $ 212 $ 579 $ 609 |
CONTRACT BALANCES (Tables)
CONTRACT BALANCES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of opening and closing balances of Company's contract assets | The opening and closing balances of contract assets and contract liabilities for our Hospital Operations segment are as follows: Contract Liability – Current Contract Assets Advances from Medicare December 31, 2019 $ 170 $ — September 30, 2020 171 1,270 Increase $ 1 $ 1,270 December 31, 2018 $ 169 $ — September 30, 2019 163 — Decrease $ (6) $ — Contract Liability – Current Advances from Medicare December 31, 2019 $ — September 30, 2020 172 Increase $ 172 December 31, 2018 $ — September 30, 2019 — Increase $ — The opening and closing balances of Conifer’s receivables, contract asset, and current and long-term contract liabilities are as follows: Contract Liability – Contract Liability – Contract Asset – Current Long-Term Receivables Unbilled Revenue Deferred Revenue Deferred Revenue December 31, 2019 $ 26 $ 11 $ 61 $ 18 September 30, 2020 29 13 58 17 Increase/(decrease) $ 3 $ 2 $ (3) $ (1) December 31, 2018 $ 42 $ 11 $ 61 $ 20 September 30, 2019 86 11 72 19 Increase/(decrease) $ 44 $ — $ 11 $ (1) |
ASSETS AND LIABILITIES HELD F_2
ASSETS AND LIABILITIES HELD FOR SALE (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Discontinued Operation, Additional Disclosures [Abstract] | |
Assets and liabilities classified as held for sale and summary of disposals of significant business components | Assets and liabilities classified as held for sale at September 30, 2020 were comprised of the following: Accounts receivable $ 85 Other current assets 24 Investments and other long-term assets 7 Property and equipment 206 Other intangible assets 22 Goodwill 42 Contract liabilities (49) Other current liabilities (34) Long-term liabilities (8) Net assets held for sale $ 295 The following table provides information on significant components of our business that have been recently disposed of or are classified as held for sale at September 30, 2020: Three Months Ended Nine Months Ended 2020 2019 2020 2019 Significant disposals: Income (loss) from continuing operations, before income taxes Chicago area (includes a $5 million loss and a $6 million loss on sale in the 2020 and 2019 periods, respectively) $ 2 $ — $ — $ (11) Total $ 2 $ — $ — $ (11) Significant planned divestitures classified as held for sale: Income (loss) from continuing operations, before income taxes Memphis area $ (5) $ 4 $ 23 $ 9 Total $ (5) $ 4 $ 23 $ 9 |
LONG-TERM DEBT (Tables)
LONG-TERM DEBT (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Long-term Debt and Lease Obligation [Abstract] | |
Summary of long-term debt | The table below shows our long-term debt at September 30, 2020 and December 31, 2019: September 30, 2020 December 31, 2019 Senior unsecured notes: 8.125% due 2022 $ — $ 2,800 6.750% due 2023 1,872 1,872 7.000% due 2025 478 478 6.125% due 2028 2,500 — 6.875% due 2031 362 362 Senior secured first lien notes: 4.625% due 2024 1,870 1,870 4.625% due 2024 600 600 7.500% due 2025 700 — 4.875% due 2026 2,100 2,100 5.125% due 2027 1,500 1,500 4.625% due 2028 600 — Senior secured second lien notes: 5.125% due 2025 1,410 1,410 6.250% due 2027 1,500 1,500 Finance leases and mortgage notes 408 445 Unamortized issue costs and note discounts (184) (186) Total long-term debt 15,716 14,751 Less current portion 155 171 Long-term debt, net of current portion $ 15,561 $ 14,580 |
EMPLOYEE BENEFIT PLANS (Tables)
EMPLOYEE BENEFIT PLANS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Summary of stock option activity | The following table summarizes stock option activity during the nine months ended September 30, 2020: Options Weighted Average Aggregate Weighted Average (In Millions) Outstanding at December 31, 2019 1,960,992 $ 20.24 Exercised (472,304) 19.02 Forfeited/Expired (11,326) 20.60 Outstanding at September 30, 2020 1,477,362 $ 20.63 $ 7 5.4 years Vested and expected to vest at September 30, 2020 1,477,362 $ 20.63 $ 7 5.4 years Exercisable at September 30, 2020 797,819 $ 17.98 $ 5 3.9 years |
Summary of information about stock options by range of exercise prices | The following table summarizes information about our outstanding stock options at September 30, 2020: Options Outstanding Options Exercisable Range of Exercise Prices Number of Weighted Average Weighted Average Number of Weighted Average $16.43 to $19.759 756,152 4.0 years $ 17.61 756,152 $ 17.61 $19.76 to $35.430 721,210 6.8 years 23.80 41,667 24.83 1,477,362 5.4 years $ 20.63 797,819 $ 17.98 |
Summary of restricted stock unit activity | The following table summarizes restricted stock unit activity during the nine months ended September 30, 2020: Restricted Stock Units Weighted Average Grant Unvested at December 31, 2019 1,463,499 $ 25.08 Granted 1,720,004 27.61 Vested (713,627) 25.57 Forfeited (263,077) 32.96 Unvested at September 30, 2020 2,206,799 $ 25.80 |
EQUITY (Tables)
EQUITY (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Stockholders' Equity Note [Abstract] | |
Schedule of changes in consolidated equity | The following tables show the changes in consolidated equity during the nine months ended September 30, 2020 and 2019 (dollars in millions, share amounts in thousands): Common Stock Additional Accumulated Accumulated Treasury Noncontrolling Total Equity Shares Issued Par Balances at December 31, 2019 104,197 $ 7 $ 4,760 $ (257) $ (2,513) $ (2,414) $ 854 $ 437 Net income — — — — 93 — 32 125 Distributions paid to noncontrolling interests — — — — — — (40) (40) Other comprehensive income — — — 1 — — — 1 Accretion of redeemable noncontrolling interests — — (1) — — — — (1) Purchases (sales) of businesses and noncontrolling interests — — (30) — — — 15 (15) Cumulative effect of accounting change — — — — (14) — — (14) Stock-based compensation expense, tax benefit and issuance of common stock 331 — 10 — — — — 10 Balances at March 31, 2020 104,528 $ 7 $ 4,739 $ (256) $ (2,434) $ (2,414) $ 861 $ 503 Net income — — — — 88 — 35 123 Distributions paid to noncontrolling interests — — — — — — (8) (8) Other comprehensive income — — — 1 — — — 1 Accretion of redeemable noncontrolling interests — — (2) — — — — (2) Purchases (sales) of businesses and noncontrolling interests — — (2) — — — 2 — Stock-based compensation expense, tax benefit and issuance of common stock 374 — 16 — — — — 16 Balances at June 30, 2020 104,902 $ 7 $ 4,751 $ (255) $ (2,346) $ (2,414) $ 890 $ 633 Net income (loss) — — — — (196) — 48 (148) Distributions paid to noncontrolling interests — — — — — — (46) (46) Other comprehensive income — — — 4 — — — 4 Accretion of redeemable noncontrolling interests — — (1) — — — — (1) Purchases of businesses and noncontrolling interests — — 58 — — — 4 62 Stock-based compensation expense, tax benefit and issuance of common stock 505 — 18 — — — — 18 Balances at September 30, 2020 105,407 $ 7 $ 4,826 $ (251) $ (2,542) $ (2,414) $ 896 $ 522 Common Stock Additional Accumulated Accumulated Treasury Noncontrolling Total Equity Shares Issued Par Balances at December 31, 2018 102,537 $ 7 $ 4,747 $ (223) $ (2,299) $ (2,414) $ 806 $ 624 Net income (loss) — — — — (12) — 37 25 Distributions paid to noncontrolling interests — — — — — — (37) (37) Other comprehensive income — — — 2 — — — 2 Accretion of redeemable noncontrolling interests — — (5) — — — — (5) Purchases (sales) of businesses and noncontrolling interests — — (2) — — — 2 — Cumulative effect of accounting change — — — — 1 — — 1 Stock-based compensation expense, tax benefit and issuance of common stock 543 — 8 — — — — 8 Balances at March 31, 2019 103,080 $ 7 $ 4,748 $ (221) $ (2,310) $ (2,414) $ 808 $ 618 Net income — — — — 26 — 47 73 Distributions paid to noncontrolling interests — — — — — — (35) (35) Other comprehensive income — — — 2 — — — 2 Accretion of redeemable noncontrolling interests — — (4) — — — — (4) Purchases of businesses and noncontrolling interests — — — — — — 5 5 Stock-based compensation expense, tax benefit and issuance of common stock 256 — 11 — — — — 11 Balances at June 30, 2019 103,336 $ 7 $ 4,755 $ (219) $ (2,284) $ (2,414) $ 825 $ 670 Net income (loss) — — — — (226) — 45 (181) Distributions paid to noncontrolling interests — — — — — — (46) (46) Other comprehensive income — — — 3 — — — 3 Accretion of redeemable noncontrolling interests — — (4) — — — — (4) Purchases (sales) of businesses and noncontrolling interests — — (5) — — — 6 1 Stock-based compensation expense, tax benefit and issuance of common stock 436 — 5 — — — — 5 Balances at September 30, 2019 103,772 $ 7 $ 4,751 $ (216) $ (2,510) $ (2,414) $ 830 $ 448 |
NET OPERATING REVENUES (Tables)
NET OPERATING REVENUES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of operating revenues less provision for doubtful accounts and implicit price concessions | The table below shows our sources of net operating revenues from continuing operations: Three Months Ended Nine Months Ended 2020 2019 2020 2019 Hospital Operations: Net patient service revenues from hospitals and related outpatient facilities: Medicare $ 662 $ 697 $ 1,964 $ 2,176 Medicaid 251 284 791 914 Managed care 2,374 2,357 6,519 7,041 Uninsured 50 44 112 56 Indemnity and other 171 184 491 508 Total 3,508 3,566 9,877 10,695 Other revenues (1) 295 284 848 844 Hospital Operations total prior to inter-segment eliminations 3,803 3,850 10,725 11,539 Ambulatory Care 565 522 1,423 1,526 Conifer 325 336 962 1,040 Inter-segment eliminations (136) (140) (385) (432) Net operating revenues $ 4,557 $ 4,568 $ 12,725 $ 13,673 (1) Primarily physician practices revenues. The table below shows the composition of net operating revenues for our Ambulatory Care segment: Three Months Ended Nine Months Ended 2020 2019 2020 2019 Net patient service revenues $ 532 $ 490 $ 1,345 $ 1,437 Management fees 23 23 60 69 Revenue from other sources 10 9 18 20 Net operating revenues $ 565 $ 522 $ 1,423 $ 1,526 The table below shows the composition of net operating revenues for our Conifer segment: Three Months Ended Nine Months Ended 2020 2019 2020 2019 Revenue cycle services – Tenet $ 132 $ 136 $ 375 $ 420 Revenue cycle services – other customers 170 175 518 542 Other services – Tenet 4 4 10 12 Other services – other customers 19 21 59 66 Net operating revenues $ 325 $ 336 $ 962 $ 1,040 |
Performance obligation, expected timing of satisfaction | The following table includes Conifer’s revenue that is 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 amounts in the table primarily consist of revenue cycle management fixed fees, which are typically recognized ratably as the performance obligation is satisfied. The estimated revenue does not include volume or contingency based contracts, performance incentives, penalties or other variable consideration that is considered constrained. Conifer’s contract with Catholic Health Initiatives (“CHI”), a minority interest owner of Conifer Health Solutions, LLC, represents the majority of the fixed-fee revenue related to remaining performance obligations. Conifer’s contract term with CHI ends December 31, 2032. Three Months Years Ending Later Years December 31, Total 2020 2021 2022 2023 2024 Performance obligations $ 6,685 $ 147 $ 585 $ 583 $ 583 $ 532 $ 4,255 |
CLAIMS AND LAWSUITS (Tables)
CLAIMS AND LAWSUITS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Reconciliations of legal settlements and related costs | The following table presents reconciliations of the beginning and ending liability balances in connection with legal settlements and related costs recorded in continuing operations during the nine months ended September 30, 2020 and 2019. No amounts were recorded in discontinued operations in those periods. Balances at Litigation and Cash Balances at Nine Months Ended September 30, 2020 $ 86 $ 13 $ (84) $ 15 Nine Months Ended September 30, 2019 $ 8 $ 115 $ (37) $ 86 |
REDEEMABLE NONCONTROLLING INT_2
REDEEMABLE NONCONTROLLING INTERESTS IN EQUITY OF CONSOLIDATED SUBSIDIARIES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Noncontrolling Interest [Abstract] | |
Schedule of changes in redeemable noncontrolling interests in equity of consolidated subsidiaries | The following table shows the changes in redeemable noncontrolling interests in equity of consolidated subsidiaries during the nine months ended September 30, 2020 and 2019: Nine Months Ended 2020 2019 Balances at beginning of period $ 1,506 $ 1,420 Net income 122 130 Distributions paid to noncontrolling interests (90) (105) Accretion of redeemable noncontrolling interests 4 13 Purchases and sales of businesses and noncontrolling interests, net (63) 17 Balances at end of period $ 1,479 $ 1,475 The following tables show the composition by segment of our redeemable noncontrolling interests balances at September 30, 2020 and December 31, 2019, as well as our net income available to redeemable noncontrolling interests for the nine months ended September 30, 2020 and 2019: September 30, 2020 December 31, 2019 Hospital Operations $ 283 $ 383 Ambulatory Care 805 777 Conifer 391 346 Redeemable noncontrolling interests $ 1,479 $ 1,506 Nine Months Ended 2020 2019 Hospital Operations $ (17) $ (26) Ambulatory Care 94 100 Conifer 45 56 Net income available to redeemable noncontrolling interests $ 122 $ 130 |
INCOME TAXES (Tables)
INCOME TAXES (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Income Tax Disclosure [Abstract] | |
Schedule of reconciliation between reported income tax expense (benefit) and income taxes calculated by the statutory federal income tax rate | Three Months Ended Nine Months Ended 2020 2019 2020 2019 Tax expense (benefit) at statutory federal rate of 21% $ (64) $ (26) $ (1) $ 24 State income taxes, net of federal income tax benefit (6) (3) 9 6 Tax benefit attributable to noncontrolling interests (18) (17) (48) (53) Nontaxable gains — — 3 (1) Nondeductible litigation costs — 7 — 7 Stock-based compensation 1 4 1 4 Change in valuation allowance (113) 53 (201) 88 Change in tax contingency reserves, including interest — (3) — (3) Other items 3 7 10 3 Income tax expense (benefit) $ (197) $ 22 $ (227) $ 75 |
LOSS PER COMMON SHARE (Tables)
LOSS PER COMMON SHARE (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of reconciliation of numerators and denominators of our basic and diluted loss per common share | The following table is a reconciliation of the numerators and denominators of our basic and diluted loss per common share calculations for our continuing operations for three and nine months ended September 30, 2020 and 2019. Net loss attributable to our common shareholders is expressed in millions and weighted average shares are expressed in thousands. Net Loss Attributable Weighted Per-Share Three Months Ended September 30, 2020: Net loss attributable to Tenet Healthcare Corporation common shareholders for basic loss per share $ (197) 105,263 $ (1.87) Effect of dilutive stock options, restricted stock units and deferred compensation units — — — Net loss attributable to Tenet Healthcare Corporation common shareholders for diluted loss per share $ (197) 105,263 $ (1.87) Three Months Ended September 30, 2019: Net loss attributable to Tenet Healthcare Corporation common shareholders for basic loss per share $ (227) 103,558 $ (2.19) Effect of dilutive stock options, restricted stock units and deferred compensation units — — — Net loss attributable to Tenet Healthcare Corporation common shareholders for diluted loss per share $ (227) 103,558 $ (2.19) Nine Months Ended September 30, 2020: Net loss attributable to Tenet Healthcare Corporation common shareholders for basic loss per share $ (15) 104,803 $ (0.14) Effect of dilutive stock options, restricted stock units and deferred compensation units — — — Net loss attributable to Tenet Healthcare Corporation common shareholders for diluted loss per share $ (15) 104,803 $ (0.14) Nine Months Ended September 30, 2019: Net loss attributable to Tenet Healthcare Corporation common shareholders for basic loss per share $ (223) 103,181 $ (2.16) Effect of dilutive stock options, restricted stock units and deferred compensation units — — — Net loss attributable to Tenet Healthcare Corporation common shareholders for diluted loss per share $ (223) 103,181 $ (2.16) |
FAIR VALUE MEASUREMENTS (Tables
FAIR VALUE MEASUREMENTS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of fair value assets on a nonrecurring basis | The following tables present this information and indicate the fair value hierarchy of the valuation techniques we utilized to determine such fair values. In general, fair values determined by Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities, which generally are not applicable to non-financial assets and liabilities. Fair values determined by Level 2 inputs utilize data points that are observable, such as definitive sales agreements, appraisals or established market values of comparable assets. Fair values determined by Level 3 inputs are unobservable data points for the asset or liability and include situations where there is little, if any, market activity for the asset or liability, such as internal estimates of future cash flows. September 30, 2020 Quoted Prices Significant Other Significant Long-lived assets held for sale $ 386 $ — $ 386 $ — December 31, 2019 Quoted Prices Significant Other Significant Long-lived assets held for sale $ 387 $ — $ 387 $ — |
ACQUISITIONS (Tables)
ACQUISITIONS (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Business Combinations [Abstract] | |
Schedule of preliminary purchase price allocation | Preliminary purchase price allocations (representing the fair value of the consideration conveyed) for all acquisitions made during the nine months ended September 30, 2020 and 2019 are as follows: Nine Months Ended 2020 2019 Current assets $ 7 $ 5 Property and equipment 15 15 Other intangible assets 8 4 Goodwill 78 34 Other long-term assets, including previously held equity method investments 6 6 Current liabilities (4) (4) Long-term liabilities (6) (10) Redeemable noncontrolling interests in equity of consolidated subsidiaries (30) (16) Noncontrolling interests (13) (6) Cash paid, net of cash acquired (61) (23) Gains on consolidations $ — $ 5 |
SEGMENT INFORMATION (Tables)
SEGMENT INFORMATION (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Reconciliation of assets by reportable segment to consolidated assets | The following tables include amounts for each of our reportable segments and the reconciling items necessary to agree to amounts reported in the accompanying Condensed Consolidated Balance Sheets and in the Condensed Consolidated Statements of Operations, as applicable: September 30, December 31, Assets: Hospital Operations $ 18,726 $ 16,196 Ambulatory Care 6,487 6,195 Conifer 974 974 Total $ 26,187 $ 23,365 |
Reconciliation of other significant reconciling items from segments to consolidated | Three Months Ended Nine Months Ended 2020 2019 2020 2019 Capital expenditures: Hospital Operations $ 71 $ 135 $ 328 $ 423 Ambulatory Care 11 16 32 57 Conifer 4 5 14 12 Total $ 86 $ 156 $ 374 $ 492 Net operating revenues: Hospital Operations total prior to inter-segment eliminations $ 3,803 $ 3,850 $ 10,725 $ 11,539 Ambulatory Care 565 522 1,423 1,526 Conifer Tenet 136 140 385 432 Other clients 189 196 577 608 Total Conifer revenues 325 336 962 1,040 Inter-segment eliminations (136) (140) (385) (432) Total $ 4,557 $ 4,568 $ 12,725 $ 13,673 Equity in earnings of unconsolidated affiliates: Hospital Operations $ 3 $ 1 $ 1 $ 12 Ambulatory Care 41 37 102 102 Total $ 44 $ 38 $ 103 $ 114 Adjusted EBITDA: Hospital Operations $ 240 $ 342 $ 1,074 $ 1,048 Ambulatory Care 215 207 538 591 Conifer 96 90 256 292 Total $ 551 $ 639 $ 1,868 $ 1,931 Depreciation and amortization: Hospital Operations $ 184 $ 175 $ 536 $ 539 Ambulatory Care 21 19 60 55 Conifer 10 11 28 33 Total $ 215 $ 205 $ 624 $ 627 Three Months Ended Nine Months Ended 2020 2019 2020 2019 Adjusted EBITDA $ 551 $ 639 $ 1,868 $ 1,931 Loss from divested and closed businesses — (1) — (2) Depreciation and amortization (215) (205) (624) (627) Impairment and restructuring charges, and acquisition-related costs (57) (46) (166) (101) Litigation and investigation costs (9) (84) (13) (115) Interest expense (263) (244) (761) (742) Loss from early extinguishment of debt (312) (180) (316) (227) Other non-operating income (expense), net — (3) 3 (3) Net gains (losses) on sales, consolidation and deconsolidation of facilities 1 (1) 4 (3) Income (loss) from continuing operations, before income taxes $ (304) $ (125) $ (5) $ 111 |
BASIS OF PRESENTATION - Descrip
BASIS OF PRESENTATION - Description of Business and Basis of Presentation (Details) $ in Millions | 9 Months Ended | ||
Sep. 30, 2020USD ($)centerhospital | Jan. 01, 2020USD ($) | Dec. 31, 2019USD ($) | |
Business Acquisition | |||
Number of hospitals operated by subsidiaries | hospital | 65 | ||
Number of healthcare facilities | center | 520 | ||
Accounting Standards Update [Extensible List] | us-gaap:AccountingStandardsUpdate201613Member | ||
Accumulated deficit | $ 2,542 | $ 2,513 | |
Cumulative Effect, Period of Adoption, Adjustment | |||
Business Acquisition | |||
Accumulated deficit | $ 14 |
BASIS OF PRESENTATION - Profess
BASIS OF PRESENTATION - Professional and General Liability Reserves (Details) - USD ($) $ / shares in Units, $ in Millions | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | Jan. 01, 2017 | |
Change in Accounting Estimate [Line Items] | |||||||
Deferred income taxes | $ 436 | $ 436 | $ 183 | ||||
Professional and general liability reserves | 666 | 666 | 635 | ||||
Other long-term liabilities | 1,564 | 1,564 | 1,415 | ||||
Accumulated deficit | (2,542) | (2,542) | (2,513) | ||||
Salaries, wages and benefits | 2,142 | $ 2,172 | 6,193 | $ 6,468 | |||
Other operating expenses, net | 1,058 | 1,036 | 3,054 | 3,136 | |||
Operating income | 271 | 302 | 1,069 | 1,083 | |||
Income tax benefit (expense) | 197 | (22) | 227 | (75) | |||
Net income (loss) | (106) | (146) | 222 | 47 | |||
Net loss from continuing operations attributable to Tenet Healthcare Corporation common shareholders | $ (197) | $ (227) | $ (15) | $ (223) | |||
Loss per share attributable to Tenet Healthcare Corporation common shareholders from continuing operations, Basic (in dollars per share) | $ (1.87) | $ (2.19) | $ (0.14) | $ (2.16) | |||
Loss per share attributable to Tenet Healthcare Corporation common shareholders from continuing operations, Diluted (in dollars per share) | $ (1.87) | $ (2.19) | $ (0.14) | $ (2.16) | |||
Deferred income tax (benefit) expense | $ (246) | $ 65 | |||||
Accounts payable, accrued expenses and other current liabilities | 1,546 | (67) | |||||
Net cash provided by operating activities | 2,961 | 713 | |||||
Effect of Change in Accounting Principle | |||||||
Change in Accounting Estimate [Line Items] | |||||||
Accumulated deficit | $ (41) | (41) | (46) | $ (63) | $ (44) | ||
Prior to Change in Accounting Principle/As Reported | |||||||
Change in Accounting Estimate [Line Items] | |||||||
Deferred income taxes | 169 | ||||||
Professional and general liability reserves | 585 | ||||||
Other long-term liabilities | 1,405 | ||||||
Accumulated deficit | (2,467) | ||||||
Salaries, wages and benefits | $ 2,142 | 2,174 | 6,200 | 6,475 | |||
Other operating expenses, net | 1,058 | 1,042 | 3,088 | 3,159 | |||
Operating income | 271 | 294 | 1,028 | 1,053 | |||
Income tax benefit (expense) | 197 | (20) | 237 | (67) | |||
Net income (loss) | (106) | (152) | 191 | 25 | |||
Net loss from continuing operations attributable to Tenet Healthcare Corporation common shareholders | $ (197) | $ (233) | $ (46) | $ (245) | |||
Loss per share attributable to Tenet Healthcare Corporation common shareholders from continuing operations, Basic (in dollars per share) | $ (1.87) | $ (2.25) | $ (0.44) | $ (2.37) | |||
Loss per share attributable to Tenet Healthcare Corporation common shareholders from continuing operations, Diluted (in dollars per share) | $ (1.87) | $ (2.25) | $ (0.44) | $ (2.37) | |||
Deferred income tax (benefit) expense | $ (256) | $ 57 | |||||
Accounts payable, accrued expenses and other current liabilities | 1,587 | (37) | |||||
Net cash provided by operating activities | 2,961 | 713 | |||||
Effect of Change in Accounting Principle | Effect of Change in Accounting Principle | |||||||
Change in Accounting Estimate [Line Items] | |||||||
Deferred income taxes | 14 | ||||||
Professional and general liability reserves | 50 | ||||||
Other long-term liabilities | 10 | ||||||
Accumulated deficit | $ (46) | ||||||
Salaries, wages and benefits | $ 0 | $ (2) | (7) | (7) | |||
Other operating expenses, net | 0 | (6) | (34) | (23) | |||
Operating income | 0 | 8 | 41 | 30 | |||
Income tax benefit (expense) | 0 | (2) | (10) | (8) | |||
Net income (loss) | 0 | 6 | 31 | 22 | |||
Net loss from continuing operations attributable to Tenet Healthcare Corporation common shareholders | $ 0 | $ 6 | $ 31 | $ 22 | |||
Loss per share attributable to Tenet Healthcare Corporation common shareholders from continuing operations, Basic (in dollars per share) | $ 0 | $ 0.06 | $ 0.30 | $ 0.21 | |||
Loss per share attributable to Tenet Healthcare Corporation common shareholders from continuing operations, Diluted (in dollars per share) | $ 0 | $ 0.06 | $ 0.30 | $ 0.21 | |||
Deferred income tax (benefit) expense | $ 10 | $ 8 | |||||
Accounts payable, accrued expenses and other current liabilities | (41) | (30) | |||||
Net cash provided by operating activities | $ 0 | $ 0 |
BASIS OF PRESENTATION - Grant I
BASIS OF PRESENTATION - Grant Income (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Received cash payments | $ 178 | $ 890 | ||
Grant income | (66) | $ 0 | 445 | $ 0 |
Deferred revenue | 403 | 403 | ||
Hospital Operations Segment | ||||
Disaggregation of Revenue [Line Items] | ||||
Grant income | (57) | 417 | ||
Ambulatory Care | ||||
Disaggregation of Revenue [Line Items] | ||||
Grant income | (13) | 36 | ||
Ambulatory Care | Equity Method Investment, Nonconsolidated Investee or Group of Investees | ||||
Disaggregation of Revenue [Line Items] | ||||
Grant income | $ (4) | $ 8 |
BASIS OF PRESENTATION - Cash an
BASIS OF PRESENTATION - Cash and Cash Equivalents (Details) - USD ($) $ in Millions | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Cash and Cash Equivalents | |||
Cash and cash equivalents | $ 3,300 | $ 262 | |
Accrued property and equipment purchases for items received but not yet paid | 43 | 136 | |
Non-cancellable finance leases entered into | 75 | $ 91 | |
Non-cancellable operating leases liability entered into | 135 | $ 208 | |
Captive insurance subsidiaries | |||
Cash and Cash Equivalents | |||
Cash and cash equivalents | 161 | 176 | |
Health plan-related businesses | |||
Cash and Cash Equivalents | |||
Cash and cash equivalents | 1 | 2 | |
Accounts payable | |||
Cash and Cash Equivalents | |||
Book overdrafts classified as accounts payable | 134 | 246 | |
Accrued property and equipment purchases for items received but not yet paid | $ 33 | $ 119 |
BASIS OF PRESENTATION - Other I
BASIS OF PRESENTATION - Other Intangible Assets (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Other intangible assets | ||
Gross Carrying Amount | $ 2,785 | $ 2,694 |
Accumulated Amortization | (1,207) | (1,092) |
Net Book Value | 1,578 | 1,602 |
Capitalized software costs | ||
Other intangible assets | ||
Gross Carrying Amount | 1,696 | 1,616 |
Accumulated Amortization | (1,012) | (912) |
Net Book Value | 684 | 704 |
Trade names | ||
Other intangible assets | ||
Gross Carrying Amount | 102 | 102 |
Accumulated Amortization | 0 | 0 |
Net Book Value | 102 | 102 |
Contracts | ||
Other intangible assets | ||
Gross Carrying Amount | 879 | 869 |
Accumulated Amortization | (107) | (94) |
Net Book Value | 772 | 775 |
Other | ||
Other intangible assets | ||
Gross Carrying Amount | 108 | 107 |
Accumulated Amortization | (88) | (86) |
Net Book Value | $ 20 | $ 21 |
BASIS OF PRESENTATION - Amortiz
BASIS OF PRESENTATION - Amortization of Intangible Assets (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Amortization of intangible assets | ||
Total | $ 890 | |
Three Months Ending 2020 | 48 | |
2021 | 134 | |
2022 | 118 | |
2023 | 106 | |
2024 | 90 | |
Later Years | 394 | |
Amortization expense | $ 127 | $ 138 |
BASIS OF PRESENTATION - Investm
BASIS OF PRESENTATION - Investments in Unconsolidated Affiliates (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)hospital | Sep. 30, 2019USD ($) | |
Schedule of Equity Method Investments [Line Items] | ||||
Grant income | $ (66) | $ 0 | $ 445 | $ 0 |
Investee results reflected (percent) | 1 | |||
Net operating revenues | 4,557 | 4,568 | $ 12,725 | 13,673 |
Net income (loss) | (106) | (146) | 222 | 47 |
Equity Method Investment, Nonconsolidated Investee or Group of Investees | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Net operating revenues | 697 | 622 | 1,731 | 1,809 |
Net income (loss) | 167 | 156 | 414 | 447 |
Net income available to the investees | 101 | 97 | $ 253 | 290 |
Ambulatory Care | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Number of outpatient centers recorded not using equity method | hospital | 244 | |||
Number of outpatient centers recorded using equity method | hospital | 108 | |||
Number of outpatient centers | hospital | 352 | |||
Grant income | (13) | $ 36 | ||
Net operating revenues | 565 | $ 522 | 1,423 | $ 1,526 |
Ambulatory Care | Equity Method Investment, Nonconsolidated Investee or Group of Investees | ||||
Schedule of Equity Method Investments [Line Items] | ||||
Grant income | $ (4) | $ 8 |
ACCOUNTS RECEIVABLE - Component
ACCOUNTS RECEIVABLE - Components (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Accounts receivable and allowance for doubtful accounts | ||
Accounts receivable, net | $ 2,479 | $ 2,743 |
Continuing operations: | ||
Accounts receivable and allowance for doubtful accounts | ||
Patient accounts receivable | 2,278 | 2,567 |
Estimated future recoveries | 158 | 162 |
Net cost reports and settlements receivable and valuation allowances | 42 | 12 |
Accounts receivable, net | 2,478 | 2,741 |
Discontinued operations | ||
Accounts receivable and allowance for doubtful accounts | ||
Accounts receivable, net | $ 1 | $ 2 |
ACCOUNTS RECEIVABLE - Narrative
ACCOUNTS RECEIVABLE - Narrative (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Accounts receivable and allowance for doubtful accounts | ||
Receivables, current | $ 2,479 | $ 2,743 |
Payable, current | 1,025 | 1,204 |
California's Provider Fee Program | Other current assets | ||
Accounts receivable and allowance for doubtful accounts | ||
Receivables, current | 325 | 316 |
California's Provider Fee Program | Other assets | ||
Accounts receivable and allowance for doubtful accounts | ||
Receivables, noncurrent | 256 | 213 |
California's Provider Fee Program | Other current liabilities | ||
Accounts receivable and allowance for doubtful accounts | ||
Payable, current | 147 | 115 |
California's Provider Fee Program | Other long-term liabilities | ||
Accounts receivable and allowance for doubtful accounts | ||
Payables, noncurrent | $ 43 | $ 57 |
ACCOUNTS RECEIVABLE - Allowance
ACCOUNTS RECEIVABLE - Allowance (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Accounts receivable and allowance for doubtful accounts | ||||
Estimated costs of caring | $ 195 | $ 212 | $ 579 | $ 609 |
Uninsured patients | ||||
Accounts receivable and allowance for doubtful accounts | ||||
Estimated costs of caring | 165 | 171 | 466 | 493 |
Charity care patients | ||||
Accounts receivable and allowance for doubtful accounts | ||||
Estimated costs of caring | $ 30 | $ 41 | $ 113 | $ 116 |
CONTRACT BALANCES - Hospital Op
CONTRACT BALANCES - Hospital Operations and Ambulatory Care Segments (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Contract Liability Current Advances from Medicare | ||
Balance at beginning of period | $ 61 | |
Balance at end of period | $ 1,500 | |
Contract Liability-Long-term Deferred Revenue | ||
Percentage of contract assets that meet the conditions for unconditional right to payment (percentage) | 85.00% | |
Discontinued Operations, Held-for-sale | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Contract liabilities | $ 49 | |
Hospital Operations and Other | ||
Contract Assets | ||
Balance at beginning of period | 170 | $ 169 |
Balance at end of period | 171 | 163 |
Increase/(decrease) | 1 | (6) |
Contract Liability Current Advances from Medicare | ||
Balance at beginning of period | 0 | 0 |
Balance at end of period | 1,270 | 0 |
Increase/(decrease) | 1,270 | 0 |
Contract Liability-Long-term Deferred Revenue | ||
Increase/(decrease) | 1,270 | 0 |
Ambulatory Care | ||
Contract Liability Current Advances from Medicare | ||
Balance at beginning of period | 0 | 0 |
Balance at end of period | 172 | 0 |
Increase/(decrease) | 172 | 0 |
Contract Liability-Long-term Deferred Revenue | ||
Increase/(decrease) | $ 172 | $ 0 |
CONTRACT BALANCES - Conifer Seg
CONTRACT BALANCES - Conifer Segment (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Contract Liability-Current Deferred Revenue | ||
Balance at beginning of period | $ 61 | |
Balance at end of period | 1,500 | |
Conifer | ||
Receivables | ||
Beginning balance | 26 | $ 42 |
Ending balance | 29 | 86 |
Increase/(decrease) | 3 | 44 |
Contract Asset-Unbilled Revenue | ||
Beginning balance | 11 | 11 |
Ending balance | 13 | 11 |
Increase/(decrease) | 2 | 0 |
Contract Liability-Current Deferred Revenue | ||
Balance at beginning of period | 61 | 61 |
Balance at end of period | 58 | 72 |
Contract Liability-Long-term Deferred Revenue | ||
Balance at beginning of period | 18 | 20 |
Balance at end of period | 17 | 19 |
Amount of revenue recognized included in current deferred revenue liability | 61 | 57 |
Conifer | Short-term Contract with Customer | ||
Contract Liability-Current Deferred Revenue | ||
Increase/(decrease) | (3) | 11 |
Contract Liability-Long-term Deferred Revenue | ||
Increase/(decrease) | (3) | 11 |
Conifer | Long-term Contract with Customer | ||
Contract Liability-Current Deferred Revenue | ||
Increase/(decrease) | (1) | (1) |
Contract Liability-Long-term Deferred Revenue | ||
Increase/(decrease) | $ (1) | $ (1) |
CONTRACT BALANCES - Contract Co
CONTRACT BALANCES - Contract Costs (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |||||
Amortization expense | $ 2 | $ 2 | $ 4 | $ 4 | |
Unamortized customer contract costs | $ 25 | $ 25 | $ 25 |
ASSETS AND LIABILITIES HELD F_3
ASSETS AND LIABILITIES HELD FOR SALE - (Details) $ in Millions | 3 Months Ended | |
Dec. 31, 2019hospital | Sep. 30, 2020USD ($) | |
Current Assets and Liabilities Held for Sale | ||
Liabilities held for sale | $ 91 | |
Philadelphia area | Disposal Group, Held-for-sale, Not Discontinued Operations | ||
Current Assets and Liabilities Held for Sale | ||
Net assets held for sale | 14 | |
Memphis area | Disposal Group, Held-for-sale, Not Discontinued Operations | ||
Current Assets and Liabilities Held for Sale | ||
Net assets held for sale | $ 372 | |
Number of hospitals | hospital | 2 |
ASSETS AND LIABILITIES HELD F_4
ASSETS AND LIABILITIES HELD FOR SALE - Schedule of Assets and Liabilities Held for Sale (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Other current liabilities | $ (91) | $ (44) |
Discontinued Operations, Held-for-sale | ||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||
Accounts receivable | 85 | |
Other current assets | 24 | |
Investments and other long-term assets | 7 | |
Property and equipment | 206 | |
Other intangible assets | 22 | |
Goodwill | 42 | |
Contract liabilities | (49) | |
Other current liabilities | (34) | |
Long-term liabilities | (8) | |
Net assets held for sale | $ 295 |
ASSETS AND LIABILITIES HELD F_5
ASSETS AND LIABILITIES HELD FOR SALE - Significant Disposals (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Income (loss) from continuing operations, before income taxes | $ 2 | $ 0 | $ 0 | $ (11) |
Disposal Group, Held-for-sale, Not Discontinued Operations | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Income (loss) from continuing operations, before income taxes | (5) | 4 | 23 | 9 |
Chicago-area | Disposal Group, Disposed of by Sale, Not Discontinued Operations | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Income (loss) from continuing operations, before income taxes | 2 | 0 | 0 | (11) |
Loss on sale of business | 5 | 6 | ||
Memphis area | Disposal Group, Held-for-sale, Not Discontinued Operations | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Income (loss) from continuing operations, before income taxes | $ (5) | $ 4 | $ 23 | $ 9 |
IMPAIRMENT AND RESTRUCTURING _2
IMPAIRMENT AND RESTRUCTURING CHARGES, AND ACQUISITION-RELATED COSTS - (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)segment | Sep. 30, 2019USD ($) | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Impairment and restructuring charges, and acquisition-related costs | $ 57 | $ 46 | $ 166 | $ 101 |
Impairment charges | 8 | 7 | ||
Restructuring charges | 155 | 90 | ||
Acquisition costs | 3 | 4 | ||
Employee severance costs | 53 | 38 | ||
Contract and lease termination costs | 15 | 3 | ||
Other restructuring costs | $ 24 | 49 | ||
Number of reportable segments | segment | 3 | |||
Ambulatory Care Segment | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Impairment charges | $ 5 | 3 | ||
Hospital Operations and Other | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Impairment charges | 2 | 4 | ||
Conifer | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Impairment charges | 1 | |||
Series of individual business acquisitions | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Acquisition-related transaction costs | 3 | $ 4 | ||
Global Business Center In The Republic Of Philippines | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Restructuring charges | 40 | |||
USPI Management Equity Plan | ||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | ||||
Restructuring charges | $ 23 |
LONG-TERM DEBT - Schedule of De
LONG-TERM DEBT - Schedule of Debt (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Sep. 16, 2020 | Jun. 16, 2020 | Apr. 07, 2020 | Dec. 31, 2019 |
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||
Finance leases and mortgage notes | $ 408 | $ 445 | |||
Total long-term debt | 15,716 | 14,751 | |||
Less current portion | 155 | 171 | |||
Long-term debt, net of current portion | 15,561 | 14,580 | |||
Senior Notes | |||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||
Unamortized issue costs and note discounts | (184) | (186) | |||
Senior Notes | 8.125% due 2022 | |||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||
Carrying amount | $ 0 | 2,800 | |||
Stated interest rate, percentage | 8.125% | 8.125% | |||
Senior Notes | 6.750% due 2023 | |||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||
Carrying amount | $ 1,872 | 1,872 | |||
Stated interest rate, percentage | 6.75% | ||||
Senior Notes | 7.000% due 2025 | |||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||
Carrying amount | $ 478 | 478 | |||
Stated interest rate, percentage | 7.00% | ||||
Senior Notes | 6.125% due 2028 | |||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||
Carrying amount | $ 2,500 | 0 | |||
Stated interest rate, percentage | 6.125% | 6.125% | |||
Senior Notes | 6.875% due 2031 | |||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||
Carrying amount | $ 362 | 362 | |||
Stated interest rate, percentage | 6.875% | ||||
Senior Notes | 4.625% due 2024 | |||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||
Carrying amount | $ 1,870 | 1,870 | |||
Stated interest rate, percentage | 4.625% | ||||
Senior Notes | 4.625% due 2024 | |||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||
Carrying amount | $ 600 | 600 | |||
Stated interest rate, percentage | 4.625% | ||||
Senior Notes | 7.500% due 2025 | |||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||
Carrying amount | $ 700 | 0 | |||
Stated interest rate, percentage | 7.50% | 7.50% | |||
Senior Notes | 4.875% due 2026 | |||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||
Carrying amount | $ 2,100 | 2,100 | |||
Stated interest rate, percentage | 4.875% | ||||
Senior Notes | 5.125% due 2027 | |||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||
Carrying amount | $ 1,500 | 1,500 | |||
Stated interest rate, percentage | 5.125% | ||||
Senior Notes | 4.625% due 2028 | |||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||
Carrying amount | $ 600 | 0 | |||
Stated interest rate, percentage | 4.625% | 4.625% | |||
Senior Notes | 5.125% due 2025 | |||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||
Carrying amount | $ 1,410 | 1,410 | |||
Stated interest rate, percentage | 5.125% | ||||
Senior Notes | 6.250% due 2027 | |||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||
Carrying amount | $ 1,500 | $ 1,500 | |||
Stated interest rate, percentage | 6.25% |
LONG-TERM DEBT - Narrative (Det
LONG-TERM DEBT - Narrative (Details) | Sep. 16, 2020USD ($) | Jun. 30, 2020USD ($) | Apr. 30, 2020 | Aug. 31, 2020USD ($) | Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)numberOfBusinessDays | Sep. 30, 2019USD ($) | Apr. 30, 2021 | Sep. 12, 2024 | Jul. 29, 2020 | Jul. 28, 2020 | Jun. 16, 2020USD ($) | Apr. 07, 2020USD ($) | Mar. 31, 2020USD ($) | Dec. 31, 2019USD ($) |
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||||||||||||||
Loss from early extinguishment of debt | $ (312,000,000) | $ (180,000,000) | $ (316,000,000) | $ (227,000,000) | |||||||||||||
Senior Notes | 6.125% due 2028 | |||||||||||||||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||||||||||||||
Long term debt, face amount | $ 2,500,000,000 | ||||||||||||||||
Stated interest rate, percentage | 6.125% | 6.125% | 6.125% | ||||||||||||||
Carrying amount | $ 2,500,000,000 | $ 2,500,000,000 | $ 0 | ||||||||||||||
Senior Notes | 8.125% due 2022 | |||||||||||||||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||||||||||||||
Stated interest rate, percentage | 8.125% | 8.125% | 8.125% | ||||||||||||||
Repurchased face amount | $ 2,556,000,000 | $ 135,000,000 | $ 109,000,000 | $ 135,000,000 | |||||||||||||
Repayments of debt | 2,843,000,000 | $ 142,000,000 | 114,000,000 | ||||||||||||||
Loss from early extinguishment of debt | $ (305,000,000) | $ (7,000,000) | $ (8,000,000) | ||||||||||||||
Carrying amount | $ 0 | $ 0 | 2,800,000,000 | ||||||||||||||
Senior Notes | 4.625% due 2028 | |||||||||||||||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||||||||||||||
Long term debt, face amount | $ 600,000,000 | ||||||||||||||||
Stated interest rate, percentage | 4.625% | 4.625% | 4.625% | ||||||||||||||
Carrying amount | $ 600,000,000 | $ 600,000,000 | 0 | ||||||||||||||
Senior Notes | 7.500% due 2025 | |||||||||||||||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||||||||||||||
Long term debt, face amount | $ 700,000,000 | ||||||||||||||||
Stated interest rate, percentage | 7.50% | 7.50% | 7.50% | ||||||||||||||
Carrying amount | $ 700,000,000 | $ 700,000,000 | 0 | ||||||||||||||
Senior secured credit facility due 2024 | |||||||||||||||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||||||||||||||
Carrying amount | $ 500,000,000 | ||||||||||||||||
Revolving credit facility, maximum borrowing capacity (up to) | 200,000,000 | 200,000,000 | $ 180,000,000 | ||||||||||||||
Standby letters of credit outstanding | 88,000,000 | $ 88,000,000 | |||||||||||||||
Maximum secured debt covenant ratio | 6 | 4 | |||||||||||||||
Unused commitment fee after step down (up to) (percentage) | 0.50% | ||||||||||||||||
Secured debt to EBITDA ratio | 3 | ||||||||||||||||
Issuance fee (percentage) | 1.50% | ||||||||||||||||
Issuance fee, based on face amount (percentage) | 0.125% | ||||||||||||||||
Senior secured credit facility due 2024 | Maximum | |||||||||||||||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||||||||||||||
Number of business days after notice, for reimbursement of amount drawn | numberOfBusinessDays | 3 | ||||||||||||||||
Credit Agreement | |||||||||||||||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||||||||||||||
Carrying amount | 0 | $ 0 | |||||||||||||||
Revolving credit facility, maximum borrowing capacity (up to) | 1,900,000,000 | 1,900,000,000 | $ 1,500,000,000 | ||||||||||||||
Line of credit facility, subfacility maximum available capacity | 200,000,000 | $ 200,000,000 | |||||||||||||||
Incremental period | 364 days | ||||||||||||||||
Standby letters of credit outstanding | 1,000,000 | $ 1,000,000 | |||||||||||||||
Amount available for borrowing under revolving credit facility | $ 1,777,000,000 | $ 1,777,000,000 | |||||||||||||||
Credit Agreement | Minimum | |||||||||||||||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||||||||||||||
Margin on variable rate (percentage) | 0.25% | ||||||||||||||||
Unused commitment fee (percentage) | 0.25% | ||||||||||||||||
Credit Agreement | Maximum | |||||||||||||||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||||||||||||||
Unused commitment fee (percentage) | 0.375% | ||||||||||||||||
Credit Agreement | Base rate | |||||||||||||||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||||||||||||||
Margin on variable rate (percentage) | 0.75% | ||||||||||||||||
Credit Agreement | Base rate | Minimum | Scenario, Forecast | |||||||||||||||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||||||||||||||
Margin on variable rate (percentage) | 0.50% | 0.25% | |||||||||||||||
Credit Agreement | Base rate | Maximum | Scenario, Forecast | |||||||||||||||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||||||||||||||
Margin on variable rate (percentage) | 1.00% | 0.75% | |||||||||||||||
Credit Agreement | LIBOR | |||||||||||||||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||||||||||||||
Margin on variable rate (percentage) | 1.75% | ||||||||||||||||
Credit Agreement | LIBOR | Minimum | Scenario, Forecast | |||||||||||||||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||||||||||||||
Margin on variable rate (percentage) | 1.50% | 1.25% | |||||||||||||||
Credit Agreement | LIBOR | Maximum | Scenario, Forecast | |||||||||||||||||
LONG-TERM DEBT AND LEASE OBLIGATIONS | |||||||||||||||||
Margin on variable rate (percentage) | 2.00% | 1.75% |
GUARANTEES (Details)
GUARANTEES (Details) $ in Millions | Sep. 30, 2020USD ($) |
Income and Revenue Collection Guarantee | |
GUARANTEES | |
Maximum potential amount of future payments under guarantees | $ 146 |
Income and Revenue Collection Guarantee | Other current liabilities | |
GUARANTEES | |
Liability for the fair value of guarantees | 110 |
Guaranteed Investees of Third Parties | |
GUARANTEES | |
Liability for the fair value of guarantees | 24 |
Guaranteed Investees of Third Parties | Other current liabilities | |
GUARANTEES | |
Guarantee obligations for consolidated subsidiaries | $ 10 |
EMPLOYEE BENEFIT PLANS (Details
EMPLOYEE BENEFIT PLANS (Details) - USD ($) $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Stock-based compensation costs, pretax | $ 38 | $ 34 |
Stock Incentive Plan 2019 | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Shares available for issuance under the plan (in shares) | 6,100,000 | |
Stock Options | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Expiration period from the date of grant | 10 years | |
Vesting period | 3 years | |
Stock Options | Tranche One | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting percentage | 33.33% | |
Stock Options | Tranche Two | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting percentage | 33.33% | |
Stock Options | Tranche Three | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting percentage | 33.33% | |
Restricted Stock Units | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Contractual right to receive shares of common stock for a stock based award (in shares) | 1 | |
Vesting period | 3 years | |
Restricted Stock Units | Tranche One | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting percentage | 33.33% | |
Restricted Stock Units | Tranche Two | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting percentage | 33.33% | |
Restricted Stock Units | Tranche Three | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting percentage | 33.33% | |
Restricted Stock Units | Performance based vesting | Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting percentage | 0.00% | |
Restricted Stock Units | Performance based vesting | Maximum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Award vesting percentage | 200.00% |
EMPLOYEE BENEFIT PLANS - Stock
EMPLOYEE BENEFIT PLANS - Stock Options (Details) - USD ($) $ / shares in Units, $ in Millions | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Weighted Average Remaining Life | ||
Unrecognized compensation costs related to stock options | $ 2 | |
Stock Options | ||
Options | ||
Outstanding at the beginning of the period (in shares) | 1,960,992 | |
Exercised (in shares) | (472,304) | (76,159) |
Forfeited/Expired (in shares) | (11,326) | |
Outstanding at the end of the period (in shares) | 1,477,362 | |
Vested and expected to vest at the end of the period (in shares) | 1,477,362 | |
Exercisable at the end of the period (in shares) | 797,819 | |
Weighted Average Exercise Price Per Share | ||
Outstanding at the beginning of the period (in dollars per share) | $ 20.24 | |
Exercised (in dollars per share) | 19.02 | |
Forfeited/Expired (in dollars per share) | 20.60 | |
Outstanding at the end of the period (in dollars per share) | 20.63 | |
Vested and expected to vest at the end of the period (in dollars per share) | 20.63 | |
Exercisable at the end of the period (in dollars per share) | $ 17.98 | |
Aggregate Intrinsic Value | ||
Outstanding at the end of the period | $ 7 | |
Vested and expected to vest at the end of the period | 7 | |
Exercisable at the end of the period | $ 5 | |
Weighted Average Remaining Life | ||
Outstanding at the end of the period | 5 years 4 months 24 days | |
Vested and expected to vest at the end of the period | 5 years 4 months 24 days | |
Exercisable at the end of the period | 3 years 10 months 24 days | |
Exercised (in shares) | 472,304 | 76,159 |
Aggregate Intrinsic value of awards exercised | $ 3 | $ 1 |
Period for recognition of unrecognized compensation costs | 1 year 1 month 6 days |
EMPLOYEE BENEFIT PLANS - Range
EMPLOYEE BENEFIT PLANS - Range of Exercise Prices (Details) - Stock Options | 9 Months Ended |
Sep. 30, 2020$ / sharesshares | |
Options Outstanding | |
Number of Options Outstanding (in shares) | shares | 1,477,362 |
Weighted Average Remaining Contractual Life | 5 years 4 months 24 days |
Weighted Average Exercise Price (in dollars per share) | $ 20.63 |
Options Exercisable | |
Number of Options Exercisable (in shares) | shares | 797,819 |
Weighted Average Exercise Price (in dollars per share) | $ 17.98 |
$16.43 to $19.759 | |
Options Outstanding | |
Number of Options Outstanding (in shares) | shares | 756,152 |
Weighted Average Remaining Contractual Life | 4 years |
Weighted Average Exercise Price (in dollars per share) | $ 17.61 |
Options Exercisable | |
Number of Options Exercisable (in shares) | shares | 756,152 |
Weighted Average Exercise Price (in dollars per share) | $ 17.61 |
$19.76 to $35.430 | |
Options Outstanding | |
Number of Options Outstanding (in shares) | shares | 721,210 |
Weighted Average Remaining Contractual Life | 6 years 9 months 18 days |
Weighted Average Exercise Price (in dollars per share) | $ 23.80 |
Options Exercisable | |
Number of Options Exercisable (in shares) | shares | 41,667 |
Weighted Average Exercise Price (in dollars per share) | $ 24.83 |
Minimum | $16.43 to $19.759 | |
Summary information about outstanding stock options | |
Exercise price per share, low end of the range (in dollars per share) | 16.43 |
Minimum | $19.76 to $35.430 | |
Summary information about outstanding stock options | |
Exercise price per share, low end of the range (in dollars per share) | 19.76 |
Maximum | $16.43 to $19.759 | |
Summary information about outstanding stock options | |
Exercise price per share, high end of the range (in dollars per share) | 19.759 |
Maximum | $19.76 to $35.430 | |
Summary information about outstanding stock options | |
Exercise price per share, high end of the range (in dollars per share) | $ 35.430 |
EMPLOYEE BENEFIT PLANS - Restri
EMPLOYEE BENEFIT PLANS - Restricted Stock Units (Details) $ / shares in Units, $ in Millions | 1 Months Ended | 9 Months Ended | ||
May 31, 2020shares | Aug. 31, 2019shares | Sep. 30, 2020USD ($)quarter$ / sharesshares | Sep. 30, 2019quartershares | |
Restricted Stock Units | ||||
Restricted Stock Units | ||||
Unvested at the beginning of the period (in shares) | 1,463,499 | |||
Granted (in shares) | 1,720,004 | 1,460,753 | ||
Vested (in shares) | (713,627) | |||
Forfeited (in shares) | (263,077) | |||
Unvested at the end of the period (in shares) | 2,206,799 | |||
Weighted Average Grant Date Fair Value Per Unit | ||||
Unvested at the beginning of the period (in dollars per share) | $ / shares | $ 25.08 | |||
Granted (in dollars per share) | $ / shares | 27.61 | |||
Vested (in dollars per share) | $ / shares | 25.57 | |||
Forfeited (in dollars per share) | $ / shares | 32.96 | |||
Unvested at the end of the period (in dollars per share) | $ / shares | $ 25.80 | |||
Vesting period | 3 years | |||
Unrecognized compensation costs | $ | $ 37 | |||
Period for recognition of unrecognized compensation costs | 1 year 10 months 24 days | |||
Restricted Stock Units | 2013 Grant | ||||
Restricted Stock Units | ||||
Granted (in shares) | 7,427 | |||
Restricted Stock Units | 2014 Grant | ||||
Restricted Stock Units | ||||
Granted (in shares) | 96,950 | |||
Restricted Stock Units | Non-Employee Directors | ||||
Restricted Stock Units | ||||
Granted (in shares) | 103,434 | 100,444 | ||
Restricted Stock Units | Time based vesting, three year period from grant date | ||||
Restricted Stock Units | ||||
Granted (in shares) | 583,335 | 337,848 | ||
Weighted Average Grant Date Fair Value Per Unit | ||||
Vesting period | 3 years | 3 years | ||
Restricted Stock Units | Time based vesting, four year period from grant date | ||||
Restricted Stock Units | ||||
Granted (in shares) | 104,167 | |||
Weighted Average Grant Date Fair Value Per Unit | ||||
Vesting period | 4 years | |||
Restricted Stock Units | Eleven quarter vesting period | ||||
Restricted Stock Units | ||||
Granted (in shares) | 359,713 | |||
Weighted Average Grant Date Fair Value Per Unit | ||||
Vesting period, quarterly periods | quarter | 11 | |||
Restricted Stock Units | Third anniversary vesting date | ||||
Weighted Average Grant Date Fair Value Per Unit | ||||
Number of restricted stock units vested on third anniversary of grant date (in shares) | 13,805 | 340,931 | ||
Restricted Stock Units | Performance based vesting over a four year period | ||||
Restricted Stock Units | ||||
Granted (in shares) | 555,550 | |||
Restricted Stock Units | Nine quarter vesting period | ||||
Restricted Stock Units | ||||
Granted (in shares) | 566,172 | |||
Weighted Average Grant Date Fair Value Per Unit | ||||
Vesting period, quarterly periods | quarter | 9 | |||
Restricted Stock Units | Time Based Vesting | Director | ||||
Restricted Stock Units | ||||
Granted (in shares) | 7,978 | |||
Additional Prorated Restricted Stock Units | Time Based Vesting | Director | ||||
Restricted Stock Units | ||||
Granted (in shares) | 3,003 |
EMPLOYEE BENEFIT PLANS - USPI M
EMPLOYEE BENEFIT PLANS - USPI Management Equity Plan (Details) - USPI Management Equity Plan - USD ($) $ in Millions | 1 Months Ended | 3 Months Ended | |
Feb. 24, 2020 | Mar. 31, 2020 | Sep. 30, 2020 | |
Restricted Non-Voting Common Stock | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Awards granted in the period (in shares) | 2,444,049 | ||
Restricted stock units outstanding (in shares) | 2,294,330 | ||
Vested and expected to vest at the end of the period (in shares) | 441,062 | ||
Restricted Non-Voting Common Stock | Tranche One | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting percentage | 20.00% | ||
Restricted Non-Voting Common Stock | Tranche Two | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Award vesting percentage | 40.00% | ||
Nonqualified Plan | Equity Option | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Repurchase of al vested options and all shares of USPI stock acquired upon exercise of an option | $ 35 |
EMPLOYEE BENEFIT PLANS - Employ
EMPLOYEE BENEFIT PLANS - Employee Retirement Plans (Details) $ in Millions | 9 Months Ended | |
Sep. 30, 2020USD ($)plan | Sep. 30, 2019USD ($)plan | |
Employee Retirement Plans | ||
Number of frozen plans | plan | 1 | 1 |
Salaries, wages and benefits expense | ||
Employee Retirement Plans | ||
Service costs (less than in current year) | $ 1 | $ 1 |
Other non-operating income (expense), net | ||
Employee Retirement Plans | ||
Other components | $ 6 | $ 16 |
EQUITY - Changes in Shareholder
EQUITY - Changes in Shareholders' Equity (Details) - USD ($) shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Changes in Shareholders' Equity | ||||||||
Balances, beginning of period | $ 633 | $ 503 | $ 437 | $ 670 | $ 618 | $ 624 | $ 437 | $ 624 |
Net income (loss) | (148) | 123 | 125 | (181) | 73 | 25 | ||
Distributions paid to noncontrolling interests | (46) | (8) | (40) | (46) | (35) | (37) | ||
Other comprehensive income | 4 | 1 | 1 | 3 | 2 | 2 | 6 | 7 |
Accretion of redeemable noncontrolling interests | (1) | (2) | (1) | (4) | (4) | (5) | ||
Purchases (sales) of businesses and noncontrolling interests | 62 | 0 | (15) | 1 | 5 | 0 | ||
Stock-based compensation expense, tax benefit and issuance of common stock | 18 | 16 | 10 | 5 | 11 | 8 | ||
Balances, end of period | $ 522 | $ 633 | 503 | $ 448 | $ 670 | 618 | 522 | 448 |
Cumulative Effect, Period of Adoption, Adjustment | ||||||||
Changes in Shareholders' Equity | ||||||||
Balances, beginning of period | $ (14) | $ 1 | $ (14) | $ 1 | ||||
Common Stock | ||||||||
Changes in Shareholders' Equity | ||||||||
Balances, beginning of period (in shares) | 104,902 | 104,528 | 104,197 | 103,336 | 103,080 | 102,537 | 104,197 | 102,537 |
Balances, beginning of period | $ 7 | $ 7 | $ 7 | $ 7 | $ 7 | $ 7 | $ 7 | $ 7 |
Stock-based compensation expense, tax benefit and issuance of common stock (in shares) | 505 | 374 | 331 | 436 | 256 | 543 | ||
Balances, end of period (in shares) | 105,407 | 104,902 | 104,528 | 103,772 | 103,336 | 103,080 | 105,407 | 103,772 |
Balances, end of period | $ 7 | $ 7 | $ 7 | $ 7 | $ 7 | $ 7 | $ 7 | $ 7 |
Additional Paid-In Capital | ||||||||
Changes in Shareholders' Equity | ||||||||
Balances, beginning of period | 4,751 | 4,739 | 4,760 | 4,755 | 4,748 | 4,747 | 4,760 | 4,747 |
Accretion of redeemable noncontrolling interests | (1) | (2) | (1) | (4) | (4) | (5) | ||
Purchases (sales) of businesses and noncontrolling interests | 58 | (2) | (30) | (5) | (2) | |||
Stock-based compensation expense, tax benefit and issuance of common stock | 18 | 16 | 10 | 5 | 11 | 8 | ||
Balances, end of period | 4,826 | 4,751 | 4,739 | 4,751 | 4,755 | 4,748 | 4,826 | 4,751 |
Accumulated Other Comprehensive Loss | ||||||||
Changes in Shareholders' Equity | ||||||||
Balances, beginning of period | (255) | (256) | (257) | (219) | (221) | (223) | (257) | (223) |
Other comprehensive income | 4 | 1 | 1 | 3 | 2 | 2 | ||
Balances, end of period | (251) | (255) | (256) | (216) | (219) | (221) | (251) | (216) |
Accumulated Deficit | ||||||||
Changes in Shareholders' Equity | ||||||||
Balances, beginning of period | (2,346) | (2,434) | (2,513) | (2,284) | (2,310) | (2,299) | (2,513) | (2,299) |
Net income (loss) | (196) | 88 | 93 | (226) | 26 | (12) | ||
Balances, end of period | (2,542) | (2,346) | (2,434) | (2,510) | (2,284) | (2,310) | (2,542) | (2,510) |
Accumulated Deficit | Cumulative Effect, Period of Adoption, Adjustment | ||||||||
Changes in Shareholders' Equity | ||||||||
Balances, beginning of period | (14) | 1 | (14) | 1 | ||||
Treasury Stock | ||||||||
Changes in Shareholders' Equity | ||||||||
Balances, beginning of period | (2,414) | (2,414) | (2,414) | (2,414) | (2,414) | (2,414) | (2,414) | (2,414) |
Balances, end of period | (2,414) | (2,414) | (2,414) | (2,414) | (2,414) | (2,414) | (2,414) | (2,414) |
Noncontrolling Interests | ||||||||
Changes in Shareholders' Equity | ||||||||
Balances, beginning of period | 890 | 861 | 854 | 825 | 808 | 806 | 854 | 806 |
Net income (loss) | 48 | 35 | 32 | 45 | 47 | 37 | ||
Distributions paid to noncontrolling interests | (46) | (8) | (40) | (46) | (35) | (37) | ||
Purchases (sales) of businesses and noncontrolling interests | 4 | 2 | 15 | 6 | 5 | 2 | ||
Balances, end of period | $ 896 | $ 890 | $ 861 | $ 830 | $ 825 | $ 808 | $ 896 | $ 830 |
EQUITY - Narrative (Details)
EQUITY - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Stockholders equity balance | $ 522 | $ 633 | $ 503 | $ 448 | $ 670 | $ 618 | $ 522 | $ 448 | $ 437 | $ 624 |
Net income | (148) | 123 | 125 | (181) | 73 | 25 | ||||
Noncontrolling Interests | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Stockholders equity balance | 896 | 890 | 861 | 830 | 825 | 808 | 896 | 830 | 854 | $ 806 |
Net income | 48 | $ 35 | $ 32 | $ 45 | $ 47 | $ 37 | ||||
Noncontrolling Interests | Hospital Operations | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Stockholders equity balance | 120 | 120 | 114 | |||||||
Net income | 9 | 10 | ||||||||
Noncontrolling Interests | Ambulatory Care | ||||||||||
Accumulated Other Comprehensive Income (Loss) [Line Items] | ||||||||||
Stockholders equity balance | $ 776 | 776 | $ 740 | |||||||
Net income | $ 106 | $ 119 |
NET OPERATING REVENUES - Source
NET OPERATING REVENUES - Sources of Net Operating Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | $ 4,557 | $ 4,568 | $ 12,725 | $ 13,673 |
Effect of Change in Accounting Principle | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 3 | 24 | ||
Ambulatory Care | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 565 | 522 | 1,423 | 1,526 |
Conifer | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 325 | 336 | 962 | 1,040 |
Operating segments | Hospital Operations | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 3,803 | 3,850 | 10,725 | 11,539 |
Operating segments | Ambulatory Care | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 565 | 522 | 1,423 | 1,526 |
Operating segments | Conifer | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 325 | 336 | 962 | 1,040 |
Inter-segment eliminations | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | (136) | (140) | (385) | (432) |
Continuing operations: | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 4,557 | 4,568 | 12,725 | 13,673 |
Continuing operations: | Operating segments | Hospital Operations | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 3,803 | 3,850 | 10,725 | 11,539 |
Continuing operations: | Operating segments | Hospital Operations | Other Revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 295 | 284 | 848 | 844 |
Continuing operations: | Operating segments | Ambulatory Care | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 565 | 522 | 1,423 | 1,526 |
Continuing operations: | Operating segments | Conifer | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 325 | 336 | 962 | 1,040 |
Continuing operations: | Inter-segment eliminations | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | (136) | (140) | (385) | (432) |
Continuing operations: | Acute Care Hospitals and Related Outpatient Facilities | Operating segments | Hospital Operations | Medicare | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 662 | 697 | 1,964 | 2,176 |
Continuing operations: | Acute Care Hospitals and Related Outpatient Facilities | Operating segments | Hospital Operations | Medicaid | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 251 | 284 | 791 | 914 |
Continuing operations: | Acute Care Hospitals and Related Outpatient Facilities | Operating segments | Hospital Operations | Managed care | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 2,374 | 2,357 | 6,519 | 7,041 |
Continuing operations: | Acute Care Hospitals and Related Outpatient Facilities | Operating segments | Hospital Operations | Uninsured | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 50 | 44 | 112 | 56 |
Continuing operations: | Acute Care Hospitals and Related Outpatient Facilities | Operating segments | Hospital Operations | Indemnity and other | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 171 | 184 | 491 | 508 |
Continuing operations: | Acute Care Hospitals and Related Outpatient Facilities | Operating segments | Hospital Operations | Total | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | $ 3,508 | $ 3,566 | $ 9,877 | $ 10,695 |
NET OPERATING REVENUES - Ambula
NET OPERATING REVENUES - Ambulatory Care (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | $ 4,557 | $ 4,568 | $ 12,725 | $ 13,673 |
Ambulatory Care | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 565 | 522 | 1,423 | 1,526 |
Ambulatory Care | Net patient service revenues | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 532 | 490 | 1,345 | 1,437 |
Ambulatory Care | Management fees | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 23 | 23 | 60 | 69 |
Ambulatory Care | Revenue from other sources | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | $ 10 | $ 9 | $ 18 | $ 20 |
NET OPERATING REVENUES - Conife
NET OPERATING REVENUES - Conifer (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | $ 4,557 | $ 4,568 | $ 12,725 | $ 13,673 |
Conifer | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 325 | 336 | 962 | 1,040 |
Conifer | Revenue cycle services | Tenet | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 132 | 136 | 375 | 420 |
Conifer | Revenue cycle services | Non-Tenet | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 170 | 175 | 518 | 542 |
Conifer | Other services | Tenet | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | 4 | 4 | 10 | 12 |
Conifer | Other services | Non-Tenet | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues | $ 19 | $ 21 | $ 59 | $ 66 |
Conifer | Revenue from other sources | ||||
Disaggregation of Revenue [Line Items] | ||||
Net operating revenues, percentage of total | 7.00% |
NET OPERATING REVENUES - Perfor
NET OPERATING REVENUES - Performance Obligations (Details) - Conifer $ in Millions | Sep. 30, 2020USD ($) |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations | $ 6,685 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2020-10-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations | $ 147 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 3 months |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations | $ 585 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations | $ 583 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations | $ 583 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations | $ 532 |
Revenue, remaining performance obligation, expected timing of satisfaction, period | 1 year |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | |
Performance obligations | $ 4,255 |
Revenue, remaining performance obligation, expected timing of satisfaction, period |
PROPERTY AND PROFESSIONAL AND_2
PROPERTY AND PROFESSIONAL AND GENERAL LIABILITY INSURANCE - Property Insurance (Details) - Scenario, Forecast $ in Millions | 12 Months Ended |
Mar. 31, 2021USD ($) | |
Insurance coverage | |
Property insurance, annual coverage limit | $ 850 |
Floods | |
Insurance coverage | |
Property insurance, maximum coverage per incident | 100 |
Earthquake | |
Insurance coverage | |
Property insurance, maximum coverage per incident | 200 |
Property insurance, deductible | 40 |
Windstorms | |
Insurance coverage | |
Property insurance, maximum coverage per incident | 200 |
Fire and other perils | |
Insurance coverage | |
Property insurance, maximum coverage per incident | $ 850 |
Flood, earthquake and windstorm | |
Insurance coverage | |
Insurance deductible as a percent | 5.00% |
Property insurance, deductible | $ 25 |
New Madrid Fault Earthquakes | |
Insurance coverage | |
Insurance deductible as a percent | 2.00% |
Property insurance, deductible | $ 25 |
Other Catastrophic Events | |
Insurance coverage | |
Property insurance, deductible | $ 1 |
PROPERTY AND PROFESSIONAL AND_3
PROPERTY AND PROFESSIONAL AND GENERAL LIABILITY INSURANCE - Professional and General Liability Reserves (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Other operating expense, net | |||
Insurance coverage | |||
Malpractice expense | $ 233 | $ 272 | |
Professional and General Liability Reserves | |||
Insurance coverage | |||
Self insurance reserve | $ 951 | $ 965 |
CLAIMS AND LAWSUITS - (Details)
CLAIMS AND LAWSUITS - (Details) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Oct. 31, 2019USD ($) | Jul. 31, 2019USD ($) | Jan. 31, 2017lawsuit | |
Loss Contingencies | ||||||||
Settlement | $ 9 | $ 84 | $ 13 | $ 115 | ||||
Pending Litigation | ||||||||
Loss Contingencies | ||||||||
Settlement | $ 13 | $ 115 | ||||||
Maximum | ||||||||
Loss Contingencies | ||||||||
Estimate of possible liability | $ 63 | |||||||
Oklahoma Surgical Hospital Qui Tam Action | ||||||||
Loss Contingencies | ||||||||
Estimated litigation liability | $ 66 | |||||||
Settlement | $ 1 | $ 68 | ||||||
Shareholder Derivative Litigation | ||||||||
Loss Contingencies | ||||||||
Consolidated lawsuits | lawsuit | 2 |
CLAIMS AND LAWSUITS - Reconcili
CLAIMS AND LAWSUITS - Reconciliations (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Loss Contingency Accrual [Roll Forward] | |||||
Litigation reserve, balance at beginning of period | $ 86 | $ 86 | $ 8 | ||
Litigation and investigation costs | $ 9 | $ 84 | 13 | 115 | |
Cash Payments | (84) | (37) | |||
Litigation reserve, balance at end of period | $ 15 | $ 86 | $ 86 | $ 15 | $ 86 |
REDEEMABLE NONCONTROLLING INT_3
REDEEMABLE NONCONTROLLING INTERESTS IN EQUITY OF CONSOLIDATED SUBSIDIARIES - Changes in Redeemable Noncontrolling Interests (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||||||
Sep. 30, 2020 | Jun. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Jun. 30, 2019 | Mar. 31, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Changes in redeemable noncontrolling interests in equity of consolidated subsidiaries | ||||||||
Distributions paid to noncontrolling interests | $ (46) | $ (8) | $ (40) | $ (46) | $ (35) | $ (37) | ||
Redeemable noncontrolling interests | ||||||||
Changes in redeemable noncontrolling interests in equity of consolidated subsidiaries | ||||||||
Balances at beginning of period | $ 1,506 | $ 1,420 | $ 1,506 | $ 1,420 | ||||
Net income | 122 | 130 | ||||||
Distributions paid to noncontrolling interests | (90) | (105) | ||||||
Accretion of redeemable noncontrolling interests | 4 | 13 | ||||||
Purchases and sales of businesses and noncontrolling interests, net | (63) | 17 | ||||||
Balances at end of period | $ 1,479 | $ 1,475 | $ 1,479 | $ 1,475 |
REDEEMABLE NONCONTROLLING INT_4
REDEEMABLE NONCONTROLLING INTERESTS IN EQUITY OF CONSOLIDATED SUBSIDIARIES - Segment Details (Details) - Redeemable noncontrolling interests - USD ($) $ in Millions | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Dec. 31, 2018 | |
REDEEMABLE NONCONTROLLING INTEREST | ||||
Redeemable noncontrolling interests | $ 1,479 | $ 1,475 | $ 1,506 | $ 1,420 |
Net income available to redeemable noncontrolling interests | 122 | 130 | ||
Hospital Operations | ||||
REDEEMABLE NONCONTROLLING INTEREST | ||||
Redeemable noncontrolling interests | 283 | 383 | ||
Net income available to redeemable noncontrolling interests | (17) | (26) | ||
Ambulatory Care | ||||
REDEEMABLE NONCONTROLLING INTEREST | ||||
Redeemable noncontrolling interests | 805 | 777 | ||
Net income available to redeemable noncontrolling interests | 94 | 100 | ||
Conifer | ||||
REDEEMABLE NONCONTROLLING INTEREST | ||||
Redeemable noncontrolling interests | 391 | $ 346 | ||
Net income available to redeemable noncontrolling interests | $ 45 | $ 56 |
INCOME TAXES - (Details)
INCOME TAXES - (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Income Taxes | ||||
Income tax benefit (expense) | $ 197,000,000 | $ (22,000,000) | $ 227,000,000 | $ (75,000,000) |
Continued operations pre-tax earnings | (304,000,000) | (125,000,000) | (5,000,000) | 111,000,000 |
Income tax expense (benefit) | (88,000,000) | |||
Change in valuation allowance | (113,000,000) | 53,000,000 | (201,000,000) | 88,000,000 |
Increase (decrease) in deferred tax asset valuation allowance | (113,000,000) | |||
Decrease in estimated liabilities for uncertain tax positions, net of related deferred tax effects | 0 | |||
Unrecognized tax benefits | 31,000,000 | 31,000,000 | ||
Unrecognized tax benefits which, if recognized, would impact effective tax rate | 29,000,000 | 29,000,000 | ||
Interest and penalties related to accrued liabilities for uncertain tax positions, recognized | 0 | 0 | ||
Unrecognized federal and state tax benefits and reserves for interest and penalties, which may decrease in the next 12 months | 0 | 0 | ||
Change In Accounting Method | ||||
Income Taxes | ||||
Increase (decrease) in deferred tax asset valuation allowance | (119,000,000) | |||
State Interest Expense And Charitable Contributions Carryforwards | ||||
Income Taxes | ||||
Increase (decrease) in deferred tax asset valuation allowance | 6,000,000 | |||
Continuing operations: | ||||
Income Taxes | ||||
Income tax benefit (expense) | $ 197,000,000 | $ (22,000,000) | $ 227,000,000 | $ (75,000,000) |
INCOME TAXES - Federal Tax Reco
INCOME TAXES - Federal Tax Reconciliation (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Reconciliation between reported income tax expense (benefit) and income taxes calculated by the statutory federal income tax rate | ||||
Tax expense (benefit) at statutory federal rate of 21% | $ (64) | $ (26) | $ (1) | $ 24 |
State income taxes, net of federal income tax benefit | (6) | (3) | 9 | 6 |
Tax benefit attributable to noncontrolling interests | (18) | (17) | (48) | (53) |
Nontaxable gains | 0 | 0 | 3 | (1) |
Nondeductible litigation costs | 0 | 7 | 0 | 7 |
Stock-based compensation | 1 | 4 | 1 | 4 |
Change in valuation allowance | (113) | 53 | (201) | 88 |
Change in tax contingency reserves, including interest | 0 | (3) | 0 | (3) |
Other items | 3 | 7 | 10 | 3 |
Income tax expense (benefit) | $ (197) | $ 22 | $ (227) | $ 75 |
LOSS PER COMMON SHARE - (Detail
LOSS PER COMMON SHARE - (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Net Loss Attributable to Common Shareholders (Numerator) | ||||
Net loss attributable to Tenet Healthcare Corporation common shareholders for basic loss per share | $ (197) | $ (227) | $ (15) | $ (223) |
Net loss attributable to Tenet Healthcare Corporation common shareholders for diluted loss per share | $ (197) | $ (227) | $ (15) | $ (223) |
Weighted Average Shares (Denominator) | ||||
Net loss available to Tenet Healthcare Corporation common shareholders for basic earnings per share (in shares) | 105,263 | 103,558 | 104,803 | 103,181 |
Effect of dilutive stock options, restricted stock units and deferred compensation units (in shares) | 0 | 0 | 0 | 0 |
Net loss available to Tenet Healthcare Corporation common shareholders for diluted earnings per share (in shares) | 105,263 | 103,558 | 104,803 | 103,181 |
Per-Share Amount | ||||
Net loss attributable to Tenet Healthcare Corporation common shareholders for basic earnings per share (in dollars per share) | $ (1.87) | $ (2.19) | $ (0.14) | $ (2.16) |
Effect of dilutive stock options, restricted stock units and deferred compensation units (in dollars per share) | 0 | 0 | 0 | 0 |
Net loss attributable to Tenet Healthcare Corporation common shareholders for diluted earnings per share (in dollars per share) | $ (1.87) | $ (2.19) | $ (0.14) | $ (2.16) |
LOSS PER COMMON SHARE - Antidil
LOSS PER COMMON SHARE - Antidilutive securities (Details) - shares shares in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Employee stock options, restricted stock units and deferred compensation units | ||||
Antidilutive securities | ||||
Anti-dilutive securities excluded from computation of earnings per share (in shares) | 1,240 | 1,024 | 1,135 | 1,403 |
FAIR VALUE MEASUREMENTS (Detail
FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Millions | Sep. 30, 2020 | Dec. 31, 2019 |
Nonrecurring | ||
Fair value of assets and liabilities measured on recurring basis | ||
Long-lived assets held for sale | $ 386 | $ 387 |
Nonrecurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair value of assets and liabilities measured on recurring basis | ||
Long-lived assets held for sale | 0 | 0 |
Nonrecurring | Significant Other Observable Inputs (Level 2) | ||
Fair value of assets and liabilities measured on recurring basis | ||
Long-lived assets held for sale | 386 | 387 |
Nonrecurring | Significant Unobservable Inputs (Level 3) | ||
Fair value of assets and liabilities measured on recurring basis | ||
Long-lived assets held for sale | $ 0 | $ 0 |
Recurring | Quoted Prices in Active Markets for Identical Assets (Level 1) | ||
Fair value of assets and liabilities measured on recurring basis | ||
Estimated fair value of debt instrument as percentage of carrying value (percent) | 102.70% | 106.40% |
ACQUISITIONS - Preliminary purc
ACQUISITIONS - Preliminary purchase price allocations (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Final purchase price allocations | |||
Goodwill | $ 7,302 | $ 7,252 | |
Series of individual business acquisitions | |||
Final purchase price allocations | |||
Current assets | 7 | $ 5 | |
Property and equipment | 15 | 15 | |
Other intangible assets | 8 | 4 | |
Goodwill | 78 | 34 | |
Other long-term assets, including previously held equity method investments | 6 | 6 | |
Current liabilities | (4) | (4) | |
Long-term liabilities | (6) | (10) | |
Redeemable noncontrolling interests in equity of consolidated subsidiaries | (30) | (16) | |
Noncontrolling interests | (13) | (6) | |
Cash paid, net of cash acquired | (61) | (23) | |
Gains on consolidations | $ 0 | $ 5 |
ACQUISITIONS - Narrative (Detai
ACQUISITIONS - Narrative (Details) - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Business Acquisition [Line Items] | |||
Goodwill | $ 7,302 | $ 7,252 | |
Series of individual business acquisitions | |||
Business Acquisition [Line Items] | |||
Goodwill | 78 | $ 34 | |
Transaction costs related to prospective and closed acquisitions | 3 | 4 | |
Gains on consolidations | $ 0 | $ 5 |
SEGMENT INFORMATION - General I
SEGMENT INFORMATION - General Information and Customer Concentration (Details) | 9 Months Ended |
Sep. 30, 2020statehospital | |
Segment Reporting Information [Line Items] | |
Number of hospitals operated by subsidiaries | 65 |
Conifer Health Solutions, LLC | |
Segment Reporting Information [Line Items] | |
Ownership percentage by parent (percent) | 76.20% |
United Surgical Partners International | |
Segment Reporting Information [Line Items] | |
Number of states where operations occur | state | 28 |
Number of ambulatory surgery centers | 263 |
Number of urgent care centers | 40 |
Number of diagnostic imaging centers | 24 |
Number of surgical hospitals | 25 |
Hospital Operations | |
Segment Reporting Information [Line Items] | |
Number of states where operations occur | state | 9 |
Ambulatory Care | United Surgical Partners International | |
Segment Reporting Information [Line Items] | |
Ownership percentage by parent (percent) | 95.00% |
Conifer | Minimum | |
Segment Reporting Information [Line Items] | |
Number of hospitals to which segment of the entity provides revenue cycle services | 640 |
SEGMENT INFORMATION - Reconcili
SEGMENT INFORMATION - Reconciling Items (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Segment Reporting Information [Line Items] | |||||
Assets: | $ 26,187 | $ 26,187 | $ 23,365 | ||
Capital expenditures: | 86 | $ 156 | 374 | $ 492 | |
Net operating revenues | 4,557 | 4,568 | 12,725 | 13,673 | |
Equity in earnings of unconsolidated affiliates: | 44 | 38 | 103 | 114 | |
Adjusted EBITDA: | 551 | 639 | 1,868 | 1,931 | |
Depreciation and amortization: | 215 | 205 | 624 | 627 | |
Adjusted EBITDA and other reconciling items | |||||
Adjusted EBITDA | 551 | 639 | 1,868 | 1,931 | |
Loss from divested and closed businesses (i.e., the Company’s health plan businesses) | 0 | (1) | 0 | (2) | |
Depreciation and amortization | (215) | (205) | (624) | (627) | |
Impairment and restructuring charges, and acquisition-related costs | (57) | (46) | (166) | (101) | |
Litigation and investigation costs | (9) | (84) | (13) | (115) | |
Interest expense | (263) | (244) | (761) | (742) | |
Loss from early extinguishment of debt | (312) | (180) | (316) | (227) | |
Other non-operating income (expense), net | 0 | (3) | 3 | (3) | |
Net gains (losses) on sales, consolidation and deconsolidation of facilities | 1 | (1) | 4 | (3) | |
Income (loss) from continuing operations, before income taxes | (304) | (125) | (5) | 111 | |
Inter-segment eliminations | |||||
Segment Reporting Information [Line Items] | |||||
Net operating revenues | (136) | (140) | (385) | (432) | |
Hospital Operations | |||||
Segment Reporting Information [Line Items] | |||||
Assets: | 18,726 | 18,726 | 16,196 | ||
Capital expenditures: | 71 | 135 | 328 | 423 | |
Equity in earnings of unconsolidated affiliates: | 3 | 1 | 1 | 12 | |
Adjusted EBITDA: | 240 | 342 | 1,074 | 1,048 | |
Depreciation and amortization: | 184 | 175 | 536 | 539 | |
Adjusted EBITDA and other reconciling items | |||||
Adjusted EBITDA | 240 | 342 | 1,074 | 1,048 | |
Depreciation and amortization | (184) | (175) | (536) | (539) | |
Hospital Operations | Operating segments | |||||
Segment Reporting Information [Line Items] | |||||
Net operating revenues | 3,803 | 3,850 | 10,725 | 11,539 | |
Ambulatory Care | |||||
Segment Reporting Information [Line Items] | |||||
Assets: | 6,487 | 6,487 | 6,195 | ||
Capital expenditures: | 11 | 16 | 32 | 57 | |
Net operating revenues | 565 | 522 | 1,423 | 1,526 | |
Equity in earnings of unconsolidated affiliates: | 41 | 37 | 102 | 102 | |
Adjusted EBITDA: | 215 | 207 | 538 | 591 | |
Depreciation and amortization: | 21 | 19 | 60 | 55 | |
Adjusted EBITDA and other reconciling items | |||||
Adjusted EBITDA | 215 | 207 | 538 | 591 | |
Depreciation and amortization | (21) | (19) | (60) | (55) | |
Ambulatory Care | Operating segments | |||||
Segment Reporting Information [Line Items] | |||||
Net operating revenues | 565 | 522 | 1,423 | 1,526 | |
Conifer | |||||
Segment Reporting Information [Line Items] | |||||
Assets: | 974 | 974 | $ 974 | ||
Capital expenditures: | 4 | 5 | 14 | 12 | |
Net operating revenues | 325 | 336 | 962 | 1,040 | |
Adjusted EBITDA: | 96 | 90 | 256 | 292 | |
Depreciation and amortization: | 10 | 11 | 28 | 33 | |
Adjusted EBITDA and other reconciling items | |||||
Adjusted EBITDA | 96 | 90 | 256 | 292 | |
Depreciation and amortization | (10) | (11) | (28) | (33) | |
Conifer | Operating segments | |||||
Segment Reporting Information [Line Items] | |||||
Net operating revenues | 325 | 336 | 962 | 1,040 | |
Conifer | Tenet | Operating segments | |||||
Segment Reporting Information [Line Items] | |||||
Net operating revenues | 136 | 140 | 385 | 432 | |
Conifer | Other clients | Operating segments | |||||
Segment Reporting Information [Line Items] | |||||
Net operating revenues | $ 189 | $ 196 | $ 577 | $ 608 |
SUBSEQUENT EVENTS - (Details)
SUBSEQUENT EVENTS - (Details) - USD ($) $ in Millions | Oct. 31, 2020 | Sep. 30, 2020 | Dec. 31, 2019 |
Subsequent Event [Line Items] | |||
Contract liabilities | $ 1,500 | $ 61 | |
Subsequent event | |||
Subsequent Event [Line Items] | |||
Noncurrent liabilities | $ 1,000 |