Document_and_Entity_Informatio
Document and Entity Information (USD $) | 12 Months Ended | ||
Dec. 31, 2014 | Mar. 27, 2015 | Jun. 30, 2014 | |
Document And Entity Information | |||
Entity Registrant Name | RadNet, Inc. | ||
Entity Central Index Key | 790526 | ||
Document Type | 10-K | ||
Document Period End Date | 31-Dec-14 | ||
Amendment Flag | TRUE | ||
Amendment Description | We are filing this Form 10-K/A (Amendment No. 1) to our Annual Report on Form 10-K for the fiscal year ended December 31, 2014, originally filed with the U.S. Securities and Exchange Commission on March 16, 2015 (the "Original Filing"), solely for the purpose of including the financial statements of certain unconsolidated joint ventures in accordance with Rule 3-09 of Regulation S-X. Rule 3-09 requires that we file financial statements of unconsolidated joint ventures in which we hold equity interests of 50% or less and account for them under the equity method, to the extent that the unconsolidated joint ventures are individually significant. Under Rule 3-09 of Regulation S-X, we are permitted to file the financial statements for these unconsolidated joint ventures within 90 days of the end of our fiscal year. | ||
We have determined that as of and for the year ended December 31, 2014, four of our unconsolidated joint venture interests, including Franklin Imaging Joint Venture, Carroll County Radiology, LLC, MRI at St. Joseph Medical Center, LLC, and Greater Baltimore Diagnostic Imaging Partnership (collectively, the “Group”), were significant unconsolidated joint ventures under Rule 3-09. We are permitted to file combined financial statements for individually significant joint ventures which are in the same line of business. Accordingly, we are filing this Amendment No. 1 to include the combined financial statements of the Group under Item 15 - Exhibits and Financial Statement Schedules, and are amending the list of the financial statements and exhibits being filed herewith. We are also filing an updated Exhibit Index and updated Certificates of our Chief Executive Officer and Chief Financial Officer under Sections 302 and 906 of the Sarbanes Oxley Act of 2002. | |||
Except as described above, this Form 10-K/A does not amend or change any other items or disclosures in the Original Filing. The disclosure in this Form 10-K/A has not been updated to reflect events occurring after the Original Filing. Accordingly, this Amendment should be read in conjunction with the Original Filing and our other filings with the SEC subsequent to the Original Filing. | |||
Current Fiscal Year End Date | -19 | ||
Is Entity a Well-known Seasoned Issuer? | No | ||
Is Entity a Voluntary Filer? | No | ||
Is Entity's Reporting Status Current? | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Public Float | $217,067,155 | ||
Entity Common Stock, Shares Outstanding | 43,642,119 | ||
Document Fiscal Period Focus | FY | ||
Document Fiscal Year Focus | 2014 |
COMBINED_BALANCE_SHEETS
COMBINED BALANCE SHEETS (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
CURRENT ASSETS | ||
Cash and cash equivalents | $3 | $288 |
Accounts receivable, net | 7,439 | 8,603 |
Due from affiliates | 5,507 | 2,788 |
Prepaid expenses and other current assets | 129 | 667 |
Total current assets | 13,078 | 12,346 |
PROPERTY AND EQUIPMENT, NET | 13,845 | 17,794 |
OTHER ASSETS | ||
Goodwill | 9,923 | 9,923 |
Other intangible assets | 470 | 589 |
Total assets | 37,316 | 40,652 |
CURRENT LIABILITIES | ||
Accounts payable and accrued expenses | 1,483 | 1,942 |
Current portion of deferred rent | 231 | 207 |
Current portion of equipment notes payable | 692 | 668 |
Current portion of obligations under capital leases | 0 | 167 |
Total current liabilities | 2,406 | 2,984 |
LONG-TERM LIABILITIES | ||
Deferred rent, net of current portion | 1,169 | 1,399 |
Equipment notes payable, net of current portion | 565 | 1,257 |
Total liabilities | 4,140 | 5,640 |
PARTNERS' CAPITAL | ||
RadNet, Inc. | 15,339 | 16,833 |
Other partners | 17,837 | 18,179 |
Total partners' capital | 33,176 | 35,012 |
Total liabilities and partners' capital | $37,316 | $40,652 |
COMBINED_STATEMENTS_OF_INCOME
COMBINED STATEMENTS OF INCOME (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
NET SERVICE FEE REVENUE | |||
Service fee revenue, net of contractual allowances and discounts | $55,058 | $57,210 | $58,122 |
Provision for bad debts | -2,832 | -2,777 | -2,752 |
Net service fee revenue | 52,226 | 54,433 | 55,370 |
OPERATING EXPENSES | |||
Cost of operations | 36,767 | 38,220 | 38,161 |
Depreciation and amortization | 4,718 | 4,728 | 4,607 |
Net loss (gain) on sale of equipment | 19 | -143 | -35 |
Total operating expenses | 41,504 | 42,805 | 42,733 |
INCOME FROM OPERATIONS | 10,722 | 11,628 | 12,637 |
Net interest expense | 60 | 86 | 245 |
NET INCOME | $10,662 | $11,542 | $12,392 |
COMBINED_STATEMENTS_OF_PARTNER
COMBINED STATEMENTS OF PARTNERS' CAPITAL (USD $) | Radnet, Inc. | Other Partners | Total |
In Thousands | |||
Partners capital, beginning balance at Dec. 31, 2011 | $16,458 | $16,641 | $33,099 |
Net income | 5,757 | 6,635 | 12,392 |
Contributions | 920 | 1,380 | 2,300 |
Distributions | -5,418 | -6,403 | -11,821 |
Partners capital, ending balance at Dec. 31, 2012 | 17,717 | 18,253 | 35,970 |
Net income | 5,369 | 6,173 | 11,542 |
Distributions | -6,253 | -6,247 | -12,500 |
Partners capital, ending balance at Dec. 31, 2013 | 16,833 | 18,179 | 35,012 |
Net income | 4,949 | 5,713 | 10,662 |
Distributions | -6,443 | -6,055 | -12,498 |
Partners capital, ending balance at Dec. 31, 2014 | $15,339 | $17,837 | $33,176 |
COMBINED_STATEMENTS_OF_CASH_FL
COMBINED STATEMENTS OF CASH FLOWS (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
CASH FLOWS FROM OPERATING ACTIVITIES | |||
Net income | $10,662 | $11,542 | $12,392 |
Depreciation and amortization | 4,718 | 4,728 | 4,607 |
Provision for bad debts | 2,832 | 2,777 | 2,752 |
Deferred rent amortization | -206 | -155 | -122 |
Net loss (gain) on sale of equipment | 19 | -143 | -35 |
Changes in operating assets and liabilities | |||
Accounts receivable | -1,669 | -2,783 | -3,022 |
Prepaid expenses and other current assets | 537 | -69 | -264 |
Due from affiliates | -2,718 | -1,668 | 1,293 |
Accounts payable, accrued expenses | -459 | -84 | -1,424 |
Net cash provided by operating activities | 13,716 | 14,145 | 16,177 |
CASH FLOWS FROM INVESTING ACTIVITIES | |||
Purchase of property and equipment | -669 | -1,965 | -1,091 |
Purchase of imaging facilities | 0 | 0 | -2,935 |
Proceeds from sale of equipment | 1 | 30 | 35 |
Net cash used in investing activities | -668 | -1,935 | -3,991 |
CASH FLOWS FROM FINANCING ACTIVITIES | |||
Principal payments on notes and leases payable | -835 | -1,200 | -2,976 |
Contributions from partners | 0 | 0 | 2,300 |
Distributions to partners | -12,498 | -12,500 | -11,821 |
Net cash used in financing activities | -13,333 | -13,700 | -12,497 |
NET DECREASE IN CASH AND CASH EQUIVALENTS | -285 | -1,490 | -311 |
CASH AND CASH EQUIVALENTS, beginning of period | 288 | 1,778 | 2,089 |
CASH AND CASH EQUIVALENTS, end of period | 3 | 288 | 1,778 |
Cash paid during the period for interest | $60 | $86 | $245 |
1_DESCRIPTION_OF_BUSINESS
1. DESCRIPTION OF BUSINESS | 12 Months Ended | ||
Dec. 31, 2014 | |||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
NOTE 1 - DESCRIPTION OF BUSINESS | Franklin Imaging Joint Venture, Carroll County Radiology, LLC, MRI at St. Joseph Medical Center, LLC, and Greater Baltimore Diagnostic Imaging Partnership (collectively, the “Group”), are joint ventures between RadNet, Inc. and, as applicable, hospitals, health systems or radiology practices operating within the state of Maryland and were formed for the purpose of owning and operating diagnostic imaging centers. Professional services at the joint venture diagnostic imaging centers are performed by contracted radiology practices or a radiology practice that participates in the joint venture. Each joint venture within the Group is an affiliate of RadNet, Inc. as follows: | ||
% owned by RadNet, Inc. | |||
Franklin Imaging Joint Venture | 49% | ||
Carroll County Radiology, LLC | 40% | ||
MRI at St. Joseph Medical Center, LLC | 49% | ||
Greater Baltimore Diagnostic Imaging Partnership ("GBDIP") | 50% | ||
2_SUMMARY_OF_SIGNIFICANT_ACCOU
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Accounting Policies [Abstract] | |||||||||||||
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES | PRINCIPLES OF COMBINATION – Under Rule 3-09 of Regulation S-X, RadNet, Inc. is permitted to file combined financial statements for individually significant unconsolidated joint ventures. The combined financial statements include the assets, liabilities, and operations of each member of the Group. The operating activities of each of these joint ventures are completely separate from one another. Accordingly there are no intercompany transactions and balances to be eliminated when combining each together. | ||||||||||||
USE OF ESTIMATES - The preparation of these financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These estimates and assumptions affect various matters including the Group’s reported amounts of assets and liabilities in the combined balance sheets at the dates of the financial statements; disclosure of contingent assets and liabilities at the dates of the financial statements; and reported amounts of revenues and expenses in the combined statements of income during the reporting periods. These estimates involve judgments with respect to numerous factors that are difficult to predict and are beyond management’s control. As a result, actual amounts could materially differ from these estimates. | |||||||||||||
REVENUES – Combined service fee revenue, net of contractual allowances and discounts, consists of net patient fees received from various payors and patients themselves based mainly upon established contractual billing rates, less allowances for contractual adjustments and discounts. This service fee revenue is earned through providing the use of diagnostic imaging equipment and the provision of technical services as well as providing administrative services such as clerical and administrative personnel, billing and collection, provision of medical and office supplies, secretarial, reception and transcription services, maintenance of medical records, and advertising, marketing and promotional activities. | |||||||||||||
The Group's combined service fee revenues are recorded during the period the services are provided based upon the estimated amounts due from the patients and third-party payors. Third-party payors include federal and state agencies (under the Medicare and Medicaid programs), managed care health plans, commercial insurance companies and employers. Estimates of contractual allowances under managed care health plans are based upon the payment terms specified in the related contractual agreements. Contractual payment terms in managed care agreements are generally based upon predetermined rates per discounted fee-for-service rates. The Group also records a provision for doubtful accounts (based primarily on historical collection experience) related to patients and copayment and deductible amounts for patients who have health care coverage with third-party payors. | |||||||||||||
The Group’s service fee revenue, net of contractual allowances and discounts less the provision for bad debts for the years ended December 31, are summarized in the following table (in thousands): | |||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Commercial Insurance | $ | 37,384 | $ | 38,846 | $ | 40,220 | |||||||
Medicare | 12,003 | 12,472 | 12,089 | ||||||||||
Medicaid | 1,872 | 1,945 | 1,976 | ||||||||||
Workers' compensation/personal injury | 2,643 | 2,746 | 2,615 | ||||||||||
Other | 1,156 | 1,201 | 1,222 | ||||||||||
Service fee revenue, net of contractual allowances and discounts | 55,058 | 57,210 | 58,122 | ||||||||||
Provision for bad debts | (2,832 | ) | (2,777 | ) | (2,752 | ) | |||||||
Net service fee revenue | $ | 52,226 | $ | 54,433 | $ | 55,370 | |||||||
ACCOUNTS RECEIVABLE - Substantially all of the Group’s accounts receivable are due under fee-for-service contracts from third party payors, such as insurance companies and government-sponsored healthcare programs, or directly from patients. Services are generally provided pursuant to one-year contracts with healthcare providers. The Group continuously monitors collections from payors and maintains an allowance for bad debts based upon specific payor collection issues that have been identified as well as historical collection experience. | |||||||||||||
PROVISION FOR BAD DEBTS - Although outcomes vary, the Group’s policy is to attempt to collect amounts due from patients, including co-payments and deductibles due from patients with insurance, at the time of service. The Group provides for an allowance against accounts receivable that could become uncollectible by establishing an allowance to reduce the carrying value of such receivables to their estimated net realizable value. The Group estimates this allowance based on the aging of accounts receivable by each type of payor over a minimum 18-month look-back period, and other relevant factors. A significant portion of the provision for bad debt relates to co-payments and deductibles owed to the Group by patients with insurance. There are various factors that can impact collection trends, such as changes in the economy, which in turn have an impact on the increased burden of co-payments and deductibles to be made by patients with insurance. These factors continuously change and can have an impact on collection trends and the Group’s estimation process. The combined allowance for bad debts at December 31, 2014 and 2013 was $351,000 and $352,000, respectively. | |||||||||||||
CONCENTRATION OF CREDIT RISKS - Financial instruments that potentially subject the Group to credit risk are primarily cash equivalents and accounts receivable. Each joint venture places its cash and cash equivalents with a financial institution. At times, the cash in the financial institution is temporarily in excess of the amount insured by the Federal Deposit Insurance Corporation, or FDIC. Substantially all accounts receivable are due under fee-for-service contracts from third party payors, such as insurance companies and government-sponsored healthcare programs, or directly from patients. Services are generally provided pursuant to one-year contracts with healthcare providers. The Group continuously monitors collections from its clients and maintains an allowance for bad debts based upon any specific payor collection issues that are identified and historical experience. | |||||||||||||
CASH AND CASH EQUIVALENTS – The Group considers all highly liquid investments that mature in three months or less when purchased to be cash equivalents. The carrying amount of cash and cash equivalents approximates their fair market value. | |||||||||||||
PROPERTY AND EQUIPMENT – Property, furniture and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization of property, furniture and equipment are provided using the straight-line method over the estimated useful lives, which range from 3 to 15 years. Leasehold improvements are amortized at the shorter of the related lease term or their estimated useful lives which range from 3 to 30 years. | |||||||||||||
GOODWILL – Combined goodwill of the Group at December 31, 2014 totaled $9.9 million. Goodwill is recorded by each member of the Group as a result of business combinations. Management of each member of the Group evaluates goodwill, at a minimum, on an annual basis and whenever events and changes in circumstances suggest that the carrying amount may not be recoverable. On January 1, 2012, each member of the Group adopted ASU 2011-08, “Intangibles—Goodwill and Other (Topic 350): Testing Goodwill for Impairment”, changing how a company may test goodwill for impairment. Companies now have the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. Each member of the Group adopted the provisions of ASU 2011-08 effective January 1, 2012. Each member of the Group evaluated its respective share of the combined goodwill at October 1, 2014 for signs of impairment under the provisions of ASU 2011-08. By utilizing certain qualitative measures outlined in the guidance, each member determined that its respective share of the combined goodwill was not impaired. | |||||||||||||
INCOME TAXES - Each member of the Group is treated as a partnership for federal and state income tax purposes where all taxable income is allocated to the partners in accordance with the respective partnership agreement and so accordingly federal and state taxes on income are the responsibility of the joint venture partners individually. Accordingly, no income tax provision is recorded by any joint ventures in the Group. | |||||||||||||
Open tax years are those that are open for examination by taxing authorities, and include all returns for tax years ending on or after December 31, 2011, for federal returns and December 31, 2011, for Maryland returns. The Group has no examinations in process and has not been notified of any future examinations at this time. Management of the Group has reviewed all open tax years and major jurisdictions, and has not recorded an unrecognized tax benefit relating to uncertain income tax positions taken or expected to be taken in future tax returns. The Group has recognized no interest or penalties related to uncertain tax positions taken or expected to be taken. | |||||||||||||
FAIR VALUE MEASUREMENTS –The combined balance sheets include the following financial instruments: cash and cash equivalents, receivables, trade accounts payable, capital leases, equipment notes payable and other liabilities. The Group considers the carrying amounts of cash and cash equivalents, receivables, other current assets and current liabilities to approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization or payment. Additionally, the Group considers the carrying amount of its equipment notes payable and capital lease obligations to approximate their fair value because the weighted average interest rate used to formulate the carrying amounts approximates current market rates. | |||||||||||||
3_FACILITY_ACQUISITIONS
3. FACILITY ACQUISITIONS | 12 Months Ended |
Dec. 31, 2014 | |
Facility Acquisitions | |
NOTE 3 - FACILITY ACQUISITIONS | On February 22, 2012, Carroll County Radiology, LLC completed its acquisition of a multi-modality imaging center from RadNet, Inc. located in Westminster, Maryland for $2.3 million. The members made a fair value determination of the assets acquired and the liabilities assumed and approximately $200,000 of fixed assets and $2.1 million of goodwill was recorded with respect to this transaction. |
On November 1, 2012, Franklin Imaging Joint Venture completed its acquisition of a multi-modality imaging center located in Baltimore, Maryland for $635,000. The partners made a fair value determination of the assets acquired and the liabilities assumed and $635,000 of fixed assets was recorded with respect to this transaction. |
4_GOODWILL_AND_OTHER_INTANGIBL
4. GOODWILL AND OTHER INTANGIBLE ASSETS | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||
NOTE 4 - GOODWILL AND OTHER INTANGIBLE ASSETS | Combined goodwill of the Group totaled $9.9 million at December 31, 2014 and 2013. Goodwill is recorded as a result of business combinations. | ||||||||||||||||||||||||||||||||
Other intangible assets are primarily related to the value of management service contracts on the books of MRI at St. Joseph Medical Center, LLC and covenant not to compete contracts acquired through GBDIP’s acquisition of a controlling interest of a previously held non-consolidated joint venture investment and totaled $896,000 on the date of acquisition. Accumulated amortization of the management service contract and covenant not to compete contract intangible assets through December 31, 2014 was $114,000 and $313,000, respectively. Amortization expense for the year ended December 31, 2014 was $120,000. The value of these covenant not to compete contracts is amortized using the straight-line method over five years. Management service contracts are amortized over 25 years. | |||||||||||||||||||||||||||||||||
The following table shows annual amortization expense, by asset classes that will be recorded over the next five years (in thousands): | |||||||||||||||||||||||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | Total | Weighted average amortization period remaining in years | ||||||||||||||||||||||||||
Management service contracts | $ | 16 | $ | 16 | $ | 16 | $ | 16 | $ | 16 | $ | 181 | $ | 261 | 17 | ||||||||||||||||||
Covenant not to compete contracts | 104 | 105 | – | – | – | 209 | 2 | ||||||||||||||||||||||||||
Total annual amortization | $ | 120 | $ | 121 | $ | 16 | $ | 16 | $ | 16 | $ | 181 | $ | 470 | |||||||||||||||||||
5_PROPERTY_AND_EQUIPMENT
5. PROPERTY AND EQUIPMENT | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
NOTE 5 - PROPERTY AND EQUIPMENT | Property and equipment and accumulated depreciation and amortization are as follows (in thousands): | ||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Medical equipment | $ | 36,618 | $ | 34,190 | |||||
Office equipment, furniture and fixtures | 3,238 | 3,206 | |||||||
Leasehold improvements | 14,335 | 14,589 | |||||||
Equipment under capital leases | – | 1,982 | |||||||
54,191 | 53,967 | ||||||||
Accumulated depreciation and amortization | (40,346 | ) | (36,173 | ) | |||||
$ | 13,845 | $ | 17,794 | ||||||
Depreciation and amortization expense on property and equipment, including amortization of equipment under capital leases, for the years ended December 31, 2014, 2013 and 2012 totaled $4.7 million, $4.6 million and $4.5 million, respectively. |
6_ACCOUNTS_PAYABLE_AND_ACCRUED
6. ACCOUNTS PAYABLE AND ACCRUED EXPENSES | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Payables and Accruals [Abstract] | |||||||||
NOTE 6 - ACCOUNTS PAYABLE AND ACCRUED EXPENSES | Accounts payable and accrued expenses are as follows (in thousands): | ||||||||
December 31, | |||||||||
2014 | 2013 | ||||||||
Accounts payable | $ | 98 | $ | 658 | |||||
Accrued expenses | 230 | 226 | |||||||
Accrued payroll and vacation | 1,155 | 1,058 | |||||||
Total | $ | 1,483 | $ | 1,942 | |||||
7_EQUIPMENT_NOTES_PAYABLE
7. EQUIPMENT NOTES PAYABLE | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Debt Disclosure [Abstract] | |||||
NOTE 7 - EQUIPMENT NOTES PAYABLE | One member of the Group, GBDIP holds four promissory notes issued by two financing companies for the purpose of acquiring imaging equipment. These notes have interest rates between 3.5% and 4.5%, mature on or before October 2018 and are collateralized by the acquired equipment. | ||||
The following is a listing of annual principal maturities of the equipment notes discussed above for years ending December 31 (in thousands): | |||||
2015 | $ | 692 | |||
2016 | 208 | ||||
2017 | 201 | ||||
2018 | 156 | ||||
$ | 1,257 | ||||
8_COMMITMENTS_AND_CONTINGENCIE
8. COMMITMENTS AND CONTINGENCIES | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||
NOTE 8 - COMMITMENTS AND CONTINGENCIES | Leases – The Group leases various operating facilities and certain medical equipment under operating leases with renewal options expiring through 2018. Certain leases contain renewal options from two to ten years and escalation clauses based either on the consumer price index or fixed rent escalators. Leases with fixed rent escalators are recorded on a straight-line basis. The Group records deferred rent for tenant leasehold improvement allowances received from a lessor and amortizes the deferred rent expense over the term of the lease agreement. Minimum annual payments under operating leases for future years ending December 31 follow (in thousands): | ||||||||||||
Facilities | Equipment | Total | |||||||||||
2015 | $ | 2,043 | $ | 675 | $ | 2,718 | |||||||
2016 | 1,868 | 278 | 2,146 | ||||||||||
2017 | 1,401 | 35 | 1,436 | ||||||||||
2018 | 1,132 | 31 | 1,163 | ||||||||||
2019 | 879 | 16 | 895 | ||||||||||
Thereafter | 710 | – | 710 | ||||||||||
$ | 8,033 | $ | 1,035 | $ | 9,068 | ||||||||
Total rent expense, including equipment rentals, for the years ended December 31, 2014, 2013 and 2012 was $3.5 million, $3.9 million and $4.3 million, respectively. |
9_RELATED_PARTY_TRANSACTIONS
9. RELATED PARTY TRANSACTIONS | 12 Months Ended |
Dec. 31, 2014 | |
Related Party Transactions [Abstract] | |
NOTE 9 - RELATED PARTY TRANSACTIONS | See Note 3 with respect to a related party acquisition. |
RadNet, Inc. contracts with each joint venture within the Group to provide certain administrative services including assistance with accounting, payroll and employee benefits processing, and billing and collection functions on behalf of these joint ventures. RadNet Inc. remits to the joint ventures all amounts collected through its administration of the billing and collection functions. | |
RadNet, Inc., as administrator over payroll and employee benefits, pays salary and benefit obligations on behalf of these joint ventures and then bills each joint venture for its respective portion. | |
RadNet, Inc. contracts with certain members of its contracted radiologist groups to perform professional services for the joint ventures. RadNet, Inc. assures that these radiologists are adequately covered under medical malpractice insurance policies. RadNet, Inc., on behalf of its contracted radiologist groups, bills each joint venture for its respective share of the professional fees incurred through its utilization of these contracted radiologists. RadNet, Inc. remits to its contracted radiologist groups all amounts collected from the joint ventures for the billed professional fees. | |
Amounts receivable from and payable to RadNet Inc. for the activities listed above are summarized in due from affiliates on the Group’s combined balance sheets and were $5.5 million and $2.8 million at December 31, 2014 and 2013, respectively. |
10_SUBSEQUENT_EVENTS
10. SUBSEQUENT EVENTS | 12 Months Ended |
Dec. 31, 2014 | |
Subsequent Events [Abstract] | |
NOTE 10 - SUBSEQUENT EVENTS | The members of the Group evaluated subsequent events through March 31, 2015 and concluded that no additional disclosures were required. |
2_SUMMARY_OF_SIGNIFICANT_ACCOU1
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Summary Of Significant Accounting Policies Policies | |||||||||||||
PRINCIPLES OF COMBINATION | PRINCIPLES OF COMBINATION – Under Rule 3-09 of Regulation S-X, RadNet, Inc. is permitted to file combined financial statements for individually significant unconsolidated joint ventures. The combined financial statements include the assets, liabilities, and operations of each member of the Group. The operating activities of each of these joint ventures are completely separate from one another. Accordingly there are no intercompany transactions and balances to be eliminated when combining each together. | ||||||||||||
USE OF ESTIMATES | The preparation of these financial statements in conformity with U.S. generally accepted accounting principles requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. These estimates and assumptions affect various matters including the Group’s reported amounts of assets and liabilities in the combined balance sheets at the dates of the financial statements; disclosure of contingent assets and liabilities at the dates of the financial statements; and reported amounts of revenues and expenses in the combined statements of income during the reporting periods. These estimates involve judgments with respect to numerous factors that are difficult to predict and are beyond management’s control. As a result, actual amounts could materially differ from these estimates. | ||||||||||||
REVENUES | REVENUES – Combined service fee revenue, net of contractual allowances and discounts, consists of net patient fees received from various payors and patients themselves based mainly upon established contractual billing rates, less allowances for contractual adjustments and discounts. This service fee revenue is earned through providing the use of diagnostic imaging equipment and the provision of technical services as well as providing administrative services such as clerical and administrative personnel, billing and collection, provision of medical and office supplies, secretarial, reception and transcription services, maintenance of medical records, and advertising, marketing and promotional activities. | ||||||||||||
The Group's combined service fee revenues are recorded during the period the services are provided based upon the estimated amounts due from the patients and third-party payors. Third-party payors include federal and state agencies (under the Medicare and Medicaid programs), managed care health plans, commercial insurance companies and employers. Estimates of contractual allowances under managed care health plans are based upon the payment terms specified in the related contractual agreements. Contractual payment terms in managed care agreements are generally based upon predetermined rates per discounted fee-for-service rates. The Group also records a provision for doubtful accounts (based primarily on historical collection experience) related to patients and copayment and deductible amounts for patients who have health care coverage with third-party payors. | |||||||||||||
The Group’s service fee revenue, net of contractual allowances and discounts less the provision for bad debts for the years ended December 31, are summarized in the following table (in thousands): | |||||||||||||
Years Ended December 31, | |||||||||||||
2014 | 2013 | 2012 | |||||||||||
Commercial Insurance | $ | 37,384 | $ | 38,846 | $ | 40,220 | |||||||
Medicare | 12,003 | 12,472 | 12,089 | ||||||||||
Medicaid | 1,872 | 1,945 | 1,976 | ||||||||||
Workers' compensation/personal injury | 2,643 | 2,746 | 2,615 | ||||||||||
Other | 1,156 | 1,201 | 1,222 | ||||||||||
Service fee revenue, net of contractual allowances and discounts | 55,058 | 57,210 | 58,122 | ||||||||||
Provision for bad debts | (2,832 | ) | (2,777 | ) | (2,752 | ) | |||||||
Net service fee revenue | $ | 52,226 | $ | 54,433 | $ | 55,370 | |||||||
ACCOUNTS RECEIVABLE | Substantially all of the Group’s accounts receivable are due under fee-for-service contracts from third party payors, such as insurance companies and government-sponsored healthcare programs, or directly from patients. Services are generally provided pursuant to one-year contracts with healthcare providers. The Group continuously monitors collections from payors and maintains an allowance for bad debts based upon specific payor collection issues that have been identified as well as historical collection experience. | ||||||||||||
PROVISION FOR BAD DEBTS | PROVISION FOR BAD DEBTS - Although outcomes vary, the Group’s policy is to attempt to collect amounts due from patients, including co-payments and deductibles due from patients with insurance, at the time of service. The Group provides for an allowance against accounts receivable that could become uncollectible by establishing an allowance to reduce the carrying value of such receivables to their estimated net realizable value. The Group estimates this allowance based on the aging of accounts receivable by each type of payor over a minimum 18-month look-back period, and other relevant factors. A significant portion of the provision for bad debt relates to co-payments and deductibles owed to the Group by patients with insurance. There are various factors that can impact collection trends, such as changes in the economy, which in turn have an impact on the increased burden of co-payments and deductibles to be made by patients with insurance. These factors continuously change and can have an impact on collection trends and the Group’s estimation process. The combined allowance for bad debts at December 31, 2014 and 2013 was $351,000 and $352,000, respectively. | ||||||||||||
CONCENTRATION OF CREDIT RISKS | Financial instruments that potentially subject the Group to credit risk are primarily cash equivalents and accounts receivable. Each joint venture places its cash and cash equivalents with a financial institution. At times, the cash in the financial institution is temporarily in excess of the amount insured by the Federal Deposit Insurance Corporation, or FDIC. Substantially all accounts receivable are due under fee-for-service contracts from third party payors, such as insurance companies and government-sponsored healthcare programs, or directly from patients. Services are generally provided pursuant to one-year contracts with healthcare providers. The Group continuously monitors collections from its clients and maintains an allowance for bad debts based upon any specific payor collection issues that are identified and historical experience. | ||||||||||||
CASH AND CASH EQUIVALENTS | The Group considers all highly liquid investments that mature in three months or less when purchased to be cash equivalents. The carrying amount of cash and cash equivalents approximates their fair market value. | ||||||||||||
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT – Property, furniture and equipment are stated at cost, less accumulated depreciation and amortization. Depreciation and amortization of property, furniture and equipment are provided using the straight-line method over the estimated useful lives, which range from 3 to 15 years. Leasehold improvements are amortized at the shorter of the related lease term or their estimated useful lives which range from 3 to 30 years. | ||||||||||||
GOODWILL | GOODWILL – Combined goodwill of the Group at December 31, 2014 totaled $9.9 million. Goodwill is recorded by each member of the Group as a result of business combinations. Management of each member of the Group evaluates goodwill, at a minimum, on an annual basis and whenever events and changes in circumstances suggest that the carrying amount may not be recoverable. On January 1, 2012, each member of the Group adopted ASU 2011-08, “Intangibles—Goodwill and Other (Topic 350): Testing Goodwill for Impairment”, changing how a company may test goodwill for impairment. Companies now have the option to first assess qualitative factors to determine whether it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If the company determines that it is not more likely than not that the fair value of a reporting unit is less than its carrying amount, then performing the two-step impairment test is unnecessary. Each member of the Group adopted the provisions of ASU 2011-08 effective January 1, 2012. Each member of the Group evaluated its respective share of the combined goodwill at October 1, 2014 for signs of impairment under the provisions of ASU 2011-08. By utilizing certain qualitative measures outlined in the guidance, each member determined that its respective share of the combined goodwill was not impaired. | ||||||||||||
INCOME TAXES | INCOME TAXES - Each member of the Group is treated as a partnership for federal and state income tax purposes where all taxable income is allocated to the partners in accordance with the respective partnership agreement and so accordingly federal and state taxes on income are the responsibility of the joint venture partners individually. Accordingly, no income tax provision is recorded by any joint ventures in the Group. | ||||||||||||
Open tax years are those that are open for examination by taxing authorities, and include all returns for tax years ending on or after December 31, 2011, for federal returns and December 31, 2011, for Maryland returns. The Group has no examinations in process and has not been notified of any future examinations at this time. Management of the Group has reviewed all open tax years and major jurisdictions, and has not recorded an unrecognized tax benefit relating to uncertain income tax positions taken or expected to be taken in future tax returns. The Group has recognized no interest or penalties related to uncertain tax positions taken or expected to be taken. | |||||||||||||
FAIR VALUE MEASUREMENTS | The combined balance sheets include the following financial instruments: cash and cash equivalents, receivables, trade accounts payable, capital leases, equipment notes payable and other liabilities. The Group considers the carrying amounts of cash and cash equivalents, receivables, other current assets and current liabilities to approximate their fair value because of the relatively short period of time between the origination of these instruments and their expected realization or payment. Additionally, the Group considers the carrying amount of its equipment notes payable and capital lease obligations to approximate their fair value because the weighted average interest rate used to formulate the carrying amounts approximates current market rates. |
1_DESCRIPTION_OF_BUSINESS_Tabl
1. DESCRIPTION OF BUSINESS (Tables) | 12 Months Ended | ||
Dec. 31, 2014 | |||
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |||
Affiliates of Radnet | % owned by RadNet, Inc. | ||
Franklin Imaging Joint Venture | 49% | ||
Carroll County Radiology, LLC | 40% | ||
MRI at St. Joseph Medical Center, LLC | 49% | ||
Greater Baltimore Diagnostic Imaging Partnership ("GBDIP") | 50% |
2_SUMMARY_OF_SIGNIFICANT_ACCOU2
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Health Care Organization Revenue and Expense [Abstract] | |||||||||||||
Service fee revenue | Years Ended December 31, | ||||||||||||
2014 | 2013 | 2012 | |||||||||||
Commercial Insurance | $ | 37,384 | $ | 38,846 | $ | 40,220 | |||||||
Medicare | 12,003 | 12,472 | 12,089 | ||||||||||
Medicaid | 1,872 | 1,945 | 1,976 | ||||||||||
Workers' Compensation/Personal Injury | 2,643 | 2,746 | 2,615 | ||||||||||
Other | 1,156 | 1,201 | 1,222 | ||||||||||
Service fee revenue, net of contractual allowances and discounts | 55,058 | 57,210 | 58,122 | ||||||||||
Provision for bad debts | (2,832 | ) | (2,777 | ) | (2,752 | ) | |||||||
Net service fee revenue | $ | 52,226 | $ | 54,433 | $ | 55,370 |
4_GOODWILL_AND_OTHER_INTANGIBL1
4. GOODWILL AND OTHER INTANGIBLE ASSETS (Tables) | 12 Months Ended | ||||||||||||||||||||||||||||||||
Dec. 31, 2014 | |||||||||||||||||||||||||||||||||
Goodwill and Intangible Assets Disclosure [Abstract] | |||||||||||||||||||||||||||||||||
Schedule of amortization expense | 2015 | 2016 | 2017 | 2018 | 2019 | Thereafter | Total | Weighted average amortization period remaining in years | |||||||||||||||||||||||||
Management service contracts | $ | 16 | $ | 16 | $ | 16 | $ | 16 | $ | 16 | $ | 181 | $ | 261 | 17 | ||||||||||||||||||
Covenant not to compete contracts | 104 | 105 | – | – | – | 209 | 2 | ||||||||||||||||||||||||||
Total annual amortization | $ | 120 | $ | 121 | $ | 16 | $ | 16 | $ | 16 | $ | 181 | $ | 470 |
5_PROPERTY_AND_EQUIPMENT_Table
5. PROPERTY AND EQUIPMENT (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Property, Plant and Equipment [Abstract] | |||||||||
Schedule of property and equipment | December 31, | ||||||||
2014 | 2013 | ||||||||
Medical equipment | $ | 36,618 | $ | 34,190 | |||||
Office equipment, furniture and fixtures | 3,238 | 3,206 | |||||||
Leasehold improvements | 14,335 | 14,589 | |||||||
Equipment under capital leases | – | 1,982 | |||||||
54,191 | 53,967 | ||||||||
Accumulated depreciation and amortization | (40,346 | ) | (36,173 | ) | |||||
$ | 13,845 | $ | 17,794 |
6_ACCOUNTS_PAYABLE_AND_ACCRUED1
6. ACCOUNTS PAYABLE AND ACCRUED EXPENSES (IN THOUSANDS) (Tables) | 12 Months Ended | ||||||||
Dec. 31, 2014 | |||||||||
Payables and Accruals [Abstract] | |||||||||
ACCOUNTS PAYABLE AND ACCRUED EXPENSES | December 31, | ||||||||
2014 | 2013 | ||||||||
Accounts payable | $ | 98 | $ | 658 | |||||
Accrued expenses | 230 | 226 | |||||||
Accrued payroll and vacation | 1,155 | 1,058 | |||||||
Total | $ | 1,483 | $ | 1,942 | |||||
7_EQUIPMENT_NOTES_PAYABLE_Tabl
7. EQUIPMENT NOTES PAYABLE (Tables) | 12 Months Ended | ||||
Dec. 31, 2014 | |||||
Debt Disclosure [Abstract] | |||||
Maturities of notes payable | 2015 | $ | 692 | ||
2016 | 208 | ||||
2017 | 201 | ||||
2018 | 156 | ||||
$ | 1,257 |
8_COMMITMENTS_AND_CONTINGENCIE1
8. COMMITMENTS AND CONTINGENCIES (Tables) | 12 Months Ended | ||||||||||||
Dec. 31, 2014 | |||||||||||||
Commitments and Contingencies Disclosure [Abstract] | |||||||||||||
Minimum annual payments under operating leases | Facilities | Equipment | Total | ||||||||||
2015 | $ | 2,043 | $ | 675 | $ | 2,718 | |||||||
2016 | 1,868 | 278 | 2,146 | ||||||||||
2017 | 1,401 | 35 | 1,436 | ||||||||||
2018 | 1,132 | 31 | 1,163 | ||||||||||
2019 | 879 | 16 | 895 | ||||||||||
Thereafter | 710 | – | 710 | ||||||||||
$ | 8,033 | $ | 1,035 | $ | 9,068 |
1_DESCRIPTION_OF_BUSINESS_Deta
1. DESCRIPTION OF BUSINESS (Details) | Dec. 31, 2014 |
Franklin Imaging Joint Venture [Member] | |
Percent owned by Radnet, Inc. | 49.00% |
Carroll County Radiology, LLC [Member] | |
Percent owned by Radnet, Inc. | 40.00% |
MRI at St. Joseph Medical Center, LLC [Member] | |
Percent owned by Radnet, Inc. | 49.00% |
Greater Baltimore Diagnostic Imaging Partnership [Member] | |
Percent owned by Radnet, Inc. | 50.00% |
2_SUMMARY_OF_SIGNIFICANT_ACCOU3
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Health Care Organization Revenue and Expense [Abstract] | |||
Commercial Insurance/Managed Care Capitation | $37,384 | $38,846 | $40,220 |
Medicare | 12,003 | 12,472 | 12,089 |
Medicaid | 1,872 | 1,945 | 1,976 |
Workers Compensation/Personal Injury | 2,643 | 2,746 | 2,615 |
Other | 1,156 | 1,201 | 1,222 |
Service fee revenue, net of contractual allowances and discounts | 55,058 | 57,210 | 58,122 |
Provision for bad debts | 2,832 | 2,777 | 2,752 |
Net service fee revenue | $52,226 | $54,433 | $55,370 |
2_SUMMARY_OF_SIGNIFICANT_ACCOU4
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative) (USD $) | 12 Months Ended | |
Dec. 31, 2014 | Dec. 31, 2013 | |
Allowance for bad debts | 351,000 | $352,000 |
Property, furniture and equipment | ||
Useful lives | 3 to 15 years | |
Leasehold Improvements [Member] | ||
Useful lives | 3 to 30 years |
4_GOODWILL_AND_OTHER_INTANGIBL2
4. GOODWILL AND OTHER INTANGIBLE ASSETS (Details 1) (USD $) | 12 Months Ended | |
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 |
2015 | $120 | |
2016 | 121 | |
2017 | 16 | |
2018 | 16 | |
2019 | 16 | |
Thereafter | 181 | |
Total goodwill and other intangible assets | 470 | 589 |
Management service contracts [Member] | ||
2015 | 16 | |
2016 | 16 | |
2017 | 16 | |
2018 | 16 | |
2019 | 16 | |
Thereafter | 181 | |
Total goodwill and other intangible assets | 261 | |
Weighted average amortization period remaining in years | 17 years | |
Noncompete Agreements [Member] | ||
2015 | 104 | |
2016 | 105 | |
2017 | 0 | |
2018 | 0 | |
2019 | 0 | |
Thereafter | 0 | |
Total goodwill and other intangible assets | $209 | |
Weighted average amortization period remaining in years | 2 years |
5_PROPERTY_AND_EQUIPMENT_Detai
5. PROPERTY AND EQUIPMENT (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Property and equipment, gross | $54,191 | $53,967 |
Accumulated depreciation and amortization | -40,346 | -36,173 |
Property and equipment, net | 13,845 | 17,794 |
Medical equipment [Member] | ||
Property and equipment, gross | 36,618 | 34,190 |
Office equipment, furniture and fixtures [Member] | ||
Property and equipment, gross | 3,238 | 3,206 |
Leasehold improvements [Member] | ||
Property and equipment, gross | 14,335 | 14,589 |
Equipment under capital leases [Member] | ||
Property and equipment, gross | $0 | $1,982 |
5_PROPERTY_AND_EQUIPMENT_Detai1
5. PROPERTY AND EQUIPMENT (Details Narrative) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Property, Plant and Equipment [Abstract] | |||
Depreciation and amortization | $4,700 | $4,600 | $4,500 |
6_ACCOUNTS_PAYABLE_AND_ACCRUED2
6. ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Detalis) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Payables and Accruals [Abstract] | ||
Accounts payable | $98 | $658 |
Accrued expenses | 230 | 226 |
Accrued payroll and vacation | 1,155 | 1,058 |
Total | $1,483 | $1,942 |
7_EQUIPMENT_NOTES_PAYABLE_Deta
7. EQUIPMENT NOTES PAYABLE (Details) (USD $) | 12 Months Ended |
In Thousands, unless otherwise specified | Dec. 31, 2014 |
Debt Disclosure [Abstract] | |
2015 | $692 |
2016 | 208 |
2017 | 201 |
2018 | 156 |
Total equipment note | $1,257 |
Interest rates on notes | Interest rates between 3.5% and 4.5% |
Maturity description | On or before October 2018 |
8_COMMITMENTS_AND_CONTINGENCIE2
8. COMMITMENTS AND CONTINGENCIES (Details) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
2015 | $2,718 | |
2016 | 2,146 | |
2017 | 1,436 | |
2018 | 1,163 | |
2018 | 895 | |
Thereafter | 710 | |
Total minimum annual payments under operating leases | 9,068 | |
Facilities | ||
2015 | 2,043 | |
2016 | 1,868 | |
2017 | 1,401 | |
2018 | 1,132 | |
2018 | 879 | |
Thereafter | 710 | |
Total minimum annual payments under operating leases | 8,033 | |
Equipment | ||
2015 | 675 | |
2016 | 278 | |
2017 | 35 | |
2018 | 31 | |
2018 | 16 | |
Thereafter | 0 | |
Total minimum annual payments under operating leases | $1,035 |
8_COMMITMENTS_AND_CONTINGENCIE3
8. COMMITMENTS AND CONTINGENCIES (Details Narrative) (USD $) | 12 Months Ended | ||
In Thousands, unless otherwise specified | Dec. 31, 2014 | Dec. 31, 2013 | Dec. 31, 2012 |
Commitments and Contingencies Disclosure [Abstract] | |||
Rent expense | $3,500 | $3,900 | $4,300 |
9_RELATED_PARTY_TRANSACTIONS_D
9. RELATED PARTY TRANSACTIONS (Details Narrative) (USD $) | Dec. 31, 2014 | Dec. 31, 2013 |
In Thousands, unless otherwise specified | ||
Related Party Transactions [Abstract] | ||
Due from affiliates | $5,500 | $2,800 |