10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the quarterly period ended June 30, 2015

or

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934.

For the transition period from              to            

Commission File Number 001-34583

Team Health Holdings, Inc.

(Exact name of registrant as specified in its charter)

Delaware	36-4276525
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification No.)

265 Brookview Centre Way

Suite 400

Knoxville, Tennessee 37919

(865) 693-1000

(Address, zip code, and telephone number, including area code, of registrant’s principal executive office)

 Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 and 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  x    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).   Yes  x    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer	x	Accelerated filer	¨
Non-accelerated filer	¨  (Do not check if a smaller reporting company)	Smaller reporting company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  x

As of July 31, 2015, there were outstanding 72,442,827 shares of common stock of Team Health Holdings, Inc., with a par value of $0.01.

FORWARD LOOKING STATEMENTS

Statements made in this Form 10-Q that are not historical facts and that reflect the current view of Team Health Holdings, Inc. (the Company) about future events and financial performance are hereby identified as “forward looking statements.” Some of these statements can be identified by terms and phrases such as “anticipate,” “believe,” “intend,” “estimate,” “expect,” “continue,” “could,” “should,” “may,” “plan,” “project,” “predict” and similar expressions. The Company cautions readers of this Form 10-Q that such “forward looking statements,” including without limitation, those relating to the Company’s future business prospects, revenue, working capital, professional liability expense, liquidity, capital needs, interest costs and income, wherever they occur in this Form 10-Q or in other statements attributable to the Company, are necessarily estimates reflecting the judgment of the Company’s senior management and involve a number of risks and uncertainties that could cause actual results to differ materially from those suggested by the “forward looking statements.” Factors that could cause our actual results to differ materially from those expressed or implied in such forward-looking statements include, but are not limited to:

• the current U.S. and global economic conditions;

• the current U.S. and state healthcare reform legislative initiatives;

• the effect and interpretation of current or future government regulation of the healthcare industry, and our ability to comply with these regulations;

• our exposure to billing investigations and audits by private payors and federal and state authorities, as well as auditing contractors for governmental programs;

• our exposure to professional liability lawsuits;

• the adequacy of our insurance reserves;

• our reliance on reimbursements by third-party payors, as well as payments by individuals;

• change in rates or methods of government payments for our services;

• the general level of emergency department patient volumes at our clients’ facilities;

• our exposure to the financial risks associated with fee for service contracts;

• our ability to timely or accurately bill for services;

• our ability to timely enroll healthcare professionals in the Medicare program;

• a reclassification of independent contractor physicians by tax authorities;

• the concentration of a significant number of our programs in certain states, particularly Florida and Tennessee;

• any loss of or failure to renew contracts within the Military Health System Program, which are subject to a competitive bidding process;

• our exposure to litigation;

• fluctuations in our quarterly operating results, which could affect our ability to raise new capital for our business;

• effect on our revenues if we experience a net loss of contracts;

• our ability to accurately assess the costs we will incur under new contracts;

• our ability to find suitable acquisition candidates or successfully integrate completed acquisitions;

• our ability to implement our business strategy and manage our growth effectively;

• our future capital needs and ability to raise capital when needed;

• our ability to successfully recruit and retain qualified healthcare professionals;

• enforceability of our non-competition and non-solicitation contractual arrangements with some affiliated physicians and professional corporations;

• the high level of competition in our industry;

• our dependence on numerous complex information systems and our ability to maintain these systems or implement new systems or any disruptions in our information systems;

• our ability to protect our proprietary technology and services;

• our loss of key personnel and/or ability to attract and retain highly qualified personnel;

• our ability to comply with privacy regulations regarding the use and disclosure of patient information;

• our ability to comply with federal or state anti-kickback laws;

• our ability to comply with federal and state physician self-referral laws and regulations or issuance of additional legislative restrictions;

• changes in existing laws or regulations, adverse judicial or administrative interpretations of these laws and regulations or enactment of new legislation;

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• changes in accounting standards, rules and interpretations or inaccurate estimates or assumptions in the application of accounting policies and the impact on our financial statements;

• our exposure to a loss of contracts with our physicians or termination of relationships with our affiliated professional corporations in order to comply with antitrust laws;

• our substantial indebtedness and ability to incur substantially more debt;

• our ability to generate sufficient cash to service our debt; and

• restrictive covenants in our debt agreements, which may restrict our ability to pursue our business strategies and our ability to comply with them.

For a more detailed discussion of these factors, see the information under the caption “Risk Factors” in the Company’s most recent Annual Report on Form 10-K filed with the Securities and Exchange Commission and “Management’s Discussion and Analysis of Financial Condition and Results of Operations” herein and in the Company’s most recent Annual Report on Form 10-K.

The Company’s forward-looking statements speak only as of the date of this report or as of the date they are made. The Company disclaims any intent or obligation to update any “forward looking statement” made in this Form 10-Q to reflect changed assumptions, the occurrence of unanticipated events or changes to future operating results over time.

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TEAM HEALTH HOLDINGS, INC.

QUARTERLY REPORT FOR THE SIX MONTHS

ENDED JUNE 30, 2015

TABLE OF CONTENTS

		Page
Part I. Financial Information
Item 1.	Financial Statements (Unaudited)	5
	Consolidated Balance Sheets—December 31, 2014 and June 30, 2015	5
	Consolidated Statements of Comprehensive Earnings—Three Months Ended June 30, 2014 and 2015	6
	Consolidated Statements of Comprehensive Earnings—Six Months Ended June 30, 2014 and 2015	7
	Consolidated Statements of Cash Flows—Six Months Ended June 30, 2014 and 2015	8
	Notes to Consolidated Financial Statements	9
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	26
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	43
Item 4.	Controls and Procedures	43
Part II. Other Information
Item 1.	Legal Proceedings	44
Item 1A.	Risk Factors	44
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	44
Item 3.	Defaults Upon Senior Securities	44
Item 4.	Mine Safety Disclosures	44
Item 5.	Other Information	44
Item 6.	Exhibits	45
Signatures		46

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

TEAM HEALTH HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

	December 31, 2014			June 30, 2015
	(Unaudited) (In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	20,094		$	51,303
Accounts receivable, less allowance for uncollectibles of $409,851 and $475,387 in 2014 and 2015, respectively	500,633			601,032
Prepaid expenses and other current assets	46,469			55,969
Receivables under insured programs	23,623			19,345
Income tax receivable	8,935			4,968
Total current assets	599,754			732,617
Insurance subsidiaries' and other investments	112,946			103,192
Property and equipment, net	62,117			67,537
Other intangibles, net	341,194			336,601
Goodwill	724,979			781,946
Deferred income taxes	21,113			23,993
Receivables under insured programs	50,625			64,742
Other	61,994			59,946
	$	1,974,722		$	2,170,574
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	40,616		$	45,817
Accrued compensation and physician payable	283,033			269,955
Other accrued liabilities	153,137			138,296
Current maturities of long-term debt	227,750			305,750
Deferred income taxes	38,272			36,170
Total current liabilities	742,808			795,988
Long-term debt, less current maturities	577,500			562,500
Other non-current liabilities	231,778			286,660
Shareholders’ equity:
Common stock, ($0.01 par value; 100,000 shares authorized, 71,283 and 72,390 shares issued and outstanding at December 31, 2014 and June 30, 2015, respectively)	713			724
Additional paid-in capital	696,996			742,076
Accumulated deficit	(278,855		)	(221,866		)
Accumulated other comprehensive earnings	1,695			1,095
Team Health Holdings, Inc. shareholders’ equity	420,549			522,029
Noncontrolling interests	2,087			3,397
Total shareholders' equity including noncontrolling interests	422,636			525,426
	$	1,974,722		$	2,170,574

See accompanying notes to consolidated financial statements.

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TEAM HEALTH HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

	Three Months Ended June 30,
	2014			2015
	(Unaudited) (In thousands, except per share data)
Net revenue before provision for uncollectibles	$	1,166,615		$	1,466,984
Provision for uncollectibles	491,545			589,029
Net revenue	675,070			877,955
Cost of services rendered (exclusive of depreciation and amortization shown separately below)
Professional service expenses	510,070			687,540
Professional liability costs	23,623			27,279
General and administrative expenses (includes contingent purchase and other acquisition compensation expense of $9,254 and $7,856 in 2014 and 2015, respectively)	72,023			78,586
Other (income) expenses, net	(1,590		)	961
Depreciation	4,918			5,560
Amortization	11,086			21,175
Interest expense, net	3,429			4,571
Transaction costs	1,609			2,215
Earnings before income taxes	49,902			50,068
Provision for income taxes	19,630			21,186
Net earnings	30,272			28,882
Net earnings (loss) attributable to noncontrolling interests	69			(53		)
Net earnings attributable to Team Health Holdings, Inc.	$	30,203		$	28,935
Net earnings per share of Team Health Holdings, Inc.
Basic	$	0.43		$	0.40
Diluted	$	0.42		$	0.39
Weighted average shares outstanding
Basic	70,154			71,956
Diluted	71,898			73,602
Other comprehensive earnings (loss), net of tax:
Net change in fair value of investments, net of tax of $248 and $(340) for 2014 and 2015, respectively	461			(573		)
Comprehensive earnings	30,733			28,309
Comprehensive earnings (loss) attributable to noncontrolling interests	69			(53		)
Comprehensive earnings attributable to Team Health Holdings, Inc.	$	30,664		$	28,362

See accompanying notes to consolidated financial statements.

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TEAM HEALTH HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

	Six Months Ended June 30,
	2014			2015
	(Unaudited) (In thousands, except per share data)
Net revenue before provision for uncollectibles	$	2,270,788		$	2,865,273
Provision for uncollectibles	954,068			1,146,834
Net revenue	1,316,720			1,718,439
Cost of services rendered (exclusive of depreciation and amortization shown separately below)
Professional service expenses	1,011,350			1,351,005
Professional liability costs	43,918			53,897
General and administrative expenses (includes contingent purchase and other acquisition compensation expense of $19,398 and $15,760 in 2014 and 2015, respectively)	134,200			152,148
Other (income) expenses, net	(3,750		)	(2,321		)
Depreciation	9,489			11,134
Amortization	22,212			41,452
Interest expense, net	6,837			8,560
Transaction costs	2,627			3,301
Earnings before income taxes	89,837			99,263
Provision for income taxes	35,647			42,341
Net earnings	54,190			56,922
Net earnings (loss) attributable to noncontrolling interest	142			(67		)
Net earnings attributable to Team Health Holdings, Inc.	$	54,048		$	56,989
Net earnings per share of Team Health Holdings, Inc.
Basic	$	0.77		$	0.80
Diluted	$	0.75		$	0.78
Weighted average shares outstanding
Basic	69,996			71,666
Diluted	71,722			73,137
Other comprehensive earnings (loss), net of tax:
Net change in fair value of investments, net of tax of $573 and $(337) for 2014 and 2015, respectively	1,063			(600		)
Comprehensive earnings	55,253			56,322
Comprehensive earnings (loss) attributable to noncontrolling interest	142			(67		)
Comprehensive earnings attributable to Team Health Holdings, Inc.	$	55,111		$	56,389

See accompanying notes to consolidated financial statements.

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TEAM HEALTH HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Six Months Ended June 30,
	2014			2015
	(Unaudited) (In thousands)
Operating Activities
Net earnings	$	54,190		$	56,922
Adjustments to reconcile net earnings:
Depreciation	9,489			11,134
Amortization	22,212			41,452
Amortization of deferred financing costs	506			727
Equity based compensation expense	9,348			9,213
Provision for uncollectibles	954,068			1,146,834
Deferred income taxes	(8,635		)	(14,578		)
Gain on sale of equipment	(2,349		)	(400		)
Equity in joint venture income	(2,130		)	(1,714		)
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	(985,555		)	(1,244,045		)
Prepaids and other assets	(8,460		)	(9,753		)
Income tax accounts	(1,291		)	3,967
Accounts payable	1,146			5,555
Accrued compensation and physician payable	984			(10,710		)
Contingent purchase liabilities	16,340			6,872
Other accrued liabilities	1,774			(2,178		)
Professional liability reserves	12,993			18,870
Net cash provided by operating activities	74,630			18,168
Investing Activities
Purchases of property and equipment	(11,997		)	(17,364		)
Sale of property and equipment	2,776			—
Cash paid for acquisitions, net	(6,517		)	(84,792		)
Proceeds from the sale of investments	—			6,560
Net proceeds from disposition of assets held for sale	—			269
Purchases of investments at insurance subsidiaries	(31,488		)	(44,935		)
Proceeds from investments at insurance subsidiaries	25,283			51,187
Net cash used in investing activities	(21,943		)	(89,075		)
Financing Activities
Payments on long-term debt	(8,125		)	(7,500		)
Proceeds from revolving credit facility	27,500			701,500
Payments on revolving credit facility	(27,500		)	(631,000		)
Contributions from noncontrolling interests	211			1,377
Distributions to noncontrolling interests	(122		)	—
Proceeds from the issuance of common stock under stock purchase plans	1,903			3,445
Proceeds from exercise of stock options	8,678			20,519
Tax benefit from exercise of stock options	5,834			13,775
Net cash provided by financing activities	8,379			102,116
Net increase in cash and cash equivalents	61,066			31,209
Cash and cash equivalents, beginning of period	32,331			20,094
Cash and cash equivalents, end of period	$	93,397		$	51,303
Supplemental cash flow information:
Interest paid	$	7,339		$	9,380
Taxes paid	$	40,043		$	37,160

See accompanying notes to consolidated financial statements.

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TEAM HEALTH HOLDINGS, INC.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

Note 1. Organization and Basis of Presentation

The accompanying unaudited consolidated financial statements include the accounts of Team Health Holdings, Inc. (the Company) its  subsidiaries and its affiliates, including its affiliated medical groups, and have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial reporting, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements.

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal recurring items) necessary for a fair presentation of results for the interim periods presented. The results of operations for any interim period are not necessarily indicative of results for the full year. The consolidated balance sheet of the Company at December 31, 2014 has been derived from the audited financial statements at that date, but does not include all of the information and disclosures required by U.S. GAAP for complete financial statements. These financial statements and the notes thereto should be read in conjunction with the December 31, 2014 audited consolidated financial statements and the notes thereto included in our annual report on Form 10-K for fiscal year 2014 filed with the Securities and Exchange Commission (the SEC).

The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the accompanying consolidated financial statements and notes. Actual results could differ from those estimates. Certain amounts for the prior year have been reclassified to conform to the current year’s presentation.

Note 2. Recently Adopted and Recently Issued Accounting Guidance

Changes to U.S. GAAP are established by the Financial Accounting Standards Board (FASB) in the form of accounting standards updates (ASU’s) to the FASB’s Accounting Standards Codification. The Company considers the applicability and impact of all ASU’s. ASU’s not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on the Company's consolidated financial position or results of operations.

In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers," which establishes a comprehensive revenue recognition standard for virtually all industries under U.S. GAAP. The standard is effective for public entities for annual and interim periods beginning after December 15, 2017, with early adoption permitted for annual and interim periods beginning after December 15, 2016. We have not yet determined the effects, if any, that adoption of this new accounting standard may have on the Company's consolidated financial statements.

In August 2014, the FASB issued ASU No. 2014-15, "Presentation of Financial Statements—Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern," which requires management to evaluate, in connection with preparing financial statements for each annual and interim reporting period, whether there are conditions or events, considered in the aggregate, that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable) and provide related disclosures. ASU No. 2014-15 is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Early adoption is permitted. The adoption of this standard's update is not expected to impact the Company's consolidated financial statements.

In February 2015, the FASB issued ASU No. 2015-02, "Consolidation: Amendments to the Consolidation Analysis," which amends the criteria for determining which entities are considered variable interest entities (“VIEs”), amends the criteria for determining if a service provider possesses a variable interest in a VIE, and ends the deferral granted to investment companies for application of the VIE consolidation model. ASU No. 2015-02 is effective for public entities for annual and interim reporting periods beginning after December 15, 2015 and early adoption is permitted. We have not yet determined the effects, if any, that adoption of this new accounting standard may have on the Company's consolidated financial statements.

In April 2015, the FASB issued ASU No. 2015-03, "Simplifying the Presentation of Debt Issuance Costs," which changes the presentation of debt issuance costs in financial statements. ASU No. 2015-03 requires an entity to present such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of the costs

9

will continue to be reported as interest expense. ASU No. 2015-03 is effective for annual reporting periods beginning after December 15, 2015. Early adoption is permitted. The new guidance will be applied retrospectively to each prior period presented. The Company is currently in the process of evaluating the impact of adoption of the ASU on its consolidated balance sheets.

Note 3. Acquisitions and Contingent Purchase Obligations

Acquisitions

During the six months ended June 30, 2015, the Company paid a total of $84.8 million related to acquisitions including $82.4 million for the operations of five businesses acquired during the period. These acquisitions consist of the following:

Acquired Operations	Date Acquired	Business Service Line
Princeton Emergency Physicians	May 2015	Emergency Medicine
Professional Anesthesia Service	May 2015	Anesthesiology
Ruby Crest Emergency Medicine	February 2015	Emergency Medicine
Capital Emergency Associates	February 2015	Emergency/Hospital Medicine
EOS Medical Group	January 2015	Emergency Medicine

These acquisitions have expanded the Company’s presence in emergency medicine, hospital medicine and anesthesia staffing in those respective markets. The results of operations of the acquired businesses have been included in the Company’s consolidated financial statements beginning on the acquisition date.

The purchase price for these acquisitions was allocated, based on management’s estimates, in accordance with ASC Topic 805, “Business Combinations” (ASC 805). The Company’s purchase price allocation for business combinations completed during recent periods is preliminary and may be subject to revision as additional information about the fair value of acquired working capital becomes available. Additional information, which existed as of the acquisition date but at that time was unknown to the Company, may become known to the Company during the remainder of the measurement period, a period not to exceed 12 months from the acquisition date. Adjustments in the purchase price allocation may require a recasting of the amounts allocated to goodwill retroactive to the period in which the acquisition occurred. The purchase price for the acquisitions completed during the six months ended June 30, 2015 was allocated as shown in the table below (in thousands):

Accounts receivable	$	3,188
Prepaid expenses and other assets	5
Other intangibles (consisting of physician and hospital agreements)	36,860
Goodwill (of which $18.3 million is tax deductible)	55,541
Accounts payable	(456		)
Accrued compensation and physician payable	(484		)
Other accrued liabilities	(240		)
Deferred income taxes	(9,933		)
Contingent purchase liabilities	(2,057		)
Consideration paid for 2015 acquisitions, net of cash and cash equivalents of $83	82,424
Additional consideration paid for previous acquisitions	2,368
Total cash paid for acquisitions	$	84,792

During 2015, factors became known that resulted in changes to the purchase price allocation of assets and liabilities, existing at the date of acquisition, related to certain acquisitions completed during 2014. This change resulted in an increase to accrued liabilities and an increase to goodwill of $1.9 million.

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The following unaudited pro forma information combines the consolidated results of operations of the Company and the historical financial results of the acquisitions completed during 2014 and 2015 as if the transactions had occurred on January 1, 2014 (in thousands, except for per share data):

	Six Months Ended June 30,
	2014		2015
Net revenue	$	1,400,577	$	1,740,552
Net earnings attributable to Team Health Holdings, Inc.	58,262		58,319
Net earnings per share of Team Health Holdings, Inc.
Basic	$	0.83	$	0.81
Diluted	$	0.81	$	0.80
Weighted average shares outstanding:
Basic	69,996		71,666
Diluted	71,722		73,137

The pro forma results are based on estimates and assumptions, which the Company believes are reasonable and do not necessarily represent results that would have occurred if the acquisitions had taken place at the beginning of the periods, nor are they indicative of the future results of these combined operations.

In July 2015, the Company completed the acquisition of the operations of an anesthesia staffing business located in New York. This acquisition, which was funded with existing cash, will add more than 30,000 annual anesthesia cases to the Company's existing anesthesia operations. The Company is still in the process of completing the purchase price allocation for this acquisition.

Contingent Purchase Obligations

In accordance with ASC 805, when contingent payments are tied to continuing employment, such amounts are recognized ratably over the defined performance period as compensation expense which is included as a component of general and administrative expense (and parenthetically disclosed with other acquisition-related compensation expense) in the results of the Company’s operations. The payment of contingent purchase obligations tied to continuing employment is included as a component of operating cash flows.

As of June 30, 2015, the Company estimates it may have to pay $70.4 million (including $6.9 million related to transactions completed during 2015) in future contingent payments for acquisitions made prior to June 30, 2015 based upon the current projected performance of the acquired operations of which $32.0 million is recorded as a liability in other liabilities and other non-current liabilities on the Company’s consolidated balance sheet. The remaining estimated liability of $38.4 million will be recorded as contingent purchase compensation expense over the remaining performance periods. The current estimate of future contingent payments could increase or decrease depending upon the actual performance of the acquisition over the respective performance periods. These payments will be made should the acquired operations achieve the financial targets or certain contract terms as agreed to in the respective acquisition agreements, including the requirements for continuing employment. When measured on a recurring basis, this liability is considered Level 3 in the fair value hierarchy due to the use of unobservable inputs to measure fair value.

The contingent purchase and other acquisition compensation expense recognized for the six months ended June 30,2014 and 2015 was $19.4 million and $15.8 million, respectively. Included in the expense recognized in 2014 and 2015 is $0.1 million and $0.9 million, respectively, related to acquisition related payments made to non-owners of the acquired operations.

The changes to the Company’s accumulated contingent purchase liability for the six months ended June 30, 2015 are as follows (in thousands):

Contingent purchase liability at December 31, 2014	$	23,584
Payments	(9,853		)
Contingent purchase and other acquisition compensation expense recognized	15,760
Contingent purchase liability recognized at acquisition date	2,472
Contingent purchase liability at June 30, 2015	$	31,963

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Estimated unrecognized contingent purchase compensation expense as of June 30, 2015 is as follows (in thousands):

For the remainder of the year ended December 31, 2015	$	14,256
For the year ended December 31, 2016	21,436
For the year ended December 31, 2017	2,683
For the year ended December 31, 2018	52
For the year ended December 31, 2019	14
	$	38,441

In the six months ended June 30, 2014 and 2015, the Company recognized transaction costs of $2.6 million and $3.3 million, respectively, which related to external costs associated with due diligence and acquisition activity.

Note 4. Fair Value Measurements

The Company applies the provisions of FASB ASC Topic 820, “Fair Value Measurements and Disclosures,” (ASC Topic 820), in determining the fair value of its financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements.

ASC Topic 820 prioritizes the inputs used in measuring fair value into the following hierarchy:

Level 1	Quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2	Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable;
Level 3	Unobservable inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing.

The following table provides information on those assets and liabilities the Company currently measures at fair value on a recurring basis as of December 31, 2014 and June 30, 2015 (in thousands):

	Carrying Amount in Consolidated Balance Sheet December 31, 2014		Fair Value December 31, 2014		Fair Value Level 1		Fair Value Level 2		Fair Value Level 3
Investments of insurance subsidiaries:
Money market funds	$	18,577	$	18,577	$	18,577	$	—	$	—
U. S. Treasury securities	1,003		1,003		—		1,003		—
Municipal bonds	83,694		83,694		—		83,694		—
Mutual funds	3,228		3,228		—		3,228		—
Private investments	6,444		6,444		—		—		6,444
Total investments of insurance subsidiaries	$	112,946	$	112,946	$	18,577	$	87,925	$	6,444
Supplemental employee retirement plan investments:
Mutual funds	$	37,237	$	37,237	$	—	$	37,237	$	—

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	Carrying Amount in Consolidated Balance Sheet June 30, 2015		Fair Value June 30, 2015		Fair Value Level 1		Fair Value Level 2		Fair Value Level 3
Investments of insurance subsidiaries:
Money market funds	$	8,717	$	8,717	$	8,717	$	—	$	—
Municipal bonds	89,617		89,617		—		89,617		—
Mutual funds	239		239		—		239		—
Private investments	4,619		4,619		—		—		4,619
Total investments of insurance subsidiaries	$	103,192	$	103,192	$	8,717	$	89,856	$	4,619
Supplemental employee retirement plan investments:
Mutual funds	$	42,126	$	42,126	$	—	$	42,126	$	—

The Company’s insurance subsidiaries investments are valued using market prices on active markets (Level 1) and less active markets (Level 2), in addition to using alternative information when market data is not available (Level 3). Level 1 investment valuations are obtained from real-time quotes for transactions in active exchange markets involving identical assets. Level 2 investment valuations are obtained from readily available pricing sources for comparable investment or identical investments in less active markets. The fair values of the Company’s supplemental employee retirement investments are based on quoted prices. Level 3 investment valuations require significant management judgment and are based on transaction price, company performance, and market conditions. For the six ended June 30, 2015 there were no transfers between Levels 1, 2 or 3. See Note 5 for more information regarding the Company’s investments.

The Company classified its municipal bonds, mutuals funds, and U.S. Treasury securities within Level 2 because these securities were valued based on quoted prices in markets that are less active, broker or dealer quotations or alternative pricing sources with reasonable levels of price transparency.

The Company classified its private investments within Level 3 because active market pricing is not readily available and, as such, we use net asset values as an estimate of fair value as a practical expedient. The valuation of non-public private equity investments requires significant management judgment due to the absence of observable quoted market prices, inherent lack of liquidity, and the long-term nature of such assets. These investments are valued initially based upon transaction price. In determining valuation adjustments resulting from the investment review process, emphasis is placed on current company performance and market conditions.

In addition to the preceding disclosures prescribed by the provisions of ASC Topic 820, ASC Topic 825 “Financial Instruments” requires the disclosure of the estimated fair value of financial instruments. The Company’s short term financial instruments include cash and cash equivalents, accounts receivable, and accounts payable. The carrying value of the short term financial instruments approximates the fair value due to their short term nature. These financial instruments have no stated maturities or the financial instruments have short term maturities that approximate market.

The fair value of the Company's debt is estimated using quoted market prices when available. When quoted market prices are not available, fair value is estimated based on current market interest rates for debt with similar maturities (Level 2). At June 30, 2015, the estimated fair value of the Company’s outstanding debt was $848.5 million compared to a carrying value of $868.3 million.

Note 5. Investments

Investments are primarily comprised of securities held by the Company and its captive insurance subsidiaries and by the Company in connection with its participant directed supplemental employee retirement plan. Investments held by the Company and its captive insurance subsidiaries are classified as available-for-sale securities. The unrealized gains or losses of investments held by the Company and its captive insurance subsidiaries are included in accumulated other comprehensive earnings as a separate component of shareholders’ equity, unless the decline in value is deemed to be other-than-temporary and the Company does not have the intent and ability to hold such securities until their full cost can be recovered, in which case such securities are written down to fair value and the loss is charged to current period earnings.

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The investments held by the Company in connection with its participant directed supplemental employee retirement plan are classified as trading securities; therefore, changes in fair value associated with these investments are recognized as a component of earnings.

At December 31, 2014 and June 30, 2015, amortized cost basis and aggregate fair value of the Company’s available-for-sale securities by investment type were as follows (in thousands):

	Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
December 31, 2014
Money market funds	$	18,577	$	—	$	—		$	18,577
U. S. Treasury securities	1,003		—		—			1,003
Municipal bonds	81,120		2,619		(45		)	83,694
Mutual funds	3,228		—		—			3,228
Private investments	6,464		—		(20		)	6,444
	$	110,392	$	2,619	$	(65	)	$	112,946
June 30, 2015
Money market funds	$	8,717	$	—	$	—		$	8,717
Municipal bonds	88,006		2,009		(398		)	89,617
Mutual funds	239		—		—			239
Private Investments	4,635		—		(16		)	4,619
	$	101,597	$	2,009	$	(414	)	$	103,192

At December 31, 2014 and June 30, 2015, the amortized cost basis and aggregate fair value of the Company’s available-for-sale securities by contractual maturities were as follows (in thousands):

	Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
December 31, 2014
Due in less than one year	$	25,186	$	88	$	—		$	25,274
Due after one year through five years	53,735		1,676		(45		)	55,366
Due after five years through ten years	19,859		801		—			20,660
Due after ten years	1,920		54		—			1,974
Total	$	100,700	$	2,619	$	(45	)	$	103,274
June 30, 2015
Due in less than one year	$	14,791	$	50	$	—		$	14,841
Due after one year through five years	57,591		1,412		(180		)	58,823
Due after five years through ten years	21,424		529		(183		)	21,770
Due after ten years	2,917		18		(35		)	2,900
Total	$	96,723	$	2,009	$	(398	)	$	98,334

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A summary of the Company’s temporarily impaired available-for-sale investment securities as of December 31, 2014 and June 30, 2015 follows (in thousands):

	Impaired Less Than 12 Months						Impaired Over 12 Months					Total
	Fair Value		Unrealized Losses				Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
December 31, 2014
U.S. Treasury securities	$	1,003	$	—		(a)	$	—	$	—		$	1,003	$	—
Municipal bonds	4,498		(12		)		2,725		(33		)	7,223		(45		)
Private investments	1,414		(20		)		—		—			1,414		(20		)
Total investment	$	6,915	$	(32	)		$	2,725	$	(33	)	$	9,640	$	(65	)
June 30, 2015
Municipal bonds	$	21,602	$	(329	)		$	2,012	$	(69	)	$	23,614	$	(398	)
Private investments	1,241		(16		)		—		—			1,241		(16		)
Total investment	$	22,843	$	(345	)		$	2,012	$	(69	)	$	24,855	$	(414	)

(a) Unrealized loss is less than $1,000.

The unrealized losses resulted from changes in market interest rates, not from changes in the probability of contractual cash flows. Because the Company has the ability and intent to hold the investments until a recovery of carrying value and full collection of the amounts due according to the contractual terms of the investments is expected, the Company does not consider these investments to be other-than-temporarily impaired at June 30, 2015.

During the six months ended June 30, 2015, the Company recorded a gain of approximately $0.1 million on the sale of specifically identified investments.

As of June 30, 2015, and December 31, 2014, the investments related to the participant directed supplemental employee retirement plan totaled $42.1 million and $37.2 million, respectively, and are included in other assets in the accompanying consolidated balance sheets. The net trading gains on those investments for the six months ended on June 30, 2014 and June 30, 2015 that were still held by the Company as of June 30, 2014 and June 30, 2015 are as follows (in thousands):

	2014		2015
Net gains and (losses) recognized during the six months ended June 30, 2014 and 2015, respectively on trading securities	$	937	$	1,066
Less: Net gains recognized during the period on trading securities sold during the six months ended June 30, 2014 and 2015, respectively	21		20
Unrealized gains and (losses) recognized on trading securities still held at June 30, 2014 and 2015, respectively	$	916	$	1,046

During the first quarter of 2015, the Company sold its investment in a provider of hospital-based telemedicine consultations previously recorded in other assets on the consolidated balance sheet and accounted for as a cost method investment. In connection with the sale, the Company received proceeds of $4.0 million. This sale resulted in a gain of $2.0 million that was recorded in other (income) expenses, net in the results of the Company's operations.

Note 6. Net Revenue

Net revenue consists of fee for service revenue, contract revenue and other revenue. The Company’s net revenue is principally derived from the provision of healthcare staffing services to patients within healthcare facilities and is recorded in the period the services are rendered. Under the fee for service arrangements, the Company bills patients for services provided and receives payment from patients or their third-party payors. Fee for service revenue reflects gross fee for service charges less contractual allowances and policy discounts, where applicable. Contractual adjustments represent the Company’s estimate of discounts and other adjustments to be recognized from gross fee for service charges under contractual payment arrangements, primarily with commercial, managed care and governmental payment plans such as Medicare and Medicaid when the Company’s providers participate in such plans. Contractual adjustments are not reflected in self-pay fee for service revenue. Contract revenue represents revenue generated under contracts in which the Company provides physician and other healthcare staffing and administrative services in return for a contractually negotiated fee. Contract revenue consists primarily

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of billings based on hours of healthcare staffing provided at agreed-to hourly rates, monthly contractual rates, or certain operational or financial metrics. Revenue in such cases is recognized as the hours are worked by the Company’s affiliated staff and contractors or as metrics are realized. Other revenue consists primarily of revenue from management and billing services provided to outside parties. Revenue is recognized for such services pursuant to the terms of the contracts with customers. The Company also records a provision for uncollectible accounts based primarily on historical collection experience to record accounts receivables at the estimated amounts expected to be collected.

Net revenue for the three and six months ended June 30, 2014 and 2015 consisted of the following (in thousands):

	Three Months Ended June 30,										Six Months Ended June 30,
	2014					2015					2014					2015
Medicare	$	129,617		19.2	%	$	178,168		20.3	%	$	253,008		19.2	%	$	346,927		20.2	%
Medicaid	116,745			17.3		157,601			18.0		225,674			17.1		310,136			18.0
Commercial and managed care	322,155			47.7		448,043			51.0		608,254			46.2		860,000			50.0
Self-pay	397,495			58.9		464,089			52.9		783,746			59.5		908,342			52.9
Other	21,095			3.1		19,921			2.3		42,111			3.2		40,202			2.3
Unbilled	6,238			0.9		5,523			0.6		9,091			0.7		13,609			0.8
Net fee for service revenue before provision for uncollectibles	993,345			147.1		1,273,345			145.0		1,921,884			146.0		2,479,216			144.3
Contract revenue before provision for uncollectibles	162,451			24.1		183,727			20.9		328,045			24.9		367,367			21.4
Other	10,819			1.6		9,912			1.2		20,859			1.6		18,690			1.0
Net revenue before provision for uncollectibles	1,166,615			172.8		1,466,984			167.1		2,270,788			172.5		2,865,273			166.7
Provision for uncollectibles	(491,545		)	(72.8	)	(589,029		)	(67.1	)	(954,068		)	(72.5	)	(1,146,834		)	(66.7	)
Net revenue	$	675,070		100.0	%	$	877,955		100.0	%	$	1,316,720		100.0	%	$	1,718,439		100.0	%

The Company employs several methodologies for determining its allowance for uncollectibles depending on the nature of the net revenue before provision for uncollectibles recognized. The Company initially determines gross revenue for its fee for service patient visits based upon established fee schedule prices. Such gross revenue is reduced for estimated contractual allowances for those patient visits covered by contractual insurance arrangements to result in estimated net revenue before provision for uncollectibles. Net revenue before provision for uncollectibles is then reduced for management’s estimate of uncollectible amounts. Fee for service net revenue represents estimated cash to be collected from such patient visits and is net of management’s estimate of account balances estimated to be uncollectible. The provision for uncollectible fee for service patient visits is based on historical experience resulting from approximately fourteen million annual fee for service patient visits. The significant volume of patient visits and the terms of thousands of commercial and managed care contracts and the various reimbursement policies relating to governmental healthcare programs do not make it feasible to evaluate fee for service accounts receivable on a specific account basis. Fee for service accounts receivable collection estimates are reviewed on a quarterly basis for each fee for service contract by period of accounts receivable origination. Such reviews include the use of historical cash collection percentages by contract adjusted for the lapse of time since the date of the patient visit. In addition, when actual collection percentages differ from expected results, on a contract by contract basis, supplemental detailed reviews of the outstanding accounts receivable balances may be performed by the Company’s billing operations to determine whether there are facts and circumstances existing that may cause a different conclusion as to the estimate of the collectibility of that contract’s accounts receivable from the estimate resulting from using the historical collection experience. Contract-related net revenue is billed based on the terms of the contract at amounts expected to be collected. Such billings are typically submitted on a monthly basis and aged trial balances are prepared. Allowances for estimated uncollectible amounts related to such contract billings are made based upon periodic reviews of specific accounts and invoices once it is concluded that such amounts are not likely to be collected. Approximately 98% of the Company’s allowance for doubtful accounts is related to receivables for fee for service patient visits. The principal exposure for uncollectible fee for service visits is centered in self-pay patients and, to a lesser extent, for co-payments and deductibles from patients with insurance. While the Company does not specifically allocate the allowance for doubtful accounts to individual accounts or specific payor classifications, the portion of the allowance associated with fee for service charges as of June 30, 2015 was equal to approximately 93% of outstanding self-pay fee for service patient accounts. The methodologies employed to compute allowances for doubtful accounts were unchanged between 2014 and 2015.

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Note 7. Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill during the year ended December 31, 2014 and the six months ended June 30, 2015 were as follows (in thousands):

Goodwill	$	572,890
Accumulated impairment loss	(144,579		)
Additions through 2014 acquisitions	296,668
Balance, December 31, 2014	$	724,979
Goodwill	$	869,558
Accumulated impairment loss	(144,579		)
Additions through 2014 acquisitions	1,946
Additions through 2015 acquisitions	55,541
Change in goodwill attributable to the sale of outsourced medical coding practice	(520		)
Balance, June 30, 2015	$	781,946

The following is a summary of intangible assets and related amortization as of December 31, 2014 and June 30, 2015 (in thousands):

	Gross Carrying Amount		Accumulated Amortization
As of December 31, 2014:
Contracts	$	455,247	$	(126,191	)
Other	19,350		(7,212		)
Total	$	474,597	$	(133,403	)
As of June 30, 2015:
Contracts	$	488,204	$	(163,803	)
Other	20,570		(8,370		)
Total	$	508,774	$	(172,173	)
Aggregate amortization expense:
For the six months ended June 30, 2015			$	41,452
Estimated amortization expense:
For the remainder of the year ended December 31, 2015			$	40,512
For the year ended December 31, 2016			78,380
For the year ended December 31, 2017			72,543
For the year ended December 31, 2018			60,252
For the year ended December 31, 2019			51,463
For the years ended December 31, 2020 and thereafter			33,451

Intangible assets are amortized over their estimated life, which is approximately three to six years. As of June 30, 2015, the weighted average remaining amortization period for intangible assets was 3.9 years.

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Note 8. Long-Term Debt

Long-term debt as of June 30, 2015 consisted of the following (in thousands):

Term Loan A Facility	$	588,750
Revolving Credit Facility	279,500
	868,250
Less current portion	(305,750		)
	$	562,500

As of June 30, 2015, the Company's senior secured credit facilities (Credit Facility) consist of a $600.0 million term loan facility (Term Loan A Facility) and a $650.0 million revolving credit facility (Revolving Credit Facility). These facilities have a maturity date of October 2, 2019. The maturity dates under the Credit Facility are subject to extension with lender consent according to the terms of the agreement.

The interest rate on any outstanding Revolving Credit Facility borrowings and Term A Loan Facility borrowings, and the commitment fee applicable to undrawn revolving commitments, is priced off a grid based upon the Company’s first lien net leverage ratio and is currently LIBOR + 1.75% in the case of revolving credit borrowings under the Revolving Credit Facility and Term A Loan Facility and 0.30% in the case of unused revolving commitments. The weighted average interest rate for the six months ended June 30, 2015 was 1.89% for amounts outstanding under the Term A Loan Facility.

The Company had $279.5 million of borrowings outstanding under the Revolving Credit Facility as of June 30, 2015, and the Company had $6.4 million of standby letters of credit outstanding against the Revolving Credit Facility commitment.

The Credit Facility agreement contains both affirmative and negative covenants, including limitations on the Company’s ability to incur additional indebtedness, sell material assets, retire, redeem or otherwise reacquire its capital stock, acquire the capital stock or assets of another business and pay dividends, and requires the Company to comply with a maximum total leverage ratio, tested quarterly. At June 30, 2015, the Company was in compliance with all covenants under the senior credit facility agreement. The Credit Facility is secured by substantially all of the Company’s U. S. subsidiaries’ assets.

Aggregate annual maturities of long-term debt as of June 30, 2015 are as follows (in thousands):

2015	$	305,750
2016	41,250
2017	56,250
2018	60,000
2019	405,000

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Note 9. Professional Liability Insurance

The Company’s professional liability loss reserves included in other accrued liabilities and other non-current liabilities in the accompanying consolidated balance sheets consisted of the following (in thousands):

	December 31, 2014		June 30, 2015
Estimated losses under self-insured programs	$	190,117	$	208,985
Estimated losses under commercial insurance programs	74,248		84,087
	264,365		293,072
Less estimated payable within one year	82,735		74,260
	$	181,630	$	218,812

The changes to the Company’s estimated losses under self-insured programs as of June 30, 2015 were as follows (in thousands):

Balance, December 31, 2014	$	190,117
Reserves related to current period	36,696
Payments for current period reserves	(410		)
Payments for prior period reserves	(17,418		)
Balance, June 30, 2015	$	208,985

The Company provides for its estimated professional liability losses through a combination of self-insurance and commercial insurance programs. Losses under commercial insurance programs in excess of the limit of coverage remain as a self-insured obligation of the Company. A portion of the professional liability loss risks being provided for through self-insurance (claims-made basis) are transferred to and funded into captive insurance companies. The accounts of the captive insurance companies are fully consolidated with those of the other operations of the Company in the accompanying consolidated financial statements.

The self-insurance components of our risk management program include reserves for future claims incurred but not reported (IBNR). As of December 31, 2014, of the $190.1 million of estimated losses under self-insured programs, approximately $117.3 million represented an estimate of IBNR claims and expenses and additional loss development, with the remaining $72.8 million representing specific case reserves. Of the specific case reserves as of December 31, 2014, $1.9 million represented case reserves that had settled but not yet funded, and $70.9 million reflected unsettled case reserves.

As of June 30, 2015, of the $209.0 million of estimated losses under self-insurance programs, approximately $136.9 million represented an estimate of IBNR claims and expenses and additional loss development, with the remaining $72.1 million representing specific case reserves. Of the specific case reserves as of June 30, 2015, $2.3 million represented case reserves that had been settled but not yet funded, and $69.8 million reflected unsettled case reserves.

The Company’s provisions for losses under its self-insurance components are estimated using the results of periodic actuarial studies. Such actuarial studies include numerous underlying estimates and assumptions, including assumptions as to future claim losses, the severity and frequency of such projected losses, loss development factors and others. The Company’s provisions for losses under its self-insured components are subject to subsequent adjustment should future actuarial projected results for such periods indicate projected losses greater or less than previously projected.

The Company’s most recent actuarial valuation was completed in April 2015. Based on the results of the actuarial study completed in April 2015, management determined no additional change was necessary in the consolidated reserves for professional liability losses during the first quarter of 2015 related to prior year loss estimates. The discount rate on professional liability reserves was 1.4% at June 30, 2015 compared to 1.1% at December 31, 2014.

Note 10. Contingencies

Litigation

We are currently a party to various legal proceedings arising in the ordinary course of business. The legal proceedings we are involved in from time to time include lawsuits, claims, audits and investigations, including those arising out of services

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provided, personal injury claims, professional liability claims, our billing, collection and marketing practices, employment disputes and contractual claims, and seek monetary and other relief, including statutory damages and penalties. While we currently believe that the ultimate outcome of such proceedings, individually and in the aggregate, will not have a material adverse effect on our financial position or overall trends in results of operations, litigation is subject to inherent uncertainties. If an unfavorable ruling were to occur, there exists the possibility of a material adverse impact on our net earnings in the period in which the ruling occurs. The estimate of the potential impact from such legal proceedings on our financial position or overall results of operations could change in the future.

On September 3, 2013, the Company received a subpoena from the U.S. Department of Health and Human Services Office of Inspector General. The subpoena requests copies of certain documents that are primarily related to the Company’s services at hospitals that are affiliated with Health Management Associates, Inc. (HMA) and any of HMA’s affiliates. The Company is cooperating with the government in its investigation.

Healthcare Regulatory Matters

Laws and regulations governing the Medicare and Medicaid programs are complex and subject to interpretation. Compliance with such laws and regulations can be subject to future governmental review and interpretation as well as significant regulatory action. From time to time, governmental regulatory agencies conduct inquiries and audits of the Company’s practices. It is the Company’s current practice and future intent to cooperate fully with such inquiries.

In addition to laws and regulations governing the Medicare and Medicaid programs, there are a number of federal and state laws and regulations governing such matters as the corporate practice of medicine and fee splitting arrangements, anti-kickback statutes, physician self-referral laws, false or fraudulent claims filing and patient privacy requirements. The failure to comply with any of such laws or regulations could have an adverse impact on our operations and financial results. It is management’s belief that the Company is in substantial compliance in all material respects with such laws and regulations.

Healthcare Reform

The Patient Protection and Affordable Care Act (the PPACA), signed into law on March 23, 2010, as amended by the Health Care and Education Reconciliation Act of 2010 on March 30, 2010, collectively referred to as the Healthcare Reform Laws, significantly affect the U.S. healthcare system by increasing access to health insurance benefits for the uninsured and underinsured populations, among other changes. On June 28, 2012, the U.S. Supreme Court (the Supreme Court) upheld the constitutionality of the requirement in PPACA that individuals maintain health insurance or pay a penalty (the individual mandate) under Congress's taxing power. The Supreme Court upheld the PPACA provision expanding Medicaid eligibility to new populations as constitutional, but only so long as the expansion of the Medicaid program is optional for the states. States that choose not to expand their Medicaid programs to newly eligible populations in PPACA can only lose the new federal Medicaid funding in PPACA but not their eligibility for existing federal Medicaid matching payments. We continue to monitor those states that remain undecided or, in certain instances, involved in ongoing internal dialogue on whether or not the state will elect to expand its Medicaid program’s eligibility. In addition, on June 25, 2015, the Supreme Court upheld the provision of tax credits and federal subsidies to individuals who purchase health insurance through a federally-facilitated exchange.

Additional challenges to the Healthcare Reform Laws could further impact the implementation of these laws. While the ultimate impact of these laws and implementing regulations will not be known until all provisions are fully implemented, the Company believes that some of their provisions will likely yield positive results, such as increasing access to health benefits for the uninsured and underinsured populations. Since the implementation of increased access to health benefits through the expansion of Medicaid programs and through exchange enrollment beginning in 2014, we have realized a decline in the percentage of self-pay visits by our consolidated fee for service volume and an increase in the percentage of Medicaid visits that we believe is a result of healthcare reform. Other provisions, however, such as Medicare payment reforms and reductions that could reduce provider payments, may have an adverse effect on the reimbursement rates the Company receives for services provided by affiliated healthcare professionals.

Note 11. Share-based Compensation

Stock Incentive Plan

In May 2013 the Company's shareholders approved the Team Health Holdings, Inc. Amended and Restated 2009 Stock Incentive Plan (the Stock Plan) that amended the 2009 Stock Incentive Plan.

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Purpose. The purpose of the Stock Plan is to aid in recruiting and retaining key employees, directors, consultants, and other service providers of outstanding ability and to motivate those employees, directors, consultants, and other service providers to exert their best efforts on behalf of the Company and its affiliates by providing incentives through the granting of options, stock appreciation rights and other stock-based awards.

Shares Subject to the Plan. The Stock Plan provides that the total number of shares of common stock that may be issued is 15,100,000, of which approximately 2,417,000 are available to grant as of June 30, 2015. Shares of the Company’s common stock covered by awards that terminate or lapse without the payment of consideration may be granted again under the Stock Plan.

The following table summarizes the status of options under the Stock Plan as of June 30, 2015:

	Shares (in thousands)		Weighted Average Exercise Price		Aggregate Intrinsic Value (in thousands)		Weighted Average Remaining Life in Years
Outstanding at beginning of year	4,239		$	24.41	$	140,433	6.4
Granted	510		61.35
Exercised	(1,029	)	19.98		40,976
Expired or forfeited	(10	)	35.93
Outstanding at end of period	3,710		$	30.68	$	128,552	6.2
Exercisable at end of period	2,250		$	21.32	$	99,000	5.7

Intrinsic value is the amount by which the stock price as of June 30, 2015 exceeds the exercise price of the options. The Company granted 0.5 million options during the six months ended June 30, 2015. The fair value of the options granted in 2015 was based on the grant date fair value as calculated by the Black-Scholes option pricing formula with the following assumptions: risk-free interest rate of 1.6%, implied volatility of 33.8% and an expected life of the options of 5.25 years. The weighted average estimated fair value of options granted during 2015 was $20.27. As of June 30, 2015, the Company had approximately $17.5 million of unrecognized compensation expense, net of estimated forfeitures related to unvested options, which will be recognized over the remaining requisite service period.

Equity based compensation expense and the resulting tax benefits were as follows (in thousands):

	Six Months Ended June 30,
	2014		2015
Stock options	$	6,427	$	5,166
Restricted awards	2,886		3,985
Stock purchase plan	35		62
Total equity based compensation expense	$	9,348	$	9,213
Tax benefit of equity based compensation expense	$	3,599	$	3,547

Restricted awards are grants of restricted stock and grants of restricted stock units that are not vested (Restricted Awards). The Company granted 0.2 million shares of Restricted Awards in 2015. The Company had $21.2 million of expense remaining to be recognized over the requisite service period for these Restricted Awards at June 30, 2015. The Restricted Awards generally vest annually over a three to four-year period from the initial grant date for the grants made to the independent board members and management.

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A summary of changes in total outstanding unvested restricted awards for the six months ended June 30, 2015 is as follows (in thousands):

	Restricted Stock		Restricted Units		Total
Outstanding at beginning of year	161		317		478
Granted	—		183		183
Vested	(57	)	(39	)	(96	)
Forfeited and expired	(1	)	(1	)	(2	)
Outstanding at June 30, 2015	103		460		563

Stock Purchase Plans

In May 2010, the Company’s Board of Directors (the Board) adopted the 2010 Employee Stock Purchase Plan (ESPP) and the 2010 Nonqualified Stock Purchase Plan (NQSPP).

The ESPP provides for the issuance of up to 600,000 shares to the Company’s employees. All eligible employees are granted identical rights to purchase common stock in each Board authorized offering under the ESPP. Rights granted pursuant to any offering under the ESPP terminate immediately upon cessation of an employee’s employment for any reason. In general, an employee may reduce his or her contribution or withdraw from participation in an offering at any time during the purchase period for such offering. Employees receive a 5% discount on shares purchased under the ESPP. Rights granted under the plan are not transferable and may be exercised only by the person to whom such rights are granted. Offerings occur every six months in April and October. As of June 30, 2015, contributions under the ESPP totaled $1.3 million. In April 2015, approximately 40,000 shares of the Company’s common stock were issued to plan participants.

The NQSPP provides for the issuance of up to 800,000 shares to our independent contractors. All eligible contractors are granted identical rights to purchase common stock in each Board authorized offering under the NQSPP. Rights granted pursuant to any offering under the NQSPP terminate immediately upon cessation of a contractor’s relationship with the Company for any reason. In general, a contractor may reduce his or her contribution or withdraw from participation in an offering at any time during the purchase period for such offering. Contractors receive a 5% discount on shares purchased under the NQSPP. Rights granted under the NQSPP are not transferable and may be exercised only by the person to whom such rights are granted. Offerings occur every six months in April and October. As of June 30, 2015, contributions under the NQSPP totaled $0.7 million. In April 2015, approximately 21,000 shares of the Company’s common stock were issued to plan participants.

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Note 12. Earnings Per Share

The Company computes basic earnings per share using the weighted average number of shares outstanding. The Company computes diluted earnings per share using the weighted average number of shares outstanding plus the dilutive effect of outstanding stock options, restricted awards, and stock purchase plans. The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share amounts):

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2015		2014		2015
Net earnings attributable to Team Health Holdings, Inc. (numerator for basic and diluted earnings per share)	$	30,203	$	28,935	$	54,048	$	56,989
Denominator:
Weighted average shares outstanding	70,154		71,956		69,996		71,666
Effect of dilutive securities:
Stock options	1,525		1,374		1,520		1,220
Restricted awards	218		270		205		249
Stock purchase plans	1		2		1		2
Shares used for diluted earnings per share	71,898		73,602		71,722		73,137
Basic net earnings per share of Team Health Holdings, Inc.	$	0.43	$	0.40	$	0.77	$	0.80
Diluted net earnings per share of Team Health Holdings, Inc.	$	0.42	$	0.39	$	0.75	$	0.78
Securities excluded from diluted earnings per share of Team Health Holdings, Inc. because they were antidilutive:
Stock options	782		240		671		606
Restricted awards	—		—		—		—

Note 13. Noncontrolling Interests in Consolidated Entity

The Company is party to two joint venture arrangements. The joint ventures provide administrative management and billing services to certain existing and planned urgent care clinics the Company and joint venture partners operate. The consolidated financial statements include all assets, liabilities, revenues and expenses of the less than 100% owned entity that the Company controls. Accordingly, the Company has recorded noncontrolling interests in the earnings and equity of this entity. In connection with these arrangements, the Company received joint venture contributions of $1.4 million during the six months ended June 30, 2015.

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Note 14. Accumulated Other Comprehensive Earnings (Loss)

The changes in accumulated other comprehensive earnings (loss) related to available-for-sale securities were as follows (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2015			2014			2015
Balance at beginning of period	$	1,049		$	1,668		$	447		$	1,695
Other comprehensive earnings:
Net unrealized gain (loss)	765			(896		)	1,706			(887		)
Tax benefit (expense)	(248		)	340			(573		)	337
Total other comprehensive earnings before reclassifications, net of tax	517			(556		)	1,133			(550		)
Net amount reclassified to earnings(1)	(56		)	(17		)	(70		)	(50		)
Tax benefit (expense)(2)	—			—			—			—
Total amount reclassified from accumulated other comprehensive earnings, net of tax(3)	(56		)	(17		)	(70		)	(50		)
Total other comprehensive earnings (loss)	461			(573		)	1,063			(600		)
Balance at end of period	$	1,510		$	1,095		$	1,510		$	1,095

(1) This amount was included in Other (income) expenses on the accompanying Consolidated Statement of Comprehensive Earnings.

(2) These amounts were included in Provision for income taxes on the accompanying Consolidated Statement of Comprehensive Earnings.

(3) A positive amount indicates a corresponding charge to earnings and a negative amount indicates a corresponding benefit to earnings.

Note 15. Segment Reporting

The Company provides services through ten operating segments which are aggregated into two reportable segments, Healthcare Staffing and Other Services. The Healthcare Staffing segment, which is an aggregation of emergency medicine, anesthesia, specialty surgery and locums staffing, provides comprehensive healthcare service programs to users and providers of healthcare services on a fee for service as well as a cost plus or contract basis. The Other Services segment is an aggregation of hospital medicine, military and government healthcare staffing, clinical services, nurse call center operations, After Hours Pediatrics as well as billing, collection and consulting services that provides a range of other comprehensive healthcare services. The operating segments included in the Other Services reportable segment, while similar in the types of services provided by those operating segments included in the Healthcare Staffing segment, do not meet the aggregation criteria prescribed by the segment reporting guidance nor do they meet the quantitative thresholds that would require a separate presentation.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies. Segment amounts disclosed are prior to any elimination entries made in consolidation, except in the case of net revenue, where intercompany charges have been eliminated. Certain corporate expenses are not allocated to the segments. These unallocated expenses are corporate expenses, net interest expense, depreciation and amortization, transaction costs and income taxes. The Company evaluates segment performance based on profit and loss before the aforementioned expenses.

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The following table presents financial information for each reportable segment. Depreciation, amortization, management fee and other expenses separately identified in the consolidated statements of operations are included as a reduction to the respective segments’ operating earnings for each period below (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2015		2014		2015
Net Revenue:
Healthcare Services	$	560,464	$	731,217	$	1,085,258	$	1,426,859
Other Services	114,606		146,738		231,462		291,580
	$	675,070	$	877,955	$	1,316,720	$	1,718,439
Operating Earnings:
Healthcare Services	$	36,234	$	27,165	$	56,811	$	49,337
Other Services	6,479		9,542		15,668		19,482
General Corporate	10,618		17,932		24,195		39,004
	$	53,331	$	54,639	$	96,674	$	107,823
Reconciliation of Operating Earnings to Net Earnings:
Operating earnings	$	53,331	$	54,639	$	96,674	$	107,823
Interest expense, net	3,429		4,571		6,837		8,560
Provision for income taxes	19,630		21,186		35,647		42,341
Net earnings	$	30,272	$	28,882	$	54,190	$	56,922

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Note 16. Subsequent Event

On August 4, 2015, the Company and its wholly owned subsidiary Intrepid Merger Sub, Inc. (Merger Sub) entered into an Agreement and Plan of Merger with IPC Healthcare, Inc., a Delaware corporation (IPC), providing for the acquisition of IPC by the Company. Subject to the terms and conditions of the Merger Agreement, Merger Sub will be merged with and into IPC (the Merger), with IPC surviving the Merger as a wholly owned subsidiary of the Company. The merger consideration provided in the Merger Agreement (as further described below) is $80.25 per share of IPC common stock in cash, or approximately $1.6 billion in enterprise value. The Company has entered into a debt commitment letter with certain lenders (see Debt Commitment Letter below) in connection with the financing of the acquisition.

At the effective time of the Merger, each share of IPC common stock issued and outstanding immediately prior to the effective time (other than shares (i) owned by the Company or Merger Sub, (ii) held in treasury by IPC or (iii) owned by stockholders who have perfected and not withdrawn a demand for appraisal under Delaware law) will be automatically cancelled and converted into the right to receive $80.25 in cash, without interest.

Consummation of the Merger is subject to customary conditions, including without limitation (i) requisite approval of IPC’s stockholders, (ii) the absence of any action or proceeding by any governmental entity which has the effect of enjoining, making illegal or otherwise prohibiting or preventing the Merger or the consummation thereof and (iii) the expiration or early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. Moreover, each party’s obligation to consummate the Merger is subject to certain other conditions, including without limitation (x) the accuracy of the other party’s representations and warranties (subject to customary materiality qualifiers) and (y) the other party’s compliance with its covenants and agreements contained in the Merger Agreement (subject to customary materiality qualifiers).

The Merger Agreement contains certain termination rights for the Company and IPC. Upon termination of the Merger Agreement under specified circumstances IPC will be required to pay the Company a termination fee of $47 million.

Debt Commitment Letter

On August 4, 2015, and in connection with the Merger Agreement, the Company entered into a debt commitment letter (the Debt Commitment Letter) with Citigroup Global Markets, Inc. (Citi). Pursuant to the Debt Commitment Letter, subject to the conditions set forth therein, Citi committed to provide the Company with either (a) a Term B Loan Facility of $965.0 million to be obtained pursuant to amendments to the Borrower’s existing credit agreement (the Backstopped Amendments), or (b) to the extent the Backstopped Amendments are not obtained, to refinance the existing senior secured credit facilities consisting of a Revolving Credit Facility of $650.0 million, a Term A Loan Facility of $588.8 million and a Term B Loan Facility of $965.0 million (together, the Facilities) and (2) senior unsecured increasing rate loans under a new senior unsecured bridge facility of $545.0 million (the Facilities, together with the unsecured increasing rate loans, the Debt Financing). The proceeds of the Debt Financing will be used to partially finance the aggregate Merger Consideration, repay or redeem the existing indebtedness of IPC, pay costs and expenses related to the Merger and finance the ongoing working capital and other general corporate purposes of the Company, after consummation of the Merger.

Citi and certain of its affiliates may have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with the Company. They have received, or may in the future receive, customary fees and commissions for these transactions.

Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Introduction

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We believe we are one of the largest suppliers of outsourced healthcare professional staffing and administrative services to hospitals and other healthcare providers in the United States, based upon revenues and patient visits. Our regional operating models also include comprehensive programs for inpatient care, anesthesiology, inpatient specialty care, pediatrics and other healthcare services, principally within hospital departments and other healthcare treatment facilities. We have historically focused, however, primarily on providing outsourced services to hospital emergency departments, or EDs, which accounts for the majority of our net revenue.

Factors and Trends that Affect Our Results of Operations

In reading our financial statements, you should be aware of the following factors and trends we believe are important in understanding our financial performance.

General Economic Conditions

Any lingering effects of the recent economic conditions may adversely impact our ability to collect for the services we provide as higher unemployment and reductions in commercial managed care and governmental healthcare enrollment may also increase the number of uninsured and underinsured patients seeking healthcare at one of our staffed EDs or other clinical facilities. We could be negatively affected if the federal government or the states reduce funding of Medicare, Medicaid and other federal and state healthcare programs in response to increasing deficits in their budgets. Also, patient volume trends in our staffed hospital clinical departments could be adversely affected as individuals potentially defer or forgo seeking care in such departments due to the loss or reduction of coverage previously available to such individuals under commercial insurance or governmental healthcare programs.

Healthcare Reform

In 2010, the President of the United States and the U.S. Congress enacted significant reforms to the U.S. healthcare system. The Healthcare Reform Laws significantly affect the U.S. healthcare system by increasing access to health insurance benefits for the uninsured and underinsured populations, among other changes. On June 28, 2012, the U.S. Supreme Court, upheld the constitutionality of the requirement in the PPACA that individuals maintain health insurance or pay a penalty (the individual mandate) under Congress's taxing power. Additionally, the U.S. Supreme Court held in the same ruling that states were not obligated to expand their Medicaid programs as stipulated in the PPACA to eligible recipients based solely on income.  Consequently, each state retained the option whether to choose to expand their Medicaid roles. In addition, on June 25, 2015, the Supreme Court upheld the provision of tax credits and federal subsidies to individuals who purchase health insurance through a federally-facilitated exchange.

The Healthcare Reform Laws triggered numerous changes to the U.S. healthcare system, some of which have already gone into effect, including the individual mandate that went into effect on January 1, 2014, and some of which have been delayed until 2015 and beyond, including the requirement that employers provide health insurance to their employees or pay a per employee fine (the employer mandate). Additional challenges to the Healthcare Reform Laws could further impact the implementation of these laws. Additionally, recent changes in the controlling party in Congress could lead to revisions to the Healthcare Reform Laws in 2015 or subsequent years, affect how the law is implemented, or change the law’s impact on insurance coverage rates across the country.

While the ultimate impact of the Healthcare Reform Laws and implementing regulations will not be known until all provisions are fully implemented, we believe that some of their provisions will likely yield positive results, such as increasing access to health benefits for the uninsured and underinsured populations. Since the implementation of increased access to health benefits through the expansion of Medicaid programs and through exchange enrollment beginning in 2014, we have realized a decline in the percentage of self-pay visits by our consolidated fee for service volume and an increase in the percentage of Medicaid visits that we believe is a result of healthcare reform. Other provisions, however, such as Medicare payment reforms and reductions that could reduce provider payments, may have an adverse effect on the reimbursement rates we receive for services provided by affiliated healthcare professionals.

Medicare and Medicaid Payments for Physician Services

The Centers for Medicaid and Medicare Services (CMS) reimburses for our services to Medicare beneficiaries based upon the rates in the Medicare Physician Fee Schedule (MPFS), which are updated each year based on the Sustainable Growth Rate (SGR) formula enacted under the Balanced Budget Act of 1997. Many private payors use the MPFS to determine their own reimbursement rates. The application of the SGR formula to the MPFS yielded negative updates every year beginning in 2002, although CMS was able to take administrative steps to avoid a reduction in 2003 and Congress took a series of legislative actions to prevent reductions each year from 2004 through March 31, 2015.

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On April 14, 2015, Congress enacted legislation that permanently repeals the SGR formula, and provides for annual updates of 0.5% for a 5-year period (starting July 1, 2015 through the end of 2019). Starting in 2020, through the end of 2025, there will be no annual updates to the payment rates but physicians will have the opportunity to receive additional payment adjustments through the Merit-Based Incentive Payment System (MIPS), which is an incentive-based payment program that rewards quality performance related to four assessment categories: quality of care measures, resource use, meaningful use of electronic health records, and clinical practice improvement activities. Physicians will receive a positive or negative payment adjustment based on how their composite performance score for each of the four assessment categories compared to the performance threshold. Negative payment adjustments are capped at 4% in 2019, increasing up to 9% in 2022. Positive payment adjustments can reach up to a maximum of three times the annual cap for negative payment adjustments in a particular year. Additional incentive payments will be available for “exceptional performers”. Alternatively, physicians who receive a significant share of their revenue through participation in alternative payment models (APMs) that involve risk of financial losses and a quality measurement component will receive a 5% bonus each year from 2019 through 2024. These physicians are excluded from participation in the MIPS. In 2026 and subsequent years, annual updates will differ based on whether a physician is participating in an APM that meets certain criteria. Physicians participating in qualifying APMs will receive a 0.75% update, and all other physicians will receive a 0.25% update. APMs include models being tested by the Center for Medicare and Medicaid Innovation (other than health care innovation awards), the Medicare Shared Savings Program, under the Health Care Quality Demonstration Program, and other demonstrations required by Federal law. In addition to these changes to the Medicare physician payment system, the law also extends funding for the Children’s Health Insurance Program (CHIP). The CHIP program, which covers more than 8 million children and pregnant women in families that earn income above Medicaid eligibility levels, is currently authorized through 2019. Funding for the program has been extended for two years, through fiscal year 2017.

In November 2014, CMS released the 2015 MPFS Final Rule. Included in the final rule were changes in reimbursement that are overall budget neutral, but redistribute payments between different medical specialties. We estimate that the final rule will increase 2015 reimbursement rates to emergency medicine providers by approximately 1% and will not change reimbursement rates to anesthesia providers. These reimbursement rates do not take into account the additional 0.5% update that will go into effect on July 1, 2015. We estimate an increase of approximately $2.4 million in our 2015 ED fee for service revenue from the 2015 update.

In July 2015, CMS released the proposed rule to update the 2016 MPFS. This is the first proposed regulatory update to the MPFS since the SGR formula was repealed in April 2015. The proposed 2016 MPFS rule is not final and is subject to comment and revision; however, if implemented, we estimate that reimbursement rates for emergency medicine and anesthesia providers , recognizing the previously authorized additional 0.5% update to the conversion factor offset against a slightly reduced adjustment to the respective specialties' Practice Expense (PE) Relative Value Units (RVUs), will stay the same in 2016 as compared to 2015.

PPACA provided Medicare bonus payments to primary care physicians and general surgeons practicing in health professional shortage areas as well as increased Medicaid payments for primary care services furnished by certain physicians at the Medicare rates in 2013 and 2014. A limited number of the Company’s providers qualified for the increased Medicaid parity payments in certain states in 2013 and 2014. For the six months ended June 30, 2014 and June 30, 2015, we recognized $17.3 million and $1.9 million, respectively, of estimated net revenue from the Medicaid parity program. Congress failed to extend federal funding for the enhanced Medicaid payments, as the federal program known as the Medicaid Primary Care Rate Increase Program under Section 1202 of the PPACA expired on December 31, 2014. The Medicaid parity program revenue recognized in 2015 is related to changes in estimated revenue from 2014 services and the election by certain states to extend elements of the Medicaid parity program on a state funded basis for a limited period of time.

Any future reductions in amounts paid by government programs for physician services or changes in methods or regulations governing payment amounts or practices could cause our revenues to decline and we may not be able to offset reduced operating margins through cost reductions, increased volume or otherwise.

Budget Control Act's Medicare Sequestration

In August 2011, Congress enacted the Budget Control Act, which committed the U.S. government to significantly reduce the federal deficit over ten years. The Budget Control Act established caps on discretionary spending through 2021. It also established a Joint Committee of Congress (Joint Committee) that was responsible for identifying an additional $1.5 trillion in deficit reductions. The Joint Committee was unable to identify the additional deficit reductions by the deadline, thereby triggering a second provision of the Budget Control Act called “sequestration.” Sequestration calls for automatic spending cuts of $1.2 trillion over a nine-year period, beginning January 2, 2013, split between defense and non-defense programs, including spending cuts to Medicare programs averaging 2%.

On January 2, 2013, President Obama signed the American Taxpayor Relief Act of 2012 into law. This legislation delayed the sequestration cuts that would have reduced Medicare payments by 2% until March 1, 2013. Since Congress and the

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White House failed to act by March 1, 2013, across-the-board cuts to Medicare payments took effect for Medicare services furnished on or after April 1, 2013. The Bipartisan Budget Act of 2013 enacted on December 26, 2013 provides limited relief from sequestration cuts for certain defense and non-defense spending for fiscal years 2014 and 2015, but the 2% cuts in Medicare reimbursement will continue in 2015 unless additional Congressional action is taken. Further, the Bipartisan Budget Act extended sequestration for mandatory programs, including Medicare, for another two years, and Congressional action in February 2014 further extended the sequestration cuts for an additional year through 2024.

Bundled Payments for Care Improvement (BPCI) Program

BPCI is an initiative sponsored by CMS that is designed to allow organizations to enter into payment arrangements that include financial and performance accountability for certain episodes of care. The objective of the BPCI program initiative is to achieve higher quality, more coordinated care at a lower cost to Medicare. The BPCI program is comprised of four broadly defined models of care, which link payments for multiple services beneficiaries receive during an episode of care. The various models of care cover both acute care hospital stays as well as post-acute care. The Company expects to participate primarily in Model 2: Retrospective Acute Care Hospital Stay plus Post-Acute Care.

The Company has contracted with Remedy BPCI Partners, who is serving as a convening organization that brings together multiple health care providers to participate in BPCI. The Company will be participating in Phase II of the BPCI program beginning July 1, 2015. Initially, eleven of the Company’s provider groups (“TINs”) will participate in the BPCI program in several different geographic locations, but the Company has reserved the right to expand the number of TINs as appropriate. During the first year of participation in the BPCI program, the Company does not anticipate any material financial impact. The potential financial impact in subsequent years is dependent on the Company’s ability to meet the specific goals and objectives of the BPCI program.

Military and Government Healthcare Staffing

We are a provider of healthcare professionals serving patients eligible to receive care in government treatment facilities nationwide administered by the Department of Defense and beneficiaries of other government agencies in their respective clinical locations. Our revenues derived from military and government facility healthcare staffing totaled $60.0 million and $54.1 million for the six months ended June 30, 2014 and 2015, respectively. Of these revenues, $36.9 million and $31.7 million for the six months ended June 30, 2014 and 2015, respectively, are generated from contracts that are subject to a competitive bidding process which primarily takes place during the third quarter of each year. A portion of the contracts awarded during the third quarter of 2014 have or will expire during 2015 and were subject to a competitive rebidding and award process. We were successful in retaining existing business and winning new bids in the estimated annualized amount of $101.2 million following the completion of the bidding process as of October 1, 2014. This included $23.8 million awarded under one-year contracts. All contracts, including contracts with renewal options, can be terminated by the government at any time without notice. The outcome of any rebidding and award process is uncertain and we may not be awarded new contracts. Our contracts with renewal options may not be so renewed and the government may exercise its rights to terminate the contracts.

In addition, over the last several years the process of awarding military and government facility healthcare staffing contracts has developed a bias toward intentionally awarding certain contracts to qualified small and minority owned businesses. Although we participate in such small and minority owned business awards to the extent we can serve as a sub-contractor, our revenues from these arrangements are limited compared to a contract award we retain through the regular competitive bidding process. Approximately 27.3% and 27.3% of our military staffing revenue for each of the six months ended June 30, 2014 and 2015, respectively, was derived through sub-contracting agreements with small business prime contractors.

2014 and 2015 Acquisition Activity

In 2014 and continuing into 2015, the Company realized an increase in the number of acquisitions and the total expenditures in support of acquisitions when compared to prior years. During the year ended December 31, 2014, the Company acquired the operations of fifteen businesses for total net cash proceeds of $556.2 million. As of June 30, 2015, the Company paid a total of $84.8 million related to acquisitions including $82.4 million for the operations of five businesses acquired during the period. If appropriate acquisition opportunities continue to present themselves to the Company it will be able to sustain its current pace of acquisitions. However, given the inherent uncertainty in being presented appropriate acquisition opportunities, the Company might not continue acquisitions at the same pace.

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Critical Accounting Policies and Estimates

The consolidated financial statements of the Company are prepared in accordance with accounting principles generally accepted in the United States, which requires us to make estimates and assumptions. Management believes the following critical accounting policies, among others, affect its more significant judgments and estimates used in the preparation of the Company’s consolidated financial statements.

There have been no material changes to these critical accounting policies or their application during the six months ended June 30, 2015.

Revenue Recognition

Net Revenue Before Provision for Uncollectibles. Net revenue before provision for uncollectibles consist of fee for service revenue, contract revenue and other revenue. Net revenue before provision for uncollectibles are recorded in the period services are rendered. Our net revenue before provision for uncollectibles are principally derived from the provision of healthcare staffing services to patients within healthcare facilities. The form of billing and related risk of collection for such services may vary by customer. The following is a summary of the principal forms of our billing arrangements and how net revenue before provision for uncollectibles are recognized for each.

A significant portion (approximately 87% of our net revenue before provision for uncollectibles for the six months ended June 30, 2015 and 85% for the year ended December 31, 2014) resulted from fee for service patient visits. Fee for service revenue represents revenue earned under contracts in which we bill and collect the professional component of charges for medical services rendered by our contracted and employed physicians. Under the fee for service arrangements, we bill patients for services provided and receive payment from patients or their third-party payors. Fee for service revenue is reported net of contractual allowances and policy discounts. All services provided are expected to result in cash flows and are therefore reflected as net revenue before provision for uncollectibles in the financial statements. Fee for service revenue is recognized in the period that the services are rendered to specific patients and reduced immediately for the estimated impact of contractual allowances in the case of those patients having third-party payor coverage. The recognition of net revenue before provision for uncollectibles (gross charges less contractual allowances) from such visits is dependent on such factors as proper completion of medical charts following a patient visit, the forwarding of such charts to one of our billing centers for medical coding and entering into our billing systems and the verification of each patient’s submission or representation at the time services are rendered as to the payor(s) responsible for payment of such services. Net revenue before provision for uncollectibles is recorded based on the information known at the time of entering such information into our billing systems as well as an estimate of the net revenue before provision for uncollectibles associated with medical charts for a given service period that have not yet been processed into our billing systems. The above factors and estimates are subject to change. For example, patient payor information may change following an initial attempt to bill for services due to a change in payor status. Such changes in payor status have an impact on recorded net revenue before provision for uncollectibles due to differing payors being subject to different contractual allowance amounts. Such changes in net revenue before provision for uncollectibles are recognized in the period that such changes in the payor become known. Similarly, the actual volume of medical charts not processed into our billing systems may be different from the amounts estimated. Such differences in net revenue before provision for uncollectibles are adjusted the following month based on actual chart volumes processed.

Contract revenue represents revenue generated under contracts in which we provide physician and other healthcare staffing and administrative services in return for a contractually negotiated fee. In these contractual arrangements we are the principal in the transaction and therefore recognize contract revenue on a gross basis. Contract revenue consists primarily of billings based on hours of healthcare staffing provided at agreed upon hourly rates. Revenue in such cases is recognized as the hours worked by our staff and contractors. Additionally, contract revenue includes supplemental revenue from hospitals where we may have a fee for service contract arrangement. Contract revenue for the supplemental billing in such cases is recognized based on the terms of each individual contract. Such contract terms generally either provide for a fixed monthly dollar amount or a variable amount based upon measurable monthly activity, such as hours staffed, patient visits or actual patient collections compared to a minimum activity threshold. Such supplemental revenues based on variable arrangements are usually contractually fixed on a monthly, quarterly or annual calculation basis considering the variable factors negotiated in each such arrangement. Such supplemental revenues are recognized as revenue in the period when such amounts are determined to be fixed and therefore contractually obligated as payable by the customer under the terms of the respective agreement.

Other revenue consists primarily of revenue from management and billing services provided to outside parties. Revenue is recognized for such services pursuant to the terms of the contracts with customers. Generally, such contracts consist of fixed monthly amounts with revenue recognized in the month services are rendered or as hourly consulting fees recognized as revenue as hours worked in accordance with such arrangements. Additionally, we derive a portion of our revenues from providing billing services that are contingent upon the collection of third-party physician billings by us on behalf of such

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customers. Revenues are not considered earned and therefore not recognized as revenue until actual cash collections are achieved in accordance with the contractual arrangements for such services.

Net Revenue. Net revenue reflects management’s estimate of billed amounts to be ultimately collected. Management, in estimating the amounts to be collected resulting from approximately fourteen million annual fee for service patient visits and procedures, considers such factors as prior contract collection experience, current period changes in payor mix and patient acuity indicators, reimbursement rate trends in governmental and private sector insurance programs, resolution of overprovision account balances, the estimated impact of billing system effectiveness improvement initiatives, and trends in collections from self-pay patients and external collection agencies. In developing our estimate of collections per visit or procedure, we consider the amount of outstanding gross accounts receivable by period of service and by payor class, but do not use an accounts receivable aging schedule to establish estimated collection valuations. Individual estimates of net revenue by contractual location are monitored and refreshed each month as cash receipts are applied to existing accounts receivable and other current trends that have an impact upon the estimated collections per visit are observed. Such estimates are substantially formulaic in nature. In the ordinary course of business we experience changes in our initial estimates of net revenue during the year following commencement of services. Such provisions and any subsequent changes in estimates may result in adjustments to our operating results with a corresponding adjustment to our accounts receivable allowance for uncollectibles on our balance sheet. Differences between amounts ultimately realized and the initial estimates of net revenue have historically not been material.

The table below summarizes our approximate payor mix as a percentage of consolidated fee for service volume for the periods indicated:

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2015		2014		2015
Payor:
Medicare	24.8	%	25.4	%	24.9	%	25.5	%
Medicaid	29.3		31.4		28.2		31.4
Commercial and managed care	26.6		26.6		26.6		26.5
Self-pay	17.4		15.3		18.4		15.2
Other	1.9		1.3		1.9		1.4
Total	100.0	%	100.0	%	100.0	%	100.0	%

Estimated net revenue derived from commercial and managed care plans was approximately 40% in the six months ended June 30, 2015 and 38% in 2014. Estimated net revenue derived from the Medicare program was approximately 19% of total net revenue in the six months ended June 30, 2015 and 17% in 2014. Estimated net revenue derived from the Medicaid program was approximately 11% of total net revenue in the six months ended June 30, 2015 and 2014. In addition, net revenue derived from within the Military Health System (MHS), which is the U.S. military’s dependent healthcare program, and other government agencies was approximately 3% in the six months ended June 30, 2015 and 5% in 2014.

Accounts Receivable. As described above and below, we determine the estimated value of our accounts receivable based on estimated cash collection run rates of estimated future collections by contract for patient visits under our fee for service revenue. Accordingly, we are unable to report the payor mix composition on a dollar basis of its outstanding net accounts receivable. However, a 1% change in the estimated carrying value of our net fee for service patient accounts receivable before consideration of the allowance for uncollectible accounts at June 30, 2015 could have an after tax effect of approximately $5.9 million on our financial position and results of operations. Our days revenue outstanding at December 31, 2014 and June 30, 2015 were 59.0 days and 63.0 days, respectively. The number of days outstanding will fluctuate over time due to a number of factors including the timing of cash collections and valuation adjustments recorded during the period and increases in average revenue per day that are primarily attributed to an increase in gross charges and patient volumes and increased pricing with managed care plans. During the first six months of 2015 we have experienced an increased level of net accounts receivable funding associated with the increase in revenue from new and acquired contracts. Our allowance for doubtful accounts totaled $475.4 million as of June 30, 2015.

Approximately 98% of our allowance for doubtful accounts is related to gross fees for fee for service patient visits. Our principal exposure for uncollectible fee for service visits is centered in self-pay patients and in co-payments and deductibles from patients with insurance. While we do not specifically allocate the allowance for doubtful accounts to individual accounts

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or specific payor classifications, the portion of the allowance associated with fee for service charges as of June 30, 2015 was equal to approximately 93% of outstanding self-pay fee for service patient accounts.

The majority of our fee for service patient visits are for the provision of emergency care in hospital settings. Due to federal government regulations governing the provision of such care, we are obligated to provide emergency care regardless of the patient’s ability to pay or whether or not the patient has insurance or other third-party coverage for the costs of the services rendered. While we attempt to obtain all relevant billing information at the time emergency care services are rendered, there are numerous patient encounters where such information is not available at time of discharge. In such cases where detailed billing information relative to insurance or other third-party coverage is not available at discharge, we attempt to obtain such information from the patient or client hospital billing record information subsequent to discharge to facilitate the collections process. Collections at the time of rendering such services (emergency room discharge as an example) are not significant. The primary responsibility for collection of fee for service accounts receivable resides within our internal billing operations. Once a claim has been submitted to a payor or an individual patient, employees within our billing operations are responsible for the follow-up collection efforts. The protocol for follow-up differs by payor classification. For self-pay patients, our billing system will automatically send a series of dunning letters on a prescribed time frame requesting payment or the provision of information reflecting that the balance due is covered by another payor, such as Medicare or a third-party insurance plan. Generally, the dunning cycle on a self-pay account will run from 90 to 120 days. At the end of this period, if no collections or additional information is obtained from the patient, the account is no longer considered an active account and is transferred to a collection agency. Upon transfer to a collection agency, the patient account is written-off as a bad debt. Any subsequent cash receipts on accounts previously written-off are recorded as a recovery. For non-self-pay accounts, billing personnel will follow-up and respond to any communication from payors such as requests for additional information or denials until collection of the account is obtained or other resolution has occurred. At the completion of our collection cycle, selected accounts may be transferred to collection agencies under a contingent collection basis. The projected value of future contingent collection proceeds expected to be collected over a multi-year period are considered in the estimation of our overall accounts receivable valuation. For contract accounts receivable, invoices for services are prepared in our various operating locations and mailed to our customers, generally on a monthly basis. Contract terms under such arrangements generally require payment within 30 days of receipt of the invoice. Outstanding invoices are periodically reviewed and operations personnel with responsibility for the customer relationship will contact the customer to follow-up on any delinquent invoices. Contract accounts receivable will be considered as bad debt and written-off based upon the individual circumstances of the customer situation after all collection efforts have been exhausted, including legal action if warranted, and it is the judgment of management that the account is not expected to be collected.

Methodology for Computing Allowance for Doubtful Accounts. We employ several methodologies for determining our allowance for doubtful accounts depending on the nature of the net revenue before provision for uncollectibles recognized. We initially determine gross revenue for our fee for service patient visits based upon established fee schedule prices. Such gross revenue is reduced for estimated contractual allowances for those patient visits covered by contractual insurance arrangements to result in net revenue before provision for uncollectibles. Net revenue before provision for uncollectibles is then reduced for our estimate of uncollectible amounts. Fee for service net revenue represents our estimated cash to be collected from such patient visits and is net of our estimate of account balances estimated to be uncollectible. The provision for uncollectible fee for service patient visits is based on historical experience resulting from approximately fourteen million annual fee for service patient visits. The significant volume of patient visits and the terms of thousands of commercial and managed care contracts and the various reimbursement policies relating to governmental healthcare programs do not make it feasible to evaluate fee for service accounts receivable on a specific account basis. Fee for service accounts receivable collection estimates are reviewed on a quarterly basis for each of our fee for service contracts by period of accounts receivable origination. Such reviews include the use of historical cash collection percentages by contract adjusted for the lapse of time since the date of the patient visit. In addition, when actual collection percentages differ from expected results, on a contract by contract basis, supplemental detailed reviews of the outstanding accounts receivable balances may be performed by our billing operations to determine whether there are facts and circumstances existing that may cause a different conclusion as to the estimate of the collectibility of that contract’s accounts receivable from the estimate resulting from using the historical collection experience. Contract-related net revenue is billed based on the terms of the contract at amounts expected to be collected. Such billings are typically submitted on a monthly basis and aged trial balances prepared. Allowances for estimated uncollectible amounts related to such contract billings are made based upon specific accounts and invoice periodic reviews once it is concluded that such amounts are not likely to be collected. The methodologies employed to compute allowances for doubtful accounts were unchanged between 2014 and 2015.

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Insurance Reserves

The nature of our business is such that it is subject to professional liability claims and lawsuits. Historically, to mitigate a portion of this risk, we have maintained insurance for individual professional liability claims with per incident and annual aggregate limits per physician for all incidents. Prior to March 12, 2003, we obtained such insurance coverage from commercial insurance providers. Subsequent to March 11, 2003, we have provided for a significant portion of our professional liability loss exposures through the use of captive insurance subsidiaries and through greater utilization of self-insurance reserves. Since March 12, 2003, the most significant cost element within our professional liability program has consisted of the actuarial estimates of losses by occurrence period. In addition to the estimated actuarial losses, other costs that are considered by management in the estimation of professional liability costs include program costs such as brokerage fees, claims management expenses, program premiums and taxes, and other administrative costs of operating the program, such as the costs to operate the captive insurance subsidiaries. Net costs in any period reflect our estimate of net losses to be incurred in that period as well as any changes to our estimates of the reserves established for net losses of prior periods.

The accounts of the captive insurance subsidiaries are fully consolidated with those of our other operations in the accompanying financial statements.

The estimation of medical professional liability losses is inherently complex. Medical professional liability claims are typically resolved over an extended period of time, often as long as ten years or more. The combination of changing conditions and the extended time required for claim resolution results in a loss estimation process that requires actuarial skill and the application of judgment, and such estimates require periodic revision. A report of actuarial loss estimates is prepared at least semi-annually. Management’s estimate of our professional liability costs resulting from such actuarial studies is significantly influenced by assumptions and assessments regarding expectations of several factors. These factors include, but are not limited to: historical paid and incurred loss development trends; hours of exposure as measured by hours of physician and related professional staff services; trends in the frequency and severity of claims, which can differ significantly by jurisdiction due to the legislative and judicial climate in such jurisdictions; coverage limits of third-party insurance; the effectiveness of our claims management process; and the outcome of litigation. As a result of the variety of factors that must be considered by management, there is a risk that actual incurred losses may develop differently from estimates.

The underlying information that serves as the foundational basis for making our actuarial estimates of professional liability losses is our internal database of incurred professional liability losses. We have captured extensive professional liability loss data going back, in some cases, over twenty years, that is maintained and updated on an ongoing basis by our internal claims management personnel. Our database contains comprehensive incurred loss information for our existing operations as far back as fiscal year 1997 (reflecting the initial timeframe in which we migrated to a consolidated professional liability program concurrent with the consummation of several significant acquisitions), and, in addition, we possess additional loss data that predates 1997 dates of occurrence for certain of our operations. Loss information reflects both paid and reserved losses incurred when we were covered by outside commercial insurance programs as well as paid and reserved losses incurred under our self-insurance program. Because of the comprehensive nature of the loss data and our comfort with the completeness and reliability of the loss data, this is the information that is used in the development of our actuarial loss estimates. We believe this database is one of the largest repositories of physician professional liability loss information available in our industry and provides us and our actuarial consultants with sufficient data to develop reasonable estimates of the ultimate losses under our self-insurance program. In addition to the estimated losses, as part of the actuarial process, we obtain revised payment pattern assumptions that are based upon our historical loss and related claims payment experience. Such payment patterns reflect estimated cash outflows for aggregate incurred losses by period based upon the occurrence date of the loss as well as the report date of the loss. Although variances have been observed in the actuarial estimate of ultimate losses by occurrence period between actuarial studies, the estimated payment patterns have shown much more limited variability. We use these payment patterns to develop our estimate of the discounted reserve amounts. The relative consistency of the payment pattern estimates provides us with a foundation in which to develop a reasonable estimate of the discount value of the professional liability reserves based upon the most current estimate of ultimate losses to be paid and the reasonable likelihood of the related cash flows over the payment period. Our estimated loss reserves were discounted at 1.1% as of December 31, 2014 and 1.4% as of June 30, 2015, which was the current weighted average Treasury rate, over a 10 year period at December 31, 2014 and June 30, 2015, which reflects the risk free interest rate over the expected period of claims payments.

In establishing our initial reserves for a given loss period, management considers the results of the actuarial loss estimates for such periods as well as assumptions regarding loss retention levels and other program costs to be incurred. On a semi-annual basis, we will review our professional liability reserves considering not only the reserves and loss estimates associated with the current period, but also the reserves established in prior periods based upon revised actuarial loss estimates. The actuarial estimation process employed utilizes a frequency severity simulation model to estimate the ultimate cost of claims for each loss period. The results of the simulation model are then validated by a comparison to the results from several different actuarial methods (paid loss development, incurred loss development, incurred Bornhuetter-Ferguson method, paid

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Bornhuetter-Ferguson method) for reasonableness. Each method contains assumptions regarding the underlying claims process. Actuarial loss estimates at various confidence levels capture the variability in the loss estimates for process risk but assume that the underlying model and assumptions are correct. Adjustments to professional liability loss reserves will be made as needed to reflect revised assumptions and emerging trends and data. Any adjustments to reserves are reflected in the current operations. Due to the size of our reserve for professional liability losses, even a small percentage adjustment to these estimates can have a material effect on the results of operations for the period in which the adjustment is made. Given the number of factors considered in establishing the reserves for professional liability losses, it is neither practical nor meaningful to isolate a particular assumption or parameter of the process and calculate the impact of changing that single item. The actuarial reports provide a variety of loss estimates based upon statistical confidence levels reflecting the inherent uncertainty of the medical professional liability claims environment in which we operate. Initial year loss estimates are generally recorded using the actuarial expected loss estimate, but aggregate professional liability loss reserves may be carried at amounts in excess of the expected loss estimates provided by the actuarial reports due to the relatively short time period in which we have provided for our losses on a self-insured basis and the expectation that we believe additional adjustments to prior year estimates may occur as our reporting history and loss portfolio matures. In addition, we are subject to the risk of claims in excess of insured limits as well as unlimited aggregate risk of loss in certain loss periods. As our self-insurance program continues to mature and additional stability is noted in the loss development trends in the initial years of the program, we expect to continue to review and evaluate the carried level of reserves and make adjustments as needed.

Our most recent actuarial valuation was completed in April 2015. Based on the results of the semi-annual actuarial study completed during April 2015, management determined no additional change was necessary in our consolidated reserves for professional liability losses related to prior year loss estimates.

The following reflects the current reserves for professional liability costs as of June 30, 2015 (in millions) as well as the sensitivity of the reserve estimates at a 65%, 75% and 90% confidence level:

As reported	$	209.0
At 65% confidence level	$	211.9
At 75% confidence level	$	218.3
At 90% confidence level	$	233.8

It is not possible to quantify the amount of the change in our estimate of prior year losses (when required) by individual fiscal period due to the nature of the professional liability loss estimates that are provided to us on an occurrence period basis and the nature of the coverage that is obtained in the commercial insurance market which is generally underwritten on a claims made or report period basis. Even though we are self-insured for a significant portion of our risk, due to customer contracting requirements and state insurance regulations, we still, at times, must place coverage on a claims made or report period basis with commercial insurance carriers. In a limited number of markets, commercial coverage may be obtained on an occurrence basis. When evaluating the appropriate carrying level of our self-insured professional liability reserves, management considers the current estimates of occurrence period loss estimates as well as how such loss estimates and related future claims will interact with previous or current commercial insurance programs when projecting future cash flows. However, the complexity that is associated with multiple occurrence periods interacting with multiple report periods that contain risks and related reserves retained by us, as well as transferred to commercial insurance carriers, makes it impossible to allocate the change in prior year loss estimates to individual occurrence periods. Instead, we evaluate the future expected cash flows for all historical loss periods in the aggregate and compare such estimates to the current carrying value of our professional liability reserves. This process provides the basis for us to conclude that our reserves for professional liability losses are reasonable and properly stated. Management considers the results of actuarial studies when estimating the appropriate level of professional liability reserves and no adjustments to prior year loss estimates were made in periods where updated actuarial loss estimates were not available.

Due to the complexity of the actuarial estimation process, there are many factors, trends and assumptions that must be considered in the development of the actuarial loss estimates, and we are not able to quantify and disclose which specific elements are primarily contributing to changes in the revised loss estimates of historical occurrence periods when such adjustments may be recorded. However, we believe that our internal investments in enhanced risk management and claims management resources and initiatives, such as the employment of additional claims and litigation management personnel and practices, and an expansion of programs such as root cause loss analysis, early claim evaluation, and litigation support for insured providers have contributed to the generally stable trends in loss development estimates noted during the most recent periods.

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Impairment of Intangible Assets

In assessing the recoverability of our intangibles, we must make assumptions regarding estimated future cash flows and other factors to determine the fair value of the respective assets. If these estimates or their related assumptions change in the future, we may be required to record impairment charges for these assets.

Results of Operations

The following discussion provides an analysis of our results of operations and should be read in conjunction with our unaudited consolidated financial statements. Net revenue is an estimate of future cash collections and as such it is a key measurement by which management evaluates performance of individual contracts as well as the Company as a whole. The following table sets forth the components of net earnings as a percentage of net revenue for the periods indicated:

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2015		2014		2015
Net revenue	100.0	%	100.0	%	100.0	%	100.0	%
Professional service expenses	75.6		78.3		76.8		78.6
Professional liability costs	3.5		3.1		3.3		3.1
General and administrative expenses	10.7		9.0		10.2		8.9
Other (income) expenses, net	(0.2	)	0.1		(0.3	)	(0.1	)
Depreciation	0.7		0.6		0.7		0.6
Amortization	1.6		2.4		1.7		2.4
Interest expense, net	0.5		0.5		0.5		0.5
Transaction costs	0.2		0.3		0.2		0.2
Earnings before income taxes	7.4		5.7		6.8		5.8
Provision for income taxes	2.9		2.4		2.7		2.5
Net earnings	4.5	%	3.3	%	4.1	%	3.3	%
Net earnings (loss) attributable to noncontrolling interests	—	%	—	%	—	%	—	%
Net earnings attributable to Team Health Holdings, Inc.	4.5	%	3.3	%	4.1	%	3.3	%

Three Months Ended June 30, 2015 Compared to the Three Months Ended June 30, 2014

Net Revenue Before Provision for Uncollectibles. Net revenue before provision for uncollectibles in the three months ended June 30, 2015increased $300.4 million, or 25.7%, to $1.47 billion from $1.17 billion in the three months ended June 30, 2014. The increase in net revenue before provision for uncollectibles resulted primarily from increases in fee for service revenue of $280.0 million and contract revenue of $21.3 million, partially offset by a decrease in other revenue of $0.9 million. In the three months ended June 30, 2015, fee for service revenue was 86.8% of net revenue before provision for uncollectibles compared to 85.1% in the same period of 2014, contract revenue was 12.5% of net revenue before provision before uncollectibles compared to 13.9% in the same period of 2014 and other revenue was 0.7% and 0.9% in 2015 and 2014, respectively. The increase in fee for service revenue before provision for uncollectibles was primarily a result of a 35.2% increase in total fee for service visits between periods.

Provision for Uncollectibles. The provision for uncollectibles increased $97.5 million, or 19.8%, to $589.0 million in the three months ended June 30, 2015 from $491.5 million in the corresponding quarter in 2014. The provision for uncollectibles as a percentage of net revenue before provision for uncollectibles declined to 40.2% in the three months ended June 30, 2015 compared with 42.1% in the corresponding quarter of 2014. The provision for uncollectibles is primarily related to revenue generated under fee for service contracts that is not expected to be fully collected. The quarter over quarter increase in the provision for uncollectibles was due primarily to annual increases in gross fee schedules and increases in patient volumes and procedures. Changes in payor mix, particularly the level of self-pay fee for service visits, also have an impact on the provision for uncollectibles. For the three months ended June 30, 2015, self-pay fee for service visits were approximately 15.3% of the total fee for service visits compared to approximately 17.4% in the same quarter of 2014, which constrained the growth in the provision for uncollectibles between quarters.

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Net Revenue. Net revenue in the three months ended June 30, 2015increased $202.9 million, or 30.1%, to $878.0 million from $675.1 million in the three months ended June 30, 2014. Acquisitions contributed 20.5%, net sales growth contributed 5.1%, and same contract revenue contributed 4.4% of the increase in quarter over quarter growth in net revenue. Within the acquisitions category, new hospital contracting opportunities that were initially developed by our sales and marketing process contributed 5.7% of overall net revenue growth between quarters.

Total same contract revenue, which consists of contracts under management in both quarters, increased $29.6 million, or 4.7%, to $661.9 million in the three months ended June 30, 2015 compared to $632.3 million in the three months ended June 30, 2014. Fee for service volume increased 6.1%, which contributed 4.4% of same contract revenue growth between quarters. Same contract estimated collections on fee for service visits provided a 0.2% increase in same contract revenue growth. The increase in estimated collections per visit was constrained by a reduction in Medicaid parity revenue in the three months ended June 30, 2015. Contract and other revenue contributed 0.1% to same contract revenue growth. Acquisitions contributed $138.7 million of growth in net revenue and net new contract revenue increased $34.6 million between quarters. The benefit from Medicaid parity revenue recognized in the second quarter of 2015 was $0.4 million. The second quarter of 2014 reflects Medicaid parity revenue of $8.5 million, of which $8.0 million is same contract. The decline in total parity revenue between periods of $8.1 million constrained consolidated revenue growth by 1.2% while the decline in same contract Medicaid parity revenue constrained same contract revenue growth by 1.3% between quarters. Medicaid parity revenue was originally only legislated to cover two years, 2013 and 2014. The Medicaid parity revenue in 2015 is related to changes in estimated revenue from 2014 services and the election by certain states to extend elements of the Medicaid parity program on a state funded basis for a limited period of time.

We typically gain new contracts by replacing competitors at hospitals that currently outsource such services, obtaining new contracts from facilities that do not currently outsource and responding to contracting opportunities within the military healthcare system. Factors influencing new contracting opportunities include the depth and breadth of our service offerings, our reputation and experience, our ability to recruit and retain qualified clinicians, and pricing considerations when a subsidy or contract payment is required. Contracts are typically terminated due to economic considerations, a change in hospital administration or ownership, dissatisfaction with our service offerings or, primarily relating to our military staffing arrangements, at the end of the contract term.

The components of net revenue include revenue from contracts that have been in effect for prior periods (same contracts) and from net, new and acquired contracts during the periods, as set forth in the table below:

	Three Months Ended June 30,
	2014		2015
	(in thousands)
Same contracts:
Fee for service revenue	$	480,270	$	509,567
Contract and other revenue	152,037		152,334
Total same contracts	632,307		661,901
New contracts, net of terminations:
Fee for service revenue	16,767		52,048
Contract and other revenue	18,551		17,882
Total new contracts, net of terminations	35,318		69,930
Acquired contracts:
Fee for service revenue	7,132		124,169
Contract and other revenue	313		21,955
Total acquired contracts	7,445		146,124
Consolidated:
Fee for service revenue	504,169		685,784
Contract and other revenue	170,901		192,171
Total net revenue	$	675,070	$	877,955

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The following table reflects the visits and procedures included within fee for service revenues described in the table above:

	Three Months Ended June 30,
	2014	2015
	(in thousands)
Fee for service visits and procedures:
Same contracts	2,793	2,962
New and acquired contracts, net of terminations	163	1,034
Total fee for service visits and procedures	2,956	3,996

Professional Service Expenses. Professional service expenses, which include physician and provider costs, billing and collection expenses, and other professional expenses, totaled $687.5 million in the three months ended June 30, 2015 compared to $510.1 million in the three months ended June 30, 2014, an increase of $177.5 million, or 34.8%. This increase between quarters is primarily related to our acquisitions and new contracts and a 6.3% increase in same contract professional service expenses primarily associated with increases in provider compensation. Professional service expenses as a percentage of net revenue increased to 78.3% in the three months ended June 30, 2015 from 75.6% in the three months ended June 30, 2014.

Professional Liability Costs. Professional liability costs were $27.3 million in the three months ended June 30, 2015 compared to $23.6 million in the three months ended June 30, 2014, an increase of $3.7 million or 15.5%. The increase was primarily attributed to an increase in provider hours including increases from acquisitions and new contracts and an increase in allocation rates between periods. Professional liability costs as a percentage of net revenue were 3.1% in the second quarter of 2015 and 3.5% in 2014.

General and Administrative Expenses. General and administrative expenses increased $6.6 million, or 9.1%, to $78.6 million for the three months ended June 30, 2015 from $72.0 million in the three months ended June 30, 2014. General and administrative expenses included contingent purchase compensation expense of $7.9 million for the three months ended June 30, 2015 compared to $9.3 million of expense for the three months ended June 30, 2014. Excluding the contingent purchase compensation expense, general and administrative expense increased $8.0 million or 12.7%, to $70.7 million for the three months ended June 30, 2015 from $62.8 million in the three months ended June 30, 2014. The increase in general and administrative expenses was due primarily to the impact of acquisitions between periods. Total general and administrative expenses as a percentage of net revenue were 9.0% in the second quarter of 2015 and 10.7% in the same quarter in 2014. Excluding contingent purchase compensation expense, general and administrative expenses as a percentage of net revenue were 8.1% in the second quarter of 2015 compared to 9.3% in the second quarter of 2014.

Other (Income) Expenses, Net. In the three months ended June 30, 2015, we recognized other expense of $1.0 million compared to income of $1.6 million in the same quarter in 2014. The expense recognized in 2015 is primarily related to the sale of certain assets related to our outsourced medical coding practice and the change in the fair value of assets related to our non-qualified deferred compensation plan. The income recognized in 2014 is primarily related to the change in the fair value of assets related to our non-qualified deferred compensation plan.

Depreciation. Depreciation expense was $5.6 million in the three months ended June 30, 2015 compared to $4.9 million for the three months ended June 30, 2014. The increase of $0.6 million was primarily due to capital expenditures in 2015 and 2014.

Amortization. Amortization expense was $21.2 million in the three months ended June 30, 2015 compared to $11.1 million for the three months ended June 30, 2014. The increase of $10.1 million was primarily a result of an increase in other intangibles recognized in connection with our acquisitions in 2015 and 2014.

Net Interest Expense. Net interest expense increased $1.1 million to $4.6 million in the three months ended June 30, 2015 compared to $3.4 million in the corresponding quarter in 2014 primarily due to an increase in revolver borrowings due to the funding of our acquisitions partially offset by a reduction of interest from the repayment of the Term B Loan Facility in 2014.

Transaction Costs. Transaction costs were $2.2 million for the three months ended June 30, 2015 and $1.6 million for the three months ended June 30, 2014. These costs relate to advisory, legal, accounting and other fees incurred related to acquisition activity during the respective quarters.

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Earnings before Income Taxes. Earnings before income taxes in the three months ended June 30, 2015 were $50.1 million compared to $49.9 million in the three months ended June 30, 2014.

Provision for Income Taxes. The provision for income taxes was $21.2 million in the three months ended June 30, 2015 compared to $19.6 million in the three months ended June 30, 2014.

Net Earnings. Net earnings were $28.9 million in the three months ended June 30, 2015 compared to $30.3 million in the three months ended June 30, 2014.

Net Earnings (Loss) Attributable to Noncontrolling Interests. Earnings (loss) attributable to noncontrolling interests were a loss of $0.1 for the three months ended June 30, 2015 compared to earnings of $0.1 million for the three months ended June 30, 2014.

Net Earnings Attributable to Team Health Holdings, Inc. Net earnings attributable to Team Health Holdings, Inc. were $28.9 million and $30.2 million for the three months ended June 30, 2015 and June 30, 2014, respectively.

Six Months Ended June 30, 2015 Compared to the Six Months Ended June 30, 2014

Net Revenue Before Provision for Uncollectibles. Net revenue before provision for uncollectibles in the six months ended June 30, 2015increased $594.5 million, or 26.2%, to $2.87 billion from $2.27 billion in the six months ended June 30, 2014. The increase in net revenue before provision for uncollectibles resulted primarily from increases in fee for service revenue of $557.3 million, and contract revenue of $39.3 million, partially offset by a decrease in other revenue of $2.2 million. In the six months ended June 30, 2015, fee for service revenue was 86.5% of net revenue before provision for uncollectibles compared to 84.6% in the same period of 2014, contract revenue was 12.8% of net revenue before provision before uncollectibles compared to 14.4% in the same period of 2014 and other revenue was 0.7% in 2015 and 0.9% in 2014. The increase in fee for service revenue before provision for uncollectibles was primarily a result of a 35.9% increase in total fee for service visits and procedures partially offset by a decrease in the rate per visit and procedure attributable to an increase in contractual adjustments related to changes in payor mix. The increase in contract revenue was due primarily to the impact of new and acquired contracts.

Provision for Uncollectibles. The provision for uncollectibles increased $192.8 million or 20.2%, to $1.15 billion in the six months ended June 30, 2015 from $954.1 million in the corresponding period in 2014. The provision for uncollectibles as a percentage of net revenue before provision for uncollectibles declined to 40.0% in the six months ended June 30, 2015 compared with 42.0% in the corresponding period of 2014. The provision for uncollectibles is primarily related to revenue generated under fee for service contracts that is not expected to be fully collected. The period-over-period increase in the provision for uncollectibles was due primarily to annual increases in gross fee schedules and increases in patient volumes and procedures. Changes in payor mix, particularly the level of self-pay fee for service visits, also have an impact on the provision for uncollectibles. For the six months ended June 30, 2015, self-pay fee for service visits were approximately 15.2% of the total fee for service visits compared to approximately 18.4% in the same period of 2014, which constrained the growth in the provision for uncollectibles between periods.

Net Revenue. Net revenue in the six months ended June 30, 2015increased $401.7 million or 30.5%, to $1.72 billion from $1.32 billion in the six months ended June 30, 2014. Acquisitions contributed 20.3%, same contract revenue contributed 5.6%, and net sales growth contributed 4.6% of the increase in period-over-period growth in net revenue. Within the acquisitions category, new hospital contracting opportunities that were initially developed by our sales and marketing process contributed 5.5% of overall net revenue growth between periods.

Total same contract revenue, which consists of contracts under management in both periods, increased $73.6 million, or 6.1%, to $1.29 billion in the six months ended June 30, 2015 compared to $1.22 billion in the six months ended June 30, 2014. Fee for service volume increases of 7.6% increased same contract revenue growth by 5.5%, while increases in same contract estimated collections on fee for service visits of 0.5% provided a 0.6% increase in same contract revenue growth between periods. The increase in the estimated collections per visit was primarily attributable to increased managed care and Medicare reimbursement rates, and favorable changes in payor mix. Contract and other revenue did not affect same contract revenue growth. Acquisitions contributed $267.9 million of growth in net revenue and net new contract revenue increased $60.3 million between periods. The 2015 year to date benefit for Medicaid parity revenue recognized is $1.9 million, of which $0.7 million is same contract revenue. $17.3 million of Medicaid parity revenue was recognized in the six months ended June 30, 2014, $16.4 million of which was same contract. Declines in Medicaid parity constrained consolidated revenue growth by 1.2% and same contract revenue growth 1.3% by between periods.

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We typically gain new contracts by replacing competitors at hospitals that currently outsource such services, obtaining new contracts from facilities that do not currently outsource and responding to contracting opportunities within the military healthcare system. Factors influencing new contracting opportunities include the depth and breadth of our service offerings, our reputation and experience, our ability to recruit and retain qualified clinicians, and pricing considerations when a subsidy or contract payment is required. Contracts are typically terminated due to economic considerations, a change in hospital administration or ownership, dissatisfaction with our service offerings or, primarily relating to our military staffing arrangements, at the end of the contract term.

The components of net revenue include revenue from contracts that have been in effect for prior periods (same contracts) and from net, new and acquired contracts during the periods, as set forth in the table below:

	Six Months Ended June 30,
	2014		2015
	(in thousands)
Same contracts:
Fee for service revenue	$	915,211	$	988,934
Contract and other revenue	300,381		300,216
Total same contracts	1,215,592		1,289,150
New contracts, net of terminations:
Fee for service revenue	44,235		108,919
Contract and other revenue	43,987		39,600
Total new contracts, net of terminations	88,222		148,519
Acquired contracts:
Fee for service revenue	12,070		238,129
Contract and other revenue	836		42,641
Total acquired contracts	12,906		280,770
Consolidated:
Fee for service revenue	971,516		1,335,982
Contract and other revenue	345,204		382,457
Total net revenue	$	1,316,720	$	1,718,439

The following table reflects the visits and procedures included within fee for service revenues described in the table above:

	Six Months Ended June 30,
	2014	2015
	(in thousands)
Fee for service visits and procedures:
Same contracts	5,376	5,782
New and acquired contracts, net of terminations	377	2,039
Total fee for service visits and procedures	5,753	7,821

Professional Service Expenses. Professional service expenses, which include physician and provider costs, billing and collection expenses, and other professional expenses, totaled $1.35 billion in the six months ended June 30, 2015 compared to $1.01 billion in the six months ended June 30, 2014, an increase of $339.7 million, or 33.6%. This increase between periods is primarily related to our acquisitions and net new contract growth and a 6.8% increase in same contract professional service expenses primarily associated with increases in provider compensation. Professional service expenses as a percentage of net revenue increased to 78.6% in the six months ended June 30, 2015 from 76.8% in the six months ended June 30, 2014.

Professional Liability Costs. Professional liability costs were $53.9 million in the six months ended June 30, 2015 compared to $43.9 million in the six months ended June 30, 2014, a increase of $10.0 million or 22.7%. The increase was

39

primarily attributed to an increase in provider hours including increases from acquisitions and an increase in allocation rates between periods. Professional liability costs as a percentage of net revenue were 3.1% in the six months ended June 30, 2015 and 3.3% in the six months ended June 30, 2014.

General and Administrative Expenses. General and administrative expenses increased $17.9 million or 13.4% to $152.1 million for the six months ended June 30, 2015 from $134.2 million in the six months ended June 30, 2014. General and administrative expenses included contingent purchase compensation expense of $15.8 million for the six months ended June 30, 2015 compared to $19.4 million of expense for the six months ended June 30, 2014. Excluding the contingent purchase compensation expense, general and administrative expense increased $21.6 million or 18.8%, to $136.4 million for the six months ended June 30, 2015 from $114.8 million in the six months ended June 30, 2014. The increase in general and administrative expenses was due primarily to acquisitions and growth in salaries and new positions, and increases in legal and professional fees between periods on a same contract basis. Total general and administrative expenses as a percentage of net revenue were 8.9% in the six months ended June 30, 2015 and 10.2% in the six months ended June 30, 2014. Excluding contingent purchase compensation expense, general and administrative expenses as a percentage of net revenue were 7.9% in the six months ended June 30, 2015 compared to 8.7% in the six months ended June 30, 2014.

Other Income. In the six months ended June 30, 2015, we recognized other income of $2.3 million compared to $3.8 million in the same period in 2014. The income recognized in 2015 is primarily related to the sale of our equity investment in a hospital-based telemedicine consultation provider and certain assets that were held for sale, partially offset by a loss on sale of assets related to our outsourced medical coding practice. In 2014 the income recognized includes a $2.3 million net gain on the sale and disposal of assets, including the sale of assets associated with our clinic operations and income related to the change in the fair value of assets related to our non-qualified deferred compensation plan.

Depreciation. Depreciation expense was $11.1 million in the six months ended June 30, 2015 compared to $9.5 million for the six months ended June 30, 2014. The increase of $1.6 million was primarily due to capital expenditures in 2015 and 2014.

Amortization. Amortization expense was $41.5 million in the six months ended June 30, 2015 compared to $22.2 million for the six months ended June 30, 2014. The increase of $19.2 million was primarily a result of an increase in other intangibles recognized in connection with our acquisitions in 2015 and 2014.

Net Interest Expense. Net interest expense increased $1.7 million to $8.6 million in the six months ended June 30, 2015, compared to $6.8 million in the corresponding period in 2014, primarily due to increased revolver borrowings between periods partially offset by a reduction of interest from the repayment of the Term B Loan facility in 2014.

Transaction Costs. Transaction costs were $3.3 million for the six months ended June 30, 2015 and $2.6 million for the six months ended June 30, 2014. These costs relate to advisory, legal, accounting and other fees incurred related to acquisition activity during the respective periods.

Earnings before Income Taxes. Earnings before income taxes in the six months ended June 30, 2015 were $99.3 million compared to $89.8 million in the six months ended June 30, 2014.

Provision for Income Taxes. The provision for income taxes was $42.3 million in the six months ended June 30, 2015 compared to $35.6 million in the six months ended June 30, 2014.

Net Earnings. Net earnings were $56.9 million in the six months ended June 30, 2015 compared to $54.2 million in the six months ended June 30, 2014.

Net (Loss) Earnings Attributable to Noncontrolling Interests. Earnings (loss) attributable to noncontrolling interests were a loss of $0.1 million for the six months ended June 30, 2015 and earnings of $0.1 million in the six months ended June 30, 2014.

Net Earnings Attributable to Team Health Holdings, Inc. Net earnings attributable to Team Health Holdings, Inc. were $57.0 million and $54.0 million for the six months ended June 30, 2015 and June 30, 2014, respectively.

Liquidity and Capital Resources

Our principal ongoing uses of cash are to meet working capital requirements, to fund debt obligations and to finance our capital expenditures and acquisitions. We believe that our cash needs, other than for significant acquisitions, will continue to be

40

met through the use of existing available cash, cash flows derived from future operating results and borrowings under our senior secured revolving credit facility.

Cash flow provided by operations for the six months ended June 30, 2015 was $18.2 million compared to $74.6 million in the same period in 2014. Included in operating cash flow were contingent purchase price payments of $8.9 million in the six months ended June 30, 2015 and $1.2 million in the same period in 2014. Excluding the impact of the contingent purchase payments, the operating cash flows in 2015 were $27.1 million compared to $75.9 million in 2014. Operating cash flow in the first half of 2015 reflects an increased level of accounts receivable funding associated with growth in the number of new and acquired contracts when compared to the prior year. Cash used in investing activities in the six months ended June 30, 2015 was $89.1 million compared to $21.9 million in the same period of 2014. The $67.1 million increase in cash used in investing activities was principally due to an increase in cash used for acquisitions between periods. Cash provided by financing activities in the six months ended June 30, 2015 was $102.1 million compared to cash provided of $8.4 million in the six months ended June 30, 2014. The change in financing activities between periods was primarily related to increased net revolver drawings, and proceeds from stock option exercises and the related tax benefit.

We spent $17.4 million in the first six months of 2015 and $12.0 million in the first six months of 2014 on capital expenditures. These expenditures were primarily for billing and information technology investments and related development projects along with projects in support of operational initiatives.

As of June 30, 2015, we had cash and cash equivalents of approximately $51.3 million and total outstanding debt of $868.3 million. There were no known liquidity restrictions or impairments on our cash and cash equivalents as of June 30, 2015. The outstanding debt as of June 30, 2015 includes borrowings under our revolving credit facility in the amount of $279.5 million incurred to fund our recently completed acquisitions. As of June 30, 2015, we had $370.5 million of available borrowings under our revolving credit facilities (without giving effect to $6.4 million of undrawn letters of credit). See Note 8 of the accompanying consolidated financial statements for a discussion of our indebtedness.

The senior credit facility agreement contains both affirmative and negative covenants, including limitations on our ability to incur additional indebtedness, sell material assets, retire, redeem or otherwise reacquire our capital stock, acquire the capital stock or assets of another business and pay dividends, and requires us to comply with a maximum first lien net leverage ratio, tested quarterly. At June 30, 2015, we were in compliance with all covenants under the senior credit facility agreement. The senior credit facility is secured by substantially all of our U.S. subsidiaries’ assets.

Subject to any contractual restrictions, the Company and its subsidiaries, affiliates or significant shareholders may, from time to time, in their sole discretion, purchase, repay, redeem or retire any of the Company’s outstanding equity securities in privately negotiated or open market transactions, by tender offer or otherwise.

We have historically been an acquirer of other physician staffing businesses and related interests. For the six months ended June 30, 2015, total net cash used in acquisitions, including contingent payments, was $93.7 million. As of June 30, 2015, we estimate future contingent payment obligations to be approximately $70.4 million for acquisitions made prior to June 30, 2015, which we expect to fund over a period of three years. $32.0 million was recorded as a liability on our balance sheet as of June 30, 2015, while the remaining estimated liability of $38.4 million will be recorded as contingent purchase and other acquisition compensation expense over the remaining performance period. See Note 3 of the accompanying consolidated financial statements for a discussion of our acquisitions and related contingent obligations.

We are currently in discussions with certain physician staffing businesses regarding potential acquisition opportunities. If we consummate any of these potential acquisitions, we would expect to fund such acquisitions using our existing cash, through borrowings under our revolving credit facility, or through the issuance of additional debt or equity.

Effective March 12, 2003, we began providing for professional liability risks in part through captive insurance companies. Prior to such date, we insured such risks principally through the commercial insurance market. The change in the professional liability insurance program initially resulted in increased cash flow due to the retention of cash formerly paid out in the form of insurance premiums to a commercial insurance company coupled with a long period (typically 2-4 years or longer on average) before cash payout of such losses occurs. A portion of such cash retained is retained within our captive insurance companies and therefore is not immediately available for general corporate purposes. Investments held by the Company and our captive insurance subsidiaries are carried at fair market value. As of June 30, 2015, these investments totaled approximately $103.2 million, including a $1.6 million net unrealized gain. See Note 5 of the accompanying consolidated financial statements for a discussion of the investments held by the Company and our captive insurance subsidiaries.

Effective June 1, 2014, we renewed our fronting carrier program with a commercial insurance carrier through May 31, 2016. In June 2015, we paid cash premiums of approximately $15.8 million to the commercial insurance carrier. For the six months ended June 30, 2015, we funded approximately $16.7 million of premiums to our captive insurance subsidiaries.

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We present Adjusted EBITDA as a supplemental measure of our performance. We define Adjusted EBITDA as net earnings attributable to Team Health Holdings, Inc. before interest expense, taxes, depreciation and amortization, as further adjusted to exclude the non-cash items and the other adjustments shown in the table below. We present Adjusted EBITDA because we believe it assists investors and analysts in comparing our performance across reporting periods on a consistent basis by excluding items that we do not believe are indicative of our core operating performance.

Adjusted EBITDA is not a measurement of financial performance or liquidity under generally accepted accounting principles. In evaluating our performance as measured by Adjusted EBITDA, management recognizes and considers the limitations of this measure. Adjusted EBITDA does not reflect certain cash expenses that we are obligated to make, and although depreciation and amortizations are non-cash charges, assets being depreciated and amortized will often have to be replaced in the future, and Adjusted EBITDA does not reflect any cash requirements for such replacements. In addition, other companies in our industry may calculate Adjusted EBITDA differently than we do or may not calculate it at all, limiting its usefulness as a comparative measure. Because of these limitations, Adjusted EBITDA should not be considered in isolation or as a substitute for net earnings, operating income, cash flows from operating, investing or financing activities, or any other measure calculated in accordance with generally accepted accounting principles.

The following table sets forth a reconciliation of net earnings attributable to Team Health Holdings, Inc. to Adjusted EBITDA:

	Three Months Ended June 30,					Six Months Ended June 30,
	2014			2015		2014			2015
	(in thousands)
Net earnings attributable to Team Health Holdings, Inc.	$	30,203		$	28,935	$	54,048		$	56,989
Interest expense, net	3,429			4,571		6,837			8,560
Provision for income taxes	19,630			21,186		35,647			42,341
Depreciation	4,918			5,560		9,489			11,134
Amortization	11,086			21,175		22,212			41,452
Other (income) expenses, net(a)	(1,590		)	961		(3,750		)	(2,321		)
Contingent purchase and other acquisition compensation expense(b)	9,254			7,856		19,398			15,760
Transaction costs(c)	1,609			2,215		2,627			3,301
Equity based compensation expense(d)	6,374			5,670		9,348			9,213
Insurance subsidiaries interest income	498			519		998			1,023
Severance and other charges	833			729		1,181			1,247
Adjusted EBITDA	$	86,244		$	99,377	$	158,035		$	188,699

(a) Reflects gain or loss on sale of assets, realized gains on investments, and changes in fair value of investments associated with the Company’s non-qualified retirement plan.

(b) Reflects expense recognized for historical and estimated future contingent payments and other compensation expense associated with acquisitions.

(c) Reflects expenses associated with accounting, legal, due diligence and other transaction fees related to acquisition activity.

(d) Reflects costs related to equity awards granted under the Team Health Holdings, Inc. 2009 Amended and Restated Stock Incentive Plan and the 2010 Nonqualified Stock Purchase Plan.

Inflation

We do not believe that general inflation in the U.S. economy has had a material impact on our financial position or results of operations.

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Seasonality

Historically, our revenues and operating results have reflected minimal seasonal variation due to the significance of revenues derived from patient visits to emergency departments, which are generally open on a year-round basis, and also due to our geographic diversification. Revenue from our non-emergency department staffing lines is dependent on a healthcare facility being open during selected time periods. Revenue in such instances will fluctuate depending upon such factors as the number of holidays in the period.

Recently Issued Accounting Standards

See Note 2 of the notes to the consolidated financial statements for a discussion of recently issued accounting standards.

Item 3. Quantitative and Qualitative Disclosures About Market Risk

The Company is exposed to market risk related to changes in interest rates. The Company does not use derivative financial instruments for speculative or trading purposes.

The Company’s earnings are affected by changes in short-term interest rates as a result of its borrowings under its term loan facility.

At June 30, 2015, the fair value of the Company’s total debt was approximately $848.5 million, which had a carrying value of $868.3 million, all of which was variable debt. If the market interest rates for the Company’s variable rate borrowings had averaged 1% more subsequent to December 31, 2014, the Company’s interest expense would have increased, and earnings before income taxes would have decreased, by approximately $4.1 million for the six months ended June 30, 2015. This analysis does not consider the effects of the reduced level of overall economic activity that could exist in such an environment. Further, in the event of a change of such magnitude, management could take actions in an attempt to further mitigate its exposure to the change. However, due to the uncertainty of the specific actions that would be taken and their possible effects, the sensitivity analysis assumes no changes in the Company’s financial structure.

Item 4. Controls and Procedures

We maintain “disclosure controls and procedures,” as defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (Exchange Act), that are designed to ensure that information required to be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to our management, including our principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure. Any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving desired objectives. As of June 30, 2015, we conducted an evaluation under the supervision and with the participation of our management, including our Chief Executive Officer and Executive Vice President and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures. Based on that evaluation, our Chief Executive Officer and Chief Financial Officer concluded that as of June 30, 2015, our disclosure controls and procedures were effective at the reasonable assurance level.

Changes in Internal Control Over Financial Reporting: There were no changes in our internal control over financial reporting (as that term is defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act) that occurred during the three months ended June 30, 2015 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

43

PART II. OTHER INFORMATION

Item 1. Legal Proceedings

For discussion of various legal proceedings we are involved in from time to time, see Part I, Item 3 of our annual report on Form 10-K for the year ended December 31, 2014 filed with the Securities and Exchange Commission on February 10, 2015.

Item 1A. Risk Factors

For a discussion of our potential risks and uncertainties, please see “Risk Factors” in Part 1, Item 1A of our annual report on Form 10-K for the year ended December 31, 2014, filed with the Securities and Exchange Commission on February 10, 2015. In addition, please see “Management’s Discussion and Analysis of Financial Condition and Results of Operations—Risk Factors and Trends that Affect Our Results of Operations” herein and the 2014 Form 10-K. There have been no material changes to the risk factors disclosed in Part 1, Item 1A of the 2014 Form 10-K.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

None.

Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

Members of the Company’s board of directors and certain employees, including senior executives and others who regularly have access to material non-public information, may from time to time enter into trading plans (Rule 10b5-1plans) designed to comply with the Company’s Securities Trading Policy and the requirements of Rule 10b5-1 promulgated by the Securities and Exchange Commission under Section 10(b) of the Securities Exchange Act of 1934, as amended.

As of the date of this report, David P. Jones, our Executive Vice President and Chief Financial Officer, was the only executive officer that had entered into a Rule 10b5-1 trading plan that remains in effect.

The Company does not undertake any obligation to report Rule 10b5-1 plans that may be adopted by any officers or directors of the Company in the future, or to report any modifications or termination of any publicly announced plan or to report any plan adopted by an employee who is not an executive officer.

44

Item 6. Exhibits

3.1	Certificate of Incorporation of Team Health Holdings, Inc. (incorporated by reference to Exhibit 3.1 of the Current Report on Form 8-K, filed on December 18, 2009: File No. 001-34583)
3.2	Amended and Restated By-laws of Team Health Holdings, Inc. (incorporated by reference to Exhibit 3.1 of the Current Report on Form 8-K, filed on April 18, 2013: File No. 001-34583)
10.1	Transition Services Agreement dated May 29, 2015, between Team Health Holdings, Inc. and Heidi S. Allen (incorporated by reference to Exhibit 10.1 of the Current Report on Form 8-K, filed on June 10, 2015: File No. 001-34583)*
31.1	Certification by Michael D. Snow for Team Health Holdings, Inc. dated August 4, 2015 as required by Section 302 of the Sarbanes-Oxley Act of 2002. (filed herewith)
31.2	Certification by David P. Jones for Team Health Holdings, Inc. dated August 4, 2015 as required by Section 302 of the Sarbanes-Oxley Act of 2002. (filed herewith)
32.1	Certification by Michael D. Snow for Team Health Holdings, Inc. dated August 4, 2015 as required by Section 906 of the Sarbanes-Oxley Act of 2002. (filed herewith)
32.2	Certification by David P. Jones for Team Health Holdings, Inc. dated August 4, 2015 as required by Section 906 of the Sarbanes-Oxley Act of 2002. (filed herewith)
101	The following financial information from the Company’s Quarterly Report on Form 10-Q for the quarter ended June 30, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets at June 30, 2015 and December 31, 2014, (ii) Consolidated Statement of Comprehensive Earnings for the three and six months ended June 30, 2015 and 2014, (iii) Consolidated Statement of Cash Flows for the six months ended June 30, 2015 and 2014, and (iv) Notes to Consolidated Financial Statements.

* Management contracts or compensatory plans or arrangements

45

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	TEAM HEALTH HOLDINGS, INC.
August 4, 2015	/S/    MICHAEL D. SNOW
	Michael D. Snow President and Chief Executive Officer
August 4, 2015	/S/    DAVID P. JONES
	David P. Jones Executive Vice President and Chief Financial Officer

46

EX-31.1

Exhibit 31.1

Certifications

I, Michael D. Snow, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the quarter ended June 30, 2015 of Team Health Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

By:	/S/    MICHAEL D. SNOW
	Michael D. Snow President and Chief Executive Officer

Date: August 4, 2015

EX-31.2

Exhibit 31.2

Certifications

I, David P. Jones, certify that:

1. I have reviewed this quarterly report on Form 10-Q for the quarter ended June 30, 2015 of Team Health Holdings, Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f) for the registrant and have:

a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

By:	/S/    DAVID P. JONES
	David P. Jones Executive Vice President and Chief Financial Officer

Date: August 4, 2015

EX-32.1

Exhibit 32.1

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Team Health Holdings, Inc. (the “Company”) on Form 10-Q (“Form 10-Q”) for the quarter ended June 30, 2015 as filed with the Securities and Exchange Commission on the date hereof, I, Michael D. Snow, President and Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

/S/    MICHAEL D. SNOW        

Michael D. Snow

President and Chief Executive Officer

Date: August 4, 2015

EX-32.2

Exhibit 32.2

CERTIFICATION PURSUANT TO

18 U.S.C. SECTION 1350,

AS ADOPTED PURSUANT TO

SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002

In connection with the Quarterly Report of Team Health Holdings, Inc. (the “Company”) on Form 10-Q (“Form 10-Q”) for the quarter ended June 30, 2015 as filed with the Securities and Exchange Commission on the date hereof, I, David P. Jones, Executive Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, that:

(1)The Form 10-Q fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

(2)The information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of the Company.

/S/    DAVID P. JONES        

David P. Jones

Executive Vice President and Chief Financial Officer

Date: August 4, 2015

XML

Acquisitions and Contingent Purchase Obligations (Details Textual) visit in Thousands, $ in Thousands		3 Months Ended		6 Months Ended
	Jul. 31, 2015 visit	Jun. 30, 2015 USD ($)	Jun. 30, 2014 USD ($)	Jun. 30, 2015 USD ($) visit Business	Jun. 30, 2014 USD ($)	Dec. 31, 2014 USD ($)
Business Acquisition [Line Items]
Total cash paid for acquisitions				$ 84,792	$ 6,517
Number of Businesses Acquired | Business				5
Fee for Service Patient Visits | visit				14,000
Estimated contingent consideration accounted for as compensation expense		$ 70,400		$ 70,400
Accrued Contingent Purchase Liability		31,963		31,963		$ 23,584
Remaining estimated liability to be recorded as contingent purchase compensation expense		38,441		38,441
Contingent purchase compensation expense recognized		7,856	$ 9,254	15,760	19,398
Recognized transaction costs		2,215	$ 1,609	3,301	2,627
Current Year Acquisitions
Business Acquisition [Line Items]
Consideration paid for 2015 acquisitions, net of cash and cash equivalents of $83		82,424		82,424
Estimated contingent consideration accounted for as compensation expense		$ 6,900		6,900
Prior Year Acquisitions [Member]
Business Acquisition [Line Items]
Total cash paid for acquisitions					2,368
Changes to the purchase price allocation				1,946
Subsequent Event [Member]
Business Acquisition [Line Items]
Fee for Service Patient Visits | visit	30
General and Administrative Expense [Member]
Business Acquisition [Line Items]
Contingent purchase compensation expense recognized				15,760	19,398
General and Administrative Expense [Member] | Non-owner payments [Member]
Business Acquisition [Line Items]
Contingent purchase compensation expense recognized				$ 900	$ 100

XML

Long-Term Debt (Details Textual) - Jun. 30, 2015 - Subsequent Event Type [Domain] - USD ($) $ in Thousands	Total
Debt Instrument [Line Items]
Long-term debt	$ 868,250
Standby letters of credit [Member]
Debt Instrument [Line Items]
Letters of credit outstanding	6,400
Line of Credit [Member] | Revolving Credit Facility [Member]
Debt Instrument [Line Items]
Borrowing capacity	$ 650,000
Revolver maturity date	Oct. 02, 2019
Percentage points added to LIBOR	1.75%
Unused capacity interest rate	0.30%
Long-term debt	$ 279,500
Notes Payable to Banks [Member] | Term A Loan Facility [Member]
Debt Instrument [Line Items]
Face amount of debt instrument	$ 600,000
Term A maturity date	Oct. 02, 2019
Percentage points added to LIBOR	1.75%
Weighted average interest rate	1.89%
Long-term debt	$ 588,750

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Net Revenue (Details Textual) - Jun. 30, 2015 - visit visit in Millions	Total
Net Revenue (Textual) [Abstract]
Fee for Service Patient Visits	14
Doubtful accounts related to gross fees for fee-for-service patient visits	98.00%
Outstanding self-pay fee-for-service patient accounts	93.00%

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Professional Liability Insurance (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Summary of professional liability loss reserves
Estimated losses under self-insured programs	$ 208,985	$ 190,117
Estimated losses under commercial insurance programs	84,087	74,248
Professional liability loss reserves	293,072	264,365
Less estimated payable within one year	74,260	82,735
Professional liability loss reserves, Noncurrent	$ 218,812	$ 181,630

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Investments (Details Textual) - USD ($) $ in Thousands	3 Months Ended	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Investments (Textual) [Abstract]
Recorded gain on the sale of investments		$ 50
Supplemental employee retirement plan	$ 42,126	42,126		$ 37,237
Proceeds from the sale of investments		6,560	$ 0
Realized gain on sale of telemedicine consultation business	$ 2,000
Hospital-based telemedicine consultation provider [Member]
Investments (Textual) [Abstract]
Proceeds from the sale of investments		$ 4,000

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Accumulated Other Comprehensive Income (Tables)

6 Months Ended

Jun. 30, 2015

Statement of Comprehensive Income [Abstract]

Schedule of Accumulated Other Comprehensive Income (Loss)

The changes in accumulated other comprehensive earnings (loss) related to available-for-sale securities were as follows (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2015			2014			2015
Balance at beginning of period	$	1,049		$	1,668		$	447		$	1,695
Other comprehensive earnings:
Net unrealized gain (loss)	765			(896		)	1,706			(887		)
Tax benefit (expense)	(248		)	340			(573		)	337
Total other comprehensive earnings before reclassifications, net of tax	517			(556		)	1,133			(550		)
Net amount reclassified to earnings(1)	(56		)	(17		)	(70		)	(50		)
Tax benefit (expense)(2)	—			—			—			—
Total amount reclassified from accumulated other comprehensive earnings, net of tax(3)	(56		)	(17		)	(70		)	(50		)
Total other comprehensive earnings (loss)	461			(573		)	1,063			(600		)
Balance at end of period	$	1,510		$	1,095		$	1,510		$	1,095

(1) This amount was included in Other (income) expenses on the accompanying Consolidated Statement of Comprehensive Earnings.

(2) These amounts were included in Provision for income taxes on the accompanying Consolidated Statement of Comprehensive Earnings.

(3) A positive amount indicates a corresponding charge to earnings and a negative amount indicates a corresponding benefit to earnings.

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Professional Liability Insurance (Details Textual) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Dec. 31, 2014
Malpractice Insurance [Line Items]
Estimated losses under self-insured programs	$ 208,985	$ 190,117
Professional Liability Insurance (Textual) [Abstract]
Causes of Increase (Decrease) in Liability for Unpaid Claims and Claims Adjustment Expense, Amount	$ 0
Professional liability reserves, discount rate	1.40%	1.10%
Estimated IBNR
Malpractice Insurance [Line Items]
Estimated losses under self-insured programs	$ 136,900	$ 117,300
Specific Case Reserves
Malpractice Insurance [Line Items]
Estimated losses under self-insured programs	72,100	72,800
Settled But Not Yet Funded Specific Case Reserves
Malpractice Insurance [Line Items]
Estimated losses under self-insured programs	2,300	1,900
Unsettled Specific Case Reserves
Malpractice Insurance [Line Items]
Estimated losses under self-insured programs	$ 69,800	$ 70,900

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Fair Value Measurements (Tables)

6 Months Ended

Jun. 30, 2015

Fair Value Disclosures [Abstract]

Summary of assets and liabilities measured at fair value on a recurring basis

The following table provides information on those assets and liabilities the Company currently measures at fair value on a recurring basis as of December 31, 2014 and June 30, 2015 (in thousands):

	Carrying Amount in Consolidated Balance Sheet December 31, 2014		Fair Value December 31, 2014		Fair Value Level 1		Fair Value Level 2		Fair Value Level 3
Investments of insurance subsidiaries:
Money market funds	$	18,577	$	18,577	$	18,577	$	—	$	—
U. S. Treasury securities	1,003		1,003		—		1,003		—
Municipal bonds	83,694		83,694		—		83,694		—
Mutual funds	3,228		3,228		—		3,228		—
Private investments	6,444		6,444		—		—		6,444
Total investments of insurance subsidiaries	$	112,946	$	112,946	$	18,577	$	87,925	$	6,444
Supplemental employee retirement plan investments:
Mutual funds	$	37,237	$	37,237	$	—	$	37,237	$	—

	Carrying Amount in Consolidated Balance Sheet June 30, 2015		Fair Value June 30, 2015		Fair Value Level 1		Fair Value Level 2		Fair Value Level 3
Investments of insurance subsidiaries:
Money market funds	$	8,717	$	8,717	$	8,717	$	—	$	—
Municipal bonds	89,617		89,617		—		89,617		—
Mutual funds	239		239		—		239		—
Private investments	4,619		4,619		—		—		4,619
Total investments of insurance subsidiaries	$	103,192	$	103,192	$	8,717	$	89,856	$	4,619
Supplemental employee retirement plan investments:
Mutual funds	$	42,126	$	42,126	$	—	$	42,126	$	—

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Goodwill and Other Intangible Assets (Details 1) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Summary of intangible assets and related amortization
Gross Carrying Amount	$ 508,774		$ 508,774		$ 474,597
Accumulated Amortization	(172,173)		(172,173)		(133,403)
Aggregate amortization expense:
For the six months ended June 30, 2015	21,175	$ 11,086	41,452	$ 22,212
Estimated amortization expense:
For the remainder of the year ended December 31, 2015	40,512		40,512
For the year ended December 31, 2016	78,380		78,380
For the year ended December 31, 2017	72,543		72,543
For the year ended December 31, 2018	60,252		60,252
For the year ended December 31, 2019	51,463		51,463
For the years ended December 31, 2020 and thereafter	33,451		33,451
Contracts
Summary of intangible assets and related amortization
Gross Carrying Amount	488,204		488,204		455,247
Accumulated Amortization	(163,803)		(163,803)		(126,191)
Other
Summary of intangible assets and related amortization
Gross Carrying Amount	20,570		20,570		19,350
Accumulated Amortization	$ (8,370)		$ (8,370)		$ (7,212)

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Investments (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Summary of amortized cost basis and aggregate fair value of available-for-sale securities by investment type
Cost Basis	$ 101,597	$ 110,392
Gross Unrealized Gains	2,009	2,619
Gross Unrealized Losses	(414)	(65)
Fair Value	103,192	112,946
Money market funds
Summary of amortized cost basis and aggregate fair value of available-for-sale securities by investment type
Cost Basis	8,717	18,577
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	8,717	18,577
U. S. Treasury securities
Summary of amortized cost basis and aggregate fair value of available-for-sale securities by investment type
Cost Basis		1,003
Gross Unrealized Gains		0
Gross Unrealized Losses		0
Fair Value		1,003
Municipal bonds
Summary of amortized cost basis and aggregate fair value of available-for-sale securities by investment type
Cost Basis	88,006	81,120
Gross Unrealized Gains	2,009	2,619
Gross Unrealized Losses	(398)	(45)
Fair Value	89,617	83,694
Mutual funds
Summary of amortized cost basis and aggregate fair value of available-for-sale securities by investment type
Cost Basis	239	3,228
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	239	3,228
Private investments
Summary of amortized cost basis and aggregate fair value of available-for-sale securities by investment type
Cost Basis	4,635	6,464
Gross Unrealized Gains	0	0
Gross Unrealized Losses	(16)	(20)
Fair Value	$ 4,619	$ 6,444

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Acquisitions and Contingent Purchase Obligations (Details 2) - Jun. 30, 2015 - USD ($) $ in Thousands	Total
Business Combination, Separately Recognized Transactions [Line Items]
Contingent purchase liability at December 31, 2014	$ 23,584
Payments	(9,853)
Contingent purchase and other acquisition compensation expense recognized	15,760
Contingent purchase liability recognized at acquisition date	2,472
Contingent purchase liability at June 30, 2015	$ 31,963

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Long-Term Debt (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Schedule of long-term debt
Long-term debt	$ 868,250
Current maturities of long-term debt	(305,750)	$ (227,750)
Long term debt	562,500	$ 577,500
Term A Loan Facility [Member] | Notes Payable to Banks [Member]
Schedule of long-term debt
Long-term debt	588,750
Revolving Credit Facility [Member] | Line of Credit [Member]
Schedule of long-term debt
Long-term debt	$ 279,500

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Subsequent Event (Details) - USD ($) $ / shares in Units, $ in Thousands	Aug. 04, 2015	Jun. 30, 2015
Subsequent Event [Line Items]
Long-term debt		$ 868,250
Subsequent Event [Member]
Subsequent Event [Line Items]
Price per IPC share	$ 80.25
Merger consideration	$ 1,600,000
Potential termination fee	47,000
Term B Loan Facility [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Face amount of debt instrument	965,000
Line of Credit [Member] | Subsequent Event [Member]
Subsequent Event [Line Items]
Face amount of debt instrument	$ 545,000
Line of Credit [Member] | Revolving Credit Facility [Member]
Subsequent Event [Line Items]
Line of Credit Facility, Current Borrowing Capacity		650,000
Long-term debt		279,500
Notes Payable to Banks [Member] | Term Loan Facility [Member]
Subsequent Event [Line Items]
Face amount of debt instrument		600,000
Long-term debt		$ 588,750

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Share-based Compensation (Details Textual) - USD ($) $ / shares in Units, $ in Millions	1 Months Ended	6 Months Ended
	Apr. 30, 2015	Jun. 30, 2015
Two Thousand Nine Stock Plan [Member]
Share-Based Compensation (Textual) [Abstract]
Total number of shares of common stock that may be issued		15,100,000
Number of shares available for grant		2,417,000
Options granted in period		510,000
Risk free interest rate		1.60%
Expected volatility rate		33.80%
Expected term		5 years 3 months
Weighted average grant date fair value		$ 20.27
Two Thousand Nine Stock Plan [Member] | Stock options
Share-Based Compensation (Textual) [Abstract]
Unrecognized compensation expense, options		$ 17.5
Two Thousand Nine Stock Plan [Member] | Restricted stock awards
Share-Based Compensation (Textual) [Abstract]
Restricted stock awards granted		183,000
Unrecognized compensation expense, restricted stock		$ 21.2
2010 Employee Stock Purchase Plan [Member] | Employee Stock [Member]
Share-Based Compensation (Textual) [Abstract]
Total number of shares of common stock that may be issued		600,000
Discount on shares purchased		5.00%
Contributions to the stock purchase plan		$ 1.3
Stock Issued During Period, Shares, Employee Stock Purchase Plans	40,000
2010 Nonqualified Stock Purchase Plan [Member] | Nonqualified Stock Purchase Plan [Member]
Share-Based Compensation (Textual) [Abstract]
Total number of shares of common stock that may be issued		800,000
Discount on shares purchased		5.00%
Contributions to the stock purchase plan		$ 0.7
Shares issued during period under stock purchase plans	21,000
Minimum [Member] | Two Thousand Nine Stock Plan [Member] | Restricted stock awards
Share-Based Compensation (Textual) [Abstract]
Award Vesting Period		3 years
Maximum [Member] | Two Thousand Nine Stock Plan [Member] | Restricted stock awards
Share-Based Compensation (Textual) [Abstract]
Award Vesting Period		4 years

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Net Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Schedule of net revenue
Net fee for service revenue before provision for uncollectibles	$ 1,273,345	$ 993,345	$ 2,479,216	$ 1,921,884
Percentage of net fee-for-service revenue before provision for uncollectibles	145.00%	147.10%	144.30%	146.00%
Contract revenue before provision for uncollectibles	$ 183,727	$ 162,451	$ 367,367	$ 328,045
Percentage of contract before provision for uncollectibles	20.90%	24.10%	21.40%	24.90%
Other	$ 9,912	$ 10,819	$ 18,690	$ 20,859
Percentage, Other	1.20%	1.60%	1.00%	1.60%
Net revenue before provision for uncollectibles	$ 1,466,984	$ 1,166,615	$ 2,865,273	$ 2,270,788
Percentage of net revenue before provision for uncollectibles	167.10%	172.80%	166.70%	172.50%
Provision for uncollectibles	$ (589,029)	$ (491,545)	$ (1,146,834)	$ (954,068)
Percentage of provision for uncollectibles	(67.10%)	(72.80%)	(66.70%)	(72.50%)
Net revenue	$ 877,955	$ 675,070	$ 1,718,439	$ 1,316,720
Percentage of net revenue	100.00%	100.00%	100.00%	100.00%
Medicare [Member]
Schedule of net revenue
Net fee for service revenue before provision for uncollectibles	$ 178,168	$ 129,617	$ 346,927	$ 253,008
Percentage of net fee-for-service revenue before provision for uncollectibles	20.30%	19.20%	20.20%	19.20%
Medicaid [Member]
Schedule of net revenue
Net fee for service revenue before provision for uncollectibles	$ 157,601	$ 116,745	$ 310,136	$ 225,674
Percentage of net fee-for-service revenue before provision for uncollectibles	18.00%	17.30%	18.00%	17.10%
Commercial and managed care [Member]
Schedule of net revenue
Net fee for service revenue before provision for uncollectibles	$ 448,043	$ 322,155	$ 860,000	$ 608,254
Percentage of net fee-for-service revenue before provision for uncollectibles	51.00%	47.70%	50.00%	46.20%
Self-pay [Member]
Schedule of net revenue
Net fee for service revenue before provision for uncollectibles	$ 464,089	$ 397,495	$ 908,342	$ 783,746
Percentage of net fee-for-service revenue before provision for uncollectibles	52.90%	58.90%	52.90%	59.50%
Other [Member]
Schedule of net revenue
Net fee for service revenue before provision for uncollectibles	$ 19,921	$ 21,095	$ 40,202	$ 42,111
Percentage of net fee-for-service revenue before provision for uncollectibles	2.30%	3.10%	2.30%	3.20%
Unbilled Revenue [Member]
Schedule of net revenue
Net fee for service revenue before provision for uncollectibles	$ 5,523	$ 6,238	$ 13,609	$ 9,091
Percentage of net fee-for-service revenue before provision for uncollectibles	0.60%	0.90%	0.80%	0.70%

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Acquisitions and Contingent Purchase Obligations

6 Months Ended

Jun. 30, 2015

Business Combinations [Abstract]

Acquisitions and Contingent Purchase Obligations

Acquisitions and Contingent Purchase Obligations

Acquisitions

During the six months ended June 30, 2015, the Company paid a total of $84.8 million related to acquisitions including $82.4 million for the operations of five businesses acquired during the period. These acquisitions consist of the following:

Acquired Operations	Date Acquired	Business Service Line
Princeton Emergency Physicians	May 2015	Emergency Medicine
Professional Anesthesia Service	May 2015	Anesthesiology
Ruby Crest Emergency Medicine	February 2015	Emergency Medicine
Capital Emergency Associates	February 2015	Emergency/Hospital Medicine
EOS Medical Group	January 2015	Emergency Medicine

These acquisitions have expanded the Company’s presence in emergency medicine, hospital medicine and anesthesia staffing in those respective markets. The results of operations of the acquired businesses have been included in the Company’s consolidated financial statements beginning on the acquisition date.

The purchase price for these acquisitions was allocated, based on management’s estimates, in accordance with ASC Topic 805, “Business Combinations” (ASC 805). The Company’s purchase price allocation for business combinations completed during recent periods is preliminary and may be subject to revision as additional information about the fair value of acquired working capital becomes available. Additional information, which existed as of the acquisition date but at that time was unknown to the Company, may become known to the Company during the remainder of the measurement period, a period not to exceed 12 months from the acquisition date. Adjustments in the purchase price allocation may require a recasting of the amounts allocated to goodwill retroactive to the period in which the acquisition occurred. The purchase price for the acquisitions completed during the six months ended June 30, 2015 was allocated as shown in the table below (in thousands):

Accounts receivable	$	3,188
Prepaid expenses and other assets	5
Other intangibles (consisting of physician and hospital agreements)	36,860
Goodwill (of which $18.3 million is tax deductible)	55,541
Accounts payable	(456		)
Accrued compensation and physician payable	(484		)
Other accrued liabilities	(240		)
Deferred income taxes	(9,933		)
Contingent purchase liabilities	(2,057		)
Consideration paid for 2015 acquisitions, net of cash and cash equivalents of $83	82,424
Additional consideration paid for previous acquisitions	2,368
Total cash paid for acquisitions	$	84,792

During 2015, factors became known that resulted in changes to the purchase price allocation of assets and liabilities, existing at the date of acquisition, related to certain acquisitions completed during 2014. This change resulted in an increase to accrued liabilities and an increase to goodwill of $1.9 million.

The following unaudited pro forma information combines the consolidated results of operations of the Company and the historical financial results of the acquisitions completed during 2014 and 2015 as if the transactions had occurred on January 1, 2014 (in thousands, except for per share data):

	Six Months Ended June 30,
	2014		2015
Net revenue	$	1,400,577	$	1,740,552
Net earnings attributable to Team Health Holdings, Inc.	58,262		58,319
Net earnings per share of Team Health Holdings, Inc.
Basic	$	0.83	$	0.81
Diluted	$	0.81	$	0.80
Weighted average shares outstanding:
Basic	69,996		71,666
Diluted	71,722		73,137

The pro forma results are based on estimates and assumptions, which the Company believes are reasonable and do not necessarily represent results that would have occurred if the acquisitions had taken place at the beginning of the periods, nor are they indicative of the future results of these combined operations.

In July 2015, the Company completed the acquisition of the operations of an anesthesia staffing business located in New York. This acquisition, which was funded with existing cash, will add more than 30,000 annual anesthesia cases to the Company's existing anesthesia operations. The Company is still in the process of completing the purchase price allocation for this acquisition.

Contingent Purchase Obligations

In accordance with ASC 805, when contingent payments are tied to continuing employment, such amounts are recognized ratably over the defined performance period as compensation expense which is included as a component of general and administrative expense (and parenthetically disclosed with other acquisition-related compensation expense) in the results of the Company’s operations. The payment of contingent purchase obligations tied to continuing employment is included as a component of operating cash flows.

As of June 30, 2015, the Company estimates it may have to pay $70.4 million (including $6.9 million related to transactions completed during 2015) in future contingent payments for acquisitions made prior to June 30, 2015 based upon the current projected performance of the acquired operations of which $32.0 million is recorded as a liability in other liabilities and other non-current liabilities on the Company’s consolidated balance sheet. The remaining estimated liability of $38.4 million will be recorded as contingent purchase compensation expense over the remaining performance periods. The current estimate of future contingent payments could increase or decrease depending upon the actual performance of the acquisition over the respective performance periods. These payments will be made should the acquired operations achieve the financial targets or certain contract terms as agreed to in the respective acquisition agreements, including the requirements for continuing employment. When measured on a recurring basis, this liability is considered Level 3 in the fair value hierarchy due to the use of unobservable inputs to measure fair value.

The contingent purchase and other acquisition compensation expense recognized for the six months ended June 30,2014 and 2015 was $19.4 million and $15.8 million, respectively. Included in the expense recognized in 2014 and 2015 is $0.1 million and $0.9 million, respectively, related to acquisition related payments made to non-owners of the acquired operations.

The changes to the Company’s accumulated contingent purchase liability for the six months ended June 30, 2015 are as follows (in thousands):

Contingent purchase liability at December 31, 2014	$	23,584
Payments	(9,853		)
Contingent purchase and other acquisition compensation expense recognized	15,760
Contingent purchase liability recognized at acquisition date	2,472
Contingent purchase liability at June 30, 2015	$	31,963

Estimated unrecognized contingent purchase compensation expense as of June 30, 2015 is as follows (in thousands):

For the remainder of the year ended December 31, 2015	$	14,256
For the year ended December 31, 2016	21,436
For the year ended December 31, 2017	2,683
For the year ended December 31, 2018	52
For the year ended December 31, 2019	14
	$	38,441

In the six months ended June 30, 2014 and 2015, the Company recognized transaction costs of $2.6 million and $3.3 million, respectively, which related to external costs associated with due diligence and acquisition activity.

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Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Basic and diluted earnings per share
Net earnings attributable to Team Health Holdings, Inc. (numerator for basic and diluted earnings per share)	$ 28,935	$ 30,203	$ 56,989	$ 54,048
Denominator:
Weighted average shares outstanding	71,956	70,154	71,666	69,996
Stock options	1,374	1,525	1,220	1,520
Restricted awards	270	218	249	205
Stock purchase plans	2	1	2	1
Shares used for diluted earnings per share	73,602	71,898	73,137	71,722
Basic net earnings per share of Team Health Holdings, Inc.	$ 0.40	$ 0.43	$ 0.80	$ 0.77
Diluted net earnings per share of Team Health Holdings, Inc.	$ 0.39	$ 0.42	$ 0.78	$ 0.75
Stock options
Denominator:
Securities excluded from diluted earnings per share of Team Health Holdings, Inc. because they were antidilutive:	240	782	606	671
Restricted stock awards
Denominator:
Securities excluded from diluted earnings per share of Team Health Holdings, Inc. because they were antidilutive:	0	0	0	0

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Investments (Details 1) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Summary of amortized cost basis and aggregate fair value of available-for-sale securities by contractual maturities
Due in less than one year, Cost Basis	$ 14,791	$ 25,186
Due after one year through five years, Cost Basis	57,591	53,735
Due after five years through ten years, Cost Basis	21,424	19,859
Due after ten years, Cost Basis	2,917	1,920
Total Cost Basis	96,723	100,700
Due in less than one year, Fair Value	14,841	25,274
Due after one year through five years, Fair Value	58,823	55,366
Due after five years through ten years, Fair Value	21,770	20,660
Due after ten years, Fair Value	2,900	1,974
Total Fair Value	98,334	103,274
Gross Unrealized Gain	2,009	2,619
Gross Unrealized Loss	(398)	(45)
Due in less than one year [Member]
Summary of amortized cost basis and aggregate fair value of available-for-sale securities by contractual maturities
Gross Unrealized Gain	50	88
Gross Unrealized Loss	0	0
Due after one year through five years [Member]
Summary of amortized cost basis and aggregate fair value of available-for-sale securities by contractual maturities
Gross Unrealized Gain	1,412	1,676
Gross Unrealized Loss	(180)	(45)
Due after five year through ten years [Member]
Summary of amortized cost basis and aggregate fair value of available-for-sale securities by contractual maturities
Gross Unrealized Gain	529	801
Gross Unrealized Loss	(183)	0
Due after ten years [Member]
Summary of amortized cost basis and aggregate fair value of available-for-sale securities by contractual maturities
Gross Unrealized Gain	18	54
Gross Unrealized Loss	$ (35)	$ 0

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Long-Term Debt (Tables)

6 Months Ended

Jun. 30, 2015

Debt Disclosure [Abstract]

Schedule of long-term debt

Long-term debt as of June 30, 2015 consisted of the following (in thousands):

Term Loan A Facility	$	588,750
Revolving Credit Facility	279,500
	868,250
Less current portion	(305,750		)
	$	562,500

Schedule of aggregate annual maturities of long-term debt

Aggregate annual maturities of long-term debt as of June 30, 2015 are as follows (in thousands):

2015	$	305,750
2016	41,250
2017	56,250
2018	60,000
2019	405,000

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Goodwill and Other Intangible Assets (Tables)

6 Months Ended

Jun. 30, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule Of Changes In Goodwill

The changes in the carrying amount of goodwill during the year ended December 31, 2014 and the six months ended June 30, 2015 were as follows (in thousands):

Goodwill	$	572,890
Accumulated impairment loss	(144,579		)
Additions through 2014 acquisitions	296,668
Balance, December 31, 2014	$	724,979
Goodwill	$	869,558
Accumulated impairment loss	(144,579		)
Additions through 2014 acquisitions	1,946
Additions through 2015 acquisitions	55,541
Change in goodwill attributable to the sale of outsourced medical coding practice	(520		)
Balance, June 30, 2015	$	781,946

Summary of intangible assets and related amortization

The following is a summary of intangible assets and related amortization as of December 31, 2014 and June 30, 2015 (in thousands):

	Gross Carrying Amount		Accumulated Amortization
As of December 31, 2014:
Contracts	$	455,247	$	(126,191	)
Other	19,350		(7,212		)
Total	$	474,597	$	(133,403	)
As of June 30, 2015:
Contracts	$	488,204	$	(163,803	)
Other	20,570		(8,370		)
Total	$	508,774	$	(172,173	)
Aggregate amortization expense:
For the six months ended June 30, 2015			$	41,452
Estimated amortization expense:
For the remainder of the year ended December 31, 2015			$	40,512
For the year ended December 31, 2016			78,380
For the year ended December 31, 2017			72,543
For the year ended December 31, 2018			60,252
For the year ended December 31, 2019			51,463
For the years ended December 31, 2020 and thereafter			33,451

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Professional Liability Insurance (Details 1) - Jun. 30, 2015 - USD ($) $ in Thousands	Total
Professional Liability Insurance [Abstract]
Balance, December 31, 2014	$ 190,117
Reserves related to current period	36,696
Payments for current period reserves	(410)
Payments for prior period reserves	(17,418)
Balance, June 30, 2015	$ 208,985

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Investments (Details 2) - USD ($) $ in Thousands		Jun. 30, 2015	Dec. 31, 2014
Summary of temporarily impaired available-for-sale investment securities
Impaired Less Than 12 Months, Fair Value		$ 22,843	$ 6,915
Impaired Less Than 12 Months, Unrealized Losses		(345)	(32)
Impaired Over 12 Months, Fair Value		2,012	2,725
Impaired Over 12 Months, Unrealized Losses		(69)	(33)
Total, Fair Value		24,855	9,640
Total, Unrealized Losses		(414)	(65)
U. S. Treasury securities
Summary of temporarily impaired available-for-sale investment securities
Impaired Less Than 12 Months, Fair Value			1,003
Impaired Less Than 12 Months, Unrealized Losses	[1]		0
Impaired Over 12 Months, Fair Value			0
Impaired Over 12 Months, Unrealized Losses			0
Total, Fair Value			1,003
Total, Unrealized Losses			0
Municipal bonds
Summary of temporarily impaired available-for-sale investment securities
Impaired Less Than 12 Months, Fair Value		21,602	4,498
Impaired Less Than 12 Months, Unrealized Losses		(329)	(12)
Impaired Over 12 Months, Fair Value		2,012	2,725
Impaired Over 12 Months, Unrealized Losses		(69)	(33)
Total, Fair Value		23,614	7,223
Total, Unrealized Losses		(398)	(45)
Private investments
Summary of temporarily impaired available-for-sale investment securities
Impaired Less Than 12 Months, Fair Value		1,241	1,414
Impaired Less Than 12 Months, Unrealized Losses		(16)	(20)
Impaired Over 12 Months, Fair Value		0	0
Impaired Over 12 Months, Unrealized Losses		0	0
Total, Fair Value		1,241	1,414
Total, Unrealized Losses		$ (16)	$ (20)

[1] Unrealized loss is less than $1,000.

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Professional Liability Insurance (Tables)

6 Months Ended

Jun. 30, 2015

Professional Liability Insurance [Abstract]

Summary of professional liability loss reserves

The Company’s professional liability loss reserves included in other accrued liabilities and other non-current liabilities in the accompanying consolidated balance sheets consisted of the following (in thousands):

	December 31, 2014		June 30, 2015
Estimated losses under self-insured programs	$	190,117	$	208,985
Estimated losses under commercial insurance programs	74,248		84,087
	264,365		293,072
Less estimated payable within one year	82,735		74,260
	$	181,630	$	218,812

Summary of estimated losses under self-insured programs

The changes to the Company’s estimated losses under self-insured programs as of June 30, 2015 were as follows (in thousands):

Balance, December 31, 2014	$	190,117
Reserves related to current period	36,696
Payments for current period reserves	(410		)
Payments for prior period reserves	(17,418		)
Balance, June 30, 2015	$	208,985

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Share-based Compensation (Tables)

6 Months Ended

Jun. 30, 2015

Share-based Compensation [Abstract]

Summary of stock options status under 2009 Stock Plan

The following table summarizes the status of options under the Stock Plan as of June 30, 2015:

	Shares (in thousands)		Weighted Average Exercise Price		Aggregate Intrinsic Value (in thousands)		Weighted Average Remaining Life in Years
Outstanding at beginning of year	4,239		$	24.41	$	140,433	6.4
Granted	510		61.35
Exercised	(1,029	)	19.98		40,976
Expired or forfeited	(10	)	35.93
Outstanding at end of period	3,710		$	30.68	$	128,552	6.2
Exercisable at end of period	2,250		$	21.32	$	99,000	5.7

Disclosure of Share-based Compensation Arrangements by Share-based Payment Award [Table Text Block]

Equity based compensation expense and the resulting tax benefits were as follows (in thousands):

	Six Months Ended June 30,
	2014		2015
Stock options	$	6,427	$	5,166
Restricted awards	2,886		3,985
Stock purchase plan	35		62
Total equity based compensation expense	$	9,348	$	9,213
Tax benefit of equity based compensation expense	$	3,599	$	3,547

Summary of changes in unvested shares of restricted stock

A summary of changes in total outstanding unvested restricted awards for the six months ended June 30, 2015 is as follows (in thousands):

	Restricted Stock		Restricted Units		Total
Outstanding at beginning of year	161		317		478
Granted	—		183		183
Vested	(57	)	(39	)	(96	)
Forfeited and expired	(1	)	(1	)	(2	)
Outstanding at June 30, 2015	103		460		563

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Recent Accounting Pronouncements

6 Months Ended

Jun. 30, 2015

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

Recent Accounting Pronouncements

Recently Adopted and Recently Issued Accounting Guidance

Changes to U.S. GAAP are established by the Financial Accounting Standards Board (FASB) in the form of accounting standards updates (ASU’s) to the FASB’s Accounting Standards Codification. The Company considers the applicability and impact of all ASU’s. ASU’s not listed below were assessed and determined to be either not applicable or are expected to have minimal impact on the Company's consolidated financial position or results of operations.

In May 2014, the FASB issued ASU No. 2014-09, "Revenue from Contracts with Customers," which establishes a comprehensive revenue recognition standard for virtually all industries under U.S. GAAP. The standard is effective for public entities for annual and interim periods beginning after December 15, 2017, with early adoption permitted for annual and interim periods beginning after December 15, 2016. We have not yet determined the effects, if any, that adoption of this new accounting standard may have on the Company's consolidated financial statements.

In August 2014, the FASB issued ASU No. 2014-15, "Presentation of Financial Statements—Going Concern (Subtopic 205-40), Disclosure of Uncertainties about an Entity’s Ability to Continue as a Going Concern," which requires management to evaluate, in connection with preparing financial statements for each annual and interim reporting period, whether there are conditions or events, considered in the aggregate, that raise substantial doubt about an entity’s ability to continue as a going concern within one year after the date that the financial statements are issued (or within one year after the date that the financial statements are available to be issued when applicable) and provide related disclosures. ASU No. 2014-15 is effective for the annual period ending after December 15, 2016, and for annual and interim periods thereafter. Early adoption is permitted. The adoption of this standard's update is not expected to impact the Company's consolidated financial statements.

In February 2015, the FASB issued ASU No. 2015-02, "Consolidation: Amendments to the Consolidation Analysis," which amends the criteria for determining which entities are considered variable interest entities (“VIEs”), amends the criteria for determining if a service provider possesses a variable interest in a VIE, and ends the deferral granted to investment companies for application of the VIE consolidation model. ASU No. 2015-02 is effective for public entities for annual and interim reporting periods beginning after December 15, 2015 and early adoption is permitted. We have not yet determined the effects, if any, that adoption of this new accounting standard may have on the Company's consolidated financial statements.

In April 2015, the FASB issued ASU No. 2015-03, "Simplifying the Presentation of Debt Issuance Costs," which changes the presentation of debt issuance costs in financial statements. ASU No. 2015-03 requires an entity to present such costs in the balance sheet as a direct deduction from the related debt liability rather than as an asset. Amortization of the costs will continue to be reported as interest expense. ASU No. 2015-03 is effective for annual reporting periods beginning after December 15, 2015. Early adoption is permitted. The new guidance will be applied retrospectively to each prior period presented. The Company is currently in the process of evaluating the impact of adoption of the ASU on its consolidated balance sheets.

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2015

Earnings Per Share [Abstract]

Basic and diluted earnings per share

The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share amounts):

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2015		2014		2015
Net earnings attributable to Team Health Holdings, Inc. (numerator for basic and diluted earnings per share)	$	30,203	$	28,935	$	54,048	$	56,989
Denominator:
Weighted average shares outstanding	70,154		71,956		69,996		71,666
Effect of dilutive securities:
Stock options	1,525		1,374		1,520		1,220
Restricted awards	218		270		205		249
Stock purchase plans	1		2		1		2
Shares used for diluted earnings per share	71,898		73,602		71,722		73,137
Basic net earnings per share of Team Health Holdings, Inc.	$	0.43	$	0.40	$	0.77	$	0.80
Diluted net earnings per share of Team Health Holdings, Inc.	$	0.42	$	0.39	$	0.75	$	0.78
Securities excluded from diluted earnings per share of Team Health Holdings, Inc. because they were antidilutive:
Stock options	782		240		671		606
Restricted awards	—		—		—		—

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Fair Value Measurements (Details) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Mutual funds
Assets and liabilities the Company currently measures at fair value on a recurring basis:
Investments the Company currently measures at fair value on a recurring basis	$ 42,126	$ 37,237
Fair Value Level 1 [Member] | Mutual funds
Assets and liabilities the Company currently measures at fair value on a recurring basis:
Investments the Company currently measures at fair value on a recurring basis	0	0
Fair Value Level 2 [Member] | Mutual funds
Assets and liabilities the Company currently measures at fair value on a recurring basis:
Investments the Company currently measures at fair value on a recurring basis	42,126	37,237
Fair Value Level 3 [Member] | Mutual funds
Assets and liabilities the Company currently measures at fair value on a recurring basis:
Investments the Company currently measures at fair value on a recurring basis	0	0
Carrying Amount in Consolidated Balance Sheet [member] | Mutual funds
Assets and liabilities the Company currently measures at fair value on a recurring basis:
Investments the Company currently measures at fair value on a recurring basis	42,126	37,237
Insurance subsidiaries [Member]
Assets and liabilities the Company currently measures at fair value on a recurring basis:
Investments the Company currently measures at fair value on a recurring basis	103,192	112,946
Insurance subsidiaries [Member] | Money market funds
Assets and liabilities the Company currently measures at fair value on a recurring basis:
Investments the Company currently measures at fair value on a recurring basis	8,717	18,577
Insurance subsidiaries [Member] | U. S. Treasury securities
Assets and liabilities the Company currently measures at fair value on a recurring basis:
Investments the Company currently measures at fair value on a recurring basis		1,003
Insurance subsidiaries [Member] | Municipal bonds
Assets and liabilities the Company currently measures at fair value on a recurring basis:
Investments the Company currently measures at fair value on a recurring basis	89,617	83,694
Insurance subsidiaries [Member] | Mutual funds
Assets and liabilities the Company currently measures at fair value on a recurring basis:
Investments the Company currently measures at fair value on a recurring basis	239	3,228
Insurance subsidiaries [Member] | Private investments
Assets and liabilities the Company currently measures at fair value on a recurring basis:
Investments the Company currently measures at fair value on a recurring basis	4,619	6,444
Insurance subsidiaries [Member] | Fair Value Level 1 [Member]
Assets and liabilities the Company currently measures at fair value on a recurring basis:
Investments the Company currently measures at fair value on a recurring basis	8,717	18,577
Insurance subsidiaries [Member] | Fair Value Level 1 [Member] | Money market funds
Assets and liabilities the Company currently measures at fair value on a recurring basis:
Investments the Company currently measures at fair value on a recurring basis	8,717	18,577
Insurance subsidiaries [Member] | Fair Value Level 1 [Member] | U. S. Treasury securities
Assets and liabilities the Company currently measures at fair value on a recurring basis:
Investments the Company currently measures at fair value on a recurring basis		0
Insurance subsidiaries [Member] | Fair Value Level 1 [Member] | Municipal bonds
Assets and liabilities the Company currently measures at fair value on a recurring basis:
Investments the Company currently measures at fair value on a recurring basis	0	0
Insurance subsidiaries [Member] | Fair Value Level 1 [Member] | Mutual funds
Assets and liabilities the Company currently measures at fair value on a recurring basis:
Investments the Company currently measures at fair value on a recurring basis	0	0
Insurance subsidiaries [Member] | Fair Value Level 1 [Member] | Private investments
Assets and liabilities the Company currently measures at fair value on a recurring basis:
Investments the Company currently measures at fair value on a recurring basis	0	0
Insurance subsidiaries [Member] | Fair Value Level 2 [Member]
Assets and liabilities the Company currently measures at fair value on a recurring basis:
Investments the Company currently measures at fair value on a recurring basis	89,856	87,925
Insurance subsidiaries [Member] | Fair Value Level 2 [Member] | Money market funds
Assets and liabilities the Company currently measures at fair value on a recurring basis:
Investments the Company currently measures at fair value on a recurring basis	0	0
Insurance subsidiaries [Member] | Fair Value Level 2 [Member] | U. S. Treasury securities
Assets and liabilities the Company currently measures at fair value on a recurring basis:
Investments the Company currently measures at fair value on a recurring basis		1,003
Insurance subsidiaries [Member] | Fair Value Level 2 [Member] | Municipal bonds
Assets and liabilities the Company currently measures at fair value on a recurring basis:
Investments the Company currently measures at fair value on a recurring basis	89,617	83,694
Insurance subsidiaries [Member] | Fair Value Level 2 [Member] | Mutual funds
Assets and liabilities the Company currently measures at fair value on a recurring basis:
Investments the Company currently measures at fair value on a recurring basis	239	3,228
Insurance subsidiaries [Member] | Fair Value Level 2 [Member] | Private investments
Assets and liabilities the Company currently measures at fair value on a recurring basis:
Investments the Company currently measures at fair value on a recurring basis	0	0
Insurance subsidiaries [Member] | Fair Value Level 3 [Member]
Assets and liabilities the Company currently measures at fair value on a recurring basis:
Investments the Company currently measures at fair value on a recurring basis	4,619	6,444
Insurance subsidiaries [Member] | Fair Value Level 3 [Member] | Money market funds
Assets and liabilities the Company currently measures at fair value on a recurring basis:
Investments the Company currently measures at fair value on a recurring basis	0	0
Insurance subsidiaries [Member] | Fair Value Level 3 [Member] | U. S. Treasury securities
Assets and liabilities the Company currently measures at fair value on a recurring basis:
Investments the Company currently measures at fair value on a recurring basis		0
Insurance subsidiaries [Member] | Fair Value Level 3 [Member] | Municipal bonds
Assets and liabilities the Company currently measures at fair value on a recurring basis:
Investments the Company currently measures at fair value on a recurring basis	0	0
Insurance subsidiaries [Member] | Fair Value Level 3 [Member] | Mutual funds
Assets and liabilities the Company currently measures at fair value on a recurring basis:
Investments the Company currently measures at fair value on a recurring basis	0	0
Insurance subsidiaries [Member] | Fair Value Level 3 [Member] | Private investments
Assets and liabilities the Company currently measures at fair value on a recurring basis:
Investments the Company currently measures at fair value on a recurring basis	4,619	6,444
Insurance subsidiaries [Member] | Carrying Amount in Consolidated Balance Sheet [member]
Assets and liabilities the Company currently measures at fair value on a recurring basis:
Investments the Company currently measures at fair value on a recurring basis	103,192	112,946
Insurance subsidiaries [Member] | Carrying Amount in Consolidated Balance Sheet [member] | Money market funds
Assets and liabilities the Company currently measures at fair value on a recurring basis:
Investments the Company currently measures at fair value on a recurring basis	8,717	18,577
Insurance subsidiaries [Member] | Carrying Amount in Consolidated Balance Sheet [member] | U. S. Treasury securities
Assets and liabilities the Company currently measures at fair value on a recurring basis:
Investments the Company currently measures at fair value on a recurring basis		1,003
Insurance subsidiaries [Member] | Carrying Amount in Consolidated Balance Sheet [member] | Municipal bonds
Assets and liabilities the Company currently measures at fair value on a recurring basis:
Investments the Company currently measures at fair value on a recurring basis	89,617	83,694
Insurance subsidiaries [Member] | Carrying Amount in Consolidated Balance Sheet [member] | Mutual funds
Assets and liabilities the Company currently measures at fair value on a recurring basis:
Investments the Company currently measures at fair value on a recurring basis	239	3,228
Insurance subsidiaries [Member] | Carrying Amount in Consolidated Balance Sheet [member] | Private investments
Assets and liabilities the Company currently measures at fair value on a recurring basis:
Investments the Company currently measures at fair value on a recurring basis	$ 4,619	$ 6,444

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Long-term Debt (Details 1) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Maturities of Long-term Debt [Abstract]
Rolling year one	$ 305,750	$ 227,750
Rolling year two	41,250
Rolling year three	56,250
Rolling year four	60,000
Rolling year five	$ 405,000

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Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 51,303	$ 20,094
Accounts receivable, less allowance for uncollectibles of $409,851 and $475,387 in 2014 and 2015, respectively	601,032	500,633
Prepaid expenses and other current assets	55,969	46,469
Receivables under insured programs	19,345	23,623
Income tax receivable	4,968	8,935
Total current assets	732,617	599,754
Insurance subsidiaries' and other investments	103,192	112,946
Property and equipment, net	67,537	62,117
Other intangibles, net	336,601	341,194
Goodwill	781,946	724,979
Deferred income taxes	23,993	21,113
Receivables under insured programs	64,742	50,625
Other	59,946	61,994
Total Assets	2,170,574	1,974,722
Current liabilities:
Accounts payable	45,817	40,616
Accrued compensation and physician payable	269,955	283,033
Other accrued liabilities	138,296	153,137
Current maturities of long-term debt	305,750	227,750
Deferred income taxes	36,170	38,272
Total current liabilities	795,988	742,808
Long-term debt, less current maturities	562,500	577,500
Other non-current liabilities	286,660	231,778
Shareholders’ equity:
Common stock, ($0.01 par value; 100,000 shares authorized, 71,283 and 72,390 shares issued and outstanding at December 31, 2014 and June 30, 2015, respectively)	724	713
Additional paid-in capital	742,076	696,996
Accumulated deficit	(221,866)	(278,855)
Accumulated other comprehensive earnings	1,095	1,695
Team Health Holdings, Inc. shareholders’ equity	522,029	420,549
Noncontrolling interests	3,397	2,087
Total shareholders' equity including noncontrolling interests	525,426	422,636
Total liabilities and shareholders' equity	$ 2,170,574	$ 1,974,722

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Investments (Details 3) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Investments [Abstract]
Net gains and (losses) recognized during the six months ended June 30, 2014 and 2015, respectively on trading securities	$ 1,066	$ 937
Less: Net gains recognized during the period on trading securities sold during the six months ended June 30, 2014 and 2015, respectively	20	21
Unrealized gains and (losses) recognized on trading securities still held at June 30, 2014 and 2015, respectively	$ 1,046	$ 916

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Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Operating Activities
Net earnings	$ 56,922	$ 54,190
Adjustments to reconcile net earnings:
Depreciation	11,134	9,489
Amortization	41,452	22,212
Amortization of deferred financing costs	727	506
Equity based compensation expense	9,213	9,348
Provision for uncollectibles	1,146,834	954,068
Deferred income taxes	(14,578)	(8,635)
Gain on sale of equipment	(400)	(2,349)
Equity in joint venture income	(1,714)	(2,130)
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	(1,244,045)	(985,555)
Prepaids and other assets	(9,753)	(8,460)
Income tax accounts	3,967	(1,291)
Accounts payable	5,555	1,146
Accrued compensation and physician payable	(10,710)	984
Contingent purchase liabilities	6,872	16,340
Other accrued liabilities	(2,178)	1,774
Professional liability reserves	18,870	12,993
Net cash provided by operating activities	18,168	74,630
Investing Activities
Purchases of property and equipment	(17,364)	(11,997)
Sale of property and equipment	0	2,776
Cash paid for acquisitions, net	(84,792)	(6,517)
Proceeds from the sale of investments	6,560	0
Net proceeds from disposition of assets held for sale	269	0
Purchases of investments at insurance subsidiaries	(44,935)	(31,488)
Proceeds from investments at insurance subsidiaries	51,187	25,283
Net cash used in investing activities	(89,075)	(21,943)
Financing Activities
Payments on long-term debt	(7,500)	(8,125)
Proceeds from revolving credit facility	701,500	27,500
Payments on revolving credit facility	(631,000)	(27,500)
Contributions from noncontrolling interests	1,377	211
Distributions to noncontrolling interests	0	(122)
Proceeds from the issuance of common stock under stock purchase plans	3,445	1,903
Proceeds from exercise of stock options	20,519	8,678
Tax benefit from exercise of stock options	13,775	5,834
Net cash provided by financing activities	102,116	8,379
Net increase in cash and cash equivalents	31,209	61,066
Cash and cash equivalents, beginning of period	20,094	32,331
Cash and cash equivalents, end of period	51,303	93,397
Interest paid	9,380	7,339
Taxes paid	$ 37,160	$ 40,043

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Share-based Compensation (Details 1) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity based compensation expense	$ 9,213	$ 9,348
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense	3,547	3,599
Stock Purchase Plans [Member]
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity based compensation expense	62	35
Two Thousand Nine Stock Plan [Member] | Stock options
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity based compensation expense	5,166	6,427
Two Thousand Nine Stock Plan [Member] | Restricted stock awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity based compensation expense	$ 3,985	$ 2,886

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Acquisitions and Contingent Purchase Obligations Acquisition and Contingent Purchase Obligations (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Purchase Price Allocation [Abstract]
Goodwill (of which $18.3 million is tax deductible)	$ 781,946		$ 724,979
Total cash paid for acquisitions	84,792	$ 6,517
Current Year Acquisitions
Purchase Price Allocation [Abstract]
Accounts receivable	3,188
Prepaid expenses and other assets	5
Other intangibles (consisting of physician and hospital agreements)	36,860
Goodwill (of which $18.3 million is tax deductible)	55,541
Tax deductible goodwill	18,300
Accounts payable	(456)
Accrued compensation and physician payable	(484)
Other accrued liabilities	(240)
Deferred income taxes	(9,933)
Contingent purchase liabilities	(2,057)
Consideration paid for 2015 acquisitions, net of cash and cash equivalents of $83	82,424
Cash and cash equivalents	$ 83
Prior Year Acquisitions [Member]
Purchase Price Allocation [Abstract]
Total cash paid for acquisitions		$ 2,368

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Segment Reporting (Details) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Summary of financial information of reportable segment
Net Revenue:	$ 877,955	$ 675,070	$ 1,718,439	$ 1,316,720
Operating Earnings:	54,639	53,331	107,823	96,674
Interest expense, net	4,571	3,429	8,560	6,837
Provision for income taxes	21,186	19,630	42,341	35,647
Net earnings	28,882	30,272	56,922	54,190
Healthcare Services
Summary of financial information of reportable segment
Net Revenue:	731,217	560,464	1,426,859	1,085,258
Operating Earnings:	27,165	36,234	49,337	56,811
Other Services
Summary of financial information of reportable segment
Net Revenue:	146,738	114,606	291,580	231,462
Operating Earnings:	9,542	6,479	19,482	15,668
General Corporate
Summary of financial information of reportable segment
Operating Earnings:	$ 17,932	$ 10,618	$ 39,004	$ 24,195

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Subsequent Event

6 Months Ended

Jun. 30, 2015

Subsequent Events [Abstract]

Subsequent Events [Text Block]

Subsequent Event

On August 4, 2015, the Company and its wholly owned subsidiary Intrepid Merger Sub, Inc. (Merger Sub) entered into an Agreement and Plan of Merger with IPC Healthcare, Inc., a Delaware corporation (IPC), providing for the acquisition of IPC by the Company. Subject to the terms and conditions of the Merger Agreement, Merger Sub will be merged with and into IPC (the Merger), with IPC surviving the Merger as a wholly owned subsidiary of the Company. The merger consideration provided in the Merger Agreement (as further described below) is $80.25 per share of IPC common stock in cash, or approximately $1.6 billion in enterprise value. The Company has entered into a debt commitment letter with certain lenders (see Debt Commitment Letter below) in connection with the financing of the acquisition.

At the effective time of the Merger, each share of IPC common stock issued and outstanding immediately prior to the effective time (other than shares (i) owned by the Company or Merger Sub, (ii) held in treasury by IPC or (iii) owned by stockholders who have perfected and not withdrawn a demand for appraisal under Delaware law) will be automatically cancelled and converted into the right to receive $80.25 in cash, without interest.

Consummation of the Merger is subject to customary conditions, including without limitation (i) requisite approval of IPC’s stockholders, (ii) the absence of any action or proceeding by any governmental entity which has the effect of enjoining, making illegal or otherwise prohibiting or preventing the Merger or the consummation thereof and (iii) the expiration or early termination of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended. Moreover, each party’s obligation to consummate the Merger is subject to certain other conditions, including without limitation (x) the accuracy of the other party’s representations and warranties (subject to customary materiality qualifiers) and (y) the other party’s compliance with its covenants and agreements contained in the Merger Agreement (subject to customary materiality qualifiers).

The Merger Agreement contains certain termination rights for the Company and IPC. Upon termination of the Merger Agreement under specified circumstances IPC will be required to pay the Company a termination fee of $47 million.

Debt Commitment Letter

On August 4, 2015, and in connection with the Merger Agreement, the Company entered into a debt commitment letter (the Debt Commitment Letter) with Citigroup Global Markets, Inc. (Citi). Pursuant to the Debt Commitment Letter, subject to the conditions set forth therein, Citi committed to provide the Company with either (a) a Term B Loan Facility of $965.0 million to be obtained pursuant to amendments to the Borrower’s existing credit agreement (the Backstopped Amendments), or (b) to the extent the Backstopped Amendments are not obtained, to refinance the existing senior secured credit facilities consisting of a Revolving Credit Facility of $650.0 million, a Term A Loan Facility of $588.8 million and a Term B Loan Facility of $965.0 million (together, the Facilities) and (2) senior unsecured increasing rate loans under a new senior unsecured bridge facility of $545.0 million (the Facilities, together with the unsecured increasing rate loans, the Debt Financing). The proceeds of the Debt Financing will be used to partially finance the aggregate Merger Consideration, repay or redeem the existing indebtedness of IPC, pay costs and expenses related to the Merger and finance the ongoing working capital and other general corporate purposes of the Company, after consummation of the Merger.

Citi and certain of its affiliates may have engaged in, and may in the future engage in, investment banking and other commercial dealings in the ordinary course of business with the Company. They have received, or may in the future receive, customary fees and commissions for these transactions.

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Acquisitions and Contingent Purchase Obligations Acquisition and Contingent Purchase Obligations (Details 1) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
- Proforma Business Acquisition Information [Abstract]
Net revenue			$ 1,740,552	$ 1,400,577
Net earnings attributable to Team Health Holdings, Inc.			$ 58,319	$ 58,262
Basic (usd per share)			$ 0.81	$ 0.83
Diluted (usd per share)			$ 0.80	$ 0.81
Basic (shares)	71,956	70,154	71,666	69,996
Diluted (shares)	73,602	71,898	73,137	71,722

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Acquisitions and Contingent Purchase Obligations (Tables)

6 Months Ended

Jun. 30, 2015

Business Combinations [Abstract]

Purchase price allocation

The purchase price for the acquisitions completed during the six months ended June 30, 2015 was allocated as shown in the table below (in thousands):

Accounts receivable	$	3,188
Prepaid expenses and other assets	5
Other intangibles (consisting of physician and hospital agreements)	36,860
Goodwill (of which $18.3 million is tax deductible)	55,541
Accounts payable	(456		)
Accrued compensation and physician payable	(484		)
Other accrued liabilities	(240		)
Deferred income taxes	(9,933		)
Contingent purchase liabilities	(2,057		)
Consideration paid for 2015 acquisitions, net of cash and cash equivalents of $83	82,424
Additional consideration paid for previous acquisitions	2,368
Total cash paid for acquisitions	$	84,792

During 2015, factors became known that resulted in changes to the purchase price allocation of assets and liabilities, existing at the date of acquisition, related to certain acquisitions completed during 2014. This change resulted in an increase to accrued liabilities and an increase to goodwill of $1.9 million.

Business Acquisition, Pro Forma Information

The following unaudited pro forma information combines the consolidated results of operations of the Company and the historical financial results of the acquisitions completed during 2014 and 2015 as if the transactions had occurred on January 1, 2014 (in thousands, except for per share data):

	Six Months Ended June 30,
	2014		2015
Net revenue	$	1,400,577	$	1,740,552
Net earnings attributable to Team Health Holdings, Inc.	58,262		58,319
Net earnings per share of Team Health Holdings, Inc.
Basic	$	0.83	$	0.81
Diluted	$	0.81	$	0.80
Weighted average shares outstanding:
Basic	69,996		71,666
Diluted	71,722		73,137

The pro forma results are based on estimates and assumptions, which the Company believes are reasonable and do not necessarily represent results that would have occurred if the acquisitions had taken place at the beginning of the periods, nor are they indicative of the future results of these combined operations.

Accumulated contingent purchase expense liability

The changes to the Company’s accumulated contingent purchase liability for the six months ended June 30, 2015 are as follows (in thousands):

Contingent purchase liability at December 31, 2014	$	23,584
Payments	(9,853		)
Contingent purchase and other acquisition compensation expense recognized	15,760
Contingent purchase liability recognized at acquisition date	2,472
Contingent purchase liability at June 30, 2015	$	31,963

Estimated unrecognized contingent purchase compensation expense

Estimated unrecognized contingent purchase compensation expense as of June 30, 2015 is as follows (in thousands):

For the remainder of the year ended December 31, 2015	$	14,256
For the year ended December 31, 2016	21,436
For the year ended December 31, 2017	2,683
For the year ended December 31, 2018	52
For the year ended December 31, 2019	14
	$	38,441

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Organization and Basis of Presentation

6 Months Ended

Jun. 30, 2015

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Organization and Basis of Presentation

Organization and Basis of Presentation

The accompanying unaudited consolidated financial statements include the accounts of Team Health Holdings, Inc. (the Company) its  subsidiaries and its affiliates, including its affiliated medical groups, and have been prepared in accordance with accounting principles generally accepted in the United States (U.S. GAAP) for interim financial reporting, the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and notes required by U.S. GAAP for complete financial statements.

In the opinion of management, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal recurring items) necessary for a fair presentation of results for the interim periods presented. The results of operations for any interim period are not necessarily indicative of results for the full year. The consolidated balance sheet of the Company at December 31, 2014 has been derived from the audited financial statements at that date, but does not include all of the information and disclosures required by U.S. GAAP for complete financial statements. These financial statements and the notes thereto should be read in conjunction with the December 31, 2014 audited consolidated financial statements and the notes thereto included in our annual report on Form 10-K for fiscal year 2014 filed with the Securities and Exchange Commission (the SEC).

The preparation of the financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the accompanying consolidated financial statements and notes. Actual results could differ from those estimates. Certain amounts for the prior year have been reclassified to conform to the current year’s presentation.

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Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Thousands	Jun. 30, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Allowance for uncollectibles	$ 475,387	$ 409,851
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares outstanding	72,390,000	71,283,000
Common stock, shares issued	72,390,000	71,283,000

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Share-based Compensation

6 Months Ended

Jun. 30, 2015

Share-based Compensation [Abstract]

Share-based Compensation

Share-based Compensation

Stock Incentive Plan

In May 2013 the Company's shareholders approved the Team Health Holdings, Inc. Amended and Restated 2009 Stock Incentive Plan (the Stock Plan) that amended the 2009 Stock Incentive Plan.

Purpose. The purpose of the Stock Plan is to aid in recruiting and retaining key employees, directors, consultants, and other service providers of outstanding ability and to motivate those employees, directors, consultants, and other service providers to exert their best efforts on behalf of the Company and its affiliates by providing incentives through the granting of options, stock appreciation rights and other stock-based awards.

Shares Subject to the Plan. The Stock Plan provides that the total number of shares of common stock that may be issued is 15,100,000, of which approximately 2,417,000 are available to grant as of June 30, 2015. Shares of the Company’s common stock covered by awards that terminate or lapse without the payment of consideration may be granted again under the Stock Plan.

The following table summarizes the status of options under the Stock Plan as of June 30, 2015:

	Shares (in thousands)		Weighted Average Exercise Price		Aggregate Intrinsic Value (in thousands)		Weighted Average Remaining Life in Years
Outstanding at beginning of year	4,239		$	24.41	$	140,433	6.4
Granted	510		61.35
Exercised	(1,029	)	19.98		40,976
Expired or forfeited	(10	)	35.93
Outstanding at end of period	3,710		$	30.68	$	128,552	6.2
Exercisable at end of period	2,250		$	21.32	$	99,000	5.7

Intrinsic value is the amount by which the stock price as of June 30, 2015 exceeds the exercise price of the options. The Company granted 0.5 million options during the six months ended June 30, 2015. The fair value of the options granted in 2015 was based on the grant date fair value as calculated by the Black-Scholes option pricing formula with the following assumptions: risk-free interest rate of 1.6%, implied volatility of 33.8% and an expected life of the options of 5.25 years. The weighted average estimated fair value of options granted during 2015 was $20.27. As of June 30, 2015, the Company had approximately $17.5 million of unrecognized compensation expense, net of estimated forfeitures related to unvested options, which will be recognized over the remaining requisite service period.

Equity based compensation expense and the resulting tax benefits were as follows (in thousands):

	Six Months Ended June 30,
	2014		2015
Stock options	$	6,427	$	5,166
Restricted awards	2,886		3,985
Stock purchase plan	35		62
Total equity based compensation expense	$	9,348	$	9,213
Tax benefit of equity based compensation expense	$	3,599	$	3,547

Restricted awards are grants of restricted stock and grants of restricted stock units that are not vested (Restricted Awards). The Company granted 0.2 million shares of Restricted Awards in 2015. The Company had $21.2 million of expense remaining to be recognized over the requisite service period for these Restricted Awards at June 30, 2015. The Restricted Awards generally vest annually over a three to four-year period from the initial grant date for the grants made to the independent board members and management.

A summary of changes in total outstanding unvested restricted awards for the six months ended June 30, 2015 is as follows (in thousands):

	Restricted Stock		Restricted Units		Total
Outstanding at beginning of year	161		317		478
Granted	—		183		183
Vested	(57	)	(39	)	(96	)
Forfeited and expired	(1	)	(1	)	(2	)
Outstanding at June 30, 2015	103		460		563

Stock Purchase Plans

In May 2010, the Company’s Board of Directors (the Board) adopted the 2010 Employee Stock Purchase Plan (ESPP) and the 2010 Nonqualified Stock Purchase Plan (NQSPP).

The ESPP provides for the issuance of up to 600,000 shares to the Company’s employees. All eligible employees are granted identical rights to purchase common stock in each Board authorized offering under the ESPP. Rights granted pursuant to any offering under the ESPP terminate immediately upon cessation of an employee’s employment for any reason. In general, an employee may reduce his or her contribution or withdraw from participation in an offering at any time during the purchase period for such offering. Employees receive a 5% discount on shares purchased under the ESPP. Rights granted under the plan are not transferable and may be exercised only by the person to whom such rights are granted. Offerings occur every six months in April and October. As of June 30, 2015, contributions under the ESPP totaled $1.3 million. In April 2015, approximately 40,000 shares of the Company’s common stock were issued to plan participants.

The NQSPP provides for the issuance of up to 800,000 shares to our independent contractors. All eligible contractors are granted identical rights to purchase common stock in each Board authorized offering under the NQSPP. Rights granted pursuant to any offering under the NQSPP terminate immediately upon cessation of a contractor’s relationship with the Company for any reason. In general, a contractor may reduce his or her contribution or withdraw from participation in an offering at any time during the purchase period for such offering. Contractors receive a 5% discount on shares purchased under the NQSPP. Rights granted under the NQSPP are not transferable and may be exercised only by the person to whom such rights are granted. Offerings occur every six months in April and October. As of June 30, 2015, contributions under the NQSPP totaled $0.7 million. In April 2015, approximately 21,000 shares of the Company’s common stock were issued to plan participants.

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Document and Entity Information - shares	6 Months Ended
	Jun. 30, 2015	Jul. 31, 2015
Document and Entity Information [Abstract]
Entity Registrant Name	TEAM HEALTH HOLDINGS INC.
Entity Central Index Key	0001082754
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-Q
Document Period End Date	Jun. 30, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q2
Amendment Flag	false
Entity Common Stock, Shares Outstanding		72,442,827

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Earnings Per Share

6 Months Ended

Jun. 30, 2015

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

The Company computes basic earnings per share using the weighted average number of shares outstanding. The Company computes diluted earnings per share using the weighted average number of shares outstanding plus the dilutive effect of outstanding stock options, restricted awards, and stock purchase plans. The following table sets forth the computation of basic and diluted earnings per share (in thousands, except per share amounts):

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2015		2014		2015
Net earnings attributable to Team Health Holdings, Inc. (numerator for basic and diluted earnings per share)	$	30,203	$	28,935	$	54,048	$	56,989
Denominator:
Weighted average shares outstanding	70,154		71,956		69,996		71,666
Effect of dilutive securities:
Stock options	1,525		1,374		1,520		1,220
Restricted awards	218		270		205		249
Stock purchase plans	1		2		1		2
Shares used for diluted earnings per share	71,898		73,602		71,722		73,137
Basic net earnings per share of Team Health Holdings, Inc.	$	0.43	$	0.40	$	0.77	$	0.80
Diluted net earnings per share of Team Health Holdings, Inc.	$	0.42	$	0.39	$	0.75	$	0.78
Securities excluded from diluted earnings per share of Team Health Holdings, Inc. because they were antidilutive:
Stock options	782		240		671		606
Restricted awards	—		—		—		—

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Consolidated Statements of Comprehensive Earnings (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Income Statement [Abstract]
Net revenue before provision for uncollectibles	$ 1,466,984	$ 1,166,615	$ 2,865,273	$ 2,270,788
Provision for uncollectibles	589,029	491,545	1,146,834	954,068
Net revenue	877,955	675,070	1,718,439	1,316,720
Cost of services rendered (exclusive of depreciation and amortization shown separately below)
Professional service expenses	687,540	510,070	1,351,005	1,011,350
Professional liability costs	27,279	23,623	53,897	43,918
General and administrative expenses (includes contingent purchase compensation expense)	78,586	72,023	152,148	134,200
Other (income) expense, net	961	(1,590)	(2,321)	(3,750)
Depreciation	5,560	4,918	11,134	9,489
Amortization	21,175	11,086	41,452	22,212
Interest expense, net	4,571	3,429	8,560	6,837
Transaction costs	2,215	1,609	3,301	2,627
Earnings before income taxes	50,068	49,902	99,263	89,837
Provision for income taxes	21,186	19,630	42,341	35,647
Net earnings	28,882	30,272	56,922	54,190
Net earnings attributable to noncontrolling interest	(53)	69	(67)	142
Net earnings attributable to Team Health Holdings, Inc.	$ 28,935	$ 30,203	$ 56,989	$ 54,048
Net earnings per share of Team Health Holdings, Inc.
Basic	$ 0.40	$ 0.43	$ 0.80	$ 0.77
Diluted	$ 0.39	$ 0.42	$ 0.78	$ 0.75
Weighted average shares outstanding
Basic (shares)	71,956	70,154	71,666	69,996
Diluted (shares)	73,602	71,898	73,137	71,722
Net change in fair value of investments, net of tax	$ (573)	$ 461	$ (600)	$ 1,063
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest	28,309	30,733	56,322	55,253
Comprehensive earnings attributable to noncontrolling interest	(53)	69	(67)	142
Comprehensive earnings attributable to Team Health Holdings, Inc.	$ 28,362	$ 30,664	$ 56,389	$ 55,111

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Net Revenue

6 Months Ended

Jun. 30, 2015

Revenue, Net [Abstract]

Net Revenue

Net Revenue

Net revenue consists of fee for service revenue, contract revenue and other revenue. The Company’s net revenue is principally derived from the provision of healthcare staffing services to patients within healthcare facilities and is recorded in the period the services are rendered. Under the fee for service arrangements, the Company bills patients for services provided and receives payment from patients or their third-party payors. Fee for service revenue reflects gross fee for service charges less contractual allowances and policy discounts, where applicable. Contractual adjustments represent the Company’s estimate of discounts and other adjustments to be recognized from gross fee for service charges under contractual payment arrangements, primarily with commercial, managed care and governmental payment plans such as Medicare and Medicaid when the Company’s providers participate in such plans. Contractual adjustments are not reflected in self-pay fee for service revenue. Contract revenue represents revenue generated under contracts in which the Company provides physician and other healthcare staffing and administrative services in return for a contractually negotiated fee. Contract revenue consists primarily of billings based on hours of healthcare staffing provided at agreed-to hourly rates, monthly contractual rates, or certain operational or financial metrics. Revenue in such cases is recognized as the hours are worked by the Company’s affiliated staff and contractors or as metrics are realized. Other revenue consists primarily of revenue from management and billing services provided to outside parties. Revenue is recognized for such services pursuant to the terms of the contracts with customers. The Company also records a provision for uncollectible accounts based primarily on historical collection experience to record accounts receivables at the estimated amounts expected to be collected.

Net revenue for the three and six months ended June 30, 2014 and 2015 consisted of the following (in thousands):

	Three Months Ended June 30,										Six Months Ended June 30,
	2014					2015					2014					2015
Medicare	$	129,617		19.2	%	$	178,168		20.3	%	$	253,008		19.2	%	$	346,927		20.2	%
Medicaid	116,745			17.3		157,601			18.0		225,674			17.1		310,136			18.0
Commercial and managed care	322,155			47.7		448,043			51.0		608,254			46.2		860,000			50.0
Self-pay	397,495			58.9		464,089			52.9		783,746			59.5		908,342			52.9
Other	21,095			3.1		19,921			2.3		42,111			3.2		40,202			2.3
Unbilled	6,238			0.9		5,523			0.6		9,091			0.7		13,609			0.8
Net fee for service revenue before provision for uncollectibles	993,345			147.1		1,273,345			145.0		1,921,884			146.0		2,479,216			144.3
Contract revenue before provision for uncollectibles	162,451			24.1		183,727			20.9		328,045			24.9		367,367			21.4
Other	10,819			1.6		9,912			1.2		20,859			1.6		18,690			1.0
Net revenue before provision for uncollectibles	1,166,615			172.8		1,466,984			167.1		2,270,788			172.5		2,865,273			166.7
Provision for uncollectibles	(491,545		)	(72.8	)	(589,029		)	(67.1	)	(954,068		)	(72.5	)	(1,146,834		)	(66.7	)
Net revenue	$	675,070		100.0	%	$	877,955		100.0	%	$	1,316,720		100.0	%	$	1,718,439		100.0	%

The Company employs several methodologies for determining its allowance for uncollectibles depending on the nature of the net revenue before provision for uncollectibles recognized. The Company initially determines gross revenue for its fee for service patient visits based upon established fee schedule prices. Such gross revenue is reduced for estimated contractual allowances for those patient visits covered by contractual insurance arrangements to result in estimated net revenue before provision for uncollectibles. Net revenue before provision for uncollectibles is then reduced for management’s estimate of uncollectible amounts. Fee for service net revenue represents estimated cash to be collected from such patient visits and is net of management’s estimate of account balances estimated to be uncollectible. The provision for uncollectible fee for service patient visits is based on historical experience resulting from approximately fourteen million annual fee for service patient visits. The significant volume of patient visits and the terms of thousands of commercial and managed care contracts and the various reimbursement policies relating to governmental healthcare programs do not make it feasible to evaluate fee for service accounts receivable on a specific account basis. Fee for service accounts receivable collection estimates are reviewed on a quarterly basis for each fee for service contract by period of accounts receivable origination. Such reviews include the use of historical cash collection percentages by contract adjusted for the lapse of time since the date of the patient visit. In addition, when actual collection percentages differ from expected results, on a contract by contract basis, supplemental detailed reviews of the outstanding accounts receivable balances may be performed by the Company’s billing operations to determine whether there are facts and circumstances existing that may cause a different conclusion as to the estimate of the collectibility of that contract’s accounts receivable from the estimate resulting from using the historical collection experience. Contract-related net revenue is billed based on the terms of the contract at amounts expected to be collected. Such billings are typically submitted on a monthly basis and aged trial balances are prepared. Allowances for estimated uncollectible amounts related to such contract billings are made based upon periodic reviews of specific accounts and invoices once it is concluded that such amounts are not likely to be collected. Approximately 98% of the Company’s allowance for doubtful accounts is related to receivables for fee for service patient visits. The principal exposure for uncollectible fee for service visits is centered in self-pay patients and, to a lesser extent, for co-payments and deductibles from patients with insurance. While the Company does not specifically allocate the allowance for doubtful accounts to individual accounts or specific payor classifications, the portion of the allowance associated with fee for service charges as of June 30, 2015 was equal to approximately 93% of outstanding self-pay fee for service patient accounts. The methodologies employed to compute allowances for doubtful accounts were unchanged between 2014 and 2015.

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Investments

6 Months Ended

Jun. 30, 2015

Investments [Abstract]

Investments

Investments

Investments are primarily comprised of securities held by the Company and its captive insurance subsidiaries and by the Company in connection with its participant directed supplemental employee retirement plan. Investments held by the Company and its captive insurance subsidiaries are classified as available-for-sale securities. The unrealized gains or losses of investments held by the Company and its captive insurance subsidiaries are included in accumulated other comprehensive earnings as a separate component of shareholders’ equity, unless the decline in value is deemed to be other-than-temporary and the Company does not have the intent and ability to hold such securities until their full cost can be recovered, in which case such securities are written down to fair value and the loss is charged to current period earnings.

The investments held by the Company in connection with its participant directed supplemental employee retirement plan are classified as trading securities; therefore, changes in fair value associated with these investments are recognized as a component of earnings.

At December 31, 2014 and June 30, 2015, amortized cost basis and aggregate fair value of the Company’s available-for-sale securities by investment type were as follows (in thousands):

	Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
December 31, 2014
Money market funds	$	18,577	$	—	$	—		$	18,577
U. S. Treasury securities	1,003		—		—			1,003
Municipal bonds	81,120		2,619		(45		)	83,694
Mutual funds	3,228		—		—			3,228
Private investments	6,464		—		(20		)	6,444
	$	110,392	$	2,619	$	(65	)	$	112,946
June 30, 2015
Money market funds	$	8,717	$	—	$	—		$	8,717
Municipal bonds	88,006		2,009		(398		)	89,617
Mutual funds	239		—		—			239
Private Investments	4,635		—		(16		)	4,619
	$	101,597	$	2,009	$	(414	)	$	103,192

At December 31, 2014 and June 30, 2015, the amortized cost basis and aggregate fair value of the Company’s available-for-sale securities by contractual maturities were as follows (in thousands):

	Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
December 31, 2014
Due in less than one year	$	25,186	$	88	$	—		$	25,274
Due after one year through five years	53,735		1,676		(45		)	55,366
Due after five years through ten years	19,859		801		—			20,660
Due after ten years	1,920		54		—			1,974
Total	$	100,700	$	2,619	$	(45	)	$	103,274
June 30, 2015
Due in less than one year	$	14,791	$	50	$	—		$	14,841
Due after one year through five years	57,591		1,412		(180		)	58,823
Due after five years through ten years	21,424		529		(183		)	21,770
Due after ten years	2,917		18		(35		)	2,900
Total	$	96,723	$	2,009	$	(398	)	$	98,334

A summary of the Company’s temporarily impaired available-for-sale investment securities as of December 31, 2014 and June 30, 2015 follows (in thousands):

	Impaired Less Than 12 Months						Impaired Over 12 Months					Total
	Fair Value		Unrealized Losses				Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
December 31, 2014
U.S. Treasury securities	$	1,003	$	—		(a)	$	—	$	—		$	1,003	$	—
Municipal bonds	4,498		(12		)		2,725		(33		)	7,223		(45		)
Private investments	1,414		(20		)		—		—			1,414		(20		)
Total investment	$	6,915	$	(32	)		$	2,725	$	(33	)	$	9,640	$	(65	)
June 30, 2015
Municipal bonds	$	21,602	$	(329	)		$	2,012	$	(69	)	$	23,614	$	(398	)
Private investments	1,241		(16		)		—		—			1,241		(16		)
Total investment	$	22,843	$	(345	)		$	2,012	$	(69	)	$	24,855	$	(414	)

(a) Unrealized loss is less than $1,000.

The unrealized losses resulted from changes in market interest rates, not from changes in the probability of contractual cash flows. Because the Company has the ability and intent to hold the investments until a recovery of carrying value and full collection of the amounts due according to the contractual terms of the investments is expected, the Company does not consider these investments to be other-than-temporarily impaired at June 30, 2015.

During the six months ended June 30, 2015, the Company recorded a gain of approximately $0.1 million on the sale of specifically identified investments.

As of June 30, 2015, and December 31, 2014, the investments related to the participant directed supplemental employee retirement plan totaled $42.1 million and $37.2 million, respectively, and are included in other assets in the accompanying consolidated balance sheets. The net trading gains on those investments for the six months ended on June 30, 2014 and June 30, 2015 that were still held by the Company as of June 30, 2014 and June 30, 2015 are as follows (in thousands):

	2014		2015
Net gains and (losses) recognized during the six months ended June 30, 2014 and 2015, respectively on trading securities	$	937	$	1,066
Less: Net gains recognized during the period on trading securities sold during the six months ended June 30, 2014 and 2015, respectively	21		20
Unrealized gains and (losses) recognized on trading securities still held at June 30, 2014 and 2015, respectively	$	916	$	1,046

During the first quarter of 2015, the Company sold its investment in a provider of hospital-based telemedicine consultations previously recorded in other assets on the consolidated balance sheet and accounted for as a cost method investment. In connection with the sale, the Company received proceeds of $4.0 million. This sale resulted in a gain of $2.0 million that was recorded in other (income) expenses, net in the results of the Company's operations.

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Recent Accounting Pronouncements Accounting Policies (Policies)

6 Months Ended

Jun. 30, 2015

Accounting Policies [Abstract]

Business Combinations Policy [Policy Text Block]

In accordance with ASC 805, when contingent payments are tied to continuing employment, such amounts are recognized ratably over the defined performance period as compensation expense which is included as a component of general and administrative expense (and parenthetically disclosed with other acquisition-related compensation expense) in the results of the Company’s operations. The payment of contingent purchase obligations tied to continuing employment is included as a component of operating cash flows.

The purchase price for these acquisitions was allocated, based on management’s estimates, in accordance with ASC Topic 805, “Business Combinations” (ASC 805). The Company’s purchase price allocation for business combinations completed during recent periods is preliminary and may be subject to revision as additional information about the fair value of acquired working capital becomes available. Additional information, which existed as of the acquisition date but at that time was unknown to the Company, may become known to the Company during the remainder of the measurement period, a period not to exceed 12 months from the acquisition date. Adjustments in the purchase price allocation may require a recasting of the amounts allocated to goodwill retroactive to the period in which the acquisition occurred.

Fair Value of Financial Instruments, Policy [Policy Text Block]

The Company applies the provisions of FASB ASC Topic 820, “Fair Value Measurements and Disclosures,” (ASC Topic 820), in determining the fair value of its financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements.

ASC Topic 820 prioritizes the inputs used in measuring fair value into the following hierarchy:

Level 1	Quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2	Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable;
Level 3	Unobservable inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing.

The Company’s insurance subsidiaries investments are valued using market prices on active markets (Level 1) and less active markets (Level 2), in addition to using alternative information when market data is not available (Level 3). Level 1 investment valuations are obtained from real-time quotes for transactions in active exchange markets involving identical assets. Level 2 investment valuations are obtained from readily available pricing sources for comparable investment or identical investments in less active markets. The fair values of the Company’s supplemental employee retirement investments are based on quoted prices. Level 3 investment valuations require significant management judgment and are based on transaction price, company performance, and market conditions.

Net Revenue

Net revenue consists of fee for service revenue, contract revenue and other revenue. The Company’s net revenue is principally derived from the provision of healthcare staffing services to patients within healthcare facilities and is recorded in the period the services are rendered. Under the fee for service arrangements, the Company bills patients for services provided and receives payment from patients or their third-party payors. Fee for service revenue reflects gross fee for service charges less contractual allowances and policy discounts, where applicable. Contractual adjustments represent the Company’s estimate of discounts and other adjustments to be recognized from gross fee for service charges under contractual payment arrangements, primarily with commercial, managed care and governmental payment plans such as Medicare and Medicaid when the Company’s providers participate in such plans. Contractual adjustments are not reflected in self-pay fee for service revenue. Contract revenue represents revenue generated under contracts in which the Company provides physician and other healthcare staffing and administrative services in return for a contractually negotiated fee. Contract revenue consists primarily of billings based on hours of healthcare staffing provided at agreed-to hourly rates, monthly contractual rates, or certain operational or financial metrics. Revenue in such cases is recognized as the hours are worked by the Company’s affiliated staff and contractors or as metrics are realized. Other revenue consists primarily of revenue from management and billing services provided to outside parties. Revenue is recognized for such services pursuant to the terms of the contracts with customers. The Company also records a provision for uncollectible accounts based primarily on historical collection experience to record accounts receivables at the estimated amounts expected to be collected.

Allowance for Uncollectibles

The Company employs several methodologies for determining its allowance for uncollectibles depending on the nature of the net revenue before provision for uncollectibles recognized. The Company initially determines gross revenue for its fee for service patient visits based upon established fee schedule prices. Such gross revenue is reduced for estimated contractual allowances for those patient visits covered by contractual insurance arrangements to result in estimated net revenue before provision for uncollectibles. Net revenue before provision for uncollectibles is then reduced for management’s estimate of uncollectible amounts. Fee for service net revenue represents estimated cash to be collected from such patient visits and is net of management’s estimate of account balances estimated to be uncollectible. The provision for uncollectible fee for service patient visits is based on historical experience resulting from approximately fourteen million annual fee for service patient visits. The significant volume of patient visits and the terms of thousands of commercial and managed care contracts and the various reimbursement policies relating to governmental healthcare programs do not make it feasible to evaluate fee for service accounts receivable on a specific account basis. Fee for service accounts receivable collection estimates are reviewed on a quarterly basis for each fee for service contract by period of accounts receivable origination. Such reviews include the use of historical cash collection percentages by contract adjusted for the lapse of time since the date of the patient visit. In addition, when actual collection percentages differ from expected results, on a contract by contract basis, supplemental detailed reviews of the outstanding accounts receivable balances may be performed by the Company’s billing operations to determine whether there are facts and circumstances existing that may cause a different conclusion as to the estimate of the collectibility of that contract’s accounts receivable from the estimate resulting from using the historical collection experience. Contract-related net revenue is billed based on the terms of the contract at amounts expected to be collected. Such billings are typically submitted on a monthly basis and aged trial balances are prepared. Allowances for estimated uncollectible amounts related to such contract billings are made based upon periodic reviews of specific accounts and invoices once it is concluded that such amounts are not likely to be collected. Approximately 98% of the Company’s allowance for doubtful accounts is related to receivables for fee for service patient visits. The principal exposure for uncollectible fee for service visits is centered in self-pay patients and, to a lesser extent, for co-payments and deductibles from patients with insurance. While the Company does not specifically allocate the allowance for doubtful accounts to individual accounts or specific payor classifications, the portion of the allowance associated with fee for service charges as of June 30, 2015 was equal to approximately 93% of outstanding self-pay fee for service patient accounts. The methodologies employed to compute allowances for doubtful accounts were unchanged between 2014 and 2015.

Earnings Per Share, Policy [Policy Text Block]

The Company computes basic earnings per share using the weighted average number of shares outstanding. The Company computes diluted earnings per share using the weighted average number of shares outstanding plus the dilutive effect of outstanding stock options, restricted awards, and stock purchase plans.

Consolidation, Policy

The consolidated financial statements include all assets, liabilities, revenues and expenses of the less than 100% owned entity that the Company controls. Accordingly, the Company has recorded noncontrolling interests in the earnings and equity of this entity.

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Noncontrolling Interests in Consolidated Entity

6 Months Ended

Jun. 30, 2015

Noncontrolling Interest [Abstract]

Noncontrolling Interest Disclosure

Noncontrolling Interests in Consolidated Entity

The Company is party to two joint venture arrangements. The joint ventures provide administrative management and billing services to certain existing and planned urgent care clinics the Company and joint venture partners operate. The consolidated financial statements include all assets, liabilities, revenues and expenses of the less than 100% owned entity that the Company controls. Accordingly, the Company has recorded noncontrolling interests in the earnings and equity of this entity. In connection with these arrangements, the Company received joint venture contributions of $1.4 million during the six months ended June 30, 2015.

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Professional Liability Insurance

6 Months Ended

Jun. 30, 2015

Professional Liability Insurance [Abstract]

Professional Liability Insurance

Professional Liability Insurance

The Company’s professional liability loss reserves included in other accrued liabilities and other non-current liabilities in the accompanying consolidated balance sheets consisted of the following (in thousands):

	December 31, 2014		June 30, 2015
Estimated losses under self-insured programs	$	190,117	$	208,985
Estimated losses under commercial insurance programs	74,248		84,087
	264,365		293,072
Less estimated payable within one year	82,735		74,260
	$	181,630	$	218,812

The changes to the Company’s estimated losses under self-insured programs as of June 30, 2015 were as follows (in thousands):

Balance, December 31, 2014	$	190,117
Reserves related to current period	36,696
Payments for current period reserves	(410		)
Payments for prior period reserves	(17,418		)
Balance, June 30, 2015	$	208,985

The Company provides for its estimated professional liability losses through a combination of self-insurance and commercial insurance programs. Losses under commercial insurance programs in excess of the limit of coverage remain as a self-insured obligation of the Company. A portion of the professional liability loss risks being provided for through self-insurance (claims-made basis) are transferred to and funded into captive insurance companies. The accounts of the captive insurance companies are fully consolidated with those of the other operations of the Company in the accompanying consolidated financial statements.

The self-insurance components of our risk management program include reserves for future claims incurred but not reported (IBNR). As of December 31, 2014, of the $190.1 million of estimated losses under self-insured programs, approximately $117.3 million represented an estimate of IBNR claims and expenses and additional loss development, with the remaining $72.8 million representing specific case reserves. Of the specific case reserves as of December 31, 2014, $1.9 million represented case reserves that had settled but not yet funded, and $70.9 million reflected unsettled case reserves.

As of June 30, 2015, of the $209.0 million of estimated losses under self-insurance programs, approximately $136.9 million represented an estimate of IBNR claims and expenses and additional loss development, with the remaining $72.1 million representing specific case reserves. Of the specific case reserves as of June 30, 2015, $2.3 million represented case reserves that had been settled but not yet funded, and $69.8 million reflected unsettled case reserves.

The Company’s provisions for losses under its self-insurance components are estimated using the results of periodic actuarial studies. Such actuarial studies include numerous underlying estimates and assumptions, including assumptions as to future claim losses, the severity and frequency of such projected losses, loss development factors and others. The Company’s provisions for losses under its self-insured components are subject to subsequent adjustment should future actuarial projected results for such periods indicate projected losses greater or less than previously projected.

The Company’s most recent actuarial valuation was completed in April 2015. Based on the results of the actuarial study completed in April 2015, management determined no additional change was necessary in the consolidated reserves for professional liability losses during the first quarter of 2015 related to prior year loss estimates. The discount rate on professional liability reserves was 1.4% at June 30, 2015 compared to 1.1% at December 31, 2014.

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Share-based Compensation (Details 2) - Two Thousand Nine Stock Plan [Member] shares in Thousands	6 Months Ended
	Jun. 30, 2015 shares
Restricted Stock [Member]
Summary of changes in unvested restricted stock awards
Outstanding at beginning of year	161
Granted	0
Vested	(57)
Forfeited and expired	(1)
Outstanding at June 30, 2015	103
Restricted Stock Units (RSUs) [Member]
Summary of changes in unvested restricted stock awards
Outstanding at beginning of year	317
Granted	183
Vested	(39)
Forfeited and expired	(1)
Outstanding at June 30, 2015	460
Restricted stock awards
Summary of changes in unvested restricted stock awards
Outstanding at beginning of year	478
Granted	183
Vested	(96)
Forfeited and expired	(2)
Outstanding at June 30, 2015	563

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Goodwill and Other Intangible Assets

6 Months Ended

Jun. 30, 2015

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill and Other Intangible Assets

Goodwill and Other Intangible Assets

The changes in the carrying amount of goodwill during the year ended December 31, 2014 and the six months ended June 30, 2015 were as follows (in thousands):

Goodwill	$	572,890
Accumulated impairment loss	(144,579		)
Additions through 2014 acquisitions	296,668
Balance, December 31, 2014	$	724,979
Goodwill	$	869,558
Accumulated impairment loss	(144,579		)
Additions through 2014 acquisitions	1,946
Additions through 2015 acquisitions	55,541
Change in goodwill attributable to the sale of outsourced medical coding practice	(520		)
Balance, June 30, 2015	$	781,946

The following is a summary of intangible assets and related amortization as of December 31, 2014 and June 30, 2015 (in thousands):

	Gross Carrying Amount		Accumulated Amortization
As of December 31, 2014:
Contracts	$	455,247	$	(126,191	)
Other	19,350		(7,212		)
Total	$	474,597	$	(133,403	)
As of June 30, 2015:
Contracts	$	488,204	$	(163,803	)
Other	20,570		(8,370		)
Total	$	508,774	$	(172,173	)
Aggregate amortization expense:
For the six months ended June 30, 2015			$	41,452
Estimated amortization expense:
For the remainder of the year ended December 31, 2015			$	40,512
For the year ended December 31, 2016			78,380
For the year ended December 31, 2017			72,543
For the year ended December 31, 2018			60,252
For the year ended December 31, 2019			51,463
For the years ended December 31, 2020 and thereafter			33,451

Intangible assets are amortized over their estimated life, which is approximately three to six years. As of June 30, 2015, the weighted average remaining amortization period for intangible assets was 3.9 years.

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Long-Term Debt

6 Months Ended

Jun. 30, 2015

Debt Disclosure [Abstract]

Long-Term Debt

Long-Term Debt

Long-term debt as of June 30, 2015 consisted of the following (in thousands):

Term Loan A Facility	$	588,750
Revolving Credit Facility	279,500
	868,250
Less current portion	(305,750		)
	$	562,500

As of June 30, 2015, the Company's senior secured credit facilities (Credit Facility) consist of a $600.0 million term loan facility (Term Loan A Facility) and a $650.0 million revolving credit facility (Revolving Credit Facility). These facilities have a maturity date of October 2, 2019. The maturity dates under the Credit Facility are subject to extension with lender consent according to the terms of the agreement.

The interest rate on any outstanding Revolving Credit Facility borrowings and Term A Loan Facility borrowings, and the commitment fee applicable to undrawn revolving commitments, is priced off a grid based upon the Company’s first lien net leverage ratio and is currently LIBOR + 1.75% in the case of revolving credit borrowings under the Revolving Credit Facility and Term A Loan Facility and 0.30% in the case of unused revolving commitments. The weighted average interest rate for the six months ended June 30, 2015 was 1.89% for amounts outstanding under the Term A Loan Facility.

The Company had $279.5 million of borrowings outstanding under the Revolving Credit Facility as of June 30, 2015, and the Company had $6.4 million of standby letters of credit outstanding against the Revolving Credit Facility commitment.

The Credit Facility agreement contains both affirmative and negative covenants, including limitations on the Company’s ability to incur additional indebtedness, sell material assets, retire, redeem or otherwise reacquire its capital stock, acquire the capital stock or assets of another business and pay dividends, and requires the Company to comply with a maximum total leverage ratio, tested quarterly. At June 30, 2015, the Company was in compliance with all covenants under the senior credit facility agreement. The Credit Facility is secured by substantially all of the Company’s U. S. subsidiaries’ assets.

Aggregate annual maturities of long-term debt as of June 30, 2015 are as follows (in thousands):

2015	$	305,750
2016	41,250
2017	56,250
2018	60,000
2019	405,000

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Contingencies

6 Months Ended

Jun. 30, 2015

Commitments and Contingencies Disclosure [Abstract]

Contingencies

Contingencies

Litigation

We are currently a party to various legal proceedings arising in the ordinary course of business. The legal proceedings we are involved in from time to time include lawsuits, claims, audits and investigations, including those arising out of services provided, personal injury claims, professional liability claims, our billing, collection and marketing practices, employment disputes and contractual claims, and seek monetary and other relief, including statutory damages and penalties. While we currently believe that the ultimate outcome of such proceedings, individually and in the aggregate, will not have a material adverse effect on our financial position or overall trends in results of operations, litigation is subject to inherent uncertainties. If an unfavorable ruling were to occur, there exists the possibility of a material adverse impact on our net earnings in the period in which the ruling occurs. The estimate of the potential impact from such legal proceedings on our financial position or overall results of operations could change in the future.

On September 3, 2013, the Company received a subpoena from the U.S. Department of Health and Human Services Office of Inspector General. The subpoena requests copies of certain documents that are primarily related to the Company’s services at hospitals that are affiliated with Health Management Associates, Inc. (HMA) and any of HMA’s affiliates. The Company is cooperating with the government in its investigation.

Healthcare Regulatory Matters

Laws and regulations governing the Medicare and Medicaid programs are complex and subject to interpretation. Compliance with such laws and regulations can be subject to future governmental review and interpretation as well as significant regulatory action. From time to time, governmental regulatory agencies conduct inquiries and audits of the Company’s practices. It is the Company’s current practice and future intent to cooperate fully with such inquiries.

In addition to laws and regulations governing the Medicare and Medicaid programs, there are a number of federal and state laws and regulations governing such matters as the corporate practice of medicine and fee splitting arrangements, anti-kickback statutes, physician self-referral laws, false or fraudulent claims filing and patient privacy requirements. The failure to comply with any of such laws or regulations could have an adverse impact on our operations and financial results. It is management’s belief that the Company is in substantial compliance in all material respects with such laws and regulations.

Healthcare Reform

The Patient Protection and Affordable Care Act (the PPACA), signed into law on March 23, 2010, as amended by the Health Care and Education Reconciliation Act of 2010 on March 30, 2010, collectively referred to as the Healthcare Reform Laws, significantly affect the U.S. healthcare system by increasing access to health insurance benefits for the uninsured and underinsured populations, among other changes. On June 28, 2012, the U.S. Supreme Court (the Supreme Court) upheld the constitutionality of the requirement in PPACA that individuals maintain health insurance or pay a penalty (the individual mandate) under Congress's taxing power. The Supreme Court upheld the PPACA provision expanding Medicaid eligibility to new populations as constitutional, but only so long as the expansion of the Medicaid program is optional for the states. States that choose not to expand their Medicaid programs to newly eligible populations in PPACA can only lose the new federal Medicaid funding in PPACA but not their eligibility for existing federal Medicaid matching payments. We continue to monitor those states that remain undecided or, in certain instances, involved in ongoing internal dialogue on whether or not the state will elect to expand its Medicaid program’s eligibility. In addition, on June 25, 2015, the Supreme Court upheld the provision of tax credits and federal subsidies to individuals who purchase health insurance through a federally-facilitated exchange.

Additional challenges to the Healthcare Reform Laws could further impact the implementation of these laws. While the ultimate impact of these laws and implementing regulations will not be known until all provisions are fully implemented, the Company believes that some of their provisions will likely yield positive results, such as increasing access to health benefits for the uninsured and underinsured populations. Since the implementation of increased access to health benefits through the expansion of Medicaid programs and through exchange enrollment beginning in 2014, we have realized a decline in the percentage of self-pay visits by our consolidated fee for service volume and an increase in the percentage of Medicaid visits that we believe is a result of healthcare reform. Other provisions, however, such as Medicare payment reforms and reductions that could reduce provider payments, may have an adverse effect on the reimbursement rates the Company receives for services provided by affiliated healthcare professionals.

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Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands		3 Months Ended		6 Months Ended
		Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Statement of Comprehensive Income [Abstract]
Accumulated other comprehensive earnings, beginning balance		$ 1,668	$ 1,049	$ 1,695	$ 447
Net unrealized gain (loss)		(896)	765	(887)	1,706
Tax benefit (expense)		340	(248)	337	(573)
Total other comprehensive earnings before reclassifications, net of tax		(556)	517	(550)	1,133
Net amount reclassified to earnings(1)	[1]	(17)	(56)	(50)	(70)
Tax benefit (expense)(2)	[2]	0	0	0	0
Total amount reclassified from accumulated other comprehensive earnings, net of tax(3)	[3]	(17)	(56)	(50)	(70)
Total other comprehensive earnings (loss)		(573)	461	(600)	1,063
Accumulated other comprehensive earnings, ending balance		$ 1,095	$ 1,510	$ 1,095	$ 1,510

[1] This amount was included in Other (income) expenses on the accompanying Consolidated Statement of Comprehensive Earnings.

[2] These amounts were included in Provision for income taxes on the accompanying Consolidated Statement of Comprehensive Earnings.

[3] A positive amount indicates a corresponding charge to earnings and a negative amount indicates a corresponding benefit to earnings.

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Segment Reporting (Details Textual)	6 Months Ended
	Jun. 30, 2015 Segments
Segment Reporting Information, Additional Information [Abstract]
Number of Operating Segments	10
Number of Reportable Segments	2

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Noncontrolling Interests in Consolidated Entity (Details) $ in Thousands	6 Months Ended
	Jun. 30, 2015 USD ($) Business	Jun. 30, 2014 USD ($)
Noncontrolling Interest [Abstract]
Number of Joint Venture Arrangements | Business	2
Contributions from noncontrolling interests	$ 1,377	$ 211

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Segment Reporting (Tables)

6 Months Ended

Jun. 30, 2015

Segment Reporting [Abstract]

Summary of financial information of reportable segment

The following table presents financial information for each reportable segment. Depreciation, amortization, management fee and other expenses separately identified in the consolidated statements of operations are included as a reduction to the respective segments’ operating earnings for each period below (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2015		2014		2015
Net Revenue:
Healthcare Services	$	560,464	$	731,217	$	1,085,258	$	1,426,859
Other Services	114,606		146,738		231,462		291,580
	$	675,070	$	877,955	$	1,316,720	$	1,718,439
Operating Earnings:
Healthcare Services	$	36,234	$	27,165	$	56,811	$	49,337
Other Services	6,479		9,542		15,668		19,482
General Corporate	10,618		17,932		24,195		39,004
	$	53,331	$	54,639	$	96,674	$	107,823
Reconciliation of Operating Earnings to Net Earnings:
Operating earnings	$	53,331	$	54,639	$	96,674	$	107,823
Interest expense, net	3,429		4,571		6,837		8,560
Provision for income taxes	19,630		21,186		35,647		42,341
Net earnings	$	30,272	$	28,882	$	54,190	$	56,922

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Goodwill and Other Intangible Assets (Details Textual)	6 Months Ended
	Jun. 30, 2015
Finite Lived Intangible Assets [Line Items]
Remaining amortization period	3 years 11 months 4 days
Maximum [Member]
Finite Lived Intangible Assets [Line Items]
Estimated useful life of contract intangibles	6 years
Minimum [Member]
Finite Lived Intangible Assets [Line Items]
Estimated useful life of contract intangibles	3 years

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Segment Reporting

6 Months Ended

Jun. 30, 2015

Segment Reporting [Abstract]

Segment Reporting

Segment Reporting

The Company provides services through ten operating segments which are aggregated into two reportable segments, Healthcare Staffing and Other Services. The Healthcare Staffing segment, which is an aggregation of emergency medicine, anesthesia, specialty surgery and locums staffing, provides comprehensive healthcare service programs to users and providers of healthcare services on a fee for service as well as a cost plus or contract basis. The Other Services segment is an aggregation of hospital medicine, military and government healthcare staffing, clinical services, nurse call center operations, After Hours Pediatrics as well as billing, collection and consulting services that provides a range of other comprehensive healthcare services. The operating segments included in the Other Services reportable segment, while similar in the types of services provided by those operating segments included in the Healthcare Staffing segment, do not meet the aggregation criteria prescribed by the segment reporting guidance nor do they meet the quantitative thresholds that would require a separate presentation.

The accounting policies of the segments are the same as those described in the summary of significant accounting policies. Segment amounts disclosed are prior to any elimination entries made in consolidation, except in the case of net revenue, where intercompany charges have been eliminated. Certain corporate expenses are not allocated to the segments. These unallocated expenses are corporate expenses, net interest expense, depreciation and amortization, transaction costs and income taxes. The Company evaluates segment performance based on profit and loss before the aforementioned expenses.

The following table presents financial information for each reportable segment. Depreciation, amortization, management fee and other expenses separately identified in the consolidated statements of operations are included as a reduction to the respective segments’ operating earnings for each period below (in thousands):

	Three Months Ended June 30,				Six Months Ended June 30,
	2014		2015		2014		2015
Net Revenue:
Healthcare Services	$	560,464	$	731,217	$	1,085,258	$	1,426,859
Other Services	114,606		146,738		231,462		291,580
	$	675,070	$	877,955	$	1,316,720	$	1,718,439
Operating Earnings:
Healthcare Services	$	36,234	$	27,165	$	56,811	$	49,337
Other Services	6,479		9,542		15,668		19,482
General Corporate	10,618		17,932		24,195		39,004
	$	53,331	$	54,639	$	96,674	$	107,823
Reconciliation of Operating Earnings to Net Earnings:
Operating earnings	$	53,331	$	54,639	$	96,674	$	107,823
Interest expense, net	3,429		4,571		6,837		8,560
Provision for income taxes	19,630		21,186		35,647		42,341
Net earnings	$	30,272	$	28,882	$	54,190	$	56,922

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Investments (Tables)

6 Months Ended

Jun. 30, 2015

Investments [Abstract]

Summary of amortized cost basis and aggregate fair value of available-for-sale securities by investment type

At December 31, 2014 and June 30, 2015, amortized cost basis and aggregate fair value of the Company’s available-for-sale securities by investment type were as follows (in thousands):

	Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
December 31, 2014
Money market funds	$	18,577	$	—	$	—		$	18,577
U. S. Treasury securities	1,003		—		—			1,003
Municipal bonds	81,120		2,619		(45		)	83,694
Mutual funds	3,228		—		—			3,228
Private investments	6,464		—		(20		)	6,444
	$	110,392	$	2,619	$	(65	)	$	112,946
June 30, 2015
Money market funds	$	8,717	$	—	$	—		$	8,717
Municipal bonds	88,006		2,009		(398		)	89,617
Mutual funds	239		—		—			239
Private Investments	4,635		—		(16		)	4,619
	$	101,597	$	2,009	$	(414	)	$	103,192

Summary of amortized cost basis and aggregate fair value of available-for-sale securities by contractual maturities

At December 31, 2014 and June 30, 2015, the amortized cost basis and aggregate fair value of the Company’s available-for-sale securities by contractual maturities were as follows (in thousands):

	Cost Basis		Gross Unrealized Gains		Gross Unrealized Losses			Fair Value
December 31, 2014
Due in less than one year	$	25,186	$	88	$	—		$	25,274
Due after one year through five years	53,735		1,676		(45		)	55,366
Due after five years through ten years	19,859		801		—			20,660
Due after ten years	1,920		54		—			1,974
Total	$	100,700	$	2,619	$	(45	)	$	103,274
June 30, 2015
Due in less than one year	$	14,791	$	50	$	—		$	14,841
Due after one year through five years	57,591		1,412		(180		)	58,823
Due after five years through ten years	21,424		529		(183		)	21,770
Due after ten years	2,917		18		(35		)	2,900
Total	$	96,723	$	2,009	$	(398	)	$	98,334

Summary of temporarily impaired available-for-sale investment securities

A summary of the Company’s temporarily impaired available-for-sale investment securities as of December 31, 2014 and June 30, 2015 follows (in thousands):

	Impaired Less Than 12 Months						Impaired Over 12 Months					Total
	Fair Value		Unrealized Losses				Fair Value		Unrealized Losses			Fair Value		Unrealized Losses
December 31, 2014
U.S. Treasury securities	$	1,003	$	—		(a)	$	—	$	—		$	1,003	$	—
Municipal bonds	4,498		(12		)		2,725		(33		)	7,223		(45		)
Private investments	1,414		(20		)		—		—			1,414		(20		)
Total investment	$	6,915	$	(32	)		$	2,725	$	(33	)	$	9,640	$	(65	)
June 30, 2015
Municipal bonds	$	21,602	$	(329	)		$	2,012	$	(69	)	$	23,614	$	(398	)
Private investments	1,241		(16		)		—		—			1,241		(16		)
Total investment	$	22,843	$	(345	)		$	2,012	$	(69	)	$	24,855	$	(414	)

(a) Unrealized loss is less than $1,000.

Summary of trading gains and losses on investments related to participant directed supplemental employee retirement plan

As of June 30, 2015, and December 31, 2014, the investments related to the participant directed supplemental employee retirement plan totaled $42.1 million and $37.2 million, respectively, and are included in other assets in the accompanying consolidated balance sheets. The net trading gains on those investments for the six months ended on June 30, 2014 and June 30, 2015 that were still held by the Company as of June 30, 2014 and June 30, 2015 are as follows (in thousands):

	2014		2015
Net gains and (losses) recognized during the six months ended June 30, 2014 and 2015, respectively on trading securities	$	937	$	1,066
Less: Net gains recognized during the period on trading securities sold during the six months ended June 30, 2014 and 2015, respectively	21		20
Unrealized gains and (losses) recognized on trading securities still held at June 30, 2014 and 2015, respectively	$	916	$	1,046

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Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Dec. 31, 2014
Goodwill [Line Items]
Goodwill, gross	$ 869,558		$ 572,890
Accumulated impairment loss	(144,579)		$ (144,579)
Additions through acquisitions		$ 296,668
Change in goodwill attributable to the sale of outsourced medical coding practice	(520)
Beginning Balance	724,979
Ending Balance	781,946
Prior Year Acquisitions [Member]
Goodwill [Line Items]
Additions through 2014 acquisitions	1,946
Current Year Acquisitions
Goodwill [Line Items]
Additions through acquisitions	55,541
Ending Balance	$ 55,541

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Fair Value Measurements (Details Textual) $ in Thousands	Jun. 30, 2015 USD ($)
Fair Value Measurements (Textual) [Abstract]
Fair Value, Assets, Level 2 to Level 1 Transfers, Amount	$ 0
Fair Value, Assets, Level 1 to Level 2 Transfers, Amount	0
Fair value of outstanding debt	848,500
Carrying value of debt	868,250
Fair Value, Liabilities, Level 2 to Level 1 Transfers, Amount	0
Fair Value, Liabilities, Level 1 to Level 2 Transfers, Amount	$ 0

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Consolidated Statements of Comprehensive Earnings (Parenthetical) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014	Jun. 30, 2015	Jun. 30, 2014
Contingent purchase compensation expense recognized	$ 7,856	$ 9,254	$ 15,760	$ 19,398
Net change in fair value of investments, tax	$ (340)	$ 248	$ (337)	$ 573

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Fair Value Measurements

6 Months Ended

Jun. 30, 2015

Fair Value Disclosures [Abstract]

Fair Value Measurements

Fair Value Measurements

The Company applies the provisions of FASB ASC Topic 820, “Fair Value Measurements and Disclosures,” (ASC Topic 820), in determining the fair value of its financial assets and liabilities. This standard defines fair value, provides guidance for measuring fair value and requires certain disclosures. This standard does not require any new fair value measurements, but rather applies to all other accounting pronouncements that require or permit fair value measurements.

ASC Topic 820 prioritizes the inputs used in measuring fair value into the following hierarchy:

Level 1	Quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2	Inputs other than quoted prices included within Level 1 that are either directly or indirectly observable;
Level 3	Unobservable inputs in which little or no market activity exists, therefore requiring an entity to develop its own assumptions about the assumptions that market participants would use in pricing.

The following table provides information on those assets and liabilities the Company currently measures at fair value on a recurring basis as of December 31, 2014 and June 30, 2015 (in thousands):

	Carrying Amount in Consolidated Balance Sheet December 31, 2014		Fair Value December 31, 2014		Fair Value Level 1		Fair Value Level 2		Fair Value Level 3
Investments of insurance subsidiaries:
Money market funds	$	18,577	$	18,577	$	18,577	$	—	$	—
U. S. Treasury securities	1,003		1,003		—		1,003		—
Municipal bonds	83,694		83,694		—		83,694		—
Mutual funds	3,228		3,228		—		3,228		—
Private investments	6,444		6,444		—		—		6,444
Total investments of insurance subsidiaries	$	112,946	$	112,946	$	18,577	$	87,925	$	6,444
Supplemental employee retirement plan investments:
Mutual funds	$	37,237	$	37,237	$	—	$	37,237	$	—

	Carrying Amount in Consolidated Balance Sheet June 30, 2015		Fair Value June 30, 2015		Fair Value Level 1		Fair Value Level 2		Fair Value Level 3
Investments of insurance subsidiaries:
Money market funds	$	8,717	$	8,717	$	8,717	$	—	$	—
Municipal bonds	89,617		89,617		—		89,617		—
Mutual funds	239		239		—		239		—
Private investments	4,619		4,619		—		—		4,619
Total investments of insurance subsidiaries	$	103,192	$	103,192	$	8,717	$	89,856	$	4,619
Supplemental employee retirement plan investments:
Mutual funds	$	42,126	$	42,126	$	—	$	42,126	$	—

The Company’s insurance subsidiaries investments are valued using market prices on active markets (Level 1) and less active markets (Level 2), in addition to using alternative information when market data is not available (Level 3). Level 1 investment valuations are obtained from real-time quotes for transactions in active exchange markets involving identical assets. Level 2 investment valuations are obtained from readily available pricing sources for comparable investment or identical investments in less active markets. The fair values of the Company’s supplemental employee retirement investments are based on quoted prices. Level 3 investment valuations require significant management judgment and are based on transaction price, company performance, and market conditions. For the six ended June 30, 2015 there were no transfers between Levels 1, 2 or 3. See Note 5 for more information regarding the Company’s investments.

The Company classified its municipal bonds, mutuals funds, and U.S. Treasury securities within Level 2 because these securities were valued based on quoted prices in markets that are less active, broker or dealer quotations or alternative pricing sources with reasonable levels of price transparency.

The Company classified its private investments within Level 3 because active market pricing is not readily available and, as such, we use net asset values as an estimate of fair value as a practical expedient. The valuation of non-public private equity investments requires significant management judgment due to the absence of observable quoted market prices, inherent lack of liquidity, and the long-term nature of such assets. These investments are valued initially based upon transaction price. In determining valuation adjustments resulting from the investment review process, emphasis is placed on current company performance and market conditions.

In addition to the preceding disclosures prescribed by the provisions of ASC Topic 820, ASC Topic 825 “Financial Instruments” requires the disclosure of the estimated fair value of financial instruments. The Company’s short term financial instruments include cash and cash equivalents, accounts receivable, and accounts payable. The carrying value of the short term financial instruments approximates the fair value due to their short term nature. These financial instruments have no stated maturities or the financial instruments have short term maturities that approximate market.

The fair value of the Company's debt is estimated using quoted market prices when available. When quoted market prices are not available, fair value is estimated based on current market interest rates for debt with similar maturities (Level 2). At June 30, 2015, the estimated fair value of the Company’s outstanding debt was $848.5 million compared to a carrying value of $868.3 million.

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Share-based Compensation (Details) - Two Thousand Nine Stock Plan [Member] - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	6 Months Ended
	Jun. 30, 2015	Jun. 30, 2014
Shares (in thousands)
Outstanding at beginning of year	4,239
Granted	510
Exercised	(1,029)
Expired or forfeited	(10)
Outstanding at end of period	3,710
Exercisable at end of period	2,250
Weighted Average Exercise Price
Outstanding at beginning of year	$ 24.41
Granted	61.35
Exercised	19.98
Expired or forfeited	35.93
Outstanding at end of period	30.68
Exercisable at end of period	$ 21.32
Aggregate Intrinsic Value (in thousands)
Outstanding at beginning of year	$ 140,433
Exercised	40,976
Outstanding at end of period	128,552
Exercisable at end of period	$ 99,000
Weighted Average Remaining Life in Years
SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2	6 years 2 months 12 days	6 years 4 months 24 days
SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsOutstandingWeightedAverageRemainingContractualTerm2	6 years 2 months 12 days	6 years 4 months 24 days
SharebasedCompensationArrangementBySharebasedPaymentAwardOptionsExercisableWeightedAverageRemainingContractualTerm1	5 years 8 months 12 days

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Net Revenue (Tables)

6 Months Ended

Jun. 30, 2015

Revenue, Net [Abstract]

Schedule of net revenue

Net revenue for the three and six months ended June 30, 2014 and 2015 consisted of the following (in thousands):

	Three Months Ended June 30,										Six Months Ended June 30,
	2014					2015					2014					2015
Medicare	$	129,617		19.2	%	$	178,168		20.3	%	$	253,008		19.2	%	$	346,927		20.2	%
Medicaid	116,745			17.3		157,601			18.0		225,674			17.1		310,136			18.0
Commercial and managed care	322,155			47.7		448,043			51.0		608,254			46.2		860,000			50.0
Self-pay	397,495			58.9		464,089			52.9		783,746			59.5		908,342			52.9
Other	21,095			3.1		19,921			2.3		42,111			3.2		40,202			2.3
Unbilled	6,238			0.9		5,523			0.6		9,091			0.7		13,609			0.8
Net fee for service revenue before provision for uncollectibles	993,345			147.1		1,273,345			145.0		1,921,884			146.0		2,479,216			144.3
Contract revenue before provision for uncollectibles	162,451			24.1		183,727			20.9		328,045			24.9		367,367			21.4
Other	10,819			1.6		9,912			1.2		20,859			1.6		18,690			1.0
Net revenue before provision for uncollectibles	1,166,615			172.8		1,466,984			167.1		2,270,788			172.5		2,865,273			166.7
Provision for uncollectibles	(491,545		)	(72.8	)	(589,029		)	(67.1	)	(954,068		)	(72.5	)	(1,146,834		)	(66.7	)
Net revenue	$	675,070		100.0	%	$	877,955		100.0	%	$	1,316,720		100.0	%	$	1,718,439		100.0	%

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Acquisitions and Contingent Purchase Obligations (Details 3) $ in Thousands	Jun. 30, 2015 USD ($)
Business Combination, Separately Recognized Transactions [Line Items]
Estimated unrecognized contingent purchase compensation expense	$ 38,441
For the remainder of the year ended December 31, 2015
Business Combination, Separately Recognized Transactions [Line Items]
Estimated unrecognized contingent purchase compensation expense	14,256
For the year ended December 31, 2016
Business Combination, Separately Recognized Transactions [Line Items]
Estimated unrecognized contingent purchase compensation expense	21,436
For the year ended December 31, 2017
Business Combination, Separately Recognized Transactions [Line Items]
Estimated unrecognized contingent purchase compensation expense	2,683
For the year ended December 31, 2018
Business Combination, Separately Recognized Transactions [Line Items]
Estimated unrecognized contingent purchase compensation expense	52
For the year ended December 31, 2019
Business Combination, Separately Recognized Transactions [Line Items]
Estimated unrecognized contingent purchase compensation expense	$ 14

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Accumulated Other Comprehensive Income

6 Months Ended

Jun. 30, 2015

Statement of Comprehensive Income [Abstract]

Accumulated Other Comprehensive Earnings (Loss)

Accumulated Other Comprehensive Earnings (Loss)

The changes in accumulated other comprehensive earnings (loss) related to available-for-sale securities were as follows (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2014			2015			2014			2015
Balance at beginning of period	$	1,049		$	1,668		$	447		$	1,695
Other comprehensive earnings:
Net unrealized gain (loss)	765			(896		)	1,706			(887		)
Tax benefit (expense)	(248		)	340			(573		)	337
Total other comprehensive earnings before reclassifications, net of tax	517			(556		)	1,133			(550		)
Net amount reclassified to earnings(1)	(56		)	(17		)	(70		)	(50		)
Tax benefit (expense)(2)	—			—			—			—
Total amount reclassified from accumulated other comprehensive earnings, net of tax(3)	(56		)	(17		)	(70		)	(50		)
Total other comprehensive earnings (loss)	461			(573		)	1,063			(600		)
Balance at end of period	$	1,510		$	1,095		$	1,510		$	1,095

(1) This amount was included in Other (income) expenses on the accompanying Consolidated Statement of Comprehensive Earnings.

(2) These amounts were included in Provision for income taxes on the accompanying Consolidated Statement of Comprehensive Earnings.

(3) A positive amount indicates a corresponding charge to earnings and a negative amount indicates a corresponding benefit to earnings.