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 September 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 October 30, 2015, there were outstanding 72,583,573 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” within the meaning of the Private Securities Litigation Reform Act of 1995. 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, the pending IPC Healthcare, Inc. acquisition, 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, including our pending acquisition of IPC Healthcare, Inc.;

• 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;

2

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

• 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;

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

• our ability to complete the acquisition of IPC Healthcare, Inc. within the anticipated timeframe and to realize the expected benefits of the acquisition; and

• the risk that the proposed IPC Healthcare, Inc. acquisition disrupts current plans and operations and disrupts our relationship with payors, physicians and other healthcare professionals.

For a more detailed discussion of these factors, see the information under the caption “Risk Factors” herein and 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 NINE MONTHS

ENDED SEPTEMBER 30, 2015

TABLE OF CONTENTS

		Page
Part I. Financial Information
Item 1.	Financial Statements (Unaudited)	5
	Consolidated Balance Sheets—December 31, 2014 and September 30, 2015	5
	Consolidated Statements of Comprehensive Earnings—Three Months Ended September 30, 2014 and 2015	6
	Consolidated Statements of Comprehensive Earnings—Nine Months Ended September 30, 2014 and 2015	7
	Consolidated Statements of Cash Flows—Nine Months Ended September 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	28
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	45
Item 4.	Controls and Procedures	45
Part II. Other Information
Item 1.	Legal Proceedings	46
Item 1A.	Risk Factors	46
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	46
Item 3.	Defaults Upon Senior Securities	47
Item 4.	Mine Safety Disclosures	47
Item 5.	Other Information	47
Item 6.	Exhibits	48
Signatures		49

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

TEAM HEALTH HOLDINGS, INC.

CONSOLIDATED BALANCE SHEETS

	December 31, 2014			September 30, 2015
	(Unaudited) (In thousands)
ASSETS
Current assets:
Cash and cash equivalents	$	20,094		$	18,194
Accounts receivable, less allowance for uncollectibles of $409,851 and $558,488 in 2014 and 2015, respectively	500,633			577,291
Prepaid expenses and other current assets	46,469			56,902
Receivables under insured programs	23,623			19,514
Income tax receivable	8,935			—
Total current assets	599,754			671,901
Insurance subsidiaries' and other investments	112,946			97,492
Property and equipment, net	62,117			74,939
Other intangibles, net	341,194			326,959
Goodwill	724,979			800,583
Deferred income taxes	21,113			39,694
Receivables under insured programs	50,625			72,959
Other	61,994			59,652
	$	1,974,722		$	2,144,179
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	40,616		$	48,886
Accrued compensation and physician payable	283,033			283,288
Other accrued liabilities	153,137			127,331
Income tax payable	—			20,650
Current maturities of long-term debt	227,750			200,000
Deferred income taxes	38,272			31,511
Total current liabilities	742,808			711,666
Long-term debt, less current maturities	577,500			555,000
Other non-current liabilities	231,778			308,105
Shareholders’ equity:
Common stock, ($0.01 par value; 100,000 shares authorized, 71,283 and 72,502 shares issued and outstanding at December 31, 2014 and September 30, 2015, respectively)	713			725
Additional paid-in capital	696,996			750,089
Accumulated deficit	(278,855		)	(186,424		)
Accumulated other comprehensive earnings	1,695			1,325
Team Health Holdings, Inc. shareholders’ equity	420,549			565,715
Noncontrolling interests	2,087			3,693
Total shareholders' equity including noncontrolling interests	422,636			569,408
	$	1,974,722		$	2,144,179

See accompanying notes to consolidated financial statements.

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TEAM HEALTH HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

	Three Months Ended September 30,
	2014		2015
	(Unaudited) (In thousands, except per share data)
Net revenue before provision for uncollectibles	$	1,223,104	$	1,525,409
Provision for uncollectibles	510,863		626,228
Net revenue	712,241		899,181
Cost of services rendered (exclusive of depreciation and amortization shown separately below)
Professional service expenses	546,346		707,871
Professional liability costs	29,564		27,474
General and administrative expenses (includes contingent purchase and other acquisition compensation expense of $3,086 and $(3,530) in 2014 and 2015, respectively)	61,643		67,066
Other (income) expenses, net	292		2,137
Depreciation	5,826		6,290
Amortization	12,991		20,633
Interest expense, net	3,921		5,572
Transaction costs	3,107		3,869
Earnings before income taxes	48,551		58,269
Provision for income taxes	20,895		22,837
Net earnings	27,656		35,432
Net earnings (loss) attributable to noncontrolling interests	70		(10		)
Net earnings attributable to Team Health Holdings, Inc.	$	27,586	$	35,442
Net earnings per share of Team Health Holdings, Inc.
Basic	$	0.39	$	0.49
Diluted	$	0.38	$	0.48
Weighted average shares outstanding
Basic	70,627		72,361
Diluted	72,331		73,687
Other comprehensive earnings (loss), net of tax:
Net change in fair value of investments, net of tax of $89 and $124 for 2014 and 2015, respectively	165		230
Comprehensive earnings	27,821		35,662
Comprehensive earnings (loss) attributable to noncontrolling interests	70		(10		)
Comprehensive earnings attributable to Team Health Holdings, Inc.	$	27,751	$	35,672

See accompanying notes to consolidated financial statements.

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TEAM HEALTH HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF COMPREHENSIVE EARNINGS

	Nine Months Ended September 30,
	2014			2015
	(Unaudited) (In thousands, except per share data)
Net revenue before provision for uncollectibles	$	3,493,892		$	4,390,682
Provision for uncollectibles	1,464,931			1,773,062
Net revenue	2,028,961			2,617,620
Cost of services rendered (exclusive of depreciation and amortization shown separately below)
Professional service expenses	1,557,696			2,058,876
Professional liability costs	73,482			81,371
General and administrative expenses (includes contingent purchase and other acquisition compensation expense of $22,483 and $12,230 in 2014 and 2015, respectively)	195,842			219,214
Other (income) expenses, net	(3,457		)	(182		)
Depreciation	15,315			17,423
Amortization	35,203			62,085
Interest expense, net	10,758			14,132
Transaction costs	5,734			7,170
Earnings before income taxes	138,388			157,531
Provision for income taxes	56,542			65,178
Net earnings	81,846			92,353
Net earnings (loss) attributable to noncontrolling interests	212			(78		)
Net earnings attributable to Team Health Holdings, Inc.	$	81,634		$	92,431
Net earnings per share of Team Health Holdings, Inc.
Basic	$	1.16		$	1.29
Diluted	$	1.13		$	1.26
Weighted average shares outstanding
Basic	70,209			71,900
Diluted	71,955			73,351
Other comprehensive earnings (loss), net of tax:
Net change in fair value of investments, net of tax of $663 and $(213) for 2014 and 2015, respectively	1,228			(370		)
Comprehensive earnings	83,074			91,983
Comprehensive earnings (loss) attributable to noncontrolling interests	212			(78		)
Comprehensive earnings attributable to Team Health Holdings, Inc.	$	82,862		$	92,061

See accompanying notes to consolidated financial statements.

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TEAM HEALTH HOLDINGS, INC.

CONSOLIDATED STATEMENTS OF CASH FLOWS

	Nine Months Ended September 30,
	2014			2015
	(Unaudited) (In thousands)
Operating Activities
Net earnings	$	81,846		$	92,353
Adjustments to reconcile net earnings:
Depreciation	15,315			17,423
Amortization	35,203			62,085
Amortization of deferred financing costs	758			2,142
Equity based compensation expense	12,693			13,197
Provision for uncollectibles	1,464,931			1,773,062
Deferred income taxes	(21,367		)	(34,140		)
Gain on sale of investments and other assets	(2,349		)	(1,879		)
Equity in joint venture income	(3,124		)	(2,856		)
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	(1,515,378		)	(1,846,532		)
Prepaids and other assets	(1,467		)	(9,774		)
Income tax accounts	1,414			29,585
Accounts payable	7,831			8,624
Accrued compensation and physician payable	13,694			2,439
Contingent purchase liabilities	(1,283		)	(13		)
Other accrued liabilities	712			(3,034		)
Professional liability reserves	17,287			29,261
Net cash provided by operating activities	106,716			131,943
Investing Activities
Purchases of property and equipment	(16,783		)	(31,123		)
Sale of property and equipment	2,776			225
Cash paid for acquisitions, net	(347,154		)	(116,314		)
Proceeds from the sale of investments	—			7,332
Net proceeds from disposition of assets held for sale	—			964
Purchases of investments at insurance subsidiaries	(68,527		)	(67,887		)
Proceeds from investments at insurance subsidiaries	61,314			79,422
Net cash used in investing activities	(368,374		)	(127,381		)
Financing Activities
Payments on long-term debt	(12,188		)	(11,250		)
Proceeds from revolving credit facility	316,100			950,500
Payments on revolving credit facility	(88,700		)	(989,500		)
Payments of financing costs	(1,146		)	—
Contributions from noncontrolling interests	262			1,683
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	15,510			23,185
Tax benefit from exercise of stock options	11,347			15,475
Net cash provided by (used in) financing activities	242,966			(6,462		)
Net decrease in cash and cash equivalents	(18,692		)	(1,900		)
Cash and cash equivalents, beginning of period	32,331			20,094
Cash and cash equivalents, end of period	$	13,639		$	18,194
Supplemental cash flow information:
Interest paid	$	11,708		$	13,619
Taxes paid	$	65,525		$	52,120

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.

In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments, which requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. ASU 2015-16 is effective for annual reporting periods after December 15, 2015, and interim periods within those fiscal years. The new guidance will be applied prospectively. Early adoption is permitted and the Company chose to do so effective September 30, 2015.

Note 3. Acquisitions and Contingent Purchase Obligations

Acquisitions

During the nine months ended September 30, 2015, the Company paid a total of $116.3 million related to acquisitions including $113.0 million for the operations of six businesses acquired during the period. These acquisitions consist of the following:

Acquired Operations	Date Acquired	Business Service Line
Brookhaven Anesthesia Associates	August 2015	Anesthesiology
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 consolidated Statement of Comprehensive Earnings for the three and nine months ended September 30, 2015 includes revenue of $44.0 million and $94.1 million, respectively, related to acquisitions completed in 2015.

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 nine months ended September 30, 2015 was allocated as shown in the table below (in thousands):

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Accounts receivable	$	3,188
Prepaid expenses and other current assets	5
Other intangibles (consisting of physician and hospital agreements)	47,851
Goodwill (of which $37.9 million is tax deductible)	75,100
Accounts payable	(456		)
Accrued compensation and physician payable	(484		)
Other accrued liabilities	(205		)
Deferred income taxes	(9,933		)
Contingent purchase liabilities	(2,057		)
Consideration paid for 2015 acquisitions, net of cash and cash equivalents of $83	113,009
Additional consideration paid for previous acquisitions	3,305
Total cash paid for acquisitions	$	116,314

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. These changes resulted in an increase to accrued liabilities of $1.9 million, and a net decrease in deferred tax liabilities of $0.9 million, resulting in a net increase to goodwill of $1.0 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):

	Nine Months Ended September 30,
	2014		2015
Net revenue	$	2,262,950	$	2,647,096
Net earnings attributable to Team Health Holdings, Inc.	96,121		93,790
Net earnings per share of Team Health Holdings, Inc.
Basic	$	1.37	$	1.30
Diluted	$	1.34	$	1.28
Weighted average shares outstanding:
Basic	70,209		71,900
Diluted	71,955		73,351

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.

IPC Transaction

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 (the IPC Transaction). 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 canceled and converted into the right to receive $80.25 in cash, without interest.

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Consummation of the Merger is subject to customary conditions, including without limitation (i) requisite approval of IPC’s stockholders, (ii) there being no law or order temporary, preliminary or permanent prohibiting the consummation of the merger, (iii) subject to specified materiality standards, the accuracy of the representations and warranties of the other party, and (iv) compliance by the other party in all material respects with its covenants.

 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 $47.0 million.

A special meeting of IPC's stockholders is scheduled to be held on November 16, 2015 to vote upon the adoption of the merger Agreement. There is no assurance that the conditions to the Merger will be satisfied or that the Merger will close on this date or at all.

Debt Commitment Letter

On August 25, 2015, in connection with entering into the Merger Agreement, the Company and Team Health, Inc. (the Borrower) entered into an amended and restated debt commitment letter (as amended, the Debt Commitment Letter) with Citigroup Global Markets Inc. (Citi) and the other lenders party thereto (the Lenders), pursuant to which, subject to the conditions set forth therein, Citi and the Lenders have committed to provide either (a) (1) a senior secured tranche B term loan facility in an aggregate principal amount of $965.0 million (the New Tranche B Facility) to be obtained pursuant to an amendment and restatement of the Borrower’s existing credit agreement (the Existing Credit Agreement) for the Borrower’s existing senior secured credit facilities (the Existing Credit Facilities) and (2) senior unsecured increasing rate term loans under a new senior unsecured bridge facility of $545.0 million (the New Senior Bridge Facility), or (b) in the event that the amendments to the Existing Credit Agreement were not obtained in order to permit the incurrence of loans under the New Tranche B Facility and the New Senior Bridge Facility and the consummation of the IPC Acquisition, to refinance the Existing Credit Facilities into new facilities consisting of (1) (x) a senior secured revolving credit facility in an aggregate principal amount not to exceed $650.0 million, (y) a senior secured tranche A term loan facility in an aggregate principal amount not to exceed $588.75 million and (z) the New Tranche B Facility and (2) the New Senior Bridge Facility (collectively, the Facilities).

On October 2, 2015 the Borrower and certain of the lenders under the Existing Credit Facilities entered into an amendment to the Existing Credit Agreement (the First Amendment).  The First Amendment allows for the amendment and restatement of the Existing Credit Agreement to permit the New Tranche B Facility in an aggregate principal amount not to exceed $1.15 billion on the date on which the IPC Acquisition is consummated and amends the Existing Credit Agreement to (a) permit the incurrence of the notes offered hereunder and the New Senior Bridge Facility in an aggregate principal amount not to exceed $1.00 billion, provided that the aggregate principal amount of the notes and any loans made under the New Tranche B Facility and New Senior Bridge Facility cannot exceed $1.95 billion and (b) to effect such other changes as contemplated therein.  In connection with Merger and related transactions, the Company expects to enter into an amended and restated credit agreement. The proceeds of the Debt Financing will be used to partially finance the aggregate Merger Consideration, repay or redeem the existing indebtedness of IPC other than certain letters of credit that are permitted to remain outstanding, 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.

Subsequent Acquisitions

In October 2015, the Company completed the acquisition of the operations of an emergency staffing business located in Nevada. This acquisition will add approximately 370,000 patient visits annually to the Company's existing emergency medicine staffing operations. The Company is still in the process of completing the purchase price allocation for this acquisition.

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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 Company's results of operations. The payment of contingent purchase obligations tied to continuing employment is included as a component of operating cash flows. When contingent payments are not tied to continuing employment, such amounts are recognized as a contingent purchase liability at the acquisition date.

As of September 30, 2015, the Company estimates it may have to pay $49.4 million (including $6.0 million related to transactions completed during 2015) in future contingent payments for acquisitions made prior to September 30, 2015, based upon the current projected performance of the acquired operations of which $24.1 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 $25.2 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 nine months ended September 30,2014 and 2015 was $22.5 million and $12.2 million, respectively. Included in the expense recognized in 2014 and 2015 is $0.2 million and $0.8 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 nine months ended September 30, 2015 are as follows (in thousands):

Contingent purchase liability at December 31, 2014	$	23,584
Payments	(14,145		)
Contingent purchase and other acquisition compensation expense recognized	12,230
Contingent purchase liability recognized at acquisition date	2,472
Contingent purchase liability at September 30, 2015	$	24,141

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

For the remainder of the year ended December 31, 2015	$	5,533
For the year ended December 31, 2016	16,960
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
	$	25,242

In the nine months ended September 30, 2014 and 2015, the Company recognized transaction costs of $5.7 million and $7.2 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.

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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 September 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 September 30, 2015		Fair Value September 30, 2015		Fair Value Level 1		Fair Value Level 2		Fair Value Level 3
Investments of insurance subsidiaries:
Money market funds	$	3,957	$	3,957	$	3,957	$	—	$	—
Municipal bonds	88,321		88,321		—		88,321		—
Mutual funds	68		68		—		68		—
Corporate bonds	2,101		2,101		—		2,101		—
Private investments	3,045		3,045		—		—		3,045
Total investments of insurance subsidiaries	$	97,492	$	97,492	$	3,957	$	90,490	$	3,045
Supplemental employee retirement plan investments:
Mutual funds	$	41,942	$	41,942	$	—	$	41,942	$	—

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 nine months ended September 30, 2015 there were no transfers between Levels 1, 2 or 3. See Note 5 for more information regarding the Company’s investments.

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The Company classified its municipal bonds, mutual funds, and corporate bonds 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 FASB 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 September 30, 2015, the estimated fair value of the Company’s outstanding debt was $741.9 million compared to a carrying value of $755.0 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.

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.

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At December 31, 2014 and September 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
September 30, 2015
Money market funds	$	3,957	$	—	$	—		$	3,957
Municipal bonds	86,432		2,290		(401		)	88,321
Mutual funds	68		—		—			68
Private Investments	2,999		46		—			3,045
Corporate bonds	2,086		16		(1		)	2,101
	$	95,542	$	2,352	$	(402	)	$	97,492

At December 31, 2014 and September 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
September 30, 2015
Due in less than one year	$	9,987	$	40	$	(48	)	$	9,979
Due after one year through five years	54,841		1,519		(129		)	56,231
Due after five years through ten years	25,732		718		(112		)	26,338
Due after ten years	1,915		29		(113		)	1,831
Total	$	92,475	$	2,306	$	(402	)	$	94,379

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A summary of the Company’s temporarily impaired available-for-sale investment securities as of December 31, 2014 and September 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	)
September 30, 2015
Municipal bonds	$	16,221	$	(240	)		$	1,917	$	(161	)	$	18,138	$	(401	)
Corporate bonds	1,087		(1		)		—		—			1,087		(1		)
Total investment	$	17,308	$	(241	)		$	1,917	$	(161	)	$	19,225	$	(402	)

(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 September 30, 2015.

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

As of September 30, 2015, and December 31, 2014, the investments related to the participant directed supplemental employee retirement plan totaled $41.9 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 nine months ended on September 30, 2014 and September 30, 2015 that were still held by the Company as of September 30, 2014 and September 30, 2015 are as follows (in thousands):

	2014			2015
Net gains and (losses) recognized during the nine months ended September 30, 2014 and 2015, respectively on trading securities	$	(414	)	$	(1,467	)
Less: Net gains (losses) recognized during the period on trading securities sold during the nine months ended September 30, 2014 and 2015, respectively	19			(35		)
Unrealized gains and (losses) recognized on trading securities still held at September 30, 2014 and 2015, respectively	$	(433	)	$	(1,432	)

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

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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 nine months ended September 30, 2014 and 2015 consisted of the following (in thousands):

	Three Months Ended September 30,										Nine Months Ended September 30,
	2014					2015					2014					2015
Medicare	$	131,562		18.5	%	$	183,120		20.4	%	$	384,570		19.0	%	$	530,047		20.2	%
Medicaid	130,368			18.3		166,015			18.5		356,043			17.5		476,151			18.2
Commercial and managed care	340,183			47.8		462,652			51.5		948,437			46.7		1,322,652			50.5
Self-pay	414,317			58.2		496,910			55.3		1,198,063			59.0		1,405,252			53.7
Other	21,703			3.0		21,576			2.4		63,813			3.1		61,777			2.4
Unbilled	14,140			2.0		2,369			0.3		23,231			1.1		15,979			0.6
Net fee for service revenue before provision for uncollectibles	1,052,273			147.7		1,332,642			148.2		2,974,157			146.6		3,811,858			145.6
Contract revenue before provision for uncollectibles	161,278			22.7		182,631			20.3		489,323			24.1		549,998			21.0
Other	9,553			1.3		10,136			1.1		30,412			1.5		28,826			1.1
Net revenue before provision for uncollectibles	1,223,104			171.7		1,525,409			169.6		3,493,892			172.2		4,390,682			167.7
Provision for uncollectibles	(510,863		)	(71.7	)	(626,228		)	(69.6	)	(1,464,931		)	(72.2	)	(1,773,062		)	(67.7	)
Net revenue	$	712,241		100.0	%	$	899,181		100.0	%	$	2,028,961		100.0	%	$	2,617,620		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 fifteen 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 99% 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 September 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 nine months ended September 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	1,024
Additions through 2015 acquisitions	75,100
Change in goodwill attributable to the sale of outsourced medical coding practice	(520		)
Balance, September 30, 2015	$	800,583

The following is a summary of intangible assets and related amortization as of December 31, 2014 and September 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 September 30, 2015:
Contracts	$	472,204	$	(156,934	)
Other	20,360		(8,671		)
Total	$	492,564	$	(165,605	)
Aggregate amortization expense:
For the nine months ended September 30, 2015			$	62,085
Estimated amortization expense:
For the remainder of the year ended December 31, 2015			$	20,651
For the year ended December 31, 2016			80,232
For the year ended December 31, 2017			74,395
For the year ended December 31, 2018			62,103
For the year ended December 31, 2019			53,314
For the years ended December 31, 2020 and thereafter			36,264

Intangible assets are amortized over their estimated life, which is approximately three to six years. As of September 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 September 30, 2015 consisted of the following (in thousands):

Term Loan A Facility	$	585,000
Revolving Credit Facility	170,000
	755,000
Less current portion	(200,000		)
	$	555,000

As of September 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 nine months ended September 30, 2015 was 1.94% for amounts outstanding under the Term A Loan Facility.

The Company had $170.0 million of borrowings outstanding under the Revolving Credit Facility as of September 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 September 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 September 30, 2015 are as follows (in thousands):

2015 (includes amounts outstanding under the revolving credit facility)	$	200,000
2016	45,000
2017	60,000
2018	45,000
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		September 30, 2015
Estimated losses under self-insured programs	$	190,117	$	219,376
Estimated losses under commercial insurance programs	74,248		92,473
	264,365		311,849
Less estimated payable within one year	82,735		71,936
	$	181,630	$	239,913

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

Balance, December 31, 2014	$	190,117
Reserves related to current period	55,652
Payments for current period reserves	(1,229		)
Payments for prior period reserves	(25,164		)
Balance, September 30, 2015	$	219,376

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 September 30, 2015, of the $219.4 million of estimated losses under self-insurance programs, approximately $134.8 million represented an estimate of IBNR claims and expenses and additional loss development, with the remaining $84.6 million representing specific case reserves. Of the specific case reserves as of September 30, 2015, $1.9 million represented case reserves that had been settled but not yet funded, and $82.7 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 October 2015. Based on the results of the actuarial study completed in October 2015, management determined no additional change was necessary in the consolidated reserves for professional liability losses during the third quarter of 2015 related to prior year loss estimates. The discount rate on professional liability reserves was 1.2% at September 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.

On August 14, 2015, a purported shareholder of IPC filed a complaint in the Delaware Court of Chancery captioned Smukler v. IPC Healthcare, Inc., et al. (Case No. 11392-CB), on behalf of a purported class of  IPC shareholders. The lawsuit names IPC, each of its current directors, the Company, and Sub as defendants. The lawsuit alleges that the individual defendants breached their fiduciary duties by, among other things, failing to take appropriate steps to maximize the value of IPC to its shareholders, failing to value IPC properly, and taking steps to avoid competitive bidding by alternate potential acquirers. The lawsuit also alleges that IPC, the Company, and Sub aided and abetted those alleged breaches of fiduciary duties by the individual defendants. The lawsuit seeks, among other things, certification of the action as a class action; injunctive relief enjoining the merger; an accounting of all damages purportedly suffered by the plaintiff and the class including rescissory damages in favor of the plaintiff and the class; and the fees and costs associated with the litigation. On August 18, 2015, an additional lawsuit was filed in the Delaware Court of Chancery, asserting similar claims and allegations to those in the Smukler lawsuit and seeking similar relief on behalf of the same putative class. Crescente v. Singer, et al. (Case No. 11405-CB).

Additionally, on August 19, 2015, a lawsuit was filed in the Superior Court for the State of California in Los Angeles County. Khemthong v. IPC Healthcare Networks, Inc., et al. (No. BC 591953). The lawsuit asserted similar claims and allegations to those in the Smukler lawsuit and sought similar relief on behalf of the same putative class. On August 27, 2015, the plaintiff filed a request for voluntary dismissal of the suit without prejudice, and on August 28, 2015, the court entered an order granting that request.

 By Order dated September 11, 2015 (the Consolidation Order), the Smukler and Crescente  actions were consolidated, and all further litigation relating to or arising out of the merger were directed to be consolidated with such actions under the caption In re IPC Healthcare, Inc. Stockholders Litigation, C.A. No. 11392-CB (the “Consolidated Action”).  On September 17, 2015, an action captioned Spencer v. IPC Healthcare, Inc., C.A. No. 11516-CB, was filed in the Delaware Court of Chancery. Under the Consolidation Order, such action is required to be consolidated with the previously-filed actions. On September 18, 2015, a Verified Consolidated Class Action Complaint was filed in the Consolidated Action.  On October 2, 2015, the defendants moved to dismiss the operative complaint.

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 the 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 the PPACA can only lose the new federal

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Medicaid funding in the 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.

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 2,426,000 are available to grant as of September 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 September 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	(1,144	)	20.05		45,916
Expired or forfeited	(19	)	37.24
Outstanding at end of period	3,586		$	30.98	$	86,433	6.0
Exercisable at end of period	2,143		$	21.40	$	69,923	5.4

Intrinsic value is the amount by which the stock price as of September 30, 2015 exceeds the exercise price of the options. The Company granted 510,000 options during the nine months ended September 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 September 30, 2015, the Company had approximately $15.4 million of unrecognized compensation expense, net of estimated forfeitures related to unvested options, which will be recognized over the remaining requisite service period.

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

	Nine Months Ended September 30,
	2014		2015
Stock options	$	8,623	$	7,212
Restricted awards	4,035		5,923
Stock purchase plan	35		62
Total equity based compensation expense	$	12,693	$	13,197
Tax benefit of equity based compensation expense	$	4,887	$	5,081

Restricted awards are grants of restricted stock and grants of restricted stock units that are not vested (Restricted Awards). The Company granted 185,000 shares of Restricted Awards in 2015. The Company had $19.4 million of expense remaining to be recognized over the requisite service period for Restricted Awards at September 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 nine months ended September 30, 2015 is as follows (in thousands):

	Restricted Stock		Restricted Units		Total
Outstanding at beginning of year	161		317		478
Granted	—		185		185
Vested	(57	)	(39	)	(96	)
Forfeited and expired	(2	)	(2	)	(4	)
Outstanding at September 30, 2015	102		461		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 September 30, 2015, contributions under the ESPP totaled $2.5 million. In October 2015, approximately 47,000 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 September 30, 2015, contributions under the NQSPP totaled $1.2 million. In October 2015, approximately 23,000 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 September 30,				Nine Months Ended September 30,
	2014		2015		2014		2015
Net earnings attributable to Team Health Holdings, Inc. (numerator for basic and diluted earnings per share)	$	27,586	$	35,442	$	81,634	$	92,431
Denominator:
Weighted average shares outstanding	70,627		72,361		70,209		71,900
Effect of dilutive securities:
Stock options	1,524		1,086		1,517		1,176
Restricted awards	178		237		227		272
Stock purchase plans	2		3		2		3
Shares used for diluted earnings per share	72,331		73,687		71,955		73,351
Basic net earnings per share of Team Health Holdings, Inc.	$	0.39	$	0.49	$	1.16	$	1.29
Diluted net earnings per share of Team Health Holdings, Inc.	$	0.38	$	0.48	$	1.13	$	1.26
Securities excluded from diluted earnings per share of Team Health Holdings, Inc. because they were antidilutive:
Stock options	488		519		793		258
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 $1.7 million during the nine months ended September 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 September 30,						Nine Months Ended September 30,
	2014			2015			2014			2015
Balance at beginning of period	$	1,510		$	1,095		$	447		$	1,695
Other comprehensive earnings:
Net unrealized gain (loss)	317			451			2,024			(436		)
Tax (expense) benefit	(89		)	(124		)	(663		)	213
Total other comprehensive earnings before reclassifications, net of tax	228			327			1,361			(223		)
Net amount reclassified to earnings(1)	(63		)	(97		)	(133		)	(147		)
Tax benefit (expense)(2)	—			—			—			—
Total amount reclassified from accumulated other comprehensive earnings, net of tax(3)	(63		)	(97		)	(133		)	(147		)
Total other comprehensive earnings (loss)	165			230			1,228			(370		)
Balance at end of period	$	1,675		$	1,325		$	1,675		$	1,325

(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 September 30,				Nine Months Ended September 30,
	2014		2015		2014		2015
Net Revenue:
Healthcare Services	$	596,205	$	754,919	$	1,681,463	$	2,181,777
Other Services	116,036		144,262		347,498		435,843
	$	712,241	$	899,181	$	2,028,961	$	2,617,620
Operating Earnings:
Healthcare Services	$	34,104	$	41,290	$	90,916	$	90,627
Other Services	6,350		3,919		22,017		23,401
General Corporate	12,018		18,632		36,213		57,635
	$	52,472	$	63,841	$	149,146	$	171,663
Reconciliation of Operating Earnings to Net Earnings:
Operating earnings	$	52,472	$	63,841	$	149,146	$	171,663
Interest expense, net	3,921		5,572		10,758		14,132
Provision for income taxes	20,895		22,837		56,542		65,178
Net earnings	$	27,656	$	35,432	$	81,846	$	92,353

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

Introduction

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 (U.S.) 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 were 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

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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.

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 went into effect on July 1, 2015. We estimate a total increase of approximately $4.2 million in our 2015 ED fee for service revenue from these 2015 updates.

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.

The 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 nine months ended September 30, 2014 and September 30, 2015, we recognized $27.7 million and $2.0 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%.

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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 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. Currently, fifteen of the Company’s provider groups (TINs) are participating 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 $87.9 million and $81.8 million for the nine months ended September 30, 2014 and 2015, respectively. Of these revenues, $54.0 million and $47.2 million for the nine months ended September 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 $111.4 million following the completion of the bidding process as of October 1, 2015. 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 27.6% and 26.5% of our military staffing revenue for each of the nine months ended September 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 September 30, 2015, the Company paid a total of $116.3 million related to acquisitions including $113.0 million for the operations of six 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.

On August 4, 2015, the Company entered into an Agreement and Plan of Merger with IPC Healthcare, Inc. (IPC), providing for the acquisition of IPC by the Company (the IPC Transaction). The merger consideration provided in the Merger

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Agreement 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 in connection with the financing of the acquisition.

A special meeting of IPC's stockholders is scheduled to be held on November 16, 2015 to vote upon the adoption of the merger Agreement. There is no assurance that the conditions to the Merger will be satisfied or that the Merger will close on this date or at all. See Note 3 of the accompanying consolidated financial statements for a discussion of the Company's acquisition activity.

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 nine months ended September 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 nine months ended September 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

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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 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 fifteen 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 September 30,				Nine Months Ended September 30,
	2014		2015		2014		2015
Payor:
Medicare	24.7	%	25.5	%	24.9	%	25.5	%
Medicaid	29.6		31.2		28.7		31.3
Commercial and managed care	26.6		26.1		26.6		26.4
Self-pay	17.3		16.0		18.0		15.5
Other	1.8		1.2		1.8		1.3
Total	100.0	%	100.0	%	100.0	%	100.0	%

Estimated net revenue derived from commercial and managed care plans was approximately 41% in the nine months ended September 30, 2015 and 39% in 2014. Estimated net revenue derived from the Medicare program was approximately 19% of total net revenue in the nine months ended September 30, 2015 and 17% in 2014. Estimated net revenue derived from the Medicaid program was approximately 11% of total net revenue in both the nine months ended September 30, 2015 and 2014. In addition, net revenue derived from within the Military Health System, which is the U.S. military’s dependent healthcare program, and other government agencies was approximately 3% in the nine months ended September 30, 2015 and 4% 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 September 30, 2015 could have an after tax effect of approximately $6.3 million on our financial position and results of operations. Our days revenue outstanding at December 31, 2014 and September 30, 2015 were 59.0 days and 60.4 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

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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. Our allowance for doubtful accounts totaled $558.5 million as of September 30, 2015.

Approximately 99% 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 or specific payor classifications, the portion of the allowance associated with fee for service charges as of September 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 fifteen 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

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likely to be collected. The methodologies employed to compute allowances for doubtful accounts were unchanged between 2014 and 2015.

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 1.2% as of September 30, 2015, which was the current weighted average Treasury rate, over a 10 year period at December 31, 2014 and September 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.

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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 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 October 2015. Based on the results of the semi-annual actuarial study completed during October 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 September 30, 2015 (in millions) as well as the sensitivity of the reserve estimates at a 65%, 75% and 90% confidence level:

As reported	$	219.4
At 65% confidence level	$	223.7
At 75% confidence level	$	230.0
At 90% confidence level	$	244.8

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

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insured providers have contributed to the generally stable trends in loss development estimates noted during the most recent periods.

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 September 30,				Nine Months Ended September 30,
	2014		2015		2014		2015
Net revenue	100.0	%	100.0	%	100.0	%	100.0	%
Professional service expenses	76.7		78.7		76.8		78.7
Professional liability costs	4.2		3.1		3.6		3.1
General and administrative expenses	8.7		7.5		9.7		8.4
Other (income) expenses, net	—		0.2		(0.2	)	—
Depreciation	0.8		0.7		0.8		0.7
Amortization	1.8		2.3		1.7		2.4
Interest expense, net	0.6		0.6		0.5		0.5
Transaction costs	0.4		0.4		0.3		0.3
Earnings before income taxes	6.8		6.5		6.8		6.0
Provision for income taxes	2.9		2.5		2.8		2.5
Net earnings	3.9	%	3.9	%	4.0	%	3.5	%
Net earnings (loss) attributable to noncontrolling interests	—	%	—	%	—	%	—	%
Net earnings attributable to Team Health Holdings, Inc.	3.9	%	3.9	%	4.0	%	3.5	%

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

Net Revenue Before Provision for Uncollectibles. Net revenue before provision for uncollectibles in the three months ended September 30, 2015increased $302.3 million, or 24.7%, to $1.53 billion from $1.22 billion in the three months ended September 30, 2014. The increase in net revenue before provision for uncollectibles resulted from increases in fee for service revenue of $280.4 million, contract revenue of $21.4 million and other revenue of $0.6 million. In the three months ended September 30, 2015, fee for service revenue was 87.4% of net revenue before provision for uncollectibles compared to 86.0% in the same period of 2014, contract revenue was 12.0% of net revenue before provision before uncollectibles compared to 13.2% in the same period of 2014 and other revenue was 0.7% and 0.8% in 2015 and 2014, respectively. The increase in fee for service revenue before provision for uncollectibles was primarily a result of a 28.7% increase in total fee for service visits between periods.

Provision for Uncollectibles. The provision for uncollectibles increased $115.4 million, or 22.6%, to $626.2 million in the three months ended September 30, 2015 from $510.9 million in the corresponding quarter in 2014. The provision for uncollectibles as a percentage of net revenue before provision for uncollectibles declined to 41.1% in the three months ended September 30, 2015 compared with 41.8% 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 September 30, 2015, self-pay fee for service visits were

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approximately 16.0% of the total fee for service visits compared to approximately 17.3% in the same quarter of 2014, which constrained the growth in the provision for uncollectibles between quarters.

Net Revenue. Net revenue in the three months ended September 30, 2015increased $186.9 million, or 26.2%, to $899.2 million from $712.2 million in the three months ended September 30, 2014. Acquisitions contributed 19.2%, net sales growth contributed 4.4%, and same contract revenue contributed 2.7% 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 4.7% of overall net revenue growth between quarters.

Total same contract revenue, which consists of contracts under management in both quarters, increased $19.0 million, or 2.9%, to $672.9 million in the three months ended September 30, 2015 compared to $653.9 million in the three months ended September 30, 2014. Fee for service volume increased 3.3%, which contributed 2.5% of same contract revenue growth between quarters. Increases in estimated collections on same contract fee for service visits provided a 0.6% increase in same contract revenue growth. The increase in estimated collections per visit was supported by increases in commercial and managed care reimbursement and improvements in prior year revenue estimates but was constrained by a reduction in Medicaid parity revenue and a decline in sequential payor mix benefit in the three months ended September 30, 2015. Contract and other revenue constrained same contract revenue growth by 0.2% between quarters. Acquisitions contributed $136.5 million of growth in net revenue and net new contract revenue increased $31.4 million between quarters. The benefit from Medicaid parity revenue recognized in the third quarter of 2015 was $0.2 million. The third quarter of 2014 reflects Medicaid parity revenue of $10.4 million, of which $9.8 million is same contract. The decline in total parity revenue between periods of $10.2 million constrained consolidated revenue growth by 1.4% while the decline in same contract Medicaid parity revenue constrained same contract revenue growth by 1.5% 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.

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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 September 30,
	2014		2015
	(in thousands)
Same contracts:
Fee for service revenue	$	504,193	$	524,203
Contract and other revenue	149,709		148,664
Total same contracts	653,902		672,867
New contracts, net of terminations:
Fee for service revenue	27,725		56,568
Contract and other revenue	19,167		21,769
Total new contracts, net of terminations	46,892		78,337
Acquired contracts:
Fee for service revenue	10,691		126,721
Contract and other revenue	756		21,256
Total acquired contracts	11,447		147,977
Consolidated:
Fee for service revenue	542,609		707,492
Contract and other revenue	169,632		191,689
Total net revenue	$	712,241	$	899,181

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

	Three Months Ended September 30,
	2014	2015
	(in thousands)
Fee for service visits and procedures:
Same contracts	2,925	3,023
New and acquired contracts, net of terminations	197	994
Total fee for service visits and procedures	3,122	4,017

Professional Service Expenses. Professional service expenses, which include physician and provider costs, billing and collection expenses, and other professional expenses, totaled $707.9 million in the three months ended September 30, 2015 compared to $546.3 million in the three months ended September 30, 2014, an increase of $161.5 million, or 29.6%. This increase between quarters is primarily related to our acquisitions and new contracts and a 5.2% 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 78.7% in the three months ended September 30, 2015 from 76.7% in the three months ended September 30, 2014.

Professional Liability Costs. Professional liability costs were $27.5 million in the three months ended September 30, 2015 compared to $29.6 million in the three months ended September 30, 2014, a decrease of $2.1 million or 7.1%. Professional liability costs for the three months ended September 30, 2014 included an increase in prior year professional liability loss reserves of $7.1 million. Excluding the prior year reserve adjustment in the three months ended September 30, 2014, professional liability costs increased $5.0 million, or 22.2%. The decrease 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 third quarter of 2015 and 4.2% in 2014. Excluding the prior year reserve adjustment in the three months ended September 30, 2014, professional liability costs as a percentage of net revenue were 3.2% in the third quarter of 2014.

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General and Administrative Expenses. General and administrative expenses increased $5.4 million, or 8.8%, to $67.1 million for the three months ended September 30, 2015 from $61.6 million in the three months ended September 30, 2014. General and administrative expenses included a credit to contingent purchase compensation expense of $3.5 million for the three months ended September 30, 2015 compared to $3.1 million of expense for the three months ended September 30, 2014. The credit in contingent purchase expense in the third quarter of 2015 is related to changes in our future contingent payment estimates due to certain acquisitions that are projected to fall short of operational or financial targets, resulting in a reduction of our previous estimate of contingent consideration payable at the end of the measurement period. In limited circumstances, the accrued contingent consideration is based on a multiple of earnings of the acquired practices during a specified measurement period and a moderate change in such projected earnings may result in a significant change to the estimated value of such previously projected contingent consideration liability during a reporting period. Excluding the contingent purchase compensation expense, general and administrative expense increased $12.0 million or 20.6%, to $70.6 million for the three months ended September 30, 2015 from $58.6 million in the three months ended September 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 7.5% in the third quarter of 2015 and 8.7% in the same quarter in 2014. Excluding contingent purchase compensation expense, general and administrative expenses as a percentage of net revenue were 7.9% in the third quarter of 2015 compared to 8.2% in the third quarter of 2014.

Other (Income) Expenses, Net. In the three months ended September 30, 2015, we recognized other expense of $2.1 million compared to expense of $0.3 million in the same quarter in 2014. The expense recognized in 2015 is primarily related to the change in the fair value of assets related to our non-qualified deferred compensation plan. The expense 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 $6.3 million in the three months ended September 30, 2015 compared to $5.8 million for the three months ended September 30, 2014. The increase of $0.5 million was primarily due to capital expenditures in 2015 and 2014.

Amortization. Amortization expense was $20.6 million in the three months ended September 30, 2015 compared to $13.0 million for the three months ended September 30, 2014. The increase of $7.6 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 $5.6 million in the three months ended September 30, 2015 compared to $3.9 million in the corresponding quarter in 2014 primarily due to an increase in revolver borrowings due primarily to the funding of our acquisitions and an increase in the amortization of deferred financing costs partially offset by a reduction of interest from the repayment of the Term B Loan Facility in 2014.

Transaction Costs. Transaction costs were $3.9 million for the three months ended September 30, 2015 and $3.1 million for the three months ended September 30, 2014. These costs relate to advisory, legal, accounting and other fees incurred related to acquisition activity during the respective quarters. Of the total transactions costs in 2015, $2.6 million is associated with the IPC Healthcare transaction.

Earnings before Income Taxes. Earnings before income taxes in the three months ended September 30, 2015 were $58.3 million compared to $48.6 million in the three months ended September 30, 2014.

Provision for Income Taxes. The provision for income taxes was $22.8 million in the three months ended September 30, 2015 compared to $20.9 million in the three months ended September 30, 2014.

Net Earnings. Net earnings were $35.4 million in the three months ended September 30, 2015 compared to $27.7 million in the three months ended September 30, 2014.

Net Earnings (Loss) Attributable to Noncontrolling Interests. Earnings (loss) attributable to noncontrolling interests were a loss of $10,000 for the three months ended September 30, 2015 compared to earnings of $70,000 for the three months ended September 30, 2014.

Net Earnings Attributable to Team Health Holdings, Inc. Net earnings attributable to Team Health Holdings, Inc. were $35.4 million and $27.6 million for the three months ended September 30, 2015 and September 30, 2014, respectively.

Nine Months Ended September 30, 2015 Compared to the Nine Months Ended September 30, 2014

Net Revenue Before Provision for Uncollectibles. Net revenue before provision for uncollectibles in the nine months ended September 30, 2015increased $896.8 million, or 25.7%, to $4.39 billion from $3.49 billion in the nine months ended

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September 30, 2014. The increase in net revenue before provision for uncollectibles resulted primarily from increases in fee for service revenue of $837.7 million and contract revenue of $60.7 million, partially offset by a decrease in other revenue of $1.6 million. In the nine months ended September 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 14.0% 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 33.4% increase in total fee for service visits and procedures. The increase in contract revenue was due primarily to the impact of new and acquired contracts.

Provision for Uncollectibles. The provision for uncollectibles increased $308.1 million or 21.0%, to $1.77 billion in the nine months ended September 30, 2015 from $1.46 billion in the corresponding period in 2014. The provision for uncollectibles as a percentage of net revenue before provision for uncollectibles declined to 40.4% in the nine months ended September 30, 2015 compared with 41.9% 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 nine months ended September 30, 2015, self-pay fee for service visits were approximately 15.5% of the total fee for service visits compared to approximately 18.0% in the same period of 2014, which constrained the growth in the provision for uncollectibles between periods.

Net Revenue. Net revenue in the nine months ended September 30, 2015increased $588.7 million or 29.0%, to $2.62 billion from $2.03 billion in the nine months ended September 30, 2014. Acquisitions contributed 19.9%, net sales growth contributed 4.9%, and same contract revenue contributed 4.2% 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 5.3% of overall net revenue growth between periods.

Total same contract revenue, which consists of contracts under management in both periods, increased $85.8 million, or 4.7%, to $1.90 billion in the nine months ended September 30, 2015 compared to $1.82 billion in the nine months ended September 30, 2014. Fee for service volume increases of 6.1% increased same contract revenue growth by 4.6%, while increases in same contract estimated collections on fee for service visits provided a 0.2% increase in same contract revenue growth between periods. The increase in the estimated collections per visit was constrained by a reduction in Medicaid parity revenue in the nine months ended September 30, 2015. Contract and other revenue constrained same contract revenue growth by 0.1% between periods. Acquisitions contributed $403.7 million of growth in net revenue and net new contract revenue increased $99.1 million between periods. The 2015 year to date benefit for Medicaid parity revenue recognized is $2.0 million, of which $0.2 million is same contract revenue. $27.7 million of Medicaid parity revenue was recognized in the nine months ended September 30, 2014, $25.6 million of which was same contract. Declines in Medicaid parity constrained consolidated revenue growth by 1.3% and same contract revenue growth 1.4% by between periods.

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.

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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:

	Nine Months Ended September 30,
	2014		2015
	(in thousands)
Same contracts:
Fee for service revenue	$	1,383,476	$	1,469,940
Contract and other revenue	434,253		433,613
Total same contracts	1,817,729		1,903,553
New contracts, net of terminations:
Fee for service revenue	92,328		193,259
Contract and other revenue	78,120		76,325
Total new contracts, net of terminations	170,448		269,584
Acquired contracts:
Fee for service revenue	38,321		380,276
Contract and other revenue	2,463		64,207
Total acquired contracts	40,784		444,483
Consolidated:
Fee for service revenue	1,514,125		2,043,475
Contract and other revenue	514,836		574,145
Total net revenue	$	2,028,961	$	2,617,620

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

	Nine Months Ended September 30,
	2014	2015
	(in thousands)
Fee for service visits and procedures:
Same contracts	8,050	8,541
New and acquired contracts, net of terminations	824	3,296
Total fee for service visits and procedures	8,874	11,837

Professional Service Expenses. Professional service expenses, which include physician and provider costs, billing and collection expenses, and other professional expenses, totaled $2.06 billion in the nine months ended September 30, 2015 compared to $1.56 billion in the nine months ended September 30, 2014, an increase of $501.2 million, or 32.2%. This increase between periods is primarily related to our acquisitions and net new contract growth and a 6.4% 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 78.7% in the nine months ended September 30, 2015 from 76.8% in the nine months ended September 30, 2014.

Professional Liability Costs. Professional liability costs were $81.4 million in the nine months ended September 30, 2015 compared to $73.5 million in the nine months ended September 30, 2014, an increase of $7.9 million or 10.7%. Professional liability costs for the nine months ended September 30, 2014 included an increase in prior year professional liability loss reserves of $7.1 million. Excluding the prior year reserve adjustment in 2014, professional liability costs increased $15.0 million, or 22.6%, between periods. 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 nine months ended September 30, 2015 and 3.6% in the nine months ended September 30, 2014. Excluding the prior year revenue adjustments in 2014, professional liability costs as a percentage of net revenue were 3.3% in the nine months ended September 30, 2014.

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General and Administrative Expenses. General and administrative expenses increased $23.4 million or 11.9% to $219.2 million for the nine months ended September 30, 2015 from $195.8 million in the nine months ended September 30, 2014. General and administrative expenses included contingent purchase compensation expense of $12.2 million for the nine months ended September 30, 2015 compared to $22.5 million of expense for the nine months ended September 30, 2014. Excluding the contingent purchase compensation expense, general and administrative expense increased $33.6 million or 19.4%, to $207.0 million for the nine months ended September 30, 2015 from $173.4 million in the nine months ended September 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 8.4% in the nine months ended September 30, 2015 and 9.7% in the nine months ended September 30, 2014. Excluding contingent purchase compensation expense, general and administrative expenses as a percentage of net revenue were 7.9% in the nine months ended September 30, 2015 compared to 8.5% in the nine months ended September 30, 2014.

Other (Income) Expenses, Net. In the nine months ended September 30, 2015, we recognized other income of $0.2 million compared to $3.5 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 and a decline in the fair value of assets related to our non-qualified deferred compensation plan. 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 increase in the fair value of assets related to our non-qualified deferred compensation plan.

Depreciation. Depreciation expense was $17.4 million in the nine months ended September 30, 2015 compared to $15.3 million for the nine months ended September 30, 2014. The increase of $2.1 million was primarily due to capital expenditures in 2015 and 2014.

Amortization. Amortization expense was $62.1 million in the nine months ended September 30, 2015 compared to $35.2 million for the nine months ended September 30, 2014. The increase of $26.9 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 $3.4 million to $14.1 million in the nine months ended September 30, 2015, compared to $10.8 million in the corresponding period in 2014, primarily due to increased revolver borrowings between periods and an increase in the amortization of deferred financing costs partially offset by a reduction of interest from the repayment of the Term B Loan facility in 2014.

Transaction Costs. Transaction costs were $7.2 million for the nine months ended September 30, 2015 and $5.7 million for the nine months ended September 30, 2014. These costs relate to advisory, legal, accounting and other fees incurred related to acquisition activity during the respective periods. Of the total transaction costs in 2015, $2.6 million is associated with the IPC Healthcare transaction.

Earnings before Income Taxes. Earnings before income taxes in the nine months ended September 30, 2015 were $157.5 million compared to $138.4 million in the nine months ended September 30, 2014.

Provision for Income Taxes. The provision for income taxes was $65.2 million in the nine months ended September 30, 2015 compared to $56.5 million in the nine months ended September 30, 2014.

Net Earnings. Net earnings were $92.4 million in the nine months ended September 30, 2015 compared to $81.8 million in the nine months ended September 30, 2014.

Net (Loss) Earnings Attributable to Noncontrolling Interests. Earnings (loss) attributable to noncontrolling interests were a loss of $0.1 million for the nine months ended September 30, 2015 and earnings of $0.2 million in the nine months ended September 30, 2014.

Net Earnings Attributable to Team Health Holdings, Inc. Net earnings attributable to Team Health Holdings, Inc. were $92.4 million and $81.6 million for the nine months ended September 30, 2015 and September 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 met through the use of existing available cash, cash flows derived from future operating results and borrowings under our senior secured revolving credit facility.

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Cash flow provided by operations for the nine months ended September 30, 2015 was $131.9 million compared to $106.7 million in the same period in 2014. Included in operating cash flow were contingent purchase price payments of $12.2 million in the nine months ended September 30, 2015 and $21.9 million in the same period in 2014. Excluding the impact of the contingent purchase payments, the operating cash flows in 2015 were $144.2 million compared to $128.7 million in 2014. Operating cash flow in the first nine months of 2015 reflects an increased level of profitability when compared to the prior year. Cash used in investing activities in the nine months ended September 30, 2015 was $127.4 million compared to $368.4 million in the same period of 2014. The $241.0 million decrease in cash used in investing activities was principally due to a decrease in cash used for acquisitions between periods. Cash used in financing activities in the nine months ended September 30, 2015 was $6.5 million compared to cash provided of $243.0 million in the nine months ended September 30, 2014. The change in financing activities between periods was primarily related to reduced net revolver drawings, offset by an increase in proceeds from stock option exercises and the related tax benefit.

We spent $31.1 million in the first nine months of 2015 and $16.8 million in the first nine 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 September 30, 2015, we had cash and cash equivalents of approximately $18.2 million and total outstanding debt of $755.0 million. There were no known liquidity restrictions or impairments on our cash and cash equivalents as of September 30, 2015. The outstanding debt as of September 30, 2015 includes borrowings under our revolving credit facility in the amount of $170.0 million incurred primarily to fund our recently completed acquisitions. As of September 30, 2015, we had $480.0 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 September 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 nine months ended September 30, 2015, total net cash used in acquisitions, including contingent payments, was $128.6 million. As of September 30, 2015, we estimate future contingent payment obligations to be approximately $49.4 million for acquisitions made prior to September 30, 2015, which we expect to fund over a period of three years. $24.1 million was recorded as a liability on our balance sheet as of September 30, 2015, while the remaining estimated liability of $25.2 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. See Note 3 of the accompanying consolidated financial statements for a discussion of the Company's acquisition activity and related contingent purchase obligations, including discussion of the IPC Transaction.

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 September 30, 2015, these investments totaled approximately $97.5 million, including a $2.0 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 nine months ended September 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 September 30,					Nine Months Ended September 30,
	2014		2015			2014			2015
	(in thousands)
Net earnings attributable to Team Health Holdings, Inc.	$	27,586	$	35,442		$	81,634		$	92,431
Interest expense, net	3,921		5,572			10,758			14,132
Provision for income taxes	20,895		22,837			56,542			65,178
Depreciation	5,826		6,290			15,315			17,423
Amortization	12,991		20,633			35,203			62,085
Other (income) expenses, net(a)	292		2,137			(3,457		)	(182		)
Contingent purchase and other acquisition compensation expense(b)	3,086		(3,530		)	22,483			12,230
Transaction costs(c)	3,107		3,869			5,734			7,170
Equity based compensation expense(d)	3,345		3,985			12,693			13,197
Insurance subsidiaries interest income	503		535			1,501			1,558
Professional liability loss reserve adjustments associated with prior years	7,088		—			7,088			—
Severance and other charges	381		3,343			1,563			4,590
Adjusted EBITDA	$	89,021	$	101,113		$	247,057		$	289,812

(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, including costs associated with the IPC Healthcare transaction of $2.6 million.

(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 September 30, 2015, the fair value of the Company’s total debt was approximately $741.9 million, which had a carrying value of $755.0 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 $6.2 million for the nine months ended September 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 September 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 Executive Vice President and Chief Financial Officer concluded that as of September 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 September 30, 2015 that has materially affected, or is reasonably likely to materially affect, the Company’s internal control over financial reporting.

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PART II. OTHER INFORMATION

Item 1. Legal Proceedings

There have been no material changes to the risk factors set forth in Item 3. to Part I of our annual report on Form 10-K for the year ended December 31, 2014, except as discussed in Note 10 of our in this quarterly report on Form 10-Q.

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. In addition to the risk factors disclosed in Part 1, Item 1A of the 2014 Form 10-K, the following are certain risk factors associated with the IPC Transaction:

Risk Factors Relating to the IPC Transaction

We may be unable to successfully integrate IPC’s operations or to realize targeted cost savings, revenues or other benefits of the IPC Transaction.

We face numerous risks and challenges to successful integration of IPC, including the following:

• the potential for unexpected costs, delays and challenges that may arise in integrating IPC into our existing business;

• limitations on our ability to realize the expected cost savings and synergies from the IPC Transaction;

• challenges related to integrating IPC’s operations that has a management team and a company culture that differs from our own;

• challenges related to the integration of businesses that operate in new geographic areas, including difficulties in identifying and gaining access to customers in new markets;

• difficulties of managing operations outside of our existing core business, which may require development of additional skills and competencies; and

• discovery of previously unknown liabilities in connection with the IPC Transaction, including, among other things, the qui tam whistleblower action and the Florida Medicaid temporary reimbursement suspension.

We will incur significant transaction and acquisition-related costs in connection with the IPC Transaction.

We expect to incur significant costs associated with the IPC Transaction and combining the operations of the two companies, including costs to achieve targeted cost-savings. The substantial majority of the expenses resulting from the IPC Transaction will be composed of transaction costs related to the IPC Transaction, systems consolidation costs, and business integration and employment-related costs, including costs for severance, retention and other restructuring. We may also incur transaction fees and costs related to formulating integration plans. Additional unanticipated costs may be incurred in the integration of the two companies’ businesses. Although we expect that the elimination of duplicative costs, as well as the realization of other efficiencies related to the integration of the businesses, should allow us to offset incremental transaction and acquisition-related costs over time, this net benefit may not be achieved in the near term, or at all.

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

None.

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Item 3. Defaults upon Senior Securities

None.

Item 4. Mine Safety Disclosures

Not Applicable.

Item 5. Other Information

None.

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Item 6. Exhibits

2.1	Agreement and Plan of Merger dated as of August 4, 2015, by and among Team Health Holdings, Inc., Intrepid Merger Sub, Inc. and IPC Healthcare, Inc. (incorporated by reference to Exhibit 2.1 of the Current Report on Form 8-K, filed on August 4, 2015: File No. 001-34573)
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	Debt Commitment letter dated as of August 4, 2015 by and among Team Health Holdings, Inc., Team Health, Inc. and Citigroup Global Markets, Inc., Citibank N.A., Citigroup USA, Inc., Citicorp North America, Inc. (incorporated by reference to Exhibit 2.1 of the Current Report on Form 8-K, filed on August 4, 2015: File No. 001-34573)
10.2	Amended and Restated Debt Commitment letter dated as of August 25, 2015 by and among Team Health Holdings, Inc., Team Health, Inc. and Citigroup Global Markets, Inc., Citibank N.A., Citigroup USA, Inc., Citicorp North America, Inc.
10.3	Amendment No. 1, dated as of October 2, 2015, among  Team Health, Inc., the Company, the lenders party thereto and JPMorgan Chase Bank, N.A., as administrative agent and as swing line lender to the Amended and Restated Credit Agreement, dated as of October 2, 2014, among Team Health, Inc., the Company, the lenders party thereto from time to time and the other agents party thereto.
31.1	Certification by Michael D. Snow for Team Health Holdings, Inc. dated November 3, 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 November 3, 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 November 3, 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 November 3, 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 September 30, 2015, formatted in XBRL (eXtensible Business Reporting Language): (i) Consolidated Balance Sheets at September 30, 2015 and December 31, 2014, (ii) Consolidated Statement of Comprehensive Earnings for the three and nine months ended September 30, 2015 and 2014, (iii) Consolidated Statement of Cash Flows for the nine months ended September 30, 2015 and 2014, and (iv) Notes to Consolidated Financial Statements.

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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.
November 3, 2015	/S/    MICHAEL D. SNOW
	Michael D. Snow President and Chief Executive Officer
November 3, 2015	/S/    DAVID P. JONES
	David P. Jones Executive Vice President and Chief Financial Officer

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EX-10.2

CITIGROUP GLOBAL MARKETS INC. 388 Greenwich Street New York, New York 10013	BANK OF AMERICA, N.A. MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED One Bryant Park New York, NY 10036		JPMORGAN CHASE BANK, N.A. J.P. MORGAN SECURITIES LLC 383 Madison Avenue New York, NY 10179
BARCLAYS 745 Seventh AvenueNew York, NY 10019	GOLDMAN SACHS BANK USA 200 West Street New York, New York 10282-2198		CITIZENS BANK, NATIONAL ASSOCIATION 28 State Street Boston, MA 02109 RBS SECURITIES INC. THE ROYAL BANK OF SCOTLAND PLC 600 Washington Boulevard Stamford, CT 06901
FIFTH THIRD BANK Fifth Third Center 38 Fountain Square Plaza Cincinnati, OH 45263	REGIONS BANK REGIONS CAPITAL MARKETS, A DIVISION OF REGIONS BANK 150 4th Avenue North, 10th Floor Nashville, TN 37219		COMPASS BANK BBVA SECURITIES INC. 2200 Post Oak Blvd. Houston, TX 77056
BANK OF MONTREAL BMO CAPITAL MARKETS CORP. 3 Times Square, 28th Floor New York, NY 10036		MIZUHO BANK LTD. 1251 Avenue of the Americas New York, NY 10020
THE BANK OF TOKYO-MITSUBISHI UFJ, LTD. 1251 Avenue of the Americas New York, NY 10020-1104		KEYBANK NATIONAL ASSOCIATION KEYBANC CAPITAL MARKETS INC. 127 Public Square Cleveland, Ohio 44114

CONFIDENTIAL

August 25, 2015

Team Health Holdings, Inc.

Team Health, Inc.

265 Brookview Centre Way, Suite 400

Knoxville, Tennessee 37934

Attention:     David Jones

Project Intrepid
Amended and Restated Commitment Letter

Ladies and Gentlemen:

Reference is made to (a) the Commitment Letter dated as of August 4, 2015 (the “Original Commitment Letter Date”), among Citigroup Global Markets Inc. and you (the “Original Commitment Letter”) and (b) the Commitment Side Letter dated as of August 4, 2015, among Citigroup Global Markets Inc. and you (the “Side Letter”). The parties to the Original Commitment Letter hereby agree to amend and restate the Original Commitment Letter and the Side Letter to read in their entirety as set forth below:

You have advised Citi (as defined below), Bank of America, N.A. (“BofA”), Merrill Lynch, Pierce, Fenner & Smith Incorporated (together with any of its designated affiliates, “MLPFS”), JPMorgan Chase Bank, N.A. (“JPMCB”), J.P. Morgan Securities LLC (“JPMorgan”), Barclays Bank PLC (“Barclays”), Goldman Sachs Bank USA (“GS”), Citizens Bank, National Association (“Citizens”), RBS Securities Inc. (“RBSSI”), The Royal Bank of Scotland plc (“RBS”), Fifth Third Bank (“Fifth Third”), Regions Bank (“Regions”), Regions Capital Markets, a division of Regions Bank (“Regions Capital”), Compass Bank (“Compass”), BBVA Securities Inc. (“BBVA”), Bank of Montreal (“BMO”), BMO Capital Markets Corp. (“BMO Capital”), Mizuho Bank Ltd. (“Mizuho”), The Bank of Tokyo-Mitsubishi UFJ, Ltd. (“BTMU”), KeyBank National Association (“KeyBank”) and KeyBanc Capital Markets Inc. (“KBCM”) (collectively, the “Commitment Parties,” “we” or “us”) that Team Health Holdings, Inc. (“Holdings”), through its wholly owned subsidiary, Intrepid Merger Sub, Inc., a Delaware corporation (“Acquisition Sub”), formed at your direction, intends to acquire a company previously identified to us and code named “Intrepid” (the “Company”) by way of merger, and to consummate the other transactions described in Exhibit A hereto. Capitalized terms used but not defined herein have the meanings assigned to them in the Exhibits attached hereto. For purposes of this Commitment Letter, “Citi” shall mean Citigroup Global Markets Inc., Citibank, N.A., Citigroup USA, Inc., Citicorp North America, Inc. and/or any of their affiliates as Citi shall determine to be appropriate to provide the services contemplated herein.

For purposes of this Commitment Letter (except as otherwise set forth herein or in the Term Sheets), (a) the term “Senior Facilities” shall mean (x) if the Backstopped Amendments are obtained on or prior to the Closing Date, solely the Term Loan B Facility and (y) if the Backstopped Amendments are not obtained on or prior to the Closing Date, the New Senior Facilities and (b) the term “Facilities” shall mean (x) if the Backstopped Amendments are obtained on or prior to the Closing Date, solely the Term Loan B Facility and the Senior Bridge Facility and (y) if the Backstopped Amendments are not obtained on or prior to the Closing Date, the New Senior Facilities and the Senior Bridge Facility.

1. Commitments; Backstopped Amendments.

In connection with the Transactions, each of Citi, JPMCB, BofA, Citizens (or, in the case of the Senior Bridge Facility, RBS), GS, Barclays, Fifth Third, Regions, Compass, BMO, Mizuho, BTMU and KeyBank is pleased to advise you of its commitment to provide the portion of each of the Senior Facilities (as the amount thereof may be adjusted as set forth under the caption “New Senior Secured Credit Facilities” in the “Senior Secured Credit Facilities” Summary of Principal Terms and Conditions attached hereto as Exhibit B) and the Senior Bridge Facility (as the amount thereof may be adjusted as set forth under the caption “Principal Amount” in the “Senior Unsecured Increasing Rate Bridge Loans” Summary of Principal Terms and Conditions attached hereto as Exhibit C) set forth opposite such financial institution’s name on Schedule I hereto (each such financial institution, together with any of its designated affiliates of similar creditworthiness, an “Initial Lender” and collectively, the “Initial Lenders”), in each case, upon the terms and subject to the conditions set forth or referred to in this commitment letter (together with the Term Sheets, this “Commitment Letter”). The commitments of the Initial Lenders shall be several and not joint.

In addition to the foregoing, Citi is pleased to advise you of its agreement to use commercially reasonable efforts to arrange the Backstopped Amendments. In furtherance of the foregoing, each of the

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Initial Lenders that is a party to the Existing Credit Agreement, in its capacity as a lender thereunder, hereby agrees to consent its respective commitments and outstanding loans under the Existing Credit Agreement to the Backstopped Amendments.

2. Titles and Roles.

It is agreed that (a) Citi, MLPFS, JPMorgan, Barclays, GS, and Citizens (or, in the case of the Senior Bridge Facility, RBSSI) will act as joint lead arrangers (in such capacities, together with any of their respective designated affiliates of similar creditworthiness, the “Lead Arrangers”) and as joint bookrunners for each of the Facilities and the Backstopped Amendments; (b) Fifth Third, Regions Capital, Compass, BMO Capital, Mizuho, BTMU and KBCM will act as co-managers (in such capacities, together with any of their respective designated affiliates of similar creditworthiness, the “Co-Managers”); (c) if the Backstopped Amendments are not obtained on or prior to the Closing Date, Citibank, N.A. will act as administrative agent (the “Bank Administrative Agent”) for the Senior Facilities (it being understood and agreed that, if the Backstopped Amendments are obtained on or prior to the Closing Date, JPMorgan Chase Bank, N.A. will continue to act as administrative agent under the Existing Credit Agreement (as amended by the Backstopped Amendments)); and (d) Citibank, N.A. will act as administrative agent for the Senior Bridge Facility (the “Bridge Administrative Agent”; the Bridge Administrative Agent together with the Bank Administrative Agent, the “Administrative Agents”). It is further agreed that (i) Citi will appear on the top left of the cover page of any marketing materials for the Senior Facilities and the Backstopped Amendments and Citi will appear on the top left of the cover page of any marketing materials for the Senior Bridge Facility, and in each case will hold the roles and responsibilities conventionally understood to be associated with such name placement; (ii) MLPFS will appear on the same line as, and immediately to the right of, Citi on the cover page of any such marketing materials; and (iii) JPMorgan will appear on the same line as, and immediately to the right of MLPFS on the cover page of any such marketing materials. No compensation (other than that expressly contemplated by this Commitment Letter and the Fee Letter referred to below) will be paid or titles awarded, in each case, in connection with the Facilities unless you and the Commitment Parties shall so agree.

3. Syndication.

The Commitment Parties reserve the right, prior to or after the execution of the Facilities Documentation (as defined below), to syndicate all or a portion of each Commitment Party’s commitments hereunder to a group of banks, financial institutions and other institutional lenders identified by the Commitment Parties in consultation with you and reasonably acceptable to you (with such consent not to be unreasonably withheld or delayed), including any relationship lenders designated by you in consultation with the Commitment Parties (together with the Initial Lenders, the “Lenders”); provided that, notwithstanding each Commitment Party’s right to syndicate the Facilities and receive commitments with respect thereto (and except in the case of an assignment by GS to Goldman Sachs Lending Partners LLC (“GSLP”)), no Commitment Party may assign all or any portion of its commitments hereunder until after the Closing Date and, unless you agree in writing, each Commitment Party shall retain exclusive control over all rights and obligations with respect to its commitments, including all rights with respect to consents, modifications, waivers and amendments, until the Closing Date has occurred. Notwithstanding the foregoing, the Commitment Parties will not syndicate to those banks, financial institutions and other institutional lenders and competitors of the Company and its subsidiaries separately identified in writing by you to us prior to the Original Commitment Letter Date, or with respect to competitors of the Company, separately identified in writing by you to us after the Original Commitment Letter Date (the foregoing, in each case inclusive of any affiliates thereof that are readily identifiable by name (other than a bona-fide debt fund), collectively, “Disqualified Lenders”). Without limiting your obligations to assist with syndication efforts as set forth

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below, it is understood that the Initial Lenders’ commitments hereunder are not subject to commencement or completion of syndication of the Facilities.

The Lead Arrangers intend to commence syndication efforts promptly after your acceptance of this Commitment Letter and as part of their syndication efforts, it is the Lead Arrangers’ intent to have Lenders commit to the Facilities prior to the Closing Date. You agree to use your commercially reasonable efforts to assist the Lead Arrangers in completing a timely syndication that is reasonably satisfactory to them and you until the date that is the earlier of (a) 45 days after the Closing Date and (b) the later of the Closing Date and the date on which a successful syndication (as defined in the Fee Letter) is achieved (such earlier date, the “Syndication Date”). Such assistance shall include (a) your using commercially reasonable efforts to ensure that any syndication efforts benefit materially from your existing lending and investment banking relationships and, to the extent practical and appropriate and in all instances not in contravention of the terms of the Acquisition Agreement as in effect on the Original Commitment Letter Date, the existing lending and investment banking relationships of the Company, (b) direct contact between your senior management, representatives and advisors (and your using commercially reasonable efforts to arrange for direct contact between senior management, representatives of the Company, to the extent practical and appropriate and in all instances not in contravention of the terms of the Acquisition Agreement as in effect on the Original Commitment Letter Date) and the proposed Lenders at times and locations mutually agreed upon, (c) your assistance (and your using commercially reasonable efforts to cause the Company, to the extent practical and appropriate and in all instances not in contravention of the terms of the Acquisition Agreement as in effect on the Original Commitment Letter Date, to assist) in the preparation, at least 10 consecutive calendar days (which period, for the avoidance of doubt, will end on a business day) ending on the business day immediately prior to the Closing Date (excluding any “blackout dates” referred to in the Fee Letter), of customary confidential information memoranda (“Confidential Information Memoranda”) for the Senior Facilities (including, without limitation, the New Senior Facilities, as applicable), the Senior Bridge Facility and the Backstopped Amendments (all of which shall be in form and substance consistent with confidential information memoranda in your recent transactions) and other customary marketing materials to be used in connection with the syndications, and, at the request of the Lead Arrangers, the preparation of versions of the Confidential Information Memoranda that do not contain material non-public information concerning you, the Company, your or its respective subsidiaries or the respective securities of any of the foregoing for purposes of United States federal and state securities laws, (d) using your commercially reasonable efforts to procure, at least 10 consecutive calendar days (which period, for the avoidance of doubt, will end on a business day) ending on the business day immediately prior to the Closing Date (excluding any “blackout dates” referred to in the Fee Letter), corporate ratings for the Borrower and ratings for each of the Facilities (including, without limitation, the New Senior Facilities, as applicable) and the Senior Notes from each of Standard & Poor’s Ratings Services (“S&P”) and Moody’s Investors Service, Inc. (“Moody’s”), and (e) the hosting, with the Lead Arrangers, of one or more meetings (or, if agreed to by the Lead Arrangers, conference calls in lieu thereof) with prospective Lenders at times and, if applicable, locations to be mutually agreed upon. During the primary syndications of the Facilities on or prior to the Syndication Date, (i) you will ensure, and will use commercially reasonable efforts, to the extent practical and appropriate and in all instances not in contravention of the terms of the Acquisition Agreement as in effect on the Original Commitment Letter Date, to cause the Company to ensure that there will not be any competing issues of debt securities or syndicated credit facilities of you, the Company or any of your or its subsidiaries (other than the Facilities, the Senior Notes, any debt securities issued in lieu of the Senior Notes and any other debt securities or credit facilities disclosed to you prior to the date hereof) being offered, placed or arranged that would materially and adversely impair the primary syndication of the Facilities (it being understood that replacements, extensions and renewals of existing indebtedness of the Company and its subsidiaries, indebtedness of the Company and its subsidiaries incurred in the ordinary course of business, including short term debt for working capital, capital leases, purchase money debt, equipment financings and any

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indebtedness of the Company and its subsidiaries permitted under the Acquisition Agreement as in effect on the Original Commitment Letter Date shall not be subject to this clause (i)) and (ii) you agree to use your commercially reasonable efforts to prepare and provide (and to use commercially reasonable efforts to cause the Company to provide, to the extent practical and appropriate and in all instances not in contravention of the terms of the Acquisition Agreement as in effect on the Original Commitment Letter Date) promptly to the Lead Arrangers all available customary information with respect to you, the Company and each of your and its respective subsidiaries, the Transactions and the other transactions contemplated hereby, including all financial information and projections relating to the Company and its subsidiaries (including financial estimates, forecasts and other forward-looking information) (the “Projections”), as the Lead Arrangers may reasonably request. For the avoidance of doubt, you will not be required to provide any information to the extent the provision thereof would violate any applicable law, rule or regulation or any obligation of confidentiality binding you, the Company or your or their respective affiliates (provided that in the case of any confidentiality obligation, (x) you shall have used commercially reasonable efforts to obtain consent to provide such information and (y) such obligation was not entered into in contemplation of this provision; provided, further, that you shall notify us if any such information is being withheld as a result of any such obligation of confidentiality). Notwithstanding anything to the contrary contained in this Commitment Letter or the Fee Letter, (i) neither the obtaining of the ratings referenced above nor the compliance with any of the other provisions set forth in clauses (a) through (e) above or any other provision of this paragraph shall constitute a condition to the commitments hereunder or the funding of the Facilities on the Closing Date or any time thereafter and (ii) neither the commencement nor the completion of the syndication of the Facilities shall constitute a condition precedent to the Closing Date.

The Lead Arrangers will, in consultation with you, manage all aspects of any syndication, including decisions as to the selection of institutions to be approached (with your consent not to be unreasonably withheld and excluding Disqualified Lenders) and when they will be approached, when their commitments will be accepted, which institutions will participate (with your consent not to be unreasonably withheld and excluding Disqualified Lenders), the allocation of the commitments among the Lenders and the amount and distribution of fees among the Lenders.

4. Information.

You hereby represent and warrant that (but the accuracy of which representation and warranty shall not be a condition to the commitments hereunder or the funding of the Facilities on the Closing Date) (a) (with respect to the Company and its subsidiaries, to the best of your knowledge) all written information and written data (such information and data, other than (i) the Projections and (ii) information of a general economic or general industry nature, the “Information”) that have been or will be made available to the Commitment Parties by you or any of your representatives, taken as a whole, does not or will not, when furnished, contain any untrue statement of a material fact or omit to state a material fact necessary in order to make the statements contained therein not materially misleading in light of the circumstances under which such statements are made (after giving effect to all supplements and updates thereto) and (b) the Projections that have been or will be made available to the Commitment Parties by you, the Company or any of your or their respective representatives have been or will be prepared in good faith based upon assumptions that are believed by you to be reasonable at the time made and furnished; it being understood that any such financial projections are subject to significant uncertainties and contingencies, many of which are beyond your control, that no assurance can be given that any particular financial projections will be realized, that actual results may differ significantly from the projected results and that such differences may be material. You agree that, if at any time prior to the Syndication Date, you become aware that any of the representations in the preceding sentence would be incorrect in any material respect if the Information and Projections were being furnished, and such representations were being made, at such time, then you will promptly (or prior to the Closing Date

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with respect to Information or Projections concerning the Company and its subsidiaries, you will use commercially reasonable efforts (to the extent practical and appropriate and in all instances not in contravention of the terms of the Acquisition Agreement as in effect on the Original Commitment Letter Date)) to supplement the Information and the Projections so that (to the best of your knowledge, with respect to the Company and its subsidiaries) such representations will be correct in all material respects under those circumstances. In arranging and syndicating the Facilities and the Backstopped Amendments, the Lead Arrangers will be entitled to use and rely on the Information and the Projections without responsibility for independent verification thereof. We will have no obligation to conduct any independent evaluation or appraisal of the assets or liabilities of you, the Company or any other party or to advise or opine on any related solvency issues.

You hereby acknowledge that (a) the Lead Arrangers will make available Information and Projections to the proposed syndicate of Lenders and (b) certain of the Lenders may be “public side” Lenders (i.e. Lenders that do not wish to receive material non-public information with respect to you, the Company, your or its respective subsidiaries or the respective securities of any of the foregoing) (each, a “Public Lender”). You hereby acknowledge that the Commitment Parties will make available Information, Projections and other offering and marketing material and presentations, including confidential information memoranda to be used in connection with the syndication of the Facilities to the proposed syndicate of Lenders, by posting the Information and Projections on Intralinks, SyndTrak Online or by similar electronic means (collectively, the “Platform”). At the request of the Lead Arrangers, you agree to assist us in preparing an additional version of each Confidential Information Memorandum to be used by Public Lenders. The information to be included in the additional version of each Confidential Information Memorandum will consist exclusively of information and documentation that is either publicly available, not material with respect to you, the Company, your or its respective subsidiaries or the respective securities of any of the foregoing for purposes of United States federal and state securities laws or of the type that is made publicly available by you or the Company, as applicable, as a public reporting company (as reasonably determined by you or the Company, as applicable). It is understood that in connection with your assistance described above, (a) customary authorization letters will be included in each Confidential Information Memorandum that authorize the distribution of such Confidential Information Memorandum to prospective Lenders, contain customary representations confirming that the public-side version does not include material non-public information about you, the Company, your or its respective subsidiaries or the respective securities of any of the foregoing, and exculpate us with respect to any liability related to the use of the contents of such Confidential Information Memorandum or any related marketing material by the recipients thereof and exculpate you, the Company and your and their respective affiliates with respect to any liability related to the misuse of the contents of such Confidential Information Memorandum or any related marketing material by the recipients thereof; (b) the public information shall include the following information except to the extent you notify us to the contrary and provided that you shall have been given a reasonable opportunity to review such documents and comply with the U.S. Securities and Exchange Commission disclosure requirements (and such public information is permitted to be made available to all prospective Lenders, including through a Platform designated “Public Lenders”): (i) drafts and final definitive documentation with respect to the Facilities and the Backstopped Amendments, including term sheets, (ii) administrative materials prepared by the Commitment Parties for prospective Lenders (such as a lender meeting or call invitation, allocations and funding and closing memoranda) and (iii) notification of changes in the terms of the Facilities or the Backstopped Amendments; (c) at our request, you shall identify information to be distributed to Public Lenders by clearly and conspicuously marking the same as “PUBLIC”; and (d) we shall be entitled to treat any Information and Projections that are not specifically identified as “PUBLIC” as being suitable only for posting on a portion of the Platform not designated for Public Lenders.

5. Fees.

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As consideration for the commitments of the Initial Lenders hereunder and the Lead Arrangers’ and Co-Managers’ agreements to perform the services described herein, you agree to pay the fees set forth in this Commitment Letter and in the Amended and Restated Fee Letter and the Administrative Agent Fee Letter, each dated the date hereof and delivered herewith with respect to the Facilities (collectively, the “Fee Letter”). Once paid, such fees shall not be refundable under any circumstances, except as otherwise contemplated by the Fee Letter.

6. Conditions Precedent.

The commitments of the Initial Lenders hereunder and the Lead Arrangers’ and Co-Managers’ agreements to perform the services described herein are subject only to (a) the execution and delivery by the Borrower (and Guarantors, as applicable) to the Bank Administrative Agent of definitive documentation with respect to the Senior Facilities and, if applicable, separate definitive documentation to the Bank Administrative Agent with respect to the Backstopped Amendments and, if applicable, separate definitive documentation to the Bridge Administrative Agent with respect to the Senior Bridge Facility (collectively, the “Facilities Documentation”), in each case, which shall be consistent with the applicable Term Sheet and the applicable Documentation Principles and shall be subject to the Limited Conditionality Provision (as defined below) and (b) (i) with respect to the Senior Facilities, the conditions set forth in Exhibit B under the headings titled “Conditions Precedent to Initial Borrowing” and “Conditions Precedent to all Borrowings”, (ii) with respect to the Senior Bridge Facility, the conditions set forth in Exhibit C under the heading titled “Conditions Precedent to Senior Bridge Loans” and (iii) with respect to each of the Facilities, as applicable, the conditions set forth in Exhibit D (clauses (a) and (b) collectively, the “Funding Conditions”); it being understood that there are no conditions (implied or otherwise) to the commitments hereunder (including compliance with the terms of this Commitment Letter, the Fee Letter and the Facilities Documentation) other than the Funding Conditions that are expressly stated to be conditions to the initial funding under the Facilities on the Closing Date (and upon satisfaction or waiver of such conditions, the initial funding under the Facilities shall occur).

Notwithstanding anything to the contrary in this Commitment Letter (including each of the exhibits attached hereto), the Fee Letter, the Facilities Documentation or any other letter agreement or other undertaking concerning the financing of the Transactions, (i) the only representations and warranties the accuracy of which shall be a condition to availability of the Facilities on the Closing Date shall be (A) such of the representations and warranties made by the Company in the Acquisition Agreement as are material to the interests of the Lenders, but only to the extent that you (or your applicable affiliates) have the right (taking into account any applicable cure provisions) to terminate your (or such affiliates’) obligations under the Acquisition Agreement, or to decline to consummate the Acquisition (in each case, in accordance with the terms thereof), as a result of a breach of such representations and warranties (the “Acquisition Agreement Representations”), and (B) the Specified Representations (as defined below) made by the Borrower and the Guarantors in the Facilities Documentation and (ii) the terms of the Facilities Documentation and the Closing Deliverables shall be in a form such that they do not impair the availability of the Facilities on the Closing Date if the conditions expressly set forth herein and in the Term Sheets are satisfied (it being understood that, to the extent any Collateral (other than assets of Holdings, the Borrower and domestic Guarantors with respect to which a lien may be perfected solely by the filing of a financing statement under the Uniform Commercial Code and the delivery of stock certificates and certificated LLC interests of the Borrower and to the extent delivered to you by the Company prior to the Closing Date (after your use of commercially reasonable efforts to obtain such stock certificates and certificated LLC interests (if any)), material (to be defined in a manner to be agreed) wholly-owned domestic restricted subsidiaries) is not or cannot be provided or perfected on the Closing Date after your use of commercially reasonable efforts to do so or without undue burden or expense, the provision and/or perfection of such Collateral shall not constitute a condition precedent

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to the availability of the Facilities on the Closing Date, but shall be required to be provided and/or perfected within 90 days after the Closing Date (subject to extensions as agreed by the Bank Administrative Agent in its reasonable discretion). For purposes hereof, “Specified Representations” means the representations and warranties of the Borrower and the Guarantors (after giving effect to the Acquisition) set forth in the Facilities Documentation relating to corporate or other organizational existence of Holdings, the Borrower and the Guarantors (prior to giving effect to the Acquisition); organizational power and authority (as to execution, delivery and performance of the applicable Facilities Documentation); the due authorization, execution, delivery and enforceability of the applicable Facilities Documentation; Federal Reserve margin regulations; the Investment Company Act; the creation, validity and perfection of security interests in the Collateral (subject to permitted liens and the limitations set forth in the preceding sentence); no conflicts of the applicable Facilities Documentation (limited to the execution, delivery and performance of the applicable Facilities Documentation, incurrence of the indebtedness thereunder and the granting of the guarantees and the security interests in respect thereof) with charter documents of the Borrower or any Guarantor; solvency as of the Closing Date (after giving effect to the Transactions) of the Borrower and its subsidiaries on a consolidated basis (to be determined in a manner consistent with the solvency certificate to be delivered in the form set forth in Annex I attached to Exhibit D); PATRIOT ACT; and use of the proceeds of the Facilities not violating FCPA, OFAC and other anti-terrorism laws. This paragraph shall be referred to herein as the “Limited Conditionality Provision”.

7. Indemnification; Expenses.

You agree (a) to indemnify and hold harmless each of the Commitment Parties and each of their respective affiliates and controlling persons and the respective officers, directors, employees, successors, partners, agents, advisors and representatives of each of the foregoing (each, an “Indemnified Person”) from and against any and all losses, claims, damages, liabilities and out-of-pocket expenses, joint or several, to which any such Indemnified Person may become subject arising out of, resulting from or in connection with this Commitment Letter, the Fee Letter, the Transactions or the Facilities, or any claim, litigation, investigation or proceeding (any of the foregoing, an “Action”) relating to any of the foregoing and regardless of whether brought by you or any of your affiliates or any other person or against any person, including the Company, its security holders and its other affiliates, regardless of whether any such Indemnified Person is a party thereto, and to reimburse each such Indemnified Person within 30 days after receipt of a written request together with reasonably detailed backup documentation for any reasonable legal (limited to one counsel for all Indemnified Persons, taken as a whole, and, if reasonably necessary, a single local counsel to all Indemnified Persons, taken as a whole, in each relevant material jurisdiction and, solely in the case of a conflict of interest, one additional counsel in each applicable material jurisdiction to the affected Indemnified Persons similarly situated taken as a whole) or other reasonable out-of-pocket expenses incurred in connection with investigating or defending any of the foregoing; provided, that the foregoing indemnity will not, as to any Indemnified Person, apply to losses, claims, damages, liabilities or related expenses (i) to the extent resulting from the willful misconduct, bad faith or gross negligence of such Indemnified Person or any of its affiliates or controlling persons or any of the officers, directors, employees, partners, successors, agents, advisors or representatives of any of the foregoing, (ii) to the extent arising from a material breach of the obligations of such Indemnified Person or any of its affiliates or controlling persons or any of the officers, directors, employees, partners, successors, agents, advisors or representatives of any of the foregoing under this Commitment Letter, the Fee Letter or the Facilities Documentation (in the case of each of preceding clauses (i) and (ii), as determined by a court of competent jurisdiction in a final and non-appealable judgment) or (iii) to the extent arising from any dispute solely among Indemnified Persons other than claims against any Commitment Party in its capacity or in fulfilling its role as an Administrative Agent or arranger or any similar role under any Facility and other than any claims arising out of any act or omission on the part of you or your affiliates, and (b) to reimburse each Commitment Party and each Indemnified Person from time

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to time, upon presentation of a summary statement, together with any supporting documentation reasonably requested by you, for all reasonable and documented out-of-pocket expenses (including but not limited to out-of-pocket expenses of the Commitment Parties’ due diligence investigation, syndication expenses, travel expenses and reasonable fees, disbursements and other charges of counsel to the Commitment Parties identified in the Term Sheets (and you acknowledge that we may receive a benefit, including, without limitation, a discount, credit or other accommodation, from such counsel based on the fees such counsel may receive on account of their relationship with us including, without limitation, fees paid pursuant hereto) and, if necessary, of a single local counsel to the Commitment Parties in each relevant material jurisdiction), in each case incurred in connection with the Facilities and the preparation of this Commitment Letter, the Fee Letter, the Facilities Documentation and any security arrangements in connection therewith (collectively, the “Expenses”); provided, that you shall not be required to reimburse any of the Expenses in the event the Closing Date does not occur. Notwithstanding any other provision of this Commitment Letter, (i) no Indemnified Person shall be liable for any damages arising from the use by others of information or other materials obtained through electronic, telecommunications or other information transmission systems, except to the extent such damages have resulted from (in each case as finally determined by a court of competent jurisdiction in a final and non-appealable judgment) the willful misconduct, bad faith or gross negligence of such Indemnified Person or any of its affiliates or controlling persons or any of the officers, directors, employees, partners, agents, advisors or representatives of any of the foregoing, and (ii) neither (x) any Indemnified Person, nor (y) you (or any of your subsidiaries or affiliates) or the Company (or any of its subsidiaries or affiliates) shall be liable for any indirect, special, punitive or consequential damages (in the case of clause (y), other than in respect of any such damages required to be indemnified under this Section 7) in connection with this Commitment Letter, the Facilities, the Transactions (including the Facilities and the use of proceeds thereunder), or with respect to any activities related to the Facilities. No Indemnified Person seeking indemnification or reimbursement under this Commitment Letter will, without your prior written consent (not to be unreasonably withheld, delayed or conditioned), settle, compromise, consent to the entry of any judgment in or otherwise seek to terminate any Action referred to herein. Notwithstanding the immediately preceding sentence, if at any time an Indemnified Person shall have requested in accordance with this Commitment Letter that you reimburse such Indemnified Person for legal or other expenses in connection with investigating, responding to or defending any Action, you shall be liable for any settlement of any Action effected without your written consent if (a) such settlement is entered into more than 30 days after receipt by you of such request for reimbursement and (b) you shall not have reimbursed such Indemnified Person in accordance with such request prior to the date of such settlement. You shall not, without the prior written consent of the affected Indemnified Person (which consent shall not be unreasonably withheld, delayed or conditioned), effect any settlement of any pending or threatened Action against such Indemnified Person in respect of which indemnity has been sought hereunder by such Indemnified Person unless such settlement (i) includes an unconditional release of such Indemnified Person in form and substance reasonably satisfactory to such Indemnified Person from all liability or claims that are the subject matter of such Action and (ii) does not include any statement as to any admission of fault.

8. Sharing Information; Absence of Fiduciary Relationship; Affiliate Activities.

You acknowledge that the Commitment Parties and their affiliates may be providing debt financing, equity capital or other services (including, without limitation, investment banking and financial advisory services, securities trading, hedging, financing and brokerage activities and financial planning and benefits counseling) to other companies in respect of which you may have conflicting interests.

We will not furnish confidential information obtained from you by virtue of the transactions contemplated by this Commitment Letter or our other relationships with you to other companies (except as contemplated below). You also acknowledge that we do not have any obligation to use in connection with

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the transactions contemplated by this Commitment Letter, or to furnish to you, confidential information obtained by us or any of our respective affiliates from other companies.

You further acknowledge and agree that (a) no fiduciary, advisory or agency relationship between you and any Commitment Party is intended to be or has been created in respect of any of the transactions contemplated by this Commitment Letter, irrespective of whether such Commitment Party has advised or is advising you on other matters, (b) each Commitment Party, on the one hand, and you, on the other hand, have an arm’s-length business relationship that does not directly or indirectly give rise to, nor do you rely on, any fiduciary duty on the part of such Commitment Party and you waive, to the fullest extent permitted by law, any claims you may have against us for breach of fiduciary duty or alleged breach of fiduciary duty in connection with the Transactions and agree that we will have no liability (whether direct or indirect) to you in respect of such a fiduciary duty claim or to any person asserting a fiduciary duty claim on your behalf, including equity holders, employees or creditors, (c) you are capable of evaluating and understanding, and you understand and accept, the terms, risks and conditions of the transactions contemplated by this Commitment Letter and you have consulted with your own legal and financial advisors to the extent you have deemed appropriate and (d) you have been advised that each Commitment Party and its affiliates is engaged in a broad range of transactions that may involve interests that differ from your interests and that no Commitment Party has an obligation to disclose such interests and transactions to you by virtue of any fiduciary, advisory or agency relationship. In addition, the Commitment Parties may employ the services of their respective affiliates in providing certain services hereunder and may exchange with such affiliates information concerning you and the Company and other companies in the industry of the Company, and such affiliates shall be entitled to the benefits afforded to, and subject to the obligations of, the Commitment Parties hereunder. You acknowledge and agree that neither we nor our affiliates have provided you with legal, tax or accounting advice and that you have obtained such independent advice from your own advisors.

You further acknowledge that each Commitment Party and its affiliates is a full service securities firm engaged in securities trading and brokerage activities as well as providing investment banking and other financial services. In the ordinary course of business, each Commitment Party may provide investment banking and other financial services to, and/or acquire, hold or sell, for its own accounts and the accounts of customers, equity, debt and other securities and financial instruments (including bank loans and other obligations) of, you, the Company and your and its respective subsidiaries and other companies with which you or the Company or your or its respective subsidiaries may have commercial or other relationships. With respect to any securities and/or financial instruments so held by the Commitment Parties, their respective affiliates or any of their respective customers, all rights in respect of such securities and financial instruments, including any voting rights, will be exercised by the holder of the rights, in its sole discretion.

9. Assignments; Amendments; Governing Law, Etc.

This Commitment Letter, the Fee Letter and the commitments hereunder shall not be assignable by any party hereto (except by you on or prior to the Closing Date to the ultimate borrower under the Facilities or another newly-formed shell entity organized in the United States so long as any such entity is directly or indirectly controlled by Holdings) (and except in the case of an assignment by GS to GSLP) without the prior written consent of each other party hereto (and any attempted assignment without such consent shall be null and void), is intended to be solely for the benefit of the parties hereto (and Indemnified Persons), is not intended to confer any benefits upon, or create any rights in favor of, any person other than the parties hereto (and Indemnified Persons) and is not intended to create a fiduciary relationship among the parties hereto. Subject to the limitations set forth in Section 3, any and all services to be provided by the Commitment Parties hereunder may be performed by or through any of their respective affiliates or branches and the provisions of Section 7 shall apply with equal force and effect to any such entities so performing any such

10

duties or activities. This Commitment Letter may not be amended or any provision hereof waived or modified except by an instrument in writing signed by the Commitment Parties and you. This Commitment Letter may be executed in any number of counterparts, each of which shall be an original and all of which, when taken together, shall constitute one agreement. Delivery of an executed counterpart of a signature page of this Commitment Letter by facsimile transmission or by “.pdf” or similar electronic transmission shall be effective as delivery of a manually executed counterpart hereof. Section headings used herein are for convenience of reference only, are not part of this Commitment Letter and are not to affect the construction of, or to be taken into consideration in interpreting, this Commitment Letter. You acknowledge that information and documents relating to the Facilities may be transmitted through SyndTrak, Intralinks, the internet, e-mail, or similar electronic transmission systems, and, notwithstanding anything herein to the contrary, that the Commitment Parties shall not be liable for any damages arising from the unauthorized use by others of information or documents transmitted in such manner unless resulting from the gross negligence, bad faith or willful misconduct, as determined by a court of competent jurisdiction in a final and non-appealable judgment, of such Commitment Party or any of its affiliates or controlling persons or any of the officers, directors, employees, partners, agents, representatives, successors or assigns of any of the foregoing. This Commitment Letter, together with the Fee Letter dated the date hereof, supersedes all prior understandings, whether written or oral, among us with respect to the Facilities and sets forth the entire understanding of the parties hereto with respect thereto. THIS COMMITMENT LETTER AND ANY CLAIM, CONTROVERSY OR DISPUTE (WHETHER IN CONTRACT, TORT OR OTHERWISE) ARISING UNDER OR RELATED TO THIS COMMITMENT LETTER SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK; provided, however, that (a) the interpretation of the definition of Company Material Adverse Effect (as defined in the Acquisition Agreement) and whether there shall have occurred a Company Material Adverse Effect (as defined in the Acquisition Agreement), (b) whether the Acquisition has been consummated as contemplated by the Acquisition Agreement and (c) whether the representations and warranties made by the Company in the Acquisition Agreement are accurate and whether as a result of any inaccuracy thereof you have the right to terminate your obligations under the Acquisition Agreement, shall be determined in accordance with the laws of the State of Delaware without regard to conflict of laws principles that would result in the application of the laws of another jurisdiction.

Each of the parties hereto agrees that this Commitment Letter is a binding and enforceable agreement with respect to the subject matter contained herein, including the good faith negotiation of the Facilities Documentation by the parties hereto in a manner consistent with this Commitment Letter, it being understood and agreed that the commitments provided hereunder by the Commitment Parties and the funding of the Facilities on the Closing Date are subject only to the Funding Conditions.

10. WAIVER OF JURY TRIAL.

EACH OF THE PARTIES HERETO IRREVOCABLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY ACTION, PROCEEDING, CLAIM OR COUNTERCLAIM BROUGHT BY OR ON BEHALF OF ANY PARTY RELATED TO OR ARISING OUT OF THIS COMMITMENT LETTER, THE FEE LETTER OR THE PERFORMANCE OF SERVICES HEREUNDER OR THEREUNDER.

11. Jurisdiction.

Each of the parties hereto hereby irrevocably and unconditionally (a) submits, for itself and its property, to the exclusive jurisdiction of (i) any New York State court or Federal court of the United States of America sitting in City of New York, Borough of Manhattan, and any appellate court from any thereof, as to any action or proceeding arising out of or relating to this Commitment Letter, the Fee Letter or the

11

transactions contemplated hereby or thereby, or for recognition or enforcement of any judgment, and agrees that all claims in respect of any such action or proceeding shall be heard and determined in such New York State court or, to the extent permitted by law, in such Federal court, and further agrees to not commence any such suit, action or proceeding other than in such New York State court or, to the extent permitted by law, in such Federal court, (b) waives, to the fullest extent it may legally and effectively do so, any objection which it may now or hereafter have to the laying of venue of any suit, action or proceeding arising out of or relating to this Commitment Letter, the Fee Letter or the transactions contemplated hereby or thereby in any court in which such venue may be laid in accordance with clause (a) of this sentence, (c) waives, to the fullest extent permitted by law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any such court and (d) agrees that a final judgment in any such action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the judgment or in any other manner provided by law. Service of any process, summons, notice or document by registered mail or overnight courier addressed to any of the parties hereto at the addresses set forth above shall be effective service of process against such party for any suit, action or proceeding brought in any such court.

12. Confidentiality.

This Commitment Letter is delivered to you on the understanding that none of the Fee Letter, or, prior to the date hereof, this Commitment Letter, or their terms or substance shall be disclosed, directly or indirectly, to any other person or entity (including other lenders, underwriters, placement agents, advisors or any similar persons) except (a) to your officers, directors, employees, affiliates, members, partners, stockholders, attorneys, accountants, agents and advisors and on a confidential basis, (b) if the Commitment Parties consent to such proposed disclosure, (c) you may disclose the Term Sheets and the existence of the Commitment Letter to any rating agency in connection with the Transactions or (d) pursuant to the order of any court or administrative agency or in any pending legal or administrative proceeding, or otherwise as required by applicable law or regulation or as requested by a governmental authority (in which case you agree to inform us promptly thereof to the extent lawfully permitted to do so); provided that (i) you may disclose this Commitment Letter and the contents thereof (but not the Fee Letter and the contents thereof, except on a redacted basis in a manner reasonably acceptable to the Lead Arrangers as to the amount or percentages of any fees, market flex provisions, securities demand and pricing caps) to the Company and its officers, directors, employees, attorneys, accountants, agents and advisors, on a confidential basis, (ii) you may disclose the Fee Letter and the contents thereof as part of generic disclosure regarding fees and expenses in connection with any syndication of the Facilities or prospectus or offering memorandum related to the Senior Notes (or any securities issued in lieu of the Senior Notes), or to the Company and its officers, directors, employees, attorneys, accountants, agents and advisors to confirm the absence of additional conditions precedent to the funding of the Facilities and the absence of any “flex” or similar terms that would decrease the amount of the Facilities (but in each case within this clause (ii), without disclosing any specific fees set forth therein), or on a redacted basis in a manner reasonably acceptable to the Commitment Parties or for customary accounting purposes, including accounting for deferred financing costs and (iii) you may disclose this Commitment Letter and the contents hereof (but not the Fee Letter and the contents thereof) in any syndication of the Facilities or in any prospectus or other offering memorandum related to the Senior Notes (or any debt securities issued in lieu of the Senior Notes) or in any proxy statement or other public filing in connection with the Acquisition. Your obligations under this paragraph with regard to this Commitment Letter (but not the Fee Letter) shall terminate on the earlier of (x) the second anniversary of the Original Commitment Letter Date or (y) one year following the termination of this Commitment Letter in accordance with its terms.

Each Commitment Party and its affiliates will use all confidential information provided to it or such affiliates by or on behalf of you hereunder solely for the purpose of providing the services which are the

12

subject of this Commitment Letter and shall treat confidentially all such information; provided that nothing herein shall prevent a Commitment Party from disclosing any such information (a) pursuant to the order of any court or administrative agency or in any pending legal or administrative proceeding, or otherwise as required by applicable law or regulation or as requested by a governmental authority (in which case such Commitment Party, to the extent permitted by law, agrees to inform you promptly thereof), (b) upon the request or demand of any regulatory authority or stock exchange having jurisdiction over such Commitment Party or any of its affiliates (in which case such Commitment Party agrees to inform you promptly thereof prior to such disclosure to the extent practicable, unless such Commitment Party is prohibited by applicable law from so informing you, or except in connection with any request as part of a regulatory examination), (c) to the extent that such information becomes publicly available other than by reason of improper disclosure by such Commitment Party or any of its affiliates in violation of this Commitment Letter, (d) to the extent that such information is received by such Commitment Party from a third party that is not to such Commitment Party’s knowledge subject to confidentiality obligations to you or the Company, (e) to the extent that such information is independently developed by such Commitment Party so long as not based on information obtained in a manner that would otherwise violate this provision, (f) to such Commitment Party’s affiliates and its and its affiliates’ respective employees, legal counsel, independent auditors and other experts or agents (collectively, the “Representatives”) who need to know such information in connection with the Transactions and are informed of the confidential nature of such information (provided that such Commitment Party shall be responsible for its affiliates and Representatives’ compliance with this paragraph), (g) to prospective Lenders, participants or assignees or any potential counterparty (or its advisors) to any swap or derivative transaction relating to the Borrower or any of its subsidiaries or any of their respective obligations, in each case who agree to be bound by the terms of this paragraph (or language substantially similar to this paragraph), (h) for purposes of establishing a “due diligence” defense or (i) to ratings agencies in connection with the Transactions; provided that (i) the disclosure of any such information to any Lenders or prospective Lenders or participants or assignees or prospective participants or assignees referred to above shall be made subject to the acknowledgement and acceptance by such Lender or prospective Lender or assignee or participant or prospective assignee or participant that such information is being disseminated on a confidential basis (on substantially the terms set forth in this paragraph or as is otherwise reasonably acceptable to you and such Commitment Party, including, without limitation, as agreed in any marketing materials for the Facilities) in accordance with the standard syndication processes of such Commitment Party or customary market standards for dissemination of such type of information and (ii) no disclosure shall be made by such Commitment Party to any Disqualified Lender. Each Commitment Party’s obligations under this paragraph shall terminate on the earlier of (x) the second anniversary of the Original Commitment Letter Date or (y) one year following the termination of this Commitment Letter in accordance with its terms and shall otherwise automatically terminate and be superseded by the confidentiality provisions in the definitive documentation relating to each of the Facilities and/or the Backstopped Amendments upon the execution and delivery of the definitive documentation therefor.

13. Surviving Provisions.

The indemnification, expense reimbursement, compensation (if applicable), confidentiality, syndication (if applicable), jurisdiction, venue, governing law, waiver of jury trial and absence of fiduciary duty provisions contained herein and in the Fee Letter shall remain in full force and effect regardless of whether definitive financing documentation shall be executed and delivered and notwithstanding the termination of this Commitment Letter or the Initial Lenders’ commitments hereunder and the Lead Arrangers’ and the Co-Managers’ agreements to provide the services described herein; provided that your obligations under this Commitment Letter, other than those relating to confidentiality and to the syndication of the Facilities (if such Facilities have been funded) and your obligations under the second sentence of Section 4 (if such Facilities have been funded), shall automatically terminate and be superseded by the

13

definitive documentation relating to the Facilities to the extent covered thereby upon the initial funding under the Senior Facilities, and you shall be released from all liability in connection therewith at such time.

14. PATRIOT ACT Notification.

We hereby notify you that pursuant to the requirements of the USA PATRIOT Act, Title III of Pub. L. 107-56 (signed into law October 26, 2001) (the “Patriot Act”), each Commitment Party and each Lender is required to obtain, verify and record information that identifies the Borrower and Guarantors, which information includes the name, address, tax identification number and other information regarding the Borrower and Guarantors that will allow such Commitment Party or such Lender to identify the Borrower and Guarantors in accordance with the Patriot Act. This notice is given in accordance with the requirements of the Patriot Act and is effective as to the Commitment Parties and each Lender. You hereby acknowledge and agree that the Commitment Parties shall be permitted to share any or all such information with the Lenders.

15. Acceptance and Termination.

If the foregoing correctly sets forth our agreement, please indicate your acceptance of the terms of this Commitment Letter and of the Fee Letter by returning to the Citi, on behalf of the Commitment Parties, executed counterparts hereof and of the Fee Letter not later than 11:59 p.m., New York City time, on August 26, 2015. Each Commitment Party’s respective commitments hereunder and agreements contained herein will expire at such time in the event that Citi has not received such executed counterparts in accordance with the immediately preceding sentence. In the event that either (x) the initial borrowing in respect of the Senior Facilities does not occur on or before 11:59 p.m., New York City time, on the date that is no earlier than five business days after the Termination Date (as defined in the Acquisition Agreement as in effect on the Original Commitment Letter Date) or (y) the Acquisition Agreement is validly terminated prior to consummation of the Acquisition, then this Commitment Letter and the commitments and undertakings of the Commitment Parties hereunder shall automatically terminate. Additionally, the commitment of each Commitment Party with respect to the Senior Bridge Facility shall terminate in the event the Acquisition is consummated without any borrowings under the Senior Bridge Facility.

[Remainder of this page intentionally left blank]

14

The Commitment Parties are pleased to have been given the opportunity to assist you in connection with the financing for the Transactions.

[signature pages follow]

Very truly yours,

CITIGROUP GLOBAL MARKETS INC.
By:
	Name:
	Title:

[SIGNATURE PAGE TO AMENDED AND RESTATED COMMITMENT LETTER]

BANK OF AMERICA, N.A.
By:
	Name:
	Title:

MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED
By:
	Name:
	Title:

[SIGNATURE PAGE TO AMENDED AND RESTATED COMMITMENT LETTER]

JPMORGAN CHASE BANK, N.A.
By:
	Name:
	Title:

J.P. MORGAN SECURITIES LLC
By:
	Name:
	Title:

[SIGNATURE PAGE TO AMENDED AND RESTATED COMMITMENT LETTER]

BARCLAYS BANK PLC
By:
	Name:
	Title:

[SIGNATURE PAGE TO AMENDED AND RESTATED COMMITMENT LETTER]

GOLDMAN SACHS BANK USA
By:
	Name:
	Title:

[SIGNATURE PAGE TO AMENDED AND RESTATED COMMITMENT LETTER]

CITIZENS BANK, NATIONAL ASSOCIATION
By:
	Name:
	Title:
By:
	Name:
	Title:

RBS SECURITIES INC.
By:
	Name:
	Title:

THE ROYAL BANK OF SCOTLAND PLC
By:
	Name:
	Title:

[SIGNATURE PAGE TO AMENDED AND RESTATED COMMITMENT LETTER]

FIFTH THIRD BANK
By:
	Name:
	Title:

[SIGNATURE PAGE TO AMENDED AND RESTATED COMMITMENT LETTER]

REGIONS BANK
By:
	Name:
	Title:

REGIONS CAPITAL MARKETS, A DIVISION OF REGIONS BANK
By:
	Name:
	Title:

[SIGNATURE PAGE TO AMENDED AND RESTATED COMMITMENT LETTER]

COMPASS BANK
By:
	Name:
	Title:

BBVA SECURITIES INC.
By:
	Name:
	Title:

[SIGNATURE PAGE TO AMENDED AND RESTATED COMMITMENT LETTER]

BANK OF MONTREAL
By:
	Name:
	Title:

BMO CAPITAL MARKETS CORP.
By:
	Name:
	Title:

[SIGNATURE PAGE TO AMENDED AND RESTATED COMMITMENT LETTER]

MIZUHO BANK LTD.
By:
	Name:
	Title:

[SIGNATURE PAGE TO AMENDED AND RESTATED COMMITMENT LETTER]

THE BANK OF TOKYO-MITSUBISHI UFJ, LTD.
By:
	Name:
	Title:

[SIGNATURE PAGE TO AMENDED AND RESTATED COMMITMENT LETTER]

KEYBANK NATIONAL ASSOCIATION
By:
	Name:
	Title:

KEYBANC CAPITAL MARKETS INC.
By:
	Name:
	Title:

[SIGNATURE PAGE TO AMENDED AND RESTATED COMMITMENT LETTER]

Accepted and agreed to as of
the date first above written:TEAM HEALTH HOLDINGS, INC.,
by: ____________________________
Name:    David Jones
Title:    Executive Vice President and    Chief Financial Officer

TEAM HEALTH, INC.,

by: ____________________________
Name:    David Jones
Title:    Executive Vice President and        Chief Financial Officer

[SIGNATURE PAGE TO AMENDED AND RESTATED COMMITMENT LETTER]

SCHEDULE I

Commitment Allocation Percentages

Commitment Party	Percentage
Citigroup Global Markets Inc.	37.00%
Bank of America, N.A.	15.00%
JPMorgan Chase Bank, N.A.	15.00%
Barclays Bank PLC	5.00%
Goldman Sachs Bank USA	5.00%
Citizens Bank, National Association (or, in the case of the Senior Bridge Facility, The Royal Bank of Scotland plc)	5.00%
Fifth Third Bank	4.00%
Regions Bank	4.00%
Compass Bank	2.00%
Bank of Montreal	2.00%
Mizuho Bank Ltd.	2.00%
The Bank of Tokyo-Mitsubishi UFJ, Ltd.	2.00%
KeyBank National Association	2.00%

CONFIDENTIAL        EXHIBIT A

Project Intrepid

Senior Secured Credit Facilities
Senior Unsecured Increasing Rate Bridge Facility

Transaction Description¹

It is intended that:

(a)    You will directly or indirectly acquire the Company pursuant to an Agreement and Plan of Merger, dated as of August 4, 2015 (as amended, supplemented or modified and in effect from time to time, and including all Schedules and Exhibits thereto, the “Acquisition Agreement”), among Holdings, Acquisition Sub and the Company, whereby Acquisition Sub will be merged with and into the Company (the “Acquisition”);

(b)    (x) on or prior to the Closing Date, the Borrower (as defined in the Senior Facilities Term Sheet (as defined below)) will obtain an amendment (which may be in the form of an amendment and restatement) of the Existing Credit Agreement, in the manner required by the Existing Credit Agreement, to permit and/or provide for (i) the consummation of the Acquisition; (ii) the establishment of a tranche B term loan facility in an aggregate principal amount of $965 million (the “Term Loan B Facility”), having the terms set forth for the “Term Loan B Facility” in the Summary of Principal Terms and Conditions attached hereto as Exhibit B (the “Senior Facilities Term Sheet”); (iii) the issuance of (and escrowing of the proceeds from, if applicable) the Securities; and (iv) such other changes to the Existing Credit Agreement as more fully described in the Senior Facilities Term Sheet (the amendments described in clause (i) through (iv), collectively, the “Backstopped Amendments”), and (y) the Borrower will obtain the Term Loan B Facility;

(c)    if the Backstopped Amendments are not obtained on or prior to the Closing Date, the Borrower (as defined in the Senior Facilities Term Sheet) will (x) obtain senior secured credit facilities consisting of (i) a senior secured revolving credit facility in an aggregate amount equal to the aggregate Revolving Credit Commitments (as defined in the Existing Credit Agreement) outstanding immediately prior to the Closing Date (but, in any event, not to exceed $650 million) (the “Revolving Facility”) and (ii) a senior secured term loan facility, consisting of (A) a tranche A term loan facility in an aggregate principal amount equal to the aggregate principal amount of Tranche A Term Loans (as defined in the Existing Credit Agreement) outstanding immediately prior to the Closing Date (but, in any event, not to exceed $588.75 million) (the “Term Loan A Facility”) and (B) the Term Loan B Facility (the Term Loan B Facility, together with the Term Loan A Facility, the “Term Facilities” and, together with the Revolving Facility, the “New Senior Facilities”), having the terms set forth in the Senior Facilities Term Sheet and (y) use a portion of the proceeds thereof to repay in full all indebtedness, and terminate all commitments, guarantees and security interests, under the Existing Credit Agreement;

(d)    the Borrower (as defined in the Senior Bridge Term Sheet (as defined below)) will, at its option, either (i) issue an aggregate principal amount of its senior unsecured notes (the “Senior Notes”) generating up to $545 million in gross proceeds in a Rule 144A or other private placement or, at the election of the Borrower to the extent an effective registration statement is then available, a registered public offering or (ii) to the extent you do not receive such amount of gross proceeds of Senior Notes on the Closing Date, borrow up to $545 million (minus the amount of gross proceeds from any Senior Notes issuance) of senior unsecured increasing rate loans (the “Senior Bridge Loans”) under a new senior unsecured credit facility (the “Senior Bridge Facility”) described in the Summary of Principal Terms and Conditions attached hereto as Exhibit C (the “Senior Bridge Term Sheet”) and which may, under their terms, be converted to term loans (“Senior Unsecured Term Loans”) or exchanged for debt securities (“Senior Exchange Notes”); and

¹ All capitalized terms used but not defined herein have the meanings given to them in the Amended and Restated Commitment Letter to which this Term Sheet is attached, including the Exhibits thereto. In the event any such capitalized term is subject to multiple and differing definitions, the appropriate meaning thereof in this Exhibit shall be determined by reference to the context in which it is used.

A-1

CONFIDENTIAL        EXHIBIT A

(e)     after giving effect to the Transactions, Holdings and its subsidiaries shall have no outstanding indebtedness other than (i) (x) if the Backstopped Amendments are obtained on or prior to the Closing Date, the indebtedness outstanding under the Existing Credit Agreement immediately prior to the Closing Date and the Term Loan B Facility or (y) if the Backstopped Amendments are not obtained on or prior to the Closing Date, the New Senior Facilities, (ii) the Senior Bridge Facility and/or the Senior Notes, (iii) ordinary course short term working capital facilities and ordinary course capital lease, purchase money and equipment financings, (iv) indebtedness not to exceed $25 million and (v) any other indebtedness as may be mutually agreed between the Borrower and the Lead Arrangers. All other indebtedness (other than contingent obligations not yet due and payable) not specified in clauses (i) through (v) of the preceding sentence that is outstanding as of the Closing Date shall be repaid in full in connection with, and substantially concurrently with the closing of, the Transactions and all commitments, security interests and guarantees in connection therewith shall have been terminated and released.

The transactions described above, together with the transactions related thereto, are collectively referred to herein as the “Transactions”. This Exhibit A, the Senior Facilities Term Sheet, the Senior Bridge Term Sheet, and the Additional Conditions Precedent attached hereto as Exhibit D are collectively referred to herein as the “Term Sheets”. For purposes of this Commitment Letter, “Closing Date” shall mean the date of the initial funding under the Senior Facilities and the consummation of the Acquisition.

A-2

CONFIDENTIAL        EXHIBIT B

Project Intrepid
Senior Secured Credit Facilities
Summary of Principal Terms and Conditions²

Borrower: Team Health, Inc. (the “Borrower”).

Administrative Agent: If the Backstopped Amendments are not obtained on or prior to the Closing Date, Citi will act as sole and exclusive administrative agent and collateral agent (in such capacities, the “Bank Administrative Agent”, collectively with any other agents party to the Senior Facilities Documentation, the “Agents”) for a syndicate of banks, financial institutions and institutional lenders excluding any Disqualified Lender (together with the Initial Lenders, the “Lenders”), and will perform the duties customarily associated with such roles. If the Backstopped Amendments are obtained on or prior to the Closing Date, JPMorgan Chase Bank, N.A., will continue to act as sole and exclusive administrative agent and collateral agent under the Existing Credit Agreement (as amended by the Backstop Amendments) (and JPMorgan Chase Bank, N.A. will, in such event, be the “Bank Administrative Agent” for purposes of this Exhibit B, as the context may require).

Joint Bookrunners and Joint Lead

Arrangers: Citi, MLPFS, JPMorgan, Barclays, GS, and Citizens will act as joint lead arrangers for the Senior Facilities (in such capacities, together with any of their respective designated affiliates of similar creditworthiness, the “Lead Arrangers”) and as joint bookrunners, and will perform the duties customarily associated with such roles.

Co-Managers: Fifth Third, Regions Capital, Compass, BMO Capital, Mizuho, BTMU and KBCM will act as co-managers for the Senior Facilities and will perform the duties customarily associated with such role.

New Senior Secured Credit Facilities: (A)    If the Backstopped Amendments are not obtained on or prior to the Closing Date, a senior secured tranche A term loan facility in an aggregate principal amount equal to the aggregate principal amount of Tranche A Term Loans (as defined in the Existing Credit Agreement) outstanding immediately prior to the Closing Date (not to exceed $588.75 million) (the “Term Loan A Facility”) plus, at the Borrower’s election, an amount sufficient to fund any OID or upfront fees required to be funded in connection with (x) the “market flex” provisions in the Fee Letter or (y) the issuance of the Senior Notes or any other debt securities pursuant to any offering by Borrower or any of its direct or indirect subsidiaries undertaken to finance the

2All capitalized terms used but not defined herein have the meanings given to them in the Amended and Restated Commitment Letter to which this Term Sheet is attached (the “Commitment Letter”), including the Exhibits thereto. In the event any such capitalized term is subject to multiple and differing definitions, the appropriate meaning thereof in this Exhibit shall be determined by reference to the context in which it is used.

B-1

CONFIDENTIAL        EXHIBIT B

Acquisition (the “Securities”), which amounts shall be automatically added to the Commitment Parties’ commitments under the Commitment Letter (the loans under the Term Loan A Facility, together with any loans issued under the Incremental Term Facilities or the Refinancing Term Facilities designated as Tranche A Term Loans, the “Tranche A Term Loans”).

(B) A senior secured tranche B term loan facility in an aggregate principal amount of $965 million, or such lesser amount as the Borrower shall determine in its sole discretion (the “Term Loan B Facility”; together with the Term Loan A Facility, the “Term Facilities”) plus, at the Borrower’s election, an amount sufficient to fund any OID or upfront fees required to be funded in connection with (x) the “market flex” provisions in the Fee Letter or (y) the issuance of the Senior Notes or any other Securities, which amounts shall be automatically added to the Commitment Parties’ commitments under the Commitment Letter (the loans under the Term Loan B Facility, together with any loans issued under the Incremental Term Facilities or the Refinancing Term Facilities designated as Tranche B Term Loans, the “Tranche B Term Loans”). The Tranche A Term Loans and the Tranche B Term Loans are collectively referred to as the “Term Loans”.    

(C) If the Backstopped Amendments are not obtained on or prior to the Closing Date, a senior secured revolving credit facility (the revolving commitments thereunder “Revolving Commitments”) in an aggregate amount equal to the aggregate Revolving Credit Commitments (as defined in the Existing Credit Agreement) outstanding immediately prior to the Closing Date (but, in any event, not to exceed $650 million) (the “Revolving Facility” and, together with the Term Facilities, the “Senior Facilities”), of which up to an amount equal to $50 million will be available in the form of letters of credit.

In connection with the Revolving Facility, the Bank Administrative Agent (in such capacity, the “Swingline Lender”) will make available to the Borrower a swingline facility under which the Borrower may make short-term borrowings of up to $40 million. Except for purposes of calculating the Commitment Fee described below, any such swingline borrowings will reduce availability under the Revolving Facility on a dollar-for-dollar basis.

Each Lender under the Revolving Facility (each such Lender, a “Revolving Lender”) shall, promptly upon request by the Swingline Lender, fund to the Swingline Lender its pro rata share of any swingline borrowings.

B-2

CONFIDENTIAL        EXHIBIT B

If any Lender becomes a Defaulting Lender (to be defined in a manner substantially similar to the corresponding term in the Existing Credit Agreement), then the swingline exposure of such Defaulting Lender will automatically be reallocated among the non-Defaulting Lenders pro rata in accordance with their commitments under the Revolving Facility up to an amount such that the revolving credit exposure of such non-Defaulting Lender does not exceed its commitments. In the event such reallocation does not fully cover the exposure of such Defaulting Lender, the Swingline Lender may require the Borrower to repay such “uncovered” exposure in respect of the swingline loans and will have no obligation to make new swingline loans to the extent such swingline loans would exceed the commitments of the non-Defaulting Lenders.

In the event that the Backstopped Amendments are obtained on or prior to the Closing Date, (a) the provisions in this Exhibit B relating to the Term Loan A Facility and the Revolving Facility (other than the increase in the swingline commitment referenced under the heading “New Senior Secured Credit Facilities”) shall not apply (it being understood that, except as modified by Backstopped Amendments, the terms of the Existing Credit Facility shall continue to apply to the Existing Credit Facilities (as defined below)), and (b) except as otherwise provided herein, references herein to the “Senior Facilities” shall mean the Term Loan B Facility and the credit facilities outstanding under the Existing Credit Agreement immediately prior to the Closing Date (such credit facilities, the “Existing Credit Facilities”), as the context may require.

Incremental Facilities: The Senior Facilities Documentation will permit the Borrower to (a) add one or more incremental term loan facilities and/or increase the loans under the Term Facilities (each, an “Incremental Term Facility”) and (b) add one or more revolving credit facilities and/or increase commitments under the Revolving Facility (any such revolving credit facility or increase, an “Incremental Revolving Facility”; the Incremental Term Facilities and the Incremental Revolving Facilities are collectively referred to as “Incremental Facilities”) on terms substantially similar to those set forth in the Existing Credit Agreement; provided that (i) the Incremental Facilities do not exceed in the aggregate the sum of (A) $350 million plus (B) all voluntary prepayments and voluntary permanent commitment reductions of the Senior Facilities made prior to such date of incurrence (other than voluntary prepayments and voluntary commitment reductions to the extent funded by a contemporaneous refinancing) plus (C) an unlimited amount at any time (including at any time prior to utilization of amounts set forth in clause (A) and (B) above) so long as the First Lien

B-3

CONFIDENTIAL        EXHIBIT B

Leverage Ratio (to be defined in a manner substantially similar to the corresponding definition in the Existing Credit Agreement) as of the last day of the most recently ended period of four consecutive fiscal quarters for which financial statements are internally available, on a pro forma basis after giving effect to such Incremental Facility ((1) assuming all commitments under any such Incremental Revolving Facility were fully drawn and (2) assuming that all indebtedness incurred under such Incremental Facility is first-lien indebtedness) does not exceed 3.75:1.00 (the amount under clauses (A), (B) and (C), the “Available Incremental Amount”) and (ii) the “most favored nations” pricing provision in the Existing Credit Agreement will be revised such that such provision applies only with respect to any Incremental Term Facility made on or prior to the date that is 6 months after the Closing Date.

In addition, the Borrower may, in lieu of adding Incremental Term Facilities, utilize any part of the Available Incremental Amount at any time by issuing or incurring Incremental Equivalent Debt (as defined below), subject to customary conditions to be agreed (such as customary applicable intercreditor documentation reasonably acceptable to the Bank Administrative Agent).

“Incremental Equivalent Debt” means indebtedness in an amount not to exceed the then Available Incremental Amount incurred by the Borrower or any Guarantor consisting of the issuance of senior secured first lien or junior lien loans or notes, subordinated loans or notes or senior unsecured loans or notes, in each case in respect of the issuance of notes, issued in a public offering, Rule 144A or other private placement or bridge financing in lieu of the foregoing, or secured or unsecured “mezzanine” debt, in each case subject to customary conditions to be agreed, including (i) in the case of any such first lien indebtedness, that the First Lien Leverage Ratio as of the last day of the most recently ended period of four consecutive fiscal quarters for which financial statements are internally available, after giving effect to such Incremental Equivalent Debt (assuming all commitments under any Incremental Revolving Facility were fully drawn), on a pro forma basis does not exceed 3.75:1.00 and (ii) in the case of any such junior lien indebtedness or unsecured indebtedness, that the Total Leverage Ratio (to be defined in a manner substantially similar to the corresponding definition in the Existing Credit Agreement) as of the last day of the most recently ended period of four consecutive fiscal quarters for which financial statements are internally available, after giving effect to such Incremental Equivalent Debt (assuming all commitments under any Incremental Revolving

B-4

CONFIDENTIAL        EXHIBIT B

Facility were fully drawn), on a pro forma basis does not exceed 5.50:1.00; provided that such indebtedness shall not mature earlier than or have a weighted average life shorter than, any of the Senior Facilities. Incremental Equivalent Debt (other than with respect to any such debt in the form of senior secured first lien loans) shall not be subject to the “most favored nation” requirements applicable to the Incremental Facilities; provided that Incremental Equivalent Debt that is first lien secured indebtedness incurred under the Available Incremental Amount outside of the Senior Facilities shall not be in the form of loans.

In the case of the incurrence of any indebtedness or liens or the making of any investments, restricted payments or fundamental changes or the designation of any restricted subsidiaries or unrestricted subsidiaries in connection with a permitted acquisition (a “Limited Condition Acquisition”), at the Borrower’s option, the relevant ratios and baskets shall be determined as of the date the definitive acquisition agreements for such Limited Condition Acquisition are entered into and calculated as if the Limited Condition Acquisition and other pro forma events in connection therewith were consummated on such date; provided that if the Borrower has made such an election, in connection with determining whether the calculation of any ratio or basket with respect to the incurrence of any debt or liens, or the making of any investments, restricted payments, prepayments of subordinated debt, asset sales, fundamental changes or the designation of a restricted subsidiary or unrestricted subsidiary in connection with such Limited Condition Acquisition is permitted on or following such date and prior to the earlier of the date on which such Limited Condition Acquisition is consummated or the definitive agreement for such acquisition is terminated or expires without consummation of such acquisition, any such ratio shall be calculated on a pro forma basis assuming such Limited Condition Acquisition and other pro forma events in connection therewith (including any incurrence of indebtedness) have been consummated and assuming further that EBITDA and consolidated net income of any target of such Limited Condition Acquisition can only be used in the determination of the relevant ratios and baskets if and when such Limited Condition Acquisition has closed.

In connection with any action being taken in connection with a Limited Condition Acquisition, for purposes of determining compliance with any provision which requires that no default, event of default or specified event of default, as applicable, has occurred, is continuing or would result from any such action, as applicable, such condition shall, at the option of the Borrower, be deemed satisfied, so long as no default, event of

B-5

CONFIDENTIAL        EXHIBIT B

default or specified event of default, as applicable, exists on the date the definitive agreements for such Limited Condition Acquisition are entered into.

Refinancing Facilities: The Senior Facilities Documentation will permit the Borrower to refinance loans under any Term Facility or commitments under the Revolving Facility (which, for purposes of this paragraph, shall include the Existing Credit Facilities) from time to time, in whole or in part, with one or more new term facilities (each, a “Refinancing Term Facility”)or new revolving credit facilities (each, a “Refinancing Revolving Facility”;the Refinancing Term Facilities and the Refinancing Revolving Facilities are collectively referred to as “Refinancing Facilities”),respectively, under the Senior Facilities Documentation with the consent of the Borrower, the Bank Administrative Agent and the lenders providing such Refinancing Term Facility or Refinancing Revolving Facility or in the case of debt refinancing of any Term Facility, with one or more additional series of senior unsecured or senior subordinated notes or loans or senior secured loans or notes that will be secured by the Collateral on a pari passu basis with the applicable Senior Facilities being refinanced or junior lien secured notes or loans that will be secured on a subordinated basis to such Senior Facility (and such notes or loans, “Refinancing Notes”and, together with the Refinancing Facilities, the “Refinancing Debt”);provided that (i) any Refinancing Term Facility or Refinancing Notes do not mature prior to the final scheduled maturity date of, or have a shorter weighted average life to maturity than, the remaining weighted average life of loans under the applicable Term Facility being refinanced, (ii) any Refinancing Revolving Facility does not mature prior to the maturity date of the revolving commitments being refinanced, (iii) the other terms and conditions of such Refinancing Term Facility, Refinancing Revolving Facility or Refinancing Notes (excluding pricing, interest rate margins, fees, discounts, rate floors and prepayment or redemption terms) are substantially identical to, or (taken as a whole) are no more favorable (as reasonably determined by the Borrower) to the lenders providing such Refinancing Term Facility, Refinancing Revolving Facility or Refinancing Notes, as applicable, than, those applicable to the applicable Term Facility or revolving commitments being refinanced (except for covenants or other provisions applicable only to periods after the latest final scheduled maturity date of the applicable Term Facility and revolving credit commitments existing at the time of such refinancing) (it being understood that to the extent any financial maintenance covenant is added for the benefit of such (A) Refinancing Term Facility or Refinancing Notes, no consent shall be required from the Bank Administrative Agent

B-6

CONFIDENTIAL        EXHIBIT B

or any applicable Lender to the extent that such financial maintenance covenant is also added for the benefit of each Senior Facility remaining outstanding after the incurrence or issuance of such Refinancing Debt or (B) Refinancing Revolving Facility, no consent shall be required from the Bank Administrative Agent or any Lender to the extent that such financial maintenance covenant is also added for the benefit of the Revolving Facility that then benefits from a financial maintenance covenant and is remaining outstanding after the incurrence of such Refinancing Revolving Facility), (iv) any secured Refinancing Debt shall be subject to an intercreditor agreement on terms reasonably acceptable to the Bank Administrative Agent, (v) any Refinancing Debt which is in the form of loans that is incurred outside of the Senior Facilities will be unsecured or secured on a junior basis and (vi) no Lender will be obligated to provide commitments to any such Refinancing Debt.

Purpose: (A)    The proceeds of the Term Facilities will be used by the Borrower on the Closing Date, together with the proceeds of the Senior Notes and/or Senior Bridge Loans and borrowings under the Revolving Facility, to pay the consideration for the Acquisition, to refinance existing indebtedness of the Company and its subsidiaries (including accrued and unpaid interest and applicable premiums) and to pay costs and expenses related to the Transactions.

(B)    The letters of credit and the proceeds of loans under the Revolving Facility (except as set forth below) will be used by the Borrower and its subsidiaries for working capital and general corporate purposes (including permitted acquisitions); provided that the amount of the Revolving Facility utilized to fund working capital, pay amounts owing to finance the Transaction or to pay costs and expenses related to the Transactions on the Closing Date shall be subject to the limitation set forth below.

Availability: (A)    The Term Facilities will be available in a single drawing on the Closing Date. Amounts borrowed under the Term Facilities that are repaid or prepaid may not be reborrowed.

(B)    Loans under the Revolving Facility will be made available on the Closing Date (i) to fund original issue discount or upfront fees required to be funded under the “market flex” provisions of the Fee Letter, (ii) to finance the Transactions and fees and expenses related to the Transactions (including to fund original issue discount or upfront fees in connection with the Senior Facilities, the Senior Notes or any other Securities not required to be funded under the “market flex” provisions of the Fee

B-7

CONFIDENTIAL        EXHIBIT B

Letter), (iii) for working capital needs and (iv) replace, backstop or cash collateralize existing letters of credit; provided that the amounts described in clause (ii) above (other than in respect of the parenthetical in clause (ii) above) shall not exceed $125 million.

Letters of credit may be issued on the Closing Date to backstop or replace letters of credit outstanding on the Closing Date (including by “grandfathering” such existing letters of credit in the Revolving Facility) or for other general corporate purposes.

Loans under the Revolving Facility will be available at any time prior to the final maturity of the Revolving Facility, in minimum principal amounts to be agreed. Amounts repaid under the Revolving Facility may be reborrowed.

Interest Rates and Fees: As set forth on Annex I hereto.

Default Rate: Any principal or interest payable under or in respect of the Senior Facilities not paid when due shall bear interest at the applicable interest rate plus 2% per annum. Other overdue amounts shall bear interest at the interest rate applicable to ABR loans plus 2% per annum.

Letters of Credit: If the Backstopped Amendments are not obtained on or prior to the Closing Date, letters of credit under the Revolving Facility will be issued by the Bank Administrative Agent and/or another Lender under the Revolving Facility reasonably acceptable to the Borrower and the Bank Administrative Agent and such Revolving Lender (each, an “Issuing Bank”) on terms substantially similar to those set forth in the Existing Credit Agreement. Each letter of credit shall expire not later than the earlier of (a) 12 months after its date of issuance and (b) the fifth business day prior to the final maturity of the Revolving Facility; provided that any letter of credit may provide for renewal thereof for additional periods of up to 12 months (which in no event shall extend beyond the date referred to in clause (b) above, except to the extent cash collateralized or backstopped pursuant to arrangements reasonably acceptable to the Issuing Bank and the Bank Administrative Agent).

Drawings under any letter of credit shall be reimbursed by the Borrower within no more than one business day after notice of drawing is delivered. To the extent that the Borrower does not reimburse the Issuing Bank within one business day, the Lenders under the Revolving Facility shall be irrevocably obligated to reimburse the Issuing Bank pro rata based upon their respective Revolving Facility commitments.

B-8

CONFIDENTIAL        EXHIBIT B

If any Lender becomes a “Defaulting Lender”, then the letter of credit exposure of such Defaulting Lender will automatically be reallocated among the non-Defaulting Lenders pro rata in accordance with their commitments under the Revolving Facility up to an amount such that the revolving credit exposure of such non-Defaulting Lender does not exceed its commitments. In the event that such reallocation does not fully cover the letter of credit exposure of such Defaulting Lender, the applicable Issuing Bank may require the Borrower to cash collateralize such “uncovered” exposure in respect of each outstanding letter of credit and will have no obligation to issue new letters of credit, or to extend, renew or amend existing letters of credit to the extent letter of credit exposure would exceed the commitments of the non-Defaulting Lenders, unless such “uncovered” exposure is cash collateralized to the Issuing Bank’s reasonable satisfaction.

Final Maturity and

Amortization: (A)    Term Facilities

The Term Loan A Facility will mature on October 2, 2019 and the Term Loan B Facility will mature on the date that is 7 years after the Closing Date. The Term Loan A Facility will amortize on the same terms as the Existing Credit Agreement, and the Term Loan B Facility will amortize in equal quarterly installments in aggregate annual amounts equal to 1% per annum of the original principal amount of the Term Loan B Facility, with the balance payable on the final maturity date; provided that the Senior Facilities Documentation shall provide the right for individual Lenders to agree to extend the maturity date of their outstanding Tranche A Loans and/or Tranche B Term Loans, as the case may be, on terms substantially consistent with the Existing Credit Agreement.

(B) Revolving Facility

The Revolving Facility will mature on October 2, 2019; provided that the Senior Facilities Documentation shall provide the right for individual Lenders to agree to extend the maturity date of their Revolving Commitments on terms substantially consistent with the Existing Credit Agreement.

Guarantees: All obligations of the Borrower (the “Borrower Obligations”) under the Senior Facilities and under any interest rate protection or other hedging arrangements (other than any Excluded Swap Obligation (to be defined in a manner substantially similar to the corresponding definition in the Existing Credit Agreement)) entered into with an Agent, a Lender or any affiliate of an Agent or a Lender at the time of the entering into of such arrangements

B-9

CONFIDENTIAL        EXHIBIT B

(“Hedging Obligations”) and under any cash management arrangements entered into with an Agent, a Lender or any affiliate of an Agent, a Lender at the time of the entering into of such arrangements (“Cash Management Obligations”; collectively with any Hedging Obligations and Borrower Obligations, collectively the “Obligations”) will be unconditionally guaranteed jointly and severally on a senior secured basis (the “Guarantees”) by Team Health Holdings, Inc. (“Holdings”) and the other guarantors pursuant to the “Collateral and Guarantee Requirement” contained in the Existing Credit Agreement (collectively, the “Guarantors”) and on other terms substantially similar to the Existing Credit Agreement, in each case, subject to the Limited Conditionality Provision.

Security: The Borrower Obligations, the Guarantees, any Hedging Obligations and any Cash Management Obligations will be secured by substantially all of the present and after-acquired assets of the Borrower and each Guarantor (collectively, the “Collateral”) on terms substantially similar to the Existing Credit Agreement.

Notwithstanding the foregoing, (a) no control agreements or other control arrangements shall be required with respect to any assets requiring perfection through control agreements (including, without limitation, cash, deposit accounts or securities accounts), (b) immaterial notes and other evidence of immaterial indebtedness shall not be required to be delivered and (c) the requirements of the preceding paragraph shall be subject to the Limited Conditionality Provision.

Mandatory Prepayments: Will be substantially similar to the Existing Credit Agreement.

Voluntary Prepayments and

Reductions in Commitments: Will be substantially similar to the Existing Credit Agreement.

Senior Facilities Documentation: The Facilities Documentation for the Senior Facilities and, if applicable, the Backstopped Amendments (the “Senior Facilities Documentation”) shall be negotiated in good faith to finalize the Senior Facilities Documentation, giving effect to the Limited Conditionality Provision, shall be based on the definitive documentation for the Borrower’s amended and restated credit agreement dated as of October 2, 2014 (the “Existing Credit Agreement”), shall contain the terms and conditions set forth in this Exhibit B and, to the extent any terms are not set forth in this Exhibit B, shall otherwise be consistent with the Existing Credit Agreement (as in effect on the date hereof), with additions, deletions, modifications and other changes as Lead Arrangers and the Borrower reasonably

B-10

CONFIDENTIAL        EXHIBIT B

determine to be necessary or advisable, including, among other things, (i) to take into account prevailing market conditions, (ii) to give effect to the Transactions and the other transactions contemplated hereby, (iii) to provide for and give effect to the Guarantees and the security over the Collateral, (iv) to reflect changes in law or accounting standards or cure mistakes or defects and (v) to reflect reasonable administrative, agency and operational requirements of the Bank Administrative Agent (collectively, the “Documentation Principles”). The Senior Facilities Documentation shall contain only those payments, conditions to borrowing, mandatory prepayments, representations, warranties, covenants and events of default expressly set forth in this Exhibit B, in each case, applicable to the Borrower and its restricted subsidiaries (and, where indicated, Holdings), and with standards, qualifications, thresholds, exceptions, “baskets” and grace and cure periods consistent with the Documentation Principles.

Representations and Warranties: Will be substantially similar to the Existing Credit Agreement.

Conditions Precedent to Initial Borrowing: Subject to the Limited Conditionality Provision, the initial borrowings under the Senior Facilities (which, if the Backstopped Amendments are obtained on or prior to the Closing Date, shall be limited to the Term Loan B Facility) on the Closing Date will be subject only to the Funding Conditions.

Conditions Precedent to all Borrowings: Delivery of notice, accuracy of representations and warranties in all material respects (subject on the Closing Date to the Limited Conditionality Provision) and, except for the initial borrowings under the Senior Facilities (which, if the Backstopped Amendments are obtained on or prior to the Closing Date, shall be limited to the Term Loan B Facility) on the Closing Date, absence of defaults.

Affirmative Covenants: Will be substantially similar to the Existing Credit Agreement.

Negative Covenants: Will be substantially similar to the Existing Credit Agreement, subject to increases to certain baskets and thresholds to reflect a larger company after giving effect to the Acquisition (and, for the avoidance of doubt, the indebtedness covenant will permit the Senior Notes, the Senior Bridge Facility and the Securities).

Financial Covenant: The Borrower will maintain a Total Leverage Ratio (to be defined in a manner substantially similar to the corresponding definition in the Existing Credit Agreement) of no greater than 6.25:1.00 with one step-down to be agreed (with such step-down commencing on the first anniversary of the Closing Date).

B-11

CONFIDENTIAL        EXHIBIT B

Events of Default: Will be substantially similar to the Existing Credit Agreement, subject to adjustments to certain baskets and thresholds to reflect a larger company after giving effect to the Acquisition.

Other terms: Will be substantially similar to the Existing Credit Agreement.

Counsel to the Commitment

Parties: Cravath, Swaine & Moore LLP.

B-12

CONFIDENTIAL        ANNEX I TO

EXHIBIT B

Interest Rates: The interest rates under the Senior Facilities will be as follows:

Revolving Facility and Term Loan A Facility

At the option of the Borrower, initially, as applicable, Adjusted LIBOR, plus 2.25% or ABR plus 1.25%.

From and after the delivery by the Borrower to the Bank Administrative Agent of the Borrower’s financial statements for the period ending at least one full fiscal quarter following the Closing Date, the applicable margin under the Revolving Facility and the Term Loan A Facility shall be subject to the following pricing grid:

First Lien Net Leverage Ratio	Adjusted LIBOR Rates	ABR
> 3.75x	2.25%	1.25%
> 2.50x but < 3.75x	2.00%	1.00%
> 1.75x but < 2.50x	1.75%	0.75%
< 1.75x	1.50%	0.50%

Term Loan B Facility: Adjusted LIBOR plus 3.00% or ABR plus 2.00%.

All Facilities

The Borrower may elect interest periods of 1, 2, 3 or 6 months (or, if agreed by all relevant Lenders, 12 months or a shorter period) for Adjusted LIBOR borrowings.

Calculation of interest shall be on the basis of the actual days elapsed in a year of 360 days (or 365 or 366 days, as the case may be, in the case of ABR loans based on the Prime Rate) and interest shall be payable (i) in the case of Adjusted LIBOR loans, at the end of each interest period and, in any event, at least every 3 months and (ii) in the case of ABR loans, quarterly in arrears.

ABR is the Alternate Base Rate, which is the highest of the Bank Administrative Agent’s Prime Rate, the Federal Funds Effective Rate plus 1/2 of 1.00%, and one-month Adjusted LIBOR plus 1.00% per annum; provided that, if such rate shall be less than zero, such rate shall be deemed to be zero, and subject, solely in the case of the Term Loan B Facility, to a floor of 1.75% per annum.

I-B-1

CONFIDENTIAL        EXHIBIT B

Adjusted LIBOR is the London interbank offered rate for U.S. dollars, adjusted for customary Eurodollar reserve requirements, if any; provided that, if such rate shall be less than zero, such rate shall be deemed to be zero, and subject, solely in the case of the Term Loan B Facility, to a floor of 0.75% per annum.

Letter of Credit Fee: A per annum fee equal to the spread over Adjusted LIBOR under the Revolving Facility will accrue on the aggregate face amount of outstanding letters of credit under the Revolving Facility, payable in arrears at the end of each quarter and upon the termination of the Revolving Facility, in each case for the actual number of days elapsed over a 360-day year. Such fees shall be distributed to the Lenders participating in the Revolving Facility pro rata in accordance with the amount of each such Lender’s Revolving Facility commitment. In addition, the Borrower shall pay to the Issuing Bank, for its own account, (a) a fronting fee equal to 0.125% of the aggregate face amount of outstanding letters of credit, payable in arrears at the end of each quarter and upon the termination of the Revolving Facility, calculated based upon the actual number of days elapsed over a 360-day year, and (b) customary issuance and administration fees.

Commitment Fees: 0.35% per annum on the average daily undrawn portion of the commitments in respect of the Revolving Facility, payable quarterly in arrears after the Closing Date and upon the termination of the commitments and calculated based on the number of days elapsed in a 360-day year.

From and after the delivery by the Borrower to the Bank Administrative Agent of the Borrower’s financial statements for the period ending at least one full fiscal quarter following the Closing Date, the commitment fee rate shall be subject to the following pricing grid:

First Lien Net Leverage Ratio	Commitment Fee Rate
> 3.75x	0.35%
> 2.50x but < 3.75x	0.35%
> 1.75x but < 2.50x	0.30%
< 1.75x	0.30%

Swingline loans shall, for purposes of the commitment fee calculations only, not be deemed to be a utilization of the Revolving Facility.

I-B-2

CONFIDENTIAL        EXHIBIT C

Project Intrepid
Senior Unsecured Increasing Rate Bridge Loans
Summary of Principal Terms and Conditions³

Borrower: Team Health, Inc. (the “Borrower”).

Administrative Agent: Citibank, N.A. will act as sole and exclusive administrative agent (in such capacity, the “BridgeAdministrative Agent”) for a syndicate of banks, financial institutions and institutional lenders determined in consultation with the Borrower excluding any Disqualified Lender (together with the Initial Lenders, the “Lenders”), and will perform the duties customarily associated with such role.

Joint Bookrunners and Joint Lead

Arrangers: Citi, MLPFS, JPMorgan, Barclays, GS, and RBSSI will act as joint lead arrangers for the Senior Bridge Loans (in such capacities, together with any of their respective designated affiliates of similar creditworthiness, the “Lead Arrangers” and together with the Co-Managers (as defined below), the “Managers”) and as joint bookrunners, and will perform the duties customarily associated with such roles.

Co-Managers: Fifth Third, Regions Capital, Compass, BMO Capital, Mizuho, BTMU and KBCM will act as co-managers for the Senior Bridge Loans (in such capacities, together with any of their respective designated affiliates of similar creditworthiness, the “Co-Managers”) and will perform the duties customarily associated with such role.

Bridge Loans: Senior unsecured increasing rate bridge loans (the “Senior Bridge Loans”).

Uses of Proceeds: The proceeds of the Senior Bridge Loans will be used by the Borrower on the Closing Date, together with the proceeds of the Senior Facilities and/or the Senior Notes (if any), solely to pay the consideration for the Acquisition, to refinance certain existing indebtedness of the Company and its subsidiaries (including accrued and unpaid interest and applicable premiums) and to pay costs and expenses related to the Transactions.

Principal Amount: $545 million of Senior Bridge Loans plus, at the Borrower’s election, an amount sufficient to fund any OID or upfront fees required to be funded on the Closing Date in connection with the issuance of the Senior Notes or any other Securities on the Closing Date (which amounts shall be automatically added to

3 All capitalized terms used but not defined herein have the meanings given to them in the Amended and Restated Commitment Letter to which this Term Sheet is attached (the “Commitment Letter”), including the Exhibits thereto. In the event any such capitalized term is subject to multiple and differing definitions, the appropriate meaning thereof in this Exhibit shall be determined by reference to the context in which it is used.

C-1

the Commitment Parties’ commitments in respect of the Senior Bridge Facility under the Commitment Letter) minus the aggregate amount of gross proceeds from (i) the Senior Notes or any other debt issuance and (ii) any public equity issuances of Holdings, in each case between the Original Commitment Letter Date and up to and including the Closing Date (and the Commitment Parties’ commitments in respect of the Senior Bridge Facility under the Commitment Letter shall be automatically reduced by such amounts).

Ranking: The Senior Bridge Loans will constitute senior unsecured indebtedness of the Borrower.

Guarantees: Each existing and subsequently acquired or organized guarantor of the Senior Facilities will jointly and severally guarantee the Senior Bridge Loans on a senior unsecured basis, with the guarantee of each such guarantor under the Senior Bridge Facility being pari passu in right of payment with all obligations under the Senior Facilities. Any guarantee will be automatically released upon the release of the corresponding guarantee under the Senior Facilities (other than upon payment in full thereof).

Security: None.

Interest Rates: Interest for the first three-month period commencing on the Closing Date shall be payable in respect of Senior Bridge Loans at (a) LIBOR (as defined below) plus (b) 500 basis points. Thereafter, interest on the Senior Bridge Loans shall increase by an additional 50 basis points at the beginning of each three-month period subsequent to the initial three-month period, increasing to a maximum equal to the Total Cap (as defined in the Fee Letter).

“LIBOR” on any date, means the greater of (i) the London interbank offered rate for dollars, adjusted for customary Eurodollar reserve requirements if any, for a three month period (as determined two business days prior to the start of the applicable interest period) and (ii) 1.00%.

Notwithstanding anything to the contrary set forth above, at no time shall the per annum yield on the Senior Bridge Loans exceed the Total Cap.

Interest Payments: Interest on the Senior Bridge Loans will be payable in cash, quarterly in arrears.

Default Rate: The applicable interest rate plus 2.00% on overdue amounts.

Notwithstanding anything to the contrary set forth herein, in no event shall any cap or limit on the yield or interest rate payable

C- 2

with respect to the Senior Bridge Loans, Senior Unsecured Term Loans or Senior Exchange Notes affect the payment of any default rate of interest in respect of any Senior Bridge Loans, Senior Unsecured Term Loans or Senior Exchange Notes.

Maturity: The Senior Bridge Loans will mature on the first anniversary of the Closing Date (the “Maturity Date”). On the Maturity Date, any Senior Bridge Loan that has not been previously repaid in full will be automatically converted into a senior unsecured term loan (a “Senior Unsecured Term Loan”) that is due on the date that is 8 years after the Closing Date. The date on which Senior Bridge Loans are converted into Senior Unsecured Term Loans is referred to as the “Senior Conversion Date”. On the Senior Conversion Date, and on the 15th calendar day of each month thereafter (or the immediately succeeding business day if such calendar day is not a business day), at the option of the applicable Lender, Senior Unsecured Term Loans may be exchanged in whole or in part for senior unsecured exchange notes (the “Senior Exchange Notes”) having an equal principal amount; provided, that (i) no Senior Exchange Notes shall be issued until the Borrower shall have received requests to issue at least $150 million in aggregate principal amount of Senior Exchange Notes and (ii) no subsequent Senior Exchange Notes shall be issued until the Borrower shall have received additional requests to issue at least $250 million in aggregate principal amount of additional Senior Exchange Notes.

The Senior Unsecured Term Loans will be governed by the provisions of the Senior Bridge Loan Documents and will have the same terms as the Senior Bridge Loans except as expressly set forth on Annex I hereto. The Senior Exchange Notes will be issued pursuant to an indenture that will have the terms set forth on Annex II hereto. The Senior Bridge Loans, the Senior Unsecured Term Loans and the Senior Exchange Notes shall be pari passu for all purposes.

Mandatory Prepayment: The Senior Bridge Loans shall be prepaid at 100% of the outstanding principal amount thereof with, subject to exceptions and baskets consistent with the Documentation Principles, (i) the net proceeds from the issuance of the Senior Notes or any other debt securities of the Borrower or its affiliates, or, subject to certain exceptions to be mutually agreed, other indebtedness for borrowed money of the Borrower or any of its restricted subsidiaries (such exceptions to include borrowings under any Incremental Facility or any other indebtedness the proceeds of which are required to be applied to a mandatory prepayment in respect of the Senior Facilities or other secured debt), (ii) the net proceeds from any non-

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ordinary course asset sales by the Borrower or any of its restricted subsidiaries in excess of amounts either reinvested in accordance with the Senior Facilities or used to repay the Term Facilities or certain other secured debt and (iii) the net proceeds of public equity issuances of Holdings and the Borrower (subject to certain exceptions, including equity issued to Holdings or the Borrower or pursuant to employee benefit plans or the proceeds of public equity issuances which are required to be applied to a mandatory prepayment in respect of the Senior Facilities or other secured debt). The Borrower will also be required to prepay the Senior Bridge Loans following the occurrence of a change of control at 100% of the outstanding principal amount thereof. In the event any Lender or affiliate of a Lender purchases debt securities from the Borrower pursuant to a permitted securities demand at a price above the level at which such Lender or affiliate has reasonably determined such debt securities can be resold by such Lender or affiliate to a bona fide third party at the time of such purchase (and notifies the Borrower thereof), the net cash proceeds received by the Borrower in respect of such debt securities may, at the option of such Lender or affiliate, be applied first to prepay the Senior Bridge Loans of such Lender or affiliate prior to being applied to prepay the Senior Bridge Loans held by other Lenders. These mandatory prepayment provisions will not apply to the Senior Unsecured Term Loans.

Optional Prepayment: The Senior Bridge Loans may be prepaid, in whole or in part, at par plus accrued and unpaid interest upon not less than three business days’ prior written notice, at the option of the Borrower at any time.

Right to Resell Senior

Bridge Loans: Each Lender shall have the absolute and unconditional right to resell or assign the Senior Bridge Loans held by it in compliance with applicable law to any third party at any time, in consultation with (but without the consent of) the Borrower and with the consent of the Bridge Administrative Agent (not to be unreasonably withheld, conditioned or delayed); provided that, for the twelve month period commencing on the Closing Date, the consent of the Borrower shall be required with respect to any assignment that would result in the Initial Lenders holding less than 50.1% of the aggregate outstanding principal amount of the Senior Bridge Loans; provided that no such consent of the Borrower shall be required after the occurrence and during the continuance of a payment or bankruptcy default or after the occurrence of a Demand Failure Event (as defined in the Fee Letter).

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The Lenders will be permitted to sell participations in the Senior Bridge Loans without restriction. Voting rights of participants shall be limited to matters in respect of (a) reductions of principal, interest or fees of the commitments participated to such participants, (b) extensions of final maturity of the Senior Bridge Loans, (c) releases of all or substantially all of the value of the guarantees provided by the guarantors and (d) changes in voting thresholds.

Conditions Precedent to Senior

Bridge Loans: The borrowing of the Senior Bridge Loans will be subject to delivery of notice, accuracy of the representations and warranties in all material respects (subject to the Limited Conditionality Provision) and the applicable conditions precedent set forth in Section 6 of the Commitment Letter and Exhibit D to the Commitment Letter.

Senior Bridge

Loan Documents: The definitive documentation relating to the Senior Bridge Loans (the “Senior Bridge Loan Documents”) shall be negotiated in good faith to finalize the Senior Bridge Loan Documents, giving effect to the Limited Conditionality Provision, shall be consistent with the indenture governing the senior subordinated notes of Team Finance LLC and Health Finance Corporation due 2013 with adjustments to reflect a senior unsecured instrument (as further adjusted based on recent offerings for similarly situated companies to the Borrower in the same industry, the “Precedent Indenture”), shall contain the terms and conditions set forth in this Term Sheet and shall be consistent with the Documentation Principles as applied to transactions of this kind and shall contain administrative agency, operational and other miscellaneous related administration provisions customary for the Bridge Administrative Agent. Such Senior Bridge Loan Documents shall contain only those payments, conditions to borrowing, mandatory prepayments, representations, warranties, covenants and events of default expressly set forth in this Exhibit C, in each case, applicable to the Borrower and its restricted subsidiaries and with standards, qualifications, thresholds, exceptions, “baskets” and grace and cure periods consistent with the Documentation Principles as applied to transactions of this kind.

Representations and Warranties: The Senior Bridge Loan Documents will contain representations and warranties as are substantially similar to those for the Senior Facilities, with modifications customary for bridge loan financings of this type to the extent necessary to reflect differences in documentation.

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Covenants: The Senior Bridge Loan Documents will contain such affirmative covenants consistent with those of the Precedent Indenture and substantially similar to (but less restrictive than) those for the Senior Facilities to the extent applicable, and the Senior Bridge Loan Documents will contain such incurrence-based negative covenants consistent with those of the Precedent Indenture and as are customary for high yield senior unsecured debt securities (but in any event less restrictive than those in the Senior Facilities) (it being understood that (x) prior to the Maturity Date the restricted payments and debt incurrence covenants shall be more restrictive than is customary for high yield senior unsecured debt securities in a manner to be mutually agreed and following the Maturity Date, the covenants of the Senior Bridge Loans will be automatically modified to be consistent with the covenants in the Senior Exchange Notes, (y) the debt covenant shall include (i) a “credit agreement” basket in the amount of the funded Term Loans plus Revolving Commitments on the Closing Date and permitting up to $350 million in the aggregate of Incremental Facilities and Incremental Equivalent Debt permitted to be incurred under the Senior Facilities Documentation (as in effect on the Closing Date), (ii) a basket for additional debt subject to compliance with a minimum Consolidated Interest Coverage Ratio (to be defined in a manner consistent with the ratio test for unsecured debt in the Precedent Indenture) of 2.00:1.00, with a sublimit (with a growth component based on consolidated total assets) to be mutually agreed for debt under this ratio basket of non-Guarantor subsidiaries and (iii) baskets for other debt in amounts to be agreed) and (z) for the avoidance of doubt, the liens covenant shall not include a basket for lien incurrence subject to a leverage ratio for liens ranking junior in priority to the liens securing the Senior Facilities. There will not be any financial maintenance covenants.

Events of Default: The Senior Bridge Loan Documents will contain such events of default (including notice and grace periods) consistent with those of the Precedent Indenture (but in any event less restrictive than those in the Senior Facilities), consisting of nonpayment of principal, interest or other amounts; violation of covenants; incorrectness of representations and warranties in any material respect; cross-acceleration to material indebtedness; bankruptcy or insolvency proceedings; material monetary judgments subject to a threshold amount; and actual or asserted invalidity of material guarantees.

Voting: Amendments and waivers of the Senior Bridge Loan Documents will require the approval of Lenders holding more than 50% of the aggregate principal amount of the Senior Bridge Loans, except that the consent of each Lender directly adversely

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affected thereby shall be required with respect to (a) reductions of principal, interest or fees payable to such Lender, (b) extensions of final maturity of the Senior Bridge Loans of such Lender or the due date of any interest or fee payment, (c) releases of all or substantially all of the value of the guarantees provided by the guarantors and (d) changes in voting thresholds.

In addition, if the Bridge Administrative Agent and the Borrower shall have jointly identified an obvious error or any error or omission of a technical nature in the Senior Bridge Loan Documents, then the Bridge Administrative Agent and the Borrower shall be permitted to amend such provision without any further action or consent of any other party with notice given to the Lenders of any such amendment.

Cost and Yield Protection: Customary for financings of this kind, it being agreed that the documentation will provide customary provisions regarding withholding tax liabilities and a customary exception to be agreed to the gross-up obligations for U.S. federal withholding taxes imposed pursuant to current Sections 1471-1474 of the Internal Revenue Code of 1986, as amended (or any amended or successor version that is substantively comparable and not materially more onerous to comply with) and any Treasury regulations or other published administrative guidance promulgated thereunder.

Expenses and Indemnification: The Borrower shall pay (a) if the Closing Date occurs, all reasonable and documented out-of-pocket expenses of the Bridge Administrative Agent and the Lead Arrangers incurred on or after the Closing Date within 30 days of a written demand therefor, together with backup documentation supporting such reimbursement request associated with the syndication of the Senior Bridge Loans and the preparation, execution, delivery and administration of the Senior Bridge Loan Documents and any amendment or waiver with respect thereto (but limited, in the case of legal fees and expenses, to the reasonable and documented fees, disbursements and other charges of one counsel to the Bridge Administrative Agent and the Lead Arrangers taken as a whole and, if necessary, of one local counsel in any relevant material jurisdiction and, solely in a conflict of interest, one additional counsel in each relevant material jurisdiction) and (b) if the Closing Date occurs, all reasonable and documented out-of-pocket expenses of the Bridge Administrative Agent within 30 days of a written demand therefor, together with backup documentation supporting such reimbursement request (but limited, in the case of legal fees and expenses, to the reasonable and documented fees, disbursements and other charges of one counsel to the

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Bridge Administrative Agent and the Lenders taken as a whole, and, if necessary, of one local counsel in any relevant material jurisdiction and, solely in a conflict of interest, one additional counsel in each relevant material jurisdiction) in connection with the enforcement of the Senior Bridge Loan Documents or protection of rights thereunder.

The Bridge Administrative Agent, the Managers and the Lenders (and their affiliates and their respective officers, directors, employees, agents, advisors and other representatives) (each, an “indemnified person”) will be indemnified for and held harmless against any losses, claims, damages, liabilities or expenses (but limited, in the case of legal fees and expenses, to the reasonable and documented out-of-pocket fees, disbursements and other charges of one counsel to the indemnified persons taken as a whole and, solely in the case of an actual conflict of interest, one additional counsel to the affected indemnified persons taken as a whole in each relevant material jurisdiction (and, if reasonably necessary, one local counsel in any relevant material jurisdiction), incurred in respect of the Senior Bridge Loans or the use or the proposed use of proceeds thereof, except to the extent they arise from the gross negligence, bad faith or willful misconduct of, or material breach of the Senior Bridge Loan Documents by, the relevant indemnified person or any of its affiliates or their respective officers, directors, employees, partners, agents, advisors or other representatives as determined by a final, non-appealable judgment of a court of competent jurisdiction or any dispute solely among the indemnified persons (other than claims against the Bridge Administrative Agent or a Manager in its capacity or in fulfilling its role as the Bridge Administrative Agent or arranger or any similar role under the Senior Bridge Facility and other than any claims arising out of any act or omission of the Borrower or any of its affiliates), providedfurther that the Borrower shall not be liable for any indirect, special, punitive or consequential damages (other than in respect of any such damages required to be indemnified pursuant to the indemnification provisions).

Governing Law: New York.

Counsel to the Commitment Parties: Cravath, Swaine & Moore LLP.

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CONFIDENTIAL        ANNEX I to

EXHIBIT C

Senior Unsecured Term Loans

Maturity: The Senior Unsecured Term Loans will mature on the date that is 8 years after the Closing Date.

Guarantees: Same as the Senior Bridge Loans.

Interest Rate: The Senior Unsecured Term Loans will bear interest at a rate equal to the Total Cap (as defined in the Fee Letter).

Covenants, Defaults and

Mandatory Offers to Purchase: Upon and after the Senior Conversion Date, the covenants, mandatory offers to purchase and defaults which would be applicable to the Senior Exchange Notes, if issued, will also be applicable to the Senior Unsecured Term Loans in lieu of the corresponding provisions of the Senior Bridge Loans (except that any offer to repurchase upon the occurrence of a change of control will be made at 100% of the outstanding principal amount thereof, plus accrued and unpaid interest to the date of repurchase).

Optional Prepayment: The Senior Unsecured Term Loans may be prepaid, in whole or in part, at par, plus accrued and unpaid interest upon not less than three days’ prior written notice, at the option of the Borrower at any time.

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CONFIDENTIAL        ANNEX II to

EXHIBIT C

Senior Exchange Notes

Issue: The Senior Exchange Notes will be issued under an indenture. Such indenture shall be negotiated in good faith and shall be based on forms of definitive documentation agreed to by you and the Commitment Parties, and such indenture (including all covenants, defaults and mandatory offers to purchase) shall be consistent with the terms in this Term Sheet, the Precedent Indenture and the Documentation Principles as applied to transactions of this kind.

Guarantees: Same as the Senior Unsecured Term Loans.

Maturity: The Senior Exchange Notes will mature on the date that is 8 years after the Closing Date.

Interest Rate: The Senior Exchange Notes will bear interest at a rate equal to the Total Cap (as defined in the Fee Letter).

Repurchase with Asset Sale Proceeds: The Borrower will be required to make an offer to repurchase the Senior Exchange Notes at 100% of the outstanding principal amount thereof with, subject to exceptions consistent with the Precedent Indenture and the Documentation Principles as applied to transactions of this kind, the net proceeds from any non-ordinary course asset sales by the Borrower or any of its restricted subsidiaries in excess of amounts either reinvested in a manner consistent with the Precedent Indenture and the Documentation Principles as applied to transactions of this kind or applied to repay the Senior Facilities or certain other secured debt.

Repurchase upon Change of Control: The Borrower will be required to make an offer to repurchase the Senior Exchange Notes following the occurrence of a change of control at a price in cash equal to 101% (or, 100% in the case of Senior Exchange Notes held by a Commitment Party or its affiliates other than Asset Management Affiliates (as defined in the Fee Letter)) of the outstanding principal amount thereof, plus accrued and unpaid interest to the date of repurchase.

Optional Redemption: The Senior Exchange Notes will be non-callable (subject to the make-whole and equity clawback exceptions in the two succeeding paragraphs below) until the third anniversary of the Closing Date. Thereafter, each Senior Exchange Note will be callable at par plus accrued interest plus a premium equal to 75% of the coupon on such Senior Exchange Note, which premium shall decline ratably on each subsequent anniversary of the Closing Date to zero on the date that is three years prior to the maturity of the Senior Exchange Notes.

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Prior to the third anniversary of the Closing Date, the Borrower may redeem Senior Exchange Notes at a make-whole price based on U.S. Treasury notes with a maturity closest to the third anniversary of the Closing Date plus 50 basis points.

Prior to the third anniversary of the Closing Date, the Borrower may redeem up to 40% of the Senior Exchange Notes with proceeds from an equity offering at a redemption price equal to par plus the coupon on such Senior Exchange Notes.

The optional redemption provisions will be otherwise consistent with the Precedent Indenture and the Documentation Principles as applied to transactions of this kind. Senior Exchange Notes held by (and for so long as they are held by) a Commitment Party or its affiliates (other than Asset Management Affiliates) shall be redeemable at any time and from time to time at the option of the Borrower at a redemption price equal to par plus accrued and unpaid interest to the redemption date.

Defeasance Provisions: Consistent with the Precedent Indenture and the Documentation Principles as applied to transactions of this kind.

Modification: Consistent with the Precedent Indenture and the Documentation Principles as applied to transactions of this kind.

Covenants: Consistent with the Precedent Indenture and the Documentation Principles as applied to transactions of this kind (but in any event less restrictive than those in the Senior Facilities and with a reporting covenant appropriate for transactions of this kind).

Registration Rights: None.

Events of Default: Consistent with the Precedent Indenture and the Documentation Principles as applied to transactions of this kind (but in any event less restrictive than those in the Senior Facilities).

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CONFIDENTIAL        EXHIBIT D

Project Intrepid

Senior Secured Credit Facilities
Senior Unsecured Increasing Rate Bridge Facility
Additional Conditions Precedent⁴ 

Except as otherwise set forth below, the initial borrowing under each of the Facilities and the effectiveness of the Backstopped Amendments shall be subject to the following additional conditions precedent, which shall be subject to the Limited Conditionality Provision and the Documentation Principles in all respects:

1.    The Acquisition shall have been consummated, or shall be consummated substantially concurrently with the initial borrowing under any of the Facilities, in accordance with the terms of the Acquisition Agreement.  The Acquisition Agreement as in effect on the Original Commitment Letter Date shall not have been amended or waived in any material respect by the Borrower or any of its affiliates, nor shall the Borrower or any of its affiliates have given a material consent thereunder, in a manner materially adverse to the Lenders (in their capacity as such) without the consent of the Lead Arrangers (such consent not to be unreasonably withheld, delayed or conditioned) (it being understood and agreed that any change to the definition of “Company Material Adverse Effect” contained in the Acquisition Agreement as in effect on the Original Commitment Letter Date shall be deemed to be materially adverse to the Lenders); provided that (a) any amendment, waiver or consent which results in a reduction in the purchase price for the Acquisition shall not be deemed to be materially adverse to the Lenders to the extent after giving effect to the application of total acquisition consideration, such reduction shall be applied to reduce the amount of commitments in respect of the Senior Bridge Facility or the Term Facilities, at the Borrower’s option and (b) any increase in purchase price for the Acquisition shall not be deemed to be materially adverse to the Lenders.  Since December 31, 2014, there has been no effect, change, event, occurrence, development or circumstance that has had, or would reasonably be expected to have, either individually or in the aggregate, a Company Material Adverse Effect (as defined in the Acquisition Agreement as in effect on the Original Commitment Letter Date) on the Company. The Acquisition Agreement shall be reasonably satisfactory to the Lead Arrangers; provided that the Lead Arrangers acknowledge and agree that the Acquisition Agreement as in effect on Original Commitment Letter Date, is reasonably satisfactory to them. The Acquisition Agreement Representations and the Specified Representations shall be true and correct in all material respects on the Closing Date.

2.    The Commitment Parties shall have received (a) audited consolidated balance sheets of the Company as of December 31, 2012, December 31, 2013 and December 31, 2014 and the audited consolidated statements of operations, comprehensive income, cash flows and equity of the Company for the fiscal years ended December 31, 2012, December 31, 2013 and December 31, 2014 and (b) unaudited consolidated balance sheets, statements of operations, comprehensive income, cash flows and equity of the Company for each subsequent fiscal quarter (other than the fourth fiscal quarter of the Company’s fiscal year) ended at least 45 days prior to the Closing Date.

3.    The Commitment Parties shall have received a pro forma consolidated balance sheet and related pro forma consolidated statement of income of Holdings as of and for the twelve-month period ending on the last day of the most recently completed four-fiscal quarter period ended at least 45 days (or 90 days in case such four-fiscal quarter period is the end of Holdings’s fiscal year) prior to the Closing Date, prepared in good faith after giving effect to the Transactions as if the Transactions had occurred as of such date (in the case of such balance sheet) or at the beginning of such period (in the case of the statement of income).

4 All capitalized terms used but not defined herein have the meanings given to them in the Amended and Restated Commitment Letter to which this Exhibit is attached (the “Commitment Letter”), including the other Exhibits thereto. In the event any such capitalized term is subject to multiple and differing definitions, the appropriate meaning thereof in this Exhibit shall be determined by reference to the context in which it is used.

D-1

4.    The Administrative Agent shall have received the following (the “Closing Deliverables”): (a) customary legal opinions, (b) customary evidence of authority, (c) customary officer’s certificates, (d) good standing certificates (to the extent applicable) in the respective jurisdictions of organization of the Borrower and Guarantors and (e) a solvency certificate, substantially in the form set forth in Annex I attached to this Exhibit D from the chief financial officer, chief accounting officer or other officer with equivalent duties of the Borrower, in each case of clauses (a) through (d) above, to be substantially similar to the documents delivered under the Existing Credit Agreement.

5.    With respect to the Senior Facilities, to the extent required by the Senior Facilities Documentation and subject to the Limited Conditionality Provision, all documents and instruments required to create and perfect the Bank Administrative Agent’s security interests in the Collateral shall have been executed and delivered and, if applicable, be in proper form for filing.

6.    The Administrative Agents shall have received at least 3 business days prior to the Closing Date all documentation and other information about the Borrower and the Guarantors required under applicable “know your customer” and anti-money laundering rules and regulations, including the PATRIOT Act that has been requested by the Administrative Agents in writing at least 10 business days prior to the Closing Date.

7.    Payment of all fees and expenses due to the Commitment Parties (in the case of expenses, to the extent invoiced at least three business days prior to the Closing Date (except as otherwise reasonably agreed by the Borrower)), required to be paid on the Closing Date from the proceeds of the initial fundings under the Facilities.

8.    If the Backstopped Amendments are not obtained on or prior to the Closing Date, substantially contemporaneously with the initial funding under the New Senior Facilities, all indebtedness under the Existing Credit Agreement shall have been repaid and all commitments, guarantees and security interests under the Existing Credit Agreement shall have been terminated and released.     

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ANNEX I TO EXHIBIT D

FORM OF SOLVENCY CERTIFICATE

SOLVENCY CERTIFICATEof
[HOLDINGS]AND ITS SUBSIDIARIES

Pursuant to the Credit Agreement⁵, the undersigned hereby certifies, solely in such undersigned’s capacity as [chief financial officer] [specify other officer with equivalent duties] of Holdings, and not individually, as follows:

As of the date hereof, after giving effect to the consummation of the Transactions, including the making of the Loans under the Credit Agreement on the date hereof, and after giving effect to the application of the proceeds of such Loans:

a. The fair value of the assets of Holdings and its Subsidiaries, on a consolidated basis, exceeds, on a consolidated basis, their debts and liabilities, subordinated, contingent or otherwise;

b. The present fair saleable value of the property of Holdings and its Subsidiaries, on a consolidated basis, is greater than the amount that will be required to pay the probable liability, on a consolidated basis, of their debts and other liabilities, subordinated, contingent or otherwise, as such debts and other liabilities become absolute and matured;

c. Holdings and its Subsidiaries, on a consolidated basis, are able to pay their debts and liabilities, subordinated, contingent or otherwise, as such liabilities become absolute and matured; and

d. Holdings and its Subsidiaries, on a consolidated basis, are not engaged in, and are not about to engage in, business for which they have unreasonably small capital.

For purposes of this Certificate, the amount of any contingent liability at any time shall be computed as the amount that would reasonably be expected to become an actual and matured liability. Capitalized terms used but not otherwise defined herein shall have the meanings assigned to them in the Credit Agreement.

The undersigned is familiar with the business and financial position of Holdings and its Subsidiaries. In reaching the conclusions set forth in this Certificate, the undersigned has made such other investigations and inquiries as the undersigned has deemed appropriate, having taken into account the nature of the particular business anticipated to be conducted by Holdings and its Subsidiaries after consummation of the transactions contemplated by the Commitment Letter.

[Signature Page Follows]

5Credit Agreement to be defined.

CONFIDENTIAL        ANNEX I TOEXHIBIT D

IN WITNESS WHEREOF, the undersigned has executed this Certificate in suchundersigned’s capacity as [chief financial officer] [specify other officer with equivalent duties] of
Holdings, on behalf of Holdings, and not individually, as of the date first stated above.

[HOLDINGS]

By ____________________________________

Name:
Title:

EX-10.3

EXECUTION VERSION

AMENDMENT NO. 1 dated as of October 2, 2015 (this “Amendment”), to the AMENDED AND RESTATED CREDIT AGREEMENT dated as of October 2, 2014 (as amended, supplemented or otherwise modified from time to time, the “Credit Agreement”), among TEAM HEALTH INC., a Tennessee corporation (the “Borrower”), TEAM HEALTH HOLDINGS, INC., a Delaware corporation (“Holdings”), JPMORGAN CHASE BANK, N.A., as Administrative Agent, Swing Line Lender and L/C Issuer, each lender from time to time party thereto and MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, as Syndication Agent. Capitalized terms used in this Amendment but not otherwise defined shall have the meanings assigned to such terms in the Credit Agreement.

WHEREAS pursuant to the Credit Agreement, the Lenders and the L/C Issuers Bank have agreed to extend credit to the Borrower on the terms and subject to the conditions set forth therein;

WHEREAS the Borrower intends to incur (a) a new tranche of “Tranche B” term loans under the Credit Agreement (the “New Tranche B Term Loans”) and (b) senior unsecured bridge loans (the “Senior Bridge Loans”) and/or senior unsecured notes (the “Senior Notes”) in an aggregate principal amount, together with the New Tranche B Term Loans, not to exceed $1,950,000,000, which such amount shall be allocated among the New Tranche B Term Loans, Senior Bridge Loans and/or Senior Notes at the Borrower’s election, the proceeds of each of which will be used, together with the proceeds of borrowings under the Revolving Credit Facility and certain cash available on the balance sheet of the Borrower, by the Borrower or any Guarantor to acquire IPC Healthcare, Inc., a Delaware corporation (the “Target”), pursuant to that certain Agreement and Plan of Merger dated as of August 4, 2015 (as amended, supplemented or otherwise modified in accordance with Paragraph 1 of Schedule I hereto, the “Acquisition Agreement”), among Holdings, Intrepid Merger Sub, Inc., a Delaware corporation, and the Target (such acquisition, the “Acquisition”) and to pay fees and expenses related to the foregoing;

WHEREAS the Borrower has requested that certain provisions of the Credit Agreement be amended as set forth herein (a) to permit the incurrence of the Senior Bridge Loans and/or the Senior Notes the proceeds of which shall be used to finance the Acquisition and to pay related fees and expenses and (b) to permit the amendment and restatement of the Credit Agreement on the Restatement Effective Date (as defined below) (i) to permit the consummation of the Acquisition, (ii) to permit the incurrence of the New Tranche B Term Loans under the Credit Agreement and (iii) to make such other changes to the Credit Agreement as contemplated herein; and

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WHEREAS the undersigned Lenders are willing to amend such provisions of the Credit Agreement, in each case on the terms and subject to the conditions set forth herein.

NOW, THEREFORE, in consideration of the mutual agreements herein contained and other good and valuable consideration, the sufficiency and receipt of which are hereby acknowledged, and subject to the conditions set forth herein, the parties hereto hereby agree as follows:

SECTION 1. Concerning the New Tranche B Term Loans. On the date on which each of the conditions precedent set forth on Schedule I hereto shall have been satisfied (such date, the “Restatement Effective Date”), the Borrower may incur New Tranche B Term Loans in an aggregate principal amount not to exceed $1,150,000,000; provided that the aggregate original principal amount of the New Tranche B Term Loans, any Senior Notes and/or any Senior Bridge Loans shall not exceed, in the aggregate, $1,950,000,000, plus an amount sufficient to fund any OID or upfront fees consistent with the Term Sheet¹ (it being understood and agreed that the Borrower may elect the allocations among the New Tranche B Term Loans, any Senior Notes and/or any Senior Bridge Loans). The New Tranche B Term Loans (a) shall rank pari passu in right of payment and security with the Revolving Credit Loans and the Term Loans, (b) shall mature on the date that is seven years after the Restatement Effective Date, (c) shall amortize in equal quarterly installments of 1.00% per annum of the original aggregate principal amount thereof, with the balance payable on the maturity date thereof, (d) shall accrue interest at rates (including, without limitation, pricing floors) determined by the Borrower and the lenders providing the New Tranche B Term Loans and (e) otherwise shall have terms consistent with the Term Sheet or other market terms. The New Tranche B Term Loans may be provided by any existing Lender or by any other bank or financial institution (any such other bank or other financial institution being called an “Additional Lender”). Commitments in respect of the New Tranche B Term Loans shall be set forth in an Amendment and Restatement Agreement (the “Amendment and Restatement Agreement”) executed by Holdings, the Borrower, each Lender agreeing to provide such Commitments, if any, each Additional Lender, if any, and the Administrative Agent. The Amendment and Restatement Agreement shall become effective on the date on which (x) the Administrative Agent shall have received signatures to the Amendment and Restatement Agreement from each of Holdings, the Borrower, the Administrative Agent and each Lender and Additional Lender having a Commitment with respect to the New Tranche B Term Loans (collectively, the “New Tranche B Term Lenders”) and (y) the other conditions set forth therein, if any (as mutually agreed by the Borrower and the Administrative Agent) shall have been satisfied, and upon such effectiveness, the Commitments in respect of the New Tranche B Term Loans shall constitute Commitments under the Credit Agreement. Pursuant to the Amendment and Restatement Agreement, the parties thereto may, without the consent of any other Lenders, effect such amendments to the Credit Agreement and the other Loan Documents as may be necessary or appropriate, in the reasonable opinion of the Administrative Agent and the Borrower, to effect the provisions of this Section 1 and Section 2(b) hereof in an amendment and

¹ References to the “Term Sheet” in this Amendment are references to Exhibit B to the Amended and Restated Commitment Letter (the “Commitment Letter”) dated as of August 25, 2015, among Holdings, the Borrower, the Lead Arrangers and the Co-Managers.

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restatement of the Credit Agreement (the “Restatement”) which shall become effective on the Restatement Effective Date. The Borrower shall use the proceeds of the New Tranche B Term Loans, together with the proceeds of the Senior Bridge Loans and/or the Senior Notes, borrowings under the Revolving Credit Facility and certain cash available on the balance sheet of the Borrower, for payment of (i) amounts payable under the Acquisition Agreement as consideration for the Acquisition and (ii) fees and expense payable in connection with the Transactions (as defined below). Nothing in this Amendment shall obligate any Lender party hereto to provide any New Tranche B Term Loans unless it so agrees (or has so agreed, including pursuant to the Commitment Letter). For purposes hereof, “Transactions” means, collectively, (A) the execution, delivery and performance by each Loan Party of this Amendment, the Amendment and Restatement Agreement, the Restatement and any other Loan Document to which such Loan Party is to be a party, the borrowing of the Loans, the use of the proceeds thereof and the issuance of Letters of Credit; (B) the consummation of the Acquisition and the other transactions contemplated by the Acquisition Agreement; (C) the repayment in full of all obligations under the Target’s existing revolving credit facility, the termination of all commitments thereunder and the release of all Guarantees and Liens in respect thereof; (D) the execution, delivery and performance by each applicable Loan Party of the definitive documentation in respect of the Senior Bridge Loans and/or the Senior Notes and the incurrence or issuance of the Senior Bridge Loans and/or the Senior Notes and the application of the proceeds thereof; (E) the consummation of any other transactions in connection with the foregoing; and (F) the payment of fees and expenses incurred in connection with any of the foregoing.

SECTION 2. Amendments to the Credit Agreement. (a) In addition to the amendments to the Credit Agreement contemplated in Section 1 hereof, the Restatement shall include, at the Borrower’s election, (i) the amendments to the Credit Agreement described in Schedule II hereto and other market terms (collectively, the “Scheduled Amendments”), (ii) any amendments to the Credit Agreement that are reasonably necessary, as mutually determined by the Administrative Agent and the Borrower, to incorporate the Scheduled Amendments and (iii) any other amendments to the Credit Agreement that are favorable to the Lenders as determined by the Administrative Agent in its reasonable discretion (provided that such favorable terms also apply to the Lenders in respect of the Tranche A Term Loans and the Revolving Credit Loans, as applicable). For purposes of clarity, the amendments described in this Section 2(a) shall become effective as of the Restatement Effective Date without the consent of any Lenders other than the Lenders providing the New Tranche B Term Loans.

(b)Subject to the satisfaction of the conditions precedent set forth in Section 4 hereof, the Credit Agreement is hereby amended as follows:

(i)Section 1.01 of the Credit Agreement is hereby amended by adding the following defined terms in alphabetical order:

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“Amendment No. 1” means Amendment No. 1 to this Agreement, dated as of October 2, 2015, among the Borrower, the Lenders party thereto and the Administrative Agent.

“Senior Notes” means senior unsecured notes issued by the Borrower that (a) do not require any scheduled payment of principal (including pursuant to a sinking fund) or mandatory redemption or redemption at the option of the holders thereof (except for redemptions or repurchases in respect of asset sales and changes in control on terms that are consistent with the indenture governing the senior subordinated notes of Team Finance LLC and Health Finance Corporation due 2013 with adjustments to reflect a senior unsecured instrument (as further adjusted based on recent offerings for similarly situated companies to the Borrower in the same industry, the “Precedent Indenture”) and the terms and conditions set forth in the Term Sheet (as defined in Amendment No. 1) (the “Notes Documentation Principles”)) prior to the date that is eight years after the issuance thereof, (b) contains guarantee release provisions that are consistent with the Notes Documentation Principles and the terms set forth in the Term Sheet and (c) contains other terms (including covenants, events of default, remedies, redemption provisions and change of control provisions) that are consistent with the Notes Documentation Principles and the terms set forth in the Term Sheet (as reasonably determined by Holdings in good faith); provided that such covenants and events of default are not materially more restrictive than the covenants and events of default contained in this Agreement (as the same are proposed to be amended pursuant to Section 2(a) of Amendment No. 1) and do not require the maintenance or achievement of any financial performance standards other than as a condition to the taking of specified actions.

(ii)Section 6.07(b) of the Credit Agreement is hereby amended by replacing the text “naming the relevant Loan Party as an additional insured” in such Section with the text “naming the Administrative Agent as an additional insured”.

(iii)Section 7.03 of the Credit Agreement is hereby amended by replacing clause (h) thereof in its entirety with the following new clause (h):

(h) (i) the Senior Notes in an aggregate principal amount not to exceed $1,000,000,000, the proceeds of which shall be used solely for payment of (A) amounts payable under the Acquisition Agreement (as such term is defined in Amendment No. 1) as consideration for the Acquisition (as such term is defined in Amendment No. 1) and (B) fees and expenses payable in connection with the Transactions (as such term is defined in Amendment No. 1) upon the occurrence of the Restatement Effective Date (as such term is defined in Amendment No. 1); provided

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that, pending such application, the proceeds of the Senior Notes may be held in an escrow account on behalf of the holders of the Senior Notes and such Senior Notes shall be redeemed by the Borrower in the event certain conditions to the release of funds from escrow are not satisfied by a specified date, the Acquisition is abandoned, the Acquisition Agreement otherwise terminates or Holdings determines not to pursue the consummation of the Acquisition; and (ii) any Permitted Refinancing of any Indebtedness set forth in the immediately preceding clause (i);

(iv)Section 7.09 of the Credit Agreement is hereby amended by deleting the “and” before clause (xi) thereto and adding a new clause (xii) as follows:

“, and (xii) are customary restrictions contained in the definitive documentation for the Senior Notes consistent with the Notes Documentation Principles (and in respect of any Permitted Refinancing thereof).”

(v)Section 7.11 of the Credit Agreement is hereby amended by adding immediately following the text “4.50:1.00” therein the text “; provided that, solely for the purposes of determining compliance with the Total Leverage Ratio in this Section, the aggregate principal amount of Senior Notes issued and outstanding shall be disregarded”.

(vi)Section 7.15(b) of the Credit Agreement is hereby amended by adding the text “, in each case” immediately after the text “business or operations” in such Section.

SECTION 3.Representations and Warranties. The Borrower represents and warrants to the Administrative Agent and to each of the Lenders and the L/C Issuers that:

(a)This Amendment has been duly authorized, executed and delivered by it and constitutes a legal, valid and binding obligation of the Borrower, enforceable against the Borrower in accordance with its terms, subject to Debtor Relief Laws and general principles of equity (whether considered in a proceeding in equity or at law) and an implied covenant of good faith and fair dealing.

(b)The representations and warranties of the Borrower and each other Loan Party contained in Article 5 of the Credit Agreement or any other Loan Document are true and correct in all material respects on and as of the date hereof; provided that, to the extent that such representations and warranties specifically refer to an earlier date, they are true and correct in all material respects as of such earlier date; provided, further that, any representation and warranty that is qualified as to “materiality”, “Material Adverse Effect” or similar language is true and correct in all respects on such respective dates.

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(c)At the time of and immediately after giving effect to this Amendment, no Default shall exist.

SECTION 4.Effectiveness. This Amendment shall become effective as of the date first above written when (a) the Administrative Agent shall have received counterparts of this Amendment that, when taken together, bear the signatures of the Borrower, the Administrative Agent, the Swing Line Lender and the Required Lenders, (b) the representations and warranties set forth in Section 3 hereof are true and correct and (c) the fees required to be paid pursuant to Section 9 hereof shall have been paid.

SECTION 5.Credit Agreement. Except as expressly set forth herein, this Amendment (a) shall not by implication or otherwise limit, impair, constitute a waiver of or otherwise affect the rights and remedies of the Lenders, the Administrative Agent, the Borrower or any other Loan Party under the Credit Agreement or any other Loan Document and (b) shall not alter, modify, amend or in any way affect any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other Loan Document, all of which are ratified and affirmed in all respects and shall continue in full force and effect. Nothing herein shall be deemed to entitle the Borrower or any other Loan Party to any future consent to, or waiver, amendment, modification or other change of, any of the terms, conditions, obligations, covenants or agreements contained in the Credit Agreement or any other Loan Document in similar or different circumstances. After the date hereof, any reference in the Loan Documents to the Credit Agreement shall mean the Credit Agreement as modified hereby. This Amendment shall constitute a “Loan Document” for all purposes of the Credit Agreement and the other Loan Documents.

SECTION 6.Applicable Law; Waiver of Jury Trial. (a)THIS AMENDMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

(b)ANY LEGAL ACTION OR PROCEEDING ARISING UNDER THIS AMENDMENT OR IN ANY WAY CONNECTED WITH OR RELATED OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT TO THIS AMENDMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE WHETHER NOW EXISTING OR HEREAFTER ARISING, SHALL BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN THE COUNTY OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS AMENDMENT, THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER CONSENTS, FOR ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE EXCLUSIVE JURISDICTION OF THOSE COURTS. THE BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING

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OF ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AMENDMENT OR OTHER DOCUMENT RELATED HERETO.

(c)EACH PARTY HERETO HEREBY AGREES AS SET FORTH IN SECTION 10.17 OF THE CREDIT AGREEMENT AS IF SUCH SECTION WERE SET FORTH IN FULL HEREIN.

SECTION 7.Counterparts; Amendment. This Amendment may be executed in two or more counterparts, each of which shall constitute an original but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Amendment by telecopy or electronic transmission shall be effective as delivery of a manually executed counterpart of this Amendment. This Amendment may not be amended nor may any provision hereof be waived except pursuant to a writing signed by the Borrower, the Administrative Agent, the Swing Line Lender and the Required Lenders.

SECTION 8.Expenses. The Borrower hereby agrees to reimburse the Administrative Agent for its reasonable out-of-pocket expenses in connection with this Amendment to the extent required under Section 10.04 of the Credit Agreement.

SECTION 9.Amendment Fees. The Borrower agrees to pay to the Administrative Agent, for the account of each Lender that delivers an executed counterpart hereof to the Administrative Agent prior to 5:00 p.m., New York time, on October 1, 2015, an amendment fee in an amount equal to 0.05% of the sum of each such Lender’s Revolving Commitments and outstanding Term Loans.

SECTION 10.Headings. The Section headings used herein are for convenience of reference only, are not part of this Amendment and are not to affect the construction of, or to be taken into consideration in interpreting, this Amendment.

[Signature Pages Follow]

IN WITNESS WHEREOF, the parties hereto have caused this Amendment to be duly executed by their respective authorized officers as of the day and year first written above.

TEAM HEALTH, INC.
By
	Name:
	Title:

[Amendment No. 1 Signature Page]

JPMORGAN CHASE BANK, N.A., individually and as Administrative Agent and Swing Line Lender
By
	Name:
	Title:

[Amendment No. 1 Signature Page]

LENDERS UNDER THE CREDIT AGREEMENT

SIGNATURE PAGE TO AMENDMENT NO. 1 TO THE AMENDED AND RESTATED CREDIT AGREEMENT DATED AS OF OCTOBER 2, 2014, AMONG TEAM HEALTH, INC., TEAM HEALTH HOLDINGS, INC., JPMORGAN CHASE BANK, N.A., AS ADMINISTRATIVE AGENT, SWING LINE LENDER AND L/C ISSUER, THE LENDERS FROM TIME TO TIME PARTY THERETO AND MERRILL LYNCH, PIERCE, FENNER & SMITH INCORPORATED, AS SYNDICATION AGENT

Name of Institution:

By

Name:

Title:

By

Name:

Title:

SCHEDULE I

Conditions Precedent to the Restatement Effective Date

1. The Acquisition shall have been consummated, or shall be consummated substantially concurrently with the initial borrowing of the New Tranche B Term Loans, in accordance with the terms of the Acquisition Agreement. The Acquisition Agreement as in effect on August 4, 2015, shall not have been amended or waived in any material respect by the Borrower or any of its Affiliates, nor shall the Borrower or any of its Affiliates have given a material consent thereunder, in a manner materially adverse to the Lenders (including, without limitation, any lender in respect of the New Tranche B Term Loans) (in their capacity as such) without the consent of Citigroup Global Markets Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated, J.P. Morgan Securities LLC, Barclays Bank PLC, Goldman Sachs Bank USA and Citizens Bank, National Association (collectively, the “Lead Arrangers”) (such consent not to be unreasonably withheld, delayed or conditioned) (it being understood and agreed that any change to the definition of “Company Material Adverse Effect” contained in the Acquisition Agreement as in effect on August 4, 2015, shall be deemed to be materially adverse to the Lenders); provided that (a) any amendment, waiver or consent which results in a reduction in the purchase price for the Acquisition shall not be deemed to be materially adverse to the Lenders to the extent after giving effect to the application of total acquisition consideration, such reduction shall be applied to reduce the amount of commitments in respect of the Senior Bridge Loans or the New Term Loan B Loans, at the Borrower’s option and (b) any increase in purchase price for the Acquisition shall not be deemed to be materially adverse to the Lenders.

2. Since December 31, 2014, there has been no effect, change, event, occurrence, development or circumstance that has had, or would reasonably be expected to have, either individually or in the aggregate, a Company Material Adverse Effect (as defined in the Acquisition Agreement as in effect on August 4, 2015) on the Target.

3. The Acquisition Agreement Representations and the Specified Representations shall be true and correct in all material respects on the Restatement Effective Date. For purposes hereof, (a) “Acquisition Agreement Representations” means such of the representations and warranties made by the Target in the Acquisition Agreement as are material to the interests of the Lenders, but only to the extent that Holdings (or its applicable affiliates) have the right (taking into account any applicable cure provisions) to terminate Holdings’s (or such affiliates’) obligations under the Acquisition Agreement, or to decline to consummate the Acquisition (in each case, in accordance with the terms thereof), as a result of a breach of such representations and warranties; and (b) “Specified Representations” means the representations and warranties of the Borrower and the Guarantors (after giving effect to the Acquisition) set forth in Restatement and consistent with Sections 5.01(a) (limited to subsections (i) (prior to giving effect to the Acquisition) and (ii)(B) thereof), 5.02 (limited to (x) the first sentence of Section 5.02 with respect to execution, delivery and performance of the Restatement and (y) clause (a) of Section 5.02 with respect to the execution, delivery and performance of the Restatement, incurrence of the Indebtedness

thereunder and the granting of the Guarantees and the security interests in respect thereof), 5.04, 5.13, 5.16 and 5.22 (with respect to the use of proceeds of the New Tranche B Term Loans) of the Credit Agreement, as well as the representations and warranties in each Collateral Document relating to the creation, validity and perfection of security interests in the Collateral (subject to Liens permitted under Section 7.01 of the Credit Agreement and to the Limited Conditionality Provision (as defined below)).

4. The Lead Arrangers shall have received (a) audited consolidated balance sheets of the Target as of December 31, 2012, December 31, 2013 and December 31, 2014, and the audited consolidated statements of operations, comprehensive income, cash flows and equity of the Target for the fiscal years ended December 31, 2012, December 31, 2013 and December 31, 2014, and (b) unaudited consolidated balance sheets, statements of operations, comprehensive income, cash flows and equity of the Target for each subsequent fiscal quarter (other than the fourth fiscal quarter of the Target’s fiscal year) ended at least 45 days prior to the Restatement Effective Date.

5. The Lead Arrangers shall have received a pro forma consolidated balance sheet and related pro forma consolidated statement of income of Holdings as of and for the twelve-month period ending on the last day of the most recently completed four-fiscal quarter period ended at least 45 days (or 90 days in case such four-fiscal quarter period is the end of Holdings’s fiscal year) prior to the Restatement Effective Date, prepared in good faith after giving effect to the Transactions as if the Transactions had occurred as of such date (in the case of such balance sheet) or at the beginning of such period (in the case of the statement of income).

6. The Collateral and Guarantee Requirement shall have been satisfied with respect to Holdings, the Borrower and each other Guarantor (after giving effect to the Acquisition), it being understood that, to the extent any Collateral (other than assets of Holdings, the Borrower and domestic Guarantors with respect to which a Lien may be perfected solely by the filing of a financing statement under the Uniform Commercial Code and, to the extent delivered to the Borrower by the Target prior to the Restatement Effective Date (after the Borrower’s use of commercially reasonable efforts to obtain such stock certificates), the delivery of stock certificates for the Target and each other Restricted Subsidiary that is a wholly owned Domestic Subsidiary and not an Excluded Subsidiary) is not or cannot be provided or perfected on the Restatement Effective Date after the Borrower’s use of commercially reasonable efforts to do so or without undue burden or expense, the provision and/or perfection of such Collateral shall not constitute a condition precedent to the availability of the New Tranche B Term Loans on the Restatement Effective Date, but shall be required to be provided and/or perfected within 90 days after the Restatement Effective Date (subject to extensions as agreed by the Administrative Agent in its reasonable discretion) (such limitation, the “Limited Conditionality Provision”). The Borrower and the Guarantors (before giving effect to the Acquisition) shall have delivered an executed reaffirmation agreement, in form and substance reasonably

satisfactory to the Administrative Agent and the Borrower, reaffirming their respective Guarantees of, and pledges of Collateral in respect of, the Obligations upon the effectiveness of the Restatement and the incurrence of the New Tranche B Term Loans.

7. The Administrative Agent shall have received at least three Business Days prior to the Restatement Effective Date all documentation and other information about the Borrower and the Guarantors required under applicable “know your customer” and anti-money laundering rules and regulations, including the Act, that has been requested by the Administrative Agent in writing at least 10 Business Days prior to the Restatement Effective Date.

8. The Lead Arrangers, the Co-Managers (as defined below) and the Lenders shall have received all fees agreed between Holdings, the Borrower and any of the Lead Arrangers, the Co-Managers or their respective Affiliates, and all other fees and expenses due and payable on or prior to the Restatement Effective Date, including, to the extent invoiced at least three Business Days prior to the Restatement Effective Date, reimbursement or payment of all reasonable and documented out-of-pocket expenses (including reasonable fees, charges and disbursements of counsel) required to be reimbursed or paid by any Loan Party under any Loan Document or as otherwise agreed between Holdings, the Borrower and any of the Lead Arrangers, the Co-Managers or their respective Affiliates, shall have been paid on or substantially simultaneously with the Restatement Effective Date. “Co-Managers” means, collectively, Fifth Third Bank, Regions Capital Markets (a division of Regions Bank), Compass Bank, BMO Capital Markets Corp., Mizuho Bank Ltd., The Bank of Tokyo-Mitsubishi UFJ, Ltd. and KeyBanc Capital Markets Inc.

9. The Administrative Agent shall have received executed counterparts of the Restatement from Holdings, the Borrower, the Administrative Agent and each New Tranche B Term Lender.

10. The Administrative Agent shall have received an executed legal opinion of Simpson Thacher & Bartlett LLP, counsel to the Loan Parties, and such other legal opinions with respect to Guarantors organized in each jurisdiction to the extent either the assets or revenues of all Guarantors organized in such jurisdiction constitute 10% of the combined assets or revenues of the Loan Parties taken as a whole after giving effect to the Acquisition.

11. The Administrative Agent shall have received (a) a certificate of good standing with respect to each of the Loan Parties in its jurisdiction of organization (to the extent applicable) and (b) a closing certificate executed by a Responsible Officer of each of the Loan Parties dated the Restatement Effective Date, substantially in the form of the closing certificate delivered in connection with the Credit Agreement certifying as to the incumbency and specimen signature of each officer executing the Restatement or any other document delivered in connection herewith on behalf of each Loan Party

and attaching (i) a true and complete copy of the certificate of incorporation or formation (or equivalent thereof), as applicable, of each of the Loan Parties, including all amendments thereto, as in effect on the Restatement Effective Date, certified as of a recent date by the Secretary of State of the state of its organization, to the extent possible, that has not been amended since the date of the last amendment thereto shown on the certificate of good standing furnished pursuant to clause (a) above, (ii) a true and complete copy of the by-laws or limited liability company agreement (or equivalent thereof), as applicable, of each Loan Party as in effect on the Restatement Effective Date and at all times since the date of the resolutions described in clause (iii) below), and (iii) a true and complete copy of resolutions duly adopted by the board of directors and/or similar governing bodies of each Loan Party approving and authorizing the execution, delivery and performance of the Restatement and certifying that such resolutions have not been modified, rescinded or amended and are in full force and effect.

12. The Administrative Agent shall have received a certificate attesting to the solvency of the Loan Parties (taken as a whole) after giving effect to the Transactions, from the chief financial officer, the chief accounting officer or another officer with equivalent duties of the Borrower.

13. The Administrative Agent shall have received from the Borrower a notice of borrowing with respect to the Borrowing of the New Tranche B Term Loans (it being agreed that the Administrative Agent and the Lenders party hereto waive compliance with the one Business Day notice requirement for Base Rate Loans under Section 2.02 of the Credit Agreement).

Notwithstanding anything to the contrary contained herein or in any other Loan Document, the only conditions precedent to drawing on the Revolving Credit Facility for the purpose of financing the Transactions and paying fees and expenses in connection therewith, including any OID or upfront fees consistent with the Term Sheet (which such amounts shall not exceed $125,000,000 in the aggregate) shall be those set forth in this Schedule I.

SCHEDULE II

Amendments to the Credit Agreement

Definitions (Article I)

1. “Consolidated EBITDA”: Allow the Borrower to add back cost savings and revenues with respect to actions taken within 12 months after the closing of the Acquisition (as defined in Amendment No. 1) and increase the cap on such cost savings from $10,000,000 to $25,000,000 (clause (x)).

2. “Consolidated Net Income”: Exclude (a) transaction expenses in respect of the Transactions and (b) accruals and reserves that are established within twelve months after the Restatement Effective Date that are required to be established as a result of the Transactions in accordance with GAAP.

3. “Indebtedness”: Increase the exclusion for earn-out obligations at any time outstanding in connection with permitted acquisitions from $100,000,000 to $150,000,000 (clause (d)(ii)).

4. “Threshold Amount”: Increase from $25,000,000 to $50,000,000.

5. Limited Condition Acquisitions: Add a customary “limited condition acquisitions” provision consistent with the Term Sheet.

Commitments and Credit Extensions (Article II)

1. Swing Line Loans (Section 2.04): Increase the cap on the aggregate principal amount of Swing Line Loans from $30,000,000 to $40,000,000.

2. Mandatory Prepayments (Section 2.05(b)):

a. Delete clause (iv) relating to automatic termination of Revolving Credit Loans and Tranche A Term Loans if the Tranche B Term Loans are not repaid in full or extended to a date that is at least 91 days outside the Maturity Date for the Revolving Credit Facility or Tranche A Term Facility.

b. Revise clause (v) relating to application of prepayments so that it provides the Borrower with discretion as to which Class of Loans shall be prepaid.

3. Incremental Extensions of Credit (Section 2.14):

a. Permit Incremental Tranche A Term Loans and Incremental Tranche B Term Loans to take the form of increases in the aggregate principal amount of the existing Term Loan tranches.

b. Increase the cap on Incremental Facilities from $250,000,000 to the sum of (i) $350,000,000, (ii) the aggregate amount of voluntary prepayments of the Term Loans and voluntary prepayments of the Revolving Credit Loans accompanied by a permanent reduction of the Revolving Credit Commitments and (iii) additional amounts subject to pro forma compliance with a First Lien Leverage Ratio of 3.75:1.00 (subject to customary parameters consistent with the Credit Agreement as modified by the Term Sheet).

c. Shorten the applicability of the “most favored nations” yield provision to the date that is six months after the Restatement Effective Date.

d. Permit the Borrower to utilize the Incremental Facilities cap to incur loans and/or notes under customary “incremental equivalent debt” provisions consistent with the Term Sheet (such debt, the “Incremental Equivalent Debt”).

e. Clarify that existing Lenders do not have the right to participate in an Incremental Facility.

4. Refinancing Indebtedness: Permit the Borrower to incur loans and/or notes under customary “refinancing debt” provisions consistent with the Term Sheet (such debt, the “Refinancing Debt”).

Affirmative Covenants (Article VI)

1. Further Assurances and Post-Closing Conditions (Section 6.11): Update to provide that, to the extent that the Collateral and Guarantee Agreement is not satisfied on the Restatement Effective Date due to the application of the Limited Conditionality Provision, the Collateral and Guarantee Agreement will be satisfied by no later than the date that is 90 days after the Restatement Effective Date (or such later date as agreed by the Administrative Agent).

2. Existing Indebtedness Refinancing: Add a new covenant providing that, prior to or substantially concurrently with the initial funding of the New Tranche B Term Loans on the Restatement Effective Date, (I)(a) all commitments under the Target’s existing credit agreement shall have been terminated; (b) all loans, interest and other amounts accrued or owing thereunder shall have been repaid in full (other than the Permitted Wells Letters of Credit (as defined below)); and (c) all Guarantees and Liens granted in respect thereof shall have been released and the terms and conditions of any such release shall be satisfactory to the Administrative Agent and (II) in the event the aggregate principal amount of Senior Bridge Loans, Senior Notes and New Tranche B Term Loans exceeds an amount necessary to consummate the Acquisition and pay fees and expenses related thereto as determined by the Borrower in its reasonable discretion, the

Borrower shall use the proceeds of such excess to repay Revolving Credit Loans then outstanding (without a corresponding reduction in commitments) substantially concurrently with the funding of the New Tranche B Term Loans.

Negative Covenants (Article VII)

1. Lien Covenant (Section 7.01):

a. Increase the general lien basket from $35,000,000 to $75,000,000 and revise the basket so that it permits Liens securing obligations generally (rather than merely Indebtedness) (clause (z)).

b. Add customary baskets in respect of (i) Refinancing Debt and (ii) Incremental Equivalent Debt, in each case subject to reasonably satisfactory intercreditor arrangements.

2. Investment Covenant (Section 7.02):

a. Increase the general basket for loans and advances to officers, directors, employees and independent contractors from $10,000,000 to $15,000,000 (clause (b)(iv)).

b. Increase the basket for investments by Loan Parties in Restricted Subsidiaries that are not Loan Parties from $10,000,000 to $15,000,000 (clause (c)).

c. Increase the basket for loans and advances in connection with the formation and support of new medical groups and loans and advances made to new clients responsible for performing and maintaining third party billing services in connection with the transfer of new accounts from $15,000,000 to $25,000,000 (clause (u)).

d. Add a statement that it is understood and agreed that the Acquisition constitutes a “Permitted Acquisition” as such term is defined in the Credit Agreement.

3. Indebtedness Covenant (Section 7.03):

a. Increase the general indebtedness basket from $50,000,000 to $100,000,000 (clause (n)).

b. Add a basket to permit the Senior Bridge Loans and/or the Senior Notes in an aggregate principal amount not to exceed $1,000,000,000; provided that the aggregate original principal amount of the New Tranche B Term Loans, any Senior Notes and/or any Senior Bridge Loans shall not exceed,

in the aggregate, $1,950,000,000, plus an amount sufficient to fund any OID or upfront fees consistent with the Term Sheet (it being understood and agreed that the Borrower may elect the allocations among the New Tranche B Term Loans, any Senior Notes and/or any Senior Bridge Loans) (and Permitted Refinancings in respect thereof).

c. Add customary baskets in respect of (i) Refinancing Debt and (ii) Incremental Equivalent Debt.

d. Add a basket to permit existing letters of credit with Wells Fargo, N.A. under the Target’s existing credit agreement (the “Permitted Wells Letters of Credit”).

4. Dispositions Covenant (Section 7.05): Increase the general basket from 10% of total assets over the life of the facility to an unlimited amount (subject to (1) the existing 75% cash consideration requirement, (2) the existing $20,000,000 threshold for Designated Non-Cash Consideration and (3) the existing requirement to apply the proceeds of such dispositions in accordance with the mandatory prepayment provision) (clause (k)).

5. Restricted Payments Covenant (Section 7.06):

a. Revise the limitation on Restricted Payments by the Borrower and its Restricted Subsidiaries so that such limitation only applies to the extent the Restricted Payment is made to an entity that is not a Loan Party or is made by a Captive Insurance Subsidiary to another Captive Insurance Subsidiary.

b. Revise the pro forma Total Leverage Ratio test from 3.75:1.00 to 4.00:1.00 (clause (h)).

c. Increase the basket for repurchases and redemptions of Equity Interests in Holdings, the Borrower and the Restricted Subsidiaries from $15,000,000 in any calendar year to $25,000,000 in any calendar year (clause (i)).

6. Restrictive Agreements (Section 7.09): Add the Senior Bridge Loans to the carve-out provided in clause (xii) thereto.

7. Financial Covenant (Section 7.11):

a. Increase the maximum Total Leverage Ratio from 4.50:1.00 to 6.25:1.00, with step-downs to (x) 5.75:1.00 for the four-fiscal-quarter periods ending on and after the last day of the first fiscal quarter ending one year after the Restatement Effective Date, (y) 5.25:1.00 for the four-fiscal-quarter periods ending on and after the last day of the first fiscal quarter ending

three years after the Restatement Effective Date and (z) 5.00:1.00 for the four-fiscal-quarter periods ending on and after the last day of the first fiscal quarter ending four years after the Restatement Effective Date.

b. Delete the language providing that the aggregate principal amount of Senior Notes issued and outstanding shall be disregarded for the purposes of determining compliance with the Total Leverage Ratio.

8. Prepayments, Etc. of Indebtedness (Section 7.13): Increase the maximum Total Leverage Ratio from 3.75:1.00 to 4.00:1.00 (clause (a)).

Miscellaneous

1. Schedules: The Schedules to the Credit Agreement will be brought down as of the Restatement Effective Date to the extent acceptable to the New Tranche B Term Lenders.

2. Notices: Update the notice information in Section 10.02.

3. Corrections: Amendments necessary to cure any ambiguity, omission, mistake, defect or inconsistency in the Credit Agreement.

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 September 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: November 3, 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 September 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: November 3, 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 September 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: November 3, 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 September 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: November 3, 2015

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Fair Value Measurements (Details) - USD ($) $ in Thousands	Sep. 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	$ 41,942	$ 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
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	41,942	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
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	41,942	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	97,492	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	3,957	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	88,321	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	68	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	3,045	6,444
Insurance subsidiaries [Member] | Corporate 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	2,101
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	3,957	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	3,957	18,577
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	90,490	87,925
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	88,321	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	68	3,228
Insurance subsidiaries [Member] | Fair Value Level 2 [Member] | Corporate 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	2,101
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	3,045	6,444
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	3,045	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	97,492	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	3,957	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	88,321	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	68	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	3,045	$ 6,444
Insurance subsidiaries [Member] | Carrying Amount in Consolidated Balance Sheet [member] | Corporate 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	$ 2,101

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Professional Liability Insurance (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Summary of professional liability loss reserves
Estimated losses under self-insured programs	$ 219,376	$ 190,117
Estimated losses under commercial insurance programs	92,473	74,248
Professional liability loss reserves	311,849	264,365
Less estimated payable within one year	71,936	82,735
Professional liability loss reserves, Noncurrent	$ 239,913	$ 181,630

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Goodwill and Other Intangible Assets (Details) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2015	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	800,583	$ 724,979
Prior Year Acquisitions [Member]
Goodwill [Line Items]
Additions through 2014 acquisitions	1,900
Current Year Acquisitions
Goodwill [Line Items]
Additions through acquisitions	75,100
Ending Balance	$ 75,100

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Professional Liability Insurance (Details 1) $ in Thousands	9 Months Ended
	Sep. 30, 2015 USD ($)
Professional Liability Insurance [Abstract]
Balance, December 31, 2014	$ 190,117
Reserves related to current period	55,652
Payments for current period reserves	(1,229)
Payments for prior period reserves	(25,164)
Balance, September 30, 2015	$ 219,376

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Net Revenue (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Schedule of net revenue
Net fee for service revenue before provision for uncollectibles	$ 1,332,642	$ 1,052,273	$ 3,811,858	$ 2,974,157
Percentage of net fee-for-service revenue before provision for uncollectibles	148.20%	147.70%	145.60%	146.60%
Contract revenue before provision for uncollectibles	$ 182,631	$ 161,278	$ 549,998	$ 489,323
Percentage of contract before provision for uncollectibles	20.30%	22.70%	21.00%	24.10%
Other	$ 10,136	$ 9,553	$ 28,826	$ 30,412
Percentage, Other	1.10%	1.30%	1.10%	1.50%
Net revenue before provision for uncollectibles	$ 1,525,409	$ 1,223,104	$ 4,390,682	$ 3,493,892
Percentage of net revenue before provision for uncollectibles	169.60%	171.70%	167.70%	172.20%
Provision for uncollectibles	$ (626,228)	$ (510,863)	$ (1,773,062)	$ (1,464,931)
Percentage of provision for uncollectibles	(69.60%)	(71.70%)	(67.70%)	(72.20%)
Net revenue	$ 899,181	$ 712,241	$ 2,617,620	$ 2,028,961
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	$ 183,120	$ 131,562	$ 530,047	$ 384,570
Percentage of net fee-for-service revenue before provision for uncollectibles	20.40%	18.50%	20.20%	19.00%
Medicaid [Member]
Schedule of net revenue
Net fee for service revenue before provision for uncollectibles	$ 166,015	$ 130,368	$ 476,151	$ 356,043
Percentage of net fee-for-service revenue before provision for uncollectibles	18.50%	18.30%	18.20%	17.50%
Commercial and managed care [Member]
Schedule of net revenue
Net fee for service revenue before provision for uncollectibles	$ 462,652	$ 340,183	$ 1,322,652	$ 948,437
Percentage of net fee-for-service revenue before provision for uncollectibles	51.50%	47.80%	50.50%	46.70%
Self-pay [Member]
Schedule of net revenue
Net fee for service revenue before provision for uncollectibles	$ 496,910	$ 414,317	$ 1,405,252	$ 1,198,063
Percentage of net fee-for-service revenue before provision for uncollectibles	55.30%	58.20%	53.70%	59.00%
Other [Member]
Schedule of net revenue
Net fee for service revenue before provision for uncollectibles	$ 21,576	$ 21,703	$ 61,777	$ 63,813
Percentage of net fee-for-service revenue before provision for uncollectibles	2.40%	3.00%	2.40%	3.10%
Unbilled Revenue [Member]
Schedule of net revenue
Net fee for service revenue before provision for uncollectibles	$ 2,369	$ 14,140	$ 15,979	$ 23,231
Percentage of net fee-for-service revenue before provision for uncollectibles	0.30%	2.00%	0.60%	1.10%

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Segment Reporting (Tables)

9 Months Ended

Sep. 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 September 30,				Nine Months Ended September 30,
	2014		2015		2014		2015
Net Revenue:
Healthcare Services	$	596,205	$	754,919	$	1,681,463	$	2,181,777
Other Services	116,036		144,262		347,498		435,843
	$	712,241	$	899,181	$	2,028,961	$	2,617,620
Operating Earnings:
Healthcare Services	$	34,104	$	41,290	$	90,916	$	90,627
Other Services	6,350		3,919		22,017		23,401
General Corporate	12,018		18,632		36,213		57,635
	$	52,472	$	63,841	$	149,146	$	171,663
Reconciliation of Operating Earnings to Net Earnings:
Operating earnings	$	52,472	$	63,841	$	149,146	$	171,663
Interest expense, net	3,921		5,572		10,758		14,132
Provision for income taxes	20,895		22,837		56,542		65,178
Net earnings	$	27,656	$	35,432	$	81,846	$	92,353

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Share-based Compensation (Details) - Two Thousand Nine Stock Plan [Member] - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands			9 Months Ended
	Sep. 30, 2015	Dec. 31, 2014	Sep. 30, 2015
Shares (in thousands)
Outstanding at beginning of year			4,239
Granted			510
Exercised			(1,144)
Expired or forfeited			(19)
Outstanding at end of period	3,586	4,239	3,586
Exercisable at end of period	2,143		2,143
Weighted Average Exercise Price
Outstanding at beginning of year			$ 24.41
Granted			61.35
Exercised			20.05
Expired or forfeited			37.24
Outstanding at end of period	$ 30.98	$ 24.41	30.98
Exercisable at end of period	$ 21.40		$ 21.40
Aggregate Intrinsic Value (in thousands)
Outstanding at beginning of year			$ 140,433
Exercised			45,916
Outstanding at end of period	$ 86,433	$ 140,433	86,433
Exercisable at end of period	$ 69,923		$ 69,923
Weighted Average Remaining Life in Years
Weighted Average Remaining Life at Balance Sheet Date	6 years	6 years 4 months 24 days
Exercisable at end of period	5 years 4 months 24 days

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Investments (Tables)

9 Months Ended

Sep. 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 September 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
September 30, 2015
Money market funds	$	3,957	$	—	$	—		$	3,957
Municipal bonds	86,432		2,290		(401		)	88,321
Mutual funds	68		—		—			68
Private Investments	2,999		46		—			3,045
Corporate bonds	2,086		16		(1		)	2,101
	$	95,542	$	2,352	$	(402	)	$	97,492

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

At December 31, 2014 and September 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
September 30, 2015
Due in less than one year	$	9,987	$	40	$	(48	)	$	9,979
Due after one year through five years	54,841		1,519		(129		)	56,231
Due after five years through ten years	25,732		718		(112		)	26,338
Due after ten years	1,915		29		(113		)	1,831
Total	$	92,475	$	2,306	$	(402	)	$	94,379

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 September 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	)
September 30, 2015
Municipal bonds	$	16,221	$	(240	)		$	1,917	$	(161	)	$	18,138	$	(401	)
Corporate bonds	1,087		(1		)		—		—			1,087		(1		)
Total investment	$	17,308	$	(241	)		$	1,917	$	(161	)	$	19,225	$	(402	)

(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 September 30, 2015, and December 31, 2014, the investments related to the participant directed supplemental employee retirement plan totaled $41.9 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 nine months ended on September 30, 2014 and September 30, 2015 that were still held by the Company as of September 30, 2014 and September 30, 2015 are as follows (in thousands):

	2014			2015
Net gains and (losses) recognized during the nine months ended September 30, 2014 and 2015, respectively on trading securities	$	(414	)	$	(1,467	)
Less: Net gains (losses) recognized during the period on trading securities sold during the nine months ended September 30, 2014 and 2015, respectively	19			(35		)
Unrealized gains and (losses) recognized on trading securities still held at September 30, 2014 and 2015, respectively	$	(433	)	$	(1,432	)

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Goodwill and Other Intangible Assets (Details Textual)	9 Months Ended
	Sep. 30, 2015
Finite Lived Intangible Assets [Line Items]
Remaining amortization period	3 years 11 months 12 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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Investments (Details 1) - USD ($) $ in Thousands	Sep. 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	$ 9,987	$ 25,186
Due after one year through five years, Cost Basis	54,841	53,735
Due after five years through ten years, Cost Basis	25,732	19,859
Due after ten years, Cost Basis	1,915	1,920
Total Cost Basis	92,475	100,700
Due in less than one year, Fair Value	9,979	25,274
Due after one year through five years, Fair Value	56,231	55,366
Due after five years through ten years, Fair Value	26,338	20,660
Due after ten years, Fair Value	1,831	1,974
Total Fair Value	94,379	103,274
Gross Unrealized Gain	2,306	2,619
Gross Unrealized Loss	(402)	(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	40	88
Gross Unrealized Loss	(48)	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	1,519	1,676
Gross Unrealized Loss	(129)	(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	718	801
Gross Unrealized Loss	(112)	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	29	54
Gross Unrealized Loss	$ (113)	$ 0

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Acquisitions and Contingent Purchase Obligations (Details 3) $ in Thousands	Sep. 30, 2015 USD ($)
Business Combination, Separately Recognized Transactions [Line Items]
Estimated unrecognized contingent purchase compensation expense	$ 25,242
For the remainder of the year ended December 31, 2015
Business Combination, Separately Recognized Transactions [Line Items]
Estimated unrecognized contingent purchase compensation expense	5,533
For the year ended December 31, 2016
Business Combination, Separately Recognized Transactions [Line Items]
Estimated unrecognized contingent purchase compensation expense	16,960
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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Long-term Debt (Details 1) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Maturities of Long-term Debt [Abstract]
Rolling year one	$ 200,000	$ 227,750
Rolling year two	45,000
Rolling year three	60,000
Rolling year four	45,000
Rolling year five	$ 405,000

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Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Basic and diluted earnings per share
Net earnings attributable to Team Health Holdings, Inc. (numerator for basic and diluted earnings per share)	$ 35,442	$ 27,586	$ 92,431	$ 81,634
Denominator:
Weighted average shares outstanding	72,361	70,627	71,900	70,209
Stock options	1,086	1,524	1,176	1,517
Restricted awards	237	178	272	227
Stock purchase plans	3	2	3	2
Shares used for diluted earnings per share	73,687	72,331	73,351	71,955
Basic net earnings per share of Team Health Holdings, Inc.	$ 0.49	$ 0.39	$ 1.29	$ 1.16
Diluted net earnings per share of Team Health Holdings, Inc.	$ 0.48	$ 0.38	$ 1.26	$ 1.13
Stock options
Denominator:
Securities excluded from diluted earnings per share of Team Health Holdings, Inc. because they were antidilutive:	519	488	258	793
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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Net Revenue (Details Textual) visit in Millions	9 Months Ended
	Sep. 30, 2015 visit
Net Revenue (Textual) [Abstract]
Fee for Service Patient Visits	15
Doubtful accounts related to gross fees for fee-for-service patient visits	99.00%
Outstanding self-pay fee-for-service patient accounts	93.00%

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Acquisitions and Contingent Purchase Obligations

9 Months Ended

Sep. 30, 2015

Business Combinations [Abstract]

Acquisitions and Contingent Purchase Obligations

Acquisitions and Contingent Purchase Obligations

Acquisitions

During the nine months ended September 30, 2015, the Company paid a total of $116.3 million related to acquisitions including $113.0 million for the operations of six businesses acquired during the period. These acquisitions consist of the following:

Acquired Operations	Date Acquired	Business Service Line
Brookhaven Anesthesia Associates	August 2015	Anesthesiology
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 consolidated Statement of Comprehensive Earnings for the three and nine months ended September 30, 2015 includes revenue of $44.0 million and $94.1 million, respectively, related to acquisitions completed in 2015.

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 nine months ended September 30, 2015 was allocated as shown in the table below (in thousands):

Accounts receivable	$	3,188
Prepaid expenses and other current assets	5
Other intangibles (consisting of physician and hospital agreements)	47,851
Goodwill (of which $37.9 million is tax deductible)	75,100
Accounts payable	(456		)
Accrued compensation and physician payable	(484		)
Other accrued liabilities	(205		)
Deferred income taxes	(9,933		)
Contingent purchase liabilities	(2,057		)
Consideration paid for 2015 acquisitions, net of cash and cash equivalents of $83	113,009
Additional consideration paid for previous acquisitions	3,305
Total cash paid for acquisitions	$	116,314

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. These changes resulted in an increase to accrued liabilities of $1.9 million, and a net decrease in deferred tax liabilities of $0.9 million, resulting in a net increase to goodwill of $1.0 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):

	Nine Months Ended September 30,
	2014		2015
Net revenue	$	2,262,950	$	2,647,096
Net earnings attributable to Team Health Holdings, Inc.	96,121		93,790
Net earnings per share of Team Health Holdings, Inc.
Basic	$	1.37	$	1.30
Diluted	$	1.34	$	1.28
Weighted average shares outstanding:
Basic	70,209		71,900
Diluted	71,955		73,351

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.

IPC Transaction

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 (the IPC Transaction). 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 canceled 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) there being no law or order temporary, preliminary or permanent prohibiting the consummation of the merger, (iii) subject to specified materiality standards, the accuracy of the representations and warranties of the other party, and (iv) compliance by the other party in all material respects with its covenants.

 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 $47.0 million.

A special meeting of IPC's stockholders is scheduled to be held on November 16, 2015 to vote upon the adoption of the merger Agreement. There is no assurance that the conditions to the Merger will be satisfied or that the Merger will close on this date or at all.

Debt Commitment Letter

On August 25, 2015, in connection with entering into the Merger Agreement, the Company and Team Health, Inc. (the Borrower) entered into an amended and restated debt commitment letter (as amended, the Debt Commitment Letter) with Citigroup Global Markets Inc. (Citi) and the other lenders party thereto (the Lenders), pursuant to which, subject to the conditions set forth therein, Citi and the Lenders have committed to provide either (a) (1) a senior secured tranche B term loan facility in an aggregate principal amount of $965.0 million (the New Tranche B Facility) to be obtained pursuant to an amendment and restatement of the Borrower’s existing credit agreement (the Existing Credit Agreement) for the Borrower’s existing senior secured credit facilities (the Existing Credit Facilities) and (2) senior unsecured increasing rate term loans under a new senior unsecured bridge facility of $545.0 million (the New Senior Bridge Facility), or (b) in the event that the amendments to the Existing Credit Agreement were not obtained in order to permit the incurrence of loans under the New Tranche B Facility and the New Senior Bridge Facility and the consummation of the IPC Acquisition, to refinance the Existing Credit Facilities into new facilities consisting of (1) (x) a senior secured revolving credit facility in an aggregate principal amount not to exceed $650.0 million, (y) a senior secured tranche A term loan facility in an aggregate principal amount not to exceed $588.75 million and (z) the New Tranche B Facility and (2) the New Senior Bridge Facility (collectively, the Facilities).

On October 2, 2015 the Borrower and certain of the lenders under the Existing Credit Facilities entered into an amendment to the Existing Credit Agreement (the First Amendment).  The First Amendment allows for the amendment and restatement of the Existing Credit Agreement to permit the New Tranche B Facility in an aggregate principal amount not to exceed $1.15 billion on the date on which the IPC Acquisition is consummated and amends the Existing Credit Agreement to (a) permit the incurrence of the notes offered hereunder and the New Senior Bridge Facility in an aggregate principal amount not to exceed $1.00 billion, provided that the aggregate principal amount of the notes and any loans made under the New Tranche B Facility and New Senior Bridge Facility cannot exceed $1.95 billion and (b) to effect such other changes as contemplated therein.  In connection with Merger and related transactions, the Company expects to enter into an amended and restated credit agreement. The proceeds of the Debt Financing will be used to partially finance the aggregate Merger Consideration, repay or redeem the existing indebtedness of IPC other than certain letters of credit that are permitted to remain outstanding, 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.

Subsequent Acquisitions

In October 2015, the Company completed the acquisition of the operations of an emergency staffing business located in Nevada. This acquisition will add approximately 370,000 patient visits annually to the Company's existing emergency medicine staffing 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 Company's results of operations. The payment of contingent purchase obligations tied to continuing employment is included as a component of operating cash flows. When contingent payments are not tied to continuing employment, such amounts are recognized as a contingent purchase liability at the acquisition date.

As of September 30, 2015, the Company estimates it may have to pay $49.4 million (including $6.0 million related to transactions completed during 2015) in future contingent payments for acquisitions made prior to September 30, 2015, based upon the current projected performance of the acquired operations of which $24.1 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 $25.2 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 nine months ended September 30,2014 and 2015 was $22.5 million and $12.2 million, respectively. Included in the expense recognized in 2014 and 2015 is $0.2 million and $0.8 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 nine months ended September 30, 2015 are as follows (in thousands):

Contingent purchase liability at December 31, 2014	$	23,584
Payments	(14,145		)
Contingent purchase and other acquisition compensation expense recognized	12,230
Contingent purchase liability recognized at acquisition date	2,472
Contingent purchase liability at September 30, 2015	$	24,141

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

For the remainder of the year ended December 31, 2015	$	5,533
For the year ended December 31, 2016	16,960
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
	$	25,242

In the nine months ended September 30, 2014 and 2015, the Company recognized transaction costs of $5.7 million and $7.2 million, respectively, which related to external costs associated with due diligence and acquisition activity.

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Noncontrolling Interests in Consolidated Entity (Details) $ in Thousands	9 Months Ended
	Sep. 30, 2015 USD ($) Business	Sep. 30, 2014 USD ($)
Noncontrolling Interest [Abstract]
Number of Joint Venture Arrangements | Business	2
Contributions from noncontrolling interests	$ 1,683	$ 262

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Investments (Details 2) - USD ($) $ in Thousands		Sep. 30, 2015	Dec. 31, 2014
Summary of temporarily impaired available-for-sale investment securities
Impaired Less Than 12 Months, Fair Value		$ 17,308	$ 6,915
Impaired Less Than 12 Months, Unrealized Losses		(241)	(32)
Impaired Over 12 Months, Fair Value		1,917	2,725
Impaired Over 12 Months, Unrealized Losses		(161)	(33)
Total, Fair Value		19,225	9,640
Total, Unrealized Losses		(402)	(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		16,221	4,498
Impaired Less Than 12 Months, Unrealized Losses		(240)	(12)
Impaired Over 12 Months, Fair Value		1,917	2,725
Impaired Over 12 Months, Unrealized Losses		(161)	(33)
Total, Fair Value		18,138	7,223
Total, Unrealized Losses		(401)	(45)
Private investments
Summary of temporarily impaired available-for-sale investment securities
Impaired Less Than 12 Months, Fair Value			1,414
Impaired Less Than 12 Months, Unrealized Losses			(20)
Impaired Over 12 Months, Fair Value			0
Impaired Over 12 Months, Unrealized Losses			0
Total, Fair Value			1,414
Total, Unrealized Losses		0	$ (20)
Corporate bonds
Summary of temporarily impaired available-for-sale investment securities
Impaired Less Than 12 Months, Fair Value		1,087
Impaired Less Than 12 Months, Unrealized Losses		(1)
Impaired Over 12 Months, Fair Value		0
Impaired Over 12 Months, Unrealized Losses		0
Total, Fair Value		1,087
Total, Unrealized Losses		$ (1)

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

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Professional Liability Insurance (Tables)

9 Months Ended

Sep. 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		September 30, 2015
Estimated losses under self-insured programs	$	190,117	$	219,376
Estimated losses under commercial insurance programs	74,248		92,473
	264,365		311,849
Less estimated payable within one year	82,735		71,936
	$	181,630	$	239,913

Summary of estimated losses under self-insured programs

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

Balance, December 31, 2014	$	190,117
Reserves related to current period	55,652
Payments for current period reserves	(1,229		)
Payments for prior period reserves	(25,164		)
Balance, September 30, 2015	$	219,376

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Long-Term Debt (Tables)

9 Months Ended

Sep. 30, 2015

Debt Disclosure [Abstract]

Schedule of long-term debt

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

Term Loan A Facility	$	585,000
Revolving Credit Facility	170,000
	755,000
Less current portion	(200,000		)
	$	555,000

Schedule of aggregate annual maturities of long-term debt

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

2015 (includes amounts outstanding under the revolving credit facility)	$	200,000
2016	45,000
2017	60,000
2018	45,000
2019	405,000

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Professional Liability Insurance (Details Textual) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Dec. 31, 2014
Malpractice Insurance [Line Items]
Estimated losses under self-insured programs	$ 219,376	$ 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	1.20%	1.10%
Estimated IBNR
Malpractice Insurance [Line Items]
Estimated losses under self-insured programs	$ 134,800	$ 117,300
Specific Case Reserves
Malpractice Insurance [Line Items]
Estimated losses under self-insured programs	84,600	72,800
Settled But Not Yet Funded Specific Case Reserves
Malpractice Insurance [Line Items]
Estimated losses under self-insured programs	1,900	1,900
Unsettled Specific Case Reserves
Malpractice Insurance [Line Items]
Estimated losses under self-insured programs	$ 82,700	$ 70,900

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Investments (Details 3) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Investments [Abstract]
Net gains and (losses) recognized during the nine months ended September 30, 2014 and 2015, respectively on trading securities	$ (1,467)	$ (414)
Less: Net gains (losses) recognized during the period on trading securities sold during the nine months ended September 30, 2014 and 2015, respectively	(35)	19
Unrealized gains and (losses) recognized on trading securities still held at September 30, 2014 and 2015, respectively	$ (1,432)	$ (433)

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Share-based Compensation (Tables)

9 Months Ended

Sep. 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 September 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	(1,144	)	20.05		45,916
Expired or forfeited	(19	)	37.24
Outstanding at end of period	3,586		$	30.98	$	86,433	6.0
Exercisable at end of period	2,143		$	21.40	$	69,923	5.4

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):

	Nine Months Ended September 30,
	2014		2015
Stock options	$	8,623	$	7,212
Restricted awards	4,035		5,923
Stock purchase plan	35		62
Total equity based compensation expense	$	12,693	$	13,197
Tax benefit of equity based compensation expense	$	4,887	$	5,081

Summary of changes in unvested shares of restricted stock

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

	Restricted Stock		Restricted Units		Total
Outstanding at beginning of year	161		317		478
Granted	—		185		185
Vested	(57	)	(39	)	(96	)
Forfeited and expired	(2	)	(2	)	(4	)
Outstanding at September 30, 2015	102		461		563

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Earnings Per Share (Tables)

9 Months Ended

Sep. 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 September 30,				Nine Months Ended September 30,
	2014		2015		2014		2015
Net earnings attributable to Team Health Holdings, Inc. (numerator for basic and diluted earnings per share)	$	27,586	$	35,442	$	81,634	$	92,431
Denominator:
Weighted average shares outstanding	70,627		72,361		70,209		71,900
Effect of dilutive securities:
Stock options	1,524		1,086		1,517		1,176
Restricted awards	178		237		227		272
Stock purchase plans	2		3		2		3
Shares used for diluted earnings per share	72,331		73,687		71,955		73,351
Basic net earnings per share of Team Health Holdings, Inc.	$	0.39	$	0.49	$	1.16	$	1.29
Diluted net earnings per share of Team Health Holdings, Inc.	$	0.38	$	0.48	$	1.13	$	1.26
Securities excluded from diluted earnings per share of Team Health Holdings, Inc. because they were antidilutive:
Stock options	488		519		793		258
Restricted awards	—		—		—		—

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Recent Accounting Pronouncements

9 Months Ended

Sep. 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.

In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments, which requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. ASU 2015-16 is effective for annual reporting periods after December 15, 2015, and interim periods within those fiscal years. The new guidance will be applied prospectively. Early adoption is permitted and the Company chose to do so effective September 30, 2015.

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Accumulated Other Comprehensive Income (Tables)

9 Months Ended

Sep. 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 September 30,						Nine Months Ended September 30,
	2014			2015			2014			2015
Balance at beginning of period	$	1,510		$	1,095		$	447		$	1,695
Other comprehensive earnings:
Net unrealized gain (loss)	317			451			2,024			(436		)
Tax (expense) benefit	(89		)	(124		)	(663		)	213
Total other comprehensive earnings before reclassifications, net of tax	228			327			1,361			(223		)
Net amount reclassified to earnings(1)	(63		)	(97		)	(133		)	(147		)
Tax benefit (expense)(2)	—			—			—			—
Total amount reclassified from accumulated other comprehensive earnings, net of tax(3)	(63		)	(97		)	(133		)	(147		)
Total other comprehensive earnings (loss)	165			230			1,228			(370		)
Balance at end of period	$	1,675		$	1,325		$	1,675		$	1,325

(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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Fair Value Measurements (Details Textual) $ in Thousands	Sep. 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, Liabilities, Level 2 to Level 1 Transfers, Amount	0
Fair Value, Liabilities, Level 1 to Level 2 Transfers, Amount	0
Fair value of outstanding debt	741,900
Carrying value of debt	$ 755,000

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Long-Term Debt (Details Textual) $ in Thousands	9 Months Ended
	Sep. 30, 2015 USD ($)
Debt Instrument [Line Items]
Long-term debt	$ 755,000
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	$ 170,000
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	1.94%
Long-term debt	$ 585,000

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Consolidated Balance Sheets (Unaudited) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Current assets:
Cash and cash equivalents	$ 18,194	$ 20,094
Accounts receivable, less allowance for uncollectibles of $409,851 and $558,488 in 2014 and 2015, respectively	577,291	500,633
Prepaid expenses and other current assets	56,902	46,469
Receivables under insured programs	19,514	23,623
Income tax receivable	0	8,935
Total current assets	671,901	599,754
Insurance subsidiaries' and other investments	97,492	112,946
Property and equipment, net	74,939	62,117
Other intangibles, net	326,959	341,194
Goodwill	800,583	724,979
Deferred income taxes	39,694	21,113
Receivables under insured programs	72,959	50,625
Other	59,652	61,994
Total Assets	2,144,179	1,974,722
Current liabilities:
Accounts payable	48,886	40,616
Accrued compensation and physician payable	283,288	283,033
Other accrued liabilities	127,331	153,137
Income tax payable	20,650	0
Current maturities of long-term debt	200,000	227,750
Deferred income taxes	31,511	38,272
Total current liabilities	711,666	742,808
Long-term debt, less current maturities	555,000	577,500
Other non-current liabilities	308,105	231,778
Shareholders’ equity:
Common stock, ($0.01 par value; 100,000 shares authorized, 71,283 and 72,502 shares issued and outstanding at December 31, 2014 and September 30, 2015, respectively)	725	713
Additional paid-in capital	750,089	696,996
Accumulated deficit	(186,424)	(278,855)
Accumulated other comprehensive earnings	1,325	1,695
Team Health Holdings, Inc. shareholders’ equity	565,715	420,549
Noncontrolling interests	3,693	2,087
Total shareholders' equity including noncontrolling interests	569,408	422,636
Total liabilities and shareholders' equity	$ 2,144,179	$ 1,974,722

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Investments (Details Textual) - USD ($) $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Investments (Textual) [Abstract]
Recorded gain on the sale of investments		$ 147
Supplemental employee retirement plan	$ 41,942	41,942		$ 37,237
Proceeds from the sale of investments		7,332	$ 0
Hospital-based telemedicine consultation provider [Member]
Investments (Textual) [Abstract]
Proceeds from the sale of investments		$ 4,000
Realized gain on sale of telemedicine consultation business	$ 2,000

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Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Operating Activities
Net earnings	$ 92,353	$ 81,846
Adjustments to reconcile net earnings:
Depreciation	17,423	15,315
Amortization	62,085	35,203
Amortization of deferred financing costs	2,142	758
Equity based compensation expense	13,197	12,693
Provision for uncollectibles	1,773,062	1,464,931
Deferred income taxes	(34,140)	(21,367)
Gain on sale of investments and other assets	(1,879)	(2,349)
Equity in joint venture income	(2,856)	(3,124)
Changes in operating assets and liabilities, net of acquisitions:
Accounts receivable	(1,846,532)	(1,515,378)
Prepaids and other assets	(9,774)	(1,467)
Income tax accounts	29,585	1,414
Accounts payable	8,624	7,831
Accrued compensation and physician payable	2,439	13,694
Contingent purchase liabilities	(13)	(1,283)
Other accrued liabilities	(3,034)	712
Professional liability reserves	29,261	17,287
Net cash provided by operating activities	131,943	106,716
Investing Activities
Purchases of property and equipment	(31,123)	(16,783)
Sale of property and equipment	225	2,776
Cash paid for acquisitions, net	(116,314)	(347,154)
Proceeds from the sale of investments	7,332	0
Net proceeds from disposition of assets held for sale	964	0
Purchases of investments at insurance subsidiaries	(67,887)	(68,527)
Proceeds from investments at insurance subsidiaries	79,422	61,314
Net cash used in investing activities	(127,381)	(368,374)
Financing Activities
Payments on long-term debt	(11,250)	(12,188)
Proceeds from revolving credit facility	950,500	316,100
Payments on revolving credit facility	(989,500)	(88,700)
Payments of financing costs	0	(1,146)
Contributions from noncontrolling interests	1,683	262
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	23,185	15,510
Tax benefit from exercise of stock options	15,475	11,347
Net cash provided by (used in) financing activities	(6,462)	242,966
Net decrease in cash and cash equivalents	(1,900)	(18,692)
Cash and cash equivalents, beginning of period	20,094	32,331
Cash and cash equivalents, end of period	18,194	13,639
Interest paid	13,619	11,708
Taxes paid	$ 52,120	$ 65,525

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Share-based Compensation (Details 2) - Two Thousand Nine Stock Plan [Member] shares in Thousands	9 Months Ended
	Sep. 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	(2)
Outstanding at September 30, 2015	102
Restricted Stock Units (RSUs) [Member]
Summary of changes in unvested restricted stock awards
Outstanding at beginning of year	317
Granted	185
Vested	(39)
Forfeited and expired	(2)
Outstanding at September 30, 2015	461
Restricted stock awards
Summary of changes in unvested restricted stock awards
Outstanding at beginning of year	478
Granted	185
Vested	(96)
Forfeited and expired	(4)
Outstanding at September 30, 2015	563

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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		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
- Proforma Business Acquisition Information [Abstract]
Net revenue			$ 2,647,096	$ 2,262,950
Net earnings attributable to Team Health Holdings, Inc.			$ 93,790	$ 96,121
Basic (usd per share)			$ 1.30	$ 1.37
Diluted (usd per share)			$ 1.28	$ 1.34
Basic (shares)	72,361	70,627	71,900	70,209
Diluted (shares)	73,687	72,331	73,351	71,955

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Segment Reporting (Details Textual)	9 Months Ended
	Sep. 30, 2015 Segments
Segment Reporting Information, Additional Information [Abstract]
Number of Operating Segments	10
Number of Reportable Segments	2

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Recent Accounting Pronouncements Accounting Policies (Policies)

9 Months Ended

Sep. 30, 2015

Accounting Policies [Abstract]

New Accounting Pronouncements, Policy [Policy Text Block]

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.

In September 2015, the FASB issued ASU 2015-16, Business Combinations (Topic 805): Simplifying the Accounting for Measurement-Period Adjustments, which requires that an acquirer recognize adjustments to provisional amounts that are identified during the measurement period in the reporting period in which the adjustment amounts are determined. ASU 2015-16 is effective for annual reporting periods after December 15, 2015, and interim periods within those fiscal years. The new guidance will be applied prospectively. Early adoption is permitted and the Company chose to do so effective September 30, 2015.

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 Company's results of operations. The payment of contingent purchase obligations tied to continuing employment is included as a component of operating cash flows. When contingent payments are not tied to continuing employment, such amounts are recognized as a contingent purchase liability at 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.

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 fifteen 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 99% 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 September 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.

Segment Reporting, Policy [Policy Text Block]

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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Acquisitions and Contingent Purchase Obligations (Details 2) $ in Thousands	9 Months Ended
	Sep. 30, 2015 USD ($)
Business Combination, Separately Recognized Transactions [Line Items]
Contingent purchase liability at December 31, 2014	$ 23,584
Payments	(14,145)
Contingent purchase and other acquisition compensation expense recognized	12,230
Contingent purchase liability recognized at acquisition date	2,472
Contingent purchase liability at September 30, 2015	$ 24,141

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 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 September 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 September 30, 2015		Fair Value September 30, 2015		Fair Value Level 1		Fair Value Level 2		Fair Value Level 3
Investments of insurance subsidiaries:
Money market funds	$	3,957	$	3,957	$	3,957	$	—	$	—
Municipal bonds	88,321		88,321		—		88,321		—
Mutual funds	68		68		—		68		—
Corporate bonds	2,101		2,101		—		2,101		—
Private investments	3,045		3,045		—		—		3,045
Total investments of insurance subsidiaries	$	97,492	$	97,492	$	3,957	$	90,490	$	3,045
Supplemental employee retirement plan investments:
Mutual funds	$	41,942	$	41,942	$	—	$	41,942	$	—

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Organization and Basis of Presentation

9 Months Ended

Sep. 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	Sep. 30, 2015	Dec. 31, 2014
Statement of Financial Position [Abstract]
Allowance for uncollectibles	$ 558,488	$ 409,851
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares outstanding	72,502,000	71,283,000
Common stock, shares issued	72,502,000	71,283,000

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Share-based Compensation

9 Months Ended

Sep. 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 2,426,000 are available to grant as of September 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 September 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	(1,144	)	20.05		45,916
Expired or forfeited	(19	)	37.24
Outstanding at end of period	3,586		$	30.98	$	86,433	6.0
Exercisable at end of period	2,143		$	21.40	$	69,923	5.4

Intrinsic value is the amount by which the stock price as of September 30, 2015 exceeds the exercise price of the options. The Company granted 510,000 options during the nine months ended September 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 September 30, 2015, the Company had approximately $15.4 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):

	Nine Months Ended September 30,
	2014		2015
Stock options	$	8,623	$	7,212
Restricted awards	4,035		5,923
Stock purchase plan	35		62
Total equity based compensation expense	$	12,693	$	13,197
Tax benefit of equity based compensation expense	$	4,887	$	5,081

Restricted awards are grants of restricted stock and grants of restricted stock units that are not vested (Restricted Awards). The Company granted 185,000 shares of Restricted Awards in 2015. The Company had $19.4 million of expense remaining to be recognized over the requisite service period for Restricted Awards at September 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 nine months ended September 30, 2015 is as follows (in thousands):

	Restricted Stock		Restricted Units		Total
Outstanding at beginning of year	161		317		478
Granted	—		185		185
Vested	(57	)	(39	)	(96	)
Forfeited and expired	(2	)	(2	)	(4	)
Outstanding at September 30, 2015	102		461		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 September 30, 2015, contributions under the ESPP totaled $2.5 million. In October 2015, approximately 47,000 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 September 30, 2015, contributions under the NQSPP totaled $1.2 million. In October 2015, approximately 23,000 shares of the Company’s common stock were issued to plan participants.

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Document and Entity Information - shares	9 Months Ended
	Sep. 30, 2015	Oct. 30, 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	Sep. 30, 2015
Document Fiscal Year Focus	2015
Document Fiscal Period Focus	Q3
Amendment Flag	false
Entity Common Stock, Shares Outstanding		72,583,573

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Earnings Per Share

9 Months Ended

Sep. 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 September 30,				Nine Months Ended September 30,
	2014		2015		2014		2015
Net earnings attributable to Team Health Holdings, Inc. (numerator for basic and diluted earnings per share)	$	27,586	$	35,442	$	81,634	$	92,431
Denominator:
Weighted average shares outstanding	70,627		72,361		70,209		71,900
Effect of dilutive securities:
Stock options	1,524		1,086		1,517		1,176
Restricted awards	178		237		227		272
Stock purchase plans	2		3		2		3
Shares used for diluted earnings per share	72,331		73,687		71,955		73,351
Basic net earnings per share of Team Health Holdings, Inc.	$	0.39	$	0.49	$	1.16	$	1.29
Diluted net earnings per share of Team Health Holdings, Inc.	$	0.38	$	0.48	$	1.13	$	1.26
Securities excluded from diluted earnings per share of Team Health Holdings, Inc. because they were antidilutive:
Stock options	488		519		793		258
Restricted awards	—		—		—		—

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Consolidated Statements of Comprehensive Earnings (Unaudited) - USD ($) shares in Thousands, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Income Statement [Abstract]
Net revenue before provision for uncollectibles	$ 1,525,409	$ 1,223,104	$ 4,390,682	$ 3,493,892
Provision for uncollectibles	626,228	510,863	1,773,062	1,464,931
Net revenue	899,181	712,241	2,617,620	2,028,961
Cost of services rendered (exclusive of depreciation and amortization shown separately below)
Professional service expenses	707,871	546,346	2,058,876	1,557,696
Professional liability costs	27,474	29,564	81,371	73,482
General and administrative expenses (includes contingent purchase compensation expense)	67,066	61,643	219,214	195,842
Other (income) expense, net	2,137	292	(182)	(3,457)
Depreciation	6,290	5,826	17,423	15,315
Amortization	20,633	12,991	62,085	35,203
Interest expense, net	5,572	3,921	14,132	10,758
Transaction costs	3,869	3,107	7,170	5,734
Earnings before income taxes	58,269	48,551	157,531	138,388
Provision for income taxes	22,837	20,895	65,178	56,542
Net earnings	35,432	27,656	92,353	81,846
Net earnings attributable to noncontrolling interest	(10)	70	(78)	212
Net earnings attributable to Team Health Holdings, Inc.	$ 35,442	$ 27,586	$ 92,431	$ 81,634
Net earnings per share of Team Health Holdings, Inc.
Basic	$ 0.49	$ 0.39	$ 1.29	$ 1.16
Diluted	$ 0.48	$ 0.38	$ 1.26	$ 1.13
Weighted average shares outstanding
Basic (shares)	72,361	70,627	71,900	70,209
Diluted (shares)	73,687	72,331	73,351	71,955
Net change in fair value of investments, net of tax	$ 230	$ 165	$ (370)	$ 1,228
Comprehensive Income (Loss), Net of Tax, Including Portion Attributable to Noncontrolling Interest	35,662	27,821	91,983	83,074
Comprehensive earnings attributable to noncontrolling interest	(10)	70	(78)	212
Comprehensive earnings attributable to Team Health Holdings, Inc.	$ 35,672	$ 27,751	$ 92,061	$ 82,862

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Net Revenue

9 Months Ended

Sep. 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 nine months ended September 30, 2014 and 2015 consisted of the following (in thousands):

	Three Months Ended September 30,										Nine Months Ended September 30,
	2014					2015					2014					2015
Medicare	$	131,562		18.5	%	$	183,120		20.4	%	$	384,570		19.0	%	$	530,047		20.2	%
Medicaid	130,368			18.3		166,015			18.5		356,043			17.5		476,151			18.2
Commercial and managed care	340,183			47.8		462,652			51.5		948,437			46.7		1,322,652			50.5
Self-pay	414,317			58.2		496,910			55.3		1,198,063			59.0		1,405,252			53.7
Other	21,703			3.0		21,576			2.4		63,813			3.1		61,777			2.4
Unbilled	14,140			2.0		2,369			0.3		23,231			1.1		15,979			0.6
Net fee for service revenue before provision for uncollectibles	1,052,273			147.7		1,332,642			148.2		2,974,157			146.6		3,811,858			145.6
Contract revenue before provision for uncollectibles	161,278			22.7		182,631			20.3		489,323			24.1		549,998			21.0
Other	9,553			1.3		10,136			1.1		30,412			1.5		28,826			1.1
Net revenue before provision for uncollectibles	1,223,104			171.7		1,525,409			169.6		3,493,892			172.2		4,390,682			167.7
Provision for uncollectibles	(510,863		)	(71.7	)	(626,228		)	(69.6	)	(1,464,931		)	(72.2	)	(1,773,062		)	(67.7	)
Net revenue	$	712,241		100.0	%	$	899,181		100.0	%	$	2,028,961		100.0	%	$	2,617,620		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 fifteen 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 99% 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 September 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

9 Months Ended

Sep. 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 September 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
September 30, 2015
Money market funds	$	3,957	$	—	$	—		$	3,957
Municipal bonds	86,432		2,290		(401		)	88,321
Mutual funds	68		—		—			68
Private Investments	2,999		46		—			3,045
Corporate bonds	2,086		16		(1		)	2,101
	$	95,542	$	2,352	$	(402	)	$	97,492

At December 31, 2014 and September 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
September 30, 2015
Due in less than one year	$	9,987	$	40	$	(48	)	$	9,979
Due after one year through five years	54,841		1,519		(129		)	56,231
Due after five years through ten years	25,732		718		(112		)	26,338
Due after ten years	1,915		29		(113		)	1,831
Total	$	92,475	$	2,306	$	(402	)	$	94,379

A summary of the Company’s temporarily impaired available-for-sale investment securities as of December 31, 2014 and September 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	)
September 30, 2015
Municipal bonds	$	16,221	$	(240	)		$	1,917	$	(161	)	$	18,138	$	(401	)
Corporate bonds	1,087		(1		)		—		—			1,087		(1		)
Total investment	$	17,308	$	(241	)		$	1,917	$	(161	)	$	19,225	$	(402	)

(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 September 30, 2015.

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

As of September 30, 2015, and December 31, 2014, the investments related to the participant directed supplemental employee retirement plan totaled $41.9 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 nine months ended on September 30, 2014 and September 30, 2015 that were still held by the Company as of September 30, 2014 and September 30, 2015 are as follows (in thousands):

	2014			2015
Net gains and (losses) recognized during the nine months ended September 30, 2014 and 2015, respectively on trading securities	$	(414	)	$	(1,467	)
Less: Net gains (losses) recognized during the period on trading securities sold during the nine months ended September 30, 2014 and 2015, respectively	19			(35		)
Unrealized gains and (losses) recognized on trading securities still held at September 30, 2014 and 2015, respectively	$	(433	)	$	(1,432	)

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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Acquisitions and Contingent Purchase Obligations (Tables)

9 Months Ended

Sep. 30, 2015

Business Combinations [Abstract]

Purchase price allocation

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

Accounts receivable	$	3,188
Prepaid expenses and other current assets	5
Other intangibles (consisting of physician and hospital agreements)	47,851
Goodwill (of which $37.9 million is tax deductible)	75,100
Accounts payable	(456		)
Accrued compensation and physician payable	(484		)
Other accrued liabilities	(205		)
Deferred income taxes	(9,933		)
Contingent purchase liabilities	(2,057		)
Consideration paid for 2015 acquisitions, net of cash and cash equivalents of $83	113,009
Additional consideration paid for previous acquisitions	3,305
Total cash paid for acquisitions	$	116,314

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. These changes resulted in an increase to accrued liabilities of $1.9 million, and a net decrease in deferred tax liabilities of $0.9 million, resulting in a net increase to goodwill of $1.0 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):

	Nine Months Ended September 30,
	2014		2015
Net revenue	$	2,262,950	$	2,647,096
Net earnings attributable to Team Health Holdings, Inc.	96,121		93,790
Net earnings per share of Team Health Holdings, Inc.
Basic	$	1.37	$	1.30
Diluted	$	1.34	$	1.28
Weighted average shares outstanding:
Basic	70,209		71,900
Diluted	71,955		73,351

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 nine months ended September 30, 2015 are as follows (in thousands):

Contingent purchase liability at December 31, 2014	$	23,584
Payments	(14,145		)
Contingent purchase and other acquisition compensation expense recognized	12,230
Contingent purchase liability recognized at acquisition date	2,472
Contingent purchase liability at September 30, 2015	$	24,141

Estimated unrecognized contingent purchase compensation expense

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

For the remainder of the year ended December 31, 2015	$	5,533
For the year ended December 31, 2016	16,960
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
	$	25,242

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Noncontrolling Interests in Consolidated Entity

9 Months Ended

Sep. 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 $1.7 million during the nine months ended September 30, 2015.

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Professional Liability Insurance

9 Months Ended

Sep. 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		September 30, 2015
Estimated losses under self-insured programs	$	190,117	$	219,376
Estimated losses under commercial insurance programs	74,248		92,473
	264,365		311,849
Less estimated payable within one year	82,735		71,936
	$	181,630	$	239,913

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

Balance, December 31, 2014	$	190,117
Reserves related to current period	55,652
Payments for current period reserves	(1,229		)
Payments for prior period reserves	(25,164		)
Balance, September 30, 2015	$	219,376

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 September 30, 2015, of the $219.4 million of estimated losses under self-insurance programs, approximately $134.8 million represented an estimate of IBNR claims and expenses and additional loss development, with the remaining $84.6 million representing specific case reserves. Of the specific case reserves as of September 30, 2015, $1.9 million represented case reserves that had been settled but not yet funded, and $82.7 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 October 2015. Based on the results of the actuarial study completed in October 2015, management determined no additional change was necessary in the consolidated reserves for professional liability losses during the third quarter of 2015 related to prior year loss estimates. The discount rate on professional liability reserves was 1.2% at September 30, 2015 compared to 1.1% at December 31, 2014.

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Share-based Compensation (Details Textual) - USD ($) $ / shares in Units, $ in Millions	1 Months Ended	9 Months Ended
	Oct. 31, 2015	Sep. 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		2,426,000
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		$ 15.4
Two Thousand Nine Stock Plan [Member] | Restricted stock awards
Share-Based Compensation (Textual) [Abstract]
Restricted stock awards granted		185,000
Unrecognized compensation expense, restricted stock		$ 19.4
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		$ 2.5
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		$ 1.2
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
Subsequent Event [Member] | 2010 Employee Stock Purchase Plan [Member] | Employee Stock [Member]
Share-Based Compensation (Textual) [Abstract]
Stock Issued During Period, Shares, Employee Stock Purchase Plans	47,000
Subsequent Event [Member] | 2010 Nonqualified Stock Purchase Plan [Member] | Nonqualified Stock Purchase Plan [Member]
Share-Based Compensation (Textual) [Abstract]
Shares issued during period under stock purchase plans	23,000

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Goodwill and Other Intangible Assets

9 Months Ended

Sep. 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 nine months ended September 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	1,024
Additions through 2015 acquisitions	75,100
Change in goodwill attributable to the sale of outsourced medical coding practice	(520		)
Balance, September 30, 2015	$	800,583

The following is a summary of intangible assets and related amortization as of December 31, 2014 and September 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 September 30, 2015:
Contracts	$	472,204	$	(156,934	)
Other	20,360		(8,671		)
Total	$	492,564	$	(165,605	)
Aggregate amortization expense:
For the nine months ended September 30, 2015			$	62,085
Estimated amortization expense:
For the remainder of the year ended December 31, 2015			$	20,651
For the year ended December 31, 2016			80,232
For the year ended December 31, 2017			74,395
For the year ended December 31, 2018			62,103
For the year ended December 31, 2019			53,314
For the years ended December 31, 2020 and thereafter			36,264

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

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Long-Term Debt

9 Months Ended

Sep. 30, 2015

Debt Disclosure [Abstract]

Long-Term Debt

Long-Term Debt

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

Term Loan A Facility	$	585,000
Revolving Credit Facility	170,000
	755,000
Less current portion	(200,000		)
	$	555,000

As of September 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 nine months ended September 30, 2015 was 1.94% for amounts outstanding under the Term A Loan Facility.

The Company had $170.0 million of borrowings outstanding under the Revolving Credit Facility as of September 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 September 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 September 30, 2015 are as follows (in thousands):

2015 (includes amounts outstanding under the revolving credit facility)	$	200,000
2016	45,000
2017	60,000
2018	45,000
2019	405,000

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Contingencies

9 Months Ended

Sep. 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.

On August 14, 2015, a purported shareholder of IPC filed a complaint in the Delaware Court of Chancery captioned Smukler v. IPC Healthcare, Inc., et al. (Case No. 11392-CB), on behalf of a purported class of  IPC shareholders. The lawsuit names IPC, each of its current directors, the Company, and Sub as defendants. The lawsuit alleges that the individual defendants breached their fiduciary duties by, among other things, failing to take appropriate steps to maximize the value of IPC to its shareholders, failing to value IPC properly, and taking steps to avoid competitive bidding by alternate potential acquirers. The lawsuit also alleges that IPC, the Company, and Sub aided and abetted those alleged breaches of fiduciary duties by the individual defendants. The lawsuit seeks, among other things, certification of the action as a class action; injunctive relief enjoining the merger; an accounting of all damages purportedly suffered by the plaintiff and the class including rescissory damages in favor of the plaintiff and the class; and the fees and costs associated with the litigation. On August 18, 2015, an additional lawsuit was filed in the Delaware Court of Chancery, asserting similar claims and allegations to those in the Smukler lawsuit and seeking similar relief on behalf of the same putative class. Crescente v. Singer, et al. (Case No. 11405-CB).

Additionally, on August 19, 2015, a lawsuit was filed in the Superior Court for the State of California in Los Angeles County. Khemthong v. IPC Healthcare Networks, Inc., et al. (No. BC 591953). The lawsuit asserted similar claims and allegations to those in the Smukler lawsuit and sought similar relief on behalf of the same putative class. On August 27, 2015, the plaintiff filed a request for voluntary dismissal of the suit without prejudice, and on August 28, 2015, the court entered an order granting that request.

 By Order dated September 11, 2015 (the Consolidation Order), the Smukler and Crescente  actions were consolidated, and all further litigation relating to or arising out of the merger were directed to be consolidated with such actions under the caption In re IPC Healthcare, Inc. Stockholders Litigation, C.A. No. 11392-CB (the “Consolidated Action”).  On September 17, 2015, an action captioned Spencer v. IPC Healthcare, Inc., C.A. No. 11516-CB, was filed in the Delaware Court of Chancery. Under the Consolidation Order, such action is required to be consolidated with the previously-filed actions. On September 18, 2015, a Verified Consolidated Class Action Complaint was filed in the Consolidated Action.  On October 2, 2015, the defendants moved to dismiss the operative complaint.

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 the 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 the PPACA can only lose the new federal Medicaid funding in the 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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Segment Reporting (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Summary of financial information of reportable segment
Net Revenue:	$ 899,181	$ 712,241	$ 2,617,620	$ 2,028,961
Operating Earnings:	63,841	52,472	171,663	149,146
Interest expense, net	5,572	3,921	14,132	10,758
Provision for income taxes	22,837	20,895	65,178	56,542
Net earnings	35,432	27,656	92,353	81,846
Healthcare Services
Summary of financial information of reportable segment
Net Revenue:	754,919	596,205	2,181,777	1,681,463
Operating Earnings:	41,290	34,104	90,627	90,916
Other Services
Summary of financial information of reportable segment
Net Revenue:	144,262	116,036	435,843	347,498
Operating Earnings:	3,919	6,350	23,401	22,017
General Corporate
Summary of financial information of reportable segment
Operating Earnings:	$ 18,632	$ 12,018	$ 57,635	$ 36,213

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Accumulated Other Comprehensive Income (Details) - USD ($) $ in Thousands		3 Months Ended		9 Months Ended
		Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Statement of Comprehensive Income [Abstract]
Accumulated other comprehensive earnings, beginning balance		$ 1,095	$ 1,510	$ 1,695	$ 447
Net unrealized gain (loss)		451	317	(436)	2,024
Tax (expense) benefit		(124)	(89)	213	(663)
Total other comprehensive earnings before reclassifications, net of tax		327	228	(223)	1,361
Net amount reclassified to earnings(1)	[1]	(97)	(63)	(147)	(133)
Tax benefit (expense)(2)	[2]	0	0	0	0
Total amount reclassified from accumulated other comprehensive earnings, net of tax(3)	[3]	(97)	(63)	(147)	(133)
Total other comprehensive earnings (loss)		230	165	(370)	1,228
Accumulated other comprehensive earnings, ending balance		$ 1,325	$ 1,675	$ 1,325	$ 1,675

[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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Acquisitions and Contingent Purchase Obligations Acquisition and Contingent Purchase Obligations (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Purchase Price Allocation [Abstract]
Goodwill (of which $37.9 million is tax deductible)	$ 800,583		$ 724,979
Total cash paid for acquisitions	116,314	$ 347,154
Current Year Acquisitions
Purchase Price Allocation [Abstract]
Accounts receivable	3,188
Prepaid expenses and other current assets	5
Other intangibles (consisting of physician and hospital agreements)	47,851
Goodwill (of which $37.9 million is tax deductible)	75,100
Tax deductible goodwill	37,900
Accounts payable	(456)
Accrued compensation and physician payable	(484)
Other accrued liabilities	(205)
Deferred income taxes	(9,933)
Contingent purchase liabilities	(2,057)
Consideration paid for 2015 acquisitions, net of cash and cash equivalents of $83	113,009
Cash and cash equivalents	$ 83
Prior Year Acquisitions [Member]
Purchase Price Allocation [Abstract]
Total cash paid for acquisitions		$ 3,305

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Long-Term Debt (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Schedule of long-term debt
Long-term debt	$ 755,000
Current maturities of long-term debt	(200,000)	$ (227,750)
Long term debt	555,000	$ 577,500
Term A Loan Facility [Member] | Notes Payable to Banks [Member]
Schedule of long-term debt
Long-term debt	585,000
Revolving Credit Facility [Member] | Line of Credit [Member]
Schedule of long-term debt
Long-term debt	$ 170,000

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Segment Reporting

9 Months Ended

Sep. 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 September 30,				Nine Months Ended September 30,
	2014		2015		2014		2015
Net Revenue:
Healthcare Services	$	596,205	$	754,919	$	1,681,463	$	2,181,777
Other Services	116,036		144,262		347,498		435,843
	$	712,241	$	899,181	$	2,028,961	$	2,617,620
Operating Earnings:
Healthcare Services	$	34,104	$	41,290	$	90,916	$	90,627
Other Services	6,350		3,919		22,017		23,401
General Corporate	12,018		18,632		36,213		57,635
	$	52,472	$	63,841	$	149,146	$	171,663
Reconciliation of Operating Earnings to Net Earnings:
Operating earnings	$	52,472	$	63,841	$	149,146	$	171,663
Interest expense, net	3,921		5,572		10,758		14,132
Provision for income taxes	20,895		22,837		56,542		65,178
Net earnings	$	27,656	$	35,432	$	81,846	$	92,353

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Net Revenue (Tables)

9 Months Ended

Sep. 30, 2015

Revenue, Net [Abstract]

Schedule of net revenue

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

	Three Months Ended September 30,										Nine Months Ended September 30,
	2014					2015					2014					2015
Medicare	$	131,562		18.5	%	$	183,120		20.4	%	$	384,570		19.0	%	$	530,047		20.2	%
Medicaid	130,368			18.3		166,015			18.5		356,043			17.5		476,151			18.2
Commercial and managed care	340,183			47.8		462,652			51.5		948,437			46.7		1,322,652			50.5
Self-pay	414,317			58.2		496,910			55.3		1,198,063			59.0		1,405,252			53.7
Other	21,703			3.0		21,576			2.4		63,813			3.1		61,777			2.4
Unbilled	14,140			2.0		2,369			0.3		23,231			1.1		15,979			0.6
Net fee for service revenue before provision for uncollectibles	1,052,273			147.7		1,332,642			148.2		2,974,157			146.6		3,811,858			145.6
Contract revenue before provision for uncollectibles	161,278			22.7		182,631			20.3		489,323			24.1		549,998			21.0
Other	9,553			1.3		10,136			1.1		30,412			1.5		28,826			1.1
Net revenue before provision for uncollectibles	1,223,104			171.7		1,525,409			169.6		3,493,892			172.2		4,390,682			167.7
Provision for uncollectibles	(510,863		)	(71.7	)	(626,228		)	(69.6	)	(1,464,931		)	(72.2	)	(1,773,062		)	(67.7	)
Net revenue	$	712,241		100.0	%	$	899,181		100.0	%	$	2,028,961		100.0	%	$	2,617,620		100.0	%

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Goodwill and Other Intangible Assets (Details 1) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014	Dec. 31, 2014
Summary of intangible assets and related amortization
Gross Carrying Amount	$ 492,564		$ 492,564		$ 474,597
Accumulated Amortization	(165,605)		(165,605)		(133,403)
Aggregate amortization expense:
For the nine months ended September 30, 2015	20,633	$ 12,991	62,085	$ 35,203
Estimated amortization expense:
For the remainder of the year ended December 31, 2015	20,651		20,651
For the year ended December 31, 2016	80,232		80,232
For the year ended December 31, 2017	74,395		74,395
For the year ended December 31, 2018	62,103		62,103
For the year ended December 31, 2019	53,314		53,314
For the years ended December 31, 2020 and thereafter	36,264		36,264
Contracts
Summary of intangible assets and related amortization
Gross Carrying Amount	472,204		472,204		455,247
Accumulated Amortization	(156,934)		(156,934)		(126,191)
Other
Summary of intangible assets and related amortization
Gross Carrying Amount	20,360		20,360		19,350
Accumulated Amortization	$ (8,671)		$ (8,671)		$ (7,212)

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Investments (Details) - USD ($) $ in Thousands	Sep. 30, 2015	Dec. 31, 2014
Summary of amortized cost basis and aggregate fair value of available-for-sale securities by investment type
Cost Basis	$ 95,542	$ 110,392
Gross Unrealized Gains	2,352	2,619
Gross Unrealized Losses	(402)	(65)
Fair Value	97,492	112,946
Money market funds
Summary of amortized cost basis and aggregate fair value of available-for-sale securities by investment type
Cost Basis	3,957	18,577
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	3,957	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	86,432	81,120
Gross Unrealized Gains	2,290	2,619
Gross Unrealized Losses	(401)	(45)
Fair Value	88,321	83,694
Mutual funds
Summary of amortized cost basis and aggregate fair value of available-for-sale securities by investment type
Cost Basis	68	3,228
Gross Unrealized Gains	0	0
Gross Unrealized Losses	0	0
Fair Value	68	3,228
Private investments
Summary of amortized cost basis and aggregate fair value of available-for-sale securities by investment type
Cost Basis	2,999	6,464
Gross Unrealized Gains	46	0
Gross Unrealized Losses	0	(20)
Fair Value	3,045	$ 6,444
Corporate bonds
Summary of amortized cost basis and aggregate fair value of available-for-sale securities by investment type
Cost Basis	2,086
Gross Unrealized Gains	16
Gross Unrealized Losses	(1)
Fair Value	$ 2,101

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Consolidated Statements of Comprehensive Earnings (Parenthetical) (Unaudited) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014	Sep. 30, 2015	Sep. 30, 2014
Contingent purchase compensation expense recognized	$ (3,530)	$ 3,086	$ 12,230	$ 22,483
Net change in fair value of investments, tax	$ 124	$ 89	$ (213)	$ 663

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Fair Value Measurements

9 Months Ended

Sep. 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 September 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 September 30, 2015		Fair Value September 30, 2015		Fair Value Level 1		Fair Value Level 2		Fair Value Level 3
Investments of insurance subsidiaries:
Money market funds	$	3,957	$	3,957	$	3,957	$	—	$	—
Municipal bonds	88,321		88,321		—		88,321		—
Mutual funds	68		68		—		68		—
Corporate bonds	2,101		2,101		—		2,101		—
Private investments	3,045		3,045		—		—		3,045
Total investments of insurance subsidiaries	$	97,492	$	97,492	$	3,957	$	90,490	$	3,045
Supplemental employee retirement plan investments:
Mutual funds	$	41,942	$	41,942	$	—	$	41,942	$	—

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 nine months ended September 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, mutual funds, and corporate bonds 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 FASB 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 September 30, 2015, the estimated fair value of the Company’s outstanding debt was $741.9 million compared to a carrying value of $755.0 million.

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Share-based Compensation (Details 1) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2015	Sep. 30, 2014
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity based compensation expense	$ 13,197	$ 12,693
Employee Service Share-based Compensation, Tax Benefit from Compensation Expense	5,081	4,887
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	7,212	8,623
Two Thousand Nine Stock Plan [Member] | Restricted stock awards
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Equity based compensation expense	$ 5,923	$ 4,035

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Goodwill and Other Intangible Assets (Tables)

9 Months Ended

Sep. 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 nine months ended September 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	1,024
Additions through 2015 acquisitions	75,100
Change in goodwill attributable to the sale of outsourced medical coding practice	(520		)
Balance, September 30, 2015	$	800,583

Summary of intangible assets and related amortization

The following is a summary of intangible assets and related amortization as of December 31, 2014 and September 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 September 30, 2015:
Contracts	$	472,204	$	(156,934	)
Other	20,360		(8,671		)
Total	$	492,564	$	(165,605	)
Aggregate amortization expense:
For the nine months ended September 30, 2015			$	62,085
Estimated amortization expense:
For the remainder of the year ended December 31, 2015			$	20,651
For the year ended December 31, 2016			80,232
For the year ended December 31, 2017			74,395
For the year ended December 31, 2018			62,103
For the year ended December 31, 2019			53,314
For the years ended December 31, 2020 and thereafter			36,264

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Acquisitions and Contingent Purchase Obligations (Details Textual) $ / shares in Units, $ in Thousands		1 Months Ended	3 Months Ended		9 Months Ended
	Aug. 04, 2015 USD ($) $ / shares	Oct. 31, 2015 visit	Sep. 30, 2015 USD ($)	Sep. 30, 2014 USD ($)	Sep. 30, 2015 USD ($) visit Business	Sep. 30, 2014 USD ($)	Oct. 02, 2015 USD ($)	Dec. 31, 2014 USD ($)
Business Acquisition [Line Items]
Total cash paid for acquisitions					$ 116,314	$ 347,154
Number of Businesses Acquired | Business					6
Net revenue			$ 899,181	$ 712,241	$ 2,617,620	2,028,961
Long-term debt			755,000		$ 755,000
Fee for Service Patient Visits | visit					15,000,000
Estimated contingent consideration accounted for as compensation expense			49,400		$ 49,400
Accrued Contingent Purchase Liability			24,141		24,141			$ 23,584
Remaining estimated liability to be recorded as contingent purchase compensation expense			25,242		25,242
Contingent purchase compensation expense recognized			(3,530)	3,086	12,230	22,483
Recognized transaction costs			3,869	$ 3,107	7,170	5,734
Current Year Acquisitions
Business Acquisition [Line Items]
Consideration paid for 2015 acquisitions, net of cash and cash equivalents of $83			113,009		113,009
Net revenue			44,000		94,100
Estimated contingent consideration accounted for as compensation expense			6,000		6,000
Prior Year Acquisitions [Member]
Business Acquisition [Line Items]
Total cash paid for acquisitions						3,305
Changes to the purchase price allocation - Liabilities					1,900
Changes to the purchase price allocation - Intangibles					1,024
Changes to the purchase price allocation - Deferred Tax					(900)
Pending IPC Merger [Member]
Business Acquisition [Line Items]
Business Acquisition, Share Price | $ / shares	$ 80.25
Payments to Acquire Businesses, Gross	$ 1,600,000
Gain Contingency, Unrecorded Amount	47,000
Subsequent Event [Member]
Business Acquisition [Line Items]
Fee for Service Patient Visits | visit		370,000
General and Administrative Expense [Member]
Business Acquisition [Line Items]
Contingent purchase compensation expense recognized					12,230	22,483
General and Administrative Expense [Member] | Non-owner payments [Member]
Business Acquisition [Line Items]
Contingent purchase compensation expense recognized					800	$ 200
Term B Loan Facility [Member] | Pending IPC Merger [Member]
Business Acquisition [Line Items]
Debt Instrument, Face Amount	965,000
Notes Payable to Banks [Member] | Term Loan Facility [Member]
Business Acquisition [Line Items]
Debt Instrument, Face Amount			600,000		600,000
Long-term debt			585,000		585,000
Revolving Credit Facility [Member] | Line of Credit [Member]
Business Acquisition [Line Items]
Line of Credit Facility, Current Borrowing Capacity			650,000		650,000
Long-term debt			170,000		170,000
Line of Credit [Member] | Pending IPC Merger [Member]
Business Acquisition [Line Items]
Debt Instrument, Face Amount	545,000
Maximum [Member] | Term B Loan Facility [Member] | Subsequent Event [Member] | Pending IPC Merger [Member]
Business Acquisition [Line Items]
Debt Instrument, Face Amount							$ 1,150,000
Maximum [Member] | Term Loan Facility [Member] | Pending IPC Merger [Member]
Business Acquisition [Line Items]
Debt Instrument, Face Amount	$ 588,750
Maximum [Member] | New Term B Loan and Senior Bridge Facility Combined [Member] | Subsequent Event [Member] | Pending IPC Merger [Member]
Business Acquisition [Line Items]
Debt Instrument, Face Amount							1,950,000
Maximum [Member] | Revolving Credit Facility [Member] | Line of Credit [Member] | Pending IPC Merger [Member]
Business Acquisition [Line Items]
Line of Credit Facility, Current Borrowing Capacity			$ 650,000		$ 650,000
Maximum [Member] | Line of Credit [Member] | Subsequent Event [Member] | Pending IPC Merger [Member]
Business Acquisition [Line Items]
Debt Instrument, Face Amount							$ 1,000,000

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Accumulated Other Comprehensive Income

9 Months Ended

Sep. 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 September 30,						Nine Months Ended September 30,
	2014			2015			2014			2015
Balance at beginning of period	$	1,510		$	1,095		$	447		$	1,695
Other comprehensive earnings:
Net unrealized gain (loss)	317			451			2,024			(436		)
Tax (expense) benefit	(89		)	(124		)	(663		)	213
Total other comprehensive earnings before reclassifications, net of tax	228			327			1,361			(223		)
Net amount reclassified to earnings(1)	(63		)	(97		)	(133		)	(147		)
Tax benefit (expense)(2)	—			—			—			—
Total amount reclassified from accumulated other comprehensive earnings, net of tax(3)	(63		)	(97		)	(133		)	(147		)
Total other comprehensive earnings (loss)	165			230			1,228			(370		)
Balance at end of period	$	1,675		$	1,325		$	1,675		$	1,325

(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.