EX-10.6

Exhibit 10-6

Executive Employment Agreement

This Employment Agreement (the “Agreement”), entered into on October ___, 2017,  is by and between Brad Ferguson (the “Executive”) and Cotiviti USA, LLC, a Delaware limited liability company (the “Employer”).

RECITALS

WHEREAS, the Employer, the Company and the Executive have agreed to a material change to his/her Annual Base Salary and Annual Bonus.

WHEREAS, the Employer and the Company desires to assure itself of the services of the Executive by engaging the Executive to perform services under the terms hereof.

WHEREAS, the Executive desires to provide services to the Company on the terms herein provided.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, including the respective covenants and agreements set forth below, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree, effective as of the Effective Date, as follows:

1. Certain Definitions

(a) “Affiliate” shall mean, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, such Person where “control” shall have the meaning given such term under Rule 405 of the Securities Act of 1933, as amended from time to time.

(b) “Agreement” shall have the meaning set forth in the preamble hereto.

(c) “Annual Base Salary” shall have the meaning set forth in Section 3(a).

(d) “Annual Bonus” shall have the meaning set forth in Section 3(b).

(e) “Benefit Continuation Period” shall have the meaning set forth in Section 5(b).

(f) “Board” shall mean the Board of Directors of the Company.

(g) “Business” shall mean the provision of payment integrity services, including payment policy management, recovery audit services, and prepay data mining services, 

for clients in the healthcare and retail sectors, and the creation and implementation of related analytics, data optimization and data standardization processes and services.

(h) The Employer shall have “Cause” to terminate the Executive’s employment hereunder upon: (i) the willful misconduct or an act of dishonesty of the Executive with regard to the Company or any of its Affiliates, which in either case, results in material harm to the Company or such Affiliate; (ii) the willful and continued failure of the Executive to perform his duties with the Employer or any of its Affiliates (other than any such failure resulting from Disability), which failure is not remedied within 30 days after receiving written notice thereof; (iii) the indictment of the Executive of (or the plea by the Executive of guilty or nolo contendere to) any felony or conviction of a misdemeanor involving moral turpitude ; or (iv) a material breach by the Executive of any material provision of this Agreement or material policy of the Company, or any other written agreement with the Company or its Affiliates, which breach is not remedied within 10 days after receiving written notice thereof.

(i) “Change of Control” shall mean any arm’s-length transaction or a series of related arm’s-length transactions as a result of which any Person or group of Persons shall (A) acquire (whether by purchase, exchange, tender offer, merger, consolidation, recapitalization, redemption, reorganization, issuance of capital stock or otherwise), directly or indirectly, more than 50% of the voting power of the Company or more than 50% of the Company’s Common Stock issued and outstanding immediately prior to such transaction or series of transactions, or (B) acquire assets constituting all or substantially all of the assets of the Company; provided,  however, that in no event shall a Change of Control be deemed to include (i) any transaction effected solely for the purpose, and having the sole effect, of (A) changing, directly or indirectly, the domicile or form of organization or the organizational structure of the Company or any of its Subsidiaries or (B) contributing assets or equity to entities controlled by the Company (or owned by the stockholders of the Company in substantially the same proportions as the stockholders own of the Company immediately prior to such contribution).

(j) “Code” shall mean the Internal Revenue Code of 1986, as amended.

(k) “Company” shall mean Connolly Superholdings, Inc., a Delaware Corporation.

(l) “Date of Termination” shall mean (i) if the Executive’s employment is terminated due to the Executive’s death, the date of the Executive’s death; (ii) if the Executive’s employment is terminated due to the Executive’s Disability, the date determined pursuant to Section 4(a)(ii); or (iii) if the Executive’s employment is terminated pursuant to Section 4(a)(iii)-(vi) either the date indicated in the Notice of Termination or the date specified by the Employer pursuant to Section 4(b), whichever is earlier.

(m) “Disability” shall mean the Executive’s inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or that can be expected to last for a continuous period of not less than 180 days in any consecutive 360 day period.

(n) “Effective Date” shall have the meaning set forth in the recitals hereto.

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(o) “Employer” shall have the meaning set forth in the preamble hereto.

(p) “Executive” shall have the meaning set forth in the preamble hereto.

(q) The Executive shall have “Good Reason” to terminate the Executive’s employment hereunder after the occurrence of one or more of the following conditions without the Executive’s consent: (i) any material adverse change by the Employer in the Executive’s Annual Base Salary, position, duties, responsibilities, authority, title or reporting obligations, or the assignment of duties to the Executive by the Employer or its Affiliates that are materially inconsistent with the Executive’s position; (ii) a material change in the geographic location at which the Employer or its Affiliates requires the Executive to be based, such that the Executive’s principal office moves at least 50 miles; or (iii) any other material breach by the Employer of a material provision of this Agreement or any other written agreement with the Executive. Notwithstanding the foregoing, no termination for Good Reason will be effective unless: (A) the Executive provides the Employer with at least thirty (30) days prior written notice of his intent to resign for Good Reason (which notice must be provided within sixty (60) days following the occurrence of the event(s) purported to constitute Good Reason); (B) the Employer has not remedied the alleged violation(s) within the thirty (30) day period; and (C) the Executive’s resignation becomes effective no later than thirty (30) days after the Employer has either failed to cure such event or indicated that it will not cure such event.

(r) “Notice of Termination” shall have the meaning set forth in Section 4(b).

(s) “Person” shall mean any individual, natural person, corporation (including any non-profit corporation), general partnership, limited partnership, limited liability partnership, joint venture, estate, trust, company (including any company limited by shares, limited liability company or joint stock company), incorporated or unincorporated association, governmental authority, firm, society or other enterprise, organization or other entity of any nature.

(t) “Release” shall have the meaning set forth in Section 5(b).

(u) “Release Expiration Date” shall have the meaning set forth in Section 20(c).

(v) “Section 409A” shall mean Section 409A of the Code and the Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the Effective Date.

(w) “Severance Period” shall have the meaning set forth in Section 5(b).

(x) “Term” shall have the meaning set forth in Section 2(a).

2. Employment

(a) Term. The Employer hereby employs the Executive, and the Executive hereby accepts such employment, in each case pursuant to the terms of this Agreement, for the

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period commencing on October 31, 2017 (the “Effective Date”), and ending on the date of termination of the Executive’s employment in accordance with Section 4 hereof (the “Term”).

(b) Position and Duties. During the Term, the Executive: (i) shall serve as Senior Vice President and Chief Financial Officer of the Company, with responsibilities, duties and authority customary for such position, subject to direction by the Company’s Chief Executive Officer; (ii) shall report directly to the Company’s Chief Executive Officer; (iii) shall devote substantially all the Executive’s working time and efforts to the business and affairs of the Company and its Affiliates; and (iv) agrees to observe and comply with the Employer’s rules and policies as adopted by the Employer from time to time. The parties acknowledge and agree that Executive’s duties, responsibilities and authority may include services for one or more Affiliates of the Employer. 

3. Compensation and Related Matters

(a) Annual Base Salary. During the Term, the Executive shall receive a base salary at a rate of $435,000 per annum, which shall be paid in accordance with the customary payroll practices of the Employer, subject to review by the Board in its sole discretion (the “Annual Base Salary”).

(b) Annual Bonus. With respect to each Company fiscal year that commences during the Term, the Executive shall be eligible to receive an annual performance-based cash bonus (the “Annual Bonus”) with a target amount of 70%  of the Annual Base Salary earned during such fiscal year, which shall be payable based upon the attainment of individual and Company performance goals established each fiscal year by the Board or the Compensation Committee thereof. Each such Annual Bonus shall be payable on, or at such date as is determined by the Board within 90 days following, the last day of the fiscal year with respect to which it relates. Except as provided in Section 5, notwithstanding any other provision of this Section 3(b), no bonus shall be payable with respect to any fiscal year unless the Executive remains continuously employed with the Employer during the period beginning on the Effective Date and ending on the applicable bonus payment date.

(c) Benefits. During the Term, the Executive shall be eligible to participate in employee benefit plans, programs and arrangements of the Employer in accordance with their terms, as in effect from time to time, and as are generally provided by the Employer to its senior executive officers.

(d) Vacation; Holidays. During each calendar year during the Term, the Executive shall also be entitled to vacation time and paid holidays on the same basis as other senior executives of the Employer, subject to the terms and conditions of the Employer’s vacation and holiday policies as in effect from time to time.

(e) Business Expenses. During the Term, the Employer shall reimburse the Executive for all reasonable, documented, out-of-pocket travel and other business expenses incurred by the Executive in the performance of the Executive’s duties to the Company and its Affiliates in accordance with the Employer’s applicable expense reimbursement policies and procedures.

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(f) Indemnification.During the Term and for so long thereafter as liability exists with regard to the Executive’s activities during the Term on behalf of the Company and its Affiliates, the Employer or its Affiliates shall indemnify the Executive (other than in connection with the Executive’s gross negligence or willful misconduct) in accordance with the Employer’s customary indemnification policies and procedures which are applicable to the Employer’s officers and directors.

4. Termination

. During the Term, the Executive’s employment hereunder may be terminated by the Employer or the Executive, as applicable, without any breach of this Agreement only under the following circumstances:

(a) Circumstances

(i) Death. The Executive’s employment hereunder shall terminate upon the Executive’s death.

(ii) Disability. If the Executive incurs a Disability, the Employer may give the Executive written notice of its intention to terminate the Executive’s employment. In that event, the Executive’s employment with the Employer and its Affiliates shall terminate, effective on the later of the thirtieth (30th) day after receipt of such notice by the Executive or the date specified in such notice; provided that, within the thirty (30) day period following receipt of such notice, the Executive shall not have returned to full-time performance of the Executive’s duties hereunder.

(iii) Termination for Cause. The Employer may terminate the Executive’s employment for Cause.

(iv) Termination without Cause. The Employer may terminate the Executive’s employment without Cause.

(v) Resignation for Good Reason. The Executive may resign from the Executive’s employment for Good Reason.

(vi) Resignation without Good Reason. The Executive may resign from the Executive’s employment without Good Reason.

(b) Notice of Termination. Any termination of the Executive’s employment by the Employer or by the Executive under this Section 4 (other than a termination pursuant to Section 4(a)(i) above) shall be communicated by a written notice to the other party hereto (a “Notice of Termination”): (i) indicating the specific termination provision in this Agreement relied upon, (ii) except with respect to a termination pursuant to Sections 4(a)(iv) or (vi), setting forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated, and (iii) specifying a Date of Termination which, if submitted by the Executive, shall be at least thirty (30) days following the date of such notice; provided,  however, that a Notice of Termination delivered by the Employer pursuant to Section 4(a)(ii) shall not be required to specify a Date of Termination, in which case the Date of Termination shall be determined pursuant to Section 4(a)(ii); provided;  further, that, notwithstanding the foregoing, in the event that the Executive delivers a Notice of Termination to

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the Employer, the Employer may, in its sole discretion, accelerate the Date of Termination to any date that occurs following the date of Employer’s receipt of such Notice of Termination (even if such date is prior to the date specified in such Notice of Termination). A Notice of Termination submitted by the Employer (other than a Notice of Termination under Section 4(a)(ii)) may provide for a Date of Termination on the date the Executive receives the Notice of Termination, or any date thereafter elected by the Employer in its discretion. The failure by the Employer or the Executive to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause or Good Reason shall not waive any right of the Employer or the Executive hereunder or preclude the Employer or the Executive from asserting such fact or circumstance in enforcing the Employer’s or the Executive’s rights hereunder.

5. Company Obligations Upon Termination of Employment

(a) In General. Upon a termination of the Executive’s employment for any reason, the Executive (or the Executive’s estate) shall be entitled to receive: (i) any portion of the Executive’s Annual Base Salary through the Date of Termination not theretofore paid, (ii) any expenses owed to the Executive under Section 3(e), (iii) any accrued but unused vacation pay owed to the Executive pursuant to Section 3(d), and (iv) any amount arising from the Executive’s participation in, or benefits under, any employee benefit plans, programs or arrangements under Section 3(c), which amounts shall be payable in accordance with the terms and conditions of such employee benefit plans, programs or arrangements. Except as otherwise set forth in Section 5(b) below, the payments and benefits described in this Section 5(a) shall be the only payments and benefits payable in the event of the Executive’s termination of employment for any reason.

(b) Termination without Cause or for Good Reason. In the event of the Executive’s termination of employment by the Employer without Cause pursuant to Section 4(a)(iv) or by the Executive for Good Reason pursuant to Section 4(a)(v), in addition to the payments and benefits described in Section 5(a) above, the Employer shall, subject to Section 20 and Section 5(c) and subject to the Executive’s execution and non-revocation of a waiver and release of claims agreement in the Employer’s customary form (a “Release”), as of the Release Expiration Date, in accordance with Section 20(c):

(i) Pay to the Executive an amount equal to twelve (12) months of Annual Base Salary at the rate in effect immediately prior to the Date of Termination, payable in a single lump sum;

(ii) Pay to the Executive an amount equal to the product of (A) the amount of the Annual Bonus that would have been payable to the Executive pursuant to Section 3(b) if the Executive was still employed as of the applicable bonus payment date in respect of the fiscal year in which the Date of Termination occurs based on actual individual and Company performance goals in such year and (B) the ratio of (x) the number of full weeks elapsed during the fiscal year during which such termination of employment occurs on or prior to the Date of Termination, to (y) 52. Any amount payable pursuant to this Section 5(b)(ii) shall, subject to Section 20 and Section 5(c), be paid to Executive in accordance with Section 3(b) as if the Executive was still employed on the applicable bonus payment date, but in no event earlier than January 1, or later than December 31, of the calendar year immediately following the calendar year in which the Date of Termination occurs; and 

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(iii) If the Executive elects to continue coverage under the Employer’s group medical and dental plans in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Employer will pay to the Executive an amount equal to the premium cost of the Executive’s coverage and that of the Executives eligible dependents under those plans for a period of twelve (12) months (the “Benefit Continuation Period”), at the same rate the Employer contributed to the Executive’s premium cost of coverage on the Termination Date. The Employer will make such premium contributions by direct deposit to the Executive in a single lump sum payment on the same date as any amount payable to the Executive pursuant to Section 5(b)(i). The Executive must directly pay the full premium costs during the Benefit Continuation Period plus an administrative fee of up to 2% of such premium costs. The Executive acknowledges and agrees that he or she is not an “assistance eligible individual”, as that term is defined in the amendments to COBRA made by the enactment of the American Recovery and Reinvestment Act of 2009.

(c) Termination following a Change of Control. In the event of the Executive’s termination of employment by the Employer without Cause pursuant to Section 4(a)(iv) or by the Executive for Good Reason pursuant to Section 4(a)(v) within one year following a Change of Control, then in addition to the payments and benefits described in Sections 5(a) and 5(b) above, the Executive shall be entitled to receive accelerated vesting for 100% of all unvested equity awards that are subject to time-based vesting held by the Executive immediately prior to the Change of Control.

(d) Breach of Restrictive Covenants. Notwithstanding any other provision of this Agreement, no payment or benefit shall be made or provided pursuant to Section 5(b) following the date the Executive first violates any of the restrictive covenants set forth in Section 6 or any other written agreement between the Executive and the Employer or any of its Affiliates. 

(e) Complete Severance. The provisions of this Section 5 shall supersede in their entirety any severance payment or benefit obligations to the Executive pursuant to the provisions in any severance plan, policy, program or other arrangement maintained by the Employer or any of its Affiliates.

6. Restrictive Covenants. In consideration for the potential payments to the Executive hereunder, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Executive agrees to the following:

(a) Confidentiality. The Executive shall not, at any time during the Term or at any time thereafter, directly or indirectly, use for the benefit of himself or any third party or disclose to any Person, firm, company or other entity (other than the Company or any of its Affiliates) any Confidential Information without the prior written consent of the Employer or the Company, except (i) as required in the performance of his duties to the Employer and its Affiliates, (ii) to the extent that the Executive is required by law, subpoena or court order to disclose any Confidential Information (provided that in such case, the Executive shall (1) provide the Employer with the earliest notice possible that such disclosure is or may be required, (2) reasonably cooperate with the Employer and its Affiliates, at the Employer’s expense, in protecting, to the maximum extent legally permitted, the confidential or proprietary nature of such Confidential Information and (3) disclose only that Confidential Information which he is legally required to disclose), (iii)

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disclosing information that has been or is hereafter made public through no act or omission of the Executive in violation of this Agreement or any other confidentiality obligation or duty owed to the Employer or its Affiliates, (iv) disclosing information and documents to his attorney or tax adviser for the purpose of securing legal or tax advice (provided that such Persons agree to keep such information confidential) or (v) disclosing only the post-employment restrictions in this Agreement in confidence to any potential new employer. The Executive shall take all actions necessary to protect the integrity of the business plans, customer lists, statistical data and compilations, agreements, contracts, manuals or other materials, in whatever form, of the Company and its Affiliates that contain Confidential Information, and upon the termination of the Executive’s employment, the Executive agrees that all Confidential Information in his possession or under his control, directly or indirectly, that is in writing, computer generated or other tangible form (together with all duplicates thereof) will forthwith be returned to the Company and will not be retained by the Executive or furnished to any Person, either by sample, facsimile, film, audio or video cassette, electronic data, verbal communication or any other means of communication. The Executive agrees that the provisions of this Section 6 are reasonable and necessary to protect the proprietary rights of the Company and its Affiliates in the Confidential Information and trade secrets, goodwill and reputation. In addition, the terms and conditions of this Agreement shall remain strictly confidential, and the Executive shall not disclose the terms and conditions hereof to any Person, other than immediate family members, legal advisors or personal tax or financial advisors, provided that each such Person agrees to keep such terms and conditions confidential.

(b) Non-Competition. The Executive shall not, during the Term and for a period of two (2) years thereafter (the “Non-Compete Period”), directly or indirectly, whether for himself or on behalf of any other Person, engage in, own, manage, operate, advise, provide financing to, control or participate in the ownership, management or control of, or be connected as an officer, employee, partner, director, or otherwise with, or have any financial interest (whether as a stockholder, director, officer, partner, consultant, proprietor, agent or otherwise) in, or aid or assist anyone else in the conduct of, any business that competes, directly or indirectly, with the Company or any of its Affiliates in the Business or is otherwise engaged in activities competitive with the Company or any of its Affiliates in the Business, in any jurisdiction in the United States of America (including, without limitation, the states of Connecticut, Georgia, Pennsylvania, Kentucky, Massachusetts, Minnesota, Texas and Utah), or any other country in the world where the Company or any of its Affiliates are engaged in the Business (the “Restricted Area”). The Executive agrees that the Restricted Area is reasonable taking into consideration the nature and scope of the operations of the Company and its Affiliates in the Business and the Executive’s role in such operations. It shall not be a violation of this Section 6(b) for the Executive to own less than one percent (1%) of the outstanding shares of a corporation that is engaged in the Business whose shares are listed on a national stock exchange or traded in accordance with the automated quotation system of the National Association of Securities Dealers.

(c) Non-Solicitation. The Executive shall not, during the Non-Compete Period, either directly or indirectly, and whether for himself or on behalf of any other Person; (i) seek to persuade any employee of the Company or any of its Affiliates to discontinue or diminish his or her employment therewith or seek to persuade any employee or former employee of the Company or any of its Affiliates (who was employed by the Company or any of its Affiliates at any time during the twelve (12) month period prior to the termination of the Executive’s employment with the Employer) to become employed or to provide consulting or contract services to a business

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competitive with the Company or its Affiliates in the Business; (ii) solicit, employ or engage, or cause to be solicited, employed, or engaged, any person who is or was employed by the Company or any of its Affiliates at any time during the twelve (12) month period prior to the termination of the Executive’s employment with the Employer; or (iii) solicit, encourage, or induce any contractor, agent, client, customer, supplier, or the like of the Company or any of its Affiliates to terminate or diminish its/his relationship with, the Company or any of its Affiliates, or to refrain from entering into a relationship with the Company or any of its Affiliates, including, without limitation, any prospective contact, contractor, agent, client, customer, or the like of the Company or any of its Affiliates; provided,  however, that the foregoing shall not prohibit the Executive from placing any general advertisements for employees and hiring individuals that respond to such general advertisements, so long as such general advertisements are not directed to any employees of the Company or any of its Affiliates.

(d) Non-Disparagement. The Executive agrees not to disparage the Company or the Employer, any of their products or practices, or any of their directors, officers, agents, representatives, partners, members, equity holders or Affiliates, either orally or in writing, at any time, and the Employer agrees to instruct the Employer’s and the Company’s directors and officers as of the Date of Termination not to disparage the Executive, either orally or in writing, at any time; provided that the Executive, the Company and its Affiliates, and their respective directors and officers, may confer in confidence with their respective legal representatives and make truthful statements as required by law.

(e) Remedies. In addition to whatever other rights and remedies the Company and its Affiliates may have at equity or in law (including, without limitation, the right to seek monetary damages), if the Executive breaches any of the provisions contained in this Section 6, (i) the Company and its Affiliates shall have the right immediately to terminate the Executive’s right to any amounts payable under this Agreement and (ii) the Company and its Affiliates shall have the right to injunctive relief, without the requirement to prove actual damages or to post any bond or other security, and to obtain the costs and reasonable attorneys’ fees they incur in enforcing their rights under this Agreement. The Executive acknowledges that (A) his breach of this Section 6 would cause irreparable injury to the Company and/or its Affiliates, (B) money damages alone would not provide an adequate remedy for the Company or its Affiliates, (C) his services to the Company are special, unique and extraordinary, and (D) the restrictions in this Section 6 (x) are no greater than required to protect the Company’s legitimate protectable interests (including, without limitation, the Confidential Information and the Company’s goodwill), (y) do not impose undue hardship on the Executive, and (z) are reasonable in duration and geographic scope. The Executive further acknowledges that (I) any breach or claimed breach of the provisions set forth in this Agreement shall not be a defense to enforcement of the restrictions set forth in this Section 6 and (II) the circumstances of the Executive’s termination of employment with the Employer and its Affiliates shall have no impact on his obligations under this Section 6.

(f) Blue Pencil. In the event the terms of this Section 6 shall be determined by any court of competent jurisdiction to be unenforceable by reason of its extending for too great a period of time or over too great a geographical area or by reason of its being too extensive in any other respect, it will be interpreted to extend only over the maximum period of time for which it may be enforceable, over the maximum geographical area as to which it may be enforceable, or to

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the maximum extent in all other respects as to which it may be enforceable, all as determined by such court in such action. 

(g) Tolling During Periods Of Breach. The Executive and the Employer agree and intend that the Executive’s obligations under this Section 6 be tolled during any period that the Executive is in breach of any of the obligations under this Section 6, so that the Company and each Affiliate of the Company are provided with the full benefit of the restrictive periods set forth herein.

(h) Third Party Beneficiary. The Company and each Affiliate of the Company are intended third party beneficiaries of the terms of this Section 6 and shall have the right to enforce the provisions of this Section 6 as if they were a party hereto. 

(i) Survival. The Executive’s obligations under this Section 6 shall survive the termination of this Agreement and the termination of his employment with the Employer.

7. Assignment and Successors

. The Employer may assign its rights and obligations under this Agreement to any entity, including any successor to all or substantially all the assets of the Company, by merger or otherwise, and may assign or encumber this Agreement and its rights hereunder as security for indebtedness of the Employer and its Affiliates. The Executive may not assign the Executive’s rights or obligations under this Agreement to any individual or entity. This Agreement shall be binding upon and inure to the benefit of the Company, the Employer, the Executive and their respective successors, assigns, personnel and legal representatives, executors, administrators, heirs, distributees, devisees, and legatees, as applicable.

8. Governing Law; Venue

. All issues and questions concerning the application, construction, validity, interpretation and enforcement of this Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any principles of conflicts of law, whether of the State of Delaware or any other jurisdiction. Each of the parties hereto agrees that any legal action or proceeding with respect to this Agreement shall be brought exclusively in the United States District Court for the Southern District of New York, located in New York, New York, unless the parties to any such action or dispute mutually agree to waive this provision. By execution and delivery of this Agreement, each of the parties hereto irrevocably consents to service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, or by recognized express carrier or delivery service, to the applicable party at his, her or its address referred to herein. Each of the parties hereto irrevocably waives any objection which he, she or it may now or hereafter have to the laying of venue of any of the aforementioned actions or proceedings arising out of or in connection with this Agreement, or any related agreement, certificate or instrument referred to above, brought in the courts referred to above and hereby further irrevocably waives and agrees, to the fullest extent permitted by applicable law, not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in any inconvenient forum. Nothing herein shall affect the right of any party to serve process in any other manner permitted by law.

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9. Validity

. The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. 

10. Notices

. Any notice, request, claim, demand, document and other communication hereunder to any party hereto shall be effective upon receipt (or refusal of receipt) and shall be in writing and delivered personally or sent by a reputable national overnight carrier or certified or registered mail, postage prepaid, to the following address (or at any other address as any party hereto shall have specified by notice in writing to the other party hereto):

(a) If to the Employer:

Cotiviti

Attn: General Counsel

115 Perimeter Center Place, Suite 700

Atlanta, GA 30346

(b) If to the Executive, at the address set forth on the signature page hereto.

11. Counterparts

. This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement.

12. Entire Agreement

. The terms of this Agreement (together with any other agreements and instruments contemplated hereby or referred to herein) is intended by the parties hereto to be the final expression of their agreement with respect to the employment of the Executive by the Employer and may not be contradicted by evidence of any prior or contemporaneous agreement (including, without limitation, any term sheet or offer letter). The parties hereto further intend that this Agreement shall constitute the complete and exclusive statement of its terms and that no extrinsic evidence whatsoever may be introduced in any judicial, administrative, or other legal proceeding to vary the terms of this Agreement.

13. Amendments; Waivers

. This Agreement may not be modified, amended, or terminated except by an instrument in writing, signed by the Executive and a duly authorized officer of the Employer and approved by the Board, which expressly identifies the amended provision of this Agreement. By an instrument in writing similarly executed and approved by the Board, the Executive or a duly authorized officer of the Employer may waive compliance by the other party or parties hereto with any provision of this Agreement that such other party was or is obligated to comply with or perform; provided,  however, that such waiver shall not operate as a waiver of, or estoppel with respect to, any other or subsequent failure to comply or perform. No failure to exercise and no delay in exercising any right, remedy, or power hereunder shall preclude any other or further exercise of any other right, remedy, or power provided herein or by law or in equity.

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14. No Inconsistent Actions

. The parties hereto shall not voluntarily undertake or fail to undertake any action or course of action inconsistent with the provisions or essential intent of this Agreement. Furthermore, it is the intent of the parties hereto to act in a fair and reasonable manner with respect to the interpretation and application of the provisions of this Agreement.

15. Construction

. This Agreement shall be deemed drafted equally by both of the parties hereto. Its language shall be construed as a whole and according to its fair meaning. Any presumption or principle that the language is to be construed against any party hereto shall not apply. The headings in this Agreement are only for convenience and are not intended to affect construction or interpretation. Any references to paragraphs, subparagraphs, sections or subsections are to those parts of this Agreement, unless the context clearly indicates to the contrary. Also, unless the context clearly indicates to the contrary, (a) the plural includes the singular and the singular includes the plural; (b) “and” and “or” are each used both conjunctively and disjunctively; (c) “any,” “all,” “each,” or “every” means “any and all,” and “each and every”; (d) ”includes” and “including” are each “without limitation”; (e) “herein,” “hereof,” “hereunder” and other similar compounds of the word “here” refer to the entire Agreement and not to any particular paragraph, subparagraph, section or subsection; and (f) all pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural as the identity of the Persons referred to may require.

16. Enforcement

. If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws effective during the term of this Agreement, such provision shall be fully severable; this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a portion of this Agreement; and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance from this Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable provision there shall be added automatically as part of this Agreement a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and be legal, valid and enforceable.

17. Withholding

. The Employer and its Affiliates shall be entitled to withhold from any amounts payable under this Agreement, any federal, state, local or foreign withholding or other taxes or charges which the Employer or any of its Affiliates is required to withhold. The Employer and its Affiliates shall be entitled to rely on an opinion of counsel if any questions as to the amount or requirement of withholding shall arise.

18. Absence of Conflicts; Executive Acknowledgement; Confidentiality

. The Executive hereby represents that from and after the Effective Date the performance of the Executive’s duties hereunder will not breach any other agreement to which the Executive is a party. The Executive acknowledges that the Executive has read and understands this Agreement, is fully aware of its legal effect, has not acted in reliance upon any representations or promises made by the Employer or any of its Affiliates other than those contained in writing herein, and has entered into this Agreement freely based on the Executive’s own judgment. The Executive agrees not to disclose the terms or existence of this Agreement to any Person unless the Employer agrees to such disclosure in advance and in writing; provided that the Executive may, without such permission, make such disclosures as are required by applicable law, including disclosures to taxing agencies, and disclose the terms of this Agreement to the Executive’s attorney(s), accountant(s), tax

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advisor(s), and other professional service provider(s), and to members of the Executive’s immediate family, as reasonably necessary; provided,  further, that the Executive instructs such Person(s) that the terms of this Agreement are strictly confidential and are not to be revealed to anyone else except as required by applicable law.

19. Survival

. The expiration or termination of the Term shall not impair the rights or obligations of any party hereto which shall have accrued prior to such expiration or termination (including, without limitation, pursuant to the provisions of Section 6 hereof).

20. Section 409A.

(a) General. The parties hereto acknowledge and agree that, to the extent applicable, this Agreement shall be interpreted in accordance with, and incorporate the terms and conditions required by, Section 409A. Notwithstanding any provision of this Agreement to the contrary, in the event that the Employer determines that any amounts payable hereunder will be immediately taxable to the Executive under Section 409A, the Employer reserves the right (without any obligation to do so or to indemnify the Executive for failure to do so) to (i) adopt such amendments to this Agreement and appropriate policies and procedures, including amendments and policies with retroactive effect, that the Employer determines to be necessary or appropriate to preserve the intended tax treatment of the benefits provided by this Agreement, to preserve the economic benefits of this Agreement and to avoid less favorable accounting or tax consequences for the Employer and/or (ii) take such other actions as the Employer determines to be necessary or appropriate to exempt the amounts payable hereunder from Section 409A or to comply with the requirements of Section 409A and thereby avoid the application of penalty taxes thereunder. Notwithstanding anything herein to the contrary, in no event shall any liability for failure to comply with the requirements of Section 409A be transferred from the Executive or any other individual to the Employer or any of its Affiliates, employees or agents pursuant to the terms of this Agreement or otherwise.

(b) Separation from Service under Section 409A. Notwithstanding any provision to the contrary in this Agreement: (i) no amount shall be payable pursuant to Section 5(b) unless the termination of the Executive’s employment constitutes a “separation from service” within the meaning of Section 1.409A-1(h) of the Department of Treasury Regulations; (ii) for purposes of Section 409A, the Executive’s right to receive installment payments pursuant to Section 5(b) shall be treated as a right to receive a series of separate and distinct payments; and (iii) to the extent that any reimbursement of expenses or in-kind benefits constitutes “deferred compensation” under Section 409A, such reimbursement or benefit shall be provided no later than December 31 of the year following the year in which the expense was incurred. The amount of expenses reimbursed in one year shall not affect the amount eligible for reimbursement in any subsequent year. The amount of any in-kind benefits provided in one year shall not affect the amount of in-kind benefits provided in any other year. Notwithstanding any provision to the contrary in this Agreement, if the Executive is deemed at the time of his separation from service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, to the extent delayed commencement of any portion of the termination benefits to which the Executive is entitled under this Agreement is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, such portion of the Executive’s termination benefits shall not be provided to the Executive prior to the earlier of (A) the expiration of the six-month period

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measured from the date of the Executive’s “separation from service” with the Company (as such term is defined in the Treasury Regulations issued under Section 409A of the Code) or (B) the date of the Executive’s death; upon the earlier of such dates, all payments deferred pursuant to this sentence shall be paid in a lump sum to the Executive, and any remaining payments due under the Agreement shall be paid as otherwise provided herein.

(c) Release. Notwithstanding anything to the contrary in this Agreement, to the extent that any payments of “nonqualified deferred compensation” (within the meaning of Section 409A) due under this Agreement as a result of the Executive’s termination of employment are subject to the Executive’s execution, delivery and non-revocation of a Release, (i) the Employer shall deliver the Release to the Executive within seven (7) days following the Date of Termination, and (ii) if the Executive fails to execute the Release on or prior to the Release Expiration Date (as defined below) or timely revokes his acceptance of the Release thereafter, the Executive shall not be entitled to any payments or benefits otherwise conditioned on the Release. For purposes of this Section 20(c), “Release Expiration Date” shall mean the date that is twenty-one (21) days following the date upon which the Employer timely delivers the Release to the Executive, or, in the event that the Executive’s termination of employment is “in connection with an exit incentive or other employment termination program” (as such phrase is defined in the Age Discrimination in Employment Act of 1967), the date that is forty-five (45) days following such delivery date. To the extent that any payments of nonqualified deferred compensation (within the meaning of Section 409A) due under this Agreement as a result of the Executive’s termination of employment are delayed pursuant to Section 5(b) and this Section 20(c), such amounts shall be paid in a lump sum on the first payroll date to occur on or after the 60th day following the Date of Termination, provided that, as of such 60th day, the Executive has executed and has not revoked the Release (and any applicable revocation period has expired). 

21. Compensation Recovery Policy. The Executive acknowledges and agrees that, to the extent the Employer or the Company adopts any clawback or similar policy pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act or otherwise, and any rules and regulations promulgated thereunder, he shall take all action necessary or appropriate to comply with such policy (including, without limitation, entering into any further agreements, amendments or policies necessary or appropriate to implement and/or enforce such policy).

[Signature pages follow]

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Exhibit 10-6

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date and year first above written, effective as of the Effective Date.

Cotiviti USA, LLC

By: __________________________________

Dorie Ramey

Senior Vice President, Human Resources

Executive

By: __________________________________

Brad Ferguson

3108 East Pine Valley Road

Atlanta, GA 30305

EX-10.7

Exhibit 10-7

Executive Employment Agreement

This Employment Agreement (the “Agreement”), entered into on October 23, 2017,  is by and between Nord Samuelson (the “Executive”) and Cotiviti USA, LLC, a Delaware limited liability company (the “Employer”).

RECITALS

WHEREAS, the Employer and the Company desires to assure itself of the services of the Executive by engaging the Executive to perform services under the terms hereof.

WHEREAS, the Executive desires to provide services to the Company on the terms herein provided.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, including the respective covenants and agreements set forth below, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree, effective as of the Effective Date, as follows:

1. Certain Definitions

(a) “Affiliate” shall mean, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, such Person where “control” shall have the meaning given such term under Rule 405 of the Securities Act of 1933, as amended from time to time.

(b) “Agreement” shall have the meaning set forth in the preamble hereto.

(c) “Annual Base Salary” shall have the meaning set forth in Section 3(a).

(d) “Annual Bonus” shall have the meaning set forth in Section 3(b).

(e) “Benefit Continuation Period” shall have the meaning set forth in Section 5(b).

(f) “Board” shall mean the Board of Directors of the Company.

(g) “Business” shall mean the provision of payment integrity services, including payment policy management, recovery audit services, and prepay data mining services, for clients in the healthcare and retail sectors, and the creation and implementation of related analytics, data optimization and data standardization processes and services.

(h) The Employer shall have “Cause” to terminate the Executive’s employment hereunder upon: (i) the willful misconduct or an act of dishonesty of the Executive with regard to

the Company or any of its Affiliates, which in either case, results in material harm to the Company or such Affiliate; (ii) the willful and continued failure of the Executive to perform his duties with the Employer or any of its Affiliates (other than any such failure resulting from Disability), which failure is not remedied within 30 days after receiving written notice thereof; (iii) the indictment of the Executive of (or the plea by the Executive of guilty or nolo contendere to) any felony or conviction of a misdemeanor involving moral turpitude ; or (iv) a material breach by the Executive of any material provision of this Agreement or material policy of the Company, or any other written agreement with the Company or its Affiliates, which breach is not remedied within 10 days after receiving written notice thereof.

(i) “Change of Control” shall mean any arm’s-length transaction or a series of related arm’s-length transactions as a result of which any Person or group of Persons shall (A) acquire (whether by purchase, exchange, tender offer, merger, consolidation, recapitalization, redemption, reorganization, issuance of capital stock or otherwise), directly or indirectly, more than 50% of the voting power of the Company or more than 50% of the Company’s Common Stock issued and outstanding immediately prior to such transaction or series of transactions, or (B) acquire assets constituting all or substantially all of the assets of the Company; provided,  however, that in no event shall a Change of Control be deemed to include (i) any transaction effected solely for the purpose, and having the sole effect, of (A) changing, directly or indirectly, the domicile or form of organization or the organizational structure of the Company or any of its Subsidiaries or (B) contributing assets or equity to entities controlled by the Company (or owned by the stockholders of the Company in substantially the same proportions as the stockholders own of the Company immediately prior to such contribution).

(j) “Code” shall mean the Internal Revenue Code of 1986, as amended.

(k) “Company” shall mean Connolly Superholdings, Inc., a Delaware Corporation.

(l) “Date of Termination” shall mean (i) if the Executive’s employment is terminated due to the Executive’s death, the date of the Executive’s death; (ii) if the Executive’s employment is terminated due to the Executive’s Disability, the date determined pursuant to Section 4(a)(ii); or (iii) if the Executive’s employment is terminated pursuant to Section 4(a)(iii)-(vi) either the date indicated in the Notice of Termination or the date specified by the Employer pursuant to Section 4(b), whichever is earlier.

(m) “Disability” shall mean the Executive’s inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or that can be expected to last for a continuous period of not less than 180 days in any consecutive 360 day period.

(n) “Effective Date” shall have the meaning set forth in Section 2 below.

(o) “Employer” shall have the meaning set forth in the preamble hereto.

(p) “Executive” shall have the meaning set forth in the preamble hereto.

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(q) The Executive shall have “Good Reason” to terminate the Executive’s employment hereunder after the occurrence of one or more of the following conditions without the Executive’s consent: (i) any material adverse change by the Employer in the Executive’s Annual Base Salary, position, duties, responsibilities, authority, title or reporting obligations, or the assignment of duties to the Executive by the Employer or its Affiliates that are materially inconsistent with the Executive’s position; (ii) a material change in the geographic location at which the Employer or its Affiliates requires the Executive to be based, such that the Executive’s principal office moves at least 50 miles; or (iii) any other material breach by the Employer of a material provision of this Agreement or any other written agreement with the Executive. Notwithstanding the foregoing, no termination for Good Reason will be effective unless: (A) the Executive provides the Employer with at least thirty (30) days prior written notice of his intent to resign for Good Reason (which notice must be provided within sixty (60) days following the occurrence of the event(s) purported to constitute Good Reason); (B) the Employer has not remedied the alleged violation(s) within the thirty (30) day period; and (C) the Executive’s resignation becomes effective no later than thirty (30) days after the Employer has either failed to cure such event or indicated that it will not cure such event.

(r) “Notice of Termination” shall have the meaning set forth in Section 4(b).

(s) “Person” shall mean any individual, natural person, corporation (including any non-profit corporation), general partnership, limited partnership, limited liability partnership, joint venture, estate, trust, company (including any company limited by shares, limited liability company or joint stock company), incorporated or unincorporated association, governmental authority, firm, society or other enterprise, organization or other entity of any nature.

(t) “Release” shall have the meaning set forth in Section 5(b).

(u) “Release Expiration Date” shall have the meaning set forth in Section 20(c).

(v) “Section 409A” shall mean Section 409A of the Code and the Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the Effective Date.

(w) “Severance Period” shall have the meaning set forth in Section 5(b).

(x) “Term” shall have the meaning set forth in Section 2(a).

2. Employment

(a) Term. The Employer hereby employs the Executive, and the Executive hereby accepts such employment, in each case pursuant to the terms of this Agreement, for the period commencing on October 2, 2017 (the “Effective Date”), and ending on the date of termination of the Executive’s employment in accordance with Section 4 hereof (the “Term”).

(b) Position and Duties. During the Term, the Executive: (i) shall serve as Chief Digital Officer of the Company, with responsibilities, duties and authority customary for such position, subject to direction by the Company’s Chief Executive Officer; (ii) shall report directly to Chief Executive Officer; (iii) shall devote substantially all the Executive’s working time and

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efforts to the business and affairs of the Company and its Affiliates; and (iv) agrees to observe and comply with the Employer’s rules and policies as adopted by the Employer from time to time. The parties acknowledge and agree that Executive’s duties, responsibilities and authority may include services for one or more Affiliates of the Employer. 

3. Compensation and Related Matters

(a) Annual Base Salary. During the Term, the Executive shall receive a base salary at a rate of $400,000 per annum, which shall be paid in accordance with the customary payroll practices of the Employer, subject to review by the Board in its sole discretion (the “Annual Base Salary”).

(b) Annual Bonus. With respect to each Company fiscal year that commences during the Term, the Executive shall be eligible to receive an annual performance-based cash bonus (the “Annual Bonus”) with a target amount of 70%  of the Annual Base Salary earned during such fiscal year, which shall be payable based upon the attainment of individual and Company performance goals established each fiscal year by the Board or the Compensation Committee thereof. Each such Annual Bonus shall be payable on, or at such date as is determined by the Board within 90 days following, the last day of the fiscal year with respect to which it relates. Except as provided in Section 5, notwithstanding any other provision of this Section 3(b), no bonus shall be payable with respect to any fiscal year unless the Executive remains continuously employed with the Employer during the period beginning on the Effective Date and ending on the applicable bonus payment date.

(c) Benefits. During the Term, the Executive shall be eligible to participate in employee benefit plans, programs and arrangements of the Employer in accordance with their terms, as in effect from time to time, and as are generally provided by the Employer to its senior executive officers.

(d) Vacation; Holidays. During each calendar year during the Term, the Executive shall also be entitled to vacation time and paid holidays on the same basis as other senior executives of the Employer, subject to the terms and conditions of the Employer’s vacation and holiday policies as in effect from time to time.

(e) Business Expenses. During the Term, the Employer shall reimburse the Executive for all reasonable, documented, out-of-pocket travel and other business expenses incurred by the Executive in the performance of the Executive’s duties to the Company and its Affiliates in accordance with the Employer’s applicable expense reimbursement policies and procedures.

(f) Indemnification.During the Term and for so long thereafter as liability exists with regard to the Executive’s activities during the Term on behalf of the Company and its Affiliates, the Employer or its Affiliates shall indemnify the Executive (other than in connection with the Executive’s gross negligence or willful misconduct) in accordance with the Employer’s customary indemnification policies and procedures which are applicable to the Employer’s officers and directors.

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4. Termination

 During the Term, the Executive’s employment hereunder may be terminated by the Employer or the Executive, as applicable, without any breach of this Agreement only under the following circumstances:

(a) Circumstances

(i) Death. The Executive’s employment hereunder shall terminate upon the Executive’s death.

(ii) Disability. If the Executive incurs a Disability, the Employer may give the Executive written notice of its intention to terminate the Executive’s employment. In that event, the Executive’s employment with the Employer and its Affiliates shall terminate, effective on the later of the thirtieth (30th) day after receipt of such notice by the Executive or the date specified in such notice; provided that, within the thirty (30) day period following receipt of such notice, the Executive shall not have returned to full-time performance of the Executive’s duties hereunder.

(iii) Termination for Cause. The Employer may terminate the Executive’s employment for Cause.

(iv) Termination without Cause. The Employer may terminate the Executive’s employment without Cause.

(v) Resignation for Good Reason. The Executive may resign from the Executive’s employment for Good Reason.

(vi) Resignation without Good Reason. The Executive may resign from the Executive’s employment without Good Reason.

(b) Notice of Termination. Any termination of the Executive’s employment by the Employer or by the Executive under this Section 4 (other than a termination pursuant to Section 4(a)(i) above) shall be communicated by a written notice to the other party hereto (a “Notice of Termination”): (i) indicating the specific termination provision in this Agreement relied upon, (ii) except with respect to a termination pursuant to Sections 4(a)(iv) or (vi), setting forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated, and (iii) specifying a Date of Termination which, if submitted by the Executive, shall be at least thirty (30) days following the date of such notice; provided,  however, that a Notice of Termination delivered by the Employer pursuant to Section 4(a)(ii) shall not be required to specify a Date of Termination, in which case the Date of Termination shall be determined pursuant to Section 4(a)(ii); provided;  further, that, notwithstanding the foregoing, in the event that the Executive delivers a Notice of Termination to the Employer, the Employer may, in its sole discretion, accelerate the Date of Termination to any date that occurs following the date of Employer’s receipt of such Notice of Termination (even if such date is prior to the date specified in such Notice of Termination). A Notice of Termination submitted by the Employer (other than a Notice of Termination under Section 4(a)(ii)) may provide for a Date of Termination on the date the Executive receives the Notice of Termination, or any date thereafter elected by the Employer in its discretion. The failure by the Employer or the Executive to set forth in the Notice of Termination any fact or circumstance which contributes to

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a showing of Cause or Good Reason shall not waive any right of the Employer or the Executive hereunder or preclude the Employer or the Executive from asserting such fact or circumstance in enforcing the Employer’s or the Executive’s rights hereunder.

5. Company Obligations Upon Termination of Employment

(a) In General. Upon a termination of the Executive’s employment for any reason, the Executive (or the Executive’s estate) shall be entitled to receive: (i) any portion of the Executive’s Annual Base Salary through the Date of Termination not theretofore paid, (ii) any expenses owed to the Executive under Section 3(e), (iii) any accrued but unused vacation pay owed to the Executive pursuant to Section 3(d), and (iv) any amount arising from the Executive’s participation in, or benefits under, any employee benefit plans, programs or arrangements under Section 3(c), which amounts shall be payable in accordance with the terms and conditions of such employee benefit plans, programs or arrangements. Except as otherwise set forth in Section 5(b) below, the payments and benefits described in this Section 5(a) shall be the only payments and benefits payable in the event of the Executive’s termination of employment for any reason.

(b) Termination without Cause or for Good Reason. In the event of the Executive’s termination of employment by the Employer without Cause pursuant to Section 4(a)(iv) or by the Executive for Good Reason pursuant to Section 4(a)(v), in addition to the payments and benefits described in Section 5(a) above, the Employer shall, subject to Section 20 and Section 5(c) and subject to the Executive’s execution and non-revocation of a waiver and release of claims agreement in the Employer’s customary form (a “Release”), as of the Release Expiration Date, in accordance with Section 20(c):

(i) Pay to the Executive an amount equal to twelve (12) months of Annual Base Salary at the rate in effect immediately prior to the Date of Termination, payable in a single lump sum;

(ii) Pay to the Executive an amount equal to the product of (A) the amount of the Annual Bonus that would have been payable to the Executive pursuant to Section 3(b) if the Executive was still employed as of the applicable bonus payment date in respect of the fiscal year in which the Date of Termination occurs based on actual individual and Company performance goals in such year and (B) the ratio of (x) the number of full weeks elapsed during the fiscal year during which such termination of employment occurs on or prior to the Date of Termination, to (y) 52. Any amount payable pursuant to this Section 5(b)(ii) shall, subject to Section 20 and Section 5(c), be paid to Executive in accordance with Section 3(b) as if the Executive was still employed on the applicable bonus payment date, but in no event earlier than January 1, or later than December 31, of the calendar year immediately following the calendar year in which the Date of Termination occurs; and 

(iii) If the Executive elects to continue coverage under the Employer’s group medical and dental plans in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Employer will pay to the Executive an amount equal to the premium cost of the Executive’s coverage and that of the Executives eligible dependents under those plans for a period of twelve (12) months (the “Benefit Continuation Period”), at the same rate the Employer contributed to the Executive’s premium cost of coverage

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on the Termination Date. The Employer will make such premium contributions by direct deposit to the Executive in a single lump sum payment on the same date as any amount payable to the Executive pursuant to Section 5(b)(i). The Executive must directly pay the full premium costs during the Benefit Continuation Period plus an administrative fee of up to 2% of such premium costs. The Executive acknowledges and agrees that he or she is not an “assistance eligible individual”, as that term is defined in the amendments to COBRA made by the enactment of the American Recovery and Reinvestment Act of 2009.

(c) Termination following a Change of Control. In the event of the Executive’s termination of employment by the Employer without Cause pursuant to Section 4(a)(iv) or by the Executive for Good Reason pursuant to Section 4(a)(v) within one year following a Change of Control, then in addition to the payments and benefits described in Sections 5(a) and 5(b) above, the Executive shall be entitled to receive accelerated vesting for 100% of all unvested equity awards that are subject to time-based vesting held by the Executive immediately prior to the Change of Control.

(d) Breach of Restrictive Covenants. Notwithstanding any other provision of this Agreement, no payment or benefit shall be made or provided pursuant to Section 5(b) following the date the Executive first violates any of the restrictive covenants set forth in Section 6 or any other written agreement between the Executive and the Employer or any of its Affiliates. 

(e) Complete Severance. The provisions of this Section 5 shall supersede in their entirety any severance payment or benefit obligations to the Executive pursuant to the provisions in any severance plan, policy, program or other arrangement maintained by the Employer or any of its Affiliates.

6. Restrictive Covenants In consideration for the potential payments to the Executive hereunder, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Executive agrees to the following:

(a) Confidentiality. The Executive shall not, at any time during the Term or at any time thereafter, directly or indirectly, use for the benefit of himself or any third party or disclose to any Person, firm, company or other entity (other than the Company or any of its Affiliates) any Confidential Information without the prior written consent of the Employer or the Company, except (i) as required in the performance of his duties to the Employer and its Affiliates, (ii) to the extent that the Executive is required by law, subpoena or court order to disclose any Confidential Information (provided that in such case, the Executive shall (1) provide the Employer with the earliest notice possible that such disclosure is or may be required, (2) reasonably cooperate with the Employer and its Affiliates, at the Employer’s expense, in protecting, to the maximum extent legally permitted, the confidential or proprietary nature of such Confidential Information and (3) disclose only that Confidential Information which he is legally required to disclose), (iii) disclosing information that has been or is hereafter made public through no act or omission of the Executive in violation of this Agreement or any other confidentiality obligation or duty owed to the Employer or its Affiliates, (iv) disclosing information and documents to his attorney or tax adviser for the purpose of securing legal or tax advice (provided that such Persons agree to keep such information confidential) or (v) disclosing only the post-employment restrictions in this Agreement in confidence to any potential new employer. The Executive shall take all actions

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necessary to protect the integrity of the business plans, customer lists, statistical data and compilations, agreements, contracts, manuals or other materials, in whatever form, of the Company and its Affiliates that contain Confidential Information, and upon the termination of the Executive’s employment, the Executive agrees that all Confidential Information in his possession or under his control, directly or indirectly, that is in writing, computer generated or other tangible form (together with all duplicates thereof) will forthwith be returned to the Company and will not be retained by the Executive or furnished to any Person, either by sample, facsimile, film, audio or video cassette, electronic data, verbal communication or any other means of communication. The Executive agrees that the provisions of this Section 6 are reasonable and necessary to protect the proprietary rights of the Company and its Affiliates in the Confidential Information and trade secrets, goodwill and reputation. In addition, the terms and conditions of this Agreement shall remain strictly confidential, and the Executive shall not disclose the terms and conditions hereof to any Person, other than immediate family members, legal advisors or personal tax or financial advisors, provided that each such Person agrees to keep such terms and conditions confidential.

(b) Non-Competition. The Executive shall not, during the Term and for a period of two (2) years thereafter (the “Non-Compete Period”), directly or indirectly, whether for himself or on behalf of any other Person, engage in, own, manage, operate, advise, provide financing to, control or participate in the ownership, management or control of, or be connected as an officer, employee, partner, director, or otherwise with, or have any financial interest (whether as a stockholder, director, officer, partner, consultant, proprietor, agent or otherwise) in, or aid or assist anyone else in the conduct of, any business that competes, directly or indirectly, with the Company or any of its Affiliates in the Business or is otherwise engaged in activities competitive with the Company or any of its Affiliates in the Business, in any jurisdiction in the United States of America (including, without limitation, the states of Connecticut, Georgia, Pennsylvania, Kentucky, Massachusetts, Minnesota, Texas and Utah), or any other country in the world where the Company or any of its Affiliates are engaged in the Business (the “Restricted Area”). The Executive agrees that the Restricted Area is reasonable taking into consideration the nature and scope of the operations of the Company and its Affiliates in the Business and the Executive’s role in such operations. It shall not be a violation of this Section 6(b) for the Executive to own less than one percent (1%) of the outstanding shares of a corporation that is engaged in the Business whose shares are listed on a national stock exchange or traded in accordance with the automated quotation system of the National Association of Securities Dealers.

(c) Non-Solicitation. The Executive shall not, during the Non-Compete Period, either directly or indirectly, and whether for himself or on behalf of any other Person; (i) seek to persuade any employee of the Company or any of its Affiliates to discontinue or diminish his or her employment therewith or seek to persuade any employee or former employee of the Company or any of its Affiliates (who was employed by the Company or any of its Affiliates at any time during the twelve (12) month period prior to the termination of the Executive’s employment with the Employer) to become employed or to provide consulting or contract services to a business competitive with the Company or its Affiliates in the Business; (ii) solicit, employ or engage, or cause to be solicited, employed, or engaged, any person who is or was employed by the Company or any of its Affiliates at any time during the twelve (12) month period prior to the termination of the Executive’s employment with the Employer; or (iii) solicit, encourage, or induce any contractor, agent, client, customer, supplier, or the like of the Company or any of its Affiliates to terminate or diminish its/his relationship with, the Company or any of its Affiliates, or to refrain

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from entering into a relationship with the Company or any of its Affiliates, including, without limitation, any prospective contact, contractor, agent, client, customer, or the like of the Company or any of its Affiliates; provided,  however, that the foregoing shall not prohibit the Executive from placing any general advertisements for employees and hiring individuals that respond to such general advertisements, so long as such general advertisements are not directed to any employees of the Company or any of its Affiliates.

(d) Non-Disparagement. The Executive agrees not to disparage the Company or the Employer, any of their products or practices, or any of their directors, officers, agents, representatives, partners, members, equity holders or Affiliates, either orally or in writing, at any time, and the Employer agrees to instruct the Employer’s and the Company’s directors and officers as of the Date of Termination not to disparage the Executive, either orally or in writing, at any time; provided that the Executive, the Company and its Affiliates, and their respective directors and officers, may confer in confidence with their respective legal representatives and make truthful statements as required by law.

(e) Remedies. In addition to whatever other rights and remedies the Company and its Affiliates may have at equity or in law (including, without limitation, the right to seek monetary damages), if the Executive breaches any of the provisions contained in this Section 6, (i) the Company and its Affiliates shall have the right immediately to terminate the Executive’s right to any amounts payable under this Agreement and (ii) the Company and its Affiliates shall have the right to injunctive relief, without the requirement to prove actual damages or to post any bond or other security, and to obtain the costs and reasonable attorneys’ fees they incur in enforcing their rights under this Agreement. The Executive acknowledges that (A) his breach of this Section 6 would cause irreparable injury to the Company and/or its Affiliates, (B) money damages alone would not provide an adequate remedy for the Company or its Affiliates, (C) his services to the Company are special, unique and extraordinary, and (D) the restrictions in this Section 6 (x) are no greater than required to protect the Company’s legitimate protectable interests (including, without limitation, the Confidential Information and the Company’s goodwill), (y) do not impose undue hardship on the Executive, and (z) are reasonable in duration and geographic scope. The Executive further acknowledges that (I) any breach or claimed breach of the provisions set forth in this Agreement shall not be a defense to enforcement of the restrictions set forth in this Section 6 and (II) the circumstances of the Executive’s termination of employment with the Employer and its Affiliates shall have no impact on his obligations under this Section 6.

(f) Blue Pencil. In the event the terms of this Section 6 shall be determined by any court of competent jurisdiction to be unenforceable by reason of its extending for too great a period of time or over too great a geographical area or by reason of its being too extensive in any other respect, it will be interpreted to extend only over the maximum period of time for which it may be enforceable, over the maximum geographical area as to which it may be enforceable, or to the maximum extent in all other respects as to which it may be enforceable, all as determined by such court in such action. 

(g) Tolling During Periods Of Breach. The Executive and the Employer agree and intend that the Executive’s obligations under this Section 6 be tolled during any period that the Executive is in breach of any of the obligations under this Section 6, so that the Company and

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each Affiliate of the Company are provided with the full benefit of the restrictive periods set forth herein.

(h) Third Party Beneficiary. The Company and each Affiliate of the Company are intended third party beneficiaries of the terms of this Section 6 and shall have the right to enforce the provisions of this Section 6 as if they were a party hereto. 

(i) Survival. The Executive’s obligations under this Section 6 shall survive the termination of this Agreement and the termination of his employment with the Employer.

7. Assignment and Successors

 The Employer may assign its rights and obligations under this Agreement to any entity, including any successor to all or substantially all the assets of the Company, by merger or otherwise, and may assign or encumber this Agreement and its rights hereunder as security for indebtedness of the Employer and its Affiliates. The Executive may not assign the Executive’s rights or obligations under this Agreement to any individual or entity. This Agreement shall be binding upon and inure to the benefit of the Company, the Employer, the Executive and their respective successors, assigns, personnel and legal representatives, executors, administrators, heirs, distributees, devisees, and legatees, as applicable.

8. Governing Law; Venue

 All issues and questions concerning the application, construction, validity, interpretation and enforcement of this Agreement shall be governed by and construed in accordance with the laws of the State of Delaware, without giving effect to any principles of conflicts of law, whether of the State of Delaware or any other jurisdiction. Each of the parties hereto agrees that any legal action or proceeding with respect to this Agreement shall be brought exclusively in the United States District Court for the Southern District of New York, located in New York, New York, unless the parties to any such action or dispute mutually agree to waive this provision. By execution and delivery of this Agreement, each of the parties hereto irrevocably consents to service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, or by recognized express carrier or delivery service, to the applicable party at his, her or its address referred to herein. Each of the parties hereto irrevocably waives any objection which he, she or it may now or hereafter have to the laying of venue of any of the aforementioned actions or proceedings arising out of or in connection with this Agreement, or any related agreement, certificate or instrument referred to above, brought in the courts referred to above and hereby further irrevocably waives and agrees, to the fullest extent permitted by applicable law, not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in any inconvenient forum. Nothing herein shall affect the right of any party to serve process in any other manner permitted by law.

9. Validity

 The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect. 

10. Notices

 Any notice, request, claim, demand, document and other communication hereunder to any party hereto shall be effective upon receipt (or refusal of receipt) and shall be in writing and delivered personally or sent by a reputable national overnight carrier or certified or

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registered mail, postage prepaid, to the following address (or at any other address as any party hereto shall have specified by notice in writing to the other party hereto):

(a) If to the Employer:

115 Perimeter Center Place, Suite 700

Atlanta, Georgia 30346

Attn: General Counsel

(b) If to the Executive, at the address set forth on the signature page hereto.

11. Counterparts

 This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement.

12. Entire Agreement

 The terms of this Agreement (together with any other agreements and instruments contemplated hereby or referred to herein) is intended by the parties hereto to be the final expression of their agreement with respect to the employment of the Executive by the Employer and may not be contradicted by evidence of any prior or contemporaneous agreement (including, without limitation, any term sheet or offer letter). The parties hereto further intend that this Agreement shall constitute the complete and exclusive statement of its terms and that no extrinsic evidence whatsoever may be introduced in any judicial, administrative, or other legal proceeding to vary the terms of this Agreement.

13. Amendments; Waivers

 This Agreement may not be modified, amended, or terminated except by an instrument in writing, signed by the Executive and a duly authorized officer of the Employer and approved by the Board, which expressly identifies the amended provision of this Agreement. By an instrument in writing similarly executed and approved by the Board, the Executive or a duly authorized officer of the Employer may waive compliance by the other party or parties hereto with any provision of this Agreement that such other party was or is obligated to comply with or perform; provided,  however, that such waiver shall not operate as a waiver of, or estoppel with respect to, any other or subsequent failure to comply or perform. No failure to exercise and no delay in exercising any right, remedy, or power hereunder shall preclude any other or further exercise of any other right, remedy, or power provided herein or by law or in equity.

14. No Inconsistent Actions

 The parties hereto shall not voluntarily undertake or fail to undertake any action or course of action inconsistent with the provisions or essential intent of this Agreement. Furthermore, it is the intent of the parties hereto to act in a fair and reasonable manner with respect to the interpretation and application of the provisions of this Agreement.

15. Construction

 This Agreement shall be deemed drafted equally by both of the parties hereto. Its language shall be construed as a whole and according to its fair meaning. Any presumption or principle that the language is to be construed against any party hereto shall not apply. The headings in this Agreement are only for convenience and are not intended to affect construction or interpretation. Any references to paragraphs, subparagraphs, sections or subsections are to those parts of this Agreement, unless the context clearly indicates to the contrary. 

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Also, unless the context clearly indicates to the contrary, (a) the plural includes the singular and the singular includes the plural; (b) “and” and “or” are each used both conjunctively and disjunctively; (c) “any,” “all,” “each,” or “every” means “any and all,” and “each and every”; (d) ”includes” and “including” are each “without limitation”; (e) “herein,” “hereof,” “hereunder” and other similar compounds of the word “here” refer to the entire Agreement and not to any particular paragraph, subparagraph, section or subsection; and (f) all pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural as the identity of the Persons referred to may require.

16. Enforcement

 If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws effective during the term of this Agreement, such provision shall be fully severable; this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a portion of this Agreement; and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance from this Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable provision there shall be added automatically as part of this Agreement a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and be legal, valid and enforceable.

17. Withholding

 The Employer and its Affiliates shall be entitled to withhold from any amounts payable under this Agreement, any federal, state, local or foreign withholding or other taxes or charges which the Employer or any of its Affiliates is required to withhold. The Employer and its Affiliates shall be entitled to rely on an opinion of counsel if any questions as to the amount or requirement of withholding shall arise.

18. Absence of Conflicts; Executive Acknowledgement; Confidentiality

 The Executive hereby represents that from and after the Effective Date the performance of the Executive’s duties hereunder will not breach any other agreement to which the Executive is a party. The Executive acknowledges that the Executive has read and understands this Agreement, is fully aware of its legal effect, has not acted in reliance upon any representations or promises made by the Employer or any of its Affiliates other than those contained in writing herein, and has entered into this Agreement freely based on the Executive’s own judgment. The Executive agrees not to disclose the terms or existence of this Agreement to any Person unless the Employer agrees to such disclosure in advance and in writing; provided that the Executive may, without such permission, make such disclosures as are required by applicable law, including disclosures to taxing agencies, and disclose the terms of this Agreement to the Executive’s attorney(s), accountant(s), tax advisor(s), and other professional service provider(s), and to members of the Executive’s immediate family, as reasonably necessary; provided,  further, that the Executive instructs such Person(s) that the terms of this Agreement are strictly confidential and are not to be revealed to anyone else except as required by applicable law.

19. Survival

 The expiration or termination of the Term shall not impair the rights or obligations of any party hereto which shall have accrued prior to such expiration or termination (including, without limitation, pursuant to the provisions of Section 6 hereof).

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20. Section 409A

(a) General. The parties hereto acknowledge and agree that, to the extent applicable, this Agreement shall be interpreted in accordance with, and incorporate the terms and conditions required by, Section 409A. Notwithstanding any provision of this Agreement to the contrary, in the event that the Employer determines that any amounts payable hereunder will be immediately taxable to the Executive under Section 409A, the Employer reserves the right (without any obligation to do so or to indemnify the Executive for failure to do so) to (i) adopt such amendments to this Agreement and appropriate policies and procedures, including amendments and policies with retroactive effect, that the Employer determines to be necessary or appropriate to preserve the intended tax treatment of the benefits provided by this Agreement, to preserve the economic benefits of this Agreement and to avoid less favorable accounting or tax consequences for the Employer and/or (ii) take such other actions as the Employer determines to be necessary or appropriate to exempt the amounts payable hereunder from Section 409A or to comply with the requirements of Section 409A and thereby avoid the application of penalty taxes thereunder. Notwithstanding anything herein to the contrary, in no event shall any liability for failure to comply with the requirements of Section 409A be transferred from the Executive or any other individual to the Employer or any of its Affiliates, employees or agents pursuant to the terms of this Agreement or otherwise.

(b) Separation from Service under Section 409A. Notwithstanding any provision to the contrary in this Agreement: (i) no amount shall be payable pursuant to Section 5(b) unless the termination of the Executive’s employment constitutes a “separation from service” within the meaning of Section 1.409A-1(h) of the Department of Treasury Regulations; (ii) for purposes of Section 409A, the Executive’s right to receive installment payments pursuant to Section 5(b) shall be treated as a right to receive a series of separate and distinct payments; and (iii) to the extent that any reimbursement of expenses or in-kind benefits constitutes “deferred compensation” under Section 409A, such reimbursement or benefit shall be provided no later than December 31 of the year following the year in which the expense was incurred. The amount of expenses reimbursed in one year shall not affect the amount eligible for reimbursement in any subsequent year. The amount of any in-kind benefits provided in one year shall not affect the amount of in-kind benefits provided in any other year. Notwithstanding any provision to the contrary in this Agreement, if the Executive is deemed at the time of his separation from service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, to the extent delayed commencement of any portion of the termination benefits to which the Executive is entitled under this Agreement is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, such portion of the Executive’s termination benefits shall not be provided to the Executive prior to the earlier of (A) the expiration of the six-month period measured from the date of the Executive’s “separation from service” with the Company (as such term is defined in the Treasury Regulations issued under Section 409A of the Code) or (B) the date of the Executive’s death; upon the earlier of such dates, all payments deferred pursuant to this sentence shall be paid in a lump sum to the Executive, and any remaining payments due under the Agreement shall be paid as otherwise provided herein.

(c) Release. Notwithstanding anything to the contrary in this Agreement, to the extent that any payments of “nonqualified deferred compensation” (within the meaning of Section 409A) due under this Agreement as a result of the Executive’s termination of employment

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are subject to the Executive’s execution, delivery and non-revocation of a Release, (i) the Employer shall deliver the Release to the Executive within seven (7) days following the Date of Termination, and (ii) if the Executive fails to execute the Release on or prior to the Release Expiration Date (as defined below) or timely revokes his acceptance of the Release thereafter, the Executive shall not be entitled to any payments or benefits otherwise conditioned on the Release. For purposes of this Section 20(c), “Release Expiration Date” shall mean the date that is twenty-one (21) days following the date upon which the Employer timely delivers the Release to the Executive, or, in the event that the Executive’s termination of employment is “in connection with an exit incentive or other employment termination program” (as such phrase is defined in the Age Discrimination in Employment Act of 1967), the date that is forty-five (45) days following such delivery date. To the extent that any payments of nonqualified deferred compensation (within the meaning of Section 409A) due under this Agreement as a result of the Executive’s termination of employment are delayed pursuant to Section 5(b) and this Section 20(c), such amounts shall be paid in a lump sum on the first payroll date to occur on or after the 60th day following the Date of Termination, provided that, as of such 60th day, the Executive has executed and has not revoked the Release (and any applicable revocation period has expired). 

21. Compensation Recovery PolicyThe Executive acknowledges and agrees that, to the extent the Employer or the Company adopts any clawback or similar policy pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act or otherwise, and any rules and regulations promulgated thereunder, he shall take all action necessary or appropriate to comply with such policy (including, without limitation, entering into any further agreements, amendments or policies necessary or appropriate to implement and/or enforce such policy).

[Signature pages follow]

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Exhibit 10-7

IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date and year first above written, effective as of the Effective Date.

Cotiviti USA, LLC

By: __________________________________

Dorie Ramey

Senior Vice President, Human Resources

Executive

By: __________________________________

Nord Samuelson

54 Stevens Farm Road

Freeport, ME 04032

EX-10.8

Exhibit 10-8

Executive Employment Agreement

This Employment Agreement (the “Agreement”), entered into on May 15, 2015, is by and between Jonathan Olefson (the “Executive”) and Connolly iHealth Technologies, LLC, a Delaware limited liability company (the “Employer”).

RECITALS

WHEREAS, the Employer, the Company and the Executive have agreed to a material change to his/her Annual Base Salary and Annual Bonus.

WHEREAS, the Employer and the Company desire to assure themselves of the services of the Executive by engaging the Executive to perform services under the terms hereof.

WHEREAS, the Executive desires to provide services to the Company on the terms herein provided.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing, and for other good and valuable consideration, including the respective covenants and agreements set forth below, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree, effective as of the Effective Date, as follows:

1. Certain Definitions

(a) “Affiliate” shall mean, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with, such Person where “control” shall have the meaning given such term under Rule 405 of the Securities Act of 1933, as amended from time to time.

(b) “Agreement” shall have the meaning set forth in the preamble hereto.

(c) “Annual Base Salary” shall have the meaning set forth in Section 3(a).

(d) “Annual Bonus” shall have the meaning set forth in Section 3(b).

(e) “Benefit Continuation Period” shall have the meaning set forth in  Section

5(b).

(f) “Board” shall mean the Board of Directors of the Company.

(g) “Business”  shall  mean  the  provision  of  payment  integrity services,

including payment policy management, recovery audit services, and prepay data mining services, for clients in the healthcare and retail sectors, and the creation and implementation of related analytics, data optimization and data standardization processes and services.

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(h) The Employer shall have “Cause” to terminate the Executive’s employment hereunder upon: (i) the willful misconduct or an act of dishonesty of the Executive with regard to the Company or any of its Affiliates, which in either case, results in material harm to the Company or such Affiliate; (ii) the willful and continued failure of the Executive to perform his duties with the Employer or any of its Affiliates (other than any such  failure resulting from Disability), which failure is not remedied within 30 days after receiving written notice thereof; (iii) indictment for any felony or indictment for any  misdemeanor  involving moral turpitude; or (iv) a material breach by the Executive of any material provision of this Agreement, or any other written agreement with the Company or its Affiliates or material policy of the Company or its Affiliates, which breach is not remedied within 10 days after receiving written notice thereof.

(i) “Change of Control” shall have the meaning set forth in the Strident Superholdings, Inc. 2012 Equity Incentive Plan or other equity incentive plan applicable at the time to Executive.

(j) “Code” shall mean the Internal Revenue Code of 1986, as amended.

(k) “Company”   shall   mean   Connolly   Superholdings,   Inc.,   a   Delaware

Corporation.

(l) “Confidential Information” shall mean confidential information related  to

the business of the Employer, the Company or their Affiliates or clients, including planned business that Executive becomes aware of during the Term, (i) which was disclosed to Executive or of which Executive became aware as a consequence of Executive’s relationship with the Employer or the Company; (ii) has value to the Employer or the Company; and (iii) which includes trade secrets, methods of operations, names of clients, price lists, financial information and projections, route books, personnel data, and similar information. Confidential Information shall include information in any form or media and shall not necessarily be in writing. Confidential Information also includes information which has been disclosed to the Employer, the Company or their Affiliates by a third party and which the Employer, the Company or their Affiliates are obligated to treat as confidential. Confidential Information includes information concerning (1) the business operations or internal structure of the Employer or the Company, (2) the clients of the Employer or the Company and client audit findings and reports, (3) past, present or future research done by the Employer or the Company respecting the business or operations of the Employer or the Company or clients or potential clients of the Employer or the Company, (4) work performed by Executive for    any client of the Employer or the Company, or

(5) any method or procedure relating or pertaining to projects developed by the Employer or the Company or contemplated by the Employer or the Company to be developed including but not limited to the organization, audit techniques, design and/or presentation of client data and computer screens, graphics and/or designs for the Employer’s or the Company’s clients or used in connection with work performed by the Employer or the Company for their clients, and prospective client presentation materials. Confidential Information shall not include data or information which (x) has been voluntarily disclosed to the public by the Employer or the Company, except where such public disclosure has been made by Executive without authorization from the Employer or the Company; (y) which has been   independently developed

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and disclosed by others; or (z) which has otherwise entered the public domain through lawful means.

(m) “Date of Termination” shall mean (i) if the Executive’s employment is terminated due to the Executive’s death, the date of the Executive’s death; (ii) if the Executive’s employment is terminated due to the Executive’s Disability, the date determined pursuant to Section 4(a)(ii); or (iii) if the Executive’s employment is terminated pursuant to Section 4(a)(iii)-

(vi) either the date indicated in the Notice of Termination or the date specified by the Employer pursuant to Section 4(b), whichever is earlier.

(n) “Disability” shall mean the Executive’s inability to engage in any substantial gainful activity by reason of any medically determinable physical or mental impairment that can be expected to result in death or that lasts or is expected to last 180 days in any 365 day period.

(o) “Effective Date” shall have the meaning set forth in the recitals hereto.

(p) “Employer” shall have the meaning set forth in the preamble hereto.

(q) “Executive” shall have the meaning set forth in the preamble hereto.

(r) The Executive shall have “Good Reason” to terminate the Executive’s employment hereunder after the occurrence of one or more of the following conditions without the Executive’s consent: (i) any material adverse change by the Employer in the Executive’s Annual Base Salary, position, authority, title or reporting obligations, or the assignment of duties to the Executive by the Employer or its Affiliates that are materially inconsistent with the Executive’s position; (ii) relocation of Executive’s principal place of employment by more than fifty (50) miles; or (iii) any other material breach by the Employer of a material provision of this Agreement or any other written agreement with the Executive. Notwithstanding the foregoing,  no termination for Good Reason will be effective unless: (A) the Executive provides the Employer with at least thirty (30) days prior written notice of his intent to resign for Good Reason (which notice must be provided within sixty (60) days following the occurrence of the event(s) purported to constitute Good Reason); (B) the Employer has not remedied the alleged violation(s) within the thirty (30) day period; and (C) the Executive’s resignation becomes effective no later than thirty (30) days after the Employer has either failed to cure such event or indicated that it will not cure such event.

(s) “Notice of Termination” shall have the meaning set forth in Section 4(b).

(t) “Person” shall mean any individual, natural person, corporation (including any non-profit corporation), general partnership, limited partnership, limited liability partnership, joint venture, estate, trust, company (including any company limited by shares, limited liability company or joint stock company), incorporated or unincorporated association, governmental authority, firm, society or other enterprise, organization or other entity of any nature.

(u) “Release” shall have the meaning set forth in Section 5(b).

(v) “Release Expiration Date” shall have the meaning set forth in Section 5(e).

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(w) “Section 409A” shall mean Section 409A of the Code and the Department of Treasury regulations and other interpretive guidance issued thereunder, including without limitation any such regulations or other guidance that may be issued after the Effective Date.

(x) “Term” shall have the meaning set forth in Section 2(a).

2. Employment

(a) Term. The Employer hereby employs the Executive, and the Executive hereby accepts such employment, in each case pursuant to the terms of this Agreement, for the period commencing on January 1, 2015 (the “Effective Date”), and ending on the date of termination of the Executive’s employment in accordance with Section 4 hereof (the “Term”).

(b) Position and Duties. During the Term, the Executive: (i) shall serve as SVP, General Counsel of the Company, with responsibilities, duties and authority customary for such position, subject to direction by the Company’s Chief Executive Officer; (ii) shall report directly to the Company’s Chief Executive Officer; (iii) shall devote substantially all the Executive’s working time and efforts to the business and affairs of the Company and its Affiliates; and (iv) agrees to observe and comply with the Employer’s rules and policies as adopted by the Employer from time to time. The parties acknowledge and agree that Executive’s duties, responsibilities and authority may include services for one or more Affiliates of the Employer.

3. Compensation and Related Matters

(a) Annual Base Salary. During the Term, the Executive shall receive a base salary at a rate of $320,000 per annum, which shall be paid in accordance with the customary payroll practices of the Employer, subject to review by the Board in its sole discretion (the “Annual Base Salary”).

(b) Annual Bonus. With respect to each Company fiscal year that commences during the Term, the Executive shall be eligible to receive an annual performance-based cash bonus (the “Annual Bonus”) with a target amount of 60% of the Annual Base Salary earned during such fiscal year, which shall be payable based upon the attainment of individual and Company performance goals established each fiscal year by the Board or the Compensation Committee thereof. Each such Annual Bonus shall be payable on, or at such date as is  determined by the Board within 90 days following, the last day of the fiscal year with respect to which it relates. Except as provided in Section 5, notwithstanding any other provision of this Section 3(b), no bonus shall be payable with respect to any fiscal year unless the Executive remains continuously employed with the Employer during the period beginning on the Effective Date and ending on the applicable bonus payment date.

(c) Benefits. During the Term, the Executive shall be eligible to participate in employee benefit plans, programs and arrangements of the Employer in accordance with their terms, as in effect from time to time, as are generally provided by the Employer to its senior executive officers.

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(d) Vacation; Holidays. During each calendar year during the Term, the Executive shall also be entitled to vacation time and paid holidays on the same basis as other senior executives of the Employer, subject to the terms and conditions of the Employer’s vacation and holiday policies as in effect from time to time.

(e) Business Expenses. During the Term, the Employer shall reimburse the Executive for all reasonable, documented, out-of-pocket travel and other business expenses incurred by the Executive in the performance of the Executive’s duties to the Company and its Affiliates in accordance with the Employer’s applicable expense reimbursement policies and procedures.

(f) Indemnification. The Executive shall have the same rights to indemnification as other officers and directors of the Company under the Company’s governing documents.

4. Termination.  During the Term, the Executive’s employment hereunder may be terminated by the Employer or the Executive, as applicable, without any breach of this Agreement only under the following circumstances:

(a) Circumstances

(i) Death. The Executive’s employment hereunder shall terminate upon the Executive’s death.

(ii) Disability. If the Executive incurs a Disability, the Employer may give the Executive written notice of its intention to terminate the Executive’s employment. In that event, the Executive’s employment with the Employer and its Affiliates shall terminate, effective on the later of the thirtieth (30th) day after receipt of such notice by the Executive or the date specified in such notice; provided that, within the thirty (30) day period following receipt of such notice, the Executive shall not have returned to full-time performance of the Executive’s duties hereunder.

(iii) TerminationforCause.TheEmployermayterminatethe Executive’s employment for Cause.

(iv) Termination without Cause. The Employer may terminate the Executive’s employment without Cause.

(v) Resignation for Good Reason. The Executive may resign from the Executive’s employment for Good Reason.

(vi) Resignation without Good Reason. The Executive may resign from the Executive’s employment without Good Reason.

(b) Notice of Termination. Any termination of the Executive’s employment  by the Employer or by the Executive under this Section 4 (other than a termination pursuant to Section 4(a)(i) above) shall be communicated by a written notice to the other party hereto (a “Notice of Termination”): (i) indicating the specific termination provision in this Agreement

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relied upon, (ii) except with respect to a termination pursuant to Sections 4(a)(iv) or (vi), setting forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of the Executive’s employment under the provision so indicated, and (iii) specifying a Date of Termination which, if submitted by the Executive, shall be at least thirty (30) days following the date of such notice; provided,  however, that a Notice of Termination delivered by the Employer pursuant to Section 4(a)(ii) shall not be required to specify a Date of Termination, in which case the Date of Termination shall be determined pursuant to Section 4(a)(ii); provided;  further, that, notwithstanding the foregoing, in the event that the Executive delivers a Notice of Termination  to the Employer, the Employer may, in its sole discretion, accelerate the Date of Termination to any date that occurs following the date of Employer’s receipt of such Notice of Termination (even if such date is prior to the date specified in such Notice of Termination). A Notice of Termination submitted by the Employer (other than a Notice of Termination under Section 4(a)(ii)) may provide for a Date of Termination on the date the Executive receives the Notice of Termination, or any date thereafter elected by the Employer in its discretion. The failure by the Employer or the Executive to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Cause or Good Reason shall not waive any right of the Employer or the Executive hereunder or preclude the Employer or the Executive from asserting such fact or circumstance in enforcing the Employer’s or the Executive’s rights hereunder.

5. Company Obligations Upon Termination of Employment

(a) In General. Upon a termination of the Executive’s employment for any reason, the Executive (or the Executive’s estate) shall be entitled to receive: (i) any portion of the Executive’s Annual Base Salary through the Date of Termination not theretofore paid, (ii) any expenses owed to the Executive under Section 3(e), (iii) any accrued but unused vacation pay owed to the Executive pursuant to Section 3(d), and (iv) any amount arising from the Executive’s participation in, or benefits under, any employee benefit plans, programs or arrangements under Section 3(c), which amounts shall be payable in accordance with the terms and conditions of  such employee benefit plans, programs or arrangements. Except as otherwise set forth in Section 5(b) below, the payments and benefits described in this Section 5(a) shall be the only payments and benefits payable in the event of the Executive’s termination of employment for any reason.

(b) Termination without Cause or for Good Reason. In the event of the Executive’s termination of employment by the Employer without Cause pursuant to Section 4(a)(iv) or by the Executive for Good Reason pursuant to Section 4(a)(v) (excluding by reason of death or Disability), in addition to the payments and benefits described in Section 5(a) above, the Employer shall, subject to Section 21 and Section 5(c) and subject to the Executive’s execution  of a waiver and release of claims agreement in the Employer’s customary form (a “Release”), as of the Release Expiration Date and non-revocation during the revocation period designated in the Release, in accordance with Section 5(e) below:

(i) Pay to the Executive an amount equal to twelve (12) months of Annual Base Salary at the rate in effect immediately prior to the Date of Termination, payable in a single lump sum following the Release Expiration Date, assuming the Release has been executed and not revoked; provided that if the review and revocation period applicable to the Release spans two taxable years, such payment shall be paid in the second taxable year;

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(ii) Pay to the Executive an amount equal to the product of (A) the amount of the Annual Bonus that would have been payable to the Executive pursuant to Section 3(b) if the Executive were still employed as of the applicable bonus payment date in respect of the fiscal year in which the Date of Termination occurs based on actual individual and Company performance goals in such year and (B) the ratio of (x) the number of full weeks elapsed during the fiscal year during which such termination of employment occurs on or prior to the Date of Termination, to (y) 52. Any amount payable pursuant to this Section 5(b)(ii) shall, subject to Section 21, Section 5(c) and Section 5(e), be paid to Executive in accordance with Section 3(b)  as if the Executive were still employed on the applicable bonus payment date, but in no event earlier than January 1, or later than December 31, of the calendar year immediately following the calendar year in which the Date of Termination occurs; and

(iii) If the Executive elects to continue coverage under the Employer’s group medical and dental plans in accordance with the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), the Employer will pay to the Executive an amount equal to the premium cost of the Executive’s coverage and that of the Executives eligible dependents under those plans for a period of twelve (12) months (the “Benefit Continuation Period”), at the same rate the Employer contributed to the Executive’s premium cost of coverage on the Termination Date. The Employer will make such premium contributions by direct deposit to the Executive in a single lump sum payment on the same date as any amount payable to the Executive pursuant to Section 5(b)(i). The Executive must directly pay the full premium costs during the Benefit Continuation Period plus an administrative fee of up to 2% of such premium costs.

(c) Termination following a Change of Control.  In the event of the  Executive’s termination of employment by the Employer without Cause pursuant to Section 4(a)(iv) or by the Executive for Good Reason pursuant to Section 4(a)(v) within one year following a Change of Control, then in addition to the payments and benefits described in Sections 5(a) and 5(b) above, the Executive shall be entitled to receive accelerated vesting for 100% of all unvested equity awards that are subject to time-based vesting held by the Executive immediately prior to the Change of Control.

(d) Breach of Restrictive Covenants. Notwithstanding any other provision of this Agreement, no payment or benefit shall be made or provided pursuant to Section 5(b) or (c) following the date the Executive first violates any of the restrictive covenants set forth in Section

6 or any other written agreement between the Executive and the Employer or any of its  Affiliates.

(e) Release. Notwithstanding anything to the contrary in this Agreement, to the extent that any payments due under this Agreement as a result of the Executive's termination of employment are subject to the Executive's execution, delivery and non-revocation of a Release, (i) the Employer shall deliver the Release to the Executive within seven (7) days following the Date of Termination, and (ii) if the Executive fails to execute the Release on or prior to the Release Expiration Date (as defined below) or timely revokes his acceptance of the Release thereafter, the Executive shall not be entitled to any payments or benefits otherwise conditioned on the Release. For purposes of this Section 5(e), "Release Expiration Date" shall mean the date that is twenty-one (21) days following the date upon which the Employer timely

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delivers the Release to the Executive, or, in the event that the Executive's termination of employment is "in connection with an exit incentive or other employment termination program" (as such phrase is defined in the Age Discrimination in Employment Act of 1967), the date that  is forty-five (45) days following such delivery date. To the extent that any payments due under Section 5(b)(ii) of this Agreement are considered nonqualified deferred compensation (within the meaning of Section 409A) as a result of the Executive's termination of employment and are delayed pursuant to Section 5(b) and this Section 5(e), such amounts shall be paid in a lump sum on the first payroll date to occur on or after the 60th day following the Date of Termination, provided that, as of such 60th day, the Executive has executed and has not revoked the Release (and any applicable revocation period has expired).

(f) Complete Severance. The provisions of this Section 5 shall supersede in their entirety any severance payment or benefit obligations to the Executive pursuant to the provisions in any severance plan, policy, program or other arrangement maintained by the Employer or any of its Affiliates.

6. Restrictive Covenants. In consideration for the potential payments to the Executive hereunder, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the Executive agrees to the following:

(a) Confidentiality. The Executive shall not, at any time during the Term or at any time thereafter, directly or indirectly, use for the benefit of himself or any third party or disclose to any Person, firm, company or other entity (other than the Company or any of its Affiliates) any Confidential Information without the prior written consent of the Employer or the Company, except (i) as required in the performance of his duties to the Employer and its Affiliates, (ii) to the extent that the Executive is required by law, subpoena or court order to disclose any Confidential Information, including disclosures that are protected under whistle blower laws, (provided that in such case, the Executive shall (1) provide the Employer with the earliest notice possible that such disclosure is or may be required, (2) reasonably cooperate with the Employer and its Affiliates, at the Employer’s expense, in protecting, to the maximum extent legally permitted, the confidential or proprietary nature of such Confidential Information and (3) disclose only that Confidential Information which he is legally required to disclose), (iii) disclosing information that has been or is hereafter made public through no act or omission of the Executive in violation of this Agreement or any other confidentiality obligation or duty owed to the Employer or its Affiliates, (iv) disclosing information and documents to his attorney or tax adviser for the purpose of securing legal or tax advice (provided that such Persons agree to keep such information confidential) or (v) disclosing only the post-employment restrictions in this Agreement in confidence to any potential new employer. The Executive shall take all actions necessary to protect the integrity of the business plans, customer lists, statistical data and compilations, agreements, contracts, manuals or other materials, in whatever form, of the Company and its Affiliates that contain Confidential Information, and upon the termination of  the Executive’s employment, the Executive agrees that all Confidential Information in his possession or under his control, directly or indirectly, that is in writing, computer generated or other tangible form (together with all duplicates thereof) will forthwith be returned to the Company and will not be retained by the Executive or furnished to any Person, either by sample, facsimile, film, audio or video cassette, electronic data, verbal communication or any other  means  of  communication.  The  Executive  agrees  that  the  provisions  of  this  Section  6    are

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reasonable and necessary to protect the proprietary rights of the Company and its Affiliates in the Confidential Information and trade secrets, goodwill and reputation. In addition, the terms and conditions of this Agreement shall remain strictly confidential. Notwithstanding anything herein to the contrary, nothing in this Agreement shall (i) prohibit the Executive from making reports of possible violations of federal law or regulation to any governmental agency or entity in accordance with the provisions of and rules promulgated under Section 21F of the Securities Exchange Act of 1934 or Section 806 of the Sarbanes-Oxley Act of 2002, or of any other whistleblower protection provisions of state or federal law or regulation, or (ii) require notification or prior approval by the employer of any reporting described in clause (i).

(b) Non-Competition. The Executive shall not, during the Term and for a period of two (2) years thereafter (the “Non-Compete Period”), directly or indirectly, whether for himself or on behalf of any other Person, engage in, own, manage, operate, advise, provide financing to, control or participate in the ownership, management or control of, or be connected as an officer, employee, partner, director, or otherwise with, or have any financial interest (whether as a stockholder, director, officer, partner, consultant, proprietor, agent or otherwise) in, or aid or assist anyone else in the conduct of, any business that competes, directly or indirectly, with the Company or any of its Affiliates in the Business or planned business of the Employer, the Company or any of its or their affiliates that Executive becomes aware of during the Term or is otherwise engaged in activities competitive with the Company or any of its Affiliates in the Business or planned business that Executive becomes aware of during the Term, in any jurisdiction in the United States of America or any other country in the world where the Company or any of its Affiliates are engaged in the Business (the “Restricted Area”). The Executive agrees that the Restricted Area is reasonable taking into consideration the nature and scope of the operations of the Company and its Affiliates in the Business and the Executive’s  role in such operations. It shall not be a violation of this Section 6(b) for the Executive to own less than one percent (1%) of the outstanding shares of a corporation that is engaged in the Business whose shares are listed on a national stock exchange or traded in accordance with the automated quotation system of the National Association of Securities Dealers.

(c) Non-Solicitation. The Executive shall not, during the Non-Compete Period, either directly or indirectly, and whether for himself or on behalf of any other Person; (i) seek to persuade any employee of the Company or any of its Affiliates to discontinue or diminish his or her employment therewith or seek to persuade any employee or former employee of the Company or any of its Affiliates (who was employed by the Company or any of its Affiliates at any time during the twelve (12) month period prior to the termination of the Executive’s employment with the Employer) to become employed or to provide consulting or contract services to a business competitive with the Company or its Affiliates in the Business; (ii) solicit, employ or engage, or cause to be solicited, employed, or engaged, any person who is or was employed by the Company or any of its Affiliates at any time during the twelve (12) month period prior to the termination of the Executive’s employment with the Employer; or (iii) solicit, encourage, or induce any contractor, agent, client, customer, supplier, or the like of the Company or any of its Affiliates to terminate or diminish its/his relationship with, the Company or any of its Affiliates, or to refrain from entering into a relationship with the Company or any of its Affiliates, including, without limitation, any prospective contact, contractor, agent, client, customer, or the like of the Company or any of its Affiliates; provided,  however, that the foregoing  shall  not  prohibit  the  Executive  from  placing  any  general  advertisements        for

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employees and hiring individuals that respond to such general advertisements, so long as such general advertisements are not directed to any employees of the Company or any of its Affiliates.

(d) Non-Disparagement. The Executive agrees not to disparage the Company or the Employer, any of their products or practices, or any of their directors, officers, agents, representatives, partners, members, equity holders or Affiliates, either orally or in writing, at any time, and the Employer agrees to instruct the Employer’s and the Company’s directors and officers as of the Date of Termination not to disparage the Executive, either orally or in writing, at any time; provided that the Executive, the Company and its Affiliates, and their respective directors and officers, may confer in confidence with their respective legal representatives and make truthful statements as required by law.

(e) Inventions.

(i) The Executive acknowledges and agrees that all ideas, methods, inventions, discoveries, improvements, work products and developments (“Inventions”), whether patentable or unpatentable, (x) that relate to the Executive’s work with the Employer and the Company, made or conceived by the Executive, solely or jointly with others, during or prior to the Term, or (y) suggested by any work that the Executive performs in connection with the Employer or the Company, either while performing the Executive’s duties with the Employer or on the Executive’s own time, but only insofar as the Inventions are related to the Executive’s work as an employee or other service provider to the Employer, shall belong exclusively to the Employer, the Company or its designee, whether or not patent applications are filed thereon. The Executive will keep full and complete written records (the “Records”), in the manner prescribed by the Employer, of all Inventions and will promptly disclose all Inventions completely and in writing to the Employer. The Records shall be the sole and exclusive property of the Employer and the Executive will surrender them upon termination of employment, or upon the Employer’s request. The Executive will assign to the Employer the Inventions and all patents that may issue thereon in any and all countries, whether during or subsequent to the Term, together with the right to file, in the Executive’s name or in the name of the Employer, the Company or its designee, applications for patents and equivalent rights (the “Applications”). The Executive will, at any time during and subsequent to the Term, make such applications, sign such papers, take all rightful oaths, and perform all acts as may be requested from time to time by the Employer or the Company with respect to the Inventions. The Executive will also execute assignments to the Employer, the Company or its designee, of the Applications, and give the Employer, the Company and its or their attorneys all reasonable assistance (including the giving of testimony)  to obtain the Inventions for its benefit, all without additional compensation to the Executive from the Employer or the Company, but entirely at the Employer’s or the Company’s expense.

(ii) In addition, the Inventions will be deemed Work for Hire, as such term is defined under the copyright law of the United States, on behalf of the Employer or the Company, and the Executive agrees that the Employer or the Company will be the sole owner of the Inventions, and all underlying rights therein, in all media now known or hereinafter devised, throughout the universe and in perpetuity, without any further obligations to the Executive. If the Inventions, or any portion thereof, are deemed not to be Work for Hire, the Executive hereby irrevocably conveys, transfers and assigns to the Employer or the Company all rights, in all media now known or hereinafter devised, throughout the universe and in perpetuity, in and to the

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Inventions, including, without limitation, all of the Executive’s right, title and interest in the copyrights (and all renewals, revivals and extensions thereof) to the Inventions, including, without limitation, all rights of any kind or any nature now or hereafter recognized, including, without limitation, the unrestricted right to make modifications, adaptations and revisions to the Inventions, to exploit and allow others to exploit the Inventions and all rights to sue at law or in equity for any infringement or other unauthorized use or conduct in derogation of the Inventions, known or unknown, prior to the date hereof, including, without limitation, the right to receive all proceeds and damages therefrom. In addition, the Executive hereby waives any so-called “moral rights” with respect to the Inventions. The Executive hereby waives any and all  currently existing and future monetary rights in and to the Inventions and all patents that  may issue thereon, including, without limitation, any rights that would otherwise accrue to the Executive’s benefit by virtue of the Executive being an employee of or other service provider to the  Employer or the Company.

(f) Remedies.  In addition to whatever other rights and remedies the Company and its Affiliates may have at equity or in law (including, without limitation, the right to seek monetary damages), if the Executive breaches any of the provisions contained in this Section   6,

(i) the Company and its Affiliates shall have the right immediately to terminate the Executive’s right to any amounts payable under this Agreement and (ii) the Company and its Affiliates shall have the right to injunctive relief, without the requirement to prove actual damages or to post any bond or other security, and to obtain the costs and reasonable attorneys’ fees they incur in enforcing their rights under this Agreement. The Executive acknowledges that (A) his breach of this Section 6 would cause irreparable injury to the Company and/or its Affiliates, (B) money damages alone would not provide an adequate remedy for the Company or its Affiliates, (C) his services to the Company are special, unique and extraordinary, and (D) the restrictions in this Section 6 (x) are no greater than required to protect the Company’s legitimate protectable interests (including, without limitation, the Confidential Information and the Company’s goodwill), (y) do not impose undue hardship on the Executive, and (z) are reasonable in duration and geographic scope. The Executive further acknowledges that (I) any breach or claimed breach of the provisions set forth in this Agreement shall not be a defense to enforcement of the restrictions set forth in this Section 6 and (II) the circumstances of the Executive’s termination of employment with the Employer and its Affiliates shall have no impact on his obligations under this Section 6.

(g) Blue Pencil.  In the event the terms of this Section 6 shall be determined by any court of competent jurisdiction to be unenforceable by reason of its extending for too great a period of time or over too great a geographical area or by reason of its being too extensive in any other respect, it will be interpreted to extend only over the maximum period of time for which it may be enforceable, over the maximum geographical area as to which it may be enforceable, or to the maximum extent in all other respects as to which it may be enforceable, all as determined by such court in such action.

(h) Tolling During Periods Of Breach. The Executive and the Employer agree and intend that the Executive’s obligations under this Section 6 be tolled during any period that the Executive is in breach of any of the obligations under this Section 6, so that the Company  and each Affiliate of the Company are provided with the full benefit of the restrictive periods set forth herein.

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(i) Third Party Beneficiary. The Company and each Affiliate of the Company are intended third party beneficiaries of the terms of this Section 6 and shall have the right to enforce the provisions of this Section 6 as if they were a party hereto.

(j) Survival. The Executive’s obligations under this Section 6 shall survive  the termination of this Agreement and the termination of his employment with the Employer.

7. Cooperation

Upon receipt of reasonable notice from the Company or Employer (including outside counsel), the Executive agrees that while employed by the Employer and thereafter, the Executive will respond and provide information with regard to matters in which the Executive has knowledge as a result of the Executive’s employment with the Employer, and will provide reasonable assistance to the Employer and the Company, its affiliates and representatives in defense of any claims that may be made against the Employer, Company or its affiliates, and will assist the Employer, Company and its affiliates in the prosecution of any claims that may be made by the Company and its affiliates, to the extent that such claims may relate to the period of the Executive’s employment with the Employer.

8. Assignment and Successors.  The Employer may assign its rights and obligations under this Agreement to any entity, including any successor to all or substantially all the assets  of the Company, by merger or otherwise, and may assign or encumber this Agreement and its rights hereunder as security for indebtedness of the Employer and its Affiliates. The Executive may not assign the Executive’s rights or obligations under this Agreement to any individual or entity. This Agreement shall be binding upon and inure to the benefit of the Company, the Employer, the Executive and their respective successors, assigns, personnel and legal representatives, executors, administrators, heirs, distributees, devisees, and legatees, as applicable.

9. Governing Law; Venue.  All issues and questions concerning the application, construction, validity, interpretation and enforcement of this Agreement shall be governed by  and construed in accordance with the laws of the State of Delaware, without giving effect to any principles of conflicts of law, whether of the State of Delaware or any other jurisdiction. Each of the parties hereto agrees that any legal action or proceeding with respect to this Agreement shall be brought exclusively in the United States District Court for the Southern District of New York, located in New York, New York, unless the parties to any such action or dispute mutually agree to waive this provision. By execution and delivery of this Agreement, each of the parties hereto irrevocably consents to service of process out of any of the aforementioned courts in any such action or proceeding by the mailing of copies thereof by registered or certified mail, postage prepaid, or by recognized express carrier or delivery service, to the applicable party at his, her or its address referred to herein. Each of the parties hereto irrevocably waives any objection which he, she or it may now or hereafter have to the laying of venue of any of the aforementioned actions or proceedings arising out of or in connection with this Agreement, or any related agreement, certificate or instrument referred to above, brought in the courts referred to above and hereby further irrevocably waives and agrees, to the fullest extent permitted by applicable law, not to plead or claim in any such court that any such action or proceeding brought in any such court has been brought in any inconvenient forum. Nothing herein shall affect the right of any

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party to serve process in any other manner permitted by law. EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY PROCEEDING (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE) ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE EXECUTIVE’S EMPLOYMENT BY THE EMPLOYER, COMPANY OR ANY AFFILAITE OF THE COMPANY, OR THE EXECUTIVE’S OR THE EMPLOYER’S OR COMPANY’S PERFORMANCE UNDER, OR THE ENFORCEMENT OF THIS AGREEMENT.

10. Validity.  The invalidity or unenforceability of any provision or provisions of this Agreement shall not affect the validity or enforceability of any other provision of this Agreement, which shall remain in full force and effect.

11. Notices.  Any notice, request, claim, demand, document and other communication hereunder to any party hereto shall be effective upon receipt (or refusal of receipt) and shall be in writing and delivered personally or sent by a reputable national overnight carrier or certified or registered mail, postage prepaid, to the following address (or at any other address as any party hereto shall have specified by notice in writing to the other party hereto):

(a) If to the Employer:

Connolly iHealth Technologies, LLC 50 Danbury Road

Wilton, Connecticut 06859 Attn: General Counsel

(b) If to the Executive, at the address set forth on the signature page hereto.

12. Counterparts.  This Agreement may be executed in several counterparts, each of which shall be deemed to be an original, but all of which together will constitute one and the same Agreement.

13. Entire Agreement.  The terms of this Agreement (together with any other agreements and instruments contemplated hereby or referred to herein) is intended by the parties hereto to be the final expression of their agreement with respect to the employment of the Executive by the Employer and may not be contradicted by evidence of any prior or contemporaneous agreement (including, without limitation, any term sheet or offer letter). The parties hereto further intend that this Agreement shall constitute the complete and exclusive statement of its terms and that no extrinsic evidence whatsoever may be introduced in any judicial, administrative, or other legal proceeding to vary the terms of this Agreement.

14. Amendments; Waivers.  This Agreement may not be modified, amended, or terminated except by an instrument in writing, signed by the Executive and a duly authorized officer of the Employer and approved by the Board, which expressly identifies the amended provision of this Agreement. By an instrument in writing similarly executed and approved by the Board, the Executive or a duly authorized officer of the Employer may waive compliance by the other party or parties hereto with any provision of this Agreement that such other party was or is obligated to comply with or perform; provided,  however, that such waiver shall not operate as   a

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waiver of, or estoppel with respect to, any other or subsequent failure to comply or perform. No failure to exercise and no delay in exercising any right, remedy, or power hereunder shall preclude any other or further exercise of any other right, remedy, or power provided herein or by law or in equity.

15. No Inconsistent Actions.  The parties hereto shall not voluntarily undertake or fail to undertake any action or course of action inconsistent with the provisions or essential intent of this Agreement. Furthermore, it is the intent of the parties hereto to act in a fair and reasonable manner with respect to the interpretation and application of the provisions of this Agreement.

16. Construction.  This Agreement shall be deemed drafted equally by both of the parties hereto. Its language shall be construed as a whole and according to its fair meaning. Any presumption or principle that the language is to be construed against any party hereto shall not apply. The headings in this Agreement are only for convenience and are not intended to affect construction or interpretation. Any references to paragraphs, subparagraphs, sections or subsections are to those parts of this Agreement, unless the context clearly indicates to the contrary. Also, unless the context clearly indicates to the contrary, (a) the plural includes the singular and the singular includes the plural; (b) “and” and “or” are each used both conjunctively and disjunctively; (c) “any,” “all,” “each,” or “every” means “any and all,” and “each and  every”; (d) ”includes” and “including” are each “without limitation”; (e) “herein,” “hereof,” “hereunder” and other similar compounds of the word “here” refer to the entire Agreement and not to any particular paragraph, subparagraph, section or subsection; and (f) all pronouns and any variations thereof shall be deemed to refer to the masculine, feminine, neuter, singular or plural  as the identity of the Persons referred to may require.

17. Enforcement.  If any provision of this Agreement is held to be illegal, invalid or unenforceable under present or future laws effective during the term of this Agreement, such provision shall be fully severable; this Agreement shall be construed and enforced as if such illegal, invalid or unenforceable provision had never comprised a portion of this Agreement; and the remaining provisions of this Agreement shall remain in full force and effect and shall not be affected by the illegal, invalid or unenforceable provision or by its severance from this Agreement. Furthermore, in lieu of such illegal, invalid or unenforceable provision there shall be added automatically as part of this Agreement a provision as similar in terms to such illegal, invalid or unenforceable provision as may be possible and be legal, valid and enforceable.

18. Withholding.  The Employer and its Affiliates shall be entitled to withhold from any amounts payable under this Agreement, any federal, state, local or foreign withholding or other taxes or charges which the Employer or any of its Affiliates is required to withhold. The Employer and its Affiliates shall be entitled to rely on an opinion of counsel if any questions as  to the amount or requirement of withholding shall arise.

19. Absence of Conflicts; Executive Acknowledgement; Confidentiality.  The Executive hereby represents that from and after the Effective Date the performance of the Executive’s duties hereunder will not breach any other agreement to which the Executive is a party. The Executive acknowledges that the Executive has read and understands this Agreement, is fully aware of its legal effect, has not acted in reliance upon any representations or promises made by the Employer or any of its Affiliates other than those contained in writing herein, and

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has entered into this Agreement freely based on the Executive’s own judgment. The Executive agrees not to disclose the terms or existence of this Agreement to any Person unless the Employer agrees to such disclosure in advance and in writing; provided that the Executive may, without such permission, make such disclosures as are required by applicable law, including disclosures to taxing agencies, and disclose the terms of this Agreement to the Executive’s attorney(s), accountant(s), tax advisor(s), and other professional service provider(s), and to members of the Executive’s immediate family, as reasonably necessary; provided,  further, that the Executive instructs such Person(s) that the terms of this Agreement are strictly confidential and are not to be revealed to anyone else except as required by applicable law.

20. Survival.  The expiration or termination of the Term shall not impair the rights or obligations of any party hereto which shall have accrued prior to such expiration or termination (including, without limitation, pursuant to the provisions of Section 6 hereof).

21. Section 409A; Release.

(a) General. The parties hereto acknowledge and agree that, to the extent applicable, this Agreement shall be interpreted in accordance with, and incorporate the terms and conditions required by, Section 409A. Notwithstanding any provision of this Agreement to the contrary, in the event that the Employer determines that any amounts payable hereunder will be immediately taxable to the Executive under Section 409A, the Employer reserves the right (without any obligation to do so or to indemnify the Executive for failure to do so) to (i) adopt such amendments to this Agreement and appropriate policies and procedures, including amendments and policies with retroactive effect, that the Employer determines to be necessary or appropriate to preserve the intended tax treatment of the benefits provided by this Agreement, to preserve the economic benefits of this Agreement and to avoid less favorable accounting or tax consequences for the Employer and/or (ii) take such other actions as the Employer determines to be necessary or appropriate to exempt the amounts payable hereunder from Section 409A or to comply with the requirements of Section 409A and thereby avoid the application of penalty taxes thereunder. Notwithstanding anything herein to the contrary, in no event shall any liability for failure to comply with the requirements of Section 409A be transferred from the Executive or any other individual to the Employer or any of its Affiliates, employees or agents pursuant to the terms of this Agreement or otherwise.

(b) Separation from Service under Section 409A. Notwithstanding any provision to the contrary in this Agreement: (i) no amount that is nonqualified deferred compensation shall be payable pursuant to Section 5(b) unless the termination of the Executive’s employment constitutes a “separation from service” within the meaning of Section 1.409A-1(h) of the Department of Treasury Regulations; (ii) for purposes of Section 409A, the Executive’s right to receive installment payments pursuant to Section 5(b) shall be treated as a right to receive a series of separate and distinct payments; and (iii) to the extent that any reimbursement of expenses or in-kind benefits constitutes “deferred compensation” under Section 409A, such reimbursement or benefit shall be provided no later than December 31 of the year following the year in which the expense was incurred. The amount of expenses reimbursed in one year shall  not affect the amount eligible for reimbursement in any subsequent year. The amount of any in- kind benefits provided in one year shall not affect the amount of in-kind benefits provided in any other year. Notwithstanding any provision to the contrary in this Agreement, if the Executive   is

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deemed at the time of his separation from service to be a “specified employee” for purposes of Section 409A(a)(2)(B)(i) of the Code, to the extent delayed commencement of any portion of the termination benefits to which the Executive is entitled under this Agreement is required in order to avoid a prohibited distribution under Section 409A(a)(2)(B)(i) of the Code, such portion of the Executive’s termination benefits shall not be provided to the Executive prior to the earlier of (A) the expiration of the six-month period measured from the date of the Executive’s “separation from service” with the Company (as such term is defined in the Treasury Regulations issued under Section 409A of the Code) or (B) the date of the Executive’s death; upon the earlier of  such dates, all payments deferred pursuant to this sentence shall be paid in a lump sum to the Executive, and any remaining payments due under the Agreement shall be paid as otherwise provided herein.

22. Compensation Recovery Policy.  The Executive acknowledges and agrees that,  to the extent the Employer or the Company adopts any clawback or similar policy pursuant to the Dodd-Frank Wall Street Reform and Consumer Protection Act or otherwise, and any rules and regulations promulgated thereunder, he shall take all action necessary or appropriate to comply with such policy (including, without limitation, entering into any further  agreements, amendments or policies necessary or appropriate to implement and/or enforce such policy).

[Signature pages follow]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement on the date and year first above written, effective as of the Effective Date.

Connolly iHealth Technologies, LLC

By:

Senior Vice President, Human Resources

Executive

By:

EX-21.1

Exhibit 21.1

SUBSIDIARIES OF COTIVITI HOLDINGS, INC.

Subsidiary	State or Other Jurisdiction of Formation
Cotiviti Intermediate Holdings, Inc.	Delaware
Cotiviti Corporation	Delaware
Cotiviti Domestic Holdings, Inc.	Delaware
Cotiviti, LLC	Delaware
Cotiviti USA, LLC	Delaware
Cotiviti International Holdings, Inc.	Delaware
Cotiviti Europe Limited (UK)	United Kingdom
Cotiviti Canada Corp.	Nova Scotia, Canada
Cotiviti Mauritius Ltd.	Mauritius
Cotiviti India Pvt. Ltd.	India
Cotiviti Investments, LLC	Delaware

EX-23.1

Exhibit 23.1

Consent of Independent Registered Public Accounting Firm

The Board of Directors
Cotiviti Holdings, Inc.:

We consent to the incorporation by reference in the registration statements (No. 333-214568 and 333-211618) on Form S-8 and in the registration statement (No. 333-219757) on Form S-3 of Cotiviti Holdings, Inc. and subsidiaries of our reports dated February 22, 2018, with respect to the consolidated balance sheets of Cotiviti Holdings, Inc. and subsidiaries as of December 31, 2017 and 2016, and the related consolidated statements of comprehensive income, stockholders’ equity, and cash flows for each of the years in the three-year period ended December 31, 2017, and the related notes and financial statement schedules I to II (collectively, the “consolidated financial statements”), and the effectiveness of internal control over financial reporting as of December 31, 2017, which reports appear in the December 31, 2017 annual report on Form 10-K of Cotiviti Holdings, Inc. and subsidiaries.

/s/ KPMG LLP

New York, New York

February 22, 2018

EX-31.1

EXHIBIT 31.1

CERTIFICATIONS

I, J. Douglas Williams, certify that:

1. I  have reviewed this annual report on Form 10-K of Cotiviti 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 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;

(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 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.

Date: February 22, 2018	/s/ J. DOUGLAS WILLIAMS
	J. Douglas Williams Chief Executive Officer (Principal Executive Officer)

EX-31.2

EXHIBIT 31.2

CERTIFICATIONS

I, Bradley Ferguson, certify that:

1. I have reviewed this annual report on Form 10-K of Cotiviti 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 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;

(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 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.

Date: February 22, 2018	/s/ BRADLEY FERGUSON
	Bradley Ferguson Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

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 annual report of Cotiviti Holdings, Inc. (the “Company”) on Form 10-K for the fiscal year ended December 31, 2017, as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, J. Douglas Williams, Chief Executive Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1)	The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and
(2)	The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date:    February 22, 2018

/s/ J. DOUGLAS WILLIAMS

J. Douglas Williams

Chief Executive Officer

(Principal Executive Officer)

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

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 annual report of Cotiviti Holdings, Inc. (the “Company”) on Form 10-K for the fiscal year ended December  31, 2017 as filed with the Securities and Exchange Commission on the date hereof (the “Report”), I, Bradley Ferguson, Senior Vice President and Chief Financial Officer of the Company, certify, pursuant to 18 U.S.C. § 1350, adopted pursuant to §906 of the Sarbanes-Oxley Act of 2002, that:

(1) The Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934, as amended; and

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

Date:   February 22, 2018

/s/ BRADLEY FERGUSON

Bradley Ferguson

Senior Vice President and Chief Financial Officer (Principal Financial Officer and Principal Accounting Officer)

The foregoing certification is being furnished solely pursuant to 18 U.S.C. Section 1350 and is not being filed as part of the Report or as a separate disclosure document.

XML

Document and Entity Information - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2017	Jan. 31, 2018	Jun. 30, 2017
Document and Entity Information
Entity Registrant Name	Cotiviti Holdings, Inc.
Entity Central Index Key	0001657197
Document Type	10-K
Document Period End Date	Dec. 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Entity Current Reporting Status	Yes
Entity Voluntary Filers	No
Entity Well-known Seasoned Issuer	No
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$ 979.0
Entity Common Stock, Shares Outstanding		92,421,924
Document Fiscal Year Focus	2017
Document Fiscal Period Focus	FY

XML

Consolidated Balance Sheets - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Current assets
Cash and cash equivalents	$ 165,518	$ 110,635
Restricted cash	11,383	9,103
Accounts receivable, net of allowance for doubtful accounts of $176 and $851 at December 31, 2017 and 2016, respectively; and net of estimated allowance for refunds and appeals of $35,434 and $41,020 at December 31, 2017 and 2016, respectively	83,756	67,735
Prepaid expenses and other current assets	15,314	14,957
Total current assets	275,971	202,430
Property and equipment, net	77,340	67,640
Goodwill	1,251,364	1,196,024
Intangible assets, net	492,040	533,305
Other long-term assets	2,514	2,864
TOTAL ASSETS	2,099,229	2,002,263
Current liabilities:
Current maturities of long-term debt	18,000	18,000
Customer deposits	11,383	9,103
Accounts payable and accrued other expenses	25,906	23,162
Accrued compensation costs	42,725	58,589
Estimated liability for refunds and appeals	61,607	62,539
Total current liabilities	159,621	171,393
Long-term liabilities:
Long-term debt	749,618	762,202
Other long-term liabilities	5,474	8,799
Deferred tax liabilities	83,048	120,533
Total long-term liabilities	838,140	891,534
Total liabilities	997,761	1,062,927
Commitments and contingencies (Note 7)
Stockholders' equity:
Common stock ($0.001 par value; 600,000,000 shares authorized, 92,299,294 and 90,748,740 issued, and 92,299,294 and 90,741,340 outstanding at December 31, 2017 and 2016, respectively)	92	91
Additional paid-in capital	933,710	911,582
Retained earnings	172,120	33,917
Accumulated other comprehensive loss	(4,454)	(6,156)
Treasury stock, at cost (7,400 shares at December 31, 2016)		(98)
Total stockholders' equity	1,101,468	939,336
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 2,099,229	$ 2,002,263

XML

Consolidated Balance Sheets (Parentheticals) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Consolidated Balance Sheets
Allowance for doubtful accounts	$ 176	$ 851
Estimated allowance for refunds and appeals	$ 35,434	$ 41,020
Common stock, par value per share	$ 0.001	$ 0.001
Common stock, shares authorized	600,000,000	600,000,000
Common stock, shares issued	92,299,294	90,748,740
Common stock, shares outstanding	92,299,294	90,741,340
Treasury stock, shares		7,400

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Consolidated Statements of Comprehensive Income
Net revenue	$ 678,661	$ 625,162	$ 541,343
Cost of revenue (exclusive of depreciation and amortization, stated separately below):
Compensation	226,439	229,601	183,817
Other costs of revenue	24,688	22,167	20,800
Total cost of revenue	251,127	251,768	204,617
Selling, general and administrative expenses (exclusive of depreciation and amortization, stated separately below):
Compensation	108,151	97,123	70,802
Other selling, general and administrative expenses	68,361	59,561	65,943
Total selling, general and administrative expenses	176,512	156,684	136,745
Depreciation and amortization of property and equipment	25,577	20,151	12,695
Amortization of intangible assets	59,606	60,818	61,467
Transaction-related expenses	2,219	1,788	1,469
Impairment of intangible assets	1,322		27,826
Total operating expenses	516,363	491,209	444,819
Operating income	162,298	133,953	96,524
Other expense (income):
Interest expense	34,876	48,653	65,561
Loss on extinguishment of debt	3,183	16,417	4,084
Other non-operating (income) expense	(2,191)	(939)	(826)
Total other expense (income)	35,868	64,131	68,819
Income before income taxes	126,430	69,822	27,705
Income tax (benefit) expense	(11,773)	20,970	14,401
Income from continuing operations	138,203	48,852	13,304
Gain on discontinued operations, net of tax			559
Net income	138,203	48,852	13,863
Other comprehensive income, net of tax:
Foreign currency translation adjustments	924	(923)	(664)
Change in fair value of derivative instruments	778	(366)	(2,345)
Total other comprehensive income (loss)	1,702	(1,289)	(3,009)
Comprehensive income	$ 139,905	$ 47,563	$ 10,854
Earnings per share from continuing operations:
Basic (in dollars per share)	$ 1.50	$ 0.57	$ 0.17
Diluted (in dollars per share)	1.45	0.55	0.17
Earnings per share from discontinued operations:
Basic (in dollars per share)			0.01
Diluted (in dollars per share)			0.01
Earnings per share
Basic (in dollars per share)	1.50	0.57	0.18
Diluted (in dollars per share)	$ 1.45	$ 0.55	$ 0.18

XML

Consolidated Statements of Stockholders' Equity - USD ($) $ in Thousands	Common stock	Additional Paid-in Capital	Accumulated Deficit	Accumulated Other Comprehensive Income/(Loss)	Treasury Stock	Total
Balance at beginning of period at Dec. 31, 2014	$ 77	$ 803,810	$ (28,798)	$ (1,858)	$ (98)	$ 773,133
Balance at beginning of period (in shares) at Dec. 31, 2014	77,204,691				7,400
Change in Stockholders' Equity
Net income			13,863			13,863
Stock-based compensation expense		3,399				3,399
Exercise of stock options		210				210
Exercise of stock options (in shares)	25,620
Other comprehensive loss, net				(3,009)		(3,009)
Balance at end of period at Dec. 31, 2015	$ 77	807,419	(14,935)	(4,867)	$ (98)	787,596
Balance at end of period (in shares) at Dec. 31, 2015	77,230,311				7,400
Change in Stockholders' Equity
Net income			48,852			48,852
Proceeds from issuance of common stock	$ 13	226,950				226,963
Proceeds from issuance of common stock (in shares)	12,936,038
Dividends paid		(150,000)				(150,000)
Stock-based compensation expense		22,954				22,954
Exercise of stock options	$ 1	4,259				4,260
Exercise of stock options (in shares)	574,991
Other comprehensive loss, net				(1,289)		(1,289)
Balance at end of period at Dec. 31, 2016	$ 91	911,582	33,917	(6,156)	$ (98)	$ 939,336
Balance at end of period (in shares) at Dec. 31, 2016	90,741,340				7,400	90,741,340
Change in Stockholders' Equity
Net income			138,203			$ 138,203
Stock-based compensation expense		16,873				16,873
Exercise of stock options	$ 2	13,530				$ 13,532
Exercise of stock options (in shares)	1,778,104					1,778,104
Release of RSUs		(124)			$ (3)	$ (127)
Release of RSUs (shares)	35,056				77
Retirement of treasury shares		(101)			$ 101
Retirement of treasury shares (shares)					(7,477)
Stock issued under ESPP		1,949				1,949
Stock issued under ESPP (shares)	62,694
Repurchase of common stock	$ (1)	(9,999)				(10,000)
Repurchase of common stock (shares)	(317,900)
Other comprehensive loss, net				1,702		1,702
Balance at end of period at Dec. 31, 2017	$ 92	$ 933,710	$ 172,120	$ (4,454)		$ 1,101,468
Balance at end of period (in shares) at Dec. 31, 2017	92,299,294					92,299,294

XML

Consolidated Statements of Cash Flows - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Cash flows from operating activities:
Net income	$ 138,203	$ 48,852	$ 13,863
Adjustments to reconcile net income to net cash provided by operating activities:
Deferred income taxes	(41,641)	(7,735)	(11,832)
Depreciation and amortization of property and equipment	85,183	80,969	74,162
Stock-based compensation expense	16,873	22,954	3,399
Amortization of debt issuance costs	2,893	4,278	5,565
Accretion of asset retirement obligations	194	186	166
Loss on impairment of intangible assets	1,322		27,826
Loss on extinguishment of debt	3,183	16,417	4,084
Gain on discontinued operations			(900)
Changes in operating assets and liabilities:
Restricted cash	(2,280)	1,638	9,486
Accounts receivable	(13,494)	11,121	(18,641)
Other assets	1,232	7,217	(12,167)
Customer deposits	2,280	(1,638)	(9,486)
Accrued compensation	(16,072)	15,687	263
Accounts payable and accrued other expenses	(2,402)	(4,821)	(14,831)
Estimated liability for refunds and appeals	(932)	(5,236)	(7,166)
Other long-term liabilities	413	109	(115)
Other	148	(827)	(522)
Net cash provided by operating activities	175,103	189,171	63,154
Cash flows from investing activities:
Expenditures for property and equipment	(37,274)	(35,213)	(22,982)
Business combinations, net of cash acquired	(69,992)
Other investing activities		1,181	401
Net cash used in investing activities	(107,266)	(34,032)	(22,581)
Cash flows from financing activities:
Net proceeds from issuance of common stock		226,963
Proceeds from issuance of common stock under equity plans	15,340	4,243	210
Proceeds from issuance of debt		800,000
Dividends paid		(150,000)
Repurchase of common stock	(10,000)
Payment of debt issuance costs	(661)	(7,131)	(1,086)
Repayment of debt	(18,000)	(1,067,350)	(8,100)
Net cash used in financing activities	(13,321)	(193,275)	(8,976)
Effect of foreign exchanges on cash and cash equivalents	367	(594)	(844)
Net increase (decrease) in cash and cash equivalents	54,883	(38,730)	30,753
Cash and cash equivalents at beginning of period	110,635	149,365	118,612
Cash and cash equivalents at end of the period	165,518	110,635	149,365
Supplemental disclosures of cash flow information:
Cash paid for income taxes	28,452	25,359	41,119
Cash paid for interest	29,601	43,227	60,238
Noncash investing activities (accrued property and equipment purchases)	$ 5,912	$ 8,163	$ 12,949

XML

Description of Business

12 Months Ended

Dec. 31, 2017

Description of Business

Description of Business

Note 1. Description of Business

Cotiviti Holdings, Inc. (collectively with its subsidiaries, “we,” “our,” “Cotiviti” or the “Company”) is a leading provider of analytics‑driven payment accuracy and spend management solutions, focused primarily on the healthcare sector. Our integrated solutions help clients enhance payment accuracy in an increasingly complex healthcare environment. We leverage our robust technology platform, configurable analytics, proprietary information assets and expertise in healthcare reimbursement to help our clients enhance their claims payment accuracy. We help our healthcare clients identify and correct payment inaccuracies. We work with over 60 healthcare organizations, including a majority of the 25 largest U.S. commercial, Medicaid and Medicare managed health plans, as well as CMS. We are also a leading provider of payment accuracy solutions to approximately 30 retail clients, including a majority of the ten largest retailers in the United States.

We have adopted a holding company structure and our primary domestic operations are performed through our wholly-owned operating subsidiaries. We have international operations in Canada, the United Kingdom and India.

XML

Summary of Significant Accounting Policies

12 Months Ended

Dec. 31, 2017

Summary of Significant Accounting Policies

Summary of Significant Accounting Policies

Note 2. Summary of Significant Accounting Policies

Basis of Presentation

The accompanying consolidated financial statements include our accounts and our wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the current year presentation.

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions affecting the reported amounts in our consolidated financial statements and accompanying notes. These estimates are based on information available as of the date of the Consolidated Financial Statements; therefore, actual results could differ from those estimates.

Foreign Currency Translation

Assets and liabilities of our foreign subsidiaries with a functional currency other than the U.S. Dollar are translated into U.S. Dollars using applicable exchange rates at the balance sheet date. Revenue and expenses are translated at average exchange rates effective during the year. The resulting foreign currency translation gains and losses are included as a component of accumulated other comprehensive income (loss) within stockholders’ equity on our Consolidated Balance Sheets.

Assets and liabilities of our foreign subsidiaries for which the functional currency is the U.S. Dollar are re-measured into U.S. Dollars using applicable exchange rates at the balance sheet date, except nonmonetary assets and liabilities, which are re-measured at the historical exchange rates prevailing when acquired. Revenue and expenses are re-measured at average exchange rates effective during the year.

Foreign currency translation gains and losses from re-measurement are included in other non-operating (income) expense in the accompanying Consolidated Statements of Comprehensive Income. The amounts of net gain (loss) on foreign currency re-measurement recognized were immaterial for all periods presented.

Revenue Recognition, Unbilled Receivables and Estimated Liability for Refunds and Appeals

We provide services under contracts that contain various fee structures, including performance fee‑based contracts and fixed fee arrangements. Revenue is recognized when a contract exists, services have been provided to the client, the fee is fixed and determinable and collectability is reasonably assured.

We recognize revenue on performance fee-based contracts based upon the specific terms of the underlying contract. The contract terms generally specify: (a) time periods covered by the work to be performed; (b) nature and extent of services we are to provide; (c) the client’s duties in assisting and cooperating with us; and (d) fees payable to us. Our fees are most often expressed as a percentage of our findings. Generally, our services are rendered when our clients realize the economic benefits from our services. Our clients realize economic benefits when they take credits against their existing accounts payable based on when we identify cost savings, when they receive refund checks based on overpayments, or when they acknowledge payment reductions based on cost savings. 

We derive a relatively small portion of revenue on contracts with fixed fee arrangements. We recognize revenue on these contracts ratably over the contract term and once all of the above criteria have been satisfied.

As discussed below under Recently Issued Accounting Standards, we will adopt the updated FASB revenue recognition guidance ASC 606 on January 1, 2018. ASC 606 is an update to ASC 605, which was the revenue recognition standard in effect for each of the three years in the period ended December 31, 2017.

Historically, there has been a certain amount of revenue with respect to which, even though we had met the requirements of our revenue recognition policy, the claim is ultimately rejected. In such cases, our clients may request a refund or offset if their providers or vendors ultimately reject the payment inaccuracies we find or if our clients determine not to pursue reimbursement from their providers or vendors even though we may have collected fees. We record any such refund as a reduction of revenue. We record an estimate for refund liabilities at any given time based on actual historical refund data by client type. We satisfy such refund liabilities either by offsets to accounts receivable or by cash payments to clients. In addition to these estimated refund liabilities, we calculate client specific reserves when we determine an additional reserve may be necessary.

The estimated liability for refunds and appeals representing our estimate of claims that may be overturned related to revenue which had already been received was $61,607 and $62,539 at December 31, 2017 and December 31, 2016, respectively. The estimated allowance for refunds and appeals representing our estimate of claims that may be overturned related to amounts in accounts receivable was $35,434 and $41,020 at December 31, 2017 and December 31, 2016, respectively.

Under the Medicare Recovery Audit Program, in which we are one of the Medicare RACs for CMS, healthcare providers have the right to appeal a claim and may pursue additional appeals if the initial appeal is found in favor of CMS. We accrue an estimated liability for appeals based on the amount of fees that are subject to appeals, closures or other adjustments and those which we estimate are probable of being returned to CMS following a successful appeal by the providers. Our estimates are based on our historical experience with the Medicare RAC appeal process. This estimated liability for Medicare RAC appeals is an offset to revenue in our Consolidated Statements of Comprehensive Income. The liability is included in the estimated liability for refunds and appeals on our Consolidated Balance Sheets. See Note 7 and Note 20 for further information regarding the estimated liability for appeals related to the Medicare RAC program.

Unbilled receivables represent revenue recognized related to claims for which clients have received economic value that were not invoiced at the balance sheet date. Unbilled receivables were approximately $62,294 and $51,643 as of December 31, 2017 and December 31, 2016, respectively and are included in accounts receivable on our Consolidated Balance Sheets.

Certain unbilled receivables arise when a portion of our earned fee is deferred at the time of the initial invoice. At a later date (which can be up to a year after original invoice, and at other times during the year after completion of the audit period based on contractual terms or as agreed with our client), we invoice the unbilled receivable amount. Notwithstanding the deferred due date, our clients acknowledge we have earned this unbilled receivable at the time of the original invoice, but we have agreed to defer billing the client for the related services. Unbilled receivables of this nature were approximately $4,958 and $6,137 as of December 31, 2017 and December 31, 2016, respectively, and are included in accounts receivable on our Consolidated Balance Sheets.

We record periodic changes in unbilled receivables and refund liabilities as adjustments to revenue.

Cost of Revenue

Cost of revenue is a direct cost associated with generating revenue. Cost of revenue related to compensation includes the total cost of payroll, related benefits and stock-based compensation expense for employees in roles that serve to provide direct revenue generating services to clients. Other cost of revenue primarily includes expenses related to the use of certain subcontractors and professional service firms, costs associated with the retrieval of medical records and facilities related costs associated with locations that are used strictly for revenue generating activities. Cost of revenue does not include depreciation and amortization, which is stated separately in our Consolidated Statements of Comprehensive Income.

Selling, General and Administrative

Compensation within SG&A includes the total cost of payroll, related benefits and stock-based compensation expense for employees who do not have a direct role associated with revenue generation including those involved with developing new service offerings. Other SG&A expenses include all general operating costs. These costs include, but are not limited to, rent and occupancy costs for facilities associated with locations that are used for employees not serving in revenue generating roles, telecommunications costs, information technology infrastructure costs, software licensing costs, advertising and marketing expenses, costs associated with developing new service offerings and expenses related to the use of certain subcontractors and professional services firms. SG&A expenses do not include depreciation and amortization, which is stated separately in our Consolidated Statements of Comprehensive Income.

Advertising Costs

Advertising costs are expensed as incurred and included in other SG&A expenses on our Consolidated Statements of Comprehensive Income. Advertising expense was $1,439,  $1,345 and $1,241 for the years ended December 31, 2017, 2016 and 2015, respectively.

Cash and Cash Equivalents

Cash and cash equivalents include all cash balances and highly liquid investments with an original maturity of 90 days or less from the date of purchase.

Restricted Cash

In connection with providing services to certain clients, we maintain a series of lockbox accounts with certain financial institutions. These lockbox accounts exist to receive funds we collect on behalf of our clients resulting from services provided. When client funds are received and deposited into the lockbox accounts, we record a corresponding customer deposit liability. These funds are included as both restricted cash in current assets and customer deposits in current liabilities on our Consolidated Balance Sheets.

Accounts Receivable

Trade accounts receivable are recorded at the invoiced amount and do not bear interest. We accrue an allowance against accounts receivable related to fees yet to be collected, based on historical losses adjusted for current market conditions, our clients’ financial condition, the amount of any receivables in dispute, the current receivables aging and current payment patterns. We record changes in our estimate to the allowance for doubtful accounts through bad debt expense and relieve the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Write-offs for all periods presented have not been significant. We do not have any off balance sheet credit exposure related to our clients.

Property and Equipment

Property and equipment is stated at cost, net of accumulated depreciation. Depreciation on property and equipment is calculated using the straight-line method over the estimated useful lives of the assets and is included in depreciation and amortization of property and equipment in our Consolidated Statements of Comprehensive Income. The estimated useful lives of our property and equipment are as follows:

Computer equipment	3	-	5	years
Software	2	-	5	years
Furniture and fixtures			7	years
Leasehold improvements				Lesser of remaining lease term or expected service life of improvement

We have AROs arising from contractual requirements to perform specified activities at the time of disposition of certain leasehold improvements and equipment at some of our facilities. We record a liability for the estimated costs of these AROs. The liabilities are included in other long-term liabilities on our Consolidated Balance Sheets and are initially measured at fair value and subsequently are adjusted for accretion expense and any changes in the amount or timing of the estimated cash flows.

Internally Developed Software Costs

Capitalization of costs incurred in connection with software developed for internal use commences when both the preliminary project stage is completed and management has authorized further funding for the project, based on a determination that it is probable the project will be completed and used to perform the function intended. Capitalized costs are limited to (i) external direct costs of materials and services consumed in developing or obtaining internal use software and (ii) payroll and payroll related costs for employees who are directly associated with and devote time to the internal use software project. Capitalization of such costs ceases no later than the point at which the project is substantially complete and ready for its intended use. All other costs to develop software for internal use are expensed as incurred.

We capitalized approximately $14,765, $21,580 and $7,239 for the years ended December 31, 2017, 2016 and 2015 respectively. Amortization of software and software development costs is calculated on a straight-line basis over the expected economic life of the software, generally estimated to be five years and is included in depreciation and amortization of property and equipment on our Consolidated Statements of Comprehensive Income. Amortization expense for internal use software was $7,745,  $2,992 and $2,287 for the years ended December 31, 2017, 2016 and 2015, respectively. Amortization expense for the year ended December 31, 2015 includes the write off of approximately $975 related to software that is no longer being used.

Goodwill

Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination which are not individually identified and separately recognized. We do not amortize goodwill. Goodwill is reviewed for impairment on an annual basis as of October 1, of each year or more frequently if events or circumstances indicate the carrying amount may not be recoverable. These tests are performed at the reporting unit level. We have two reporting units, Healthcare and Global Retail and Other. Application of the goodwill impairment test requires judgment, including: the identification of reporting units; assignment of assets and liabilities to reporting units; determination of the fair value of each reporting unit; and an assumption as to the form of the transaction in which the reporting unit would be acquired by a market participant (either a taxable or nontaxable transaction).

Under ASC 350, Intangibles—Goodwill and Other, we are permitted to make a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount.  If we can support the conclusion that it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, then we would not need to perform the quantitative impairment test. If we cannot support such a conclusion, or we do not elect to perform the qualitative assessment, then a quantitative test for goodwill is used to identify potential impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill. The fair value of a reporting unit is determined using a discounted cash flow analysis based on assumptions regarding our future business outlook. While we continue to review and analyze many factors that can impact our business prospects in the future, our analyses are subjective and are based on conditions existing at and trends leading up to the time the assumptions are made. Actual results could differ materially from these assumptions.

Intangible Assets

Our intangible assets with definite lives include customer relationships and acquired software. Intangible assets with indefinite lives include a trademark, which is not being amortized, and is tested for impairment on an annual basis as of October 1 of each year or when events or changes in circumstances necessitate an evaluation for impairment. Recoverability of these assets is measured by a comparison of the carrying amounts to the future discounted cash flows the assets are expected to generate. Intangible assets with definite lives are initially recorded at fair value and are amortized on a basis consistent with the timing and pattern of expected cash flows used to value the intangibles, generally on a straight-line basis over useful lives ranging from 5 to 14 years. Amortization expense is included in amortization of intangible assets in our Consolidated Statements of Comprehensive Income. Intangible assets with definite lives are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. See Note 5 for further detail.

Long-Lived Assets

Long-lived assets, including property and equipment, with definite lives, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. If circumstances require the asset or asset group be tested for possible impairment, we first compare undiscounted cash flows expected to be generated by the asset or asset group to its carrying value. If the carrying value of the asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment loss is recognized to the extent the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third party independent appraisals, as necessary.

Business Combinations

We account for acquisitions of businesses using the acquisition method of accounting. The purchase price is allocated to the identifiable net assets acquired, including intangible assets and liabilities assumed, based on estimated fair values at the date of the acquisition. The excess of the purchase price over the amount allocated to the identifiable assets and liabilities, if any, is recorded as goodwill.

Determining the fair value of assets acquired and liabilities assumed requires significant judgment, including the selection of valuation methodologies, estimates of future revenue and cash flows and discount rates.

Under the acquisition method of accounting for business combinations, any changes to acquired balances in tax accounts, including adjustments to deferred tax asset valuation allowances or liabilities related to uncertain tax positions, which are recorded during the measurement period, and are determined to be attributable to facts and circumstances that existed as of the acquisition date, are considered a measurement period adjustment and will result in an offsetting increase or decrease to goodwill. All other changes to deferred tax asset valuation allowances and liabilities related to uncertain tax positions will result in an increase or decrease to income tax expense.

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as for tax attributes such as operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

We recognize net deferred tax assets to the extent that we believe these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, and results of recent operations. In the event we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we reduce the deferred tax asset valuation allowance and record a benefit in our provision for income taxes in our Consolidated Statements of Comprehensive Income.

We record liabilities related to uncertain tax positions in accordance with ASC 740, Income Taxes, on the basis of a two step process whereby (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more likely than not recognition threshold, we recognize the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority. We recognize interest and penalties related to unrecognized tax benefits within the income tax provision in the accompanying Consolidated Statements of Comprehensive Income. Accrued interest and penalties are included within accounts payable and accrued other expenses in the Consolidated Balance Sheets.

The Tax Act, which was enacted on December 22, 2017, resulted in a substantial impact on our income tax benefit for the year ended December 31, 2017. See Note 11 for additional information. 

Derivative Instruments

Our derivative instruments consist entirely of interest rate cap agreements, are stated at fair value and are included in accounts payable and accrued other expenses and other long-term liabilities on our Consolidated Balance Sheets. Changes in the fair value of derivatives that are designated as cash flow hedges are deferred in accumulated other comprehensive loss on our Consolidated Balance Sheets until the underlying hedged transactions are recognized in earnings, at which time any deferred hedging gains or losses are also recorded in earnings. See Note 9 for more information.

Stock-Based Compensation

Our policy is to issue new shares for purchases under our equity incentive plans as described in Note 14. Stock-based compensation expense is estimated at the grant date based on an award’s fair value. The determination of the stock-based compensation expense related to stock options is calculated using a Black-Scholes-Merton option pricing model and is affected by our stock price, expected stock price volatility over the term of the awards, expected term, risk free interest rate and expected dividends. The determination of the stock-based compensation expense related to RSUs is calculated based on the closing price of our stock on the grant date. We record forfeitures as they occur.

We recognize stock-based compensation expense for service-based equity awards using the straight-line attribution method over the requisite service period.

We have awarded performance-based equity awards to certain employees and directors. Performance-based awards vest in accordance with the specific performance criteria outlined in the executed award agreements. The vesting of performance-based equity awards is also dependent upon the participant’s continued employment. The criteria associated with our outstanding performance-based stock options as defined in the terms of the award agreements, was satisfied as of September 30, 2016 and therefore these stock options all became vested and exercisable. As such, we recorded stock-based compensation expense during the year ended December 31, 2016 based on the grant date fair value of the performance-based awards.

As part of the RowdMap Acquisition, we issued restricted stock to certain employees. We recognized the related expense for these awards ratably over the applicable vesting period or as achievement of performance criteria become probable. See Note 14 for additional information.

Commitments and Contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. See Note 7 for further detail on loss contingency related to the Medicare RAC.

Fair Value of Financial Instruments

The carrying values for cash and cash equivalents, restricted cash, accounts receivable, accounts payable, and other accrued liabilities reasonably approximate fair market value due to their nature and the short term maturity of these financial instruments. We measure assets and liabilities at fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, we use a consistent fair value hierarchy framework as defined in ASC 820, Fair Value Measurement.  See Note 10 for more information regarding management’s fair value estimates.

Recently Issued Accounting Standards

New accounting rules and disclosure requirements can impact our financial results and the comparability of our financial statements. The authoritative literature which has recently been issued and that we believe will most impact our consolidated financial statements is described below. There are also several new proposals under development. If and when enacted, these proposals may have a significant impact on our financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (“ASU 2016-02”), which changes the accounting recognition, measurement and disclosure for leases in order to increase transparency. ASU 2016-02 requires lease assets and liabilities to be recognized on the balance sheet and key information about leasing arrangements to be disclosed. The guidance is effective for public companies with annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period. Early adoption is permitted. We are evaluating this new guidance and its impact on our consolidated financial statements and related disclosures.

In May 2014, the FASB issued ASU 2014‑09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014‑09”), which supersedes existing revenue recognition guidance and provides clarification of principles for recognizing revenue from contracts with customers. ASU 2014-09 sets forth a five-step model for determining when and how revenue is recognized. The core principle of the new standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. Additional disclosures will be required to describe the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. The two permitted transition methods under ASU 2014-09 are the full retrospective method, in which case the new guidance would be applied to each prior reporting period presented and the cumulative effect of applying the standard would be recognized at the earliest period shown, or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of the initial application. The guidance is effective for public companies with annual periods beginning after December 15, 2017 and interim periods within that reporting period.

In 2016, we formed an internal team to evaluate and quantify the potential impact of this new revenue guidance. As of the date of this filing, we have completed our contract review and policy drafting. Based on our review, we believe the timing of revenue recognition will not materially change from current practice. We will adopt as of January 1, 2018 using the modified retrospective method. Adoption of this standard will require changes to our business processes, systems and controls to support the additional required disclosures. Our identification and design of such changes is ongoing. We will provide additional information about the impact of this new guidance, including enhanced disclosure requirements, in future filings.

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Acquisition

12 Months Ended

Dec. 31, 2017

Acquisition

Acquisition

Note 3. Acquisition

On July 14, 2017, we acquired all of the outstanding equity of RowdMap. Based in Louisville, Kentucky, RowdMap is a payer-provider, value-based analytics company that helps health plans and providers identify and reduce low-value care from inefficient and unnecessary services. We paid approximately $74,000 in cash, subject to certain adjustments and funded entirely with available liquidity. We also issued an aggregate of 768,021 shares of restricted common stock to certain employees of RowdMap in connection with their continued employment with us. Half of these shares are subject to continued employment and performance-based vesting requirements. The other half are subject to continued employment, with one-third vesting on each of the first three anniversaries of the closing of the acquisition. We record stock-based compensation expense related to this restricted stock ratably over the vesting period or to the extent it is probable the performance criteria will be achieved. This stock-based compensation expense is not deductible for income tax purposes. 

As part of the RowdMap Acquisition, we allocated the purchase price to the identifiable net assets acquired, including intangible assets and liabilities assumed, based on the estimated fair values at the date of acquisition. The excess of the purchase price over the amount allocated to the identifiable assets and liabilities was recorded as goodwill.

Goodwill represents the value of acquired assembled workforce, specialized processes and procedures and operating synergies, none of which qualify as separate intangible assets. We believe these specialized processes and procedures will enhance our long history of innovation and help expand our solution offerings. We determined the estimated fair values of intangible assets acquired using estimates of future discounted cash flows to be generated by the business over the estimated duration of those cash flows. We based the estimated cash flows on our projections of future revenue, operating expenses, capital expenditures, working capital needs and tax rates. We estimated the duration of the cash flows based on the projected useful lives of the assets acquired. The discount rate was determined based on specific business risk, cost of capital and other factors.

The purchase price allocation is preliminary and subject to change up to one year after the date of acquisition and could result in changes to the amounts recorded below. The preliminary allocation of the purchase price to the fair values of the assets acquired and liabilities assumed at the date of the acquisition was as follows:

	July 14, 2017
Cash	$	4,107
Accounts receivable		2,526
Prepaid expenses and other assets		1,212
Other long-term assets		12
Property and equipment		263
Intangible assets		19,510
Total identifiable assets acquired		27,630
Accounts payable and accrued liabilities		4,491
Deferred tax liabilities		3,688
Total liabilities assumed		8,179
Net identifiable assets acquired		19,451
Goodwill		54,673
Net assets acquired	$	74,124

The $19,510 of acquired intangible assets include acquired software of $6,310 (5 year useful life) and customer relationships of $13,200 (5 year useful life).

For federal income tax purposes, the RowdMap Acquisition was treated as a stock acquisition. The goodwill and the intangible assets recognized are not deductible for income tax purposes.

In connection with the RowdMap Acquisition, a preliminary liability of $1,068 was recorded in accounts payable and accrued other expenses on the Consolidated Balance Sheets as of December 31, 2017, for payments due to the former stockholders of RowdMap, some of whom are now our employees.

We recorded approximately $700 of transaction costs primarily related to professional services associated with the acquisition as transaction-related expenses within our Consolidated Statements of Comprehensive Income during the year ended December 31, 2017.

The acquisition was not significant to our consolidated financial statements, therefore, pro forma results of operations related to this business acquisition have not been presented. The financial results of RowdMap have been included in our consolidated financial statements since the date of the acquisition.

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Property and Equipment

12 Months Ended

Dec. 31, 2017

Property and Equipment

Property and Equipment

Note 4. Property and Equipment

Property and equipment by major asset class for the periods presented consisted of the following:

	December 31,
	2017		2016
Computer equipment	$	46,731	$	40,349
Software		67,511		42,614
Furniture and fixtures		9,199		8,652
Leasehold improvements		5,256		4,392
Projects in progress		10,295		12,001
Property and equipment, gross	$	138,992	$	108,008
Less: accumulated depreciation and amortization		61,652		40,368
Property and equipment, net	$	77,340	$	67,640

In December 2015, we purchased a perpetual software license, which is included in the software total above. We are paying for this software over a two year period ending in January 2018. As such, there is approximately $3,351  included in accounts payable and accrued other expenses on our Consolidated Balance Sheets as of December 31, 2017 and 2016 and $3,225 included in other long-term liabilities on our Consolidated Balance Sheets as of December 31, 2016. The amount included in other long-term liabilities as of December 31, 2016 represented the then present value of payments that will ultimately be made.

Total depreciation and amortization expense related to property and equipment, including capitalized software costs, was $25,577,  $20,151 and $12,695 for the years ended December 31, 2017, 2016 and 2015, respectively.

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Intangible Assets

12 Months Ended

Dec. 31, 2017

Intangible Assets

Intangible Assets

Note 5. Intangible Assets

Intangible asset balances by major asset class for the periods presented were as follows:

									Weighted
	Gross						Net		Average
	Carrying		Accumulated				Carrying		Amortization
	Amount		Amortization		Impairment		Amount		Period
December 31, 2017:
Customer relationships	$	650,954	$	190,572	$	1,322	$	459,060	13.5	years
Acquired software		54,210		25,430		—		28,780	6.8	years
Connolly trademark		4,200		—		—		4,200	indefinite-lived
Total	$	709,364	$	216,002	$	1,322	$	492,040	13.0	years
December 31, 2016:
Customer relationships	$	640,052	$	144,768	$	—	$	495,284	13.7	years
Acquired software		82,400		48,579		—		33,821	6.2	years
Connolly trademark		4,200		—		—		4,200	indefinite-lived
Total	$	726,652	$	193,347	$	—	$	533,305	12.8	years

As of December 31, 2017,  $34,500 of the acquired software intangible asset that became fully amortized during 2017 has been removed from the gross carrying amount and accumulated amortization.

Amortization expense was $59,606,  $60,818 and $61,467 for the years ended December 31, 2017, 2016 and 2015, respectively.

As a result of the loss of a retail client in the United Kingdom, we recorded an impairment of intangible assets of $1,322 related to our customer relationships during the year ended December 31, 2017.

As a result of our rebranding in September 2015, we recorded an impairment of intangible assets of $27,826 related to our legacy trademarks during the year ended December 31, 2015. The remaining trademark value as of December 31, 2017 of $4,200 is related to our retail business that continues to operate as Connolly, a division of Cotiviti.

As of December 31, 2017 amortization expense for the next 5 years is expected to be:

2018	$	57,588
2019		57,588
2020		57,588
2021		53,264
2022		48,956

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Goodwill

12 Months Ended

Dec. 31, 2017

Goodwill

Goodwill

Note 6. Goodwill

Total goodwill in our Consolidated Balance Sheets was $1,251,364 and $1,196,024 as of December 31, 2017 and December 31, 2016, respectively.

Changes in the carrying amount of goodwill for the years ended December 31, 2017 and 2016 as allocated to each of our Healthcare and Global Retail and Other segments was as follows:

	December 31, 2017				December 31, 2016
			Global Retail				Global Retail
	Healthcare		and Other		Healthcare		and Other
Beginning balance	$	1,147,771	$	48,253	$	1,147,771	$	49,273
RowdMap Acquisition		54,673		—		—		—
Foreign currency translation		—		667		—		(1,020)
Ending balance	$	1,202,444	$	48,920	$	1,147,771	$	48,253

There was no impairment related to goodwill for any period presented.

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Commitments and Contingencies

12 Months Ended

Dec. 31, 2017

Commitments and Contingencies

Commitments and Contingencies

Note 7. Commitments and Contingencies

Operating Leases

We are obligated under non-cancellable lease agreements for certain facilities and equipment, which frequently include renewal options and escalation clauses. For leases that contain predetermined fixed escalations, we recognize the related rent expense on a straight-line basis and record the difference between the recognized rent expense and amounts payable under the lease as lease obligations. Lease obligations due within one year are included in accounts payable and accrued other expenses on our Consolidated Balance Sheets. These leases expire at various points through 2029. Rent expense related to these leases was $10,719, $10,529 and $8,826 for the years ended December 31, 2017, 2016 and 2015, respectively.

Future minimum payments under non cancelable operating lease agreements as of December 31, 2017 were as follows:

Year ending December 31:
2018	$	8,640
2019		9,588
2020		8,882
2021		8,173
2022		8,363
2023 - 2029		44,308
Total minimum lease payments	$	87,954

Legal and Other Matters

We may be involved in various legal proceedings and litigation arising in the ordinary course of business. While any legal proceeding or litigation has an element of uncertainty, management believes the ultimate disposition of these matters will not have a material adverse effect on our consolidated financial position, results of operations, or liquidity.

Medicare RAC Contract Contingency

In August 2014, CMS announced it would allow providers to remove all eligible claims currently pending in the appeals process by offering to pay hospitals 68% of the original claim amount. This settlement was offered to the providers and it was unknown what, if any, impact there would be for the Medicare RACs. On July 1, 2015, CMS issued a Technical Direction Letter to the Medicare RACs, including us, indicating that Medicare RACs will only be entitled to the contract contingency fee on the settled amounts of the claims, or 32% of the original inpatient claim amounts. Based on the initial lists of finalized settlements provided by CMS, we would be required to refund CMS approximately $22,308 due to the related adjustments in Medicare RAC contingency fees. In 2016, CMS announced a second settlement process to allow eligible providers to settle their inpatient status claims currently under appeal beginning on December 1, 2016. These additional settlements could result in CMS claims that it is entitled to additional refunds, however, CMS has not asserted any such claims since its initial communication and the amount of additional claims, if any, cannot be determined at this time.  While there are uncertainties in any dispute resolution and results are uncertain, we have disputed CMS’s findings based on our interpretation of the terms of the Medicare RAC contract and our belief that the backup data provided by CMS is inaccurate and/or incomplete. Our liability for estimated refunds and appeals includes amounts for these settled claims based on our best estimates of the amount we believe will be ultimately payable to CMS based on our interpretation of the terms of the Medicare RAC contract. As of December 31, 2017, we believed that it was possible that we could be required to pay an additional amount up to approximately $13,000 in excess of the amount we accrued as of December 31, 2017 based on the claims data we have received from CMS to date. As CMS completes its settlement process with the providers and updated files are provided to us, the potential amount owed by us may change.

Our original Medicare RAC contract with CMS expired on January 31, 2018. In connection with the expiration of the contract, we determined that we have no obligation to CMS with respect to any appeals resolved in the providers favor after the expiration date and, in addition, we believe that we have no obligation to CMS in connection with the hospital settlement processes described above.  See Note 20 for further information.

Asset Retirement Obligations

We have AROs arising from contractual requirements to perform specified activities at the time of disposition of certain leasehold improvements and equipment at some of our facilities. Changes in the carrying amount of AROs were as follows:

	Year ended
	December 31,
	2017		2016
Balance beginning of period	$	2,725	$	2,415
Additional ARO liability		—		133
Accretion expense		183		177
Settled ARO liability		(64)		—
Balance at end of period	$	2,844	$	2,725

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Long-term Debt

12 Months Ended

Dec. 31, 2017

Long-term Debt

Long-term Debt

Note 8. Long‑term Debt

In April 2017, we entered into and executed the First Amendment Agreement to the Restated Credit Agreement, which, among other things, provided for a 25 basis point reduction in applicable interest rate spread over LIBOR associated with the First Lien Term B Loans. As a result, we recognized a loss on extinguishment of $3,183 during the year ended December  31, 2017, which is included in our Consolidated Statements of Comprehensive Income.

In September 2016, we entered into and executed the Restated Credit Agreement, which replaced our then outstanding Initial Secured Credit Facilities, lowered total debt outstanding by $22,700 and provided for lower applicable interest rates. The Restated Credit Agreement consists of (a) the First Lien Term A Loans in the amount of $250,000, (b) the First Lien Term B Loans in the amount of $550,000 and (c) the Revolver in the amount of up to $100,000. As a result of this refinancing, we recognized a loss on extinguishment of debt of $9,349 during the year ended December 31, 2016, which is included in our Consolidated Statements of Comprehensive Income.

In June 2016, we repaid $223,000 in outstanding principal under our then outstanding Initial Second Lien Credit Facility using proceeds from our IPO. We also made a voluntary prepayment of $13,100 of outstanding principal under the Initial Second Lien Credit Facility. As a result of these repayments, we recognized a loss on extinguishment of debt of $7,068 during the year ended December 31, 2016, which is included in our Consolidated Statements of Comprehensive Income.

In May 2015, we entered into and executed the First and Second Amendments to the then outstanding Initial First Lien Credit Facilities, which, among other things, provided for lower applicable interest rates associated with the Initial First Lien Credit Facilities by 50 basis points. As a result, we recognized a loss on extinguishment of debt of $4,084 during the year ended December 31, 2015, which is included in our Consolidated Statements of Comprehensive Income.

Long‑term debt for the periods presented was as follows:

	December 31,
	2017		2016
First Lien Term A Loans(a)	$	234,237	$	246,694
First Lien Term B Loans(b)		540,585		544,345
Revolver(c)		—		—
Total debt		774,822		791,039
Less: debt issuance costs		7,204		10,837
Less: current portion		18,000		18,000
Total long-term debt	$	749,618	$	762,202

(a) The First Lien Term A  Loans mature on September 28, 2021 and requires quarterly principal payments of $3,125 per quarter in 2018, $4,688 per quarter in 2019, $6,250 per quarter in 2020 and $9,375 per quarter for the first two quarters of 2021. The remainder of the outstanding First Lien Term A  Loans borrowings are due on September 28, 2021. Any mandatory or voluntary prepayment will be applied against the remaining scheduled installments of principal payments in direct order of maturity, unless other direction of application is provided by us. Based on our periodic election, borrowings under the First Lien Term A  Loans bear interest at either (a) the ABR plus, based on our Secured Leverage Ratio (as defined in the Restated Credit Agreement), 1.25% - 2.00% for ABR loans or (b) LIBOR plus, based on our Secured Leverage Ratio, 2.25% to 3.00% for LIBOR loans. The ABR is equal to the highest of (i) the New York Federal Reserve Bank rate in effect on such date plus 0.50%, (ii) the LIBOR plus 1.00% and (iii) the prime commercial lending rate of the administrative agent as in effect on the relevant day. The interest period applicable to any LIBOR borrowing is one,  two,  three or six months, at the election of the borrower. Interest on LIBOR loans is payable the last day of the applicable interest period and, in the case of an interest period of more than three months’ duration, each day on which interest would have been payable had successive interest periods of three months’s duration been applicable to such borrowing. The interest rate in effect was 3.95% and 3.75% at December 31, 2017 and 2016, respectively.  

(b) The First Lien Term B  Loans mature on September 28, 2023 and requires quarterly principal payments of $1,375 with all remaining borrowings due on September 28, 2023. Based on our periodic election, borrowings under the First Lien Term B  Loans bear interest at either (a) the ABR plus 1.75% for ABR loans or (b) LIBOR plus 2.50% for LIBOR loans. The ABR is equal to the highest of (i) the New York Federal Reserve Bank rate in effect on such date plus 0.50%, (ii) LIBOR plus 1.00%, (iii) the prime commercial lending rate of the administrative agent as in effect on the relevant day and (iv) 1.75%. LIBOR is equal to the higher of (a) the published LIBOR or (b) 0.75%. If our corporate credit rating from Moody’s Investor Service, Inc. is Ba3 or better and our corporate family rating from Standard & Poor’s Financial Services, LLC is BB- or better, the margin will be reduced by 0.25% per annum for as long as such ratings are maintained. The interest period applicable to any LIBOR borrowing is one,  two,  three or six months, at the election of the borrower. Interest on LIBOR loans is payable the last day of the applicable interest period and, in the case of an interest period of more than three months’ duration, each day on which interest would have been payable had successive interest periods of three months’ duration been applicable to such borrowing. The interest rate in effect was 4.20% and 3.75% at December 31, 2017 and 2016, respectively.  

(c) The Revolver expires on September 28, 2021. Interest for any borrowings under the Revolver is payable over one,  two,  three or six months at our election. A commitment fee is payable quarterly based on the unused portion of the Revolver commitment which ranges from 0.30% to 0.50% per annum based on certain financial tests. Based on our periodic election, borrowings under the Revolver bear interest at either (a) ABR plus, based on our Secured Leverage Ratio, 1.25% - 2.00% for ABR loans or (b) LIBOR plus, based on our Secured Leverage Ratio, 2.25% to 3.00% for LIBOR loans. The ABR is equal to the highest of (i) the New York Federal Reserve Bank rate in effect on such date plus 0.50%, (ii) LIBOR plus 1.00% and (iii) the prime commercial lending rate of the administrative agent as in effect on the relevant day. There were no borrowings outstanding under the Revolver as of December 31, 2017 and 2016. The interest rate in effect was 3.95% and 3.75% at December 31, 2017 and 2016, respectively.

The Restated Credit Agreement includes certain binding affirmative and negative covenants, including delivery of financial statements and other reports, maintenance of existence and transactions with affiliates. The negative covenants restrict our ability, among other things, to incur indebtedness, grant liens, make investments, sell or otherwise dispose of assets or enter into a merger, pay dividends or repurchase stock. As a result of these restrictions, approximately 64% of the subsidiary net assets are deemed restricted as of December 31, 2017. Refer to Schedule I Condensed Financial Information of Parent. There is a required financial covenant applicable only to the Revolver and the First Lien Term A  Loans, pursuant to which we agree not to permit our Secured Leverage Ratio (as defined in the Restated Credit Agreement) to exceed 5.50:1.00 through September 2018, 5.25:1.00 through September 2019 and 5.00:1.00 through June 2021. In addition, the Restated Credit Agreement includes certain events of default including payment defaults, failure to perform affirmative covenants, failure to refrain from actions or omissions prohibited by negative covenants, the inaccuracy of representations or warranties, bankruptcy and insolvency related defaults and a change of control default. We were in compliance with all such covenants as of December 31, 2017 and December 31, 2016.

The Restated Credit Agreement requires mandatory prepayments based upon our leverage ratio at the time payment is required and an annual excess cash flows commencing with the year ended December 31, 2017. The mandatory prepayment is contingently payable in the second quarter of each year based on an annual excess cash flow calculation for the preceding year as defined within the Restated Credit Agreement. As of December 31, 2017 we do not expect to be required to make a mandatory prepayment during 2018.   

As of December 31, 2017, the expected aggregate maturities of long‑term debt for each of the next five years are as follows:

	December 31,
	2017
2018	$	18,000
2019		24,250
2020		30,500
2021		183,625
2022		5,500
Thereafter		515,625
Total	$	777,500

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Derivative Instruments

12 Months Ended

Dec. 31, 2017

Derivative Instruments

Derivative Instruments

Note 9. Derivative Instruments

We are exposed to fluctuations in interest rates on our long‑term debt. We manage our exposure to fluctuations in the 3‑month LIBOR through the use of interest rate cap agreements designated as cash flow hedges. We are meeting our objective by hedging the risk of changes in cash flows related to changes in LIBOR by capping the interest on our floating rate debt linked to LIBOR to approximately 3%. We do not utilize derivatives for speculative or trading purposes.

As of December 31, 2017 and December 31, 2016, we had $435,000 and $540,000, respectively, in notional debt outstanding related to these interest rate caps, which cover quarterly interest payments through September 2019. The notional amount decreases over time. See Note 8 for more information regarding the debt outstanding related to these agreements.

All of our outstanding interest rate cap contracts qualify for cash flow hedge accounting treatment in accordance with ASC 815, Derivatives and Hedging. Cash flow hedge accounting treatment allows for gains and losses on the effective portion of qualifying hedges to be deferred in accumulated other comprehensive income (loss) until the underlying transaction occurs, rather than recognizing the gains and losses on these instruments in earnings during each period they are outstanding. When the actual interest payments are made on our variable rate debt as described in Note 8 and the related derivative contract settles, any effective portion of realized interest rate hedging derivative gains and losses previously recorded in accumulated other comprehensive income (loss) is recognized in interest expense. We recognized interest expense of $1,789,  $283 and $105 during the years ended December 31, 2017, 2016 and 2015, respectively, associated with the interest rate cap agreements.  

Ineffectiveness results, in certain circumstances, when the change in total fair value of the derivative instrument differs from the change in the fair value of our expected future cash outlays for the related interest payment and is recognized immediately in interest expense. There was no ineffectiveness recorded during the years ended December 31, 2017, 2016, and 2015, respectively. Likewise, if the hedge does not qualify for hedge accounting, the periodic changes in its fair value are recognized in the period of the change in interest expense. All cash flows related to our interest rate cap agreements are classified as operating cash flows.

Any outstanding derivative instruments expose us to credit loss in the event of nonperformance by the counterparties to the agreements, but we do not expect that the counterparty will fail to meet their obligations. The amount of such credit exposure is generally the positive fair value of our outstanding contracts. To manage credit risks, we select counterparties based on credit assessments, limit our overall exposure to any single counterparty and monitor the market position of any counterparty.

The table below reflects quantitative information related to the fair value of our derivative instruments and where these amounts are recorded in our consolidated financial statements as of the period presented:

	December 31,
	2017		2016
Liability fair value recorded in other long-term liabilities	$	951	$	1,729
Liability fair value recorded in accounts payable and accrued other expenses		979		1,065
Estimated amount of existing losses expected to be reclassified into earnings in the next 12 months		(2,440)		(1,783)

We record deferred hedge premiums which are being paid over the life of the hedge in accumulated other comprehensive income (loss) until the related hedge ultimately settles and interest payments are made on the underlying debt. As of December 31, 2017, we have made payments of $4,021 related to these deferred premiums. We expect to pay an additional $2,374 in deferred premiums through 2019 related to our outstanding interest rate cap agreements which is reflected in the fair value of these derivatives in the table above.

Comprehensive income includes changes in the fair value of our interest rate cap agreements which qualify for hedge accounting. Changes in other comprehensive income (loss) for the periods presented related to derivative instruments classified as cash flow hedges were as follows:

Balance, January 1, 2015	$	(623)
Reclassifications in earnings, net of tax benefit of $40		65
Change in fair value of derivative instrument, net of tax of $1,360		(2,410)
Balance, December 31, 2015		(2,968)
Reclassifications in earnings, net of tax benefit of $107		176
Change in fair value of derivative instrument, net of tax of $319		(542)
Balance, December 31, 2016		(3,334)
Reclassifications in earnings, net of tax benefit of $675		1,114
Change in fair value of derivative instrument, net of tax of $215		(336)
Balance, December 31, 2017	$	(2,556)

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Fair Value Measurements

12 Months Ended

Dec. 31, 2017

Fair Value Measurements

Fair Value Measurements

Note 10. Fair Value Measurements

We measure assets and liabilities at fair value based on assumptions market participants would use in pricing an asset or liability in the principal or most advantageous market. Authoritative guidance on fair value measurements establishes a consistent framework for measuring fair value whereby inputs are assigned a hierarchical level. The hierarchical levels are:

Level 1: Unadjusted quoted prices in active markets for identical assets or liabilities accessible to the reporting entity at the measurement date.

Level 2: Observable prices, other than quoted prices included in Level 1 inputs for the asset or liability, either directly or indirectly, for substantially the full term of the asset or liability.

Level 3: Unobservable inputs for the asset or liability used to measure fair value to the extent observable inputs are not available, thereby allowing for situations in which there is little, if any, market activity for the asset or liability at measurement date.

The following table summarizes our financial instruments measured at fair value within the Consolidated Balance Sheets:

	December 31, 2017						December 31, 2016
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Liabilities:
Long-term debt	$	—	$	—	$	774,822	$	—	$	—	$	791,039
Interest rate cap agreements		—		1,930		—		—		2,794		—
Total	$	—	$	1,930	$	774,822	$	—	$	2,794	$	791,039

The fair value of our private debt is determined based on fluctuations in current interest rates, the trends in market yields of debt instruments with similar credit ratings, general economic conditions and other quantitative and qualitative factors. The carrying value of our debt approximates its fair value.

The fair value of the interest rate cap agreements is determined using the market standard methodology of discounting the future expected variable cash receipts that would occur if interest rates rose above the strike rate of the caps. The analysis reflects the contractual terms of the derivatives, including period to maturity and remaining deferred premium payments, and uses observable market‑based inputs, including interest rates and implied volatilities. The variable cash receipts are based on an expectation of future interest rates (forward curves) derived from observable market interest rates. As such, the estimated fair values of these liabilities are classified as Level 2 in the fair value hierarchy.

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Income Taxes

12 Months Ended

Dec. 31, 2017

Income Taxes

Income Taxes

Note 11. Income Taxes

On December 22, 2017, the U.S. government enacted the Tax Act, reducing the federal tax rate on U.S. earnings to 21%, effective January 1, 2018, and moves from a global taxation regime to a modified territorial regime. Given the significant complexity of the Tax Act, anticipated guidance from the U.S. Treasury about implementing the Tax Act, and the potential for additional guidance from the Securities and Exchange Commission or the Financial Accounting Standards Board related to the Tax Act, we will continue to evaluate the accounting for the tax effects related to the enactment of the Tax Act. As of December 31, 2017, we have made a reasonable estimate of the effects of the Tax Act on our existing deferred tax balances and the one-time transition tax as described below.  

We recognized a net income tax benefit of $45,019 in the year ended December 31, 2017 associated with the revaluation of our net deferred tax liabilities based on a U.S. federal tax rate of 21% of $46,600 offset by the one-time transition tax expense of $1,581 on our unremitted foreign earnings and profits which we have elected to pay in the current year. As part of our analysis, a tax credit carryforward of $1,174 was identified and a full valuation allowance was established. Although we believe this represents a reasonable estimate of the impact of the income tax effects of the Tax Act,  it should be considered provisional as of December 31, 2017. Upon completion of our 2017 U.S. tax return, we will be able to conclude whether any further adjustments are required to our deferred tax liabilities, as well as the liability associated with the one-time mandatory tax. Any adjustments to these provisional amounts will be reported as a component of tax (benefit) expense in the reporting period in which any such adjustments are determined, which will be no later than the fourth quarter of 2018.

While the Tax Act provides for a modified territorial regime, effective January 1, 2018, it includes a new U.S. tax base erosion provision, the global intangible low-taxed income (“GILTI”) tax. Although we do not expect that we will be subject to any material incremental U.S. tax on GILTI income in 2018, we have elected to account for any potential GILTI tax in the period in which it is incurred, and therefore have not provided any deferred income tax impacts of GILTI for the year ended December 31, 2017.

Total income tax (benefit) expense for the years ended December 31, 2017, 2016, and 2015 was as follows:

	Year ended
	December 31,
	2017		2016		2015
Income tax (benefit) expense from continuing operations	$	(11,773)	$	20,970	$	14,401
Income tax expense from discontinued operations		—		—		341
Total income tax (benefit) expense	$	(11,773)	$	20,970	$	14,742

For the years ended December 31, 2017, 2016, and 2015, income from continuing operations before income taxes includes the following components:

	Year ended
	December 31,
	2017		2016		2015
U.S. operations	$	122,952	$	66,838	$	27,605
Foreign operations		3,478		2,984		100
Income before income taxes	$	126,430	$	69,822	$	27,705

The income tax (benefit) expense that is attributable to income from continuing operations before income taxes included in our Consolidated Statements of Comprehensive Income for the years ended December 31, 2017, 2016, and 2015 consisted of the following:

	Year ended
	December 31,
	2017		2016		2015
Current:
U.S. federal	$	26,509	$	26,734	$	20,382
State and local		1,679		613		4,822
Foreign		1,680		1,358		1,029
Current income tax expense		29,868		28,705		26,233
Deferred
U.S. federal		(42,430)		(5,858)		(12,584)
State and local		(304)		(1,825)		798
Foreign		1,093		(52)		(46)
Deferred income tax benefit		(41,641)		(7,735)		(11,832)
Total income tax (benefit) expense	$	(11,773)	$	20,970	$	14,401

The factors accounting for the variation in our overall effective tax rates from continuing operations compared to U.S. statutory income tax rates for the years ended December 31, 2017, 2016, and 2015 were as follows:

	Year ended
	December 31,
	2017		2016		2015
Federal income tax expense at the statutory rate	$	44,250	$	24,438	$	9,697
State and local taxes, net of federal benefit		1,657		556		3,922
Non-deductible costs		1,197		779		1,070
Stock-based compensation		(11,985)		(4,000)		—
Unrecognized tax positions		(532)		(1,397)		508
U.S. Tax Act benefit, net		(45,019)		—		—
Other		(1,341)		594		(796)
Total income tax (benefit) expense	$	(11,773)	$	20,970	$	14,401

Our effective income tax rate from continuing operations was (9.3%),  30.0% and 52.0% for the years ended December 31, 2017, 2016, and 2015, respectively. The decrease in the effective tax rate for the year ended December 31, 2017 compared to December 31, 2016 is primarily due to a $45,019 tax benefit as a result of the remeasurement of deferred tax liabilities of $46,600, offset by a $1,581 estimated repatriation tax charge. In addition, for the year ended December 31, 2017, we recorded a $11,985 net tax benefit consisting of $15,017 of federal excess tax benefits associated with the exercise of stock options offset by $3,032 of income tax expense associated with the nondeductible restricted stock issued in connection with the RowdMap Acquisition. The decrease in the effective tax rate for the year ended December 31, 2016 compared to December 31, 2015 is primarily due to a $1,300 state tax benefit related to the settlement of an uncertain tax position that was recorded in a prior period, a $4,000 excess tax benefit related to stock option exercises resulting from the early adoption of ASU 2016-09 and a $1,122 state tax benefit from the implementation of certain tax planning.

In general, it is our practice and intention to reinvest the earnings of our non branch foreign subsidiaries in those operations on an indefinite basis. For the years ended December 31, 2016 and 2015, the amounts considered indefinitely reinvested were $8,065 and $5,910, respectively. If the earnings were not considered indefinitely reinvested under prior law, the tax on such earnings would be approximately $1,891 and $1,386 for the years ended December 31, 2016, and 2015, respectively. In light of the Tax Act, companies are required to pay tax on historical earnings that have not been repatriated to the U.S. For year ended December 31, 2017, the amount considered indefinitely reinvested was provisionally estimated at $8,739, and the foreign taxes on such earnings is provisionally estimated at $1,581.

The net deferred taxes below are included on our Consolidated Balance Sheets as a long-term net deferred tax liability of $83,048 at December 31, 2017 and a long-term net deferred tax liability of $120,533 at December 31, 2016.

The components of our deferred tax assets and liabilities as of December 31, 2017 and 2016 are as follows:

	Year ended December 31,
	2017		2016
Deferred tax assets:
Allowance for doubtful accounts and estimated allowance for refunds and appeals	$	21,829	$	34,794
Accrued compensation		929		2,185
Deferred rent		194		149
Stock-based compensation		6,045		10,381
Tax credit and net operating loss carryforward		3,420		652
Other deductible temporary differences		2,333		5,077
Gross deferred tax assets		34,750		53,238
Less: valuation allowance		(1,847)		(199)
Total deferred tax assets		32,903		53,039
Deferred tax liabilities:
Unbilled receivables and other liabilities		(1,206)		(2,307)
Intangibles and goodwill		(103,203)		(154,528)
Property and equipment		(4,738)		(10,795)
Software development costs		(5,868)		(2,603)
Other taxable temporary differences		(936)		(3,339)
Total gross deferred tax liabilities		(115,951)		(173,572)
Net deferred tax liability	$	(83,048)	$	(120,533)

We have federal net operating loss carryforwards of $1,197 which will expire in 2029. In addition, we have a foreign net operating loss of $3,695 with an unlimited carryforward. All state net operating losses were utilized in the prior year. Additionally, we generated state tax credit carryforwards of $1,322, which are anticipated to be fully utilized before expiration.

As of December 31, 2017 and 2016, a valuation allowance of $1,847 and $199, respectively, has been recorded to reflect the portion of the deferred tax asset that is not more likely than not to be realized. The increase in the valuation allowance relates to cumulative foreign net operating losses for 2017, as well as foreign tax credit carryforwards relating to the Tax Act. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence such as our projections for growth.

Due to change of ownership provisions in the Internal Revenue Code, use of a portion of our domestic net operating loss and tax credit carryforwards will be limited in future periods. Further, a portion of the carryforwards may expire before being applied to reduce future income tax liabilities.

ASC 740 clarifies the accounting and reporting for uncertainties in income tax law. This interpretation prescribes a comprehensive model for financial statement recognition measurement, presentation and disclosure of uncertain tax positions taken or expected to be taken in income tax returns. ASC 740 requires that the tax effects of an uncertain tax position be recognized only if it is “more likely than not” to be sustained by the taxing authority as of the reporting date.

A reconciliation of the beginning and ending amount of unrecognized tax benefits at December 31, 2017 and 2016 is as follows:

	Year ended December 31,
	2017		2016
Unrecognized tax benefits — January 1	$	2,571	$	4,937
Increase for tax positions taken in prior period		1,186		67
Increase for tax positions taken in current period		385		203
Decrease for tax positions taken in prior period		—		(508)
Decrease for tax positions taken in current period		—		(43)
Decrease related to lapse in statute of limitations		(1,836)		(96)
Decrease related to settlement of positions taken in prior periods		(308)		(1,989)
Unrecognized tax benefits — December 31	$	1,998	$	2,571

The majority of the balance of unrecognized tax benefits as of December 31, 2017 and 2016, would affect the effective tax rate if recognized.

The total uncertain tax positions expected to reverse in the next 12 months is approximately $81 and $2,301 as of December 31, 2017 and 2016, respectively, due to lapse of statute of limitations. The current year change in uncertain tax positions is primarily the result of the settlement of an uncertain tax position recorded during a prior period as well as lapses in statute of limitations, offset by increases of tax positions taken in a prior period.

The total penalty and interest incurred, relating to uncertain tax positions, for years ended December 31, 2017, 2016, and 2015, was $103,  $424 and $920, respectively. We include interest and penalties as tax expense in the Consolidated Statements of Comprehensive Income.

We file income taxes with the U.S. federal government and various states and foreign jurisdictions. We operate in a number of state and local jurisdictions and as such are subject to state and local income tax examinations based upon various statutes of limitations in each jurisdiction. We are currently under audit by the State of New York for the tax year ended December 31, 2014 and for iHealth Technologies for the tax years ended December 31, 2012, December 31, 2013, May 13, 2014 and December 31, 2014.

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Stockholders' Equity

12 Months Ended

Dec. 31, 2017

Stockholders' Equity

Stockholders' Equity

Note 12. Stockholders’ Equity

Share Repurchase Program

On October 31, 2017, the Board of Directors approved a share repurchase program under which we may repurchase up to $100,000 of common stock. This authorization permits us to repurchase shares from time to time until October 31, 2018 through a variety of methods, including open market repurchases and in privately negotiated transactions subject to debt covenants and other customary legal, contractual, regulatory and market considerations and may be discontinued at any time. All share repurchases will be implemented in accordance with Rule 10b-18 of the Exchange Act with respect to the timing, pricing and volume of such transactions. There can be no assurance as to the amount, timing or prices of repurchases, which may vary based on market conditions and other factors.

During the year ended December 31, 2017, we repurchased 317,900 shares of our common stock under this share repurchase program for $10,000, at a weighted average share price of $31.43 per share. Shares repurchased are immediately retired.

Secondary Offerings

On August 7, 2017, we completed a secondary offering of 10,000,000 shares of our common stock by certain of our stockholders at an offering price of $37.00 per share. All of the shares offered were sold by selling stockholders. Accordingly, we did not receive any proceeds from the sale of shares. In connection with this offering, we incurred approximately $700 in professional services expenses, which are included in transaction-related expenses on our Consolidated Statements of Comprehensive Income for the year ended December 31, 2017.

On March 7, 2017, we completed a secondary offering of 9,683,000 shares of our common stock by certain of our stockholders, including 1,263,000 shares sold to the underwriters pursuant to their option to purchase additional shares, at an offering price of $36.00 per share. All of the shares offered were sold by selling stockholders. Accordingly, we did not receive any proceeds from the sale of the shares. In connection with this offering, we incurred approximately $600 in professional services expenses, which are included in transaction-related expenses on our Consolidated Statements of Comprehensive Income for the year ended December 31, 2017.

Issuance of Common Stock

On May 25, 2016 we consummated our IPO in which we issued and sold a total of 12,936,038 shares of common stock, including a portion of the underwriter overallotment, at a public offering price of $19.00 per share. We received net proceeds of approximately $226,963 after deducting underwriting discounts and commissions and other offering expenses of approximately $18,822.

A summary of the current rights and preferences of holders of our common stock are as follows:

Voting

Common stockholders are entitled to one vote per share of common stock held on all matters on which such common stockholders are entitled to vote.

Dividends

Common stockholders are eligible to receive dividends on common stock held when funds are available and as approved by the Board. The Restated Credit Agreement contains certain negative covenants that may restrict our ability to pay dividends. In addition, Delaware law may restrict the Board’s ability to declare dividends.

Liquidation Rights

In the event of liquidation or dissolution, common stockholders are entitled to receive all assets available for distribution to stockholders.

Registration Rights

The Second Amended and Restated Stockholders Agreement entered into as of June 1, 2016 in connection with our IPO contains (i) demand registration rights for Advent, subject to a cap of two requests in any 12 month period; (ii) piggy-back registration rights for any stockholder holding at least $500 worth of shares (each, a “Holder”), subject to a pro rata reduction if the total amount of shares requested to be included exceeds the amount of securities which in the opinion of the underwriters can be sold; and (iii) shelf registration rights for Holders, subject to a required anticipated aggregate offering price, net of selling expenses, of $5,000 subject to a cap of two requests for shelf registrations, for all Holders in the aggregate, in any 12 month period. Holders that are capable of selling all of their registrable securities pursuant to Rule 144 under the Securities Act in a single transaction without timing or volume limitations do not have piggy-back registration rights. We will be responsible for fees and expenses in connection with the registration rights, other than underwriters’ discounts and brokers’ commissions, if any, relating to any such registration and offering.

Common Stock Split

On May 13, 2016 we effected a 6.1-for-1 stock split of all outstanding shares of our common stock. All share, option and per share information presented in the accompanying consolidated financial statements and notes thereto have been adjusted to reflect the stock split on a retroactive basis for all periods presented and all share information is rounded up to the nearest whole share after reflecting the stock split.

Common Stock Dividends

On May 26, 2016 we paid a Special Cash Dividend of $150,000, or $1.94 per share of common stock outstanding prior to the IPO, to holders of record of our common stock on the dividend record date. In connection with the Special Cash Dividend we lowered the exercise price of then outstanding stock options by $1.94 per share in order to preserve the intrinsic value of the options giving effect to the Special Cash Dividend.

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Earnings per Share

12 Months Ended

Dec. 31, 2017

Earnings per Share

Earnings per Share

Note 13. Earnings per Share

Basic EPS is computed based on the weighted average number of shares of common stock outstanding during the period. Diluted EPS is computed based on the weighted average number of shares of common stock plus the effect of dilutive potential common shares outstanding during the period. For all periods presented, potentially dilutive outstanding shares consisted of equity incentive awards.  Restricted stock issued in connection with RowdMap was also included in the calculation of dilutive potential common shares for the year ended December 31, 2017. Our potential common shares consist of the incremental common shares issuable upon the exercise of the options or vesting of RSUs and restricted stock. The dilutive effect of outstanding equity incentive awards is reflected in diluted earnings per share by application of the treasury stock method. For all periods presented, all outstanding common stock consisted of a single‑class.

Basic and diluted earnings per share are computed as follows:

	Year Ended
	December 31,
	2017		2016		2015
Net income available to common stockholders	$	138,203	$	48,852	$	13,863
Weighted average outstanding shares of common stock		91,928,364		85,053,890		77,216,133
Dilutive effect of stock-based awards and restricted stock		3,167,726		3,524,302		425,255
Adjusted weighted average outstanding and assumed conversions for diluted EPS		95,096,090		88,578,192		77,641,388
Earnings per share from continuing operations:
Basic	$	1.50	$	0.57	$	0.17
Diluted		1.45		0.55		0.17
Earnings per share from discontinued operations:
Basic	$	—	$	—	$	0.01
Diluted		—		—		0.01
Earnings per share:
Basic	$	1.50	$	0.57	$	0.18
Diluted		1.45		0.55		0.18

Employee stock options, RSUs and restricted stock that were excluded from the calculation of diluted earnings per share because their effect is anti‑dilutive for the periods presented were as follows:

	Years Ended
	December 31,
	2017	2016	2015
Employee stock options, RSUs and restricted stock	833,670	341,054	2,035,332

The criteria associated with all of our outstanding performance-based stock options as defined in the terms of the applicable award agreements, were satisfied as of September  30, 2016 and, as a result, outstanding performance-based stock options were included in the calculation of diluted earnings per share for the year ended December 31, 2016. Performance-based stock options of 2,794,910 as of December 31, 2015, were not included in the calculation of diluted earnings per share as the vesting conditions were not probable of occurring. Performance-based restricted stock of 76,546 shares as of December 31, 2017 were not included in the calculation of diluted earnings per share as the vesting conditions were not probable of occurring.

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Stock-Based Compensation

12 Months Ended

Dec. 31, 2017

Stock-Based Compensation

Stock-Based Compensation

Note 14. Stock‑Based Compensation

Equity Incentive Plans

In 2012, we adopted the 2012 Plan pursuant to which our Board of Directors (or committee as designated by the Board of Directors) may grant options to purchase shares of our stock, restricted stock and certain other equity awards to directors, officers and key employees. We only granted stock options that can be settled in shares of our common stock under the 2012 Plan. The 2012 Plan had a total of 7,243,330 shares authorized for issuance. Upon completion of the IPO in May 2016, we adopted the 2016 Plan, and issuances under the 2012 Plan were suspended. Awards granted under the 2012 Plan will remain outstanding until the earlier of exercise, forfeiture, cancellation or expiration. There are no shares available for future issuance under the 2012 Plan as it was discontinued upon adoption of the 2016 Plan. Under the 2016 Plan, our Board of Directors (or a committee or sub-committee designated by the Board of Directors) may grant options to purchase shares of our stock, restricted stock and certain other equity awards to directors, officers and key employees. The 2016 Plan was established with the authorization for grants of up to 5,490,000 shares of authorized but unissued shares of common stock. As of December 31, 2017 the total number of shares available for future issuance under the 2016 Plan is 4,313,279.

Stock Options

Under the terms of the 2016 Plan, we may issue options to purchase shares of our common stock at a price equal to 100% of the market price on the date of grant. Issuances under the 2012 Plan, prior to its suspension, were under terms similar to issuances under the 2016 Plan. Stock options granted are subject to either time of service (service-based awards) or performance (performance-based awards) criteria. Service-based awards typically vest ratably over a five year service period from the date of grant under the 2012 Plan and typically vest ratably over a four year service period from the date of grant under the 2016 Plan. In the event of a change in control, any outstanding, unvested service-based awards will vest immediately. Performance-based awards vest in accordance with the specific performance criteria espoused in the executed award agreements. The term of any stock option shall not exceed ten years from the date of grant. However, an incentive stock option granted to an employee who, at the time of grant, owns stock possessing more than 10% of the total combined voting power of all classes of our stock may not have a term exceeding five years from the date of grant.

The following is a summary of stock option activity under the Equity Plans:

				Weighted
		Weighted		average
		average		remaining	Aggregate
	Outstanding	exercise price		contractual life	Intrinsic Value
	Options	per share		(Years)	(in thousands)
Outstanding at December 31, 2016	5,997,372	$	10.18	7.30	$	145,270
Granted	599,153		34.70
Forfeited	(240,845)		19.48
Exercised	(1,778,104)		7.61
Expired	(2,969)		13.92
Outstanding at December 31, 2017	4,574,607	$	13.89	6.65	$	85,138
Vested and exercisable at December 31, 2017	3,117,670	$	10.38	5.95	$	68,061

Aggregate intrinsic value represents the difference between the fair value of common stock and the exercise price of outstanding in-the-money options. The fair value per share of common stock was $32.21 as of December 31, 2017 based upon the closing price of our common stock on the NYSE. The total intrinsic value of options exercised was $52,828 and $15,521  for the years ended December 31, 2017 and 2016, respectively, and was insignificant for the year ended December 31, 2015. The total fair value of stock options vested was $4,066, $22,453 and $2,450 during the years ended December 31, 2017, 2016 and 2015, respectively.

Restricted Stock Units

RSUs provide participants the right to receive a payment based on the value of a share of common stock. RSUs may be subject to vesting requirements, restrictions and conditions to payment. Such requirements may be based on the continued service for a specified time period or on the attainment of specified performance goals as specified in the award agreements. RSUs are payable in cash or in shares or a combination of both. Under the terms of the Equity Plans, RSUs have a grant date fair value equal to the closing price of our stock on the grant date. The units typically vest ratably over a four year service period other than those issued to members of our Board of Directors. Director RSU grants vest over their one-year annual service period. We began issuing RSUs upon adoption of the 2016 Plan; no RSUs were issued under the 2012 Plan.

The following is a summary of RSU activity under the 2016 Plan:

		Weighted
		average
		grant date fair value
	Number of Awards	per share
Nonvested at December 31, 2016	67,295	$	25.88
Granted	398,728		34.30
Forfeited	(48,447)		31.91
Vested and converted to shares	(38,302)		29.88
Nonvested at December 31, 2017	379,274	$	33.56
Expected to vest at December 31, 2017	379,274	$	33.56

Restricted Stock

We issued an aggregate of 768,021 shares of restricted common stock to certain employees of RowdMap at a fair market value of $43.27 per share. Half of these shares are subject to continued employment and performance-based vesting requirements and, if achieved, will vest on the one year anniversary of the closing date of the RowdMap Acquisition. The other half are subject to continued employment with us, with one-third vesting on each of the first three anniversaries of the closing of the RowdMap Acquisition.

Employee Stock Purchase Plan

We have an ESPP, which became effective January 1, 2017, for US and non-US employees, both of which have a series of six month offering periods, with a new offering period beginning on the first day of January and July each year. The ESPP was adopted by our Board of Directors in August 2016 and approved by shareholders in May 2017. Employees may contribute up to 10% of their pay towards the purchase of common stock via payroll deductions to a maximum of $10 per year, or $5 per offering period. Purchase dates occur on the last business day of June and December of each year and shares are purchased at a 10% discount off the closing price on the NYSE on the date of purchase. Employees must hold the shares purchased for a minimum of 90 days. 

The ESPP had 1,260,000 shares of our common stock initially reserved for issuance upon its inception. The reserve automatically increases each January by an amount equal to the lesser of 1,260,000 or approximately 1.5% of total common shares outstanding on the first day of January. A summary of ESPP share reserve activity for the year ended December 31, 2017 is as follows:

	Shares	Weighted average price
Available for future purchases, beginning of year	1,260,000
Shares reserved for issuance(a)	—
Common stock purchased	(62,694)	$	31.09
Available for future purchases, end of year	1,197,306

(a) On January 1, 2018, the number of shares reserved for issuance was increased by 1,260,000.

Stock-Based Compensation Expense

The fair value of each stock option award is estimated on the date of grant using a Black-Scholes-Merton option pricing model. The expected term of the option represents the period the stock-based awards are expected to be outstanding. We use the simplified method under the provisions of ASC 718, Compensation – Stock Compensation, for estimating the expected term of the options. Since our shares were not publicly traded until May 2016 and were rarely traded privately, at the time of each grant, there has been insufficient volatility data available. Accordingly, we calculate expected volatility using comparable peer companies with publicly traded shares over a term similar to the expected term of the options issued. We do not intend to pay dividends on our common shares, therefore, the dividend yield percentage is zero. The risk-free interest rate is based on the U.S. Treasury constant maturity interest rate whose term is consistent with the expected life of our stock options.

We used the following weighted average assumptions to estimate the fair value of stock options granted for the periods presented as follows:

	Year Ended December 31,
	2017			2016			2015
Expected term (years)		6.25			6.25			6.25
Expected volatility		40.00	%		50.00	%		50.00	%
Expected dividend yield		0.00	%		0.00	%		0.00	%
Weighted average risk-free interest rate		1.93	%		1.36	%		1.70	%
Weighted average grant date fair value	$	14.57		$	9.53		$	7.77

Total fair market value related to the restricted stock issued in connection with the RowdMap Acquisition was  $33,232 based on the closing price of our common stock on the date of grant. For the time-based shares, stock-based compensation expense is being recorded ratably over the three year vesting period. For the performance-based shares, stock-based compensation expense will be recorded over the one year vesting period to the extent it is probable the performance criteria will be achieved. For the year ended December  31, 2017, we recorded approximately $6,072 in stock-based compensation expense related to the performance-based awards that we estimate are probable of achieving the performance criteria.

We recorded total stock-based compensation expense of $16,873,  $22,954 and $3,399 for the years ended December 31, 2017, 2016 and 2015. Stock-based compensation expense during the year ended December 31, 2016 includes $15,898 related to the vesting of all outstanding performance-based stock options. Stock-based compensation expense during the year ended December 31, 2016 also includes $2,257 related to the accelerated vesting of certain stock options as the result of our IPO. We account for forfeitures as they occur. As of December 31, 2017, we had total unrecognized compensation cost of $43,342 related to 2,526,406 unvested service-based stock options, RSUs and restricted stock which we expect to recognize over the next 2.4 years.

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Segment Information

12 Months Ended

Dec. 31, 2017

Segment Information

Segment Information

Note 15. Segment and Geographic Information

Operating segments are components of an enterprise for which separate financial information is available that is evaluated regularly by our Chief Operating Decision Maker in deciding how to allocate resources and in assessing financial performance. We conduct our business through two reportable business segments: Healthcare and Global Retail and Other.

Through our Healthcare segment, we offer prospective and retrospective claims accuracy solutions to healthcare payers in the United States. We also provide a network efficiency solution to payers and providers as well as, on a limited basis, certain analytics-based solutions unrelated to our healthcare payment accuracy solutions in the United States. Through our Global Retail and Other segment, we provide retrospective claims accuracy solutions to retailers primarily in the United States, with additional clients in Canada and the United Kingdom, as well as solutions that improve efficiency and effectiveness of payment networks for a limited number of clients.

We evaluate the performance of each segment based on segment net revenue and segment operating income. Operating income is calculated as net revenue less operating expenses and is not affected by other expense (income) or by income taxes. Indirect costs are generally allocated to the segments based on the segments’ proportionate share of revenue and expenses directly related to the operation of the segment. We do not allocate interest expense, other non‑operating (income) expense or the provision for income taxes, since these items are not considered in evaluating the segment’s overall operating performance. Our Chief Operating Decision Maker does not receive or utilize asset information to evaluate performance of operating segments. Accordingly, asset‑related information has not been presented.

Our operating segment results for the periods presented were as follows:

	Year Ended
	December 31,
	2017		2016		2015
Net Revenue
Healthcare	$	605,228	$	552,041	$	467,044
Global Retail and Other		73,433		73,121		74,299
Consolidated net revenue	$	678,661	$	625,162	$	541,343
Depreciation and amortization
Healthcare	$	81,388	$	77,178	$	70,479
Global Retail and Other		3,795		3,791		3,683
Consolidated depreciation and amortization	$	85,183	$	80,969	$	74,162
Transaction-related expenses
Healthcare	$	2,087	$	1,673	$	1,332
Global Retail and Other		132		115		137
Consolidated transaction-related expenses	$	2,219	$	1,788	$	1,469
Impairment of intangible assets
Healthcare	$	—	$	—	$	26,326
Global Retail and Other		1,322		—		1,500
Consolidated impairment of intangible assets	$	1,322	$	—	$	27,826
Operating Income
Healthcare	$	151,340	$	123,917	$	84,240
Global Retail and Other		10,958		10,036		12,284
Consolidated operating income	$	162,298	$	133,953	$	96,524

Operating segment net revenue by product type for the periods presented was as follows:

	Year Ended December 31,
	2017		%	2016		%	2015		%
Healthcare
Retrospective claims accuracy	$	351,662	51.8	$	310,496	49.7	$	251,288	46.4
Prospective claims accuracy		236,192	34.8		229,491	36.7		201,899	37.3
Other		17,374	2.6		12,054	1.9		13,857	2.6
Total Healthcare		605,228	89.2		552,041	88.3		467,044	86.3
Global Retail and Other
Retrospective claims accuracy		71,437	10.5		70,656	11.3		72,060	13.3
Other		1,996	0.3		2,465	0.4		2,239	0.4
Total Global Retail and Other		73,433	10.8		73,121	11.7		74,299	13.7
Consolidated net revenue	$	678,661	100.0	$	625,162	100.0	$	541,343	100.0

Geographic Information

Geographic net revenue and long-lived assets are attributed to the geographic regions based on the geographic location of each of our subsidiaries/locations. Our operations are primarily within the continental United States. We also operate in Canada and the United Kingdom.

Net revenue generated in the United States accounted for approximately 99%,  98% and 98% of total net revenue for the years ended December 31, 2017, 2016 and 2015, respectively. Remaining net revenue was generated in the rest of the world.

Long-lived assets are primarily based in the United States with over 99% of total consolidated long-lived assets. Less than 1% of total consolidated long-lived assets are foreign.

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Client Concentration

12 Months Ended

Dec. 31, 2017

Client Concentration

Client Concentration

Note 16. Client Concentration

The list of our largest clients changes periodically. Our largest clients, all of which are in our Healthcare segment, accounted for the following percentages of total net revenue:

	Year Ended
	December 31,
	2017		2016		2015
Customer A	13	%	15	%	14	%
Customer B	11	%	11	%	10	%
Customer C	10	%	7	%	8	%

In many instances, we provide our services pursuant to agreements which have auto renewal clauses and may be periodically subject to a competitive reprocurement process.

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Employee Benefit Plans

12 Months Ended

Dec. 31, 2017

Employee Benefit Plans

Employee Benefit Plans

Note 17. Employee Benefit Plans

Contributions expensed and included in compensation on our Consolidated Statements of Comprehensive Income for employee benefit plans are detailed below:

	Year Ended
	December 31,
	2017		2016		2015
401(k) Plan (a)	$	5,101	$	3,860	$	3,053
Profit Share Plan (b)		—		220		539
Provident Plan (c)		712		528		427
Total	$	5,813	$	4,608	$	4,019

(a) We sponsor a  defined contribution retirement plan in accordance with Section 401(k) of the Internal Revenue Code, which cover substantially all U.S. employees, subject to certain minimum age and service requirements. The plans provide for a contribution based on a percentage of eligible employee contributions.

(b) We had a nonqualified profit sharing incentive compensation plan for certain eligible employees. Contributions were made within 90 days following the last day of the plan to a brokerage account in an amount determined at our discretion for employees who had completed 1,000 hours of service and were employed at the time of the contribution. This plan was discontinued after the 2014 plan year, with the final payout occurring in June

2016.

(c) Eligible employees of our subsidiary located in India are covered by the Provident Fund, contributions which are based on a percentage of eligible employees’ salaries, and the Indian Payment of Gratuity Act, which provides for benefits to be paid to eligible employees upon termination of employment (collectively, the “India Plan”). Benefits under the India Plan are administered by the Indian Government. As of December 31, 2017 and 2016 we had an accrued benefit obligation relating to the India Plan of $1,008 and $763, respectively.

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Discontinued Operations

12 Months Ended

Dec. 31, 2017

Discontinued Operations

Discontinued Operations

Note 18. Discontinued Operations

In February 2015, we received payment on a $900 note receivable related to a business that was disposed of in 2012. Since the date of sale, we had elected to fully reserve the note receivable as the collectability was determined to be uncertain. This gain from the collection of the note receivable, net of tax, is reflected as a gain on discontinued operations on our Consolidated Statements of Comprehensive Income. The estimated impact to diluted EPS as a result of this gain on discontinued operations was $0.01 per diluted share for the year ended December 31, 2015.

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Selected Quarterly Financial Data (Unaudited)

12 Months Ended

Dec. 31, 2017

Selected Quarterly Financial Data (Unaudited)

Selected Quarterly Financial Data (Unaudited)

Note 19. Selected Quarterly Financial Data (Unaudited)

Historically, there has been a seasonal pattern to our healthcare revenue with the revenues in the first quarter generally lower than the other quarters and revenues in the fourth quarter generally being higher than the other quarters. Accordingly, the comparison of revenue from quarter to quarter may fluctuate and is dependent on various factors, including, but not limited to, reset of member liability, timing of special projects and timing of inaccurate payments being prevented or recovered as well as the aforementioned seasonal considerations. Consequently, you should not rely on our revenue for any one quarter as an indication of our future performance.

The following table summarizes our unaudited quarterly operating results for the last two years:

	First		Second		Third		Fourth
Year Ended December 31, 2017	Quarter		Quarter		Quarter		Quarter
Revenue(a)	$	160,133	$	167,611	$	174,188	$	176,729
Operating income(b)		34,082		39,996		41,042		47,178
Net income(b)(c)		26,975		21,088		19,472		70,668
Total earnings per share—Basic(c)	$	0.30	$	0.23	$	0.21	$	0.77
Total earnings per share—Diluted(c)	$	0.28	$	0.22	$	0.20	$	0.74

	First		Second		Third		Fourth
Year Ended December 31, 2016	Quarter		Quarter		Quarter		Quarter
Revenue(d)	$	142,718	$	158,291	$	156,241	$	167,912
Operating income(d)(e)		29,238		38,938		24,155		41,622
Net income(d)(e)(f)		8,084		10,893		4,583		25,292
Total earnings per share—Basic(d)(e)(f)	$	0.10	$	0.13	$	0.05	$	0.28
Total earnings per share—Diluted(d)(e)(f)	$	0.10	$	0.13	$	0.05	$	0.27

(a) During the fourth quarter 2017, healthcare revenue was reduced by approximately $7,000 as a result of an increase in our estimated liability for refunds and appeals.

(b) During the second quarter 2017, as a result of the repricing our Term Loan B, we recorded a loss on extinguishment of $3,183 (see Note 8).

(c) During the fourth quarter 2017, we recognized a net income tax benefit of $45,019 associated with the impact of the Tax Act enacted on December 22, 2017 (see Note 11).

(d) During the second quarter 2016, we generated approximately $5,000 in healthcare revenue from special projects that did not reoccur in the second half of the year.

(e) During the second quarter 2016, stock-based compensation expense includes $2,257 related to the accelerated vesting of certain stock options as the result of our IPO. During the third quarter 2016, stock-based compensation expense includes $15,898 related to the vesting of all outstanding performance-based stock options (see Note 14).  

(f) During the second quarter 2016, we made a voluntary prepayment on our Initial Second Lien Credit Facility which resulted in a $7,068 loss on extinguishment of debt. During the third quarter 2016, as a result of refinancing our long-term debt, we recorded a loss on extinguishment of $9,349 (see Note 8).

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Subsequent Event

12 Months Ended

Dec. 31, 2017

Subsequent Event

Subsequent Event

Note 20.  Subsequent Event

Our original Medicare RAC contract with CMS expired on January 31, 2018. As discussed in Note 2, healthcare providers have the right to appeal a claim and may pursue additional appeals if the initial appeal is found in favor of CMS. We accrue an estimated liability for appeals based on the amount of fees that are subject to appeals, closures or other adjustments and those which we estimate are probable of being returned to CMS following a successful appeal by the providers. Our estimates are based on our historical experience with the Medicare RAC appeal process. In connection with the expiration of the contract, we determined that we have no obligation to CMS with respect to any appeals resolved in the providers favor after the expiration date and, in addition, we believe that we have no obligation to CMS in connection with the hospital settlement processes as described in Note 7. Accordingly, we expect to release at least $32,000 of the total $56,000 liability during the first quarter 2018. This will increase first quarter 2018 revenue by an amount equal to the total liability released upon contract expiration. We continue to assess the remaining estimated liability for refunds and appeals to determine management’s best estimate of any appeals overturned prior to the expiration of the contract term.

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Schedule I - Condensed Financial Information of Registrant

12 Months Ended

Dec. 31, 2017

Condensed Financial Information of Registrant

Schedule I - Condensed Financial Information of Registrant

Cotiviti Holdings, Inc.

Schedule I - Condensed Financial Information of Registrant

Parent Company Balance Sheets

(In thousands, except share amounts)

		December 31,
		2017		2016
ASSETS
Non current assets:
Investment in subsidiaries		1,101,468		939,336
TOTAL ASSETS	$	1,101,468	$	939,336
LIABILITIES AND STOCKHOLDERS' EQUITY
Total liabilities	$	—	$	—
Stockholders' equity:
Common stock ($0.001 par value; 600,000,000 shares authorized,  92,299,294 and 90,748,740 issued, and 92,299,294 and 90,741,340 outstanding at December 31, 2017 and 2016, respectively)		92		91
Additional paid-in capital		933,710		911,582
Retained earnings		172,120		33,917
Accumulated other comprehensive loss		(4,454)		(6,156)
Treasury stock, at cost (7,400 shares at December 31, 2016)		—		(98)
Total stockholders' equity		1,101,468		939,336
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$	1,101,468	$	939,336

Cotiviti Holdings, Inc.
Schedule I - Condensed Financial Information
Parent Company Statements of Comprehensive Income
(In thousands)

		Years ended December 31,
		2017		2016		2015
Equity in income of subsidiaries	$	138,203	$	48,852	$	13,863
Net income		138,203		48,852		13,863
Equity in other comprehensive income (loss) of subsidiaries		1,702		(1,289)		(3,009)
Total comprehensive income	$	139,905	$	47,563	$	10,854

Cotiviti Holdings, Inc.

Schedule I—Condensed Financial Information of Registrant

Parent Company Statements of Cash Flows

(In thousands)

	Year Ended December 31,
	2017		2016		2015
Cash flows from operating activities:
Net income	$	138,203	$	48,852	$	13,863
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in income of subsidiaries		(138,203)		(48,852)		(13,863)
Net cash provided by operating activities		—		—		—
Cash flows from investing activities:
Investment in subsidiaries		(5,340)		(81,206)		(210)
Net cash used in investing activities		(5,340)		(81,206)		(210)
Cash flows from financing activities:
Proceeds from issuance of common stock		—		226,963		—
Proceeds from issuance of common stock under equity plans		15,340		4,243		210
Dividends paid		—		(150,000)		—
Repurchase of common stock		(10,000)		—		—
Net cash provided by financing activities		5,340		81,206		210
Net increase in cash and cash equivalents		—		—		—
Cash and cash equivalents at beginning of period		—		—		—
Cash and cash equivalents at end of the period	$	—	$	—	$	—
Supplemental disclosures of cash flow information:
Noncash operating activities (stock-based compensation)	$	16,873	$	22,954	$	3,399

Cotiviti Holdings, Inc.

Schedule I—Condensed Financial Information of Registrant

Notes to Parent Company Financial Statements

(In thousands, except share amounts)

Note 1. Basis of Presentation

Cotiviti Holdings, Inc. (collectively with its subsidiaries, "we," "our," or "the Company") is incorporated in the state of Delaware and has adopted a holding company structure. With effect from September 2015, the name of our Company was changed from Connolly Superholdings, Inc. to Cotiviti Holdings, Inc. Our primary domestic operations are performed through Cotiviti, LLC and Cotiviti USA, LLC, both of which are our wholly-owned operating subsidiaries. We have international operations in Canada, the United Kingdom and India.

Pursuant to the terms of the Restated Credit Agreement discussed in Note 8 of the Notes to the Cotiviti Holdings, Inc. Consolidated Financial Statements, Cotiviti Corporation and certain of its subsidiaries have restrictions on their ability to, among other things, incur additional indebtedness, pay dividends or make certain intercompany loans and advances. As a result of these restrictions, these parent company financial statements have been prepared in accordance with Rule 12-04 of Regulation S-X, as restricted net assets of the Company's subsidiaries (as defined in Rule 4-08(e)(3) of Regulation S-X) exceed 25% of the Company's consolidated net assets as of December 31, 2017. The Company is a holding company without any operations of its own. These condensed financial statements have been prepared on a "parent-only" basis. Under a parent-only presentation, the Parent Company's investments in subsidiaries are presented under the equity method of accounting. Certain information and footnote disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. Stock-based compensation expense associated with equity incentive awards issued by the Parent Company and the related tax effects are recorded at the subsidiary level where the employees provide the services. The accompanying condensed financial information should be read in conjunction with the Cotiviti Holdings, Inc. Consolidated Financial Statements and related Notes thereto.

Note 2. Stockholders' Equity

Share Repurchase Program

On October 31, 2017, the Board of Directors approved a share repurchase program under which we may repurchase up to $100,000 of common stock. This authorization permits us to repurchase shares from time to time until October 31, 2018 through a variety of methods, including open market repurchases and in privately negotiated transactions subject to debt covenants and other customary legal, contractual, regulatory and market considerations and may be discontinued at any time. All share repurchases will be implemented in accordance with Rule 10b-18 of the Exchange Act with respect to the timing, pricing and volume of such transactions. There can be no assurance as to the amount, timing or prices of repurchases, which may vary based on market conditions and other factors.

During the year ended December 31, 2017, we repurchased 317,900 shares of our common stock under this share repurchase program for $10,000, at a weighted average share price of $31.43 per share.

Secondary Offerings

On August 7, 2017, we completed a secondary offering of 10,000,000 shares of our common stock by certain of our stockholders at an offering price of $37.00 per share. All of the shares offered were sold by selling stockholders. Accordingly, we did not receive any proceeds from the sale of shares. In connection with this offering, we incurred approximately $700 in professional services expenses, which are included in transaction-related expenses on our Consolidated Statements of Comprehensive Income for the year ended December 31, 2017.

On March 7, 2017, we completed a secondary offering of 9,683,000 shares of our common stock by certain of our stockholders, including 1,263,000 shares sold to the underwriters pursuant to their option to purchase additional shares, at an offering price of $36.00 per share. All of the shares offered were sold by selling stockholders. Accordingly, we did not receive any proceeds from the sale of the shares. In connection with this offering, we incurred approximately $600 in professional services expenses, which are included in transaction-related expenses on our Consolidated Statements of Comprehensive Income for the year ended December 31, 2017.

Issuance of Common Stock

On May 25, 2016 we consummated our IPO in which we issued and sold a total of 12,936,038 shares of common stock, including a portion of the underwriter overallotment, at a public offering price of $19.00 per share. We received net proceeds of approximately $226,963 after deducting underwriting discounts and commissions and other offering expenses of approximately $18,822.

Common Stock Split

On May 13, 2016 we effected a 6.1-for-1 stock split of all outstanding shares of our common stock. All share, option and per share information presented in the accompanying consolidated financial statements and notes thereto have been adjusted to reflect the stock split on a retroactive basis for all periods presented and all share information is rounded up to the nearest whole share after reflecting the stock split.

Common Stock Dividends

On May 26, 2016 we paid a Special Cash Dividend of $150,000, or $1.94 per share of common stock outstanding prior to the IPO, to holders of record of our common stock on the dividend record date. In connection with the Special Cash Dividend we lowered the exercise price of then outstanding stock options by $1.94 per share in order to preserve the intrinsic value of the options giving effect to the Special Cash Dividend.

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Schedule II - Valuation and Qualifying Accounts

12 Months Ended

Dec. 31, 2017

Schedule II—Valuation and Qualifying Accounts

Schedule II—Valuation and Qualifying Accounts

Cotiviti Holdings, Inc.

Schedule II—Valuation and Qualifying Accounts

(in thousands)

				Additions
Description	Balance at Beginning of Period		Charged to Operating Expenses		Provision Charged Against Revenue(a)		Deductions(b)		Balance at End of Period
Year Ended December 31, 2017
Allowance and estimated liability for refunds and appeals(c)	$	103,559	$	—	$	88,874	$	(95,392)	$	97,041
Allowance for doubtful accounts		851		(295)		—		(380)		176
Year Ended December 31, 2016
Allowance and estimated liability for refunds and appeals(c)	$	101,181	$	—	$	99,472	$	(97,094)	$	103,559
Allowance for doubtful accounts		1,053		(147)		—		(55)		851
Year Ended December 31, 2015
Allowance and estimated liability for refunds and appeals(c)	$	98,157	$	—	$	67,702	$	(64,678)	$	101,181
Allowance for doubtful accounts		655		804		—		(406)		1,053

(a) Provision charged against revenue include estimates for refund and appeals liabilities based on actual historical refunds and appeals data by client type, net of any changes to previously estimated amounts.

(b) Deductions related to the allowance and estimated liability for refunds and appeals represent credits or payments provided to our clients to settle the liability. Deductions related to the allowance for doubtful accounts represent write-offs of bad debt expense.

(c) The balance at end of period consists of the estimated allowance for refunds and appeals netted against accounts receivable of $35,434,  $41,020 and $33,406 and the estimated liability for refunds and appeals of $61,607,  $62,539 and $67,775 as of December 31, 2017, 2016 and 2015, respectively. Refer to the Notes to our Consolidated Financial Statements.

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Summary of Significant Accounting Policies (Policies)

12 Months Ended

Dec. 31, 2017

Summary of Significant Accounting Policies

Basis of Presentation

Basis of Presentation

The accompanying consolidated financial statements include our accounts and our wholly owned subsidiaries. All significant intercompany balances and transactions have been eliminated in consolidation. Certain prior year amounts have been reclassified to conform to the current year presentation.

Use of Estimates

Use of Estimates

The preparation of consolidated financial statements in conformity with GAAP requires management to make estimates and assumptions affecting the reported amounts in our consolidated financial statements and accompanying notes. These estimates are based on information available as of the date of the Consolidated Financial Statements; therefore, actual results could differ from those estimates.

Foreign Currency Translation

Foreign Currency Translation

Assets and liabilities of our foreign subsidiaries with a functional currency other than the U.S. Dollar are translated into U.S. Dollars using applicable exchange rates at the balance sheet date. Revenue and expenses are translated at average exchange rates effective during the year. The resulting foreign currency translation gains and losses are included as a component of accumulated other comprehensive income (loss) within stockholders’ equity on our Consolidated Balance Sheets.

Assets and liabilities of our foreign subsidiaries for which the functional currency is the U.S. Dollar are re-measured into U.S. Dollars using applicable exchange rates at the balance sheet date, except nonmonetary assets and liabilities, which are re-measured at the historical exchange rates prevailing when acquired. Revenue and expenses are re-measured at average exchange rates effective during the year.

Foreign currency translation gains and losses from re-measurement are included in other non-operating (income) expense in the accompanying Consolidated Statements of Comprehensive Income. The amounts of net gain (loss) on foreign currency re-measurement recognized were immaterial for all periods presented.

Revenue Recognition, Unbilled Receivables and Estimated Liability for Refunds and Appeals

Revenue Recognition, Unbilled Receivables and Estimated Liability for Refunds and Appeals

We provide services under contracts that contain various fee structures, including performance fee‑based contracts and fixed fee arrangements. Revenue is recognized when a contract exists, services have been provided to the client, the fee is fixed and determinable and collectability is reasonably assured.

We recognize revenue on performance fee-based contracts based upon the specific terms of the underlying contract. The contract terms generally specify: (a) time periods covered by the work to be performed; (b) nature and extent of services we are to provide; (c) the client’s duties in assisting and cooperating with us; and (d) fees payable to us. Our fees are most often expressed as a percentage of our findings. Generally, our services are rendered when our clients realize the economic benefits from our services. Our clients realize economic benefits when they take credits against their existing accounts payable based on when we identify cost savings, when they receive refund checks based on overpayments, or when they acknowledge payment reductions based on cost savings. 

We derive a relatively small portion of revenue on contracts with fixed fee arrangements. We recognize revenue on these contracts ratably over the contract term and once all of the above criteria have been satisfied.

As discussed below under Recently Issued Accounting Standards, we will adopt the updated FASB revenue recognition guidance ASC 606 on January 1, 2018. ASC 606 is an update to ASC 605, which was the revenue recognition standard in effect for each of the three years in the period ended December 31, 2017.

Historically, there has been a certain amount of revenue with respect to which, even though we had met the requirements of our revenue recognition policy, the claim is ultimately rejected. In such cases, our clients may request a refund or offset if their providers or vendors ultimately reject the payment inaccuracies we find or if our clients determine not to pursue reimbursement from their providers or vendors even though we may have collected fees. We record any such refund as a reduction of revenue. We record an estimate for refund liabilities at any given time based on actual historical refund data by client type. We satisfy such refund liabilities either by offsets to accounts receivable or by cash payments to clients. In addition to these estimated refund liabilities, we calculate client specific reserves when we determine an additional reserve may be necessary.

The estimated liability for refunds and appeals representing our estimate of claims that may be overturned related to revenue which had already been received was $61,607 and $62,539 at December 31, 2017 and December 31, 2016, respectively. The estimated allowance for refunds and appeals representing our estimate of claims that may be overturned related to amounts in accounts receivable was $35,434 and $41,020 at December 31, 2017 and December 31, 2016, respectively.

Under the Medicare Recovery Audit Program, in which we are one of the Medicare RACs for CMS, healthcare providers have the right to appeal a claim and may pursue additional appeals if the initial appeal is found in favor of CMS. We accrue an estimated liability for appeals based on the amount of fees that are subject to appeals, closures or other adjustments and those which we estimate are probable of being returned to CMS following a successful appeal by the providers. Our estimates are based on our historical experience with the Medicare RAC appeal process. This estimated liability for Medicare RAC appeals is an offset to revenue in our Consolidated Statements of Comprehensive Income. The liability is included in the estimated liability for refunds and appeals on our Consolidated Balance Sheets. See Note 7 and Note 20 for further information regarding the estimated liability for appeals related to the Medicare RAC program.

Unbilled receivables represent revenue recognized related to claims for which clients have received economic value that were not invoiced at the balance sheet date. Unbilled receivables were approximately $62,294 and $51,643 as of December 31, 2017 and December 31, 2016, respectively and are included in accounts receivable on our Consolidated Balance Sheets.

Certain unbilled receivables arise when a portion of our earned fee is deferred at the time of the initial invoice. At a later date (which can be up to a year after original invoice, and at other times during the year after completion of the audit period based on contractual terms or as agreed with our client), we invoice the unbilled receivable amount. Notwithstanding the deferred due date, our clients acknowledge we have earned this unbilled receivable at the time of the original invoice, but we have agreed to defer billing the client for the related services. Unbilled receivables of this nature were approximately $4,958 and $6,137 as of December 31, 2017 and December 31, 2016, respectively, and are included in accounts receivable on our Consolidated Balance Sheets.

We record periodic changes in unbilled receivables and refund liabilities as adjustments to revenue.

Cost of Revenue

Cost of Revenue

Cost of revenue is a direct cost associated with generating revenue. Cost of revenue related to compensation includes the total cost of payroll, related benefits and stock-based compensation expense for employees in roles that serve to provide direct revenue generating services to clients. Other cost of revenue primarily includes expenses related to the use of certain subcontractors and professional service firms, costs associated with the retrieval of medical records and facilities related costs associated with locations that are used strictly for revenue generating activities. Cost of revenue does not include depreciation and amortization, which is stated separately in our Consolidated Statements of Comprehensive Income.

Selling, General and Administrative

Selling, General and Administrative

Compensation within SG&A includes the total cost of payroll, related benefits and stock-based compensation expense for employees who do not have a direct role associated with revenue generation including those involved with developing new service offerings. Other SG&A expenses include all general operating costs. These costs include, but are not limited to, rent and occupancy costs for facilities associated with locations that are used for employees not serving in revenue generating roles, telecommunications costs, information technology infrastructure costs, software licensing costs, advertising and marketing expenses, costs associated with developing new service offerings and expenses related to the use of certain subcontractors and professional services firms. SG&A expenses do not include depreciation and amortization, which is stated separately in our Consolidated Statements of Comprehensive Income.

Advertising Costs

Advertising Costs

Advertising costs are expensed as incurred and included in other SG&A expenses on our Consolidated Statements of Comprehensive Income. Advertising expense was $1,439,  $1,345 and $1,241 for the years ended December 31, 2017, 2016 and 2015, respectively.

Cash and Cash Equivalents

Cash and Cash Equivalents

Cash and cash equivalents include all cash balances and highly liquid investments with an original maturity of 90 days or less from the date of purchase.

Restricted Cash

Restricted Cash

In connection with providing services to certain clients, we maintain a series of lockbox accounts with certain financial institutions. These lockbox accounts exist to receive funds we collect on behalf of our clients resulting from services provided. When client funds are received and deposited into the lockbox accounts, we record a corresponding customer deposit liability. These funds are included as both restricted cash in current assets and customer deposits in current liabilities on our Consolidated Balance Sheets.

Accounts Receivable

Accounts Receivable

Trade accounts receivable are recorded at the invoiced amount and do not bear interest. We accrue an allowance against accounts receivable related to fees yet to be collected, based on historical losses adjusted for current market conditions, our clients’ financial condition, the amount of any receivables in dispute, the current receivables aging and current payment patterns. We record changes in our estimate to the allowance for doubtful accounts through bad debt expense and relieve the allowance after all means of collection have been exhausted and the potential for recovery is considered remote. Write-offs for all periods presented have not been significant. We do not have any off balance sheet credit exposure related to our clients.

Property and Equipment

Property and Equipment

Property and equipment is stated at cost, net of accumulated depreciation. Depreciation on property and equipment is calculated using the straight-line method over the estimated useful lives of the assets and is included in depreciation and amortization of property and equipment in our Consolidated Statements of Comprehensive Income. The estimated useful lives of our property and equipment are as follows:

Computer equipment	3	-	5	years
Software	2	-	5	years
Furniture and fixtures			7	years
Leasehold improvements				Lesser of remaining lease term or expected service life of improvement

We have AROs arising from contractual requirements to perform specified activities at the time of disposition of certain leasehold improvements and equipment at some of our facilities. We record a liability for the estimated costs of these AROs. The liabilities are included in other long-term liabilities on our Consolidated Balance Sheets and are initially measured at fair value and subsequently are adjusted for accretion expense and any changes in the amount or timing of the estimated cash flows.

Internally Developed Software Costs

Internally Developed Software Costs

Capitalization of costs incurred in connection with software developed for internal use commences when both the preliminary project stage is completed and management has authorized further funding for the project, based on a determination that it is probable the project will be completed and used to perform the function intended. Capitalized costs are limited to (i) external direct costs of materials and services consumed in developing or obtaining internal use software and (ii) payroll and payroll related costs for employees who are directly associated with and devote time to the internal use software project. Capitalization of such costs ceases no later than the point at which the project is substantially complete and ready for its intended use. All other costs to develop software for internal use are expensed as incurred.

We capitalized approximately $14,765, $21,580 and $7,239 for the years ended December 31, 2017, 2016 and 2015 respectively. Amortization of software and software development costs is calculated on a straight-line basis over the expected economic life of the software, generally estimated to be five years and is included in depreciation and amortization of property and equipment on our Consolidated Statements of Comprehensive Income. Amortization expense for internal use software was $7,745,  $2,992 and $2,287 for the years ended December 31, 2017, 2016 and 2015, respectively. Amortization expense for the year ended December 31, 2015 includes the write off of approximately $975 related to software that is no longer being used.

Goodwill

Goodwill

Goodwill is an asset representing the future economic benefits arising from other assets acquired in a business combination which are not individually identified and separately recognized. We do not amortize goodwill. Goodwill is reviewed for impairment on an annual basis as of October 1, of each year or more frequently if events or circumstances indicate the carrying amount may not be recoverable. These tests are performed at the reporting unit level. We have two reporting units, Healthcare and Global Retail and Other. Application of the goodwill impairment test requires judgment, including: the identification of reporting units; assignment of assets and liabilities to reporting units; determination of the fair value of each reporting unit; and an assumption as to the form of the transaction in which the reporting unit would be acquired by a market participant (either a taxable or nontaxable transaction).

Under ASC 350, Intangibles—Goodwill and Other, we are permitted to make a qualitative assessment of whether it is more likely than not that a reporting unit’s fair value is less than its carrying amount.  If we can support the conclusion that it is more likely than not that the fair value of a reporting unit is greater than its carrying amount, then we would not need to perform the quantitative impairment test. If we cannot support such a conclusion, or we do not elect to perform the qualitative assessment, then a quantitative test for goodwill is used to identify potential impairment by comparing the fair value of a reporting unit with its carrying amount, including goodwill. The fair value of a reporting unit is determined using a discounted cash flow analysis based on assumptions regarding our future business outlook. While we continue to review and analyze many factors that can impact our business prospects in the future, our analyses are subjective and are based on conditions existing at and trends leading up to the time the assumptions are made. Actual results could differ materially from these assumptions.

Intangible Assets

Intangible Assets

Our intangible assets with definite lives include customer relationships and acquired software. Intangible assets with indefinite lives include a trademark, which is not being amortized, and is tested for impairment on an annual basis as of October 1 of each year or when events or changes in circumstances necessitate an evaluation for impairment. Recoverability of these assets is measured by a comparison of the carrying amounts to the future discounted cash flows the assets are expected to generate. Intangible assets with definite lives are initially recorded at fair value and are amortized on a basis consistent with the timing and pattern of expected cash flows used to value the intangibles, generally on a straight-line basis over useful lives ranging from 5 to 14 years. Amortization expense is included in amortization of intangible assets in our Consolidated Statements of Comprehensive Income. Intangible assets with definite lives are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. See Note 5 for further detail.

Long-Lived Assets

Long-Lived Assets

Long-lived assets, including property and equipment, with definite lives, are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. If circumstances require the asset or asset group be tested for possible impairment, we first compare undiscounted cash flows expected to be generated by the asset or asset group to its carrying value. If the carrying value of the asset or asset group is not recoverable on an undiscounted cash flow basis, an impairment loss is recognized to the extent the carrying value exceeds its fair value. Fair value is determined through various valuation techniques including discounted cash flow models, quoted market values and third party independent appraisals, as necessary.

Business Combinations

Business Combinations

We account for acquisitions of businesses using the acquisition method of accounting. The purchase price is allocated to the identifiable net assets acquired, including intangible assets and liabilities assumed, based on estimated fair values at the date of the acquisition. The excess of the purchase price over the amount allocated to the identifiable assets and liabilities, if any, is recorded as goodwill.

Determining the fair value of assets acquired and liabilities assumed requires significant judgment, including the selection of valuation methodologies, estimates of future revenue and cash flows and discount rates.

Under the acquisition method of accounting for business combinations, any changes to acquired balances in tax accounts, including adjustments to deferred tax asset valuation allowances or liabilities related to uncertain tax positions, which are recorded during the measurement period, and are determined to be attributable to facts and circumstances that existed as of the acquisition date, are considered a measurement period adjustment and will result in an offsetting increase or decrease to goodwill. All other changes to deferred tax asset valuation allowances and liabilities related to uncertain tax positions will result in an increase or decrease to income tax expense.

Income Taxes

Income Taxes

Income taxes are accounted for under the asset and liability method. Deferred tax assets and liabilities are recognized for the future tax consequences attributable to differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax bases, as well as for tax attributes such as operating loss and tax credit carryforwards. Deferred tax assets and liabilities are measured using enacted tax rates expected to apply to taxable income in the years in which those temporary differences are expected to be recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in income in the period that includes the enactment date.

We recognize net deferred tax assets to the extent that we believe these assets are more likely than not to be realized. In making such a determination, we consider all available positive and negative evidence, including future reversals of existing taxable temporary differences, projected future taxable income, tax planning strategies, and results of recent operations. In the event we determine that we would be able to realize our deferred tax assets in the future in excess of their net recorded amount, we reduce the deferred tax asset valuation allowance and record a benefit in our provision for income taxes in our Consolidated Statements of Comprehensive Income.

We record liabilities related to uncertain tax positions in accordance with ASC 740, Income Taxes, on the basis of a two step process whereby (1) we determine whether it is more likely than not that the tax positions will be sustained on the basis of the technical merits of the position and (2) for those tax positions that meet the more likely than not recognition threshold, we recognize the largest amount of tax benefit that is more than 50% likely to be realized upon ultimate settlement with the related tax authority. We recognize interest and penalties related to unrecognized tax benefits within the income tax provision in the accompanying Consolidated Statements of Comprehensive Income. Accrued interest and penalties are included within accounts payable and accrued other expenses in the Consolidated Balance Sheets.

The Tax Act, which was enacted on December 22, 2017, resulted in a substantial impact on our income tax benefit for the year ended December 31, 2017. See Note 11 for additional information. 

Derivative Instruments

Derivative Instruments

Our derivative instruments consist entirely of interest rate cap agreements, are stated at fair value and are included in accounts payable and accrued other expenses and other long-term liabilities on our Consolidated Balance Sheets. Changes in the fair value of derivatives that are designated as cash flow hedges are deferred in accumulated other comprehensive loss on our Consolidated Balance Sheets until the underlying hedged transactions are recognized in earnings, at which time any deferred hedging gains or losses are also recorded in earnings. See Note 9 for more information.

Stock-Based Compensation

Stock-Based Compensation

Our policy is to issue new shares for purchases under our equity incentive plans as described in Note 14. Stock-based compensation expense is estimated at the grant date based on an award’s fair value. The determination of the stock-based compensation expense related to stock options is calculated using a Black-Scholes-Merton option pricing model and is affected by our stock price, expected stock price volatility over the term of the awards, expected term, risk free interest rate and expected dividends. The determination of the stock-based compensation expense related to RSUs is calculated based on the closing price of our stock on the grant date. We record forfeitures as they occur.

We recognize stock-based compensation expense for service-based equity awards using the straight-line attribution method over the requisite service period.

We have awarded performance-based equity awards to certain employees and directors. Performance-based awards vest in accordance with the specific performance criteria outlined in the executed award agreements. The vesting of performance-based equity awards is also dependent upon the participant’s continued employment. The criteria associated with our outstanding performance-based stock options as defined in the terms of the award agreements, was satisfied as of September 30, 2016 and therefore these stock options all became vested and exercisable. As such, we recorded stock-based compensation expense during the year ended December 31, 2016 based on the grant date fair value of the performance-based awards.

As part of the RowdMap Acquisition, we issued restricted stock to certain employees. We recognized the related expense for these awards ratably over the applicable vesting period or as achievement of performance criteria become probable. See Note 14 for additional information.

Commitments and Contingencies

Commitments and Contingencies

Liabilities for loss contingencies arising from claims, assessments, litigation, fines and penalties and other sources are recorded when it is probable a liability has been incurred and the amount can be reasonably estimated. Legal costs incurred in connection with loss contingencies are expensed as incurred. See Note 7 for further detail on loss contingency related to the Medicare RAC.

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The carrying values for cash and cash equivalents, restricted cash, accounts receivable, accounts payable, and other accrued liabilities reasonably approximate fair market value due to their nature and the short term maturity of these financial instruments. We measure assets and liabilities at fair value based on assumptions that market participants would use in pricing an asset or liability in the principal or most advantageous market. When considering market participant assumptions in fair value measurements, we use a consistent fair value hierarchy framework as defined in ASC 820, Fair Value Measurement.  See Note 10 for more information regarding management’s fair value estimates.

Recently Issued Accounting Standards

Recently Issued Accounting Standards

New accounting rules and disclosure requirements can impact our financial results and the comparability of our financial statements. The authoritative literature which has recently been issued and that we believe will most impact our consolidated financial statements is described below. There are also several new proposals under development. If and when enacted, these proposals may have a significant impact on our financial statements.

In February 2016, the FASB issued ASU 2016-02, Leases (“ASU 2016-02”), which changes the accounting recognition, measurement and disclosure for leases in order to increase transparency. ASU 2016-02 requires lease assets and liabilities to be recognized on the balance sheet and key information about leasing arrangements to be disclosed. The guidance is effective for public companies with annual reporting periods beginning after December 15, 2018, including interim periods within that reporting period. Early adoption is permitted. We are evaluating this new guidance and its impact on our consolidated financial statements and related disclosures.

In May 2014, the FASB issued ASU 2014‑09, Revenue from Contracts with Customers (Topic 606) (“ASU 2014‑09”), which supersedes existing revenue recognition guidance and provides clarification of principles for recognizing revenue from contracts with customers. ASU 2014-09 sets forth a five-step model for determining when and how revenue is recognized. The core principle of the new standard is that a company should recognize revenue to depict the transfer of promised goods or services to customers in an amount that reflects the consideration to which the company expects to be entitled in exchange for those goods or services. Additional disclosures will be required to describe the nature, amount, timing and uncertainty of revenue and cash flows arising from customer contracts. The two permitted transition methods under ASU 2014-09 are the full retrospective method, in which case the new guidance would be applied to each prior reporting period presented and the cumulative effect of applying the standard would be recognized at the earliest period shown, or the modified retrospective method, in which case the cumulative effect of applying the standard would be recognized at the date of the initial application. The guidance is effective for public companies with annual periods beginning after December 15, 2017 and interim periods within that reporting period.

In 2016, we formed an internal team to evaluate and quantify the potential impact of this new revenue guidance. As of the date of this filing, we have completed our contract review and policy drafting. Based on our review, we believe the timing of revenue recognition will not materially change from current practice. We will adopt as of January 1, 2018 using the modified retrospective method. Adoption of this standard will require changes to our business processes, systems and controls to support the additional required disclosures. Our identification and design of such changes is ongoing. We will provide additional information about the impact of this new guidance, including enhanced disclosure requirements, in future filings.

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Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2017

Summary of Significant Accounting Policies

Schedule of useful lives

Computer equipment	3	-	5	years
Software	2	-	5	years
Furniture and fixtures			7	years
Leasehold improvements				Lesser of remaining lease term or expected service life of improvement

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Acquisition (Tables)

12 Months Ended

Dec. 31, 2017

Acquisition

Schedule of estimated fair values of the assets acquired and liabilities assumed

	July 14, 2017
Cash	$	4,107
Accounts receivable		2,526
Prepaid expenses and other assets		1,212
Other long-term assets		12
Property and equipment		263
Intangible assets		19,510
Total identifiable assets acquired		27,630
Accounts payable and accrued liabilities		4,491
Deferred tax liabilities		3,688
Total liabilities assumed		8,179
Net identifiable assets acquired		19,451
Goodwill		54,673
Net assets acquired	$	74,124

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Property and Equipment (Tables)

12 Months Ended

Dec. 31, 2017

Property and Equipment

Schedule of property and equipment by major asset class

	December 31,
	2017		2016
Computer equipment	$	46,731	$	40,349
Software		67,511		42,614
Furniture and fixtures		9,199		8,652
Leasehold improvements		5,256		4,392
Projects in progress		10,295		12,001
Property and equipment, gross	$	138,992	$	108,008
Less: accumulated depreciation and amortization		61,652		40,368
Property and equipment, net	$	77,340	$	67,640

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Intangible Assets (Tables)

12 Months Ended

Dec. 31, 2017

Intangible Assets

Schedule of finite-lived intangible asset balances by major asset class

Intangible asset balances by major asset class for the periods presented were as follows:

									Weighted
	Gross						Net		Average
	Carrying		Accumulated				Carrying		Amortization
	Amount		Amortization		Impairment		Amount		Period
December 31, 2017:
Customer relationships	$	650,954	$	190,572	$	1,322	$	459,060	13.5	years
Acquired software		54,210		25,430		—		28,780	6.8	years
Connolly trademark		4,200		—		—		4,200	indefinite-lived
Total	$	709,364	$	216,002	$	1,322	$	492,040	13.0	years
December 31, 2016:
Customer relationships	$	640,052	$	144,768	$	—	$	495,284	13.7	years
Acquired software		82,400		48,579		—		33,821	6.2	years
Connolly trademark		4,200		—		—		4,200	indefinite-lived
Total	$	726,652	$	193,347	$	—	$	533,305	12.8	years

Schedule of indefinite-lived intangible asset balances by major asset class

Intangible asset balances by major asset class for the periods presented were as follows:

									Weighted
	Gross						Net		Average
	Carrying		Accumulated				Carrying		Amortization
	Amount		Amortization		Impairment		Amount		Period
December 31, 2017:
Customer relationships	$	650,954	$	190,572	$	1,322	$	459,060	13.5	years
Acquired software		54,210		25,430		—		28,780	6.8	years
Connolly trademark		4,200		—		—		4,200	indefinite-lived
Total	$	709,364	$	216,002	$	1,322	$	492,040	13.0	years
December 31, 2016:
Customer relationships	$	640,052	$	144,768	$	—	$	495,284	13.7	years
Acquired software		82,400		48,579		—		33,821	6.2	years
Connolly trademark		4,200		—		—		4,200	indefinite-lived
Total	$	726,652	$	193,347	$	—	$	533,305	12.8	years

Schedule of intangible asset amortization expense

2018	$	57,588
2019		57,588
2020		57,588
2021		53,264
2022		48,956

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Goodwill (Tables)

12 Months Ended

Dec. 31, 2017

Goodwill

Schedule of changes in the carrying amount of goodwill by segment

	December 31, 2017				December 31, 2016
			Global Retail				Global Retail
	Healthcare		and Other		Healthcare		and Other
Beginning balance	$	1,147,771	$	48,253	$	1,147,771	$	49,273
RowdMap Acquisition		54,673		—		—		—
Foreign currency translation		—		667		—		(1,020)
Ending balance	$	1,202,444	$	48,920	$	1,147,771	$	48,253

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Commitments and Contingencies (Tables)

12 Months Ended

Dec. 31, 2017

Commitments and Contingencies

Schedule of future minimum payments under non-cancelable operating lease agreements

Year ending December 31:
2018	$	8,640
2019		9,588
2020		8,882
2021		8,173
2022		8,363
2023 - 2029		44,308
Total minimum lease payments	$	87,954

Schedule of changes in the carrying amount of AROs

	Year ended
	December 31,
	2017		2016
Balance beginning of period	$	2,725	$	2,415
Additional ARO liability		—		133
Accretion expense		183		177
Settled ARO liability		(64)		—
Balance at end of period	$	2,844	$	2,725

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Long-term Debt (Tables)

12 Months Ended

Dec. 31, 2017

Long-term Debt

Schedule of long-term debt

	December 31,
	2017		2016
First Lien Term A Loans(a)	$	234,237	$	246,694
First Lien Term B Loans(b)		540,585		544,345
Revolver(c)		—		—
Total debt		774,822		791,039
Less: debt issuance costs		7,204		10,837
Less: current portion		18,000		18,000
Total long-term debt	$	749,618	$	762,202

(a) The First Lien Term A  Loans mature on September 28, 2021 and requires quarterly principal payments of $3,125 per quarter in 2018, $4,688 per quarter in 2019, $6,250 per quarter in 2020 and $9,375 per quarter for the first two quarters of 2021. The remainder of the outstanding First Lien Term A  Loans borrowings are due on September 28, 2021. Any mandatory or voluntary prepayment will be applied against the remaining scheduled installments of principal payments in direct order of maturity, unless other direction of application is provided by us. Based on our periodic election, borrowings under the First Lien Term A  Loans bear interest at either (a) the ABR plus, based on our Secured Leverage Ratio (as defined in the Restated Credit Agreement), 1.25% - 2.00% for ABR loans or (b) LIBOR plus, based on our Secured Leverage Ratio, 2.25% to 3.00% for LIBOR loans. The ABR is equal to the highest of (i) the New York Federal Reserve Bank rate in effect on such date plus 0.50%, (ii) the LIBOR plus 1.00% and (iii) the prime commercial lending rate of the administrative agent as in effect on the relevant day. The interest period applicable to any LIBOR borrowing is one,  two,  three or six months, at the election of the borrower. Interest on LIBOR loans is payable the last day of the applicable interest period and, in the case of an interest period of more than three months’ duration, each day on which interest would have been payable had successive interest periods of three months’s duration been applicable to such borrowing. The interest rate in effect was 3.95% and 3.75% at December 31, 2017 and 2016, respectively.  

(b) The First Lien Term B  Loans mature on September 28, 2023 and requires quarterly principal payments of $1,375 with all remaining borrowings due on September 28, 2023. Based on our periodic election, borrowings under the First Lien Term B  Loans bear interest at either (a) the ABR plus 1.75% for ABR loans or (b) LIBOR plus 2.50% for LIBOR loans. The ABR is equal to the highest of (i) the New York Federal Reserve Bank rate in effect on such date plus 0.50%, (ii) LIBOR plus 1.00%, (iii) the prime commercial lending rate of the administrative agent as in effect on the relevant day and (iv) 1.75%. LIBOR is equal to the higher of (a) the published LIBOR or (b) 0.75%. If our corporate credit rating from Moody’s Investor Service, Inc. is Ba3 or better and our corporate family rating from Standard & Poor’s Financial Services, LLC is BB- or better, the margin will be reduced by 0.25% per annum for as long as such ratings are maintained. The interest period applicable to any LIBOR borrowing is one,  two,  three or six months, at the election of the borrower. Interest on LIBOR loans is payable the last day of the applicable interest period and, in the case of an interest period of more than three months’ duration, each day on which interest would have been payable had successive interest periods of three months’ duration been applicable to such borrowing. The interest rate in effect was 4.20% and 3.75% at December 31, 2017 and 2016, respectively.  

(c) The Revolver expires on September 28, 2021. Interest for any borrowings under the Revolver is payable over one,  two,  three or six months at our election. A commitment fee is payable quarterly based on the unused portion of the Revolver commitment which ranges from 0.30% to 0.50% per annum based on certain financial tests. Based on our periodic election, borrowings under the Revolver bear interest at either (a) ABR plus, based on our Secured Leverage Ratio, 1.25% - 2.00% for ABR loans or (b) LIBOR plus, based on our Secured Leverage Ratio, 2.25% to 3.00% for LIBOR loans. The ABR is equal to the highest of (i) the New York Federal Reserve Bank rate in effect on such date plus 0.50%, (ii) LIBOR plus 1.00% and (iii) the prime commercial lending rate of the administrative agent as in effect on the relevant day. There were no borrowings outstanding under the Revolver as of December 31, 2017 and 2016. The interest rate in effect was 3.95% and 3.75% at December 31, 2017 and 2016, respectively.

Schedule of expected aggregate maturities of long term debt

	December 31,
	2017
2018	$	18,000
2019		24,250
2020		30,500
2021		183,625
2022		5,500
Thereafter		515,625
Total	$	777,500

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Derivative Instruments (Tables)

12 Months Ended

Dec. 31, 2017

Derivative Instruments

Schedule of fair value and location of derivative instruments

	December 31,
	2017		2016
Liability fair value recorded in other long-term liabilities	$	951	$	1,729
Liability fair value recorded in accounts payable and accrued other expenses		979		1,065
Estimated amount of existing losses expected to be reclassified into earnings in the next 12 months		(2,440)		(1,783)

Schedule of changes in other comprehensive income related to derivative instruments classified as cash flow hedges

Balance, January 1, 2015	$	(623)
Reclassifications in earnings, net of tax benefit of $40		65
Change in fair value of derivative instrument, net of tax of $1,360		(2,410)
Balance, December 31, 2015		(2,968)
Reclassifications in earnings, net of tax benefit of $107		176
Change in fair value of derivative instrument, net of tax of $319		(542)
Balance, December 31, 2016		(3,334)
Reclassifications in earnings, net of tax benefit of $675		1,114
Change in fair value of derivative instrument, net of tax of $215		(336)
Balance, December 31, 2017	$	(2,556)

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Fair Value Measurements (Tables)

12 Months Ended

Dec. 31, 2017

Fair Value Measurements

Summary of financial instruments measured at fair value

	December 31, 2017						December 31, 2016
	Level 1		Level 2		Level 3		Level 1		Level 2		Level 3
Liabilities:
Long-term debt	$	—	$	—	$	774,822	$	—	$	—	$	791,039
Interest rate cap agreements		—		1,930		—		—		2,794		—
Total	$	—	$	1,930	$	774,822	$	—	$	2,794	$	791,039

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Income Taxes (Tables)

12 Months Ended

Dec. 31, 2017

Income Taxes

Schedule of total income tax (benefit) expense

	Year ended
	December 31,
	2017		2016		2015
Income tax (benefit) expense from continuing operations	$	(11,773)	$	20,970	$	14,401
Income tax expense from discontinued operations		—		—		341
Total income tax (benefit) expense	$	(11,773)	$	20,970	$	14,742

Schedule of income (loss) from continuing operations before income taxes

	Year ended
	December 31,
	2017		2016		2015
U.S. operations	$	122,952	$	66,838	$	27,605
Foreign operations		3,478		2,984		100
Income before income taxes	$	126,430	$	69,822	$	27,705

Schedule of income tax (benefit) expense from continuing operations

	Year ended
	December 31,
	2017		2016		2015
Current:
U.S. federal	$	26,509	$	26,734	$	20,382
State and local		1,679		613		4,822
Foreign		1,680		1,358		1,029
Current income tax expense		29,868		28,705		26,233
Deferred
U.S. federal		(42,430)		(5,858)		(12,584)
State and local		(304)		(1,825)		798
Foreign		1,093		(52)		(46)
Deferred income tax benefit		(41,641)		(7,735)		(11,832)
Total income tax (benefit) expense	$	(11,773)	$	20,970	$	14,401

Schedule of factors for variation in effective tax rates from continuing operations compared to U.S. statutory income tax rates

	Year ended
	December 31,
	2017		2016		2015
Federal income tax expense at the statutory rate	$	44,250	$	24,438	$	9,697
State and local taxes, net of federal benefit		1,657		556		3,922
Non-deductible costs		1,197		779		1,070
Stock-based compensation		(11,985)		(4,000)		—
Unrecognized tax positions		(532)		(1,397)		508
U.S. Tax Act benefit, net		(45,019)		—		—
Other		(1,341)		594		(796)
Total income tax (benefit) expense	$	(11,773)	$	20,970	$	14,401

Schedule of components of deferred tax assets and liabilities

	Year ended December 31,
	2017		2016
Deferred tax assets:
Allowance for doubtful accounts and estimated allowance for refunds and appeals	$	21,829	$	34,794
Accrued compensation		929		2,185
Deferred rent		194		149
Stock-based compensation		6,045		10,381
Tax credit and net operating loss carryforward		3,420		652
Other deductible temporary differences		2,333		5,077
Gross deferred tax assets		34,750		53,238
Less: valuation allowance		(1,847)		(199)
Total deferred tax assets		32,903		53,039
Deferred tax liabilities:
Unbilled receivables and other liabilities		(1,206)		(2,307)
Intangibles and goodwill		(103,203)		(154,528)
Property and equipment		(4,738)		(10,795)
Software development costs		(5,868)		(2,603)
Other taxable temporary differences		(936)		(3,339)
Total gross deferred tax liabilities		(115,951)		(173,572)
Net deferred tax liability	$	(83,048)	$	(120,533)

Schedule of reconciliation of beginning and ending unrecognized tax benefits

	Year ended December 31,
	2017		2016
Unrecognized tax benefits — January 1	$	2,571	$	4,937
Increase for tax positions taken in prior period		1,186		67
Increase for tax positions taken in current period		385		203
Decrease for tax positions taken in prior period		—		(508)
Decrease for tax positions taken in current period		—		(43)
Decrease related to lapse in statute of limitations		(1,836)		(96)
Decrease related to settlement of positions taken in prior periods		(308)		(1,989)
Unrecognized tax benefits — December 31	$	1,998	$	2,571

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Earnings per Share (Tables)

12 Months Ended

Dec. 31, 2017

Earnings per Share

Schedule of computation of basic and diluted earnings per share

	Year Ended
	December 31,
	2017		2016		2015
Net income available to common stockholders	$	138,203	$	48,852	$	13,863
Weighted average outstanding shares of common stock		91,928,364		85,053,890		77,216,133
Dilutive effect of stock-based awards and restricted stock		3,167,726		3,524,302		425,255
Adjusted weighted average outstanding and assumed conversions for diluted EPS		95,096,090		88,578,192		77,641,388
Earnings per share from continuing operations:
Basic	$	1.50	$	0.57	$	0.17
Diluted		1.45		0.55		0.17
Earnings per share from discontinued operations:
Basic	$	—	$	—	$	0.01
Diluted		—		—		0.01
Earnings per share:
Basic	$	1.50	$	0.57	$	0.18
Diluted		1.45		0.55		0.18

Schedule of antidilutive securities excluded from earnings per share

	Years Ended
	December 31,
	2017	2016	2015
Employee stock options, RSUs and restricted stock	833,670	341,054	2,035,332

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Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2017

Stock-Based Compensation

Summary of stock option activity

				Weighted
		Weighted		average
		average		remaining	Aggregate
	Outstanding	exercise price		contractual life	Intrinsic Value
	Options	per share		(Years)	(in thousands)
Outstanding at December 31, 2016	5,997,372	$	10.18	7.30	$	145,270
Granted	599,153		34.70
Forfeited	(240,845)		19.48
Exercised	(1,778,104)		7.61
Expired	(2,969)		13.92
Outstanding at December 31, 2017	4,574,607	$	13.89	6.65	$	85,138
Vested and exercisable at December 31, 2017	3,117,670	$	10.38	5.95	$	68,061

Summary of restricted stock units activity

		Weighted
		average
		grant date fair value
	Number of Awards	per share
Nonvested at December 31, 2016	67,295	$	25.88
Granted	398,728		34.30
Forfeited	(48,447)		31.91
Vested and converted to shares	(38,302)		29.88
Nonvested at December 31, 2017	379,274	$	33.56
Expected to vest at December 31, 2017	379,274	$	33.56

Summary of ESPP share reserve activity

	Shares	Weighted average price
Available for future purchases, beginning of year	1,260,000
Shares reserved for issuance(a)	—
Common stock purchased	(62,694)	$	31.09
Available for future purchases, end of year	1,197,306

(a) On January 1, 2018, the number of shares reserved for issuance was increased by 1,260,000.

Schedule of weighted average assumptions to estimate the fair value of stock options granted

	Year Ended December 31,
	2017			2016			2015
Expected term (years)		6.25			6.25			6.25
Expected volatility		40.00	%		50.00	%		50.00	%
Expected dividend yield		0.00	%		0.00	%		0.00	%
Weighted average risk-free interest rate		1.93	%		1.36	%		1.70	%
Weighted average grant date fair value	$	14.57		$	9.53		$	7.77

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Segment Information (Tables)

12 Months Ended

Dec. 31, 2017

Segment Information

Schedule of operating segment results

	Year Ended
	December 31,
	2017		2016		2015
Net Revenue
Healthcare	$	605,228	$	552,041	$	467,044
Global Retail and Other		73,433		73,121		74,299
Consolidated net revenue	$	678,661	$	625,162	$	541,343
Depreciation and amortization
Healthcare	$	81,388	$	77,178	$	70,479
Global Retail and Other		3,795		3,791		3,683
Consolidated depreciation and amortization	$	85,183	$	80,969	$	74,162
Transaction-related expenses
Healthcare	$	2,087	$	1,673	$	1,332
Global Retail and Other		132		115		137
Consolidated transaction-related expenses	$	2,219	$	1,788	$	1,469
Impairment of intangible assets
Healthcare	$	—	$	—	$	26,326
Global Retail and Other		1,322		—		1,500
Consolidated impairment of intangible assets	$	1,322	$	—	$	27,826
Operating Income
Healthcare	$	151,340	$	123,917	$	84,240
Global Retail and Other		10,958		10,036		12,284
Consolidated operating income	$	162,298	$	133,953	$	96,524

Schedule of operating segment net revenue by product type

	Year Ended December 31,
	2017		%	2016		%	2015		%
Healthcare
Retrospective claims accuracy	$	351,662	51.8	$	310,496	49.7	$	251,288	46.4
Prospective claims accuracy		236,192	34.8		229,491	36.7		201,899	37.3
Other		17,374	2.6		12,054	1.9		13,857	2.6
Total Healthcare		605,228	89.2		552,041	88.3		467,044	86.3
Global Retail and Other
Retrospective claims accuracy		71,437	10.5		70,656	11.3		72,060	13.3
Other		1,996	0.3		2,465	0.4		2,239	0.4
Total Global Retail and Other		73,433	10.8		73,121	11.7		74,299	13.7
Consolidated net revenue	$	678,661	100.0	$	625,162	100.0	$	541,343	100.0

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Client Concentration (Tables)

12 Months Ended

Dec. 31, 2017

Client Concentration

Schedule of significant clients accounted for the following percentages of total net revenue

	Year Ended
	December 31,
	2017		2016		2015
Customer A	13	%	15	%	14	%
Customer B	11	%	11	%	10	%
Customer C	10	%	7	%	8	%

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Employee Benefit Plans (Tables)

12 Months Ended

Dec. 31, 2017

Employee Benefit Plans

Schedule of contributions expensed and included in compensation for employee benefit plans

	Year Ended
	December 31,
	2017		2016		2015
401(k) Plan (a)	$	5,101	$	3,860	$	3,053
Profit Share Plan (b)		—		220		539
Provident Plan (c)		712		528		427
Total	$	5,813	$	4,608	$	4,019

(a) We sponsor a  defined contribution retirement plan in accordance with Section 401(k) of the Internal Revenue Code, which cover substantially all U.S. employees, subject to certain minimum age and service requirements. The plans provide for a contribution based on a percentage of eligible employee contributions.

(b) We had a nonqualified profit sharing incentive compensation plan for certain eligible employees. Contributions were made within 90 days following the last day of the plan to a brokerage account in an amount determined at our discretion for employees who had completed 1,000 hours of service and were employed at the time of the contribution. This plan was discontinued after the 2014 plan year, with the final payout occurring in June

2016.

(c) Eligible employees of our subsidiary located in India are covered by the Provident Fund, contributions which are based on a percentage of eligible employees’ salaries, and the Indian Payment of Gratuity Act, which provides for benefits to be paid to eligible employees upon termination of employment (collectively, the “India Plan”). Benefits under the India Plan are administered by the Indian Government. As of December 31, 2017 and 2016 we had an accrued benefit obligation relating to the India Plan of $1,008 and $763, respectively.

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Selected Quarterly Financial Data (Unaudited) (Tables)

12 Months Ended

Dec. 31, 2017

Selected Quarterly Financial Data (Unaudited)

Summary of quarterly operating results

	First		Second		Third		Fourth
Year Ended December 31, 2017	Quarter		Quarter		Quarter		Quarter
Revenue(a)	$	160,133	$	167,611	$	174,188	$	176,729
Operating income(b)		34,082		39,996		41,042		47,178
Net income(b)(c)		26,975		21,088		19,472		70,668
Total earnings per share—Basic(c)	$	0.30	$	0.23	$	0.21	$	0.77
Total earnings per share—Diluted(c)	$	0.28	$	0.22	$	0.20	$	0.74

	First		Second		Third		Fourth
Year Ended December 31, 2016	Quarter		Quarter		Quarter		Quarter
Revenue(d)	$	142,718	$	158,291	$	156,241	$	167,912
Operating income(d)(e)		29,238		38,938		24,155		41,622
Net income(d)(e)(f)		8,084		10,893		4,583		25,292
Total earnings per share—Basic(d)(e)(f)	$	0.10	$	0.13	$	0.05	$	0.28
Total earnings per share—Diluted(d)(e)(f)	$	0.10	$	0.13	$	0.05	$	0.27

(a) During the fourth quarter 2017, healthcare revenue was reduced by approximately $7,000 as a result of an increase in our estimated liability for refunds and appeals.

(b) During the second quarter 2017, as a result of the repricing our Term Loan B, we recorded a loss on extinguishment of $3,183 (see Note 8).

(c) During the fourth quarter 2017, we recognized a net income tax benefit of $45,019 associated with the impact of the Tax Act enacted on December 22, 2017 (see Note 11).

(d) During the second quarter 2016, we generated approximately $5,000 in healthcare revenue from special projects that did not reoccur in the second half of the year.

(e) During the second quarter 2016, stock-based compensation expense includes $2,257 related to the accelerated vesting of certain stock options as the result of our IPO. During the third quarter 2016, stock-based compensation expense includes $15,898 related to the vesting of all outstanding performance-based stock options (see Note 14).  

(f) During the second quarter 2016, we made a voluntary prepayment on our Initial Second Lien Credit Facility which resulted in a $7,068 loss on extinguishment of debt. During the third quarter 2016, as a result of refinancing our long-term debt, we recorded a loss on extinguishment of $9,349 (see Note 8).

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Description of Business (Details)	Dec. 31, 2017 customer company
Healthcare | Minimum
Description of business
Number of clients | customer	60
Commercial, Medicaid and Medicare managed health plans | United States
Description of business
Number of largest companies in the industry sector | company	25
Retail
Description of business
Number of clients | customer	30
Retail | United States
Description of business
Number of largest companies in the industry sector | company	10

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Summary of Significant Accounting Policies - Revenue Recognition, Unbilled Receivables, and Estimated Liability for Refunds and Appeals (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Summary of Significant Accounting Policies
Period of time previous revenue standard was in effect	3 years
Estimated liability for refunds and appeals	$ 61,607	$ 62,539	$ 67,775
Estimated allowance for refunds and appeals	35,434	41,020	$ 33,406
Accounts receivable
Summary of Significant Accounting Policies
Unbilled receivables	62,294	51,643
Unbilled receivables arising from deferred billing	$ 4,958	$ 6,137

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Summary of Significant Accounting Policies - Advertising Costs (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Selling, general and administrative expenses
Advertising Expense
Advertising expense	$ 1,439	$ 1,345	$ 1,241

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Summary of Significant Accounting Policies - Useful Lives (Details)	12 Months Ended
	Dec. 31, 2017
Computer equipment | Minimum
Property and equipment
Estimated useful life	3 years
Computer equipment | Maximum
Property and equipment
Estimated useful life	5 years
Software | Minimum
Property and equipment
Estimated useful life	2 years
Software | Maximum
Property and equipment
Estimated useful life	5 years
Furniture and fixtures
Property and equipment
Estimated useful life	7 years

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Summary of Significant Accounting Policies - Internally Developed Software Costs (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Internally Developed Software Costs
Internally developed software costs capitalized during the period	$ 14,765	$ 21,580	$ 7,239
Amortization expense	$ 7,745	$ 2,992	2,287
Amortization expense
Internally Developed Software Costs
Software written off			$ 975
Internally Developed Software
Internally Developed Software Costs
Estimated useful life	5 years

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Summary of Significant Accounting Policies - Intangible Assets and Impairment (Details)	12 Months Ended
	Dec. 31, 2017 segment
Goodwill
Number of reporting units	2
Minimum
Intangible assets, gross
Amortization period	5 years
Maximum
Intangible assets, gross
Amortization period	14 years

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Summary of Significant Accounting Policies - Recently Issued Accounting Standards - ASU 2014-09 (Details)	12 Months Ended
	Dec. 31, 2017 approach
Summary of Significant Accounting Policies
Number of permitted transition methods under ASU 2014-09	2

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Acquisition - Consideration Transferred (Details) - RowdMap $ in Thousands	Jul. 14, 2017 USD ($) shares
Consideration transferred
Cash paid | $	$ 74,000
Common stock | Restricted Stock
Consideration transferred
Shares issued (in shares) | shares	768,021
Common stock | Restricted stock, performance-based
Consideration transferred
Percentage of total shares awarded	50.00%
Vesting period (in years)	1 year
Common stock | Restricted stock, time-based
Consideration transferred
Percentage of total shares awarded	50.00%
Percentage vesting each anniversary	33.30%
Vesting period (in years)	3 years

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Acquisition - Net Assets Acquired (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Jul. 14, 2017	Dec. 31, 2016
Preliminary allocation of the purchase price
Goodwill	$ 1,251,364		$ 1,196,024
RowdMap
Preliminary allocation of the purchase price
Cash		$ 4,107
Accounts receivable		2,526
Prepaid expenses and other assets		1,212
Other long-term assets		12
Property and equipment		263
Intangible assets		19,510
Total identifiable assets acquired		27,630
Accounts payable and accrued liabilities		4,491
Deferred tax liabilities		3,688
Total liabilities assumed		8,179
Net identifiable assets acquired		19,451
Goodwill		54,673
Net assets acquired		$ 74,124

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Acquisition - Acquired Intangible Assets (Details) - RowdMap - USD ($) $ in Thousands	Jul. 14, 2017	Dec. 31, 2017
Finite-Lived Intangible Assets
Finite-lived intangible assets acquired	$ 19,510
Goodwill acquired, tax deductible amount		$ 0
Acquired software
Finite-Lived Intangible Assets
Finite-lived intangible assets acquired	$ 6,310
Weighted-average useful life of acquired intangible assets	5 years
Customer relationships
Finite-Lived Intangible Assets
Finite-lived intangible assets acquired	$ 13,200
Weighted-average useful life of acquired intangible assets	5 years

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Acquisition - Other Acquisition Related Disclosures (Details) - RowdMap $ in Thousands	Dec. 31, 2017 USD ($)
Acquisition
Transaction costs	$ 700
Accounts payable and accrued other expenses | Former stockholders
Acquisition
Payable to related parties	$ 1,068

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Property and Equipment - Balances by Major Asset Class (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Property and equipment
Property and equipment, gross	$ 138,992	$ 108,008
Less: Accumulated depreciation and amortization	61,652	40,368
Property and equipment, net	77,340	67,640
Computer equipment
Property and equipment
Property and equipment, gross	46,731	40,349
Software
Property and equipment
Property and equipment, gross	67,511	42,614
Furniture and fixtures
Property and equipment
Property and equipment, gross	9,199	8,652
Leasehold improvements
Property and equipment
Property and equipment, gross	5,256	4,392
Projects in progress
Property and equipment
Property and equipment, gross	$ 10,295	$ 12,001

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Property and Equipment - Perpetual Software License (Details) - Perpetual software license - USD ($) $ in Thousands	1 Months Ended
	Dec. 31, 2015	Dec. 31, 2017	Dec. 31, 2016
Recorded obligation
Remaining payment period	2 years
Accounts payable and accrued other expenses
Recorded obligation
Current portion of obligation		$ 3,351	$ 3,351
Other long-term liabilities
Recorded obligation
Long-term portion of obligation			$ 3,225

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Property and Equipment - Depreciation and Amortization Expense (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Property and Equipment
Depreciation and amortization expense related to property and equipment	$ 25,577	$ 20,151	$ 12,695

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Intangible Assets - Finite-Lived (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Intangible assets with finite lives
Accumulated Amortization		$ 216,002	$ 193,347
Impairment	$ 27,826	$ 1,322		$ 27,826
Weighted average
Intangible assets with finite lives
Amortization period		13 years	12 years 9 months 18 days
Customer relationships
Intangible assets with finite lives
Gross Carrying Amount		$ 650,954	$ 640,052
Accumulated Amortization		190,572	144,768
Impairment		1,322
Net carrying amount		$ 459,060	$ 495,284
Customer relationships | Weighted average
Intangible assets with finite lives
Amortization period		13 years 6 months	13 years 8 months 12 days
Acquired software
Intangible assets with finite lives
Gross Carrying Amount		$ 54,210	$ 82,400
Accumulated Amortization		25,430	48,579
Net carrying amount		$ 28,780	$ 33,821
Acquired software | Weighted average
Intangible assets with finite lives
Amortization period		6 years 9 months 18 days	6 years 2 months 12 days

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Intangible Assets - Indefinite-lived (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Connolly Trademark
Intangible assets with indefinite lives
Net Carrying Amount	$ 4,200	$ 4,200

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Intangible Assets - Total by Major Asset Class (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Intangible assets
Gross carrying amount	$ 709,364	$ 726,652
Accumulated Amortization	216,002	193,347
Net carrying amount	492,040	533,305
Intangible assets, gross
Total intangible assets, gross	709,364	726,652
Intangible assets, net
Net carrying amount	$ 492,040	$ 533,305
Weighted average
Intangible assets
Amortization period	13 years	12 years 9 months 18 days

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Intangible Assets - Amortization and Impairment (Details) - USD ($) $ in Thousands	1 Months Ended	12 Months Ended
	Sep. 30, 2015	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Intangible assets, net
Accumulated Amortization		$ 216,002	$ 193,347
Amortization expense		59,606	60,818	$ 61,467
Impairment of intangible assets	$ 27,826	1,322		$ 27,826
Connolly Trademark
Intangible assets, net
Net carrying amount, indefinite-lived		4,200	4,200
Acquired software
Intangible assets, net
Gross Carrying Amount		54,210	82,400
Accumulated Amortization		25,430	48,579
Acquired software | Adjustment
Intangible assets, net
Gross Carrying Amount		(34,500)
Accumulated Amortization		(34,500)
Customer relationships
Intangible assets, net
Gross Carrying Amount		650,954	640,052
Accumulated Amortization		190,572	$ 144,768
Impairment of intangible assets		$ 1,322

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Intangible Assets - Future Amortization (Details) $ in Thousands	Dec. 31, 2017 USD ($)
Amortization expense for the next 5 years
2018	$ 57,588
2019	57,588
2020	57,588
2021	53,264
2022	$ 48,956

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Goodwill - Changes in carrying amount (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Changes in the carrying amount of goodwill
Beginning balance	$ 1,196,024
Ending balance	1,251,364	$ 1,196,024
Healthcare
Changes in the carrying amount of goodwill
Beginning balance	1,147,771	1,147,771
Acquisition	54,673	0
Foreign currency translation and other	0	0
Ending balance	1,202,444	1,147,771
Global Retail and Other
Changes in the carrying amount of goodwill
Beginning balance	48,253	49,273
Foreign currency translation and other	667	(1,020)
Ending balance	$ 48,920	$ 48,253

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Goodwill - Impairment (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Goodwill
Impairment related to goodwill	$ 0	$ 0	$ 0

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Commitments and Contingencies - Operating Leases (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Operating Leases
Rental expense relating to operating leases	$ 10,719	$ 10,529	$ 8,826
Future minimum payments under non cancellable operating leases
2018	8,640
2019	9,588
2020	8,882
2021	8,173
2022	8,363
2023 - 2029	44,308
Total minimum lease payments	$ 87,954

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Commitments and Contingencies - Legal and Other Matters (Details) - Unfavorable action - Centers for Medicare and Medicaid Services (CMS) - USD ($) $ in Thousands		1 Months Ended
	Jul. 01, 2015	Aug. 31, 2014	Dec. 31, 2017
Loss contingency
Settlement on original claim amount offered by CMS to allow providers to remove eligible claims pending in appeals process (as a percent)		68.00%
RAC contract contingency fee on original amount of settled claims under CMS July 1, 2015 Technical Direction Letter (as a percent)	32.00%
Maximum possible additional amount of refund payable in excess of amount accrued			$ 13,000
Estimated liability for refunds and appeals
Loss contingency
Estimated refund liability on settled claims			$ 22,308

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Commitments and Contingencies - Asset Retirement Obligations (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Asset Retirement Obligations
Balance beginning of period	$ 2,725	$ 2,415
Additional ARO Liability		133
Accretion expense	183	177
Settled ARO liability	(64)
Balance at end of period	$ 2,844	$ 2,725

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Long-term Debt - New Agreements (Details) - USD ($) $ in Thousands	1 Months Ended				3 Months Ended			12 Months Ended
	Apr. 30, 2017	Sep. 30, 2016	Jun. 30, 2016	May 31, 2015	Jun. 30, 2017	Sep. 30, 2016	Jun. 30, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Long-term debt
Loss on extinguishment of debt								$ 3,183	$ 16,417	$ 4,084
Restated Credit Agreement
Long-term debt
Decrease in total debt outstanding		$ 22,700
Initial Secured Credit Facilities
Long-term debt
Loss on extinguishment of debt						$ 9,349			9,349
Initial First Lien Credit Facilities
Long-term debt
Decrease in applicable interest rates (as a percent)				0.50%
Loss on extinguishment of debt										$ 4,084
Initial Second Lien Credit Facilities
Long-term debt
Loss on extinguishment of debt							$ 7,068		$ 7,068
Outstanding borrowings repaid			$ 223,000
Voluntary prepayment of borrowings			$ 13,100
First Lien Term A Loan | Restated Credit Agreement
Long-term debt
Maximum borrowing capacity		250,000				250,000
First Lien Term B Loan | First Amendment Agreement
Long-term debt
Loss on extinguishment of debt								$ 3,183
First Lien Term B Loan | First Amendment Agreement | LIBOR
Long-term debt
Decrease in applicable interest rates (as a percent)	0.25%
First Lien Term B Loan | Restated Credit Agreement
Long-term debt
Loss on extinguishment of debt					$ 3,183
Maximum borrowing capacity		550,000				550,000
Revolver | Restated Credit Agreement
Long-term debt
Maximum borrowing capacity		$ 100,000				$ 100,000

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Long-term Debt - Summary of Components (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Long-term debt components
Total debt	$ 774,822	$ 791,039
Less: debt issuance costs	7,204	10,837
Less: current portion	18,000	18,000
Total long-term debt	749,618	762,202
First Lien Term A Loan | Restated Credit Agreement
Long-term debt components
Total debt	234,237	246,694
First Lien Term B Loan | Restated Credit Agreement
Long-term debt components
Total debt	$ 540,585	$ 544,345

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Long-term Debt - Term Loan A (Details) - Restated Credit Agreement - First Lien Term A Loan $ in Thousands	12 Months Ended
	Dec. 31, 2017 USD ($) period	Dec. 31, 2016
Debt covenants
Interest rate in effect at end of period (as a percent)	3.95%	3.75%
ABR Loans | Alternate Base Rate | Minimum
Debt covenants
Basis spread on variable rate (as a percent)	1.25%
ABR Loans | Alternate Base Rate | Maximum
Debt covenants
Basis spread on variable rate (as a percent)	2.00%
ABR Loans | LIBOR
Debt covenants
Basis spread on variable rate (as a percent)	1.00%
ABR Loans | New York Federal Reserve Bank Rate
Debt covenants
Basis spread on variable rate (as a percent)	0.50%
LIBOR Loans
Debt covenants
Interest period, option one	1 month
Interest period, option two	2 months
Interest period, option three	3 months
Interest period, option four	6 months
Interest period, threshold period	3 months
LIBOR Loans | LIBOR | Minimum
Debt covenants
Basis spread on variable rate (as a percent)	2.25%
LIBOR Loans | LIBOR | Maximum
Debt covenants
Basis spread on variable rate (as a percent)	3.00%
2018
Debt covenants
Frequency of payment	quarter
Principal payment	$ 3,125
2019
Debt covenants
Frequency of payment	quarter
Principal payment	$ 4,688
2020
Debt covenants
Frequency of payment	quarter
Principal payment	$ 6,250
2021
Debt covenants
Frequency of payment	quarter
Principal payment	$ 9,375
Number of quarters in redemption period | period	2

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Long-term Debt - Term Loan B (Details) - Restated Credit Agreement - First Lien Term B Loan - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Debt covenants
Frequency of payment	quarterly
Principal payment	$ 1,375
ABR Loans | Alternate Base Rate
Debt covenants
Basis spread on variable rate (as a percent)	1.75%
ABR Loans | Alternate Base Rate | Minimum
Debt covenants
Interest rate (as a percent)	1.75%
ABR Loans | LIBOR
Debt covenants
Basis spread on variable rate (as a percent)	1.00%
ABR Loans | New York Federal Reserve Bank Rate
Debt covenants
Basis spread on variable rate (as a percent)	0.50%
LIBOR Loans
Debt covenants
Interest period, option one	1 month
Interest period, option two	2 months
Interest period, option three	3 months
Interest period, option four	6 months
Interest period, threshold period	3 months
Interest rate in effect at end of period (as a percent)	4.20%	3.75%
LIBOR Loans | LIBOR
Debt covenants
Basis spread on variable rate (as a percent)	2.50%
LIBOR Loans | LIBOR | Minimum
Debt covenants
Interest rate (as a percent)	0.75%
Standard & Poor's, BB Rating | Moody's, Ba3 Rating | Minimum
Debt covenants
Margin reduction per annum if ratings met (as a percent)	0.25%

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Long-term Debt - Revolver (Details) - Restated Credit Agreement - Revolver - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Debt covenants
Interest period, option one	1 month
Interest period, option two	2 months
Interest period, option three	3 months
Interest period, option four	6 months
Borrowings outstanding	$ 0	$ 0
Interest rate in effect at end of period (as a percent)	3.95%	3.75%
Minimum
Debt covenants
Commitment fee on unused capacity (as a percent)	0.30%
Maximum
Debt covenants
Commitment fee on unused capacity (as a percent)	0.50%
ABR Loans | Alternate Base Rate | Minimum
Debt covenants
Basis spread on variable rate (as a percent)	1.25%
ABR Loans | Alternate Base Rate | Maximum
Debt covenants
Basis spread on variable rate (as a percent)	2.00%
ABR Loans | LIBOR
Debt covenants
Basis spread on variable rate (as a percent)	1.00%
ABR Loans | New York Federal Reserve Bank Rate
Debt covenants
Basis spread on variable rate (as a percent)	0.50%
LIBOR Loans | LIBOR | Minimum
Debt covenants
Basis spread on variable rate (as a percent)	2.25%
LIBOR Loans | LIBOR | Maximum
Debt covenants
Basis spread on variable rate (as a percent)	3.00%

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Long-term Debt - Other Covenant Terms (Details) - Restated Credit Agreement	12 Months Ended
	Dec. 31, 2017
Ratio requirements
Percent of subsidiary net assets deemed restricted	64.00%
First Lien Term A Loan | Maximum
Ratio requirements
Secured Leverage Ratio covenant, through September 2018	5.50
Secured Leverage Ratio covenant, through September 2019	5.25
Secured Leverage Ratio covenant, through June 2021	5.00
Revolver | Maximum
Ratio requirements
Secured Leverage Ratio covenant, through September 2018	5.50
Secured Leverage Ratio covenant, through September 2019	5.25
Secured Leverage Ratio covenant, through June 2021	5.00

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Long-term Debt - Aggregate Maturities (Details) $ in Thousands	Dec. 31, 2017 USD ($)
Aggregate maturities of long term debt
2018	$ 18,000
2019	24,250
2020	30,500
2021	183,625
2022	5,500
Thereafter	515,625
Total	$ 777,500

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Derivative Instruments - Interest Rate Cap Contracts (Details) - Interest rate cap agreements - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Cash flow hedge
Cash flow hedge activity
Notional amount	$ 435,000	$ 540,000
Cash flow hedge | Interest expense
Cash flow hedge activity
Expense recognized	1,789	283	$ 105
Ineffectiveness recorded	$ 0	$ 0	$ 0
LIBOR
Cash flow hedge activity
Interest rate cap on floating rate debt (as a percent)	3.00%

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Derivative Instruments - Quantitative Information Related to Fair Value (Details) - Interest rate cap agreements - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Interest rate cash flow hedges
Estimated amount of existing losses expected to be reclassified into earnings in the next 12 months	$ (2,440)	$ (1,783)
Deferred hedge premiums paid and recorded in accumulated other comprehensive (loss) income	4,021
Expected additional payments of deferred premiums	2,374
Designated as Hedge | Other long-term liabilities
Interest rate cash flow hedges
Derivative liability	951	1,729
Designated as Hedge | Accounts payable and accrued other expenses
Interest rate cash flow hedges
Derivative liability	$ 979	$ 1,065

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Derivative Instruments - Changes in Other Comprehensive Income Related to Cash Flow Hedges (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Changes in other comprehensive income related to derivative instruments classified as cash flow hedges
Balance at beginning of period	$ 939,336	$ 787,596	$ 773,133
Balance at end of period	1,101,468	939,336	787,596
Derivative instruments classified as cash flow hedges
Changes in other comprehensive income related to derivative instruments classified as cash flow hedges
Balance at beginning of period	(3,334)	(2,968)	(623)
Reclassifications in earnings, net of tax of $675, $107, and $40 for the years ended December 31, 2017, 2016 and 2015, respectively	1,114	176	65
Change in fair value of derivative instrument, net of tax of $215, $319 and $1,360 for the years ended December 31, 2017, 2016 and 2015, respectively	(336)	(542)	(2,410)
Balance at end of period	(2,556)	(3,334)	(2,968)
Other comprehensive income, tax effect
Reclassifications in earnings, tax	675	107	40
Change in fair value of derivative instrument, tax	$ 215	$ 319	$ 1,360

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Fair Value Measurements (Details) - Recurring - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Level 2
Liabilities
Interest rate cap agreements	$ 1,930	$ 2,794
Total	1,930	2,794
Level 3
Liabilities
Long-term debt	774,822	791,039
Total	$ 774,822	$ 791,039

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Income Taxes - 2018 Tax Act (Details) - USD ($) $ in Thousands		3 Months Ended	12 Months Ended
	Jan. 01, 2018	Dec. 31, 2017	Dec. 31, 2017
Tax Act
Net income tax benefit		$ 45,019	$ 45,019
Revaluation of net deferred tax liabilities			46,600
Transition tax			1,581
Provisional liability, current		$ 1,581	1,581
Tax credit carryforward, provisional estimate			$ 1,174
Forecast
Tax Act
Federal tax rate (as a percent)	21.00%

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Income Taxes - Tax Expense (Benefit) (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Income Taxes
Income tax expense (benefit) from continuing operations	$ (11,773)	$ 20,970	$ 14,401
Income tax expense from discontinued operations			341
Total income tax (benefit) expense	$ (11,773)	$ 20,970	$ 14,742

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Income Taxes - Income (Loss) before Tax from Continuing Operations (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Components of income (loss) before income taxes from continuing operations
U.S. operations	$ 122,952	$ 66,838	$ 27,605
Foreign operations	3,478	2,984	100
Income before income taxes	$ 126,430	$ 69,822	$ 27,705

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Income Taxes - Current and Deferred Taxes (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Current:
U.S. federal	$ 26,509	$ 26,734	$ 20,382
State and local	1,679	613	4,822
Foreign	1,680	1,358	1,029
Current income tax expense	29,868	28,705	26,233
Deferred
U.S. federal	(42,430)	(5,858)	(12,584)
State and local	(304)	(1,825)	798
Foreign	1,093	(52)	(46)
Deferred income tax benefit	(41,641)	(7,735)	(11,832)
Total income tax (benefit) expense	$ (11,773)	$ 20,970	$ 14,401

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Income Taxes - Effective Tax Rate Reconciliation (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Reconciliation of effective tax rates from continuing operations to U.S. statutory rates
Federal income tax expense at the statutory rate		$ 44,250	$ 24,438	$ 9,697
State and local taxes, net of federal benefit		1,657	556	3,922
Non-deductible costs		1,197	779	1,070
Stock-based compensation		(11,985)	(4,000)
Unrecognized tax positions		(532)	(1,397)	508
U.S. Tax Act benefit, net	$ (45,019)	(45,019)
Other		(1,341)	594	(796)
Total income tax (benefit) expense		$ (11,773)	$ 20,970	$ 14,401
Effective income tax rate from continuing operations
Effective income tax rate (as a percent)		(9.30%)	30.00%	52.00%
Net income tax benefit from impact of Tax Act	45,019	$ 45,019
Revaluation of net deferred tax liabilities		46,600
Transition tax		1,581
Net tax benefit adjustments		11,985
Excess tax benefit related to stock option exercises		15,017	$ 4,000
Tax expense, nondeductible restricted stock		3,032
Decrease related to settlement with taxing authorities		308	1,989
Tax benefit from the implementation of certain tax planning			1,122
Undistributed earnings of foreign subsidiaries
Earnings of non-branch foreign subsidiaries considered indefinitely reinvested			8,065	$ 5,910
Tax expense on earnings of non-branch foreign subsidiaries if not considered indefinitely reinvested			1,891	$ 1,386
Provisional undistributed earnings of foreign subsidiary	8,739	8,739
Provisional liability, current	$ 1,581	$ 1,581
State
Effective income tax rate from continuing operations
Decrease related to settlement with taxing authorities			$ 1,300

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Income Taxes - Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Components of deferred tax assets and liabilities
Deferred tax liabilities	$ 83,048	$ 120,533
Deferred tax assets:
Allowance for doubtful accounts and estimated allowance for refunds and appeals	21,829	34,794
Accrued compensation	929	2,185
Deferred rent	194	149
Stock compensation	6,045	10,381
Tax credit and net operating loss carryforward	3,420	652
Other deductible temporary differences	2,333	5,077
Gross deferred tax assets	34,750	53,238
Less: valuation allowance	(1,847)	(199)
Total deferred tax assets	32,903	53,039
Deferred tax liabilities:
Unbilled receivables and other liabilities	(1,206)	(2,307)
Intangibles and goodwill	(103,203)	(154,528)
Property and equipment	(4,738)	(10,795)
Software development costs	(5,868)	(2,603)
Other taxable temporary differences	(936)	(3,339)
Total gross deferred tax liabilities	115,951	173,572
Net deferred tax liability	$ (83,048)	$ (120,533)

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Income Taxes - NOL and Carryforwards (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Valuation allowance
Deferred tax asset valuation allowance	$ 1,847	$ 199
Federal
Net operating loss carryforwards
Net operating loss carryforwards	1,197
Foreign
Net operating loss carryforwards
Net operating loss carryforwards	3,695
State
Net operating loss carryforwards
Tax credit carryforwards	$ 1,322

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Income Taxes - Unrecognized Tax Benefits (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016
Reconciliation of the beginning and ending amount of unrecognized tax benefits
Unrecognized tax benefits - January 1	$ 2,571	$ 4,937
Increase for tax positions taken in prior period	1,186	67
Increase for tax positions taken in current period	385	203
Decrease for tax positions taken in prior period		(508)
Decrease for tax positions taken in current period		(43)
Decrease related to lapse in statute of limitations	(1,836)	(96)
Decrease related to settlement of positions taken in prior periods	(308)	(1,989)
Unrecognized tax benefits - December 31	$ 1,998	$ 2,571

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Income Taxes - Uncertain Tax Positions and Other (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Income Taxes
Total uncertain tax positions expected to reverse in the next 12 months	$ 81	$ 2,301
Total penalty and interest incurred, relating to uncertain tax positions	$ 103	$ 424	$ 920

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Stockholders' Equity - Share Repurchase Program (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Oct. 31, 2017
Share Repurchase Program
Repurchase of common stock	$ 10,000,000
Common stock
Share Repurchase Program
Repurchase of common stock (shares)	317,900
Repurchase of common stock	$ 1,000
Common stock | Share Repurchase Program
Share Repurchase Program
Repurchase of common stock (shares)	317,900
Repurchase of common stock	$ 10,000,000
Weighted average share price (in dollars per share)	$ 31.43
Common stock | Share Repurchase Program | Maximum
Share Repurchase Program
Share repurchase program, amount authorized		$ 100,000,000

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Stockholders' Equity - Issuance of Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands				12 Months Ended
	Aug. 07, 2017	Mar. 07, 2017	May 25, 2016	Dec. 31, 2017	Dec. 31, 2016
Issuance of stock
Proceeds from issuance of common stock			$ 226,963		$ 226,963
Common stock, shares authorized				600,000,000	600,000,000
Common stock
Issuance of stock
Stock issued (in shares)					12,936,038
IPO
Issuance of stock
Offering expenses			$ 18,822
IPO | Common stock
Issuance of stock
Stock issued (in shares)			12,936,038
Offering price (in dollars per share)			$ 19.00
August 2017 Secondary Offering
Issuance of stock
Proceeds from issuance of common stock	$ 0
Offering expenses				$ 700
August 2017 Secondary Offering | Common stock
Issuance of stock
Stock issued (in shares)	10,000,000
Offering price (in dollars per share)	$ 37.00
March 2017 Secondary Offering
Issuance of stock
Proceeds from issuance of common stock		$ 0
Offering expenses				$ 600
March 2017 Secondary Offering | Common stock | Selling Stockholders
Issuance of stock
Stock issued (in shares)		9,683,000
Offering price (in dollars per share)		$ 36.00
Underwriters option
Issuance of stock
Stock issued (in shares)		1,263,000

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Stockholders' Equity - Common Stockholder Rights and Preferences (Details)		12 Months Ended
	Jun. 01, 2016 USD ($) Right	Dec. 31, 2017 Vote
Registration rights
Number of votes a share of common stock entitles the holder | Vote		1
Demand registration rights
Registration rights
Cap period	12 months
Shelf registration rights
Registration rights
Cap period	12 months
Maximum | Demand registration rights
Registration rights
Number of requests in any 12 month period | Right	2
Maximum | Shelf registration rights
Registration rights
Number of requests in any 12 month period | Right	2
Minimum | Piggyback registration rights
Registration rights
Value of shares owned by Holder (in dollars) | $	$ 500
Minimum | Shelf registration rights
Registration rights
Anticipated aggregate offering price, net of selling expenses (in dollars) | $	$ 5,000,000

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Stockholders' Equity - Common Stock Split and Dividends (Details) $ / shares in Units, $ in Thousands	May 26, 2016 USD ($) $ / shares	May 13, 2016
Common stock
Common stock dividends paid (in dollars) | $	$ 150,000
Common stock dividends paid (in dollars per share)	$ 1.94
Reduction in stock option exercise price (in dollars per share)	$ 1.94
Common stock
Common stock
Stock split ratio		6.1

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Earnings per Share - Basic and Diluted (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Basic and diluted earnings per share computation
Net income available to common stockholders									$ 138,203	$ 48,852	$ 13,863
Weighted average outstanding shares of common stock									91,928,364	85,053,890	77,216,133
Dilutive effect of stock-based awards and restricted stock									3,167,726	3,524,302	425,255
Adjusted weighted average outstanding and assumed conversions for diluted EPS									95,096,090	88,578,192	77,641,388
Earnings per share from continuing operations:
Basic (in dollars per share)									$ 1.50	$ 0.57	$ 0.17
Diluted (in dollars per share)									1.45	0.55	0.17
Earnings per share from discontinued operations:
Basic (in dollars per share)											0.01
Diluted (in dollars per share)											0.01
Earnings per share
Basic (in dollars per share)	$ 0.77	$ 0.21	$ 0.23	$ 0.30	$ 0.28	$ 0.05	$ 0.13	$ 0.10	1.50	0.57	0.18
Diluted (in dollars per share)	$ 0.74	$ 0.20	$ 0.22	$ 0.28	$ 0.27	$ 0.05	$ 0.13	$ 0.10	$ 1.45	$ 0.55	$ 0.18

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Earnings per Share - Awards Excluded from Diluted Calculation (Details) - Employee stock-based awards and restricted stock - shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Anti-dilutive securities and other information
Stock-based awards excluded from calculation of diluted earnings per share (in shares)	833,670	341,054	2,035,332
Performance-based stock options
Anti-dilutive securities and other information
Share-based awards excluded because vesting conditions not satisfied			2,794,910
Restricted stock, performance-based
Anti-dilutive securities and other information
Share-based awards excluded because vesting conditions not satisfied	76,546

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Stock-Based Compensation - Equity Incentive Plans (Details) - shares	12 Months Ended
	Dec. 31, 2017	Jun. 01, 2016	May 25, 2016	May 24, 2016
Equity Incentive Plans
Granted (in shares)	599,153
2012 Plan
Equity Incentive Plans
Shares authorized for issuance				7,243,330
Shares available for future issuance		0
2016 Plan
Equity Incentive Plans
Shares authorized for issuance			5,490,000
Shares available for future issuance	4,313,279

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Stock-Based Compensation - Stock Option Terms (Details)	12 Months Ended
	Dec. 31, 2017
Stock options | Maximum
Stock Options
Term of award	10 years
Stock options | Owner of more than 10 percent of voting stock | Maximum
Stock Options
Term of award	5 years
2012 Plan | Service-based stock options
Stock Options
Vesting period	5 years
2016 Plan | Stock options
Stock Options
Percentage of market price to purchase shares of common stock (as a percent)	100.00%
2016 Plan | Service-based stock options
Stock Options
Vesting period	4 years

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Stock-Based Compensation - Stock Option Activity (Details) - USD ($) $ / shares in Units, $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Shares
Outstanding at beginning of period (in shares)	5,997,372
Granted (in shares)	599,153
Forfeited (in shares)	(240,845)
Exercised (in shares)	(1,778,104)
Expired (in shares)	(2,969)
Outstanding at end of period (in shares)	4,574,607	5,997,372
Vested and exercisable at end of period, vested (in shares)	3,117,670
Vested and exercisable at end of period, exercisable (in shares)	3,117,670
Weighted average exercise price
Outstanding at beginning of period (in dollars per share)	$ 10.18
Granted (in dollars per share)	34.70
Forfeited (in dollars per share)	19.48
Exercised (in dollars per share)	7.61
Expired (in dollars per share)	13.92
Outstanding at end of period (in dollars per share)	13.89	$ 10.18
Vested and exercisable at end of period, vested (in dollars per share)	10.38
Vested and exercisable (in dollars per share)	$ 10.38
Weighted Average Remaining Contractual Term
Outstanding	6 years 7 months 24 days	7 years 3 months 18 days
Vested and exercisable at end of period, vested (in years)	5 years 11 months 12 days
Vested and exercisable at end of period, exercisable (in years)	5 years 11 months 12 days
Aggregate Intrinsic Value
Outstanding	$ 85,138	$ 145,270
Vested and exercisable at end of period, vested	68,061
Vested and exercisable at end of period, exercisable	68,061
Total intrinsic value of options exercised	52,828	15,521
Total fair value of options vested	$ 4,066	$ 22,453	$ 2,450
Common stock
Shares
Exercised (in shares)	(1,778,104)	(574,991)	(25,620)
Aggregate Intrinsic Value
Fair value per share (in dollars per share)	$ 32.21

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Stock-Based Compensation - Restricted Stock Units Vesting and Activity (Details) - $ / shares	12 Months Ended	53 Months Ended
	Dec. 31, 2017	May 24, 2016
Restricted stock units
Equity Incentive Plans
Vesting period	4 years
Director RSU grants
Equity Incentive Plans
Vesting period	1 year
2016 Plan | Restricted stock units
Shares
Nonvested at beginning of period (in shares)	67,295
Granted (in shares)	398,728
Forfeited (in shares)	(48,447)
Vested and converted to shares (in shares)	(38,302)
Nonvested at end of period (in shares)	379,274
Expected to vest at December 31, 2017 (in shares)	379,274
Weighted average grant date fair value
Nonvested at beginning of period (in dollars per share)	$ 25.88
Granted (in dollars per share)	34.30
Forfeited (in dollars per share)	31.91
Vested and converted to shares (in dollars per share)	29.88
Nonvested at end of period (in dollars per share)	33.56
Expected to vest at end of period	$ 33.56
2012 Plan | Restricted stock units
Shares
Granted (in shares)		0

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Stock-Based Compensation - Restricted Stock (Details) - Common stock - RowdMap	Jul. 14, 2017 $ / shares shares
Restricted Stock
Acquisition
Shares issued (in shares) | shares	768,021
Fair market value per share | $ / shares	$ 43.27
Restricted stock, performance-based
Acquisition
Percentage of total shares awarded	50.00%
Vesting period (in years)	1 year
Restricted stock, time-based
Acquisition
Percentage of total shares awarded	50.00%
Percentage vesting each anniversary	33.30%
Vesting period (in years)	3 years

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Stock-Based Compensation - Employee Stock Purchase Plan (Details) - Employee Stock Purchase Plan - USD ($)		12 Months Ended
	Jan. 01, 2018	Dec. 31, 2017	Dec. 31, 2016
Employee Stock Purchase Plan
Offering period		6 months
Contribution maximum percentage of pay		10.00%
Contribution maximum amount per year		$ 10,000
Contribution maximum amount per offering period		$ 5,000
Discount applied to closing price, percentage		10.00%
Holding period (in days)		90 days
Available for future purchases, beginning of year (in shares)	1,197,306	1,260,000
Shares reserved for issuance	1,260,000		1,260,000
Common stock purchased		(62,694)
Available for future purchases, end of year (in shares)		1,197,306	1,260,000
Minimum
Employee Stock Purchase Plan
Threshold increase in number of shares reserved for issuance		1,260,000
Percentage of total common shares outstanding used as determination of threshold for increase in shares reserved for issuance		1.50%
Weighted average
Employee Stock Purchase Plan
Price per share (in dollars per share)		$ 31.09

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Stock-Based Compensation - Weighted Average Assumptions to Estimate Fair Value of Stock Options (Details) - Stock options - $ / shares	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Assumptions used to estimate fair value of stock options granted
Expected term	6 years 3 months	6 years 3 months	6 years 3 months
Expected volatility (as a percent)	40.00%	50.00%	50.00%
Expected dividend yield (as a percent)	0.00%	0.00%	0.00%
Weighted average grant date fair value (in dollars per share)	$ 14.57	$ 9.53	$ 7.77
Weighted average
Assumptions used to estimate fair value of stock options granted
Risk-free interest rate (as a percent)	1.93%	1.36%	1.70%

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Stock-Based Compensation - Expense Recorded (Details) - USD ($) $ in Thousands		3 Months Ended		12 Months Ended
	Jul. 14, 2017	Sep. 30, 2016	Jun. 30, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Stock-based compensation expense
Stock-based compensation expense				$ 16,873	$ 22,954	$ 3,399
Service based stock options and RSUs
Stock-based compensation expense
Unvested service-based stock options and RSU awards (in shares)				2,526,406
Unrecognized compensation cost				$ 43,342
Period of recognition of unrecognized compensation cost				2 years 4 months 24 days
Stock options
Stock-based compensation expense
Stock-based compensation expense related to accelerated vesting			$ 2,257		2,257
Performance-based stock options
Stock-based compensation expense
Stock-based compensation expense		$ 15,898			$ 15,898
RowdMap | Restricted Stock
Stock-based compensation expense
Fair value of equity interests issued	$ 33,232
RowdMap | Restricted stock, time-based
Stock-based compensation expense
Vesting period	3 years
RowdMap | Restricted stock, performance-based
Stock-based compensation expense
Vesting period	1 year
Stock-based compensation expense				$ 6,072

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Segment Information - Operating Segment Results (Details) $ in Thousands	1 Months Ended	3 Months Ended								12 Months Ended
	Sep. 30, 2015 USD ($)	Dec. 31, 2017 USD ($)	Sep. 30, 2017 USD ($)	Jun. 30, 2017 USD ($)	Mar. 31, 2017 USD ($)	Dec. 31, 2016 USD ($)	Sep. 30, 2016 USD ($)	Jun. 30, 2016 USD ($)	Mar. 31, 2016 USD ($)	Dec. 31, 2017 USD ($) segment	Dec. 31, 2016 USD ($)	Dec. 31, 2015 USD ($)
Segment information
Number of reportable segments | segment										2
Net Revenue		$ 176,729	$ 174,188	$ 167,611	$ 160,133	$ 167,912	$ 156,241	$ 158,291	$ 142,718	$ 678,661	$ 625,162	$ 541,343
Depreciation and amortization										85,183	80,969	74,162
Transaction-related expenses										2,219	1,788	1,469
Impairment of intangible assets	$ 27,826									1,322		27,826
Operating Income		$ 47,178	$ 41,042	$ 39,996	$ 34,082	$ 41,622	$ 24,155	$ 38,938	$ 29,238	162,298	133,953	96,524
Healthcare
Segment information
Net Revenue										605,228	552,041	467,044
Depreciation and amortization										81,388	77,178	70,479
Transaction-related expenses										2,087	1,673	1,332
Impairment of intangible assets												26,326
Operating Income										151,340	123,917	84,240
Global Retail and Other
Segment information
Net Revenue										73,433	73,121	74,299
Depreciation and amortization										3,795	3,791	3,683
Transaction-related expenses										132	115	137
Impairment of intangible assets										1,322		1,500
Operating Income										$ 10,958	$ 10,036	$ 12,284

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Segment Information - Operating Segment Net Revenue by Product Type (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Net revenue by product type
Net revenue	$ 176,729	$ 174,188	$ 167,611	$ 160,133	$ 167,912	$ 156,241	$ 158,291	$ 142,718	$ 678,661	$ 625,162	$ 541,343
Product | Total net revenue
Net revenue by product type
Net revenue									$ 678,661	$ 625,162	$ 541,343
Proportionate share of total (as a percent)									100.00%	100.00%	100.00%
Healthcare
Net revenue by product type
Net revenue									$ 605,228	$ 552,041	$ 467,044
Healthcare | Product | Total net revenue
Net revenue by product type
Net revenue									$ 605,228	$ 552,041	$ 467,044
Proportionate share of total (as a percent)									89.20%	88.30%	86.30%
Healthcare | Retrospective claims accuracy | Product | Total net revenue
Net revenue by product type
Net revenue									$ 351,662	$ 310,496	$ 251,288
Proportionate share of total (as a percent)									51.80%	49.70%	46.40%
Healthcare | Prospective claims accuracy | Product | Total net revenue
Net revenue by product type
Net revenue									$ 236,192	$ 229,491	$ 201,899
Proportionate share of total (as a percent)									34.80%	36.70%	37.30%
Healthcare | Other | Product | Total net revenue
Net revenue by product type
Net revenue									$ 17,374	$ 12,054	$ 13,857
Proportionate share of total (as a percent)									2.60%	1.90%	2.60%
Global Retail and Other
Net revenue by product type
Net revenue									$ 73,433	$ 73,121	$ 74,299
Global Retail and Other | Product | Total net revenue
Net revenue by product type
Net revenue									$ 73,433	$ 73,121	$ 74,299
Proportionate share of total (as a percent)									10.80%	11.70%	13.70%
Global Retail and Other | Retrospective claims accuracy | Product | Total net revenue
Net revenue by product type
Net revenue									$ 71,437	$ 70,656	$ 72,060
Proportionate share of total (as a percent)									10.50%	11.30%	13.30%
Global Retail and Other | Other | Product | Total net revenue
Net revenue by product type
Net revenue									$ 1,996	$ 2,465	$ 2,239
Proportionate share of total (as a percent)									0.30%	0.40%	0.40%

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Segment and Geographic Information - Geographic Information (Details) - Geographic	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Total net revenue | United States
Geographic net revenue and long lived assets
Proportionate share of total (as a percent)	99.00%	98.00%	98.00%
Long-lived assets | Minimum | United States
Geographic net revenue and long lived assets
Proportionate share of total (as a percent)	99.00%	99.00%
Long-lived assets | Maximum | Foreign
Geographic net revenue and long lived assets
Proportionate share of total (as a percent)	1.00%	1.00%

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Client Concentration (Details) - Total net revenue - Customer Concentration Risk	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Customer A
Client Concentration
Concentration percentage	13.00%	15.00%	14.00%
Customer B
Client Concentration
Concentration percentage	11.00%	11.00%	10.00%
Customer C
Client Concentration
Concentration percentage	10.00%	7.00%	8.00%

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Employee Benefit Plans - Contributions Expensed (Details) - Compensation - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Employee benefit plans
Contributions expensed	$ 5,813	$ 4,608	$ 4,019
401(k) Plan
Employee benefit plans
Contributions expensed	5,101	3,860	3,053
Profit Share Plan
Employee benefit plans
Contributions expensed		220	539
Provident Plan
Employee benefit plans
Contributions expensed	$ 712	$ 528	$ 427

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Employee Benefit Plans - Nonqualified Profit Sharing Incentive Compensation Plan (Details) - Profit Share Plan	12 Months Ended
	Dec. 31, 2014
Maximum
Employee benefit plans
Period following last day of plan year that contributions are made	90 days
Minimum
Employee benefit plans
Service period required for eligibility	1000 hours

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Employee Benefit Plans - India Plan (Details) - USD ($) $ in Thousands	Dec. 31, 2017	Dec. 31, 2016
Provident Fund | India
Employee benefit plans
Accrued benefit obligation	$ 1,008	$ 763

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Discontinued Operations (Details) - USD ($) $ / shares in Units, $ in Thousands	1 Months Ended	12 Months Ended
	Feb. 28, 2015	Dec. 31, 2015
Discontinued operations
Gain from collection of fully reserved note receivable		$ 900
Estimated impact to diluted EPS as a result of gain on discontinued operations (in dollars per share)		$ 0.01
Discontinued operations sold | Business disposed of in 2012
Discontinued operations
Gain from collection of fully reserved note receivable	$ 900
Estimated impact to diluted EPS as a result of gain on discontinued operations (in dollars per share)		$ 0.01

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Selected Quarterly Financial Data (Unaudited) (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Selected Quarterly Financial Data (Unaudited)
Net Revenue	$ 176,729	$ 174,188	$ 167,611	$ 160,133	$ 167,912	$ 156,241	$ 158,291	$ 142,718	$ 678,661	$ 625,162	$ 541,343
Operating income	47,178	41,042	39,996	34,082	41,622	24,155	38,938	29,238	162,298	133,953	96,524
Income (loss) from continuing operations									138,203	48,852	13,304
Net income (loss)	$ 70,668	$ 19,472	$ 21,088	$ 26,975	$ 25,292	$ 4,583	$ 10,893	$ 8,084	$ 138,203	$ 48,852	$ 13,863
Earnings (loss) per share from continuing operations-Basic (in dollars per share)									$ 1.50	$ 0.57	$ 0.17
Earnings (loss) per share from continuing operations-Diluted (in dollars per share)									1.45	0.55	0.17
Total earnings (loss) per share - Basic (in dollars per share)	$ 0.77	$ 0.21	$ 0.23	$ 0.30	$ 0.28	$ 0.05	$ 0.13	$ 0.10	1.50	0.57	0.18
Total earnings (loss) per share-Diluted (in dollars per share)	$ 0.74	$ 0.20	$ 0.22	$ 0.28	$ 0.27	$ 0.05	$ 0.13	$ 0.10	$ 1.45	$ 0.55	$ 0.18

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Selected Quarterly Financial Data (Unaudited) Narrative (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Quarterly operating results
Revenues	$ 176,729	$ 174,188	$ 167,611	$ 160,133	$ 167,912	$ 156,241	$ 158,291	$ 142,718	$ 678,661	$ 625,162	$ 541,343
Loss on extinguishment of debt									3,183	16,417	4,084
Net income tax benefit from impact of Tax Act	45,019								45,019
Stock-based compensation expense									16,873	22,954	3,399
Restated Credit Agreement | First Lien Term B Loan
Quarterly operating results
Loss on extinguishment of debt			$ 3,183
Initial Second Lien Credit Facilities
Quarterly operating results
Loss on extinguishment of debt							7,068			7,068
Initial Secured Credit Facilities
Quarterly operating results
Loss on extinguishment of debt						9,349				9,349
Healthcare
Quarterly operating results
Revenues									$ 605,228	552,041	$ 467,044
Healthcare | Increase in estimated liability fo refunds and appeals
Quarterly operating results
Revenues	$ (7,000)
Healthcare | Special projects
Quarterly operating results
Revenues							5,000
Stock options
Quarterly operating results
Stock-based compensation expense related to accelerated vesting							$ 2,257			2,257
Performance-based stock options
Quarterly operating results
Stock-based compensation expense						$ 15,898				$ 15,898

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Subsequent Event (Details) - USD ($) $ in Thousands	3 Months Ended	12 Months Ended
	Mar. 31, 2018	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Medicare RAC contract
Total liability expected to be released		$ 932	$ 5,236	$ 7,166
Estimated liability for refunds and appeals		$ 61,607	$ 62,539	$ 67,775
Subsequent Events
Medicare RAC contract
Estimated liability for refunds and appeals	$ 56,000
Subsequent Events | Minimum
Medicare RAC contract
Total liability expected to be released	$ 32,000

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Schedule I - Condensed Financial Information of Registrant - Parent Company Balance Sheets (Details) - USD ($) $ / shares in Units, $ in Thousands	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015	Dec. 31, 2014
Non current assets:
TOTAL ASSETS	$ 2,099,229	$ 2,002,263
LIABILITIES AND STOCKHOLDERS' EQUITY
Total liabilities	997,761	1,062,927
Stockholders' equity:
Common stock ($0.001 par value; 600,000,000 shares authorized, 92,299,294 and 90,748,740 issued, and 92,299,294 and 90,741,340 outstanding at December 31, 2017 and 2016, respectively)	92	91
Additional paid-in capital	933,710	911,582
Retained earnings	172,120	33,917
Accumulated other comprehensive loss	(4,454)	(6,156)
Treasury stock, at cost (7,400 shares at December 31, 2016)		(98)
Total stockholders' equity	1,101,468	939,336	$ 787,596	$ 773,133
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 2,099,229	$ 2,002,263
Stockholders' equity parenthetical
Common stock, par value per share	$ 0.001	$ 0.001
Common stock, shares authorized	600,000,000	600,000,000
Common stock, shares issued	92,299,294	90,748,740
Common stock, shares outstanding	92,299,294	90,741,340
Treasury stock, shares		7,400
Parent Company
Non current assets:
Investment in subsidiaries	$ 1,101,468	$ 939,336
TOTAL ASSETS	1,101,468	939,336
Stockholders' equity:
Common stock ($0.001 par value; 600,000,000 shares authorized, 92,299,294 and 90,748,740 issued, and 92,299,294 and 90,741,340 outstanding at December 31, 2017 and 2016, respectively)	92	91
Additional paid-in capital	933,710	911,582
Retained earnings	172,120	33,917
Accumulated other comprehensive loss	(4,454)	(6,156)
Treasury stock, at cost (7,400 shares at December 31, 2016)		(98)
Total stockholders' equity	1,101,468	939,336
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	$ 1,101,468	$ 939,336
Stockholders' equity parenthetical
Common stock, par value per share	$ 0.001	$ 0.001
Common stock, shares authorized	600,000,000
Common stock, shares issued	92,299,294	90,748,740
Common stock, shares outstanding	92,299,294	90,741,340
Treasury stock, shares		7,400

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Schedule I - Condensed Financial Information of Registrant - Parent Company Statements of Comprehensive Income (Details) - USD ($) $ in Thousands	3 Months Ended								12 Months Ended
	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2016	Sep. 30, 2016	Jun. 30, 2016	Mar. 31, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Parent Company Statements of Comprehensive Income
Net income	$ 70,668	$ 19,472	$ 21,088	$ 26,975	$ 25,292	$ 4,583	$ 10,893	$ 8,084	$ 138,203	$ 48,852	$ 13,863
Comprehensive income									139,905	47,563	10,854
Parent Company
Parent Company Statements of Comprehensive Income
Equity in income of subsidiaries									138,203	48,852	13,863
Net income									138,203	48,852	13,863
Equity in other comprehensive income (loss) of subsidiaries									1,702	(1,289)	(3,009)
Comprehensive income									$ 139,905	$ 47,563	$ 10,854

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Schedule I - Condensed Financial Information of Registrant - Parent Company Statements of Cash Flows (Details) - USD ($) $ in Thousands		12 Months Ended
	May 25, 2016	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Cash flows from operating activities:
Net income		$ 138,203	$ 48,852	$ 13,863
Adjustments to reconcile net income to net cash provided by operating activities:
Net cash provided by operating activities		175,103	189,171	63,154
Cash flows from investing activities:
Net cash used in investing activities		(107,266)	(34,032)	(22,581)
Cash flows from financing activities:
Proceeds from issuance of common stock	$ 226,963		226,963
Proceeds from issuance of common stock under equity plans		15,340	4,243	210
Dividends Paid			(150,000)
Repurchase of common stock		(10,000)
Net cash used in financing activities		(13,321)	(193,275)	(8,976)
Net increase (decrease) in cash and cash equivalents		54,883	(38,730)	30,753
Cash and cash equivalents at beginning of period		110,635	149,365	118,612
Cash and cash equivalents at end of the period		165,518	110,635	149,365
Parent Company
Cash flows from operating activities:
Net income		138,203	48,852	13,863
Adjustments to reconcile net income to net cash provided by operating activities:
Equity in income of subsidiaries		(138,203)	(48,852)	(13,863)
Cash flows from investing activities:
Investment in subsidiaries		(5,340)	(81,206)	(210)
Net cash used in investing activities		(5,340)	(81,206)	(210)
Cash flows from financing activities:
Proceeds from issuance of common stock	$ 226,963		226,963
Proceeds from issuance of common stock under equity plans		15,340	4,243	210
Dividends Paid			(150,000)
Repurchase of common stock		(10,000)
Net cash used in financing activities		5,340	81,206	210
Net increase (decrease) in cash and cash equivalents		0	0	0
Cash and cash equivalents at beginning of period		0	0
Cash and cash equivalents at end of the period		0	0	0
Supplemental disclosures of cash flow information:
Noncash operating activities (stock-based compensation)		$ 16,873	$ 22,954	$ 3,399

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Schedule I - Condensed Financial Information of Registrant - Stockholders' Equity - Share Repurchase Program (Details) - USD ($)	12 Months Ended
	Dec. 31, 2017	Oct. 31, 2017
Share Repurchase Program
Repurchase of common stock	$ 10,000,000
Common stock
Share Repurchase Program
Repurchase of common stock (shares)	317,900
Repurchase of common stock	$ 1,000
Common stock | Share Repurchase Program
Share Repurchase Program
Repurchase of common stock (shares)	317,900
Repurchase of common stock	$ 10,000,000
Weighted average share price (in dollars per share)	$ 31.43
Common stock | Share Repurchase Program | Maximum
Share Repurchase Program
Share repurchase program, amount authorized		$ 100,000,000
Parent Company | Common stock | Share Repurchase Program
Share Repurchase Program
Repurchase of common stock (shares)	317,900
Repurchase of common stock	$ 10,000,000
Weighted average share price (in dollars per share)	$ 31.43
Parent Company | Common stock | Share Repurchase Program | Maximum
Share Repurchase Program
Share repurchase program, amount authorized		$ 100,000,000

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Schedule I - Condensed Financial Information of Registrant - Stockholders' Equity - Secondary Offerings (Details) - USD ($) $ / shares in Units, $ in Thousands			12 Months Ended
	Aug. 07, 2017	Mar. 07, 2017	Dec. 31, 2017	Dec. 31, 2016
Common stock
Issuance of stock
Stock issued (in shares)				12,936,038
August 2017 Secondary Offering
Issuance of stock
Offering expenses			$ 700
Proceeds from issuance of common stock	$ 0
August 2017 Secondary Offering | Common stock
Issuance of stock
Stock issued (in shares)	10,000,000
Offering price (in dollars per share)	$ 37.00
March 2017 Secondary Offering
Issuance of stock
Offering expenses			600
Proceeds from issuance of common stock		$ 0
March 2017 Secondary Offering | Common stock | Selling Stockholders
Issuance of stock
Stock issued (in shares)		9,683,000
Offering price (in dollars per share)		$ 36.00
Underwriters option
Issuance of stock
Stock issued (in shares)		1,263,000
Parent Company | August 2017 Secondary Offering
Issuance of stock
Offering expenses			700
Proceeds from issuance of common stock	$ 0
Parent Company | August 2017 Secondary Offering | Common stock
Issuance of stock
Stock issued (in shares)	10,000,000
Offering price (in dollars per share)	$ 37.00
Parent Company | March 2017 Secondary Offering
Issuance of stock
Offering expenses			$ 600
Proceeds from issuance of common stock		$ 0
Parent Company | March 2017 Secondary Offering | Common stock | Selling Stockholders
Issuance of stock
Stock issued (in shares)		9,683,000
Offering price (in dollars per share)		$ 36.00
Parent Company | Underwriters option
Issuance of stock
Stock issued (in shares)		1,263,000

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Schedule I - Condensed Financial Information of Registrant - Stockholders' Equity - Issuance of Common Stock (Details) - USD ($) $ / shares in Units, $ in Thousands		12 Months Ended
	May 25, 2016	Dec. 31, 2016
Issuance of stock
Proceeds from issuance of common stock	$ 226,963	$ 226,963
Common stock
Issuance of stock
Stock issued (in shares)		12,936,038
IPO
Issuance of stock
Offering expenses	$ 18,822
IPO | Common stock
Issuance of stock
Stock issued (in shares)	12,936,038
Offering price (in dollars per share)	$ 19.00
Parent Company
Issuance of stock
Proceeds from issuance of common stock	$ 226,963	$ 226,963
Parent Company | IPO
Issuance of stock
Offering expenses	$ 18,822
Parent Company | IPO | Common stock
Issuance of stock
Stock issued (in shares)	12,936,038
Offering price (in dollars per share)	$ 19.00

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Schedule I - Condensed Financial Information of Registrant - Stockholders' Equity - Common Stock Split and Dividends (Details) $ / shares in Units, $ in Thousands	May 26, 2016 USD ($) $ / shares	May 13, 2016
Common stock
Common stock dividends paid (in dollars) | $	$ 150,000
Common stock dividends paid (in dollars per share)	$ 1.94
Reduction in stock option exercise price (in dollars per share)	$ 1.94
Common stock
Common stock
Stock split ratio		6.1
Parent Company
Common stock
Common stock dividends paid (in dollars) | $	$ 150,000
Common stock dividends paid (in dollars per share)	$ 1.94
Reduction in stock option exercise price (in dollars per share)	$ 1.94
Parent Company | Common stock
Common stock
Stock split ratio		6.1

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Schedule II - Valuation and Qualifying Accounts (Details) - USD ($) $ in Thousands	12 Months Ended
	Dec. 31, 2017	Dec. 31, 2016	Dec. 31, 2015
Activity in valuation and qualifying accounts
Estimated allowance for refunds and appeals	$ 35,434	$ 41,020	$ 33,406
Estimated liability for refunds and appeals	61,607	62,539	67,775
Allowance and estimated liability for refunds and appeals
Activity in valuation and qualifying accounts
Balance at Beginning of Period	103,559	101,181	98,157
Provision Charged Against Revenue	88,874	99,472	67,702
Deductions	(95,392)	(97,094)	(64,678)
Valuation Allowances and Reserves, Balance, Ending Balance	97,041	103,559	101,181
Allowance for doubtful accounts
Activity in valuation and qualifying accounts
Balance at Beginning of Period	851	1,053	655
Charged to Operating Expenses	(295)	(147)	804
Deductions	(380)	(55)	(406)
Valuation Allowances and Reserves, Balance, Ending Balance	$ 176	$ 851	$ 1,053