Revenue Recognition

12 Months Ended

Dec. 31, 2022

Revenue from Contract with Customer [Abstract]

Revenue Recognition

10) REVENUE RECOGNITION

We recognize revenue when it transfers promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. Our estimate for amounts not expected to be collected based on historical experience will continue to be recognized as a reduction to net revenue. However, subsequent changes in estimate of collectability due to a change in the financial status of a payer, for example a bankruptcy, will be recognized as bad debt expense in operating charges.

The performance obligation is separately identifiable from other promises in the customer contract. As the performance obligations are met (i.e.: room, board, ancillary services, level of care), revenue is recognized based upon allocated transaction price. The transaction price is allocated to separate performance obligations based upon the relative standalone selling price. In instances where we determine there are multiple performance obligations across multiple months, the transaction price will be allocated by applying an estimated implicit and explicit rate to gross charges based on the separate performance obligations.

In assessing collectability, we have elected the portfolio approach. This portfolio approach is being used as we have large volume of similar contracts with similar classes of customers. We reasonably expect that the effect of applying a portfolio approach to a group of contracts would not differ materially from considering each contract separately. Management’s judgment to group the contracts by portfolio is based on the payment behavior expected in each portfolio category. As a result, aggregating all of the contracts (which are at the patient level) by the particular payer or group of payers, will result in the recognition of the same amount of revenue as applying the analysis at the individual patient level.

We group our revenues into categories based on payment behaviors. Each component has its own reimbursement structure which allows us to disaggregate the revenue into categories that share the nature and timing of payments. The other patient revenue consists primarily of self-pay, government-funded non-Medicaid, and other.

The following table disaggregates our revenue by major source for the years ended December 31, 2022, 2021 and 2020 (in thousands):

	For the year ended December 31, 2022
	Acute Care				Behavioral Health				Other		Total
Medicare	$	1,289,425	17	%	$	326,337	6	%			$	1,615,762	12	%
Managed Medicare		1,274,719	17	%		285,870	5	%				1,560,589	12	%
Medicaid		719,870	9	%		792,526	14	%				1,512,396	11	%
Managed Medicaid		757,488	10	%		1,449,367	25	%				2,206,855	16	%
Managed Care (HMO and PPOs)		2,536,818	33	%		1,476,136	26	%				4,012,954	30	%
UK Revenue		0	0	%		684,594	12	%				684,594	5	%
Other patient revenue and adjustments, net		261,879	3	%		483,763	8	%				745,642	6	%
Other non-patient revenue		806,550	11	%		231,165	4	%		22,863		1,060,578	8	%
Total Net Revenue	$	7,646,749	100	%	$	5,729,758	100	%	$	22,863		13,399,370	100	%
	For the year ended December 31, 2021
	Acute Care				Behavioral Health				Other		Total
Medicare	$	1,292,205	18	%	$	361,914	7	%			$	1,654,119	13	%
Managed Medicare		1,118,901	16	%		244,061	4	%				1,362,962	11	%
Medicaid		539,741	8	%		751,951	14	%				1,291,692	10	%
Managed Medicaid		618,727	9	%		1,328,536	24	%				1,947,263	15	%
Managed Care (HMO and PPOs)		2,521,089	35	%		1,435,938	26	%				3,957,027	31	%
UK Revenue		0	0	%		687,725	12	%				687,725	5	%
Other patient revenue and adjustments, net		358,458	5	%		484,742	9	%				843,200	7	%
Other non-patient revenue		659,133	9	%		208,777	4	%		30,219		898,129	7	%
Total Net Revenue	$	7,108,254	100	%	$	5,503,644	100	%	$	30,219		12,642,117	100	%
	For the year ended December 31, 2020
	Acute Care				Behavioral Health				Other		Total
Medicare	$	1,242,268	20	%	$	448,323	9	%			$	1,690,591	15	%
Managed Medicare		869,488	14	%		235,442	5	%				1,104,930	10	%
Medicaid		551,551	9	%		651,081	12	%				1,202,632	10	%
Managed Medicaid		491,234	8	%		1,224,205	24	%				1,715,439	15	%
Managed Care (HMO and PPOs)		2,146,018	34	%		1,280,919	25	%				3,426,937	30	%
UK Revenue		0	0	%		584,000	11	%				584,000	5	%
Other patient revenue and adjustments, net		248,047	4	%		497,297	10	%				745,344	6	%
Other non-patient revenue (a)		788,698	12	%		287,455	6	%		12,871		1,089,024	9	%
Total Net Revenue	$	6,337,304	100	%	$	5,208,722	100	%	$	12,871		11,558,897	100	%

(a) The 2020 other non-patient revenue includes Acute Care CARES Act and other grant revenue of $316 million and Behavioral Health CARES Act and other grant revenue of $97 million. As an accounting policy election, we have utilized ASC 958 by analogy to recognize funds received under the CARES Act from the Provider Relief Fund as revenue, given no direct authoritative guidance available to for-profit organizations to recognize revenue for government contributions and grants. CARES Act revenues may be subject to future adjustments based on future changes to statutes.