Revenue Recognition

12 Months Ended

Dec. 31, 2020

Revenue From Contract With Customer [Abstract]

Revenue Recognition

10) REVENUE RECOGNITION

The company recognizes revenue when it transfers 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. 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, 2020, 2019 and 2018 (in thousands):

	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	%
	For the year ended December 31, 2019
	Acute Care				Behavioral Health				Other		Total
Medicare	$	1,336,200	22	%	$	553,045	11	%			$	1,889,245	17	%
Managed Medicare		827,216	13	%		220,543	4	%				1,047,759	9	%
Medicaid		519,508	8	%		688,141	13	%				1,207,649	11	%
Managed Medicaid		560,029	9	%		1,118,612	21	%				1,678,641	15	%
Managed Care (HMO and PPOs)		2,271,002	37	%		1,363,815	26	%				3,634,817	32	%
UK Revenue		0	0	%		553,831	11	%				553,831	5	%
Other patient revenue and adjustments, net		191,422	3	%		505,144	10	%				696,566	6	%
Other non-patient revenue		459,183	7	%		206,932	4	%		3,636		669,751	6	%
Total Net Revenue	$	6,164,560	100	%	$	5,210,063	100	%	$	3,636		11,378,259	100	%
	For the year ended December 31, 2018
	Acute Care				Behavioral Health				Other		Total
Medicare	$	1,296,152	23	%	$	579,723	12	%			$	1,875,875	17	%
Managed Medicare		730,387	13	%		199,003	4	%				929,390	9	%
Medicaid		487,197	9	%		696,421	14	%				1,183,618	11	%
Managed Medicaid		554,438	10	%		975,567	19	%				1,530,005	14	%
Managed Care (HMO and PPOs)		2,093,890	37	%		1,395,980	28	%				3,489,870	32	%
UK Revenue		0	0	%		504,721	10	%				504,721	5	%
Other patient revenue and adjustments, net		167,570	3	%		483,417	10	%				650,987	6	%
Other non-patient revenue		390,271	7	%		204,042	4	%		13,499		607,812	6	%
Total Net Revenue	$	5,719,905	100	%	$	5,038,874	100	%	$	13,499		10,772,278	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.