10-Q/A

 UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q/A

(Amendment No. 1)

x Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly Period Ended September 30, 2013

or

o Transition Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the transition period from _____  to _____

Commission File Number 000-19364

HEALTHWAYS, INC.

(Exact Name of Registrant as Specified in its Charter)

Delaware	62-1117144
(State or Other Jurisdiction of	(I.R.S. Employer
Incorporation or Organization)	Identification No.)

701 Cool Springs Boulevard, Franklin, TN  37067

(Address of Principal Executive Offices) (Zip Code)

615-614-4929

(Registrant's Telephone Number, Including Area Code)

(Former name, former address and former fiscal year, if changed since last report)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes   x  No   o

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).

Yes   x   No  o

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

Large accelerated filer oAccelerated filer x

Non-accelerated filer   o (Do not check if a smaller reporting company) Smaller reporting company o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes  o   No  x

As of October 31, 2013, there were outstanding 35,060,079 shares of the registrant's common stock, par value $.001 per share.

2

Explanatory Note

Healthways, Inc. (the "Company") is filing this Amendment No. 1 (this "Amendment") to its Quarterly Report on Form 10-Q for the quarter ended September 30, 2013, filed with the Securities and Exchange Commission on November 5, 2013 (the "Original Filing"), for the sole purpose of furnishing the Interactive Data File as Exhibit 101 and updating the exhibit index.  The Interactive Data File was inadvertently excluded from the Original Filing due to unanticipated technical difficulties associated with the Company's XBRL and EDGAR filing software.

Other than as described above, no changes have been made to the Original Filing. This Amendment speaks as of the date of the Original Filing, does not reflect subsequent events that may have occurred after the date of the Original Filing and does not modify or update in any way any disclosures made in the Original Filing.

3

Item 6.Exhibits

(a) Exhibits

3.1	Restated Certificate of Incorporation, as amended [incorporated by reference to Exhibit 3.1 to Form 10-Q of the Company's fiscal quarter ended February 29, 2008, File No. 000-19364]
3.2	Certificate of Amendment to Restated Certificate of Incorporation, as amended, dated as of October 10, 2013*
10.1	Investment Agreement, dated October 1, 2013, between the Company and CareFirst Holdings, LLC [incorporated by reference to Exhibit 10.1 of the Company's Current Report on Form 8-K dated October 2, 2013, File No. 000-19364]+
10.2	Convertible Senior Subordinated Note, dated October 1, 2013, issued by the Company and CareFirst Holdings, LLC [incorporated by reference to Exhibit 10.2 of the Company's Current Report on Form 8-K dated October 2, 2013, File No. 000-19364]
10.3	Form of Common Stock Purchase Warrant [incorporated by reference to Exhibit 10.3 of the Company's Current Report on Form 8-K dated October 2, 2013, File No. 000-19364]
10.4	Registration Rights Agreement, dated October 1, 2013, between the Company and CareFirst Holdings, LLC [incorporated by reference to Exhibit 10.4 of the Company's Current Report on Form 8-K dated October 2, 2013, File No. 000-19364]
10.5	Third Amendment to Fifth Amended and Restated Revolving Credit and Term Loan Agreement and First Amendment to Second Amended and Restated Subsidiary Guarantee Agreement [incorporated by reference to Exhibit 10.1 to the Company's Current Report on Form 8-K dated July 1, 2013, File No. 000-19364]

31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended*
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) and Rule 15d-14(a) of the Securities Exchange Act of 1934, as amended*
32	Certification of Chief Executive Officer and Chief Financial Officer pursuant to 18 U.S.C 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002*
101.INS		XBRL Instance Document**
101.SCH		XBRL Taxonomy Extension Schema**
101.CAL		XBRL Taxonomy Extension Calculation Linkbase**
101.DEF		XBRL Taxonomy Extension Definition Linkbase**
101.LAB		XBRL Taxonomy Extension Label Linkbase**
101.PRE		XBRL Taxonomy Extension Presentation Linkbase**

^*  Previously filed as an exhibit to the Company's Quarterly Report on Form 10-Q for the quarter ended September 30, 2013 filed on November 5, 2013.

** Furnished herewith.

⁺ Certain confidential portions of this exhibit were omitted by means of redacting a portion of the text. This exhibit has been filed separately with the Securities and Exchange Commission accompanied by a confidential treatment request pursuant to Rule 24b-2 of the Securities Exchange Act of 1934, as amended.

4

SIGNATURES

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

			Healthways, Inc.
			(Registrant)
Date	November 6, 2013	By	/s/ Alfred Lumsdaine
			Alfred Lumsdaine
			Chief Financial Officer
			(Principal Financial Officer)

5

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Accumulated OCI

9 Months Ended

Sep. 30, 2013

Accumulated OCI [Abstract]

Accumulated OCI

(10)Accumulated OCI

The following tables summarize the changes in accumulated OCI, net of tax, for the nine months ended September 30, 2013 and 2012:

	Net Change in Fair Value of Interest Rate Swaps			Foreign Currency Translation Adjustments			Total
Accumulated OCI, net of tax, as of January 1, 2013	$	(1,790	)	$	861		$	(929	)
Other comprehensive income (loss) before reclassifications, net of tax		377			(557	)		(180	)
Amounts reclassified from accumulated OCI, net of tax		987			—			987
Net increase (decrease) in other comprehensive income (loss), net of tax		1,364			(557	)		807
Accumulated OCI, net of tax, as of September 30, 2013	$	(426	)	$	304		$	(122	)

	Net Change in Fair Value of Interest Rate Swaps			Foreign Currency Translation Adjustments			Total
Accumulated OCI, net of tax, as of January 1, 2012	$	(2,570	)	$	781		$	(1,789	)
Other comprehensive loss before reclassifications, net of tax		(1,246	)		(92	)		(1,338	)
Amounts reclassified from accumulated OCI, net of tax		1,606			—			1,606
Net increase (decrease) in other comprehensive income (loss), net of tax		360			(92	)		268
Accumulated OCI, net of tax, as of September 30, 2012	$	(2,210	)	$	689		$	(1,521	)

The following table provides details about reclassifications out of accumulated OCI for the nine months ended September 30, 2013:

	Nine Months Ended September 30,						Statement of Comprehensive Income
	2013			2012			(Loss) Classification
Interest rate swaps	$	1,632		$	2,579		Interest expense
		(645	)		(973	)	Income tax benefit
	$	987		$	1,606		Net of tax

See Note 6 for further discussion of our interest rate swaps.

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 30, 2013		Sep. 30, 2012		Sep. 30, 2013		Sep. 30, 2012
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) [Abstract]
Revenues	$ 166,615		$ 166,559		$ 494,049		$ 501,990
Cost of services (exclusive of depreciation and amortization of $8,825, and $8,683, respectively, included below)	131,109		126,782		405,835		396,321
Selling, general and administrative expenses	16,440		14,727		43,816		43,455
Depreciation and amortization	12,952		13,259		39,499		38,233
Operating loss	6,114		11,791		4,899		23,981
Interest expense	5,006		3,249		11,486		10,822
Loss before income taxes	1,108		8,542		(6,587)		13,159
Income tax benefit	(691)		3,514		(3,336)		5,739
Net loss	1,799		5,028		(3,251)		7,420
Loss per share:
Basic (in dollars per share)	$ 0.05		$ 0.15		$ (0.09)		$ 0.22
Diluted (in dollars per share)	$ 0.05	[1]	$ 0.15	[1]	$ (0.09)	[1]	$ 0.22	[1]
Comprehensive loss	$ 2,444		$ 4,909		$ (2,444)		$ 7,688
Weighted average common shares and equivalents:
Basic (in shares)	34,682		33,683		34,288		33,485
Diluted (in shares)	35,834	[1]	34,068		34,288	[1]	33,706	[1]

[1] The assumed exercise of stock-based compensation awards for the nine months ended September 30, 2013 were not considered because the impact would be anti-dilutive.

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Share-Based Compensation

9 Months Ended

Sep. 30, 2013

Share-Based Compensation [Abstract]

Share-Based Compensation

(3)Share-Based Compensation

We have several stockholder-approved stock incentive plans for our employees and directors.  We currently have three types of share-based awards outstanding under these plans: stock options, restricted stock units, and restricted stock.  We believe that such awards align the interests of our employees and directors with those of our stockholders.

For the three and nine months ended September 30, 2013, we recognized share-based compensation costs of $1.7 million and $5.2 million, respectively.  For the three and nine months ended September 30, 2012, we recognized share-based compensation costs of $1.9 million and $4.7 million, respectively.

A summary of our stock options as of September 30, 2013 and changes during the nine months then ended is presented below:

							Weighted-
							Average
				Weighted-			Remaining	Aggregate
	Shares			Average			Contractual	Intrinsic
Options		(000s)		Exercise Price			Term (years)	Value ($000s)
Outstanding at January 1, 2013		4,689			$	15.65
Granted		1,011				12.95
Exercised		(1,062	)			14.27
Forfeited		(128	)			10.94
Expired		(62	)			20.44
Outstanding at September 30, 2013		4,448				15.43	6.44	$24,602
Exercisable at September 30, 2013		2,081			$	20.26	4.06	$7,278

The weighted-average grant-date fair value of options granted during the three and nine months ended September 30, 2013 was $9.37 and $7.11, respectively.

The following table shows a summary of our restricted stock and restricted stock units ("nonvested shares") as of September 30, 2013, as well as activity during the nine months then ended:

				Weighted-
				Average
	Shares			Grant Date
Nonvested Shares		(000s)		Fair Value
Nonvested at January 1, 2013		1,013			$	9.93
Granted		183				13.05
Vested		(225	)			10.50
Forfeited		(55	)			10.11
Nonvested at September 30, 2013		916			$	10.40

10

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Income Taxes (Details) (USD $)	3 Months Ended	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Income Taxes [Abstract]
Effective tax rate (in hundredths)	41.10%	50.60%	43.60%
Unrecognized Tax Benefits, Income Tax Penalties and Interest Accrued		$ 1,100,000

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Subsequent Events

9 Months Ended

Sep. 30, 2013

Subsequent Events [Abstract]

Subsequent Events [Text Block]

(11)Subsequent Events

On October 1, 2013, we entered into an Investment Agreement (the "Investment Agreement") with CareFirst Holdings, LLC ("CareFirst"), which is in addition to certain existing commercial agreements between us and CareFirst relating to, among other things, disease management and care coordination services (the "Commercial Agreements"). Pursuant to the Investment Agreement, we issued to CareFirst a convertible subordinated promissory note in the aggregate original principal amount of $20 million (the "CareFirst Convertible Note") for a purchase price of $20 million. The CareFirst Convertible Note bears interest at a rate of 4.75% per year, payable quarterly in arrears on March 31, June 30, September 30 and December 31 of each calendar year, beginning on December 31, 2013.  If the CareFirst Convertible Note has not been fully converted or redeemed in accordance with its terms, it will mature on October 1, 2019.  

20

The CareFirst Convertible Note is convertible into shares of our common stock at the conversion rate determined by dividing (a) the sum of the portion of the principal to be converted and accrued and unpaid interest with respect to such principal by (b) the conversion price equal to $22.41 per share of our common stock.  The conversion price is subject to adjustment for stock splits, stock dividends, recapitalizations, reorganizations, reclassifications and similar events.

CareFirst has an opportunity to earn warrants to purchase shares of our common stock ("CareFirst Warrants") based on achievement of certain quarterly thresholds (the "Revenue Thresholds") for revenue derived from both the Commercial Agreements and from new business to us from third parties as a result of an introduction or referral to us by CareFirst (collectively, the "Quarterly Revenue").  If the Quarterly Revenue is greater than or equal to the applicable Revenue Threshold for any quarter ending on or prior to September 30, 2017, then we will issue to CareFirst a certain number of warrants exercisable for the number of shares of our common stock ("CareFirst Warrant Shares") determined in accordance with the terms of the Investment Agreement. The aggregate number of CareFirst Warrant Shares in any single 12-month period beginning on October 1, 2013 cannot exceed 400,000, and the aggregate number of CareFirst Warrant Shares issuable pursuant to the Investment Agreement cannot exceed 1,600,000.

Also on October 1, 2013, in connection with the execution of the Investment Agreement, we entered into a Registration Rights Agreement with CareFirst (the "Registration Rights Agreement"), pursuant to which we agreed to use commercially reasonable efforts to cause any registration statement covering an underwritten offering of our common stock for our own account or for the account of any holder of our common stock (other than a registration statement on Form S-4 or Form S-8 or any successor thereto) to include those registrable common shares that any holder of such registrable common shares has requested to be registered.  

The term of the Investment Agreement expires on the earlier of (a) December 31, 2017 and (b) the first date on which no Commercial Agreement is in effect.

21

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Derivative Investments and Hedging Activities (Details) (USD $)		3 Months Ended	9 Months Ended	3 Months Ended		9 Months Ended							9 Months Ended
	Sep. 30, 2013	Sep. 30, 2013 Selling, General and Administrative Expenses [Member]	Sep. 30, 2013 Selling, General and Administrative Expenses [Member]	Sep. 30, 2013 Cash Flow Hedging [Member]	Sep. 30, 2012 Cash Flow Hedging [Member]	Sep. 30, 2013 Cash Flow Hedging [Member]	Sep. 30, 2012 Cash Flow Hedging [Member]	Sep. 30, 2013 Derivatives Not Designated as Hedging Instruments [Member] Other Long-Term Liabilities [Member]	Dec. 31, 2012 Derivatives Not Designated as Hedging Instruments [Member] Other Long-Term Liabilities [Member]	Dec. 31, 2012 Derivatives Not Designated as Hedging Instruments [Member] Other Noncurrent Assets [Member]	Sep. 30, 2013 Note Hedges and Conversions [Member]	Dec. 31, 2012 Interest Rate Swap Agreements [Member]	Sep. 30, 2013 Interest Rate Swap Agreements [Member] Derivatives Designated as Hedging Instruments [Member]	Dec. 31, 2012 Interest Rate Swap Agreements [Member] Derivatives Designated as Hedging Instruments [Member]	Sep. 30, 2013 Interest Rate Swap Agreements [Member] Derivatives Designated as Hedging Instruments [Member] Accrued Liabilities [Member]	Dec. 31, 2012 Interest Rate Swap Agreements [Member] Derivatives Designated as Hedging Instruments [Member] Accrued Liabilities [Member]	Sep. 30, 2013 Interest Rate Swap Agreements [Member] Derivatives Designated as Hedging Instruments [Member] Other Long-Term Liabilities [Member]	Dec. 31, 2012 Interest Rate Swap Agreements [Member] Derivatives Designated as Hedging Instruments [Member] Other Long-Term Liabilities [Member]	Sep. 30, 2013 Interest Rate Swap Agreements [Member] Derivatives Designated as Hedging Instruments [Member] Effective in November 2013 [Member]	Sep. 30, 2013 Interest Rate Swap Agreements [Member] Derivatives Designated as Hedging Instruments [Member] Effective in 2015 [Member]	Sep. 30, 2013 Interest Rate Swap Agreements [Member] Derivatives Not Designated as Hedging Instruments [Member]	Dec. 31, 2012 Interest Rate Swap Agreements [Member] Derivatives Not Designated as Hedging Instruments [Member]	Sep. 30, 2013 Interest Rate Swap Agreements [Member] Derivatives Not Designated as Hedging Instruments [Member] Other Current Assets [Member]	Dec. 31, 2012 Interest Rate Swap Agreements [Member] Derivatives Not Designated as Hedging Instruments [Member] Other Current Assets [Member]	Sep. 30, 2013 Interest Rate Swap Agreements [Member] Derivatives Not Designated as Hedging Instruments [Member] Other Noncurrent Assets [Member]	Sep. 30, 2013 Foreign Currency Exchange Contracts [Member]	Dec. 31, 2012 Foreign Currency Exchange Contracts [Member]	Sep. 30, 2013 Foreign Currency Exchange Contracts [Member] Derivatives Designated as Hedging Instruments [Member]	Dec. 31, 2012 Foreign Currency Exchange Contracts [Member] Derivatives Designated as Hedging Instruments [Member]	Sep. 30, 2013 Foreign Currency Exchange Contracts [Member] Derivatives Designated as Hedging Instruments [Member] Accrued Liabilities [Member]	Dec. 31, 2012 Foreign Currency Exchange Contracts [Member] Derivatives Designated as Hedging Instruments [Member] Accrued Liabilities [Member]	Dec. 31, 2012 Foreign Currency Exchange Contracts [Member] Derivatives Designated as Hedging Instruments [Member] Other Long-Term Liabilities [Member]	Sep. 30, 2013 Foreign Currency Exchange Contracts [Member] Derivatives Not Designated as Hedging Instruments [Member]	Dec. 31, 2012 Foreign Currency Exchange Contracts [Member] Derivatives Not Designated as Hedging Instruments [Member]	Sep. 30, 2013 Foreign Currency Exchange Contracts [Member] Derivatives Not Designated as Hedging Instruments [Member] Other Current Assets [Member]	Dec. 31, 2012 Foreign Currency Exchange Contracts [Member] Derivatives Not Designated as Hedging Instruments [Member] Other Current Assets [Member]	Dec. 31, 2012 Foreign Currency Exchange Contracts [Member] Derivatives Not Designated as Hedging Instruments [Member] Other Long-Term Liabilities [Member]	Sep. 30, 2013 Foreign Currency Exchange Contracts [Member] Derivatives Not Designated as Hedging Instruments [Member] Other Noncurrent Assets [Member]	Sep. 30, 2013 Foreign Currency Exchange Contracts [Member] Forward Contracts [Member] Derivatives Designated as Hedging Instruments [Member] Other Long-Term Liabilities [Member]	Sep. 30, 2013 Foreign Currency Exchange Contracts [Member] Forward Contracts [Member] Derivatives Not Designated as Hedging Instruments [Member]	Sep. 30, 2013 Cash Convertible Notes Hedge [Member] Derivatives Designated as Hedging Instruments [Member]	Sep. 30, 2013 Cash Convertible Notes Hedge [Member] Derivatives Not Designated as Hedging Instruments [Member]	Sep. 30, 2013 Cash Convertible Notes Hedge [Member] Derivatives Not Designated as Hedging Instruments [Member] Other Noncurrent Assets [Member]	Sep. 30, 2013 Cash Convertible Notes Hedge [Member] Note Hedges and Conversions [Member] Derivatives Not Designated as Hedging Instruments [Member] Other Current Assets [Member]	Sep. 30, 2013 Embedded Derivative Financial Instruments [Member] Other Long-Term Liabilities [Member]	Sep. 30, 2013 Embedded Derivative Financial Instruments [Member] Derivatives Designated as Hedging Instruments [Member]	Sep. 30, 2013 Embedded Derivative Financial Instruments [Member] Note Hedges and Conversions [Member]	Sep. 30, 2013 Embedded Derivative Financial Instruments [Member] Note Hedges and Conversions [Member] Derivatives Not Designated as Hedging Instruments [Member] Other Long-Term Liabilities [Member]
Derivatives, Fair Value [Line Items]
Derivative Asset, Notional Amount																																								$ 16,700,000
Assets, Fair Value																																									44,091,000
Debt Instrument, Unamortized Discount																																														36,750,000.00
Description of variable rate basis													LIBOR (as defined in Note 5)
Lower variable interest rate range (in hundredths)													0.465%
Higher variable interest rate range (in hundredths)													3.385%
Current notional amount													235,000,000
Notional amount effective in future													125,000,000						60,000,000	50,000,000
Fair Values of Derivative Instruments [Abstract]		7,341,000	7,341,000
Assets										0											0	0	0	0	0								158,000	73,000	158,000	73,000		0				44,091,000	44,091,000	0
Liabilities								0	0		0		208,000	1,742,000	0	0	499,000	1,221,000										0	0	115,000	255,000	0					0		0						0		0	44,091,000
Liabilities, Fair Value Disclosure, Recurring	707,000										44,091,000	2,963,000														115,000	255,000																			44,091,000
Derivative, Gain on Derivative		7,341,000	7,341,000
Assets										0											0	0	0	0	0								158,000	73,000	158,000	73,000		0				44,091,000	44,091,000	0
Liabilities								0	0		0		208,000	1,742,000	0	0	499,000	1,221,000										0	0	115,000	255,000	0					0		0						0		0	44,091,000
Derivative, Loss on Derivative		(7,341,000)	(7,341,000)
Derivative, Gain (Loss) on Derivative, Net, Total													0
Reclassification of net losses on interest rate swap agreements from accumulated OCI to interest expense within the next 12 months													600,000
Derivatives in Cash Flow Hedging Relationships [Abstract]
Loss related to effective portion of derivatives recognized in accumulated OCI, gross of tax effect				72,000	1,223,000	(624,000)	2,001,000
Loss related to effective portion of derivatives reclassified from accumulated OCI to interest expense, gross of tax effect				452,000	790,000	1,632,000	2,579,000
Gains or losses on cash flow hedges recognized in our consolidated statements of comprehensive income (loss) resulting from hedge ineffectiveness				$ 0

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Long-Term Debt, Line of Credit and Term Loan (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2013
Base Rate LIBOR [Member]
Line of Credit Facility [Line Items]
Basis spread on variable rate increased (in hundredths)	0.25%
Fifth Amended Credit Agreement [Member]
Line of Credit Facility [Line Items]
Initiation date	Jun. 08, 2012
Maximum borrowing capacity	$ 200
Expiration date	Jun. 08, 2017
Amount outstanding	140
Availability under the Revolving Credit Facility under most restrictive covenant	57.5
Interest rate description	Borrowings under the Fifth Amended Credit Agreement generally bear interest at variable rates based on a margin or spread in excess of either (1) the one-month, two-month, three-month or six-month rate (or with the approval of affected lenders, nine-month or twelve-month rate) for Eurodollar deposits ("LIBOR") or (2) the greatest of (a) the SunTrust Bank prime lending rate, (b) the federal funds rate plus 0.50%, and (c) one-month LIBOR plus 1.00% (the "Base Rate"), as selected by the Company. The LIBOR margin varies between 1.75% and 3.00%, and the Base Rate margin varies between 0.75% and 2.00%, depending on our leverage ratio. On February 5, 2013, we entered into a First Amendment to the Fifth Amended Credit Agreement, which included, among other things, a temporary increase in the LIBOR and Base Rate margins of 0.25%. The increased margins are effective through December 31, 2013 and apply only in the event that our total funded debt to EBITDA ratio is greater than or equal to 3.50 to 1.00.
Line of Credit Facility, Commitment Fee Description	The Fifth Amended Credit Agreement also provides for an annual fee ranging between 0.30% and 0.50% of the unused commitments under the revolving credit facility.
Letters of Credit Sub Facility[Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity	75
Swingline Sub Facility [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity	20
Term Loan Facility [Member]
Line of Credit Facility [Line Items]
Maturity date	Jun. 08, 2017
Terms of periodic payments	We are required to repay outstanding revolving loans under the revolving credit facility on June 8, 2017. We are required to repay term loans in quarterly principal installments aggregating (1) 1.250% of the original aggregate principal amount of the term loans during each of the eight quarters beginning with the quarter ended September 30, 2012, (2) 1.875% of the original aggregate principal amount of the term loans during each of the next four quarters beginning with the quarter ending September 30, 2014, and (3) 2.500% of the original aggregate principal amount of the term loans during each of the remaining quarters prior to maturity on June 8, 2017, at which time the entire unpaid principal balance of the term loans is due and payable.
Uncommitted Incremental Accordion Facility [Member]
Line of Credit Facility [Line Items]
Maximum borrowing capacity	$ 200

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Accumulated OCI (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Accumulated Other Comprehensive Income Loss [Line Items]
Accumulated OCI, net of tax Beginning Balance			$ (929)	$ (1,789)
Other comprehensive loss before reclassifications, net of tax			(180)	(1,338)
Amounts reclassified from accumulated OCI, net of tax			987	1,606
Net increase (decrease) in other comprehensive income (loss), net of tax			807	268
Accumulated OCI, net of tax Ending Balance	(122)	(1,521)	(122)	(1,521)
Reclassification adjustments out of AOCI [Abstract]
Reclassification to interest expense	(5,006)	(3,249)	(11,486)	(10,822)
Net Change in Fair Value of Interest Rate Swaps [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Accumulated OCI, net of tax Beginning Balance			(1,790)	(2,570)
Other comprehensive loss before reclassifications, net of tax			377	(1,246)
Amounts reclassified from accumulated OCI, net of tax			987	1,606
Net increase (decrease) in other comprehensive income (loss), net of tax			1,364	360
Accumulated OCI, net of tax Ending Balance	(426)	(2,210)	(426)	(2,210)
Net Change in Fair Value of Interest Rate Swaps [Member] | Amounts reclassified from accumulated other comprehensive income to: [Member]
Reclassification adjustments out of AOCI [Abstract]
Reclassification to interest expense			1,632	2,579
Tax effect of reclassification			(645)	(973)
Reclassification Adjustment on Derivatives Included in Net Income			987	1,606
Foreign Currency Translation Adjustments [Member]
Accumulated Other Comprehensive Income Loss [Line Items]
Accumulated OCI, net of tax Beginning Balance			861	781
Other comprehensive loss before reclassifications, net of tax			(557)	(92)
Amounts reclassified from accumulated OCI, net of tax			0	0
Net increase (decrease) in other comprehensive income (loss), net of tax			(557)	(92)
Accumulated OCI, net of tax Ending Balance	$ 304	$ 689	$ 304	$ 689

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Long-Term Debt (Details) (USD $)	0 Months Ended	9 Months Ended		0 Months Ended
	Jul. 16, 2013	Sep. 30, 2013	Sep. 30, 2012	Jul. 01, 2018 Cash Convertible Notes [Member]	Jul. 16, 2013 Cash Convertible Notes [Member]	Sep. 30, 2013 Cash Convertible Notes [Member]
Debt Instrument [Line Items]
Cash Convertible Notes, Issuance Date					Jul. 16, 2013
Debt Instrument, Maturity Date				Jul. 01, 2018
Debt Instrument, Interest Rate, Effective Percentage		5.66%
Amortization of debt discount		$ 1,497,000	$ 0
Debt Instrument, Convertible, Conversion Ratio					51.38
Debt Instrument, Unamortized Discount					36,750,000
Deferred Finance Costs, Gross	3,939,543
Interest Rate for Notes	1.50%
Aggregate Principal of convertible notes	150,000,000					150,000,000
Debt Instrument, Convertible, Conversion Price					$ 19.46
Payments for Hedge, Financing Activities	$ 36,750,000	$ 36,750,000	$ 0
Initial Conversion rate					$ 19.46
Warrants Strike Price	$ 25.95
Conversion price premium percentage		60.00%

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CONSOLIDATED STATEMENT OF CHANGES IN STOCKHOLDERS' EQUITY (Unaudited) (USD $) In Thousands, unless otherwise specified	Preferred Stock [Member]	Common Stock [Member]	Additional Paid-in Capital [Member]	Retained Earnings [Member]	Treasury Stock [Member]	Accumulated Other Comprehensive Loss [Member]	Total
Balance at Dec. 31, 2012	$ 0	$ 34	$ 251,357	$ 56,541	$ (28,182)	$ (929)	$ 278,821
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Comprehensive income (loss)	0	0	0	(3,251)	0	807	(2,444)
Exercise of stock options	0	1	12,561	0	0	0	12,562
Tax effect of stock options and restricted stock units	0	0	(1,908)	0	0	0	(1,908)
Share-based employee compensation expense	0	0	5,207	0	0	0	5,207
Proceeds from Sale of Warrants	0	0	15,150	0	0	0	15,150
Other	0	0	(183)	0	0	0	(183)
Balance at Sep. 30, 2013	$ 0	$ 35	$ 282,184	$ 53,290	$ (28,182)	$ (122)	$ 307,205

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Basis of Presentation

9 Months Ended

Sep. 30, 2013

Basis of Presentation [Abstract]

Basis of Presentation

(1)Basis of Presentation

Our consolidated financial statements and accompanying notes are prepared in accordance with generally accepted accounting principles in the United States ("U.S. GAAP").  In our opinion, the accompanying consolidated financial statements of Healthways, Inc. and its wholly-owned subsidiaries ("Healthways," the "Company," or such terms as "we," "us," or "our") reflect all adjustments consisting of normal, recurring accruals necessary for a fair presentation.

We have omitted certain financial information that is normally included in financial statements prepared in accordance with U.S. GAAP but that is not required for interim reporting purposes. You should read the accompanying consolidated financial statements in conjunction with the financial statements and notes thereto included in our Annual Report on Form 10-K for the year ended December 31, 2012.

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Income Taxes

9 Months Ended

Sep. 30, 2013

Income Taxes [Abstract]

Income Taxes

(4)Income Taxes

Despite having pre-tax income for the three months ended September 30, 2013, we had an income tax benefit of $0.7 million primarily as a result of a $1.1 million reduction to an unrecognized tax benefit due to the expiration of the applicable statutes of limitations for the 2009 tax year. This $1.1 million benefit more than offset the income tax expense for the quarter calculated using our annualized effective tax rate. For the three months ended September 30, 2012, the effective tax rate was 41.1%.

For the nine months ended September 30, 2013, the effective tax rate was a benefit of 50.6%, which was also favorably impacted by the reduction to an unrecognized tax benefit as discussed above.  For the nine months ended September 30, 2012, the effective tax rate was 43.6%.

We file income tax returns in the U.S. federal jurisdiction and various state and foreign jurisdictions.  Tax years remaining subject to examination in these major jurisdictions include 2010 to present.

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Recent Accounting Standards

9 Months Ended

Sep. 30, 2013

Recent Accounting Standards [Abstract]

Recent Accounting Standards

(2)Recent Accounting Standards

In July 2012, the Financial Accounting Standards Board (the "FASB") issued Accounting Standards Update ("ASU") No. 2012-02, "Intangibles—Goodwill and Other (Topic 350)—Testing Indefinite-Lived Intangible Assets for Impairment."  ASU No. 2012-02 permits an entity to perform a qualitative assessment to determine whether it is more likely than not that the fair value of an indefinite-lived intangible asset is less than its carrying value.  If the entity concludes that this is the case, it must perform the currently prescribed quantitative impairment test by comparing the fair value of the indefinite-lived intangible asset with its carrying value.  Otherwise, the quantitative impairment test is not required. ASU No. 2012-02 is effective for fiscal years beginning after September 15, 2012, with earlier adoption permitted.  We adopted this standard for the fiscal year beginning January 1, 2013.  The adoption of this standard did not have a material impact on our consolidated results of operations, financial position, cash flows, or notes to the consolidated financial statements.

In February 2013, the FASB issued ASU No. 2013-02, "Comprehensive Income (Topic 220)—Reporting of Amounts Reclassified Out of Accumulated Other Comprehensive Income," which requires companies to provide information about the amounts reclassified out of accumulated other comprehensive income ("AOCI") by component. In addition, entities are required to present, either on the face of the statement where net income is presented or in the accompanying notes, significant amounts reclassified out of AOCI by the respective line items of net income, but only if the amount reclassified is required to be reclassified to net income in its entirety in the same reporting period. For amounts that are not required to be reclassified in their entirety to net income, entities are required to cross-reference to other disclosures that provide additional detail on those amounts. ASU No. 2013-02 is effective prospectively for reporting periods beginning after December 15, 2012.  We adopted this standard for the interim period beginning January 1, 2013.  The adoption of this standard did not have a material impact on our consolidated results of operations, financial position, cash flows, or notes to the consolidated financial statements.

9

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Fair Value Measurements (Details) (USD $)								9 Months Ended
	Sep. 30, 2013	Jul. 16, 2013	Dec. 31, 2012	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2013 Foreign Exchange Contract [Member] Level 3 [Member]	Sep. 30, 2013 Interest Rate Swap [Member] Level 3 [Member]	Sep. 30, 2013 Cash Convertible Notes Hedge [Member]	Sep. 30, 2013 Embedded Derivative Financial Instruments [Member]	Sep. 30, 2013 Recurring [Member] Level 3 [Member]	Sep. 30, 2013 Recurring [Member] Foreign Exchange Contract [Member] Level 2 [Member]	Dec. 31, 2012 Recurring [Member] Foreign Exchange Contract [Member] Level 2 [Member]	Sep. 30, 2013 Recurring [Member] Foreign Exchange Contract [Member] Level 3 [Member]	Sep. 30, 2013 Recurring [Member] Foreign Exchange Contract [Member] Gross Fair Value [Member]	Dec. 31, 2012 Recurring [Member] Foreign Exchange Contract [Member] Gross Fair Value [Member]	Sep. 30, 2013 Recurring [Member] Foreign Exchange Contract [Member] Netting [Member]		Dec. 31, 2012 Recurring [Member] Foreign Exchange Contract [Member] Netting [Member]		Sep. 30, 2013 Recurring [Member] Foreign Exchange Contract [Member] Net Fair Value [Member]		Dec. 31, 2012 Recurring [Member] Foreign Exchange Contract [Member] Net Fair Value [Member]	Sep. 30, 2013 Recurring [Member] Interest Rate Swap [Member] Level 2 [Member]	Dec. 31, 2012 Recurring [Member] Interest Rate Swap [Member] Level 2 [Member]	Sep. 30, 2013 Recurring [Member] Interest Rate Swap [Member] Gross Fair Value [Member]	Dec. 31, 2012 Recurring [Member] Interest Rate Swap [Member] Gross Fair Value [Member]	Sep. 30, 2013 Recurring [Member] Interest Rate Swap [Member] Netting [Member]		Dec. 31, 2012 Recurring [Member] Interest Rate Swap [Member] Netting [Member]		Sep. 30, 2013 Recurring [Member] Interest Rate Swap [Member] Net Fair Value [Member]	Dec. 31, 2012 Recurring [Member] Interest Rate Swap [Member] Net Fair Value [Member]	Sep. 30, 2013 Recurring [Member] Cash Convertible Notes Hedge [Member] Level 2 [Member]	Sep. 30, 2013 Recurring [Member] Cash Convertible Notes Hedge [Member] Gross Fair Value [Member]	Sep. 30, 2013 Recurring [Member] Cash Convertible Notes Hedge [Member] Netting [Member]		Sep. 30, 2013 Recurring [Member] Cash Convertible Notes Hedge [Member] Net Fair Value [Member]		Sep. 30, 2013 Recurring [Member] Embedded Derivative Financial Instruments [Member] Level 2 [Member]	Sep. 30, 2013 Recurring [Member] Embedded Derivative Financial Instruments [Member] Level 3 [Member]	Sep. 30, 2013 Recurring [Member] Embedded Derivative Financial Instruments [Member] Gross Fair Value [Member]	Sep. 30, 2013 Recurring [Member] Embedded Derivative Financial Instruments [Member] Netting [Member]		Sep. 30, 2013 Recurring [Member] Embedded Derivative Financial Instruments [Member] Net Fair Value [Member]
Assets [Abstract]
Assets, Fair Value										$ 44,091,000	$ 158,000	$ 73,000	$ 0	$ 158,000	$ 73,000	$ (78,000)	[1]	$ (73,000)	[1]	$ 80,000	[1]	$ 0											$ 0	$ 44,091,000	$ 0	[1]	$ 44,091,000	[1]
Liabilities [Abstract]
Liabilities, Fair Value	707,000					0	0				115,000	255,000		115,000	255,000	(78,000)	[1]	(73,000)	[1]	37,000		182,000	707,000	2,963,000	707,000	2,963,000	0	[1]	0	[1]	707,000	2,963,000							0	44,091,000		0	[1]	44,091,000
Derivative Liability, Fair Value, Gross Liability																																									44,091,000
Fair Value, Assets Measured on Recurring Basis, Unobservable Input Reconciliation, Calculation [Roll Forward]
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value, Beginning Balance			0
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Issuances									(36,750,000)
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Purchases								36,750,000
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset Value, Ending Balance			0					44,091,000	(44,091,000)
Fair Value, Measurement with Unobservable Inputs Reconciliation, Recurring Basis, Asset, Period Increase (Decrease), Total								7,341,000	(7,341,000)
Cash and cash equivalents	2,815,000		1,759,000	2,571,000	864,000
Outstanding borrowings under the Fifth Amended Credit Agreement	142,900,000
Outstanding borrowings under the Fifth Amended Credit Agreement	143,300,000
Cash Convertible Notes, Fair Value	167,600,000
Cash Convertible Notes, Carrying Amount	114,700,000
Aggregate Principal of convertible notes		$ 150,000,000

[1] This column reflects the impact of netting derivative assets and liabilities by counterparty when a legally enforceable master netting agreement exists

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Subsequent Events (Details) (USD $)	0 Months Ended		0 Months Ended
	Oct. 03, 2013	Jul. 16, 2013	Oct. 03, 2013 Convertible Notes [Member]	Oct. 01, 2013 CareFirst Convertible Note [Member]
Subsequent Event [Line Items]
October 1, 2013	Oct. 01, 2013
CareFirst Warrant Shares Maximum			1,600,000
CareFirst Warrant Shares for one year period	400,000
Initial Conversion rate				$ 22.41
Aggregate Principal of convertible notes		$ 150,000,000		$ 20,000,000
Interest Rate for Notes		1.50%		4.75%
Warrants Strike Price		$ 25.95

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CONSOLIDATED BALANCE SHEETS (Unaudited) (Parenthetical) (USD $)	Sep. 30, 2013	Dec. 31, 2012
Stockholders' equity:
Preferred stock, par value (in dollars per share)	$ 0.001	$ 0.001
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, shares outstanding (in shares)	0	0
Common stock, par value (in dollars per share)	$ 0.001	$ 0.001
Common stock, shares authorized (in shares)	120,000,000	120,000,000
Common stock, shares outstanding (in shares)	35,024,421	33,924,464
Treasury stock (in shares)	2,254,953	2,254,953

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Fair Value Measurements

9 Months Ended

Sep. 30, 2013

Fair Value Measurements [Abstract]

Fair Value Measurements

(7)Fair Value Measurements

We account for certain assets and liabilities at fair value.  Fair value is defined as the price that would be received upon sale of an asset or paid upon transfer of a liability in an orderly transaction between market participants at the measurement date, assuming the transaction occurs in the principal or most advantageous market for that asset or liability.

Fair Value Hierarchy

The hierarchy below lists three levels of fair value based on the extent to which inputs used in measuring fair value are observable in the market. We categorize each of our fair value measurements in one of these three levels based on the lowest level input that is significant to the fair value measurement in its entirety. These levels are:

Level 1:  Quoted prices in active markets for identical assets or liabilities;

Level 2:  Quoted prices for similar instruments in active markets; quoted prices for identical or similar instruments in markets that are not active; and model-based valuation techniques in which all significant assumptions are observable in the market or can be corroborated by observable market data for substantially the full term of the assets or liabilities; and

Level 3:  Unobservable inputs that are supported by little or no market activity and typically reflect management's estimates of assumptions that market participants would use in pricing the asset or liability.

Assets and Liabilities Measured at Fair Value on a Recurring Basis

The following tables present our assets and liabilities measured at fair value on a recurring basis at September 30, 2013 and December 31, 2012:

September 30, 2013	Level 2		Level 3		Gross Fair Value		Netting (1)			Net Fair Value
Assets:
Foreign currency exchange contracts	$	158	$	—	$	158	$	(78	)	$	80
Cash Convertible Notes Hedges		—		44,091		44,091		—			44,091
Liabilities:
Foreign currency exchange contracts	$	115	$	—	$	115	$	(78	)	$	37
Interest rate swap agreements		707		—		707		—			707
Cash Conversion Derivative		—		44,091		44,091		—			44,091

December 31, 2012	Level 2		Gross Fair Value		Netting (1)			Net Fair Value
Assets:
Foreign currency exchange contracts	$	73	$	73	$	(73	)	$	—
Liabilities:
Foreign currency exchange contracts	$	255	$	255	$	(73	)	$	182
Interest rate swap agreements		2,963		2,963		—			2,963

⁽¹⁾ This column reflects the impact of netting derivative assets and liabilities by counterparty when a legally enforceable master netting agreement exists.

16

The fair values of forward foreign currency exchange contracts are valued using broker quotations of similar assets or liabilities in active markets.  The fair values of interest rate swap agreements are primarily determined based on the present value of future cash flows using internal models and third-party pricing services with observable inputs, including interest rates, yield curves and applicable credit spreads. The fair values of the Cash Convertible Notes Hedges and the Cash Conversion Derivative are measured using Level 3 inputs. These instruments are not actively traded and are valued using an option pricing model that uses observable and unobservable market data for inputs, such as expected time to maturity of the derivative instruments, the risk-free interest rate, the expected volatility of our common stock and other factors. The Cash Convertible Notes Hedges and the Cash Conversion Derivative were designed such that changes in their fair values would offset, with minimal impact to the consolidated statements of comprehensive income (loss). Therefore, the sensitivity of changes in the unobservable inputs to the option pricing model for such instruments is largely mitigated.

The following table presents our financial instruments measured at fair value on a recurring basis using unobservable inputs (Level 3):

	Balance at December 31, 2012		Purchases of Level 3 Instruments		Issuances of Level 3 Instruments			Gains/ (Losses) included in Earnings			Balance at September 30, 2013
Cash Convertible Notes Hedges	$	—	$	36,750	$	—		$	7,341		$	44,091
Cash Conversion Derivative		—		—		(36,750	)		(7,341	)		(44,091	)

The gains and losses included in earnings noted above represent the change in the fair value of these financial instruments and are recorded each period in the consolidated statements of comprehensive income (loss) in selling, general and administrative expenses.

Fair Value of Other Financial Instruments

In addition to foreign currency exchange contracts, interest rate swap agreements, the Cash Convertible Notes Hedges, and the Cash Conversion Derivative, the estimated fair values of which are disclosed above, the estimated fair value of each class of financial instruments at September 30, 2013 was as follows:

• Cash and cash equivalents – The carrying amount of $2.8 million approximates fair value because of the short maturity of those instruments (less than three months).

• Long-term debt – The estimated fair value of outstanding borrowings under the Fifth Amended Credit Agreement, which includes a revolving credit facility and a term loan facility (see Note 5), and the Cash Convertible Notes are determined based on the fair value hierarchy as discussed above.  The revolving credit facility and the term loan facility are not actively traded and therefore are classified as Level 2 valuations based on the market for similar instruments.  The estimated fair value is based on the average of the prices set by the issuing bank given current market conditions and is not necessarily indicative of the amount we could realize in a current market exchange. The estimated fair value and carrying amount of outstanding borrowings under the Fifth Amended Credit Agreement at September 30, 2013 are $142.9 million and $143.3 million, respectively. The Cash Convertible Notes are actively traded and therefore are classified as Level 1 valuations. The estimated fair value at September 30, 2013 was $167.6 million, which is based on the last quoted price of the Cash Convertible Notes on September 30, 2013, and the par value was $150.0 million. The carrying amount of the Cash Convertible Notes at September 30, 2013 was $114.7 million, which is net of the debt discount discussed in Note 5.

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) (Parenthetical) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
CONSOLIDATED STATEMENTS OF COMPREHENSIVE LOSS (Unaudited) [Abstract]
Cost of services, depreciation and amortization	$ 9,115	$ 9,158	$ 26,826	$ 26,689

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CONSOLIDATED BALANCE SHEETS (Unaudited) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2013	Dec. 31, 2012
Current assets:
Cash and cash equivalents	$ 2,815	$ 1,759
Accounts receivable, net	85,731	108,337
Prepaid expenses	13,283	9,727
Other current assets	6,648	7,227
Income taxes receivable	5,653	5,920
Deferred tax asset	8,169	8,839
Total current assets	122,299	141,809
Property and equipment:
Leasehold improvements	38,406	40,679
Computer equipment and related software	283,707	267,902
Furniture and office equipment	23,591	23,552
Capital projects in process	23,612	11,799
Property and equipment, gross	369,316	343,932
Less accumulated depreciation	(211,355)	(187,438)
Property and equipment, net	157,961	156,494
Other assets	69,546	21,042
Intangible assets, net	81,809	90,228
Goodwill, net	339,132	338,695
Total assets	770,747	748,268
Current liabilities:
Accounts payable	20,547	26,343
Accrued salaries and benefits	15,848	24,909
Accrued liabilities	36,095	39,234
Deferred revenue	5,197	5,643
Contract billings in excess of earned revenue	19,263	14,793
Current portion of long-term debt	13,737	11,801
Current portion of long-term liabilities	3,181	5,535
Total current liabilities	113,868	128,258
Long-term debt	246,926	278,534
Long-term deferred tax liability	35,461	36,053
Other long-term liabilities	67,287	26,602
Stockholders' equity:
Preferred stock $.001 par value, 5,000,000 shares authorized, none outstanding	0	0
Common stock $.001 par value, 120,000,000 shares authorized, 34,133,567 and 33,924,464 shares outstanding, respectively	35	34
Additional paid-in capital	282,184	251,357
Retained earnings	53,290	56,541
Treasury stock, at cost, 2,254,953 shares in treasury	(28,182)	(28,182)
Accumulated other comprehensive loss	(122)	(929)
Total stockholders' equity	307,205	278,821
Total liabilities and stockholders' equity	$ 770,747	$ 748,268

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Commitments and Contingencies (Details) (USD $) In Millions, unless otherwise specified	9 Months Ended
	Sep. 30, 2013
Anti Trust Lawsuit [Abstract]
Amount of treble damages sought under the Sherman Antitrust Act and injunctive relief	$ 15
Contractual Commitment [Abstract]
Minimum remaining contractual cash obligations	43.9
Total minimum payments required under outsourcing agreement over remaining term	148.3
Estimate of remaining payments pursuant to outsourcing agreement	$ 309.2

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Share-Based Compensation (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012	Sep. 30, 2013	Sep. 30, 2012
Share-Based Compensation [Abstract]
Share-based compensation costs	$ 1,749	$ 1,900	$ 5,207	$ 4,652
Shares [Roll Forward]
Outstanding, beginning of period (in shares)			4,689
Granted (in shares)			1,011
Exercised (in shares)			(1,062)
Forfeited (in shares)			(128)
Expired (in shares)			(62)
Outstanding, end of period (in shares)	4,448		4,448
Exercisable, end of period (in shares)	2,081		2,081
Weighted-Average Exercise Price [Roll Forward]
Outstanding, beginning of period (in dollars per share)			$ 15.65
Granted (in dollars per share)			$ 12.95
Exercised (in dollars per share)			$ 14.27
Forfeited (in dollars per share)			$ 10.94
Expired (in dollars per share)			$ 20.44
Outstanding, end of period (in dollars per share)	$ 15.43		$ 15.43
Exercisable, end of period (in dollars per share)	$ 20.26		$ 20.26
Weighted-Average Remaining Contractual Term (years) [Abstract]
Outstanding at September 30, 2013			6 years 5 months 8 days
Exercisable at September 30, 2013			4 years 0 months 22 days
Aggregate Intrinsic Value [Abstract]
Outstanding at September 30, 2013	24,602		24,602
Exercisable at September 30, 2013	$ 7,278		$ 7,278
Weighted average grant-date fair value of options per share (in dollars per share)	$ 9.37		$ 7.11
Restricted Stock and Restricted Stock Units (RSUs) [Member]
Shares [Roll Forward]
Nonvested, beginning of period (in shares)			1,013
Granted (in shares)			183
Vested (in shares)			(225)
Forfeited (in shares)			(55)
Nonvested, end of period (in shares)	916		916
Weighted-Average Grant Date Fair Value [Roll Forward]
Nonvested, beginning of period (in dollars per share)			$ 9.93
Granted (in dollars per share)			$ 13.05
Vested (in dollars per share)			$ 10.5
Forfeited (in dollars per share)			$ 10.11
Nonvested, end of period (in dollars per share)	$ 10.4		$ 10.4

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Derivative Investments and Hedging Activities

9 Months Ended

Sep. 30, 2013

Derivative Investments and Hedging Activities [Abstract]

Derivative Investments and Hedging Activities

(6)Derivative Investments and Hedging Activities

We use derivative instruments to manage risks related to interest rate swap agreements, foreign currencies, and the Cash Convertible Notes. We account for derivatives in accordance with FASB ASC Topic 815, Derivative and Hedging, which establishes accounting and reporting standards requiring that derivative instruments be recorded on the balance sheet as either an asset or liability measured at fair value. Additionally, changes in the derivative's fair value shall be recognized currently in earnings unless specific hedge accounting criteria are met. As permitted under our master netting arrangements, the fair value amounts of our interest rate swaps and foreign currency options and/ or forward contracts are presented on a net basis by counterparty in the consolidated balance sheets.

Derivative Instruments Designated as Hedging Instruments

Cash Flow Hedges

Derivative instruments that are designated and qualify as cash flow hedges are recorded at estimated fair value in the consolidated balance sheets, with the effective portion of the gains and losses being reported in accumulated other comprehensive income or loss ("accumulated OCI").  Cash flow hedges for all periods presented consist solely of interest rate swap agreements, which effectively modify our exposure to interest rate risk by converting a portion of our floating rate debt to fixed obligations, thus reducing the impact of interest rate changes on future interest expense. Under these agreements, we receive a variable rate of interest based on LIBOR (as defined in Note 5), and we pay a fixed rate of interest with interest rates ranging from 0.465% to 3.385% plus a spread (see Note 7).  We maintain interest rate swap agreements with current notional amounts of $235.0 million and termination dates ranging from November 2013 to December 2016.  Of this amount, $125.0 million was effective at September 30, 2013, $60.0 million will become effective in November 2013, and $50.0 million will become effective in 2015, as older interest rate swap agreements expire. Gains and losses on these interest rate swap agreements are reclassified to interest expense in the same period during which the hedged transaction affects earnings or the period in which all or a portion of the hedge becomes ineffective.  As of September 30, 2013, we expect to reclassify $0.6 million of net losses on interest rate swap agreements from accumulated OCI to interest expense within the next 12 months due to the scheduled payment of interest associated with our debt.

The following table shows the effect of our cash flow hedges on the consolidated balance sheets during the three and nine months ended September 30, 2013 and 2012:

(In $000s)	For the Three Months Ended				For the Nine Months Ended
Derivatives in Cash Flow Hedging Relationships	September 30, 2013		September 30, 2012		September 30, 2013			September 30, 2012
(Gain) loss related to effective portion of derivatives recognized in accumulated OCI, gross of tax effect	$	72	$	1,223	$	(624	)	$	2,001
Loss related to effective portion of derivatives reclassified from accumulated OCI to interest expense, gross of tax effect	$	452	$	790	$	1,632		$	2,579

Gains and losses representing either hedge ineffectiveness or hedge components excluded from the assessment of effectiveness are recognized in current earnings.  During the three and nine months ended September 30, 2013 and 2012, there were no gains or losses on cash flow hedges recognized in our consolidated statements of comprehensive income (loss) resulting from hedge ineffectiveness.

Derivative Instruments Not Designated as Hedging Instruments

Our Cash Conversion Derivative, Cash Convertible Notes Hedges, and foreign currency options and/ or forward contracts do not qualify for hedge accounting treatment under U.S. GAAP and are measured at fair value with gains and losses recognized immediately in the consolidated statements of comprehensive income (loss). These derivative instruments not designated as hedging instruments did not have a material impact on our consolidated statements of comprehensive income (loss) during the three and nine months ended September 30, 2013 and 2012.

The Cash Conversion Derivative is accounted for as a derivative liability and carried at fair value. In order to offset the risk associated with the Cash Conversion Derivative, we entered into Cash Convertible Notes Hedges which are cash-settled and are intended to reduce our exposure to potential cash payments that we would be required to make if holders elect to convert the Cash Convertible Notes at a time when our stock price exceeds the conversion price. The Cash Convertible Notes Hedges are accounted for as a derivative assetand carried at fair value.

The gains and losses resulting from a change in fair values of the Cash Conversion Derivative and the Cash Convertible Notes Hedges are reported in the consolidated statements of comprehensive income (loss) as follows:

	Three Months Ended			Nine Months Ended			Statements of Comprehensive Income
	September 30, 2013			September 30, 2013			(Loss) Classification
Cash Convertible Notes Hedges:
Net unrealized gain	$	7,341		$	7,341		Selling, general and administrative expenses
Cash Conversion Derivative:
Net unrealized loss	$	(7,341	)	$	(7,341	)	Selling, general and administrative expenses

We also enter into foreign currency options and/or forward contracts in order to minimize our earnings exposure to fluctuations in foreign currency exchange rates.  Our foreign currency exchange contracts require current period mark-to-market accounting, with any change in fair value being recorded each period in the consolidated statements of comprehensive income in selling, general and administrative expenses. At September 30, 2013, we had forward contracts with notional amounts of $16.7 million to exchange foreign currencies, primarily the Australian dollar and Euro, that were entered into in order to hedge forecasted foreign net income (loss) and intercompany debt. We routinely monitor our foreign currency exposures to maximize the overall effectiveness of our foreign currency hedge positions.  We do not execute transactions or hold derivative financial instruments for trading or other purposes.

The estimated gross fair values of derivative instruments at September 30, 2013 and December 31, 2012, excluding the impact of netting derivative assets and liabilities when a legally enforceable master netting agreement exists, were as follows:

	September 30, 2013						December 31, 2012
(In $000s)	Foreign currency exchange contracts		Interest rate swap agreements		Cash Convertible Notes Hedges and Cash Conversion Derivative		Foreign currency exchange contracts		Interest rate swap agreements
Assets:
Derivatives not designated as hedging instruments:
Other current assets	$	158	$	—	$	—	$	73	$	—
Other assets		—		—		44,091		—		—
Total assets	$	158	$	—	$	44,091	$	73	$	—
Liabilities:
Derivatives not designated as hedging instruments:
Accrued liabilities	$	115	$	—	$	—	$	255	$	—
Other long-term liabilities		—		—		44,091		—		—
Derivatives designated as hedging instruments:
Accrued liabilities		—		208		—		—		1,742
Other long-term liabilities		—		499		—		—		1,221
Total liabilities	$	115	$	707	$	44,091	$	255	$	2,963

See also Note 7.

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Earnings Per Share (Details) (USD $) In Thousands, except Per Share data, unless otherwise specified	3 Months Ended				9 Months Ended
	Sep. 30, 2013		Sep. 30, 2012		Sep. 30, 2013		Sep. 30, 2012
Numerator [Abstract]
Net loss - numerator for basic loss per share	$ 1,799		$ 5,028		$ (3,251)		$ 7,420
Denominator [Abstract]
Shares used for basic loss per share (in shares)	34,682		33,683		34,288		33,485
Effect of dilutive stock options and restricted stock units outstanding (in shares)	784	[1]	127	[1]	0	[1]	50	[1]
Shares used for diluted loss per share (in shares)	35,834	[1]	34,068		34,288	[1]	33,706	[1]
Loss per share [Abstract]
Basic (in dollars per share)	$ 0.05		$ 0.15		$ (0.09)		$ 0.22
Diluted (in dollars per share)	$ 0.05	[1]	$ 0.15	[1]	$ (0.09)	[1]	$ 0.22	[1]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Dilutive securities outstanding not included in the computation of loss per share because their effect is antidilutive (in shares)	1,682		4,339		3,343		5,146
Restricted Stock Units [Member]
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Dilutive securities outstanding not included in the computation of loss per share because their effect is antidilutive (in shares)	0		124		331		236
Restricted Stock Units [Member]
Denominator [Abstract]
Effect of dilutive stock options and restricted stock units outstanding (in shares)	368	[1]	258	[1]	0	[1]	171	[1]

[1] The assumed exercise of stock-based compensation awards for the nine months ended September 30, 2013 were not considered because the impact would be anti-dilutive.

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Earnings Per Share

9 Months Ended

Sep. 30, 2013

Earnings Per Share [Abstract]

Earnings Per Share

(9)Earnings Per Share

The following is a reconciliation of the numerator and denominator of basic and diluted earnings per share for the three and nine months ended September 30, 2013 and 2012:

(In 000s, except per share data)	Three Months Ended				Nine Months Ended
	September 30,		September 30,		September 30,			September 30,
	2013		2012		2013			2012
Numerator:
Net income (loss) - numerator for basic loss per share	$	1,799	$	5,028	$	(3,251	)	$	7,420
Denominator:
Shares used for basic earnings (loss) per share		34,682		33,683		34,288			33,485
Effect of dilutive securities outstanding:
Non-qualified stock options(1)		784		127		—			50
Restricted stock units(1)		368		258		—			171
Shares used for diluted earnings (loss) per share(1)	$	35,834	$	34,068	$	34,288		$	33,706
Earnings (loss) per share:
Basic	$	0.05	$	0.15	$	(0.09	)	$	0.22
Diluted(1)	$	0.05	$	0.15	$	(0.09	)	$	0.22
Dilutive securities outstanding not included in the computation of loss per share because their effect is antidilutive:
Non-qualified stock options		1,682		4,339		3,343			5,146
Restricted stock units		—		124		331			236

⁽¹⁾ The assumed exercise of stock-based compensation awards for the nine months ended September 30, 2013 was not considered because the impact would be anti-dilutive.

19

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Long-Term Debt

9 Months Ended

Sep. 30, 2013

Long-Term Debt [Abstract]

Long-Term Debt

(5)Long-Term Debt

1.50% Cash Convertible Senior Notes Due 2018

On July 16, 2013, we completed a private placement of $150.0 million aggregate principal amount of cash convertible senior notes due 2018 (the "Cash Convertible Notes"), which bear interest at a rate of 1.50 % per year, payable semiannually in arrears on January 1 and July 1 of each year, beginning on January 1, 2014. The Cash Convertible Notes will mature on July 1, 2018, unless earlier repurchased or converted into cash in accordance with their terms prior to such date. The Cash Convertible Notes are convertible into cash based on the conversion rate set forth below and are not convertible into our common stock or any other securities under any circumstances. The initial cash conversion rate is 51.38 shares of our common stock per $1,000 principal amount of Cash Convertible Notes (equivalent to an initial conversion price of approximately $19.46 per share of common stock). The Cash Convertible Notes are our senior unsecured obligations and rank senior in right of payment to any of our indebtedness that is expressly subordinated in right of payment to the Cash Convertible Notes. As a result of this transaction, we recognized deferred loan costs of approximately $3.9 million, which are being amortized over the term of the Cash Convertible Notes using the effective interest method.

The cash conversion feature of the Cash Convertible Notes (the "Cash Conversion Derivative") requires bifurcation from the Cash Convertible Notes in accordance with FASB ASC Topic 815, Derivatives and Hedging, and is recorded in other long-term liabilities as a derivative liability and carried at fair value. The fair value of the Cash Conversion Derivative at the time of issuance of the Cash Convertible Notes was approximately $36.8 million, which was recorded as a debt discount for purposes of accounting for the debt component of the Cash Convertible Notes. The debt discount willl be amortized over the term of the Cash Convertible Notes using the effective interest method. For the three and nine months ended September 30, 2013, we recorded $1.5 million of interest expense related to the amortization of the debt discount based upon an effective interest rate of 5.7%.

In connection with the issuance of the Cash Convertible Notes, we entered into privately negotiated convertible note hedge transactions (the "Cash Convertible Notes Hedges"), which are cash-settled and are intended to reduce our exposure to potential cash payments that we  would be required to make if holders elect to convert the Cash Convertible Notes at a time when our stock price exceeds the conversion price. The initial cost of the Cash Convertible Notes Hedges was approximately $36.8 million. The Cash Convertible Notes Hedges are recorded in other assets as a derivative asset under FASB ASC Topic 815 and are carried at fair value.  See Note 6 for additional information regarding the Cash Convertible Notes Hedges and the Cash Conversion Derivative and their fair values as of September 30, 2013.

11

In July 2013, we also sold separate privately negotiated warrants (the "Warrants") initially relating, in the aggregate, to a notional number of shares of our common stock underlying the Cash Convertible Notes Hedges. The Warrants have an initial strike price of $25.95 per share, which effectively increases the conversion price of the Cash Convertible Notes to a 60% premium to our stock price on July 1, 2013. The Warrants will be net share settled by issuing a number of shares of our common stock per Warrant corresponding to the excess of the market price per share of our common stock (as measured on each warrant exercise date under the terms of the Warrants) over the applicable strike price of the Warrants. The Warrants meet the definition of derivatives under the guidance in ASC Topic 815; however, because these instruments have been determined to be indexed to our own stock and meet the criteria for equity classification under ASC Topic 815-40, the Warrants have been accounted for as an adjustment to our additional paid-in-capital.

If the market value per share of our common stock exceeds the strike price of the warrants, the warrants will have a dilutive effect on net income per share, and the "treasury stock" method will be used in calculating the dilutive effect on earnings per share.

Credit Facility

On June 8, 2012, we entered into the Fifth Amended and Restated Revolving Credit and Term Loan Agreement (the "Fifth Amended Credit Agreement"). The Fifth Amended Credit Agreement provides us with a $200.0 million revolving credit facility that expires on June 8, 2017 and includes a swingline sub facility of $20.0 million and a $75.0 million sub facility for letters of credit.  The Fifth Amended Credit Agreement also provides a $200.0 million term loan facility that matures on June 8, 2017, $140.0 million of which remained outstanding on September 30, 2013, and an uncommitted incremental accordion facility of $200.0 million.

Borrowings under the Fifth Amended Credit Agreement generally bear interest at variable rates based on a margin or spread in excess of either (1) the one-month, two-month, three-month or six-month rate (or with the approval of affected lenders, nine-month or twelve-month rate) for Eurodollar deposits ("LIBOR") or (2) the greatest of (a) the SunTrust Bank prime lending rate, (b) the federal funds rate plus 0.50%, and (c) one-month LIBOR plus 1.00% (the "Base Rate"), as selected by the Company.  The LIBOR margin varies between 1.75% and 3.00%, and the Base Rate margin varies between 0.75% and 2.00%, depending on our leverage ratio.  The Fifth Amended Credit Agreement also provides for an annual fee ranging between 0.30% and 0.50% of the unused commitments under the revolving credit facility.  Extensions of credit under the Fifth Amended Credit Agreement are secured by guarantees from all of the Company's active domestic subsidiaries and by security interests in substantially all of the Company's and such subsidiaries' assets.

On February 5, 2013, we entered into an amendment to the Fifth Amended Credit Agreement, which included, among other things, a temporary increase in the LIBOR and Base Rate margins of 0.25%.  The increased margins are effective through December 31, 2013 and apply only in the event that our total funded debt to EBITDA ratio is greater than or equal to 3.50 to 1.00.  On July 1, 2013, we entered into an additional amendment to the Fifth Amended Credit Agreement, which provided for, among other things, the amendment of certain negative covenants to permit the issuance of and payments related to the Cash Convertible Notes described above as well as increases in the maximum required levels of total funded debt to EBITDA beginning with the quarter ended June 30, 2013.  As of September 30, 2013, availability under the revolving credit facility totaled $57.5 million as calculated under the most restrictive covenant.

We are required to repay outstanding revolving loans under the revolving credit facility in full on June 8, 2017. We are required to repay term loans in quarterly principal installments aggregating (1) 1.250% of the original aggregate principal amount of the term loans during each of the eight quarters beginning with the quarter ended September 30, 2012, (2) 1.875% of the original aggregate principal amount of the term loans during each of the next four quarters beginning with the quarter ending September 30, 2014, and (3) 2.500% of the original aggregate principal amount of the term loans during each of the remaining quarters prior to maturity on June 8, 2017, at which time the entire unpaid principal balance of the term loans is due and payable.

The Fifth Amended Credit Agreement contains financial covenants that require us to maintain specified ratios or levels of (1) total funded debt to EBITDA and (2) fixed charge coverage.  As of September 30, 2013, we were in compliance with all of the financial covenant requirements of the Fifth Amended Credit Agreement.

The Fifth Amended Credit Agreement contains various other affirmative and negative covenants that are typical for financings of this type.  Among other things, the Fifth Amended Credit Agreement limits repurchases of our common stock and the amount of dividends that we can pay to holders of our common stock.

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CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) (USD $)	9 Months Ended
	Sep. 30, 2013	Sep. 30, 2012
Cash flows from operating activities:
Net loss	$ (3,251,000)	$ 7,420,000
Adjustments to reconcile net loss to net cash flows provided by (used in) operating activities, net of business acquisitions:
Depreciation and amortization	39,499,000	38,233,000
Amortization and write-off of deferred loan costs	1,096,000	2,077,000
Amortization of debt discount	1,497,000	0
Share-based employee compensation expense	5,207,000	4,652,000
Deferred income taxes	45,000	(1,517,000)
Excess tax benefits from share-based payment arrangements	(572,000)	(477,000)
Decrease (increase) in accounts receivable, net	23,185,000	(17,081,000)
(Increase) decrease in other current assets	138,000	779,000
Increase (decrease) in accounts payable	(4,363,000)	(6,029,000)
Decrease in accrued salaries and benefits	(9,777,000)	(14,454,000)
Increase in other current liabilities	(398,000)	12,912,000
Other	(941,000)	(3,124,000)
Net cash flows provided by (used in) operating activities	51,365,000	23,391,000
Cash flows from investing activities:
Acquisition of property and equipment	(32,833,000)	(40,735,000)
Business acquisitions, net of cash acquired	(830,000)	(4,693,000)
Other	(5,754,000)	(6,075,000)
Net cash flows used in investing activities	(39,417,000)	(51,503,000)
Cash flows from financing activities:
Proceeds from issuance of long-term debt	314,800,000	653,874,000
Payments of long-term debt	(461,380,000)	(631,315,000)
Deferred loan costs	(5,210,000)	(2,547,000)
Excess tax benefits from share-based payment arrangements	572,000	477,000
Exercise of stock options	12,562,000	2,835,000
Change in outstanding checks and other	104,000	6,471,000
Proceeds From Cash Convertible Senior Notes	150,000,000	0
Proceeds from Sale of Warrants	15,150,000	0
Payments for convertible note hedge transactions	(36,750,000)	0
Effect of exchange rate changes on cash	(740,000)	24,000
Net increase in cash and cash equivalents	1,056,000	1,707,000
Net cash flows (used in) provided by financing activities	(10,152,000)	29,795,000
Cash and cash equivalents, beginning of period	1,759,000	864,000
Cash and cash equivalents, end of period	$ 2,815,000	$ 2,571,000

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Share-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2013

Share-Based Compensation [Abstract]

Summary of stock option activity

A summary of our stock options as of September 30, 2013 and changes during the nine months then ended is presented below:

							Weighted-
							Average
				Weighted-			Remaining	Aggregate
	Shares			Average			Contractual	Intrinsic
Options		(000s)		Exercise Price			Term (years)	Value ($000s)
Outstanding at January 1, 2013		4,689			$	15.65
Granted		1,011				12.95
Exercised		(1,062	)			14.27
Forfeited		(128	)			10.94
Expired		(62	)			20.44
Outstanding at September 30, 2013		4,448				15.43	6.44	$24,602
Exercisable at September 30, 2013		2,081			$	20.26	4.06	$7,278

Summary of restricted stock and restricted stock units ("nonvested shares")

The following table shows a summary of our restricted stock and restricted stock units ("nonvested shares") as of September 30, 2013, as well as activity during the nine months then ended:

				Weighted-
				Average
	Shares			Grant Date
Nonvested Shares		(000s)		Fair Value
Nonvested at January 1, 2013		1,013			$	9.93
Granted		183				13.05
Vested		(225	)			10.50
Forfeited		(55	)			10.11
Nonvested at September 30, 2013		916			$	10.40

10

XML

Commitments and Contingencies

9 Months Ended

Sep. 30, 2013

Commitments and Contingencies [Abstract]

Commitments and Contingencies

17

(8)Commitments and Contingencies

Contract Dispute

We currently are involved in a contractual dispute with Blue Cross Blue Shield of Minnesota regarding fees paid to us as part of a former contractual relationship.  On January 25, 2010, Blue Cross Blue Shield of Minnesota issued notice of arbitration with the American Arbitration Association in Minneapolis in accordance with the terms of the contract alleging violations of certain contract provisions and seeking recoupment of an unspecified amount of payments made to us under the contract. We believe we performed our services in compliance with the terms of our agreement and that the assertions made in the arbitration notice are without merit.  On August 3, 2011, we asserted numerous counterclaims against Blue Cross Blue Shield of Minnesota. The arbitration hearing concluded on October 23, 2013, and the parties are waiting on the arbitrator's award. We are not able to reasonably estimate a range of potential losses, if any, related to this dispute.

Performance Award Lawsuit

On September 4, 2012, Milton Pfeiffer ("Plaintiff"), claiming to be a stockholder of the Company, filed a putative derivative action against the Company and the Board of Directors (the "Board") in Delaware Chancery Court alleging that the Compensation Committee of the Board and the Board breached their fiduciary duties and violated the Company's 2007 Stock Incentive Plan (the "Plan") by granting Ben R. Leedle, Jr., Chief Executive Officer and President of the Company, discretionary performance awards under the Plan in the form of options to purchase an aggregate of 500,000 shares of the Company's common stock, which consisted of a performance award in November 2011 granting Mr. Leedle the right to purchase 365,000 shares and a performance award in February 2012 granting Mr. Leedle the right to purchase 135,000 shares (the "Performance Awards").  Plaintiff alleges that the Performance Awards exceeded what is authorized by the Plan and that the Company's 2012 proxy statement, in which the Performance Awards are disclosed, is false and misleading.  Plaintiff also alleges that Mr. Leedle breached his fiduciary duties and was unjustly enriched by receiving the Performance Awards.  Plaintiff is seeking, among other things, the rescission or disgorgement of all alleged "excess" awards granted to Mr. Leedle under the Performance Awards, to recover any incidental damages to the Company, and an award of attorneys' fees and expenses.  On November 2, 2012, the Company and the Board filed a Motion to Dismiss because Plaintiff failed to make a demand upon the Board as required by Delaware law.

Outlook

We are also subject to other contractual disputes, claims and legal proceedings that arise from time to time in the ordinary course of our business.  While we are unable to estimate a range of potential losses, we do not believe that any of the legal proceedings pending against us as of the date of this report will have a material adverse effect on our liquidity or financial condition.  As these matters are subject to inherent uncertainties, our view of these matters may change in the future.

18

Contractual Commitments

We entered into a 25-year strategic relationship agreement with Gallup in January 2008 and a global joint venture agreement with Gallup in October 2012 that requires us to make payments over a 5-year period beginning January 2013.  We have minimum remaining contractual cash obligations of $43.9 million related to these agreements.

In May 2011, we entered into a ten-year applications and technology services outsourcing agreement with HP Enterprise Services, LLC that contains minimum fee requirements.  Total payments over the remaining term, including an estimate for future contractual cost of living adjustments, must equal or exceed a minimum level of approximately $148.3 million; however, based on initial required service and equipment level assumptions, we estimate that the remaining payments will be approximately $309.2 million.  The agreement allows us to terminate all or a portion of the services after the first two years provided we pay certain termination fees, which could be material to the Company.

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Accumulated OCI (Tables)

9 Months Ended

Sep. 30, 2013

Accumulated OCI [Abstract]

Schedule of changes in accumulated other comprehensive income (AOCI)

The following tables summarize the changes in accumulated OCI, net of tax, for the nine months ended September 30, 2013 and 2012:

	Net Change in Fair Value of Interest Rate Swaps			Foreign Currency Translation Adjustments			Total
Accumulated OCI, net of tax, as of January 1, 2013	$	(1,790	)	$	861		$	(929	)
Other comprehensive income (loss) before reclassifications, net of tax		377			(557	)		(180	)
Amounts reclassified from accumulated OCI, net of tax		987			—			987
Net increase (decrease) in other comprehensive income (loss), net of tax		1,364			(557	)		807
Accumulated OCI, net of tax, as of September 30, 2013	$	(426	)	$	304		$	(122	)

	Net Change in Fair Value of Interest Rate Swaps			Foreign Currency Translation Adjustments			Total
Accumulated OCI, net of tax, as of January 1, 2012	$	(2,570	)	$	781		$	(1,789	)
Other comprehensive loss before reclassifications, net of tax		(1,246	)		(92	)		(1,338	)
Amounts reclassified from accumulated OCI, net of tax		1,606			—			1,606
Net increase (decrease) in other comprehensive income (loss), net of tax		360			(92	)		268
Accumulated OCI, net of tax, as of September 30, 2012	$	(2,210	)	$	689		$	(1,521	)

The following table provides details about reclassifications out of accumulated OCI for the nine months ended September 30, 2013:

Reclassification out of Accumulated Other Comprehensive Income

	Nine Months Ended September 30,						Statement of Comprehensive Income
	2013			2012			(Loss) Classification
Interest rate swaps	$	1,632		$	2,579		Interest expense
		(645	)		(973	)	Income tax benefit
	$	987		$	1,606		Net of tax

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Derivative Investments and Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2013

Derivative Investments and Hedging Activities [Abstract]

Fair values of derivative instruments

The estimated gross fair values of derivative instruments at September 30, 2013 and December 31, 2012, excluding the impact of netting derivative assets and liabilities when a legally enforceable master netting agreement exists, were as follows:

	September 30, 2013						December 31, 2012
(In $000s)	Foreign currency exchange contracts		Interest rate swap agreements		Cash Convertible Notes Hedges and Cash Conversion Derivative		Foreign currency exchange contracts		Interest rate swap agreements
Assets:
Derivatives not designated as hedging instruments:
Other current assets	$	158	$	—	$	—	$	73	$	—
Other assets		—		—		44,091		—		—
Total assets	$	158	$	—	$	44,091	$	73	$	—
Liabilities:
Derivatives not designated as hedging instruments:
Accrued liabilities	$	115	$	—	$	—	$	255	$	—
Other long-term liabilities		—		—		44,091		—		—
Derivatives designated as hedging instruments:
Accrued liabilities		—		208		—		—		1,742
Other long-term liabilities		—		499		—		—		1,221
Total liabilities	$	115	$	707	$	44,091	$	255	$	2,963

Effect of cash flow hedges on consolidated balance sheets

The following table shows the effect of our cash flow hedges on the consolidated balance sheets during the three and nine months ended September 30, 2013 and 2012:

(In $000s)	For the Three Months Ended				For the Nine Months Ended
Derivatives in Cash Flow Hedging Relationships	September 30, 2013		September 30, 2012		September 30, 2013			September 30, 2012
(Gain) loss related to effective portion of derivatives recognized in accumulated OCI, gross of tax effect	$	72	$	1,223	$	(624	)	$	2,001
Loss related to effective portion of derivatives reclassified from accumulated OCI to interest expense, gross of tax effect	$	452	$	790	$	1,632		$	2,579

Gains and Losses on Cash Convertible Notes Hedges and Cash Conversion Derivative

The gains and losses resulting from a change in fair values of the Cash Conversion Derivative and the Cash Convertible Notes Hedges are reported in the consolidated statements of comprehensive income (loss) as follows:

	Three Months Ended			Nine Months Ended			Statements of Comprehensive Income
	September 30, 2013			September 30, 2013			(Loss) Classification
Cash Convertible Notes Hedges:
Net unrealized gain	$	7,341		$	7,341		Selling, general and administrative expenses
Cash Conversion Derivative:
Net unrealized loss	$	(7,341	)	$	(7,341	)	Selling, general and administrative expenses

XML

Document and Entity Information	9 Months Ended
	Sep. 30, 2013	Oct. 31, 2013
Document and Entity Information [Abstract]
Entity Registrant Name	Healthways, Inc.
Entity Central Index Key	0000704415
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	No
Entity Voluntary Filers	No
Entity Current Reporting Status	No
Entity Filer Category	Accelerated Filer
Entity Common Stock, Shares Outstanding		35,060,079
Document Fiscal Year Focus	2013
Document Fiscal Period Focus	Q3
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2013

XML

Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2013

Fair Value Measurements [Abstract]

Assets and liabilities measured at fair value on a recurring basis

The following tables present our assets and liabilities measured at fair value on a recurring basis at September 30, 2013 and December 31, 2012:

September 30, 2013	Level 2		Level 3		Gross Fair Value		Netting (1)			Net Fair Value
Assets:
Foreign currency exchange contracts	$	158	$	—	$	158	$	(78	)	$	80
Cash Convertible Notes Hedges		—		44,091		44,091		—			44,091
Liabilities:
Foreign currency exchange contracts	$	115	$	—	$	115	$	(78	)	$	37
Interest rate swap agreements		707		—		707		—			707
Cash Conversion Derivative		—		44,091		44,091		—			44,091

December 31, 2012	Level 2		Gross Fair Value		Netting (1)			Net Fair Value
Assets:
Foreign currency exchange contracts	$	73	$	73	$	(73	)	$	—
Liabilities:
Foreign currency exchange contracts	$	255	$	255	$	(73	)	$	182
Interest rate swap agreements		2,963		2,963		—			2,963

⁽¹⁾ This column reflects the impact of netting derivative assets and liabilities by counterparty when a legally enforceable master netting agreement exists.

16

Level 3 Financial Instruments [Table Text Block]

The following table presents our financial instruments measured at fair value on a recurring basis using unobservable inputs (Level 3):

	Balance at December 31, 2012		Purchases of Level 3 Instruments		Issuances of Level 3 Instruments			Gains/ (Losses) included in Earnings			Balance at September 30, 2013
Cash Convertible Notes Hedges	$	—	$	36,750	$	—		$	7,341		$	44,091
Cash Conversion Derivative		—		—		(36,750	)		(7,341	)		(44,091	)