Accounts Receivable, Net

9 Months Ended

Sep. 30, 2021

Accounts Receivable, after Allowance for Credit Loss [Abstract]

Accounts Receivable, Net

Accounts Receivable, NetAccounts receivable, net represents outstanding amounts we expect to collect from the transfer of our products and services. Principally, these amounts are comprised of receivables from Medicare, Medicaid, and commercial insurance plans. Our accounts receivable represent amounts outstanding from our gross charges, net of contractual discounts, sales returns, and other implicit price concessions including estimates for payor disallowances and patient non-payments.

We are exposed to credit losses primarily through our accounts receivable. These receivables are short in nature because their due date varies between due upon receipt of invoice and 90 days. We assess our receivables, divide them into similar risk pools, and monitor our ongoing credit exposure through active review of our aging buckets. Our activities include timely account reconciliations, dispute resolution, and payment confirmations. We also employ collection agencies and legal counsel to pursue recovery of defaulted receivables.

Our expected loss methodology is developed using historical liquidation rates, current and future economic and market conditions, and a review of the current status of our patients and customers’ trade accounts receivable balances. We also grouped our receivables into similar risk pools to better measure the risks for each pool. After evaluating the risk for each pool, we determined that additional credit loss risk was immaterial for the Patient Care segment. For the Products & Services segment, an allowance for doubtful accounts is recorded, which is deducted from gross accounts receivable to arrive at “Accounts receivable, net.” As of September 30, 2021, we have considered the current and future economic and market conditions resulting in a decrease to the allowance for doubtful accounts by approximately $0.8 million since December 31, 2020.

Accounts receivable, net as of September 30, 2021 and December 31, 2020 is comprised of the following:

	As of September 30, 2021						As of December 31, 2020
(in thousands)	Patient Care		Products & Services		Consolidated		Patient Care		Products & Services		Consolidated
Gross charges before estimates for implicit price concessions	$	161,888	$	21,336	$	183,224	$	156,504	$	21,300	$	177,804
Less estimates for implicit price concessions:
Payor disallowances	(37,211)		—		(37,211)		(39,343)		—		(39,343)
Patient non-payments	(7,890)		—		(7,890)		(7,042)		—		(7,042)
Accounts receivable, gross	116,787		21,336		138,123		110,119		21,300		131,419
Allowance for doubtful accounts	—		(2,011)		(2,011)		—		(2,823)		(2,823)
Accounts receivable, net	$	116,787	$	19,325	$	136,112	$	110,119	$	18,477	$	128,596