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Basis of Presentation
9 Months Ended
Sep. 30, 2021
Organization, Consolidation and Presentation of Financial Statements [Abstract]  
Basis of Presentation Basis of Presentation
Encompass Health Corporation, incorporated in Delaware in 1984, including its subsidiaries, is a leading provider of post-acute healthcare services, offering both facility-based and home-based patient services in 42 states and Puerto Rico through its network of inpatient rehabilitation hospitals, home health agencies, and hospice agencies. We manage our operations and disclose financial information using two reportable segments: (1) inpatient rehabilitation and (2) home health and hospice. See also Note 11, Segment Reporting.
The accompanying unaudited condensed consolidated financial statements of Encompass Health Corporation and Subsidiaries should be read in conjunction with the consolidated financial statements and accompanying notes contained in Encompass Health’s Annual Report on Form 10-K filed with the United States Securities and Exchange Commission on February 26, 2021 (the “2020 Form 10‑K”). The unaudited condensed consolidated financial statements have been prepared in accordance with the rules and regulations of the SEC applicable to interim financial information. Certain information and note disclosures included in financial statements prepared in accordance with generally accepted accounting principles in the United States of America have been omitted in these interim statements, as allowed by such SEC rules and regulations. The condensed consolidated balance sheet as of December 31, 2020 has been derived from audited financial statements, but it does not include all disclosures required by GAAP. However, we believe the disclosures are adequate to make the information presented not misleading.
The unaudited results of operations for the interim periods shown in these financial statements are not necessarily indicative of operating results for the entire year. In our opinion, the accompanying condensed consolidated financial statements recognize all adjustments of a normal recurring nature considered necessary to fairly state the financial position, results of operations, and cash flows for each interim period presented. Certain prior-year amounts have been reclassified to conform to the current year presentation.
Net Operating Revenues
Our Net operating revenues disaggregated by payor source and segment are as follows (in millions):
Inpatient RehabilitationHome Health and HospiceConsolidated
Three Months Ended September 30,Three Months Ended September 30,Three Months Ended September 30,
202120202021202020212020
Medicare$649.4 $592.4 $224.2 $228.6 $873.6 $821.0 
Medicare Advantage
152.2 141.1 28.6 29.6 180.8 170.7 
Managed care
123.1 95.9 17.0 12.4 140.1 108.3 
Medicaid41.9 38.4 3.7 3.3 45.6 41.7 
Other third-party payors10.6 10.8 — — 10.6 10.8 
Workers’ compensation5.7 4.6 0.1 0.3 5.8 4.9 
Patients4.9 5.1 0.1 0.2 5.0 5.3 
Other income23.1 11.1 0.2 0.1 23.3 11.2 
Total$1,010.9 $899.4 $273.9 $274.5 $1,284.8 $1,173.9 
Inpatient RehabilitationHome Health and HospiceConsolidated
Nine Months Ended September 30,Nine Months Ended September 30,Nine Months Ended September 30,
202120202021202020212020
Medicare$1,914.3 $1,738.1 $683.1 $658.8 $2,597.4 $2,396.9 
Medicare Advantage464.1 418.2 86.5 88.3 550.6 506.5 
Managed care350.3 274.3 47.9 35.9 398.2 310.2 
Medicaid122.7 103.7 11.6 11.7 134.3 115.4 
Other third-party payors33.7 31.1 — — 33.7 31.1 
Workers’ compensation16.7 15.7 0.2 0.8 16.9 16.5 
Patients14.2 14.8 0.6 0.9 14.8 15.7 
Other income56.4 37.2 0.6 0.5 57.0 37.7 
Total$2,972.4 $2,633.1 $830.5 $796.9 $3,802.9 $3,430.0 
    
See Note 1, Summary of Significant Accounting Policies, to the consolidated financial statements accompanying the 2020 Form 10-K for our policy related to Net operating revenues.
Recently Adopted Accounting Pronouncements
In December 2019, the FASB issued ASU 2019-12, “Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes.” The standard removes certain exceptions to the general principles of ASC 740 and simplifies other areas such as accounting for outside basis differences of equity method investments. Either prospective or retrospective transition of this standard is dependent upon the specific amendments. The new guidance was effective for us beginning January 1, 2021. The adoption of this guidance did not have a material impact to our condensed consolidated financial statements.
We do not believe any other recently issued, but not yet effective, accounting standards will have a material effect on our condensed consolidated financial position, results of operations, or cash flows.