Revenue from Contracts with Customers

9 Months Ended

Sep. 30, 2018

Revenue from Contract with Customer [Abstract]

Net operating revenues consist primarily of patient service revenues generated from services provided to patients and other revenues for services provided to healthcare institutions under contractual arrangements. The following tables disaggregate the Company’s net operating revenues by operating segment for the three and nine months ended September 30, 2017 and 2018:



	Three Months Ended September 30, 2017
	Critical Illness Recovery Hospital⁽¹⁾		Rehabilitation Hospital⁽¹⁾		Outpatient Rehabilitation		Concentra
	(in thousands)
Patient service revenues:
Medicare	$	217,116	$	64,227	$	36,821	$	472
Non-Medicare	195,872		53,054		179,171		253,437
Total patient services revenues	412,988		117,281		215,992		253,909
Other revenues	3,946		40,218		30,652		1,972
Total net operating revenues	$	416,934	$	157,499	$	246,644	$	255,881



	Three Months Ended September 30, 2018
	Critical Illness Recovery Hospital⁽¹⁾		Rehabilitation Hospital⁽¹⁾		Outpatient Rehabilitation		Concentra
	(in thousands)
Patient service revenues:
Medicare	$	210,101	$	71,564	$	40,563	$	455
Non-Medicare	206,629		64,322		185,787		401,537
Total patient services revenues	416,730		135,886		226,350		401,992
Other revenues	3,378		40,999		39,577		2,489
Total net operating revenues	$	420,108	$	176,885	$	265,927	$	404,481



	Nine Months Ended September 30, 2017
	Critical Illness Recovery Hospital⁽¹⁾		Rehabilitation Hospital⁽¹⁾		Outpatient Rehabilitation		Concentra
	(in thousands)
Patient service revenues:
Medicare	$	682,286	$	183,820	$	111,638	$	1,588
Non-Medicare	610,372		151,731		551,983		755,345
Total patient services revenues	1,292,658		335,551		663,621		756,933
Other revenues	8,593		118,151		88,378		6,424
Total net operating revenues	$	1,301,251	$	453,702	$	751,999	$	763,357



	Nine Months Ended September 30, 2018
	Critical Illness Recovery Hospital⁽¹⁾		Rehabilitation Hospital⁽¹⁾		Outpatient Rehabilitation		Concentra
	(in thousands)
Patient service revenues:
Medicare	$	676,950	$	217,459	$	120,228	$	1,600
Non-Medicare	639,718		188,611		569,298		1,164,711
Total patient services revenues	1,316,668		406,070		689,526		1,166,311
Other revenues	10,568		119,358		100,965		7,109
Total net operating revenues	$	1,327,236	$	525,428	$	790,491	$	1,173,420

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(1)	The critical illness recovery hospital segment was previously referred to as the long term acute care segment. The rehabilitation hospital segment was previously referred to as the inpatient rehabilitation segment.

Patient Services Revenue

Patient services revenue is recognized when obligations under the terms of the contract are satisfied; generally, this occurs as the Company provides healthcare services, as each service provided is distinct and future services rendered are not dependent on previously rendered services. Patient service revenues are recognized at an amount equal to the consideration the Company expects to receive in exchange for providing healthcare services to its patients. These amounts are due from patients; third-party payors, including health insurers and government programs; and other payors.

Medicare: Medicare is a federal program that provides medical insurance benefits to persons age 65 and over, some disabled persons, and persons with end stage renal disease. Amounts we receive for treatment of patients covered by the Medicare program are generally less than the standard billing rates; accordingly, the Company recognizes revenue based on amounts which are reimbursable by Medicare under prospective payment systems and provisions of cost-reimbursement and other payment methods. The amount reimbursed is derived based on the type of services provided.

Non-Medicare: The Company is reimbursed for healthcare services provided from various other payor sources which include insurance companies, workers’ compensation programs, health maintenance organizations, preferred provider organizations, other managed care companies and employers, as well as patients. The Company is reimbursed by these payors using a variety of payment methodologies and the amounts the Company receives are generally less than the standard billing rates.

In the critical illness recovery hospital and rehabilitation hospital segments, the Company recognizes revenue based on known contractual provisions associated with the specific payor or, where the Company has a relatively homogeneous patient population, the Company will monitor individual payors’ historical reimbursement rates to derive a per diem rate which is used to determine the amount of revenue to be recognized for services rendered.

In the outpatient rehabilitation and Concentra segments, the Company recognizes revenue from payors based on known contractual provisions, negotiated amounts, or usual and customary amounts associated with the specific payor. The Company performs provision testing, using internally developed systems, whereby the Company monitors a payors’ historical reimbursement rates and compares them against the associated gross charges for the service provided. The percentage of historical reimbursed claims to gross charges is utilized to determine the amount of revenue to be recognized for services rendered.

The Company is subject to potential retrospective adjustments to net operating revenues in future periods for matters related to claims processing and other price concessions. These adjustments, which are estimated based on an analysis of historical experience by payor source, are accounted for as a constraint to the amount of revenue recognized by the Company in the period services are rendered.

Other Revenues

The Company recognizes revenue for services provided to healthcare institutions, principally management and employee leasing services, under contractual arrangements with related parties affiliated through the Company’s equity investments and other third-party healthcare institutions. Revenue is recognized when obligations under the terms of the contract are satisfied. Revenues from these services are measured as the amount of consideration the Company expects to receive for those services.