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Goodwill
9 Months Ended
Mar. 31, 2013
Goodwill and Intangible Assets Disclosure [Abstract]  
GOODWILL
GOODWILL

During the nine months ended March 31, 2013, goodwill increased by $4.1 million, with approximately $0.8 million and $3.3 million of this increase related to acute care services segment acquisitions and health plan services segment acquisitions, respectively.

The Company has a significant amount of goodwill, which is tested for impairment at least annually but also as impairment indicators become known. The Company's fiscal 2012 annual impairment analysis did not result in any impairment of its goodwill. However, the Company's Arizona hospitals experienced market challenges that negatively impacted their results of operations and cash flows during the fiscal year ended June 30, 2012 and such challenges have continued through the nine months ended March 31, 2013. These challenges included hospital reimbursement cuts, reductions to covered lives under the Arizona Health Care Cost Containment System (“AHCCCS”) program and local economic conditions that adversely impacted elective surgery volumes for these hospitals. Based upon the implementation of certain cost reduction and revenue expansion initiatives, expected improvements in the local economic and state financial conditions and the demographic composition of this market, the Company believes the future operating results and cash flows of these hospitals will improve. However, the Company will continue to monitor the operating results of these hospitals and other market environmental factors to determine if further impairment considerations are necessary with respect to the $100.7 million of goodwill for the Arizona hospitals.

The Company has $79.4 million of goodwill related to the Phoenix Health Plan (“PHP”), which is included in the Company's health plan services segment. PHP's current contract with AHCCCS, Arizona's state Medicaid program, expires September 30, 2013. On March 22, 2013, the Company was notified that PHP was not awarded an acute care program contract with AHCCCS for the three-year period commencing October 1, 2013. However, on April 1, 2013, PHP agreed with AHCCCS on the general terms of a capped contract for Maricopa County for the three-year period commencing October 1, 2013. Approximately 98,000 of PHP's members resided in Maricopa County as of March 31, 2013. Pursuant to the terms of PHP's agreement with AHCCCS, PHP will not file a protest of any of the AHCCCS decisions. In addition, PHP agreed that enrollment will be capped effective October 1, 2013 and the enrollment cap will not be lifted at any time during the total contracting period, except if AHCCCS deems additional plan capacity necessary based upon growth in covered lives or other reasons as outlined in a letter provided by AHCCCS that clarifies certain terms of the capped contract. AHCCCS has also indicated that it intends to hold an open enrollment for PHP members in Maricopa County sometime in calendar year 2014. During the quarter ended March 31, 2013, the Company assessed whether goodwill had been impaired for the health plan reporting unit based upon the significant differences between the terms of its current contract with AHCCCS and the terms of the capped contract beginning October 1, 2013. Based upon the Company's current projections of future cash flows (Level 3 inputs) for the health plan reporting unit, management concluded that goodwill associated with its health plan reporting unit is not impaired. However, the Company will continue to monitor the projections of future cash flows in the health plan reporting unit as impacted by this contractual change. The Company's calculations used to determine the fair value of the health plan reporting unit require significant judgment, assumptions, and estimation, the most significant of which is projected membership levels, and may be revised in the future as additional information becomes available. If these estimates and assumptions prove to be materially inaccurate, an impairment charge could be required in a future period.