Variable Interest Entities

3 Months Ended

Mar. 31, 2022

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Variable Interest Entities

Variable Interest Entities

Certain states prohibit the “corporate practice of medicine,” which restricts the Company from owning medical practices which directly employ physicians and from exercising control over medical decisions by physicians. In these states, the Company enters into long-term management agreements with medical practices that are owned by licensed physicians, which, in turn, employ or contract with physicians who provide professional medical services. The management agreements provide for the Company to direct the transfer of ownership of the medical practices to new licensed physicians at any time. Based on the provisions of the management agreements, the medical practices are variable interest entities for which the Company is the primary beneficiary.

As of December 31, 2021 and March 31, 2022, the total assets of the Company’s variable interest entities were $225.1 million and $242.0 million, respectively, and are principally comprised of accounts receivable. As of December 31, 2021 and March 31, 2022, the total liabilities of the Company’s variable interest entities were $74.8 million and $79.1 million, respectively, and are principally comprised of accounts payable and accrued expenses. These variable interest entities have obligations payable for services received under their management agreements with the Company of $150.3 million and $163.4 million as of December 31, 2021 and March 31, 2022, respectively. These intercompany balances are eliminated in consolidation.