10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

☑    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

    For the quarterly period ended March 31, 2021

OR

☐    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

    For the transition period from to

COMMISSION FILE NUMBER: 001-34746

R1 RCM INC.

(Exact name of registrant as specified in its charter)

Delaware	02-0698101
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
401 North Michigan Avenue	60611
Chicago
Illinois
(Address of principal executive offices)	(Zip code)

(312) 324-7820

(Registrant’s telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.01 per share	RCM	NASDAQ

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ     No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes þ    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ý
Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☐     No ☑

As of April 27, 2021, the registrant had 261,589,352 shares of common stock, par value $0.01 per share, outstanding.

Table of Contents

Part I.	Financial Information
Item 1.	Consolidated Financial Statements	3
	Consolidated Balance Sheets	4
	Consolidated Statements of Operations and Comprehensive Income	5
	Consolidated Statements of Stockholders' Equity	6
	Consolidated Statements of Cash Flows	7
	Notes to Unaudited Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	27
Item 3.	Qualitative and Quantitative Disclosures About Market Risk	36
Item 4.	Controls and Procedures	36
Part II.	Other Information
Item 1.	Legal Proceedings	38
Item 1A.	Risk Factors	38
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	38
Item 6.	Exhibits	39
SIGNATURES		40

PART I — FINANCIAL INFORMATION

ITEM 1.CONSOLIDATED FINANCIAL STATEMENTS

3

R1 RCM Inc.

Consolidated Balance Sheets

(In millions, except share and per share data)

	(Unaudited)
	March 31,		December 31,
	2021		2020
Assets
Current assets:
Cash and cash equivalents	$	103.5	$	173.8
Accounts receivable, net of $3.8 million and $3.7 million allowance	97.6		91.3
Accounts receivable, net of $0.1 million and $0.1 million allowance - related party	31.8		30.9
Prepaid expenses and other current assets	65.7		59.4
Total current assets	298.6		355.4
Property, equipment and software, net	89.0		93.7
Operating lease right-of-use assets	59.8		57.8
Intangible assets, net	166.7		171.1
Goodwill	375.5		375.3
Non-current deferred tax assets	68.5		73.7
Non-current portion of restricted cash equivalents	0.5		1.0
Other assets	75.9		61.0
Total assets	$	1,134.5	$	1,189.0
Liabilities
Current liabilities:
Accounts payable	$	22.8	$	18.2
Current portion of customer liabilities	23.0		16.7
Current portion of customer liabilities - related party	10.6		15.3
Accrued compensation and benefits	61.2		51.9
Current portion of operating lease liabilities	11.8		12.2
Current portion of long-term debt	35.5		32.3
Other accrued expenses	56.6		59.7
Total current liabilities	221.5		206.3
Non-current portion of customer liabilities - related party	15.4		16.3
Non-current portion of operating lease liabilities	68.7		71.0
Long-term debt	510.2		519.7
Other non-current liabilities	35.1		36.3
Total liabilities	850.9		849.6
8.00% Series A convertible preferred stock, par value $0.01, no shares authorized, issued and outstanding as of March 31, 2021; 370,000 shares authorized, 288,497 shares issued and outstanding as of December 31, 2020 (aggregate liquidation value of $294.3)	—		251.5
Stockholders’ equity:
Common stock, $0.01 par value, 500,000,000 shares authorized, 277,972,263 shares issued and 261,301,541 shares outstanding at March 31, 2021; 137,812,559 shares issued and 121,144,038 shares outstanding at December 31, 2020	2.8		1.4
Additional paid-in capital	562.1		393.7
Accumulated deficit	(135.7)		(161.5)
Accumulated other comprehensive loss	(6.4)		(6.5)
Treasury stock, at cost, 16,670,722 shares as of March 31, 2021; 16,668,521 shares as of December 31, 2020	(139.2)		(139.2)
Total stockholders’ equity	283.6		87.9
Total liabilities and stockholders’ equity	$	1,134.5	$	1,189.0

See accompanying notes to consolidated financial statements.

4

R1 RCM Inc.

Consolidated Statements of Operations and Comprehensive Income (Unaudited)

(In millions, except share and per share data)

	Three Months Ended March 31,
	2021		2020
Net services revenue ($215.5 million and $208.4 million for the three months ended March 31, 2021 and 2020, from related party, respectively)	$	342.6	$	320.5
Operating expenses:
Cost of services	267.2		253.9
Selling, general and administrative	25.6		25.5
Other expenses	13.0		8.7
Total operating expenses	305.8		288.1
Income from operations	36.8		32.4
Net interest expense	3.9		3.8
Income before income tax provision	32.9		28.6
Income tax provision	7.1		10.4
Net income	$	25.8	$	18.2
Net income (loss) per common share:
Basic	$	(2.37)	$	0.06
Diluted	$	(2.37)	$	0.05
Weighted average shares used in calculating net income (loss) per common share:
Basic	239,290,145		114,441,043
Diluted	239,290,145		169,620,178
Consolidated statements of comprehensive income
Net income	$	25.8	$	18.2
Other comprehensive income (loss):
Net change on derivatives designated as cash flow hedges, net of tax	0.5		(4.4)
Foreign currency translation adjustments	(0.4)		(2.1)
Comprehensive income	$	25.9	$	11.7

Basic:
Net income	$	25.8	$	18.2
Less dividends on preferred shares	(592.3)		(5.4)
Less income allocated to preferred shareholders	—		(6.2)
Net income (loss) available/allocated to common shareholders - basic	$	(566.5)	$	6.6
Diluted:
Net income	$	25.8	$	18.2
Less dividends on preferred shares	(592.3)		(5.4)
Less income allocated to preferred shareholders	—		(5.0)
Net income (loss) available/allocated to common shareholders - diluted	$	(566.5)	$	7.8

See accompanying notes to consolidated financial statements.

5

R1 RCM Inc.

Consolidated Statements of Stockholders’ Equity (Unaudited)

(In millions, except share and per share data)

	Common Stock			Treasury Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total
	Shares	Amount		Shares	Amount
Balance at December 31, 2020	137,812,559	$	1.4	(16,668,521)	$	(139.2)	$	393.7	$	(161.5)	$	(6.5)	$	87.9
Share-based compensation expense	—	—		—	—		12.8		—		—		12.8
Issuance of common stock related to share-based compensation plans	6,497	—		—	—		—		—		—		—
Issuance of common stock	324,212	—		—	—		7.0		—		—		7.0
Exercise of vested stock options	539,795	—		—	—		3.5		—		—		3.5
Acquisition of treasury stock related to share-based compensation plans	—	—		(2,201)	—		—		—		—		—
Net change on derivatives designated as cash flow hedges, net of tax of $0.2 million	—	—		—	—		—		—		0.5		0.5
Foreign currency translation adjustments	—	—		—	—		—		—		(0.4)		(0.4)
Conversion of preferred shares	117,706,400	1.2		—	—		250.3		—		—		251.5
Inducement dividend	—	—		—	—		(592.3)		—		—		(592.3)
Issuance of common stock related to inducement	21,582,800	0.2		—	—		487.1		—		—		487.3
Net income	—	—		—	—		—		25.8		—		25.8
Balance at March 31, 2021	277,972,263	$	2.8	(16,670,722)	$	(139.2)	$	562.1	$	(135.7)	$	(6.4)	$	283.6

See accompanying notes to consolidated financial statements.

	Common Stock			Treasury Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total
	Shares	Amount		Shares	Amount
Balance at December 31, 2019	127,807,546	$	1.3	(13,786,266)	$	(73.6)	$	372.7	$	(277.8)	$	(4.5)	$	18.1
Impact of credit-loss standard adoption, net of tax of $0.3 million	—	—		—	—		—		(0.8)		—		(0.8)
Adjusted balance at January 1, 2020	127,807,546	$	1.3	(13,786,266)	$	(73.6)	$	372.7	$	(278.6)	$	(4.5)	$	17.3
Share-based compensation expense	—	—		—	—		4.8		—		—		4.8
Issuance of common stock related to share-based compensation plans	1,720	—		—	—		—		—		—		—
Exercise of vested stock options	553,520	—		—	—		3.1		—		—		3.1
Dividends paid/accrued	—	—		—	—		(5.4)		—		—		(5.4)
Acquisition of treasury stock related to share-based compensation plans	—	—		(545)	—		—		—		—		—
Net change on derivatives designated as cash flow hedges, net of tax of $1.5 million	—	—		—	—		—		—		(4.4)		(4.4)
Foreign currency translation adjustments	—	—		—	—		—		—		(2.1)		(2.1)
Net income	—	—		—	—		—		18.2		—		18.2
Balance at March 31, 2020	128,362,786	$	1.3	(13,786,811)	$	(73.6)	$	375.2	$	(260.4)	$	(11.0)	$	31.5

See accompanying notes to consolidated financial statements.

6

R1 RCM Inc.

Consolidated Statements of Cash Flows (Unaudited)

(In millions)

	Three Months Ended March 31,
	2021		2020
Operating activities
Net income	$	25.8	$	18.2
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization	17.9		15.7
Amortization of debt issuance costs	0.3		0.2
Share-based compensation	12.7		4.8
Loss on disposal and right-of-use asset write-downs	0.6		—
Provision for credit losses	0.1		0.8
Deferred income taxes	4.9		8.9
Non-cash lease expense	2.9		2.9
Change in value of contingent consideration	0.5		—
Changes in operating assets and liabilities:
Accounts receivable and related party accounts receivable	(7.3)		(12.5)
Prepaid expenses and other assets	(19.4)		(5.2)
Accounts payable	5.2		2.8
Accrued compensation and benefits	9.4		(46.6)
Lease liabilities	(4.1)		(2.6)
Other liabilities	(4.2)		16.0
Customer liabilities and customer liabilities - related party	0.7		(2.8)
Net cash provided by operating activities	46.0		0.6
Investing activities
Purchases of property, equipment, and software	(9.6)		(13.3)
Net cash used in investing activities	(9.6)		(13.3)
Financing activities
Borrowings on revolver	—		50.0
Repayment of senior secured debt	(6.5)		(4.1)
Repayments on revolver	—		(20.0)
Inducement of preferred stock conversion	(105.0)		—
Exercise of vested stock options	4.4		3.1
Finance lease payments	—		(0.6)
Net cash (used in) provided by financing activities	(107.1)		28.4
Effect of exchange rate changes in cash, cash equivalents and restricted cash	(0.1)		(1.2)
Net (decrease) increase in cash, cash equivalents and restricted cash	(70.8)		14.5
Cash, cash equivalents and restricted cash, at beginning of period	174.8		92.5
Cash, cash equivalents and restricted cash, at end of period	$	104.0	$	107.0
Supplemental disclosures of cash flow information
Accrued dividends payable to preferred stockholders	$	—	$	5.4
Accrued and other liabilities related to purchases of property, equipment and software	$	7.9	$	18.4
Accounts payable related to purchases of property, equipment and software	$	2.4	$	3.1
Interest paid	$	3.8	$	3.2
Income taxes paid	$	0.6	$	0.9

See accompanying notes to consolidated financial statements.

7

R1 RCM Inc.

Notes to Unaudited Consolidated Financial Statements

1. Business Description and Basis of Presentation

Business Description

R1 RCM Inc. (the “Company”) is a leading provider of technology-driven solutions that transform the patient experience and financial performance of healthcare providers. The Company helps healthcare providers generate sustainable improvements in their operating margins and cash flows while also enhancing patient, physician, and staff satisfaction for its customers. For further information regarding the Company's business, including relationships with Ascension Health (“Ascension”) and TowerBrook Capital Partners (“TowerBrook”), refer to Note 1 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (the “2020 Form 10-K”).

SCI Solutions, Inc. Acquisition

On April 1, 2020, the Company completed the acquisition of scheduling.com, Inc. d/b/a SCI Solutions, Inc. (“SCI”) pursuant to a stock purchase agreement dated as of January 9, 2020 (the “Stock Purchase Agreement”), by and among the Company, Clearsight Intermediate Holdings, Inc. (“Clearsight Holdings”) and Clearsight Group Holdings, LLC (the “Seller”) (the “SCI Acquisition”). At the closing of the transaction, the Company purchased from the Seller all of the issued and outstanding equity interests of Clearsight Holdings, which owns all of the issued and outstanding equity interests of SCI. SCI is a leading provider of software-as-a-service (“SaaS”)-based scheduling and patient access solutions. SCI’s platform streamlines the patient and provider experience, creating efficient care networks where health systems’ capacity is digitally and conveniently accessible to all market constituents. The combination of R1 and SCI is expected to deliver enhanced value for healthcare providers by enabling them to expand digital front door strategies for their patients, improve operating efficiency, and increase capacity utilization, among other benefits. Refer to Note 4, Acquisitions for additional details.

RevWorks Acquisition

On August 3, 2020, the Company completed the acquisition of the RevWorks services business pursuant to an asset purchase agreement dated as of June 2, 2020 (the “RevWorks Purchase Agreement”) by and among the Company and Cerner Corporation (the “RevWorks Acquisition”). At the closing of the transaction, the Company purchased certain assets relating to the RevWorks services business, as specified in the RevWorks Purchase Agreement. The combination of R1 and RevWorks is expected to provide enhanced revenue cycle capabilities and expertise to RevWorks clients, helping drive sustainable financial improvements for providers while improving their patients’ overall experience. Refer to Note 4, Acquisitions for additional details.

Emergency Medical Services Disposition

As part of the Company’s portfolio analysis and strategic initiatives, the Company disposed the emergency medical services (“EMS”) business on October 30, 2020 for $140.0 million, inclusive of a $5.0 million hold-back amount subject to the completion of certain transition services, to be paid approximately one year from the date of the disposition (the “EMS Disposition”). The total sale price net of costs to sale was $132.7 million, which included customary adjustments for working capital, indebtedness, cash, and transaction expenses. R1 allocated goodwill to the disposed business based on the relative fair value methodology. The total goodwill allocated to the EMS Disposition was $7.1 million. The gain recognized on the EMS Disposition was $55.7 million.

8

R1 RCM Inc.

Notes to Unaudited Consolidated Financial Statements

Basis of Presentation

The accompanying unaudited consolidated financial statements reflect the Company's financial position as of March 31, 2021, the results of operations of the Company for the three months ended March 31, 2021 and 2020, and the cash flows of the Company for the three months ended March 31, 2021 and 2020. These financial statements include the accounts of R1 RCM Inc. and its wholly-owned subsidiaries. All material intercompany amounts have been eliminated in consolidation. These financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial reporting and as required by the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, certain information and footnote disclosures required for complete financial statements are not included herein. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the interim financial information, have been included. Operating results for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for any other interim period or for the fiscal year ending December 31, 2021.

When preparing financial statements in conformity with GAAP, the Company must make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures at the date of the financial statements. Actual results could differ from those estimates. For a more complete discussion of the Company’s significant accounting policies and other information, the unaudited consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements included in the Company's 2020 Form 10-K.

2. Recent Accounting Pronouncements

Recently Issued Accounting Standards and Disclosures

No new accounting pronouncements issued or effective during the fiscal year had, or is expected to have, a material impact on the Company’s consolidated financial statements.

3. Fair Value of Financial Instruments

The Company's accounting policy for fair values, including details of the fair value hierarchy levels, are outlined in Note 4 of the Company's 2020 Form 10-K.

The carrying amounts of the Company’s financial instruments, which include financial assets such as cash and cash equivalents, restricted cash equivalents, accounts receivable, net, and certain other current assets, as well as financial liabilities such as accounts payable, accrued service costs, accrued compensation and benefits, and certain other accrued expenses, approximate their fair values, due to the short-term nature of these instruments. See Note 21, Derivative Financial Instruments, for a discussion of the fair value of the Company's forward currency derivative contracts and interest rate swaps.

The Company believes the carrying value of the senior revolver and term loan (see Note 11, Debt) approximates fair value as they are variable rate bank debt.

4. Acquisitions

SCI

On April 1, 2020, the Company completed the acquisition of SCI. The SCI Acquisition has been accounted for under ASC 805, Business Combinations. Accordingly, the accounts of the acquired company, after adjustments to reflect fair values assigned to assets and liabilities, have been included in the Company’s consolidated financial statements since the date of the SCI Acquisition.

9

R1 RCM Inc.

Notes to Unaudited Consolidated Financial Statements

The purchase price for the SCI Acquisition was $190.0 million, subject to customary adjustments for cash, transaction expenses, earn-out consideration, and normalized working capital. The Company funded the purchase price for the SCI Acquisition and the Company’s associated transaction expenses with a combination of cash on hand and the incurrence of additional indebtedness (see Note 11, Debt).

The fair value of assets acquired and liabilities assumed is (in millions):

	Purchase Price Allocation
Total purchase consideration	$	197.0
Allocation of consideration to assets acquired and liabilities assumed:
Cash and cash equivalents	$	2.9
Accounts receivable	2.8
Prepaid expenses and other current assets	1.2
Property, equipment and software	0.3
Operating lease right-of-use assets	1.2
Intangible assets	86.1
Goodwill	125.8
Accounts payable	(0.2)
Current portion of customer liabilities	(4.0)
Accrued compensation and benefits	(1.6)
Current portion of operating lease liabilities	(0.5)
Other accrued expenses	(0.4)
Non-current portion of operating lease liabilities	(0.7)
Other non-current liabilities	(5.0)
Deferred income tax liabilities	(10.9)
Net assets acquired	$	197.0

Other non-current liabilities contained a note payable for $5.0 million. The Company repaid this note in the second quarter of 2020.

The goodwill recognized is primarily attributable to synergies that are expected to be achieved from the integration of SCI. None of the goodwill is expected to be deductible for income tax purposes.

The purchase price includes an earn-out provision, which is dependent on achieving certain revenue and operational targets in the year following the acquisition. Based on projections at the time of acquisition, the earn-out was valued at $4.8 million. As of March 31, 2021, the Company determined the performance metrics for the earn-out had been met, and expects to pay the full earn-out of $10.0 million in the second quarter of 2021. Changes to the earn-out value were recorded as a component of other expenses.

RevWorks

On August 3, 2020, the Company completed the acquisition of RevWorks. The RevWorks Acquisition has been accounted for under ASC 805, Business Combinations. Accordingly, the accounts of the acquired company, after adjustments to reflect estimated fair values assigned to assets and liabilities, have been included in the Company’s consolidated financial statements since the date of the RevWorks Acquisition.

10

R1 RCM Inc.

Notes to Unaudited Consolidated Financial Statements

The $30.0 million purchase consideration for the RevWorks Acquisition (inclusive of working capital) consisted of a $5.0 million payment at closing and two deferred payments, each of $12.5 million and totaling $25.0 million, which are due and payable on the first and second anniversary of the closing date. The two deferred payments are contractual obligations of the Company; however, they are potentially effectively refundable to the Company contingent on the achievement of certain pre-existing customer revenue targets for the RevWorks business that were agreed in the purchase agreement. If such targets are not achieved, this will result in Cerner Corporation (“Cerner”) returning to the Company up to $25.0 million. At the time of the acquisition, the Company recorded a present value liability for the contractual deferred payments of $24.3 million, and recorded an asset for the contingently returnable consideration of $22.3 million, including $11.5 million in prepaid expenses and $10.8 million in other assets on the Consolidated Balance Sheets, which is measured at fair value. The Company reviewed the balances at March 31, 2021 and determined that the fair value remained the same.

The assets acquired in the RevWorks Acquisition consist primarily of customer relationships of approximately $2.8 million and fixed assets. There were no significant pre-closing liabilities of the RevWorks business included in the RevWorks Acquisition. The fair value estimate of assets acquired and liabilities assumed are pending completion of multiple elements, including gathering further information about the identification and completeness of all assets and liabilities acquired.

The goodwill recognized of approximately $3.6 million is primarily attributable to synergies that are expected to be achieved from the integration of RevWorks.

Pro Forma Results

The following table summarizes, on a pro forma basis, the combined results of the Company as though the SCI and RevWorks acquisitions had occurred as of January 1, 2019. These pro forma results are not necessarily indicative of either the actual consolidated results had the acquisitions occurred as of January 1, 2019 or of the future consolidated operating results for any period. Pro forma results are (in millions):

	Three Months Ended March 31, 2020
Net services revenue	$	349.6
Net income	$	17.3

Adjustments were made to earnings to adjust depreciation and amortization to reflect fair value of identified assets acquired, to record the effects of extinguishing the debt of SCI and replacing it with the debt of the Company, and to record the income tax effect of these adjustments.

5. Accounts Receivable and Allowance for Credit Losses

Accounts receivable is comprised of unpaid balances pertaining to modular services and end-to-end revenue cycle management (“RCM”) customers, net receivable balances for end-to-end RCM customers after considering cost reimbursements owed to such customers, including related accrued balances, and amounts due from physician RCM and practice management customers.

The Company evaluates its accounts receivable for expected credit losses quarterly. The Company maintains an estimated allowance for credit losses to reduce its accounts receivable to the amount that it believes will be collected. This allowance is based on the Company’s historical experience, its assessment of each customer’s ability to pay, the length of time a balance has been outstanding, input from key Company resources assigned to each customer, the status of any ongoing operations with each applicable customer, and environmental factors such as significant shifts in the healthcare environment which the Company believes may have impacted or will impact its customers’ financial health and ability to pay.

11

R1 RCM Inc.

Notes to Unaudited Consolidated Financial Statements

The full effects of COVID-19 on the Company’s customers are uncertain and cannot be predicted. As a result, the Company’s future collection experience may differ from historical collection trends.

The Company has presented the rollforward below on a consolidated basis as the currently expected credit losses for its large integrated healthcare system customers are not anticipated to be material.

Movements in the allowance for credit losses are as follows (in millions):

	Three Months Ended March 31,
	2021		2020
Beginning balance	$	3.8	$	2.8
Cumulative effect of ASC 326 adoption	—		1.1
Provision (recoveries)	0.1		0.8
Ending balance	$	3.9	$	4.7

6. Property, Equipment and Software

Property, equipment and software consist of the following (in millions):

	March 31, 2021		December 31, 2020
Buildings and land	$	4.6	$	4.6
Computer and other equipment	56.6		55.0
Leasehold improvements	23.3		23.2
Software	142.3		135.7
Office furniture	6.4		6.4
Property, equipment and software, gross	233.2		224.9
Less accumulated depreciation and amortization	(144.2)		(131.2)
Property, equipment and software, net	$	89.0	$	93.7

The following table summarizes the allocation of depreciation and amortization expense between cost of services and selling, general and administrative expenses (in millions):

	Three Months Ended March 31,
	2021		2020
Cost of services	$	12.7	$	10.9
Selling, general and administrative	0.8		1.3
Total depreciation and amortization	$	13.5	$	12.2

7. Leases

The Company's accounting policy for leases, including the elections made as part of the adoption of ASC 842 effective January 1, 2019, are outlined in Note 8 of the Company's 2020 Form 10-K. The components of lease costs are as follows (in millions):

12

R1 RCM Inc.

Notes to Unaudited Consolidated Financial Statements

	Three Months Ended March 31,
	2021		2020
Operating lease cost	$	4.1	$	4.9
Finance lease cost:
Amortization of right-of-use (“ROU”) assets	0.1		0.2
Interest on lease liabilities	—		0.1
Sublease income	(0.6)		(0.6)
Total lease cost	$	3.6	$	4.6

Supplemental cash flow information related to leases are as follows (in millions):

	Three Months Ended March 31,
	2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	9.4	$	4.9
Operating cash flows for finance leases	—		0.1
Financing cash flows for finance leases	—		0.6
ROU assets obtained in exchange for lease obligations:
Operating leases	5.6		1.7

The Company presents all non-cash transactions related to adjustments to the lease liability or ROU asset as non-cash transactions. This includes all non-cash charges related to any modification or reassessment events triggering remeasurement, and obtaining new leases for non-cash consideration.

Supplemental balance sheet information related to leases are as follows:

	March 31, 2021		December 31, 2020
Weighted average remaining lease term:
Operating leases	7 years		7 years
Finance leases	3 years		2 years
Weighted average incremental borrowing rate:
Operating leases	8.99	%	8.94	%
Finance leases	6.71	%	6.62	%

Maturities of lease liabilities as of March 31, 2021 are as follows (in millions):

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R1 RCM Inc.

Notes to Unaudited Consolidated Financial Statements

	Operating Leases		Finance Leases
Remainder of 2021	$	14.0	$	0.1
2022	16.0		0.1
2023	15.2		—
2024	15.3		—
2025	15.2		—
2026	12.0		—
Thereafter	22.1		—
Total	109.8		0.2
Less:
Imputed interest	29.3		—
Present value of lease liabilities	$	80.5	$	0.2

8. Intangible Assets

The following table provides the gross carrying value and accumulated amortization for each major class of intangible asset at March 31, 2021 and December 31, 2020 (in millions):

	March 31, 2021						December 31, 2020
	Gross Carrying Value		Accumulated Amortization		Net Book Value		Gross Carrying Value		Accumulated Amortization		Net Book Value
Customer relationships	$	97.7	$	(16.2)	$	81.5	$	97.7	$	(14.7)	$	83.0
Technology	101.7		(16.5)		85.2		101.7		(13.6)		88.1
Total intangible assets	$	199.4	$	(32.7)	$	166.7	$	199.4	$	(28.3)	$	171.1

Intangible asset amortization expense was $4.4 million and $3.5 million for the three months ended March 31, 2021 and 2020, respectively.

Estimated annual amortization expense related to intangible assets with definite lives as of March 31, 2021 is as follows (in millions):

Remainder of 2021	$	12.9
2022	17.3
2023	17.3
2024	15.5
2025	14.5
2026	14.5
Thereafter	74.7
Total	$	166.7

9. Goodwill

Unless otherwise required, goodwill is tested for impairment annually in the fourth quarter. Changes in the carrying amount of goodwill for the three months ended March 31, 2021 were (in millions):

14

R1 RCM Inc.

Notes to Unaudited Consolidated Financial Statements

	Goodwill
Balance as of December 31, 2020	$	375.3
Measurement period adjustments	0.2
Balance as of March 31, 2021	$	375.5

10. Revenue Recognition

The Company follows the guidance under Topic 606, Revenue from Contracts with Customers (“Topic 606”). Revenue is measured based on consideration specified in a contract with a customer, and excludes any sales incentives and amounts collected on behalf of third parties. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a service to a customer, which is typically over the contact term. Estimates of variable consideration are included in revenue to the extent that it is probable that a significant reversal of cumulative revenue will not occur once the uncertainty is resolved.

Disaggregation of Revenue

In the following table, revenue is disaggregated by source (in millions):

	Three Months Ended March 31,
	2021		2020
Net operating fees	$	286.1	$	280.9
Incentive fees	29.0		16.8
Other	27.5		22.8
Net services revenue	$	342.6	$	320.5

Contract Balances

The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers (in millions):

	March 31, 2021		December 31, 2020
Receivables (1)	$	129.4	$	122.2
Contract assets (2)	6.7		—
Contract liabilities (2)	25.7		28.6

(1) Receivables are included in accounts receivable, net. The balance includes accounts receivable, net - related party.

(2) Contract assets and contract liabilities are included in other current assets and customer liabilities, respectively. The contract liabilities balance contains related party amounts, including $3.9 million and $5.6 million of current customer liabilities and $15.4 million and $16.3 million of non-current customer liabilities for the three months ended March 31, 2021 and year ended December 31, 2020, respectively.

A receivable is recognized in the period the Company provides services when the Company’s right to consideration is unconditional. Payment terms on invoiced amounts are typically 30-60 days.

The Company recognized revenue of $93.7 million and $86.0 million during the three months ended March 31, 2021 and 2020, which amounts were included in contract liabilities at the beginning of the respective periods. These revenue amounts include $88.1 million and $85.0 million for the three months ended March 31, 2021 and 2020, respectively, related to advanced billings which become accounts receivable and contract liabilities on the first day of the respective service period.

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R1 RCM Inc.

Notes to Unaudited Consolidated Financial Statements

Transaction Price Allocated to the Remaining Performance Obligation

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period (in millions). The estimated revenue does not include amounts of variable consideration that are constrained.

	Net operating fees		Incentive fees		Other
Remainder of 2021	$	83.9	$	31.4	$	1.7
2022	70.0		—		—
2023	55.0		—		—
2024	35.0		—		—
2025	11.7		—		—
2026	5.6		—		—
Thereafter	—		—		—
Total	$	261.2	$	31.4	$	1.7

The amounts presented in the table above include variable fee estimates for the non-cancellable term of the Company's physician groups RCM services contracts, fixed fees which are typically recognized ratably as the performance obligation is satisfied, and incentive fees which are measured cumulatively over the contractually defined performance period.

Estimates of revenue expected to be recognized in future periods exclude unexercised customer options to purchase services within the Company's physician advisory services (“PAS”) contracts that do not represent material rights to the customer. Customer options that do not represent a material right are only accounted for in accordance with Topic 606 when the customer exercises its option to purchase additional goods or services.

11. Debt

The carrying amounts of debt consist of the following (in millions):

	March 31, 2021		December 31, 2020
Senior Revolver	$	70.0	$	70.0
Senior Term Loan	478.1		484.6
Unamortized discount and issuance costs	(2.4)		(2.6)
Total debt	545.7		552.0
Less: Current maturities	(35.5)		(32.3)
Total long-term debt	$	510.2	$	519.7

Senior Secured Credit Facilities

On June 26, 2019, the Company and certain of its subsidiaries entered into a senior credit agreement (the “Credit Agreement”) with Bank of America, N.A., as administrative agent, and the lenders named therein, for senior secured credit facilities (the “Senior Secured Credit Facilities”), consisting of a $325.0 million senior secured term loan facility (the “Senior Term Loan”) issued at 99.66% of par and a $100.0 million senior secured revolving credit facility (the “Senior Revolver”).

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R1 RCM Inc.

Notes to Unaudited Consolidated Financial Statements

On March 20, 2020, the Company entered into Amendment No. 1 to the Credit Agreement (the “Amendment”), pursuant to which the lenders named in the Amendment agreed to provide an additional $191.1 million incremental delayed-draw term loan facility (the “Incremental Term Loan”) on the same terms as its existing Senior Term Loan provided under the Credit Agreement.

The Incremental Term Loan was drawn substantially concurrently with the closing of the SCI Acquisition on April 1, 2020. The proceeds of the Incremental Term Loan were used to fund the purchase price for the SCI Acquisition and related expenses. For further details on the closing, refer to Note 4, Acquisitions. The Incremental Term Loan has terms consistent with those of the Senior Term Loan, including with respect to interest, maturity, amortization, and prepayments and has the same affirmative and negative covenants and events of default as those applicable to the Senior Term Loan under the Credit Agreement. The drawing of the Incremental Term Loan increased the balance of the obligation due under the Senior Term Loan, and therefore is shown as one consolidated obligation.

In accordance with ASC 470-50, the Amendment was treated as a loan modification in the financial statements.

On January 13, 2021, the Company entered into Amendment No. 2 and Waiver to Credit Agreement (the “Second Amendment”), pursuant to which the lenders agreed (i) to waive the Company’s obligation to use the $135.0 million of net proceeds from the EMS Disposition for purposes of reinvestments in useful assets of the Company, or to prepay the loans under the Credit Agreement, as otherwise required by the terms of the Credit Agreement, (ii) to amend the restricted payments covenant to permit the Company to make additional cash payments to the Investor in an amount not to exceed $105.0 million in connection with the preferred stock conversion (refer to Note 15. 8.00% Series A Convertible Preferred Stock) and reduce the “Available Amount” from which the Company can make certain investments, debt prepayments, or restricted payments by $105.0 million and (iii) that the excess cash flow sweep will begin with fiscal year ended December 31, 2021 instead of fiscal year ended December 31, 2020.

The Senior Revolver includes borrowing capacity available for letters of credit and for borrowings on same-day notice, referred to as the “swing loans.” Any issuance of letters of credit or making of a swing loan will reduce the amount available under the revolving credit facility. As of March 31, 2021, the Company had $70.0 million in borrowings, no letters of credit outstanding, and $30.0 million of availability under the Senior Revolver.

Borrowings under the Senior Secured Credit Facilities bear interest, at the Company’s option, at: (i) an Alternate Base Rate (“ABR”) equal to the greater of (a) the prime rate of Bank of America, N.A., (b) the federal funds rate plus 0.50% per annum, and (c) the Eurodollar rate for an interest period of one-month beginning on such day plus 100 basis points, plus between 0.75% and 1.75% dependent on the Company's Net Leverage Ratio (provided that the Eurodollar rate applicable to the Term Loan Facility shall not be less than 0.00% per annum); or (ii) the Eurodollar rate (provided that the Eurodollar rate applicable to the Term Loan Facility shall not be less than 0.00% per annum), plus between 1.75% and 2.75%, dependent on the Company's Net Leverage Ratio. The interest rate as of March 31, 2021 was 2.36%. The Company is also required to pay an unused commitment fee to the lenders under the Senior Revolver at a rate between 0.30% and 0.50% of the average daily unutilized commitments thereunder dependent on the Company's net leverage ratio.

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R1 RCM Inc.

Notes to Unaudited Consolidated Financial Statements

The Credit Agreement contains a number of covenants that, among other things, restrict, subject to certain exceptions, the Company’s ability and the ability of its subsidiaries to: (i) incur additional indebtedness; (ii) create liens on assets; (iii) engage in mergers or consolidations; (iv) sell assets; (v) pay dividends and distributions or repurchase the Company’s capital stock; (vi) make investments, loans or advances; (vii) repay certain junior indebtedness; (viii) engage in certain transactions with affiliates; (ix) enter into sale and leaseback transactions; (x) amend material agreements governing certain of the Company’s junior indebtedness; (xi) change the Company’s lines of business; (xii) make certain acquisitions; and (xiii) limitations on the letter of credit cash collateral account. The Credit Agreement contains customary affirmative covenants and events of default. In addition, the Company is required to maintain minimum consolidated total net leverage and consolidated interest coverage ratios. The Company was in compliance with all of the covenants in the Credit Agreement as of March 31, 2021.

Debt Maturities

Scheduled maturities of the Company’s long-term debt are summarized as follows (in millions):

	Scheduled Maturities
Remainder of 2021	$	25.8
2022	38.7
2023	45.2
2024	438.4
Total	$	548.1

For further details on the Company's debt, refer to Note 13 of the Company's 2020 Form 10-K.

12. Share-Based Compensation

The share-based compensation expense relating to the Company’s stock options, restricted stock units (“RSUs”), and performance-based restricted stock units (“PBRSUs”) for the three months ended March 31, 2021 and 2020 was $12.7 million and $4.8 million, respectively, with related tax benefits of approximately $2.2 million and $0.7 million, respectively.

The Company accounts for forfeitures as they occur. Excess tax benefits and shortfalls for share-based payments are recognized in income tax expense (benefit) and included in operating activities. The Company recognized $2.3 million and $0.6 million of income tax benefit from windfalls associated with vesting and exercises of equity awards for the three months ended March 31, 2021 and 2020, respectively.

Total share-based compensation costs that have been included in the Company’s consolidated statements of operations were as follows (in millions):

	Three Months Ended March 31,
	2021		2020
Share-Based Compensation Expense Allocation Details:
Cost of services	$	7.3	$	1.9
Selling, general and administrative	5.4		2.9
Other	—		—
Total share-based compensation expense	$	12.7	$	4.8

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R1 RCM Inc.

Notes to Unaudited Consolidated Financial Statements

The Company uses the Black-Scholes option pricing model to estimate the fair value of its service-based options as of their grant dates. Monte Carlo simulations are used to estimate the fair value of its market-based PBRSUs. The market-based PBRSUs vest upon satisfaction of both time-based requirements and market targets based on share price. Expected life is based on the market condition to which the vesting is tied. The Company assesses current performance on performance-based PBRSUs by reviewing historical performance to date, along with any adjustments which have been approved to the reported performance, and changes to the projections to determine the probable outcome of the awards. The current estimates are then compared to the scoring metrics and any necessary adjustments are reflected in the current period to update share-based compensation expense to the current performance expectations.

The following table sets forth the significant assumptions used in the Black-Scholes option pricing model and the Monte Carlo simulations and the calculation of share-based compensation expense for the three months ended March 31, 2021 and 2020:

	Three Months Ended March 31,
	2021	2020
Expected dividend yield	—%	—%
Risk-free interest rate	0.4%	1.7%
Expected volatility	43%	43%
Expected term (in years)	5.5	5.5

The risk-free interest rate input is based on U.S. Treasury instruments, and the expected volatility of the share price is based on review of the historical volatility levels of the Company’s common stock in conjunction with that of public companies that operate in similar industries or are similar in terms of stage of development or size and a projection of this information toward its future expected volatility. The Company used the simplified method to estimate the expected option life. The simplified method was used due to the lack of sufficient historical data available to provide a reasonable basis upon which to estimate the expected term of each stock option.

Stock options

A summary of the options activity during the three months ended March 31, 2021 is shown below:

	Options	Weighted- Average Exercise Price
Outstanding at December 31, 2020	6,220,971	$	3.68
Granted	1,625	23.49
Exercised	(539,795)	6.47
Canceled/forfeited	(1,040)	3.85
Expired	—	—
Outstanding at March 31, 2021	5,681,761	$	3.42
Outstanding, vested and exercisable at March 31, 2021	4,782,897	$	3.41
Outstanding, vested and exercisable at December 31, 2020	5,230,690	$	3.73

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R1 RCM Inc.

Notes to Unaudited Consolidated Financial Statements

Restricted stock units and performance-based restricted stock units    

A summary of the RSU and PBRSU activity during the three months ended March 31, 2021 is shown below:

					Weighted- Average Grant Date Fair Value
	RSUs		PBRSUs		RSU		PBRSU
Outstanding and unvested at December 31, 2020	2,108,447		2,917,071		$	9.87	$	11.35
Granted	2,719		290,354		23.77		25.09
Vested	(6,497)		—		10.80		—
Forfeited	(41,381)		(646)		12.99		5.34
Outstanding and unvested at March 31, 2021	2,063,288		3,206,779		$	9.82	$	12.59
Shares surrendered for taxes for the three months ended March 31, 2021	2,201		—
Cost of shares surrendered for taxes for the three months ended March 31, 2021 (in millions)	$	—	$	—
Shares surrendered for taxes for the three months ended March 31, 2020	545		—
Cost of shares surrendered for taxes for the three months ended March 31, 2020 (in millions)	$	—	$	—

Outstanding PBRSUs issued prior to April 2019 vest upon satisfaction of both time-based requirements and market targets based on share price. Depending on the percentage level at which the market-based condition is satisfied, the number of shares vesting could be between 0% and 150% of the number of PBRSUs originally granted. PBRSUs issued subsequent to April 2019 vest upon satisfaction of both time-based and performance-based conditions. Depending on the award, performance condition targets may include cumulative adjusted EBITDA, end-to-end RCM agreement growth, scored revenue growth, or other specific performance factors. Depending on the percentage level at which the performance-based conditions are satisfied, the number of shares vesting could be between 0% and 200% of the number of PBRSUs originally granted. Based on the established targets, the maximum number of shares that could vest for all outstanding PBRSUs is 5,943,470.

13. Other Expenses

Other expenses consist of the following (in millions):

	Three Months Ended March 31,
	2021		2020
Severance and related employee benefits	$	1.5	$	1.1
Strategic initiatives (1)	6.5		3.2
Facility-exit charges (2)	1.5		0.4
Other (3)	3.5		4.0
Total other expenses	$	13.0	$	8.7

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R1 RCM Inc.

Notes to Unaudited Consolidated Financial Statements

(1) Costs related to evaluating, pursuing, and integrating acquisitions, performing portfolio and capital structure analyses and transactions, and other inorganic business projects as part of the Company’s growth strategy. Costs include vendor spend, employee time and expenses spent on activities, severance and retention amounts associated with integration activities, and changes to contingent consideration related to acquisitions. For the three months ended March 31, 2021, $0.5 million of contingent consideration changes were included.

(2) As part of evaluating the Company’s footprint, R1 has exited certain leased facilities. Costs include asset impairment charges and other costs related to exited leased facilities.

(3) For the three months ended March 31, 2021 and 2020, includes $1.7 million and $2.6 million, respectively, of expenses related to the COVID-19 pandemic, inclusive of appreciation bonuses for the Company’s front-line employees, pandemic response mobilization efforts, telemedicine and testing costs for employees, and other costs related to the COVID-19 pandemic.

14. Income Taxes

Income tax provisions for interim periods are based on estimated annual income tax rates, adjusted to reflect the effects of any significant and infrequent or unusual items which are required to be discretely recognized within the current interim period. The effective tax rates in the periods presented are largely based upon the projected annual pre-tax earnings by jurisdiction and the allocation of certain expenses in various taxing jurisdictions where the Company conducts its business. These taxing jurisdictions apply a broad range of statutory income tax rates. The global intangible low-taxed income (“GILTI”) provisions impose taxes on foreign income in excess of a deemed return on tangible assets of foreign corporations. The Company elected to account for GILTI tax in the period in which it is incurred.

The Company recognized income tax expense for the three months ended March 31, 2021 on the year-to-date pre-tax income. The deviation from the federal statutory tax rate of 21% is primarily attributable to recognizing the provisions for state taxes, GILTI, non-deductible compensation, and discrete items.

The Company recognized income tax expense for the three months ended March 31, 2020 on the year-to-date pre-tax income. The deviation from the federal statutory tax rate of 21% is primarily attributable to recognizing the provisions for GILTI plus the geographical mix of earnings, permanent differences, and discrete items.

The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax of multiple state and foreign jurisdictions. U.S. federal income tax returns since 2017 are currently open for examination. State jurisdictions vary for open tax years. The statute of limitations for most states ranges from three to six years.

At December 31, 2020, the Company had gross deferred tax assets of $146.1 million, of which $81.6 million related to net operating loss (“NOL”) carryforwards. The majority of the Company's carryforwards were generated in 2014 and 2016. The Company expects to be profitable, allowing the Company to utilize its NOL carryforward and other deferred tax assets.

The Company's completed acquisition of SCI and purchase accounting included $10.9 million of net deferred tax liabilities. In this amount is a deferred tax asset related to net operating loss carryforwards of approximately $10.4 million generated since 2002. Since a portion of state net operating loss will not be realizable, partial valuation allowance was established for the net operating loss. Through the SCI Acquisition, the Company also acquired a deferred tax asset related to research and experimentation credits of approximately $3.7 million that management believes will not be realized, and a full valuation allowance was established.

21

R1 RCM Inc.

Notes to Unaudited Consolidated Financial Statements

15. 8.00% Series A Convertible Preferred Stock

On January 15, 2021, TCP-ASC ACHI Series LLLP (“TCP-ASC”), a limited liability limited partnership jointly owned by Ascension Health Alliance and investment funds affiliated with TowerBrook (the “Investor”), a related party, converted all of its 294,266 shares (the “Current Shares”) of preferred stock into 117,706,400 shares of common stock of the Company into which the Current Shares were convertible pursuant to the Certificate of Designation of the preferred stock, and, in consideration therefor, the Company (i) issued 21,582,800 additional shares of common stock to the Investor, and (ii) paid the Investor $105.0 million in cash. On January 19, 2021, the Company filed a Certificate of Elimination of 8.00% Series A Convertible Preferred Stock with the Secretary of State of the State of Delaware to eliminate the Certificate of Designations of the 8.00% Series A Convertible Preferred Stock. The consideration paid to induce the conversion was recorded as a dividend of $592.3 million and reduced income available to common shareholders in our earnings per share calculation. The dividend was calculated as the cash paid of $105.0 million plus the fair value on the conversion date of the additional 21,582,800 shares of common stock issued as consideration for the conversion.

The following summarizes the preferred stock activity for the three months ended March 31, 2021 (in millions, except per share data):

	Preferred Stock
	Shares Issued and Outstanding	Carrying Value
Balance at December 31, 2020	288,497	$	251.5
Dividends paid/accrued dividends	5,769	—
Conversion of preferred stock	(294,266)	(251.5)
Balance at March 31, 2021	—	$	—

16. Earnings (Loss) Per Share

Basic net income per share is computed by dividing net income, less any dividends, accretion or decretion, redemption or induced conversion on the preferred stock, by the weighted average number of common shares outstanding during the period. As the preferred stock participates in dividends alongside the Company’s common stock (per their participating dividends), the preferred stock would constitute participating securities under ASC 260-10 and are applied to earnings per share using the two-class method. Under this method, all earnings (distributed and undistributed) are allocated to common shares and participating securities based on their respective rights to receive dividends.

Diluted net income per share is calculated using the more dilutive of the if-converted or the two-class method. For the three months ended March 31, 2021 and 2020, the two-class method was more dilutive and was computed by adjusting the denominator used in the basic net income per share computation by potentially dilutive securities outstanding during the period plus, when their effect is dilutive, incremental shares consisting of shares subject to stock options, shares issuable upon vesting of RSUs and PBRSUs, and shares issuable upon conversion of preferred stock.

Basic and diluted net income (loss) per common share are calculated as follows (in millions, except share and per share data):

22

R1 RCM Inc.

Notes to Unaudited Consolidated Financial Statements

	Three Months Ended March 31,
	2021		2020
Basic EPS:
Net income	$	25.8	$	18.2
Less dividends on preferred shares (1)	(592.3)		(5.4)
Less income allocated to preferred shareholders	—		(6.2)
Net income (loss) available/(allocated) to common shareholders - basic	$	(566.5)	$	6.6
Diluted EPS:
Net income	$	25.8	$	18.2
Less dividends on preferred shares (1)	(592.3)		(5.4)
Less income allocated to preferred shareholders	—		(5.0)
Net income (loss) available/(allocated) to common shareholders - diluted	$	(566.5)	$	7.8
Basic weighted-average common shares	239,290,145		114,441,043
Add: Effect of dilutive equity awards	—		11,893,514
Add: Effect of dilutive warrants	—		43,285,621
Diluted weighted average common shares	239,290,145		169,620,178
Net income (loss) per common share (basic)	$	(2.37)	$	0.06
Net income (loss) per common share (diluted)	$	(2.37)	$	0.05

(1) The 2021 dividend on preferred shares includes amounts related to the conversion of the preferred shares. See Note 15, 8.00% Series A Convertible Preferred Stock, to the consolidated financial statements included in this Quarterly Report on Form 10-Q for more information.

Because of their anti-dilutive effect, 13,688,519 common share equivalents comprised of stock options, PBRSUs, and RSUs have been excluded from the diluted earnings per share calculation for the three months ended March 31, 2021. Additionally, for the three months ended March 31, 2021, the Investor's and Intermountain's exercisable warrants to acquire up to 60 million and 1.5 million shares, respectively, of the Company's common stock have been excluded from the diluted earnings per share calculation because they are anti-dilutive. For the three months ended March 31, 2021, the exercisable warrants equate to 53,206,631 dilutive shares under the treasury stock method.

For the three months ended March 31, 2020, 525,414 common share equivalents have been excluded from the diluted earnings per share calculation because of their anti-dilutive effect.

17. Commitments and Contingencies

Legal Proceedings

Other than as described below, the Company is not presently a party to any material litigation or regulatory proceeding and is not aware of any pending or threatened litigation or regulatory proceeding against the Company which, individually or in the aggregate, could have a material adverse effect on its business, operating results, financial condition or cash flows.

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R1 RCM Inc.

Notes to Unaudited Consolidated Financial Statements

In May 2016, the Company was served with a False Claims Act case brought by a former emergency department service associate who worked at a hospital of one of the Company’s customers, MedStar Inc.’s Washington Hospital Center (“WHC”), along with WHC and three other hospitals that were PAS customers and a place holder, John Doe hospital, representing all PAS customers (U.S. ex rel. Graziosi vs. Accretive Health, Inc. et. al.), and seeking money damages, False Claims Act penalties, and plaintiff’s attorneys’ fees. The Third Amended Complaint alleges that the Company’s PAS business violates the federal False Claims Act. The case was originally filed under seal in 2013 in the federal district court in Chicago, was presented to the U.S. Attorney in Chicago, and the U.S. Attorney declined to intervene. The Company believes that it has meritorious defenses to all claims in the case and intends to vigorously defend itself against these claims. Both the Company’s and plaintiff’s motions for summary judgment were denied in December 2020, and the parties are presently conducting damages and expert discovery. Discovery and dispositive motions are expected to extend through January 2022, with trial, if necessary, in mid-to-late 2022.

On April 13, 2021 and April 19, 2021, respectively, certain purported stockholders of the Company filed two complaints in the Delaware Court of Chancery regarding the Company’s January 15, 2021 recapitalization transaction with TCP-ASC, an investment vehicle owned jointly by Ascension and TowerBrook. Both complaints allege that TCP-ASC, Ascension, and TowerBrook controlled the Company and breached their fiduciary duties by using that alleged control to force the Company to overpay in redeeming TCP-ASC’s preferred stock as part of the recapitalization transaction. The plaintiffs seek an unspecified amount of damages against TCP-ASC, Ascension, and TowerBrook. The plaintiffs also allege that the Company and TCP-ASC entered into amendments to the Investor Rights Agreement that the plaintiffs contend contains provisions that are void under the Company’s charter, bylaws, and the Delaware General Corporation Law. The plaintiffs seek a declaratory judgment that these amendments are invalid, as well as attorneys’ fees and costs. The Company believes that it has meritorious defenses to all claims against the Company and intends to vigorously defend itself against these claims.

18. Related Party Transactions

This note encompasses transactions between Ascension and its affiliates, including AMITA Health, and the Company pursuant to the amended and restated Master Professional Services Agreement (“A&R MPSA”), including all supplements, amendments, and other documents entered into in connection therewith. For further details on the Company's agreements with Ascension, see Note 1 and Note 18 of the Company's 2020 Form 10-K.

Net services revenue from services provided to Ascension included in the Company’s consolidated statements of operations were (in millions):

	Three Months Ended March 31,
	2021		2020
Ascension	$	215.5	$	208.4

Amounts included in the Company's consolidated balance sheets for Ascension are (in millions):

	March 31, 2021		December 31, 2020
Accounts receivable, net of $0.1 million and $0.1 million allowance - related party	$	31.8	$	30.9
Current portion of customer liabilities	$	10.6	$	15.3
Non-current portion of customer liabilities	$	15.4	$	16.3
Total customer liabilities	$	26.0	$	31.6

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R1 RCM Inc.

Notes to Unaudited Consolidated Financial Statements

Since Ascension is the Company's largest customer, a significant percentage of the Company's cost of services is associated with providing services to Ascension. However, due to the nature of the Company's global business services and information technology operations, it is impractical to assign the dollar amount associated with services provided to Ascension.

19. Deferred Contract Costs

Certain costs associated with the initial phases of customer contracts and the related transition of customer hospitals and physician groups are deferred. These fulfillment costs relate directly to the Company’s responsibilities under the corresponding customer contracts, generate or enhance resources of the Company that will be used in satisfying its performance obligations in the future, and are expected to be recovered through the margins realized. The following table summarizes the breakout of deferred contract costs (in millions):

	March 31, 2021		December 31, 2020
Prepaid expenses and other current assets	$	4.7	$	4.5
Other assets	19.5		19.6
Total deferred contract costs	$	24.2	$	24.1

The associated assets are amortized as services are transferred to the customer over the remaining life of the contracts. For the three months ended March 31, 2021 and 2020, total amortization was $1.2 million and $1.1 million, respectively, and there were no associated impairment losses.

20. Segments and Customer Concentrations

The Company has determined that it has a single operating segment in accordance with how its business activities are managed and evaluated. All of the Company’s significant operations are organized around the single business of providing end-to-end management services of revenue cycle operations for U.S.-based healthcare providers. Accordingly, for purposes of segment disclosures, the Company has only one reportable segment.

Healthcare providers affiliated with Ascension have accounted for a significant portion of the Company’s net services revenue each year since the Company’s formation. For the three months ended March 31, 2021 and 2020, net services revenue from healthcare organizations affiliated with Ascension accounted for 63% and 65% of the Company's total net services revenue, respectively. The loss of customers within the Ascension health system could have a material adverse impact on the Company’s operations. For the three months ended March 31, 2021 and 2020, Intermountain Healthcare accounted for 14% and 15% of the Company's total net services revenue, respectively.

As of March 31, 2021 and December 31, 2020, the Company had a concentration of credit risk with Ascension accounting for 25% and 25% of accounts receivable, respectively.

21. Derivative Financial Instruments

The Company utilizes cash flow hedges to mitigate its currency risk arising from its global delivery resources and to reduce variability in interest cash flows from its outstanding debt. As of March 31, 2021, the Company has recorded $0.6 million of existing gains and $1.8 million of existing losses in accumulated other comprehensive income for the foreign currency hedges and interest rate swaps, respectively. The Company estimates that $0.6 million of gains and $1.3 million of losses reported in accumulated other comprehensive income are expected to be reclassified into earnings within the next 12 months for the foreign currency hedges and interest rate swaps, respectively. The amounts related to foreign currency hedges that were reclassified into cost of services were a net gain of $0.4 million and a net loss of $0.1 million during the three month periods ended March 31, 2021 and 2020, respectively. The amounts related to the interest rate swaps that were reclassified into interest expense were a net loss of $0.5 million and a net gain of $0.1 million during the three month periods ended March 31, 2021 and 2020, respectively.

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R1 RCM Inc.

Notes to Unaudited Consolidated Financial Statements

The Company classifies cash flows from its derivative programs as cash flows from operating activities in the consolidated statements of cash flows. As of March 31, 2021, the Company’s currency forward contracts have maturities extending no later than March 31, 2022. The Company's interest rate swaps extend no later than August of 2022.

As of March 31, 2021, the notional amounts of the Company's open foreign currency forward contracts and interest rate swaps were approximately $95.1 million and $100.0 million, respectively. As of December 31, 2020, the notional amounts of the Company's open foreign currency forward contracts and interest rate swaps were approximately $55.9 million and $200.0 million, respectively. As of March 31, 2021, the Company held no derivatives, or non-derivative hedging instruments, that were designated in fair value or net investment hedges. Fair values for derivative financial instruments are based on prices computed using third-party valuation models and are classified as Level 2 in accordance with the three-level hierarchy of fair value measurements.

22. Subsequent Events

On April 30, 2021, the Company entered into an agreement with Ascension amending the A&R MPSA. The agreement expands R1’s role as the provider of patient experience technologies, and extends R1’s revenue cycle management services agreement with Ascension to 2031.

On May 3, 2021, the Company entered into a definitive agreement to acquire VisitPay Inc. (“VisitPay”), a provider of digital payment solutions. The Company will acquire VisitPay for $298.0 million in cash, subject to customary adjustments for working capital, cash, and debt. The Company intends to fund the acquisition and related fees and expenses with the proceeds from additional borrowings and cash on hand. Concurrent with the entry into the definitive agreement to acquire VisitPay, the Company obtained a debt financing commitment letter from Bank of America in the amount of $300.0 million. There is no financing condition linked to the consummation of the acquisition. The agreement contains customary representations, warranties, and closing conditions. The transaction is expected to close in the third quarter of 2021.

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Unless the context indicates otherwise, references in this Quarterly Report on Form 10-Q to “R1,” “the Company,” “we,” “our,” and “us” mean R1 RCM Inc., and its subsidiaries.

The following discussion and analysis is an integral part of understanding our financial results and is provided as an addition to, and should be read in connection with, our consolidated financial statements and the accompanying notes. Also refer to Note 1 of our consolidated financial statements.

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the federal securities laws, that involve substantial risks and uncertainties. These statements are often identified by the use of words such as “anticipate,” “believe,” “estimate,” “expect,” “intend,” “designed,” “may,” “plan,” “predict,” “project,” “would,” and similar expressions or variations. These forward-looking statements include, among other things, statements about the potential impacts of the COVID-19 pandemic, our strategic initiatives, our capital plans, our costs, our ability to successfully deliver on our commitments to our customers, our ability to deploy new business as planned, our ability to successfully implement new technologies, our future financial performance, and our liquidity. Such forward-looking statements are subject to risks, uncertainties, and other factors that could cause actual results and the timing of certain events to differ materially from future results expressed or implied by such forward-looking statements. Factors that could cause or contribute to such differences include, but are not limited to, the severity, magnitude, and duration of the COVID-19 pandemic; responses to the pandemic by the government and healthcare providers and the direct and indirect impacts of the pandemic on our customers and personnel; the disruption of national, state, and local economies as a result of the pandemic; the impact of the pandemic on our financial results, including possible lost revenue and increased expenses; as well as those discussed in the section titled “Risk Factors,” in Part II, Item 1A of this Quarterly Report on Form 10-Q, and elsewhere in this Report, and those set forth in Part I, Item 1A of the 2020 Form 10-K and our other filings with the SEC. The forward-looking statements in this Quarterly Report on Form 10-Q represent our views as of the date of this Quarterly Report on Form 10-Q. Subsequent events and developments may cause our views to change. While we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Quarterly Report on Form 10-Q.

Overview

Our Business

We are a leading provider of technology-driven solutions that transform the patient experience and financial performance of healthcare providers. Our services help healthcare providers generate sustainable improvements in their operating margins and cash flows while also enhancing patient, physician, and staff satisfaction for our customers.

We achieve these results for our customers by managing healthcare providers’ revenue cycle operations, which encompass processes including patient registration, insurance and benefit verification, medical treatment documentation and coding, bill preparation, and collections from patients and payers. We do so by deploying a unique operating model that leverages our extensive healthcare site experience, innovative technology, and process excellence. We assist our revenue cycle management (“RCM”) customers in managing their revenue cycle operating costs while simultaneously increasing the portion of the maximum potential services revenue they receive. Together, these benefits can generate significant and sustainable improvements in operating margins and cash flows for our customers.

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Our primary service offering consists of end-to-end RCM services for health systems, hospitals, and physician groups, which we deploy through an operating partner relationship or a co-managed relationship. Under an operating partner relationship, we provide comprehensive revenue cycle infrastructure to providers, including all revenue cycle personnel, technology solutions, and process workflow. Under a co-managed relationship, we leverage our customers’ existing RCM staff and processes, and supplement them with our infused management, subject matter specialists, proprietary technology solutions, and other resources. Under the operating partner model, we record higher revenue and expenses due to the fact that almost all of the revenue cycle personnel are our employees and more third-party vendor contracts are controlled by us. Under the co-managed model, the majority of the revenue cycle personnel and more third-party vendor contracts remain with the customer and those costs are netted against our co-managed revenue. For the three months ended March 31, 2021 and 2020, substantially all of our net operating and incentive fees from end-to-end RCM services were generated under the operating partner model.

We also offer modular services, allowing customers to engage us for only specific components of our end-to-end RCM service offering, such as physician advisory services (“PAS”), practice management (“PM”), revenue integrity solutions (“RIS”), patient experience (“PX”), coding management, and business office services. Our PAS offering assists healthcare organizations in complying with payer requirements regarding whether to classify a hospital visit as an in-patient or an out-patient observation case for billing purposes. Our PM services offer administrative and operational support to allow healthcare providers to focus on delivering high quality patient care and outsource non-core functions to us. Our RIS offering includes charge capture, charge description master (“CDM”) maintenance, and pricing services that help providers ensure they are capturing the maximum net compliant revenue for services delivered. Our PX offering helps patients manage their data in one easy-to-use environment, enabling eligibility validation and insurance plan attribution, demographic accuracy, meeting authorization and referral requirements, medical necessity validation, and patient out-of-pocket cost estimation. Our coding management offering drives performance, quality, and consistent results via business intelligence and analysis, human capital management, an accountability framework, and a quality management program. Our business office services can help providers with the entire billing function or to specifically recoup revenue that may otherwise be lost by focusing skilled resources in lower priority areas with significant revenue potential.

Once implemented, our technology solutions, processes, and services are deeply embedded in our customers’ day-to-day revenue cycle operations. We believe our service offerings are adaptable to meet an evolving healthcare regulatory environment, technology standards, and market trends.

We operate our business as a single segment configured with our significant operations and offerings organized around the business of providing revenue cycle operations for healthcare providers.

SCI Solutions, Inc. Acquisition

On April 1, 2020, we completed the acquisition of scheduling.com, Inc. d/b/a SCI Solutions, Inc. (“SCI”) pursuant to a stock purchase agreement dated as of January 9, 2020 (the “Stock Purchase Agreement”), by and among the Company, Clearsight Intermediate Holdings, Inc. (“Clearsight Holdings”) and Clearsight Group Holdings, LLC (the “Seller”) (the “SCI Acquisition”). At the closing of the transaction, we purchased from the Seller all of the issued and outstanding equity interests of Clearsight Holdings, which owns all of the issued and outstanding equity interests of SCI. SCI is a leading provider of software-as-a-service (“SaaS”)-based scheduling and patient access solutions. SCI’s platform streamlines the patient and provider experience, creating efficient care networks where health systems’ capacity is digitally and conveniently accessible to all market constituents. The combination of R1 and SCI is expected to deliver enhanced value for healthcare providers by enabling them to expand digital front door strategies for their patients, improve operating efficiency, and increase capacity utilization, among other benefits. The aggregate purchase price consisted of $190.0 million in cash, adjusted pursuant to the Stock Purchase Agreement for cash and working capital. The agreement also contained an earn-out of $10.0 million for meeting certain financial and operational targets. The earn-out is expected to be paid in the second quarter of 2021.

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On June 26, 2019, we entered into a senior credit agreement (the “Credit Agreement”) with Bank of America, N.A., as administrative agent and the lenders named therein for senior secured credit facilities consisting of a $325.0 million senior secured term loan facility (the “Senior Term Loan”) and a $100.0 million senior secured revolving credit facility. On March 20, 2020, we entered into Amendment No. 1 to the Credit Agreement (the “Amendment”), pursuant to which the lenders named in the Amendment agreed to provide an additional $191.1 million incremental delayed-draw term loan facility (the “Incremental Term Loan”) on the same terms as its existing Senior Term Loan provided under the Credit Agreement.

The Incremental Term Loan was drawn substantially concurrently with the acquisition of SCI. The proceeds of the Incremental Term Loan were used to fund the purchase price for SCI and related expenses. The Incremental Term Loan has terms consistent with those of the Senior Term Loan, including with respect to interest, maturity, amortization, and prepayments and has the same affirmative and negative covenants and events of default as those applicable to the Senior Term Loan under the Credit Agreement.

RevWorks Acquisition

On August 3, 2020, we completed the acquisition of the RevWorks services business pursuant to an asset purchase agreement dated as of June 2, 2020 (the “RevWorks Purchase Agreement”) by and among the Company and Cerner Corporation (the “RevWorks Acquisition”). At the closing of the transaction, we purchased certain assets relating to the RevWorks services business, as specified in the RevWorks Purchase Agreement. The combination of R1 and RevWorks is expected to provide enhanced revenue cycle capabilities and expertise to RevWorks clients, helping drive sustainable financial improvements for providers while improving their patients’ overall experience.

Emergency Medical Services Disposition

On July 19, 2020, we entered into a definitive agreement to dispose of our emergency medical services (“EMS”) business, including EMS Revenue Cycle Management and Electronic Patient Care Reporting (the “EMS Disposition”) for $140.0 million, inclusive of a $5.0 million hold-back amount subject to the completion of certain transition services, to be paid approximately one year from the date of the disposition. On October 30, 2020, we completed the EMS Disposition. We recognized a gain on the sale of $55.7 million, which was subject to customary working capital adjustments.

VisitPay Inc. Acquisition

On May 3, 2021, we entered into a definitive agreement to acquire VisitPay Inc. (“VisitPay”), a provider of digital payment solutions. We will acquire VisitPay for $298.0 million in cash, subject to customary adjustments for working capital, cash, and debt. We intend to fund the acquisition and related fees and expenses with the proceeds from additional borrowings and cash on hand. Concurrent with the entry into the definitive agreement to acquire VisitPay, we obtained a debt financing commitment letter from Bank of America in the amount of $300.0 million. There is no financing condition linked to the consummation of the acquisition. The agreement contains customary representations, warranties, and closing conditions. The transaction is expected to close in the third quarter of 2021.

Coronavirus Pandemic

In March 2020, the World Health Organization characterized COVID-19 as a pandemic. Restrictions on businesses and travel are occurring based on state and local guidelines and vary by locality and cannot be reasonably predicted.

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Given the ongoing challenges associated with efforts to contain the spread of COVID-19 and related business impact for our customers, we initiated a number of actions in 2020 and continuing into 2021 to ensure (1) the health, safety, and well-being of our workforce; (2) uninterrupted and, in many respects, expanded support for our customers and the patients and communities they serve; and (3) business and operational continuity. Our efforts to date include: repositioning more than 15,000 global employees to a work-from-home operating environment; offering zero out-of-pocket cost COVID-19 testing and telemedicine visits; encouraging vaccinations; restricting all non-essential domestic and international travel; launching our PX mobile patient registration technology to reduce risk of patient and R1 staff exposure and preserve the use of critical personal protective equipment for clinical staff; leveraging capabilities acquired via our SCI acquisition to assist customers with processes to restart elective procedure scheduling; developing reporting to allow for detailed COVID-19 order tracking, scheduling, and follow-up; offering in-depth regulatory resource guidance and content to aid our customers in navigating a rapidly developing and changing series of healthcare regulations during the public health emergency; preserving continuous pay for our hourly workforce during periods of reduced patient volumes for our customers; and providing customers with operational best practices for implementation and revenue cycle management of telehealth services.

Due to the impact of the pandemic, there continues to be decreased patient volumes for our customers. Corresponding to the decreased volume, we anticipate that our revenues on average will be approximately 90 to 95% of pre-COVID amounts. Given the uncertainty of the pandemic, we cannot reasonably predict when volumes will return to their pre-COVID levels. The impact of the COVID-19 pandemic is fluid and continues to evolve. We cannot predict the extent to which our business, results of operations, financial condition or liquidity will ultimately be impacted. However, we continue to assess its impact on our business and are actively managing our response. For further details on the potential impact of COVID-19 on our business, refer to “Risk Factors,” in Part II, Item 1A of our Annual Report on Form 10-K for the fiscal year ended December 31, 2020.

CONSOLIDATED RESULTS OF OPERATIONS

The following table provides consolidated operating results and other operating data for the periods indicated:

		Three Months Ended March 31,				2021 vs. 2020 Change
		2021		2020		Amount		%
	(In millions except percentages)
Consolidated Statement of Operations Data:
Net operating fees		$	286.1	$	280.9	$	5.2	2	%
Incentive fees		29.0		16.8		12.2		73	%
Other		27.5		22.8		4.7		21	%
Net services revenue		342.6		320.5		22.1		7	%
Operating expenses:
Cost of services		267.2		253.9		13.3		5	%
Selling, general and administrative		25.6		25.5		0.1		—	%
Other expenses		13.0		8.7		4.3		49	%
Total operating expenses		305.8		288.1		17.7		6	%
Income from operations		36.8		32.4		4.4		14	%
Net interest expense		3.9		3.8		0.1		3	%
Net income before income tax provision		32.9		28.6		4.3		15	%
Income tax provision		7.1		10.4		(3.3)		(32)	%
Net income		$	25.8	$	18.2	$	7.6	42	%
Adjusted EBITDA (1)		$	80.4	$	61.6	$	18.8	31	%

(1) Refer to the Non-GAAP Financial Measures section below for a reconciliation of our financial results reported in accordance with GAAP to non-GAAP financial results.

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Use of Non-GAAP Financial Information

In order to provide a more comprehensive understanding of the information used by our management team in financial and operational decision-making, we supplement our consolidated financial statements that have been prepared in accordance with GAAP with the non-GAAP financial measure adjusted EBITDA. Adjusted EBITDA is utilized by our Board and management team as (i) one of the primary methods for planning and forecasting overall expectations and for evaluating actual results against such expectations; and (ii) as a performance evaluation metric in determining achievement of certain executive incentive compensation programs, as well as for incentive compensation plans for employees.

Selected Non-GAAP Measure

Adjusted EBITDA

We define adjusted EBITDA as net income before net interest income/expense, income tax provision/benefit, depreciation and amortization expense, share-based compensation expense, strategic initiatives costs, and other items which are detailed in the table below.

We understand that, although non-GAAP measures are frequently used by investors, securities analysts, and others in their evaluation of companies, these measures have limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of our results of operations as reported under GAAP. Some of these limitations are:

•Adjusted EBITDA does not reflect:

•Changes in, or cash requirements for, our working capital needs;

•Share-based compensation expense;

•Income tax expenses or cash requirements to pay taxes;

•Interest expenses or cash required to pay interest;

•Certain other expenses which may require cash payments;

•Although depreciation and amortization charges are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and adjusted EBITDA does not reflect cash requirements for such replacements or other purchase commitments, including lease commitments; and

•Other companies in our industry may calculate adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.

Reconciliation of GAAP and Non-GAAP Measures

The following table represents a reconciliation of adjusted EBITDA to net income, the most comparable GAAP measure, for each of the periods indicated:

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		Three Months Ended March 31,				2021 vs. 2020 Change
		2021		2020		Amount		%
	(In millions except percentages)
Net income		$	25.8	$	18.2	$	7.6	42	%
Net interest expense		3.9		3.8		0.1		3	%
Income tax provision		7.1		10.4		(3.3)		(32)	%
Depreciation and amortization expense		17.9		15.7		2.2		14	%
Share-based compensation expense (1)		12.7		4.8		7.9		165	%
Other expenses (2)		13.0		8.7		4.3		49	%
Adjusted EBITDA (non-GAAP)		$	80.4	$	61.6	$	18.8	31	%

(1)        Share-based compensation expense represents the expense associated with stock options, restricted stock units, and performance-based restricted stock units granted, as reflected in our Consolidated Statements of Operations and Comprehensive Income. See Note 12, Share-Based Compensation, to the consolidated financial statements included in this Quarterly Report on Form 10-Q for the detail of the amounts of share-based compensation expense.

(2)        Other expenses consist of the following (in millions):

	Three Months Ended March 31,
	2021		2020
Severance and related employee benefits	$	1.5	$	1.1
Strategic initiatives (1)	6.5		3.2
Facility-exit charges (2)	1.5		0.4
Other (3)	3.5		4.0
Total other expenses	$	13.0	$	8.7

(1) Costs related to evaluating, pursuing, and integrating acquisitions, performing portfolio and capital structure analyses and transactions, and other inorganic business projects as part of the Company’s growth strategy. Costs include vendor spend, employee time and expenses spent on activities, severance and retention amounts associated with integration activities, and changes to contingent consideration related to acquisitions. For the three months ended March 31, 2021, $0.5 million of contingent consideration changes were included.

(2) As part of evaluating our footprint, we have exited certain leased facilities. Costs include asset impairment charges and other costs related to exited leased facilities.

(3) For the three months ended March 31, 2021 and 2020, includes $1.7 million and $2.6 million, respectively, of expenses related to the COVID-19 pandemic, inclusive of appreciation bonuses for the Company’s front-line employees, pandemic response mobilization efforts, telemedicine and testing costs for employees, and other costs related to the COVID-19 pandemic.

Three Months Ended March 31, 2021 Compared to Three Months Ended March 31, 2020

Net Services Revenue

Net services revenue increased by $22.1 million, or 7%, from $320.5 million for the three months ended March 31, 2020, to $342.6 million for the three months ended March 31, 2021. The increase was primarily driven by the SCI and RevWorks acquisitions, higher incentive fees, and new customers onboarded in the last twelve months, partially offset by the EMS Disposition.

Cost of Services

Cost of services increased by $13.3 million, or 5%, from $253.9 million for the three months ended March 31, 2020, to $267.2 million for the three months ended March 31, 2021, modestly improving cost of services as a percentage of revenue. The increase in cost of services was primarily driven by the SCI and RevWorks acquisitions and an increase associated with new customers onboarded in the last twelve months, partially offset by the EMS Disposition.

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Selling, General and Administrative Expenses

Selling, general and administrative expenses increased by $0.1 million, or 0%, from $25.5 million for the three months ended March 31, 2020, to $25.6 million for the three months ended March 31, 2021. The increase was primarily driven by increased share-based compensation expense, partially offset by lower travel and marketing expenses.

Other Expenses

Other expenses increased by $4.3 million, or 49%, from $8.7 million for the three months ended March 31, 2020, to $13.0 million for the three months ended March 31, 2021. The increase was primarily driven by expenses related to strategic initiatives, the preferred stock conversion transaction, and facility-exit expenses, partially offset by lower expenses related to COVID-19.

Income Tax Provision

Income tax expense decreased by $3.3 million from $10.4 million income tax expense for the three months ended March 31, 2020, to $7.1 million income tax expense for the three months ended March 31, 2021, primarily due to higher discrete benefits. Our effective tax rate (including discrete items) was approximately 22% and 36% for the three months ended March 31, 2021 and 2020, respectively. The interim tax accounting guidance requires the use of the estimated Annual Effective Tax Rate (“AETR”) based on a full year of forecasted income and tax expense/(benefit) applied to year to date income/(loss). Our tax rate is also affected by discrete items that may occur in any given year, but are not necessarily consistent from year to year.

CRITICAL ACCOUNTING POLICIES

Management considers an accounting policy to be critical if the accounting policy requires management to make particularly difficult, subjective, or complex judgments about matters that are inherently uncertain. A summary of our critical accounting policies is included in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Application of Critical Accounting Policies and Use of Estimates” of our 2020 Form 10-K. There have been no material changes to the critical accounting policies disclosed in our 2020 Form 10-K.

NEW ACCOUNTING PRONOUNCEMENTS

For additional information regarding new accounting guidance, see Note 2, Recent Accounting Pronouncements, to our consolidated financial statements included in this Quarterly Report on Form 10-Q, which provides a summary of our recently adopted accounting standards and disclosures.

Liquidity and Capital Resources

Our primary sources of liquidity include our cash and cash equivalents, cash flows from operations, and borrowings under our Credit Agreement. As of March 31, 2021 and December 31, 2020, we had cash and cash equivalents of $103.5 million and $173.8 million, respectively. The primary driver for the decreased cash position at March 31, 2021 was the payment made related to the conversion of the preferred stock, offset by cash inflows from operations.

Our Credit Agreement includes a senior secured revolving credit facility (the “Senior Revolver”) with a total capacity of $100.0 million. As of March 31, 2021 and December 31, 2020, we had drawn $70.0 million and had $30.0 million remaining under the senior revolver. See Note 11, Debt, to our consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information on our Credit Agreement. As of March 31, 2021 we had total available liquidity of $133.5 million reflecting our cash and cash equivalents as well as remaining availability under our revolver. On January 15, 2021, we paid $105.0 million in cash to the Investor in connection with the conversion of the preferred stock held by the Investor.

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Concurrent with entering into a definitive agreement to acquire VisitPay on May 3, 2021, we obtained a debt financing incremental commitment letter from Bank of America with respect to a potential incremental term loan in the amount of $300.0 million, subject to the terms and conditions set forth in the incremental commitment letter and related fee letter.

We intend to embark on a process to refinance our senior credit facility in the second quarter of 2021. The intended purpose of the refinancing is to complete the VisitPay acquisition, increase borrowing capacity, provide for more flexibility for general corporate purposes and potential acquisitions, and to generally improve terms, including pricing terms. There can be no assurances that such refinancing will be completed. If such refinancing is completed as contemplated, we will not incur the potential incremental term loan described in the preceding paragraph.

Our liquidity is influenced by many factors, including timing of revenue and corresponding cash collections, the amount and timing of investments in strategic initiatives, our investments in property, equipment and software, and the use of cash to pay tax withholding obligations upon surrender of shares upon vesting of equity awards. We continue to invest capital in order to achieve our strategic initiatives. In addition, we plan to enhance customer service by continuing our investment in technology to enable our systems to more effectively integrate with our customers' existing technologies.

We plan to continue to deploy resources to strengthen our information technology infrastructure, including automation, in order to drive additional value for our customers. We also expect to continue to invest in our global business services infrastructure and capabilities, and selectively pursue acquisitions and/or strategic relationships that will enable us to broaden or further enhance our offerings. New business development remains a priority as we plan to continue to boost our sales and marketing efforts. Additionally, we expect to incur costs associated with implementation and transition costs to onboard new customers.

We expect cash and cash equivalents, cash flows from operations, and our availability under the Senior Revolver to continue to be sufficient to fund our operating activities and cash commitments for investing and financing activities, including debt maturities and material capital expenditures, for at least the next 12 months. As noted above, we obtained a debt financing commitment letter from Bank of America in the amount of $300.0 million, which would be sufficient to cover the acquisition of VisitPay. The extent to which COVID-19 will ultimately impact our results will depend on future developments, but could adversely impact our business, results of operations, and liquidity in future periods.

Cash flows from operating, investing, and financing activities, as reflected in our consolidated statements of cash flows, are summarized in the following table:

	Three Months Ended March 31,
	2021		2020
	(In millions)
Net cash provided by operating activities	$	46.0	$	0.6
Net cash used in investing activities	$	(9.6)	$	(13.3)
Net cash (used in) provided by financing activities	$	(107.1)	$	28.4

Cash Flows from Operating Activities

Cash provided by operating activities increased by $45.4 million from $0.6 million for the three months ended March 31, 2020, to $46.0 million for the three months ended March 31, 2021. Cash provided by operating activities increased due to increased net income of $7.6 million and a smaller cash bonus pay-out related to the 2020 bonus plan.

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Cash Used in Investing Activities

Cash used in investing activities primarily includes our investments in property, equipment and software and our inorganic growth initiatives. Outflows for significant acquisitions are typically offset by cash inflows from financing activities related to obtaining new debt.

Cash used in investing activities decreased by $3.7 million from $13.3 million for the three months ended March 31, 2020, to $9.6 million for the three months ended March 31, 2021. Cash used in investing activities decreased due to timing of payments for purchases of property, equipment and software.

Cash Flows from Financing Activities

Cash flows from financing activities primarily relate to borrowings and repayments of debt. In conjunction with the acquisition of SCI in 2020, we amended our Credit Agreement to draw additional funds to finance the acquisition. We utilize our revolver to ensure we have sufficient cash on hand to support the needs of the business at any given point in time. Cash flows from financing activities also include cash received from exercises of stock options and the use of cash to pay tax withholding obligations upon surrender of shares upon vesting of equity awards, as well as other cash financing activities.

Cash used in financing activities increased by $135.5 million from cash provided of $28.4 million for the three months ended March 31, 2020, to cash used of $107.1 million for the three months ended March 31, 2021. This change was due to the payment made in conjunction of the conversion of the preferred stock, as well as changes in our revolver financing activities.

Debt and Financing Arrangements

On June 26, 2019, we entered into a senior credit agreement (the “Credit Agreement”) with Bank of America, N.A., as administrative agent, and the lenders named therein, for senior secured credit facilities (the “Senior Secured Credit Facilities”), consisting of a $325.0 million senior secured term loan facility (the “Senior Term Loan”) issued at 99.66% of par and a $100.0 million senior secured revolving credit facility (the “Senior Revolver”). On April 1, 2020, we drew an additional $191.1 million in conjunction with Amendment No. 1 to the Credit Agreement (the “Amendment”) on the same terms as our existing Senior Term Loan provided under the Credit Agreement. As of March 31, 2021, we had $548.1 million outstanding on our term loan facilities and had drawn $70.0 million on our Senior Revolver, with $30.0 million of availability remaining. The term loans require quarterly payments, and we bear interest at a floating rate, which was 2.36% at March 31, 2021.

The Credit Agreement contains a number of financial and non-financial covenants. We are required to maintain minimum consolidated total net leverage and consolidated interest coverage ratios. The Company was in compliance with all of the covenants in the Credit Agreement as of March 31, 2021.

Concurrent with entering into a definitive agreement to acquire VisitPay on May 3, 2021, we obtained a debt financing incremental commitment letter from Bank of America with respect to a potential incremental term loan in the amount of $300.0 million, subject to the terms and conditions set forth in the incremental commitment letter and related fee letter.

We intend to embark on a process to refinance our senior credit facility in the second quarter of 2021. The intended purpose of the refinancing is to complete the VisitPay acquisition, increase borrowing capacity, provide for more flexibility for general corporate purposes and potential acquisitions, and to generally improve terms, including pricing terms. There can be no assurances that such refinancing will be completed. If such refinancing is completed as contemplated, we will not incur the potential incremental term loan described in the preceding paragraph.

See Note 11, Debt, to our consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information.

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CONTRACTUAL OBLIGATIONS

The following table presents a summary of our contractual obligations as of March 31, 2021 (in millions):

	2021		2022		2023		2024		2025		2026		Thereafter		Total
Operating leases (1)	$	14.0	$	16.0	$	15.2	$	15.3	$	15.2	$	12.0	$	22.1	$	109.8
Purchase and finance lease obligations (2)	$	7.4	$	10.1	$	9.0	$	5.0	$	1.8	$	—	$	—	$	33.3
Debt obligations	$	25.8	$	38.7	$	45.2	$	438.4	$	—	$	—	$	—	$	548.1
Interest on debt	$	10.8	$	13.0	$	11.2	$	5.0	$	—	$	—	$	—	$	40.0
Total	$	58.0	$	77.8	$	80.6	$	463.7	$	17.0	$	12.0	$	22.1	$	731.2

(1) Obligations and commitments to make future minimum rental payments under non-cancelable operating leases having remaining terms in excess of one year.

(2) Includes obligations associated with IT software and service costs.

We do not have any other off-balance sheet arrangements that have or are reasonably likely to have a material current or future impact on our financial results.

Item 3. Qualitative and Quantitative Disclosures about Market Risk

Interest Rate Sensitivity. Our results of operations and cash flows are subject to fluctuations due to changes in interest rates due to our debt and banking arrangements, which can result in fluctuations in our interest income and expense. As of March 31, 2021, we have hedged $100.0 million of our $548.1 million outstanding floating rate debt to a fixed rate of 1.4% plus the applicable spread defined in the Credit Agreement. The remaining $448.1 million outstanding is subject to an average variable rate of 2.36% as of March 31, 2021. Assuming the current level of borrowings, a one percentage point increase or decrease in interest rates would increase or decrease our annual interest expense by approximately $4.5 million.

Our interest income is primarily generated from variable rate interest earned on operating cash accounts.

Foreign Currency Exchange Risk. Our results of operations and cash flows are subject to fluctuations due to changes in the Indian rupee because a portion of our operating expenses are incurred by our subsidiary in India and are denominated in Indian rupees. We do not generate significant revenues outside of the United States. For the three months ended March 31, 2021 and 2020, 9% and 9% of our expenses were denominated in foreign currencies, respectively. As of March 31, 2021 and 2020, we had net assets of $61.0 million and $40.0 million in foreign entities, respectively. The reduction in earnings from a 10% change in foreign currency spot rates would be $3.0 million and $2.8 million at March 31, 2021 and 2020, respectively.

For designated cash flow hedges, gains and losses currently recorded in accumulated other comprehensive loss will be reclassified into earnings at the time when certain anticipated intercompany charges are accrued as cost of services. As of March 31, 2021, it was anticipated that approximately $0.4 million of gains, net of tax, currently recorded in accumulated other comprehensive loss will be reclassified into cost of services within the next 12 months.

We use sensitivity analysis to determine the effects that market foreign currency exchange rate fluctuations may have on the fair value of our hedge portfolio. The sensitivity of the hedge portfolio is computed based on the market value of future cash flows as affected by changes in exchange rates. This sensitivity analysis represents the hypothetical changes in value of the hedge position and does not reflect the offsetting gain or loss on the underlying exposure. A 10% change in the levels of foreign currency exchange rates against the U.S. dollar (or other base currency of the hedge if not a U.S. dollar hedge) with all other variables held constant would have resulted in a change in the fair value of our hedge instruments of approximately $8.7 million as of March 31, 2021.

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Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) are designed to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to management including its principal executive officer and principal financial officer to allow timely decisions regarding required disclosures.

In connection with the preparation of this report, our management, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2021. Our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2021, our disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting during the first quarter of 2021 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II

Item 1. Legal Proceedings

Other than the litigation described in Note 17, Commitments and Contingencies, to our consolidated financial statements included in this Quarterly Report on Form 10-Q, we are presently not a party to any material litigation or regulatory proceeding and are not aware of any pending or threatened litigation or regulatory proceeding against us which, individually or in the aggregate, could have a material adverse effect on our business, operating results, financial condition, or cash flows.

Item 1A. Risk Factors

There have been no material changes in our risk factors from those disclosed in our 2020 Form 10-K. The risk factors disclosed in Part I, Item 1A of our 2020 Form 10-K, in addition to the other information set forth in this Quarterly Report on Form 10-Q, could materially affect our business, financial condition or future results. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition, and/or operating results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Unregistered Sale of Equity Securities

None.

Issuer Purchases of Equity Securities

The following table provides information about our repurchases of common stock during the periods indicated:

Period	Number of Shares  Purchased (1)	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (2)	Maximum Dollar Value of Shares that May Yet be Purchased Under Publicly Announced Plans or Programs (in millions) (2)
January 1, 2021 through January 31, 2021	1,945	$	23.97	—	$	49.0
February 1, 2021 through February 28, 2021	136	$	27.44	—	$	49.0
March 1, 2021 through March 31, 2021	120	$	28.06	—	$	49.0

(1)

Includes the surrender of shares of our common stock related to employees’ tax withholding upon vesting of restricted stock. See Note 12, Share-Based Compensation, to our consolidated financial statements included in this Quarterly Report on Form 10-Q.

(2)

On November 13, 2013, the Board authorized, subject to the completion of the restatement of our financial statements, the repurchase of up to $50.0 million of our common stock from time to time in the open market or in privately negotiated transactions (the “2013 Repurchase Program”). The timing and amount of any shares repurchased under the 2013 Repurchase Program will be determined by our management based on its evaluation of market conditions and other factors. The 2013 Repurchase Program may be suspended or discontinued at any time.

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Item 6. Exhibits

The following are filed or incorporated by reference as a part of this Quarterly Report on Form 10-Q:

(a)

Exhibit Number	Exhibit Description
3.1	Amendment No. 3 to the Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.1 to the Current Report on 8-K (file No. 001-34746) filed on February 26, 2021)
10.1*	Amended and Restated Offer Letter Agreement between the Registrant and Joseph Flanagan dated March 23, 2021
10.2+	Addendum No. 8 to the Amended and Restated Services Agreement between the Registrant and IHC Health Services, Inc. dated as of March 24, 2021
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

*

+ Management contract or compensatory plan or arrangement.

Portions of this exhibit (indicated therein by asterisks) have been omitted for confidential treatment.

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SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.  

	R1 RCM INC.
By:	/s/ Joseph Flanagan
	Joseph Flanagan
	President and Chief Executive Officer
By:	/s/ Rachel Wilson
	Rachel Wilson
	Chief Financial Officer and Treasurer

Date: May 4, 2021

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EX-10.1

Exhibit 10.1

Execution Version

R1 RCM INC.

401 N. Michigan Avenue
Chicago, Illinois 60611

March 23, 2021

Mr. Joseph Flanagan

Re: Offer Letter

Dear Joe:

Reference is made to the offer letter, dated April 27, 2013 (as amended as of April 29, 2014 and March 6, 2019, the “Offer Letter”) between you and R1 RCM Inc. (previously known as Accretive Health, Inc.), a Delaware corporation (the “Company”). This letter agreement (this “Agreement”) amends, restates and supersedes the Offer Letter in its entirety, and sets forth all of the terms and conditions of your employment with the Company.

1.At-Will Employment. Your employment with the Company under this Agreement will continue for an indefinite term. Your employment with the Company will be “at-will,” and will be terminable by you or the Company at any time and for any reason (or no reason), subject to the terms and conditions hereof.

2.Title and Reporting. During the term of your employment with the Company, you will (i) continue to serve as the Chief Executive Officer and as a member of the Board of Directors of the Company (the “Board”) and (ii) report directly to the Board.

3.Duties and Responsibilities. You will have the duties and responsibilities that are normally associated with the positions described above and such executive responsibilities as may be prescribed by the Board from time to time and that are consistent with the position of Chief Executive Officer. During your period of employment, you will devote substantially all of your business time, energy and efforts to your obligations hereunder and to the affairs of the Company; provided that the foregoing will not prevent you from (i) participating in charitable, civic, educational, professional, community or industry affairs, and (ii) managing your passive personal investments, in each case, so long as such activities, individually or in the aggregate, do not materially interfere with your duties hereunder or create a potential business or fiduciary conflict.

4.Base Salary. You will receive an annualized base salary of $1,000,000, retroactive to January 1, 2021, which will be paid in equal installments in accordance with the Company’s normal payroll practices as in effect from time to time. To achieve the retroactive effect of such base salary, the installment of your base salary payable on the first regularly scheduled payroll date after the date hereof shall be adjusted such that you will have received aggregate installments of your base salary after giving effect to the payment of such installment as you would have received had all prior installments of your salary since January 1, 2021 been made based on an annualized base salary of $1,000,000. Your base salary will be subject to review each year for possible increase (but not decrease) by the Board in its sole discretion. The base salary as determined herein from time to time will constitute “Base Salary” for purposes of this Agreement. For the avoidance of doubt, you will not receive any additional compensation for your service on the Board.

5.Annual Bonus. You will be eligible to receive an annual cash incentive award in respect of each calendar year that ends during the period of your employment with the Company based on the achievement of performance goals established by the Board (or its Human Capital Committee). Effective as of January 1, 2021, the target amount of any such award will be 100% of the Base Salary earned by you for the calendar year in question (“Annual Bonus”). The amount to be paid for any calendar year (which amount may be less than the target amount, but in no event will be more than 200% of the Base Salary) will be determined in good faith by the Board (or its Human Capital Committee), and any amount earned will be paid to you on or before March 15th of the calendar year following the calendar year to which such award relates, at the same time annual cash incentive awards are paid to other senior executives of the Company.

6.Catch-Up Equity Award. You will be granted a one-time equity award of 273,701 performance-based restricted stock units (“PBRSUs”) under the Company’s Second Amended and Restated 2010 Stock Incentive Plan, as amended from time to time (the “Equity Plan”), and subject to the terms and conditions of the award agreement evidencing such award, which shall be substantially consistent with the terms and conditions of awards granted to other senior executives under the Company’s 2020 PBRSU SLPP Program, including, without limitation, a performance period relating to such PBRSUs that will end on December 31, 2022.

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7.Annual Equity Awards. During the term of your employment with the Company, and subject to the approval of the Board (or its Human Capital Committee), commencing with the 2021 annual equity grants, you will be eligible to receive an annual equity award covering a target number of shares of the Company’s common stock having a grant date value equal to 500% of Base Salary. All such equity awards will be in such form and on such terms and conditions as the Board (or its Human Capital Committee) shall determine from time to time, and shall be subject to and governed by the terms and conditions of (i) the Equity Plan (or such other equity incentive plan of the Company under which such awards are granted) as may be in effect from time to time and (ii) the respective award agreements evidencing such awards. Nothing herein shall be construed to give you any rights to any amount or type of grant except as provided in an award agreement and authorized by the Board (or its Human Capital Committee).

8.Employee Benefits. You will be entitled to participate in the employee and fringe benefit plans and programs (including, without limitation, health, retirement and vacation programs) of the Company in effect during your employment that are generally available to the senior management of the Company, subject to and on a basis consistent with the terms, conditions and overall administration of such plans and programs.

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9.Restrictions on Transfer of PBRSU Shares. Capitalized terms used in this Section 9 but not otherwise defined in this Agreement have the meanings ascribed to such terms in that certain Amended and Restated Grant of Performance Based Awards, dated as of December 20, 2017 (the “2017 PBRSU Agreement”). Any and all PBRSU Shares shall cease to be subject to the PBRSU Shares Transfer Restrictions effective as of January 15, 2022 (the “Lockup Expiration Date”); provided, however, that if, prior to the Lockup Expiration Date, TowerBrook Transfers any of the TowerBrook R1 Ownership Interests (other than to Affiliate Transferees or Customer Transferees and excluding, for the avoidance of doubt, an exercise of any warrants), then you shall have the right (the “Pro Rata Transfer Right”) to participate in such transaction by Transferring a portion of the PBRSU Shares held by you as of immediately prior to such Transfer equal to the TowerBrook Transferred Percentage. “TowerBrook Transferred Percentage” means, with respect to a Transfer by TowerBrook described in the preceding sentence, the quotient (expressed as a percentage) equal to (x) the number of TowerBrook R1 Ownership Interests to be Transferred in such Transfer (giving effect, if applicable, to the conventions set forth in Section 5(c) of the 2017 PBRSU Agreement); divided by (y) the number of TowerBrook R1 Ownership Interests owned directly or beneficially by TowerBrook immediately prior to such Transfer. The Pro Rata Transfer Right is in lieu of, and supersedes, the right to Transfer PBRSU Shares that is provided in clause (i) of the proviso of the first sentence of Section 5(b) of the 2017 PBRSU Agreement. Except as expressly set forth in this Section 9, the terms and conditions of the 2017 PBRSU Agreement shall remain in full force and effect.

10.Termination.

(a)Your employment with the Company and its subsidiaries will terminate (i) upon your written notice to the Company of a termination for Good Reason, (ii) upon your thirty (30) days’ prior written notice to the Company of your voluntary termination of employment without Good Reason (which the Company may, in its sole discretion, make effective earlier than any notice date), (iii) immediately upon your death or upon written notice by the Company to you of a termination of employment for Cause or without Cause (other than for death or “Disability” (as defined in Section 9(b)(ii) hereof)), or (iv) upon ten (10) days’ prior written notice by the Company to you of your termination of employment due to Disability.

(b)For purposes of this Agreement:

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(i)“Cause” means: (A) your conviction of, or plea of guilty or nolo contendere to, a felony; (B) in carrying out your duties hereunder, your engaging in conduct that constitutes gross neglect or willful misconduct and that, in either case, results in material economic or reputational harm to the Company; (C) your willful breach of any provision of this Agreement or any applicable non-disclosure, non-competition, non-solicitation or other similar restrictive covenant obligation owed to the Company, and such breach results in material economic or reputational harm to the Company; (D) your repeated refusal, or failure to undertake good faith efforts, to perform your material duties and responsibilities hereunder for the Company; or (E) your engaging in willful misconduct resulting in or intended to result in direct personal gain to you at the Company’s expense.

(ii)“Disability” means you have been unable, with or without reasonable accommodation and due to physical or mental incapacity, to substantially perform your duties and responsibilities hereunder for a period of one hundred eighty (180) days in any three hundred, sixty-five (365)-day period.

(iii)“Good Reason” means the occurrence of any of the following events, without your express written consent, unless such events are fully corrected in all material respects by the Company within thirty (30) days following your written notice to the Company: (A) material diminution in your duties, authorities or responsibilities, including, without limitation, any change to the Company’s reporting structure that would require you to report directly to someone other than the Board (other than temporarily while physically or mentally incapacitated or as required by applicable law), (B) any relocation of your principal office, or principal place of employment, to a location that is more than forty (40) miles from its location in Chicago, Illinois, as of the date hereof; or (C) any material breach by the Company of its material obligations hereunder. You must provide the Company with a written notice detailing the specific circumstances alleged to constitute Good Reason within ninety (90) days after the first occurrence of such circumstances, and actually terminate employment within thirty (30) days following the expiration of the Company’s thirty (30)-day cure period described above. Otherwise, you will be deemed to have irrevocably waived any claim of such circumstances as “Good Reason”.

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11.Severance.

(a)In the event of your termination of employment from the Company by reason of your death, Disability, voluntary resignation without Good Reason or by the Company for Cause, you will be entitled to receive (i) any unpaid Base Salary through the date of termination, (ii)except in the case of your termination by the Company for Cause, any annual bonus earned but unpaid with respect to the fiscal year ending on or preceding the date of termination, payable at the same time as it would have been paid had you not undergone a termination of employment; (iii) reimbursement in accordance with applicable Company policy for any unreimbursed business expenses incurred through the date of termination; (iv) any accrued but unused vacation time in accordance with Company policy, and (v) all other payments, benefits or fringe benefits to which you are entitled under the terms of any applicable compensation or equity arrangement or employee benefit plan or program of the Company (collectively, Sections 10(a)(i) through 10(a)(v) hereof will be hereafter referred to as the “Accrued Benefits”).

(b)In the event of your termination of employment from the Company by you for Good Reason or by the Company without Cause, the Company shall pay or provide you with the following severance benefits:

(i)the Accrued Benefits;

(ii)subject to your continued compliance with all of your post-termination obligations to the Company, an amount equal 2.00 times the sum of your (A) Base Salary and (B) target Annual Bonus, which sum shall be paid in substantially equal monthly installments for a period of twenty four (24) months following such termination; provided, however, that in the event of your termination of employment from the Company by you for Good Reason or by the Company without Cause, in each case, within twenty four (24) months following a Change in Control (as defined below), then such payment shall be made by the Company in a lump sum within sixty (60) days following your termination;

6

(iii)a prorated Annual Bonus for the calendar year in which your termination occurs, with the amount of such bonus based on the greater of (A) target performance and (B) actual performance results for such year and with the pro-ration determined by multiplying the amount of the Annual Bonus by a fraction, the numerator of which is the number of days during the year of termination that you were employed by the Company and the denominator of which is three hundred sixty-five (365), payable at the same time bonuses for the relevant year are paid to other senior executives of the Company but in no event later than March 15 of the calendar year following the calendar year in which the termination of your employment occurs; and

(iv)subject to (A) your timely election of continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), (B) your continued copayment of premiums at the same level and cost to you as if you were an employee of the Company (excluding, for purposes of calculating cost, an employee’s ability to pay premiums with pre-tax dollars), and (C) your continued compliance with all of your post-termination obligations to the Company, continued participation in the Company’s group health plan (to the extent permitted under applicable law and the terms of such plan) which covers you (and your eligible dependents) for a period of eighteen (18) months following such termination at the Company’s expense; provided that you are eligible and remain eligible for COBRA coverage; and provided, further, that in the event that you obtain other employment that offers group health benefits, such continuation of coverage by the Company will immediately cease. Notwithstanding the foregoing, the Company will not be obligated to provide the foregoing continuation coverage if it would result in the imposition of excise taxes on the Company for failure to comply with the nondiscrimination requirements of the Patient Protection and Affordable Care Act of 2010, as amended, and the Health Care and Education Reconciliation Act of 2010, as amended (to the extent applicable). If you have not become eligible to be covered under a group health plan sponsored by another employer by the date that is eighteen (18) months after the date on which your employment terminates (the “COBRA Payment Trigger Date”), then, on the Company’s first regularly scheduled pay date following the COBRA Payment Trigger, the Company shall pay you a lump sum cash payment equal to six (6) times the amount you paid to effect and continue coverage for yourself and your spouse and eligible dependents, if any, under the

7

Company’s group health plan for the full calendar month immediately preceding the COBRA Payment Trigger.

(c)For purpose of this Agreement, “Change in Control” shall mean: (A) the consummation of any consolidation or merger of the Company with any third party purchaser where the stockholders of the Company, immediately prior to the consolidation or merger, would not, immediately after the consolidation or merger, beneficially own (as such term is defined in Rule 13d-3 under the Exchange Act), directly or indirectly, shares representing in the aggregate more than fifty percent of the voting shares of the company issuing cash or securities in the consolidation or merger (or of its ultimate parent corporation, if any); (B) any sale, lease, exchange, or other transfer (in one transaction or a series of transactions contemplated or arranged by any party as a single plan) of all or substantially all of the assets of the Company to a third party purchaser; (C) any sale of a majority of the voting shares of the Company to a third party purchaser; (D) the consummation of transaction or series of transactions following which no shares of the Company (or of its ultimate parent corporation) are listed on the New York Stock Exchange or the NASDAQ, on any other United States stock exchange, or are otherwise listed on a public trading market (including the OTC Markets Group, Inc.) (a “Take Private Change of Control”); or (E) any liquidation or dissolution of the Company. Notwithstanding the foregoing, other than with respect to a Take Private Change of Control, a “Change of Control” shall not be deemed to have occurred if the event constituting such “Change of Control” is not (x) a change in the ownership of the corporation, (y) a change in effective control of the corporation, or (z) a change in the ownership of a substantial portion of the assets of the corporation, as those terms are used and defined in Section 409A(a)(2)(A)(v) of the Code, and the regulations thereunder, and where the word “corporation” used above and in such provisions is taken to refer to the Company.

(d)Payment of all amounts described in this Section 10 other than the Accrued Benefits (the “Severance Payments”) will only be payable if you deliver to the Company and do not revoke a general release of claims in favor of the Company and its affiliates in a form reasonably satisfactory to the Company. Such release must be executed and delivered (and no longer subject to revocation, if applicable) within sixty (60) days following termination. To the extent that payment of any amount of the Severance Payments constitutes “nonqualified deferred compensation” for purposes of “Code Section 409A” (as defined in Section 16 hereof), any such payment scheduled to occur during the first sixty (60) days following the termination of employment will not be paid until the sixtieth (60th) day following such termination of employment and will include payment of any amount that was otherwise scheduled to be paid prior thereto.

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12.Proprietary Interests Protection Agreement. As a condition to your continued employment, you acknowledge and agree that you remain subject to, and bound by, the Proprietary Interests Protection Agreement, as amended and attached hereto as Exhibit A.

13.No Assignments. This Agreement is personal to each of the parties hereto. Except as provided herein, no party may assign or delegate any right or obligation hereunder without first obtaining the written consent of the other party hereto. The Company may assign this Agreement to any successor to all or substantially all of the business and/or assets of the Company, provided that the Company will require such successor to expressly assume and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place. As used in this Agreement, “Company” means the Company and any successor to its business and/or assets, which assumes and agrees to perform the duties and obligations of the Company under this Agreement by operation of law or otherwise.

14.Professional Fees. Upon presentation of documentation in a form acceptable to the Company, the Company will pay or reimburse you for reasonable counsel fees incurred in connection with the negotiation and documentation of this Agreement.

15.Withholding Taxes. The Company may withhold from any and all amounts payable to you hereunder such federal, state and local taxes as may be required to be withheld pursuant to any applicable law or regulation.

16.Governing Law. The terms of this Agreement and your employment with the Company will be governed by the laws of the State of Illinois, without giving effect to the conflicts of laws principles thereof.

17.Indemnification and Liability Insurance. The Company will continue to provide you with indemnification protection and directors’ and officers’ liability insurance coverage to the same extent as the Company covers its other officers and directors. These obligations will survive the termination of your employment with the Company. In addition to the foregoing, you will continue to be covered by the Company’s standard form of indemnification agreement on the same basis as all other current officers and directors of the Company.

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18.Section 409A Compliance.

(a)The intent of the parties is that payments and benefits under this Agreement comply with, or be exempt from, Internal Revenue Code Section 409A and the regulations and guidance promulgated thereunder (collectively “Code Section 409A”) and, accordingly, to the maximum extent permitted, this Agreement will be interpreted to be in compliance therewith. To the extent that any provision hereof is modified in order to comply with Code Section 409A, such modification will be made in good faith and will, to the maximum extent reasonably possible, maintain the original intent and economic benefit to you and the Company of the applicable provision without violating the provisions of Code Section 409A. In no event whatsoever will the Company be liable for any additional tax, interest or penalty that may be imposed on you by Code Section 409A or for damages for failing to comply with Code Section 409A.

(b)A termination of employment will not be deemed to have occurred for purposes of any provision of this Agreement providing for the payment of any amount or benefit that is considered “nonqualified deferred compensation” under Code Section 409A upon or following a termination of employment unless such termination is also a “separation from service” within the meaning of Code Section 409A and, for purposes of any such provision of this Agreement, references to a “termination,” “termination of employment” or like terms will mean “separation from service.” If you are deemed on the date of termination to be a “specified employee” within the meaning of that term under Code Section 409A(a)(2)(B), then with regard to any payment or the provision of any benefit that is considered “nonqualified deferred compensation” under Code Section 409A payable on account of a “separation from service,” such payment or benefit will be made or provided at the date which is the earlier of (A) the expiration of the six (6)-month period measured from the date of your “separation from service,” and (B) the date of your death, to the extent required under Code Section 409A. Upon the expiration of the foregoing delay period, all payments and benefits delayed pursuant to this section will be paid or reimbursed to you in a lump sum and all remaining payments and benefits due under this Agreement (if any) will be paid or provided in accordance with the normal payment dates specified for them herein.

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(c)With regard to any provision herein that provides for reimbursement of costs and expenses or in-kind benefits, except as permitted by Code Section 409A, (i) the right to reimbursement or in-kind benefits will not be subject to liquidation or exchange for another benefit, (ii) the amount of expenses eligible for reimbursement, or in-kind benefits, provided during any taxable year will not affect the expenses eligible for reimbursement, or in-kind benefits to be provided, in any other taxable year, and (iii) such payments will be made on or before the last day of your taxable year following the taxable year in which the expense occurred.

(d)For purposes of Code Section 409A, your right to receive any installment payments pursuant to this Agreement will be treated as a right to receive a series of separate and distinct payments. Whenever a payment under this Agreement specifies a payment period with reference to a number of days, the actual date of payment within the specified period will be within the sole discretion of the Company.

(e)Notwithstanding any other provision of this Agreement to the contrary, in no event will any payment that constitutes “nonqualified deferred compensation” for purposes of Code Section 409A be subject to offset by any other amount unless otherwise permitted by Code Section 409A.

19.Entire Agreement; Amendment. This Agreement (including the Proprietary Interests Protection Agreement attached hereto as Exhibit A), the indemnification agreement between you and the Company and the equity award agreements entered into by and between you and the Company constitute the entire agreement between you and the Company with respect to the subject matter hereof and supersede any and all prior agreements or understandings between you and the Company with respect to the subject matter hereof, whether written or oral, including, but not limited to, the Offer Letter, provided, however, that the provisions of this Agreement and the exhibit hereto are in addition to and complement (and do not supersede) any other written agreement(s) or parts thereof between you and the Company or any of its affiliates that create restrictions on you with respect to confidentiality, non-disclosure, non-competition, non-solicitation or non-disparagement. This Agreement may be amended or modified only by a written instrument executed by you and the Company.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

11

This Agreement is intended to be a binding obligation on you and the Company regarding your employment with the Company. If this Agreement accurately reflects your understanding as to the terms and conditions of your employment with the Company, please sign and date one copy of this Agreement and return the same to us for the Company’s records. You should make a copy of the executed Agreement for your records.

Very truly yours,

/s/ M. Sean Radcliffe     

M. Sean Radcliffe
EVP & General Counsel

The above terms and conditions accurately reflect our understanding regarding the terms and conditions of my employment with the Company, and I hereby confirm my agreement to the same.

Dated: /s/ Joseph Flanagan       
Joseph Flanagan

Signature Page - Joseph Flanagan Amended and Restated Offer Letter Agreement

EXHIBIT A

PROPRIETARY INTERESTS PROTECTION AGREEMENT

R1 RCM Inc.

Proprietary Interests Protection Agreement

This Proprietary Interests Protection Agreement (this “Agreement”) is made and entered into by and between R1 RCM Inc. (the “Company”) and the undersigned employee (“Employee”).

In addition to other good and valuable consideration, Employee is expressly being given employment or continued employment with the Company including certain monies, benefits, training and/or trade secrets and other confidential information of the Company and its customers, suppliers, vendors or affiliates to which Employee would not have access but for Employee’s relationship with the Company in exchange for Employee agreeing to the terms of this Agreement. In consideration of the foregoing, Employee agrees as follows:

1.Definitions.

(a)The Company. For purposes of this Agreement, the “Company” shall mean R1 RCM Inc. and its affiliates, partners, joint ventures, predecessors and subsidiary entities, as well as its successors and assigns.

(b)The Company’s Business. For purposes of this Agreement, the “Company’s Business” shall mean the development, marketing, sale and implementation of, among other things, revenue cycle management services and solutions, physician advisory services, and quality and cost products and services.

(c)Confidential Information. For purposes of this Agreement, “Confidential Information” as used in this Agreement shall include the Company’s trade secrets as defined under Illinois law, as well as any other information or material which is not generally known to the public, and which:

(i)is generated, collected by or utilized in the operations of the Company’s business and relates to the actual or anticipated business, research or development of the Company; or

(ii)is suggested by or results from any task assigned to Employee by the Company or work performed by Employee for or on behalf of the Company.

Confidential Information shall not be considered generally known to the public if Employee or others improperly reveal such information to the public without the Company’s express written consent and/or in violation of an obligation of confidentiality to the Company. Examples of Confidential Information include, but are not limited to, all customer, client, supplier and vendor lists, budget information, contents of any database, contracts, product designs, technical know-how, engineering data, pricing and cost information, performance standards, productivity standards, research and development work, software, business plans, proprietary data, projections, market research, perceptual studies, strategic plans, marketing information, financial information (including financial statements), sales information, training manuals, employee lists and compensation of employees, and all other competitively sensitive information with respect to the Company, whether or not it is in tangible form, and including without limitation any of the foregoing contained or described on paper or in computer software or other storage devices, as the same may exist from time to time.

(d)Restricted Area. For purposes of this Agreement, “Restricted Area” shall mean the United States of America.

(e)Inventions. For purposes of this Agreement, “Inventions” shall mean all software programs, source or object code, improvements, formulas, developments, ideas, processes, techniques, know-how, data, and discoveries, whether patentable or unpatentable, conceived or reduced to practice by Employee while in the Company’s employ, either solely or jointly with others, and whether or not during regular working hours, and conceived or reduced to practice by Employee within one year of the termination of Employee’s employment with the Company that resulted from Employee’s prior work with the Company.

(f)Company Inventions. For purposes of this Agreement, “Company Inventions” shall mean any Invention that either:

(i)relates, at least in part, at the time of conception or reduction to practice of the Invention, to:

(A)the Company’s Business, projects or products, or to the manufacture or utilization thereof; or

(B)the Company’s actual or demonstrably anticipated research or development; or

(ii)results, at least in part, from any work performed directly or indirectly by Employee for the Company; or

(iii)results, at least in part, from the use of the Company’s time, materials, facilities or trade secret information.

2.Non-Solicitation. During the time in which Employee performs services for the Company and for a period of eighteen (18) months after the termination of Employee’s employment with the Company, regardless of the reason, Employee shall not, directly or indirectly, either alone or in conjunction with any person, firm, association, company or corporation:

(a)Hire, recruit, solicit or otherwise attempt to employ or retain or enter into any business relationship with, any person who is or was an employee of the Company within the twelve (12) month period immediately preceding the termination of Employee’s employment; or Solicit the sale of any products or services that are similar to or competitive with products or services offered by, manufactured by, designed by, or distributed by Company, to any person, company or entity which was a customer or potential customer of Company for such products or services and with whom Employee had direct contact or about whom Employee learned Confidential Information at any time during the last twelve (12) months of his employment with Company.

3.Non-Disclosure.

(a)Employee will not, without the Company’s prior written permission, directly or indirectly, utilize for any purpose other than for a legitimate business purpose solely on behalf of the Company, or directly or indirectly, disclose to anyone outside of the Company, either during or after Employee’s employment or relationship with the Company ends, the Company’s Confidential Information, as long as such matters remain Confidential Information.

(b)This Agreement shall not prevent Employee from revealing evidence of criminal wrongdoing to law enforcement or prohibit Employee from divulging the Company’s Confidential Information by order of a court or agency of competent jurisdiction. However, Employee shall promptly inform the Company of any such situations and shall take such reasonable steps to prevent disclosure of the Company’s Confidential Information until the Company has been informed of such requested disclosure and the Company has had an opportunity to respond to the court or agency.

(c)Federal law provides certain protections to individuals who disclose a trade secret to their attorney, a court, or a government official in certain confidential circumstances. Specifically, federal law provides that an individual shall not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret under either of the following conditions: (A) where the disclosure is made (x) in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney; and (y) solely for the purpose of reporting or investigating a suspected violation of law; or (B) where the disclosure is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal. See 18 U.S.C. § 1833(b)(1). Federal law also provides that an individual who files a lawsuit for retaliation by an employer for reporting a suspected violation of law may disclose the trade secret to the attorney of the individual and use the trade secret information in the court proceeding, if the individual (I) files any document containing the trade secret under seal and (II) does not disclose the trade secret, except pursuant to court order. See 18 U.S.C. § 1833(b)(2). Nothing in this Agreement is intended to preclude or limit such federal laws.

4.Return of Company Property. Employee agrees that, in the event that Employee’s employment with the Company is terminated for any reason, Employee shall immediately return all of the Company’s property, including without limitation, (i) tools, pagers, computers, printers, key cards, documents or other tangible property of the Company, and (ii) the Company’s Confidential Information in any media, including paper or electronic form, and Employee shall not retain in Employee’s possession any copies of such information.

5.Ownership of Inventions.

(a)Employee shall disclose all Inventions promptly and fully to the Company.

(b)Except as excluded in Section 5(e) below, Employee hereby agrees to and hereby grants and assigns to the Company all of Employee’s right, title and interest in and to all Company Inventions and agrees that all such Company Inventions shall be the Company’s sole and exclusive property to the maximum extent permitted by law.

(c)Employee shall at the request of the Company (but without additional compensation from the Company): (i) execute any and all papers and perform all lawful acts that the Company deems necessary for the preparation, filing, prosecution, and maintenance of applications for United States patents or copyrights and foreign patents or copyrights on any Company Inventions, (ii) execute such instruments as are necessary to assign to the Company or to the Company’s nominee, all of Employee’s right, title and interest in any Company Inventions so as to establish or perfect in the Company or in the Company’s nominee, the entire right, title and interest in such Company Inventions, and (iii) execute any instruments necessary or that the Company may deem desirable in connection with any continuation, renewal or reissue of any patents in any Company Inventions, renewal of any copyright registrations for any Company Inventions, or in the conduct of any proceedings or litigation relating to any Company Inventions. All expenses incurred by the Employee by reason of the performance of any of the obligations set forth in this Section 5(c) shall be borne by the Company.

(d)Concurrent with Employee’s execution of this Agreement, Employee attaches a list and brief description of all unpatented inventions and discoveries, if any, made or conceived by Employee prior to Employee’s employment with the Company and that are to be excluded from this Agreement. If no such list is attached at the time of execution of this Agreement, it shall be conclusively presumed that Employee has waived any right he may have to any such invention or discovery which relates to the Company’s business.

(e)Provisions (a) through (d) of this Section 5 regarding assignment of right, title and interest do not apply to Inventions for which no equipment, supplies, facility or trade secret information of the Company was used and which was developed entirely on Employee’s own time, unless (i) the Inventions relate either to the business of the Company, or to the Company’s actual or demonstrably anticipated research or development, or (ii) the Inventions result from any work directly or indirectly performed by the Employee for the Company.

6.Non-Competition.

(a)During the time in which Employee performs services for the Company and for a period of twelve (12) months after the termination of Employee’s employment with the Company, regardless of the reason, Employee shall not, directly or indirectly, either alone or in conjunction with any person, firm, association, company or corporation, within the Restricted Area:

(i)own, manage, operate, or participate in the ownership, management, operation, or control of, or be employed by, any entity which is in competition with the Company’s Business in which the Employee would hold a position with responsibilities that are entirely or substantially similar to any position the Employee held during the last twelve (12) months of the Employee’s employment with the Company or in which the Employee would have responsibility for or access to confidential information that is similar to or relevant to that Confidential Information which the Employee had access to during the last twelve (12) months of the Employee’s employment with the Company; or

(ii)provide services to any person or entity that engages in any business that is similar to, or competitive with the Company’s business if doing so would require Employee to use or disclose the Company’s Confidential Information.

(b)Notwithstanding anything to the contrary, nothing in this Section 6 prohibits Employee from being a passive owner of not more than one percent (1%) of the outstanding stock of any class of a corporation which is publicly traded, so long as Employee has no active participation in the business of such corporation.

Employee acknowledges and agrees that the restrictions contained in this Agreement with respect to time, geographical area and scope of activity are reasonable and do not impose a greater restraint than is necessary to protect the goodwill and other legitimate business interests of the Company and that the Employee has had the opportunity to review the provisions of this Agreement with his legal counsel. In particular, the Employee agrees and acknowledges that the Company is currently engaging in business and actively marketing its services and products throughout the United States, that Employee’s duties and responsibilities for the Company are co-extensive with the entire scope of the Company’s business, that the Company has spent significant time and effort developing and protecting the confidentiality of their methods of doing business, technology, customer lists, long term customer relationships and trade secrets and that such methods, technology, customer lists, customer relationships and trade secrets have significant value.

By continuing employment with the Company, Employee understands and agrees that: (a) Employee will not bring any confidential information of any former employer, nor any proprietary work product created as part of Employee’s duties with Employee’s former employer; and (b) Employee will not use or disclose any former employer’s confidential information or proprietary work product in the performance of Employee’s duties with the Company. Further, Employee represents that Employee is not subject to any contract that would prohibit Employee from performing Employee’s duties for the Company.

7.Remedies. Employee acknowledges that the compliance with the terms of this Agreement is necessary to protect the Confidential Information, customer relationships and goodwill of the Company and that any breach by Employee of this Agreement will cause continuing and irreparable injury to the Company for which money damages would not be an adequate remedy. Employee acknowledges that affiliates are and are intended to be third party beneficiaries of this Agreement. Employee acknowledges that the Company and any affiliate shall, in addition to any other rights or remedies they may have, be entitled to injunctive relief for any breach by Employee of any part of this Agreement. This Agreement shall not in any way limit the remedies in law or equity otherwise available to the Company and its affiliates.

8.Severability; Modification. It is expressly agreed by Employee that:

(a)Modification. If, at the time of enforcement of this Agreement, a court holds that the duration, geographical area or scope of activity restrictions stated herein are unreasonable under circumstances then existing or impose a greater restraint than is necessary to protect the goodwill and other business interests of the Company, Employee agrees that the maximum duration, scope or area reasonable under such circumstances will be substituted for the stated duration, scope or area and that the court will be allowed to revise the restrictions contained herein to cover the maximum duration, scope and area permitted by law, in all cases giving effect to the intent of the parties that the restrictions contained herein be given effect to the broadest extent possible.

(b)Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under applicable law, such invalidity, illegality or unenforceability will not affect any other provision, but this Agreement will be reformed, construed and enforced as if such invalid, illegal or unenforceable provision had never been contained herein.

9.Non-Disparagement. Subject to Section 3(c), Employee understands and agrees that Employee will not disparage the Company, its officers, directors, administrators, representatives, employees, contractors, consultants or customers and will not engage in any communications or other conduct which might interfere with the relationship between the Company and its current, former, or prospective employees, contractors, consultants, customers, suppliers, regulatory entities, and/or any other persons or entities.

10.Applicable Law. This Agreement shall be construed, interpreted, and enforced, and its validity and enforceability determined, strictly in accordance with the laws of the State of Delaware without applying its conflicts of laws principles.

11.Exclusive Jurisdiction/Venue. The parties agree that all litigation arising out of or relating to Sections 2 (Non-Solicitation), 3 (Confidential Information), and 6 (Non-Competition) of this Agreement must be brought in Cook County, Illinois or the federal court of competent jurisdiction sitting in Cook County, Illinois, and each party shall submit to and accept the exclusive jurisdiction of such court for the purpose of such suit, legal action or proceeding. All other disputes, controversies or questions arising under, out of, or relating to this Agreement or the breach thereof, other than those disputes relating to alleged violations of Sections 2 (Non-Solicitation), 3 (Confidential Information), and 6 (Non-Competition) of this Agreement, shall be conclusively settled by arbitration to be held in Chicago, Illinois, in accordance with the American Arbitration Association’s Commercial Arbitration Rules and Mediation Procedures (the “Rules”).

Arbitration shall be the parties’ exclusive remedy for any such controversies, claims or breaches. The parties also consent to personal jurisdiction in Chicago, Illinois with respect to such arbitration. The award resulting from such arbitration shall be final and binding upon both parties. The arbitrator shall be selected by agreement between the parties, but if they do not agree on the selection of an arbitrator within thirty (30) days after the date of the request for arbitration, the arbitrator shall be selected pursuant to the Rules. With respect to any claim brought to arbitration hereunder, both the Company and Employee shall be entitled to recover whatever damages would otherwise be available in any legal proceeding based upon the federal and/or state law applicable to the claim. The decision of the arbitrator may be entered and enforced in any court of competent jurisdiction by either the Company or Employee. Each party shall pay the fees of their respective attorneys (except as otherwise awarded by the arbitrator), the expenses of their witnesses and any other expenses connected with representing their cases. Other costs, including the fees of the mediator, the arbitrator, the cost of any record or transcript of the arbitration, and administrative fees, shall be borne equally by the parties, one-half by Employee, on the one hand, and one-half by the Company, on the other hand.

12.Assignability. The rights herein may be assigned by the Company and shall bind and inure to the benefit of the Company’s successors, assigns, heirs and representatives. If the Company makes any assignment of the rights herein, Employee agrees that this Agreement shall remain binding upon Employee in any event.

13.Acceptance. The parties agree that this Agreement is accepted electronically.

I hereby acknowledge that I have reviewed the Agreement and agree to comply with the terms and conditions set forth herein.

EMPLOYEE ACCEPTANCE

/s/ Joseph Flanagan                                
    Joseph Flanagan

EX-10.2

Exhibit 10.2

ADDENDUM NO. 8 TO

AMENDED AND RESTATED SERVICES AGREEMENT

This Addendum No. 8 (this “Addendum”) is made and entered into as of the 24th day of March, 2021 (the “Addendum Effective Date”) by and between IHC Health Services, Inc., a Utah non-profit corporation, (“IMH” or sometimes referred to as “Intermountain” or “Intermountain Healthcare”) and R1 RCM Inc., a Delaware corporation, formerly known as Accretive Health, Inc. (“R1”) (each a “Party” and collectively, the “Parties”), pursuant to and subject to that certain Amended and Restated Services Agreement (as amended, referred to herein as the "Services Agreement") dated as of January 23, 2018, by and between the Parties.

WHEREAS, the Services Agreement was amended by (i) Addendum No. 1 to Amended and Restated Services Agreement, effective as of April 30, 2018, (ii) Addendum No. 2 to Amended and Restated Services Agreement, effective as of June 18, 2018, (iii) Addendum No. 3 to Amended and Restated Services Agreement, effective as of September 27, 2018, (iv) Addendum No. 4 to Amended and Restated Services Agreement, effective as of April 30, 2019, (v) Addendum No. 5 to Amended and Restated Services Agreement, effective as of December 31, 2019, (vi) Addendum No. 6 to Amended and Restated Services Agreement, effective as of January 28, 2020, and (vii) Addendum No. 7 to Amended and Restated Services Agreement, effective as of April 30, 2020.

NOW THEREFORE, in consideration of the premises and mutual consents set forth below, the Parties hereby agree as follows, in each case, effective as of January 1, 2021:

1.Purpose.

This Addendum makes certain amendments with respect to Service Level 12 as a result of changes in policies and registration services for the IMH Facilities due to COVID-19. When signed by both Parties, this Addendum shall be attached to, and deemed a part of, the Services Agreement. All other terms and conditions of the Services Agreement shall remain in full force and effect.

2.Amendments to Service Level 12.

2.1Adjustments to Target Levels. The Parties agree that for the two Measurement Windows commencing January 1, 2021 and ending [*****], the Target Level for Service Level 12 ‘Patient Registration Survey Score’ shall be:

for the Emergency Department Registration Survey Score, greater than or equal to [*****]; and (b) for the Inpatient Registration Survey Score, greater than or equal to [*****]. For the avoidance of doubt, R1 must meet (a) and (b) to achieve the Target Level for this Service Level.

-1-

[*****] Text omitted for confidential treatment. The redacted information has been excluded because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.

2.2Adjustment to Calculation of Service Level Credit. The Parties agree that if, for all Measurement Windows commencing January 1, 2021, R1’s performance for Service Level 12 does not achieve the Target Level, but R1 achieved the individual target level for either the Emergency Department Registration Survey Score or the Inpatient Registration Survey Score, then the Service Level Credit owed by R1 to Intermountain with respect to Service Level 12 shall be equal to [*****] of the amount of the Service Level Credit.

2.3Patient Satisfaction Discussions. Commencing on or around [*****], the Parties will review the results from the prior [*****] period and discuss in good faith adjustments to the Target Level for Service Level 12 for Measurement Windows occurring after [*****], with the intent to improve overall patient satisfaction and to maintain or exceed [*****] percentile in the Press Ganey facilities comparison for questions related to courtesy of the registrar during registration.

2.4Commitment to Education and Training. R1 will continue to provide education and training to R1 personnel performing registration Services with a focus on courtesy during the registration process.

SIGNATURE PAGE FOLLOWS

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-2-

[*****] Text omitted for confidential treatment. The redacted information has been excluded because it is both (i) not material and (ii) would be competitively harmful if publicly disclosed.

IN WITNESS WHEREOF, the Parties have caused this Addendum to be executed by their respective duly authorized representatives as of the Addendum Effective Date.

IHC Health Services, Inc. By: /s/ Todd Craghead            Name: Todd Craghead Title: Finance VP, Revenue Cycle R1 RCM Inc. By: /s/ John Sparby              Name: John Sparby Title: EVP, COO of R1 RCM

SIGNATURE PAGE TO ADDENDUM 8 TO AMENDED AND RESTATED SERVICES AGREEMENT

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a), as adopted

pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Joseph Flanagan, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of R1 RCM Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 4, 2021

/s/ Joseph Flanagan    

Joseph Flanagan

President and Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a), as adopted

pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Rachel Wilson, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of R1 RCM Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 4, 2021

/s/ Rachel Wilson

Rachel Wilson

Chief Financial Officer and Treasurer

(Principal Financial Officer)

EX-32.1

Exhibit 32.1

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted

pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of R1 RCM Inc. (the “Company”) for the period ended March 31, 2021 as filed with the Securities and Exchange Commission on or about the date hereof (the “Report”), the undersigned, Joseph Flanagan, President and Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, that:

1.the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 4, 2021

/s/ Joseph Flanagan    

Joseph Flanagan

President and Chief Executive Officer

(Principal Executive Officer)

EX-32.2

Exhibit 32.2

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted

pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of R1 RCM Inc. (the “Company”) for the period ended March 31, 2021 as filed with the Securities and Exchange Commission on or about the date hereof (the “Report”), the undersigned, Rachel Wilson, Chief Financial Officer and Treasurer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, that:

1.the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 4, 2021

/s/ Rachel Wilson    

Rachel Wilson

Chief Financial Officer and Treasurer

(Principal Financial Officer)

XML

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2021	Apr. 27, 2021
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2021
Document Transition Report	false
Entity File Number	001-34746
Entity Registrant Name	R1 RCM INC.
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	02-0698101
Entity Address, Address Line One	401 North Michigan Avenue
Entity Address, City or Town	Chicago
Entity Address, State or Province	IL
Entity Address, Postal Zip Code	60611
City Area Code	312
Local Phone Number	324-7820
Title of 12(b) Security	Common stock, par value $0.01 per share
Trading Symbol	RCM
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filter Category	Large Accelerated Filer
Smaller Reporting Company	false
Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)		261,589,352
Amendment Flag	false
Document Fiscal Year Focus	2021
Document Fiscal Period Focus	Q1
Entity Central Index Key	0001472595
Current Fiscal Year End Date	--12-31

XML

Consolidated Balance Sheets - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
Current assets:
Cash and cash equivalents	$ 103.5	$ 173.8
Accounts receivable, net of $3.8 million and $3.7 million allowance	97.6	91.3
Accounts receivable, net of $0.1 million and $0.1 million allowance - related party	31.8	30.9
Prepaid expenses and other current assets	65.7	59.4
Total current assets	298.6	355.4
Property, equipment and software, net	89.0	93.7
Operating lease right-of-use assets	59.8	57.8
Intangible assets, net	166.7	171.1
Goodwill	375.5	375.3
Non-current deferred tax assets	68.5	73.7
Non-current portion of restricted cash equivalents	0.5	1.0
Other assets	75.9	61.0
Total assets	1,134.5	1,189.0
Current liabilities:
Accounts payable	22.8	18.2
Current portion of customer liabilities	23.0	16.7
Current portion of customer liabilities - related party	10.6	15.3
Accrued compensation and benefits	61.2	51.9
Current portion of operating lease liabilities	11.8	12.2
Current portion of long-term debt	35.5	32.3
Other accrued expenses	56.6	59.7
Total current liabilities	221.5	206.3
Non-current portion of customer liabilities - related party	15.4	16.3
Non-current portion of operating lease liabilities	68.7	71.0
Long-term debt	510.2	519.7
Other non-current liabilities	35.1	36.3
Total liabilities	850.9	849.6
8.00% Series A convertible preferred stock, par value $0.01, no shares authorized, issued and outstanding as of March 31, 2021; 370,000 shares authorized, 288,497 shares issued and outstanding as of December 31, 2020 (aggregate liquidation value of $294.3)	0.0	251.5
Stockholders’ equity:
Common stock, $0.01 par value, 500,000,000 shares authorized, 277,972,263 shares issued and 261,301,541 shares outstanding at March 31, 2021; 137,812,559 shares issued and 121,144,038 shares outstanding at December 31, 2020	2.8	1.4
Additional paid-in capital	562.1	393.7
Accumulated deficit	(135.7)	(161.5)
Accumulated other comprehensive loss	(6.4)	(6.5)
Treasury stock, at cost, 16,670,722 shares as of March 31, 2021; 16,668,521 shares as of December 31, 2020	(139.2)	(139.2)
Total stockholders’ equity	283.6	87.9
Total liabilities and stockholders’ equity	$ 1,134.5	$ 1,189.0

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Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	3 Months Ended	12 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Accounts receivable, allowance	$ 3.8	$ 3.7
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	500,000,000	500,000,000
Common stock, shares issued (in shares)	277,972,263	137,812,559
Common stock, shares outstanding (in shares)	261,301,541	121,144,038
Treasury stock, shares (in shares)	16,670,722	16,668,521
Redeemable Convertible Preferred Stock
Preferred stock, dividend rate (percentage)	8.00%	8.00%
Preferred stock, par value (in dollars per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	0	370,000
Preferred stock, shares issued (in shares)	0	288,497
Preferred stock, shares outstanding (in shares)	0	288,497
Preferred stock, aggregate liquidation value		$ 294.3
Related Party
Accounts receivable, allowance	$ 0.1	$ 0.1

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Consolidated Statements of Operations and Comprehensive Income (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Income Statement [Abstract]
Net services revenue ($215.5 million and $208.4 million for the three months ended March 31, 2021 and 2020, from related party, respectively)	$ 342.6	$ 320.5
Operating expenses:
Cost of services	267.2	253.9
Selling, general and administrative	25.6	25.5
Other expenses	13.0	8.7
Total operating expenses	305.8	288.1
Income from operations	36.8	32.4
Net interest expense	3.9	3.8
Income before income tax provision	32.9	28.6
Income tax provision	7.1	10.4
Net income	$ 25.8	$ 18.2
Net income (loss) per common share:
Basic (in dollars per share)	$ (2.37)	$ 0.06
Diluted (in dollars per share)	$ (2.37)	$ 0.05
Weighted average shares used in calculating net income (loss) per common share:
Basic (in shares)	239,290,145	114,441,043
Diluted (in shares)	239,290,145	169,620,178
Consolidated statements of comprehensive income
Net income	$ 25.8	$ 18.2
Other comprehensive income (loss):
Net change on derivatives designated as cash flow hedges, net of tax	0.5	(4.4)
Foreign currency translation adjustments	(0.4)	(2.1)
Comprehensive income	25.9	11.7
Basic:
Net income	25.8	18.2
Less dividends on preferred shares	(592.3)	(5.4)
Less income allocated to preferred shareholders	0.0	(6.2)
Net income (loss) available/allocated to common shareholders - basic	(566.5)	6.6
Diluted:
Net income	25.8	18.2
Less dividends on preferred shares	(592.3)	(5.4)
Less income allocated to preferred shareholders	0.0	(5.0)
Net income (loss) available/allocated to common shareholders - diluted	$ (566.5)	$ 7.8

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Consolidated Statements of Operations and Comprehensive Income (Unaudited) (Parenthetical) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Income Statement [Abstract]
Revenue from related parties	$ 215.5	$ 208.4

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Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Millions	Total	Cumulative Effect, Period of Adoption, Adjustment	Cumulative Effect, Period of Adoption, Adjusted Balance	Common Stock	Common Stock Cumulative Effect, Period of Adoption, Adjusted Balance	Treasury Stock	Treasury Stock Cumulative Effect, Period of Adoption, Adjusted Balance	Additional Paid-In Capital	Additional Paid-In Capital Cumulative Effect, Period of Adoption, Adjusted Balance	Accumulated Deficit	Accumulated Deficit Cumulative Effect, Period of Adoption, Adjustment	Accumulated Deficit Cumulative Effect, Period of Adoption, Adjusted Balance	Accumulated Other Comprehensive Loss	Accumulated Other Comprehensive Loss Cumulative Effect, Period of Adoption, Adjusted Balance
Beginning Balance (in shares) at Dec. 31, 2019				127,807,546	127,807,546	13,786,266	13,786,266
Beginning Balance at Dec. 31, 2019	$ 18.1	$ (0.8)	$ 17.3	$ 1.3	$ 1.3	$ (73.6)	$ (73.6)	$ 372.7	$ 372.7	$ (277.8)	$ (0.8)	$ (278.6)	$ (4.5)	$ (4.5)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Accounting Standards Update [Extensible List]	us-gaap:AccountingStandardsUpdate201613Member
Share-based compensation expense	$ 4.8							4.8
Issuance of common stock related to share-based compensation plans (in shares)				1,720
Exercise of vested stock options (in shares)				553,520
Exercise of vested stock options	3.1							3.1
Dividends paid/accrued	(5.4)							(5.4)
Acquisition of treasury stock related to share-based compensation plans (in shares)						(545)
Net change on derivatives designated as cash flow hedges, net of tax	(4.4)												(4.4)
Foreign currency translation adjustments	(2.1)												(2.1)
Net income	18.2									18.2
Ending Balance (in shares) at Mar. 31, 2020				128,362,786		13,786,811
Ending Balance at Mar. 31, 2020	31.5			$ 1.3		$ (73.6)		375.2		(260.4)			(11.0)
Beginning Balance (in shares) at Dec. 31, 2020				137,812,559		16,668,521
Beginning Balance at Dec. 31, 2020	$ 87.9			$ 1.4		$ (139.2)		393.7		(161.5)			(6.5)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Accounting Standards Update [Extensible List]	us-gaap:AccountingStandardsUpdate201613Member
Share-based compensation expense	$ 12.8							12.8
Issuance of common stock related to share-based compensation plans (in shares)				6,497
Issuance of common stock (in shares)				324,212
Issuance of common stock	$ 7.0							7.0
Exercise of vested stock options (in shares)	539,795			539,795
Exercise of vested stock options	$ 3.5							3.5
Acquisition of treasury stock related to share-based compensation plans (in shares)						(2,201)
Net change on derivatives designated as cash flow hedges, net of tax	0.5												0.5
Foreign currency translation adjustments	(0.4)												(0.4)
Conversion of preferred shares (in shares)				117,706,400
Conversion of preferred shares	251.5			$ 1.2				250.3
Inducement dividend	(592.3)							(592.3)
Issuance of common stock related to inducement (in shares)				21,582,800
Issuance of common stock related to inducement	487.3			$ 0.2				487.1
Net income	25.8									25.8
Ending Balance (in shares) at Mar. 31, 2021				277,972,263		16,670,722
Ending Balance at Mar. 31, 2021	$ 283.6			$ 2.8		$ (139.2)		$ 562.1		$ (135.7)			$ (6.4)

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Consolidated Statements of Stockholders' Equity (Unaudited) (Parenthetical) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2019
Accumulated Other Comprehensive Loss
Net change on derivatives designated as cash flow hedges, tax	$ 0.2	$ 1.5
Cumulative Effect, Period of Adoption, Adjustment
Impact of credit-loss standard adoption, tax			$ 0.3

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Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Operating activities
Net income	$ 25.8	$ 18.2
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization	17.9	15.7
Amortization of debt issuance costs	0.3	0.2
Share-based compensation	12.7	4.8
Loss on disposal and right-of-use asset write-downs	0.6	0.0
Provision for credit losses	0.1	0.8
Deferred income taxes	4.9	8.9
Non-cash lease expense	2.9	2.9
Change in value of contingent consideration	0.5	0.0
Changes in operating assets and liabilities:
Accounts receivable and related party accounts receivable	(7.3)	(12.5)
Prepaid expenses and other assets	(19.4)	(5.2)
Accounts payable	5.2	2.8
Accrued compensation and benefits	9.4	(46.6)
Lease liabilities	(4.1)	(2.6)
Other liabilities	(4.2)	16.0
Customer liabilities and customer liabilities - related party	0.7	(2.8)
Net cash provided by operating activities	46.0	0.6
Investing activities
Purchases of property, equipment, and software	(9.6)	(13.3)
Net cash used in investing activities	(9.6)	(13.3)
Financing activities
Repayment of senior secured debt and revolver	(6.5)	(4.1)
Inducement of preferred stock conversion	(105.0)	0.0
Exercise of vested stock options	4.4	3.1
Finance lease payments	0.0	(0.6)
Net cash (used in) provided by financing activities	(107.1)	28.4
Effect of exchange rate changes in cash, cash equivalents and restricted cash	(0.1)	(1.2)
Net (decrease) increase in cash, cash equivalents and restricted cash	(70.8)	14.5
Cash, cash equivalents and restricted cash, at beginning of period	174.8	92.5
Cash, cash equivalents and restricted cash, at end of period	104.0	107.0
Supplemental disclosures of cash flow information
Accrued dividends payable to preferred stockholders	0.0	5.4
Accrued and other liabilities related to purchases of property, equipment and software	7.9	18.4
Accounts payable related to purchases of property, equipment and software	2.4	3.1
Interest paid	3.8	3.2
Income taxes paid	0.6	0.9
Senior Revolver
Financing activities
Borrowings on revolver	0.0	50.0
Repayment of senior secured debt and revolver	$ 0.0	$ (20.0)

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Business Description and Basis of Presentation

3 Months Ended

Mar. 31, 2021

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Business Description and Basis of Presentation

Business Description and Basis of Presentation

Business Description

R1 RCM Inc. (the “Company”) is a leading provider of technology-driven solutions that transform the patient experience and financial performance of healthcare providers. The Company helps healthcare providers generate sustainable improvements in their operating margins and cash flows while also enhancing patient, physician, and staff satisfaction for its customers. For further information regarding the Company's business, including relationships with Ascension Health (“Ascension”) and TowerBrook Capital Partners (“TowerBrook”), refer to Note 1 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2020 (the “2020 Form 10-K”).

SCI Solutions, Inc. Acquisition

On April 1, 2020, the Company completed the acquisition of scheduling.com, Inc. d/b/a SCI Solutions, Inc. (“SCI”) pursuant to a stock purchase agreement dated as of January 9, 2020 (the “Stock Purchase Agreement”), by and among the Company, Clearsight Intermediate Holdings, Inc. (“Clearsight Holdings”) and Clearsight Group Holdings, LLC (the “Seller”) (the “SCI Acquisition”). At the closing of the transaction, the Company purchased from the Seller all of the issued and outstanding equity interests of Clearsight Holdings, which owns all of the issued and outstanding equity interests of SCI. SCI is a leading provider of software-as-a-service (“SaaS”)-based scheduling and patient access solutions. SCI’s platform streamlines the patient and provider experience, creating efficient care networks where health systems’ capacity is digitally and conveniently accessible to all market constituents. The combination of R1 and SCI is expected to deliver enhanced value for healthcare providers by enabling them to expand digital front door strategies for their patients, improve operating efficiency, and increase capacity utilization, among other benefits. Refer to Note 4, Acquisitions for additional details.

RevWorks Acquisition

On August 3, 2020, the Company completed the acquisition of the RevWorks services business pursuant to an asset purchase agreement dated as of June 2, 2020 (the “RevWorks Purchase Agreement”) by and among the Company and Cerner Corporation (the “RevWorks Acquisition”). At the closing of the transaction, the Company purchased certain assets relating to the RevWorks services business, as specified in the RevWorks Purchase Agreement. The combination of R1 and RevWorks is expected to provide enhanced revenue cycle capabilities and expertise to RevWorks clients, helping drive sustainable financial improvements for providers while improving their patients’ overall experience. Refer to Note 4, Acquisitions for additional details.

Emergency Medical Services Disposition

As part of the Company’s portfolio analysis and strategic initiatives, the Company disposed the emergency medical services (“EMS”) business on October 30, 2020 for $140.0 million, inclusive of a $5.0 million hold-back amount subject to the completion of certain transition services, to be paid approximately one year from the date of the disposition (the “EMS Disposition”). The total sale price net of costs to sale was $132.7 million, which included customary adjustments for working capital, indebtedness, cash, and transaction expenses. R1 allocated goodwill to the disposed business based on the relative fair value methodology. The total goodwill allocated to the EMS Disposition was $7.1 million. The gain recognized on the EMS Disposition was $55.7 million.

Basis of Presentation

The accompanying unaudited consolidated financial statements reflect the Company's financial position as of March 31, 2021, the results of operations of the Company for the three months ended March 31, 2021 and 2020, and the cash flows of the Company for the three months ended March 31, 2021 and 2020. These financial statements include the accounts of R1 RCM Inc. and its wholly-owned subsidiaries. All material intercompany amounts have been eliminated in consolidation. These financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial reporting and as required by the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, certain information and footnote disclosures required for complete financial statements are not included herein. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the interim financial information, have been included. Operating results for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for any other interim period or for the fiscal year ending December 31, 2021.

When preparing financial statements in conformity with GAAP, the Company must make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures at the date of the financial statements. Actual results could differ from those estimates. For a more complete discussion of the Company’s significant accounting policies and other information, the unaudited consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements included in the Company's 2020 Form 10-K.

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Recent Accounting Pronouncements

3 Months Ended

Mar. 31, 2021

Accounting Policies [Abstract]

Recent Accounting Pronouncements

Recent Accounting Pronouncements

Recently Issued Accounting Standards and Disclosures

No new accounting pronouncements issued or effective during the fiscal year had, or is expected to have, a material impact on the Company’s consolidated financial statements.

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Fair Value of Financial Instruments

3 Months Ended

Mar. 31, 2021

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair Value of Financial Instruments

The Company's accounting policy for fair values, including details of the fair value hierarchy levels, are outlined in Note 4 of the Company's 2020 Form 10-K.

The carrying amounts of the Company’s financial instruments, which include financial assets such as cash and cash equivalents, restricted cash equivalents, accounts receivable, net, and certain other current assets, as well as financial liabilities such as accounts payable, accrued service costs, accrued compensation and benefits, and certain other accrued expenses, approximate their fair values, due to the short-term nature of these instruments. See Note 21, Derivative Financial Instruments, for a discussion of the fair value of the Company's forward currency derivative contracts and interest rate swaps.

The Company believes the carrying value of the senior revolver and term loan (see Note 11, Debt) approximates fair value as they are variable rate bank debt.

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Acquisitions

3 Months Ended

Mar. 31, 2021

Business Combinations [Abstract]

Acquisitions

Acquisitions

SCI

On April 1, 2020, the Company completed the acquisition of SCI. The SCI Acquisition has been accounted for under ASC 805, Business Combinations. Accordingly, the accounts of the acquired company, after adjustments to reflect fair values assigned to assets and liabilities, have been included in the Company’s consolidated financial statements since the date of the SCI Acquisition.

The purchase price for the SCI Acquisition was $190.0 million, subject to customary adjustments for cash, transaction expenses, earn-out consideration, and normalized working capital. The Company funded the purchase price for the SCI Acquisition and the Company’s associated transaction expenses with a combination of cash on hand and the incurrence of additional indebtedness (see Note 11, Debt).

The fair value of assets acquired and liabilities assumed is (in millions):

	Purchase Price Allocation
Total purchase consideration	$	197.0
Allocation of consideration to assets acquired and liabilities assumed:
Cash and cash equivalents	$	2.9
Accounts receivable	2.8
Prepaid expenses and other current assets	1.2
Property, equipment and software	0.3
Operating lease right-of-use assets	1.2
Intangible assets	86.1
Goodwill	125.8
Accounts payable	(0.2)
Current portion of customer liabilities	(4.0)
Accrued compensation and benefits	(1.6)
Current portion of operating lease liabilities	(0.5)
Other accrued expenses	(0.4)
Non-current portion of operating lease liabilities	(0.7)
Other non-current liabilities	(5.0)
Deferred income tax liabilities	(10.9)
Net assets acquired	$	197.0

Other non-current liabilities contained a note payable for $5.0 million. The Company repaid this note in the second quarter of 2020.

The goodwill recognized is primarily attributable to synergies that are expected to be achieved from the integration of SCI. None of the goodwill is expected to be deductible for income tax purposes.

The purchase price includes an earn-out provision, which is dependent on achieving certain revenue and operational targets in the year following the acquisition. Based on projections at the time of acquisition, the earn-out was valued at $4.8 million. As of March 31, 2021, the Company determined the performance metrics for the earn-out had been met, and expects to pay the full earn-out of $10.0 million in the second quarter of 2021. Changes to the earn-out value were recorded as a component of other expenses.

RevWorks

On August 3, 2020, the Company completed the acquisition of RevWorks. The RevWorks Acquisition has been accounted for under ASC 805, Business Combinations. Accordingly, the accounts of the acquired company, after adjustments to reflect estimated fair values assigned to assets and liabilities, have been included in the Company’s consolidated financial statements since the date of the RevWorks Acquisition.

The $30.0 million purchase consideration for the RevWorks Acquisition (inclusive of working capital) consisted of a $5.0 million payment at closing and two deferred payments, each of $12.5 million and totaling $25.0 million, which are due and payable on the first and second anniversary of the closing date. The two deferred payments are contractual obligations of the Company; however, they are potentially effectively refundable to the Company contingent on the achievement of certain pre-existing customer revenue targets for the RevWorks business that were agreed in the purchase agreement. If such targets are not achieved, this will result in Cerner Corporation (“Cerner”) returning to the Company up to $25.0 million. At the time of the acquisition, the Company recorded a present value liability for the contractual deferred payments of $24.3 million, and recorded an asset for the contingently returnable consideration of $22.3 million, including $11.5 million in prepaid expenses and $10.8 million in other assets on the Consolidated Balance Sheets, which is measured at fair value. The Company reviewed the balances at March 31, 2021 and determined that the fair value remained the same.

The assets acquired in the RevWorks Acquisition consist primarily of customer relationships of approximately $2.8 million and fixed assets. There were no significant pre-closing liabilities of the RevWorks business included in the RevWorks Acquisition. The fair value estimate of assets acquired and liabilities assumed are pending completion of multiple elements, including gathering further information about the identification and completeness of all assets and liabilities acquired.

The goodwill recognized of approximately $3.6 million is primarily attributable to synergies that are expected to be achieved from the integration of RevWorks.

Pro Forma Results

The following table summarizes, on a pro forma basis, the combined results of the Company as though the SCI and RevWorks acquisitions had occurred as of January 1, 2019. These pro forma results are not necessarily indicative of either the actual consolidated results had the acquisitions occurred as of January 1, 2019 or of the future consolidated operating results for any period. Pro forma results are (in millions):

	Three Months Ended March 31, 2020
Net services revenue	$	349.6
Net income	$	17.3

Adjustments were made to earnings to adjust depreciation and amortization to reflect fair value of identified assets acquired, to record the effects of extinguishing the debt of SCI and replacing it with the debt of the Company, and to record the income tax effect of these adjustments.

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Accounts Receivable and Allowance for Credit Losses

3 Months Ended

Mar. 31, 2021

Receivables [Abstract]

Accounts Receivable and Allowance for Credit Losses

Accounts Receivable and Allowance for Credit Losses

Accounts receivable is comprised of unpaid balances pertaining to modular services and end-to-end revenue cycle management (“RCM”) customers, net receivable balances for end-to-end RCM customers after considering cost reimbursements owed to such customers, including related accrued balances, and amounts due from physician RCM and practice management customers.

The Company evaluates its accounts receivable for expected credit losses quarterly. The Company maintains an estimated allowance for credit losses to reduce its accounts receivable to the amount that it believes will be collected. This allowance is based on the Company’s historical experience, its assessment of each customer’s ability to pay, the length of time a balance has been outstanding, input from key Company resources assigned to each customer, the status of any ongoing operations with each applicable customer, and environmental factors such as significant shifts in the healthcare environment which the Company believes may have impacted or will impact its customers’ financial health and ability to pay.

The full effects of COVID-19 on the Company’s customers are uncertain and cannot be predicted. As a result, the Company’s future collection experience may differ from historical collection trends.

The Company has presented the rollforward below on a consolidated basis as the currently expected credit losses for its large integrated healthcare system customers are not anticipated to be material.

Movements in the allowance for credit losses are as follows (in millions):

	Three Months Ended March 31,
	2021		2020
Beginning balance	$	3.8	$	2.8
Cumulative effect of ASC 326 adoption	—		1.1
Provision (recoveries)	0.1		0.8
Ending balance	$	3.9	$	4.7

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Property, Equipment and Software

3 Months Ended

Mar. 31, 2021

Property, Plant and Equipment [Abstract]

Property, Equipment and Software

Property, Equipment and Software

Property, equipment and software consist of the following (in millions):

	March 31, 2021		December 31, 2020
Buildings and land	$	4.6	$	4.6
Computer and other equipment	56.6		55.0
Leasehold improvements	23.3		23.2
Software	142.3		135.7
Office furniture	6.4		6.4
Property, equipment and software, gross	233.2		224.9
Less accumulated depreciation and amortization	(144.2)		(131.2)
Property, equipment and software, net	$	89.0	$	93.7

The following table summarizes the allocation of depreciation and amortization expense between cost of services and selling, general and administrative expenses (in millions):

	Three Months Ended March 31,
	2021		2020
Cost of services	$	12.7	$	10.9
Selling, general and administrative	0.8		1.3
Total depreciation and amortization	$	13.5	$	12.2

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Leases

3 Months Ended

Mar. 31, 2021

Leases [Abstract]

Leases

LeasesThe Company's accounting policy for leases, including the elections made as part of the adoption of ASC 842 effective January 1, 2019, are outlined in Note 8 of the Company's 2020 Form 10-K. The components of lease costs are as follows (in millions):

	Three Months Ended March 31,
	2021		2020
Operating lease cost	$	4.1	$	4.9
Finance lease cost:
Amortization of right-of-use (“ROU”) assets	0.1		0.2
Interest on lease liabilities	—		0.1
Sublease income	(0.6)		(0.6)
Total lease cost	$	3.6	$	4.6

Supplemental cash flow information related to leases are as follows (in millions):

	Three Months Ended March 31,
	2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	9.4	$	4.9
Operating cash flows for finance leases	—		0.1
Financing cash flows for finance leases	—		0.6
ROU assets obtained in exchange for lease obligations:
Operating leases	5.6		1.7

The Company presents all non-cash transactions related to adjustments to the lease liability or ROU asset as non-cash transactions. This includes all non-cash charges related to any modification or reassessment events triggering remeasurement, and obtaining new leases for non-cash consideration.

Supplemental balance sheet information related to leases are as follows:

	March 31, 2021		December 31, 2020
Weighted average remaining lease term:
Operating leases	7 years		7 years
Finance leases	3 years		2 years
Weighted average incremental borrowing rate:
Operating leases	8.99	%	8.94	%
Finance leases	6.71	%	6.62	%

Maturities of lease liabilities as of March 31, 2021 are as follows (in millions):

	Operating Leases		Finance Leases
Remainder of 2021	$	14.0	$	0.1
2022	16.0		0.1
2023	15.2		—
2024	15.3		—
2025	15.2		—
2026	12.0		—
Thereafter	22.1		—
Total	109.8		0.2
Less:
Imputed interest	29.3		—
Present value of lease liabilities	$	80.5	$	0.2

Leases

LeasesThe Company's accounting policy for leases, including the elections made as part of the adoption of ASC 842 effective January 1, 2019, are outlined in Note 8 of the Company's 2020 Form 10-K. The components of lease costs are as follows (in millions):

	Three Months Ended March 31,
	2021		2020
Operating lease cost	$	4.1	$	4.9
Finance lease cost:
Amortization of right-of-use (“ROU”) assets	0.1		0.2
Interest on lease liabilities	—		0.1
Sublease income	(0.6)		(0.6)
Total lease cost	$	3.6	$	4.6

Supplemental cash flow information related to leases are as follows (in millions):

	Three Months Ended March 31,
	2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	9.4	$	4.9
Operating cash flows for finance leases	—		0.1
Financing cash flows for finance leases	—		0.6
ROU assets obtained in exchange for lease obligations:
Operating leases	5.6		1.7

The Company presents all non-cash transactions related to adjustments to the lease liability or ROU asset as non-cash transactions. This includes all non-cash charges related to any modification or reassessment events triggering remeasurement, and obtaining new leases for non-cash consideration.

Supplemental balance sheet information related to leases are as follows:

	March 31, 2021		December 31, 2020
Weighted average remaining lease term:
Operating leases	7 years		7 years
Finance leases	3 years		2 years
Weighted average incremental borrowing rate:
Operating leases	8.99	%	8.94	%
Finance leases	6.71	%	6.62	%

Maturities of lease liabilities as of March 31, 2021 are as follows (in millions):

	Operating Leases		Finance Leases
Remainder of 2021	$	14.0	$	0.1
2022	16.0		0.1
2023	15.2		—
2024	15.3		—
2025	15.2		—
2026	12.0		—
Thereafter	22.1		—
Total	109.8		0.2
Less:
Imputed interest	29.3		—
Present value of lease liabilities	$	80.5	$	0.2

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Intangible Assets

3 Months Ended

Mar. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Intangible Assets

Intangible Assets

The following table provides the gross carrying value and accumulated amortization for each major class of intangible asset at March 31, 2021 and December 31, 2020 (in millions):

	March 31, 2021						December 31, 2020
	Gross Carrying Value		Accumulated Amortization		Net Book Value		Gross Carrying Value		Accumulated Amortization		Net Book Value
Customer relationships	$	97.7	$	(16.2)	$	81.5	$	97.7	$	(14.7)	$	83.0
Technology	101.7		(16.5)		85.2		101.7		(13.6)		88.1
Total intangible assets	$	199.4	$	(32.7)	$	166.7	$	199.4	$	(28.3)	$	171.1

Intangible asset amortization expense was $4.4 million and $3.5 million for the three months ended March 31, 2021 and 2020, respectively.

Estimated annual amortization expense related to intangible assets with definite lives as of March 31, 2021 is as follows (in millions):

Remainder of 2021	$	12.9
2022	17.3
2023	17.3
2024	15.5
2025	14.5
2026	14.5
Thereafter	74.7
Total	$	166.7

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Goodwill

3 Months Ended

Mar. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Goodwill

GoodwillUnless otherwise required, goodwill is tested for impairment annually in the fourth quarter. Changes in the carrying amount of goodwill for the three months ended March 31, 2021 were (in millions):

	Goodwill
Balance as of December 31, 2020	$	375.3
Measurement period adjustments	0.2
Balance as of March 31, 2021	$	375.5

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Revenue Recognition

3 Months Ended

Mar. 31, 2021

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue Recognition

The Company follows the guidance under Topic 606, Revenue from Contracts with Customers (“Topic 606”). Revenue is measured based on consideration specified in a contract with a customer, and excludes any sales incentives and amounts collected on behalf of third parties. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a service to a customer, which is typically over the contact term. Estimates of variable consideration are included in revenue to the extent that it is probable that a significant reversal of cumulative revenue will not occur once the uncertainty is resolved.

Disaggregation of Revenue

In the following table, revenue is disaggregated by source (in millions):

	Three Months Ended March 31,
	2021		2020
Net operating fees	$	286.1	$	280.9
Incentive fees	29.0		16.8
Other	27.5		22.8
Net services revenue	$	342.6	$	320.5

Contract Balances

The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers (in millions):

	March 31, 2021		December 31, 2020
Receivables (1)	$	129.4	$	122.2
Contract assets (2)	6.7		—
Contract liabilities (2)	25.7		28.6

(1) Receivables are included in accounts receivable, net. The balance includes accounts receivable, net - related party.

(2) Contract assets and contract liabilities are included in other current assets and customer liabilities, respectively. The contract liabilities balance contains related party amounts, including $3.9 million and $5.6 million of current customer liabilities and $15.4 million and $16.3 million of non-current customer liabilities for the three months ended March 31, 2021 and year ended December 31, 2020, respectively.

A receivable is recognized in the period the Company provides services when the Company’s right to consideration is unconditional. Payment terms on invoiced amounts are typically 30-60 days.

The Company recognized revenue of $93.7 million and $86.0 million during the three months ended March 31, 2021 and 2020, which amounts were included in contract liabilities at the beginning of the respective periods. These revenue amounts include $88.1 million and $85.0 million for the three months ended March 31, 2021 and 2020, respectively, related to advanced billings which become accounts receivable and contract liabilities on the first day of the respective service period.

Transaction Price Allocated to the Remaining Performance Obligation

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period (in millions). The estimated revenue does not include amounts of variable consideration that are constrained.

	Net operating fees		Incentive fees		Other
Remainder of 2021	$	83.9	$	31.4	$	1.7
2022	70.0		—		—
2023	55.0		—		—
2024	35.0		—		—
2025	11.7		—		—
2026	5.6		—		—
Thereafter	—		—		—
Total	$	261.2	$	31.4	$	1.7

The amounts presented in the table above include variable fee estimates for the non-cancellable term of the Company's physician groups RCM services contracts, fixed fees which are typically recognized ratably as the performance obligation is satisfied, and incentive fees which are measured cumulatively over the contractually defined performance period.

Estimates of revenue expected to be recognized in future periods exclude unexercised customer options to purchase services within the Company's physician advisory services (“PAS”) contracts that do not represent material rights to the customer. Customer options that do not represent a material right are only accounted for in accordance with Topic 606 when the customer exercises its option to purchase additional goods or services. Deferred Contract Costs

Certain costs associated with the initial phases of customer contracts and the related transition of customer hospitals and physician groups are deferred. These fulfillment costs relate directly to the Company’s responsibilities under the corresponding customer contracts, generate or enhance resources of the Company that will be used in satisfying its performance obligations in the future, and are expected to be recovered through the margins realized. The following table summarizes the breakout of deferred contract costs (in millions):

	March 31, 2021		December 31, 2020
Prepaid expenses and other current assets	$	4.7	$	4.5
Other assets	19.5		19.6
Total deferred contract costs	$	24.2	$	24.1

The associated assets are amortized as services are transferred to the customer over the remaining life of the contracts. For the three months ended March 31, 2021 and 2020, total amortization was $1.2 million and $1.1 million, respectively, and there were no associated impairment losses.

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Debt

3 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

Debt

Debt

The carrying amounts of debt consist of the following (in millions):

	March 31, 2021		December 31, 2020
Senior Revolver	$	70.0	$	70.0
Senior Term Loan	478.1		484.6
Unamortized discount and issuance costs	(2.4)		(2.6)
Total debt	545.7		552.0
Less: Current maturities	(35.5)		(32.3)
Total long-term debt	$	510.2	$	519.7

Senior Secured Credit Facilities

On June 26, 2019, the Company and certain of its subsidiaries entered into a senior credit agreement (the “Credit Agreement”) with Bank of America, N.A., as administrative agent, and the lenders named therein, for senior secured credit facilities (the “Senior Secured Credit Facilities”), consisting of a $325.0 million senior secured term loan facility (the “Senior Term Loan”) issued at 99.66% of par and a $100.0 million senior secured revolving credit facility (the “Senior Revolver”).

On March 20, 2020, the Company entered into Amendment No. 1 to the Credit Agreement (the “Amendment”), pursuant to which the lenders named in the Amendment agreed to provide an additional $191.1 million incremental delayed-draw term loan facility (the “Incremental Term Loan”) on the same terms as its existing Senior Term Loan provided under the Credit Agreement.

The Incremental Term Loan was drawn substantially concurrently with the closing of the SCI Acquisition on April 1, 2020. The proceeds of the Incremental Term Loan were used to fund the purchase price for the SCI Acquisition and related expenses. For further details on the closing, refer to Note 4, Acquisitions. The Incremental Term Loan has terms consistent with those of the Senior Term Loan, including with respect to interest, maturity, amortization, and prepayments and has the same affirmative and negative covenants and events of default as those applicable to the Senior Term Loan under the Credit Agreement. The drawing of the Incremental Term Loan increased the balance of the obligation due under the Senior Term Loan, and therefore is shown as one consolidated obligation.

In accordance with ASC 470-50, the Amendment was treated as a loan modification in the financial statements.

On January 13, 2021, the Company entered into Amendment No. 2 and Waiver to Credit Agreement (the “Second Amendment”), pursuant to which the lenders agreed (i) to waive the Company’s obligation to use the $135.0 million of net proceeds from the EMS Disposition for purposes of reinvestments in useful assets of the Company, or to prepay the loans under the Credit Agreement, as otherwise required by the terms of the Credit Agreement, (ii) to amend the restricted payments covenant to permit the Company to make additional cash payments to the Investor in an amount not to exceed $105.0 million in connection with the preferred stock conversion (refer to Note 15. 8.00% Series A Convertible Preferred Stock) and reduce the “Available Amount” from which the Company can make certain investments, debt prepayments, or restricted payments by $105.0 million and (iii) that the excess cash flow sweep will begin with fiscal year ended December 31, 2021 instead of fiscal year ended December 31, 2020.

The Senior Revolver includes borrowing capacity available for letters of credit and for borrowings on same-day notice, referred to as the “swing loans.” Any issuance of letters of credit or making of a swing loan will reduce the amount available under the revolving credit facility. As of March 31, 2021, the Company had $70.0 million in borrowings, no letters of credit outstanding, and $30.0 million of availability under the Senior Revolver.

Borrowings under the Senior Secured Credit Facilities bear interest, at the Company’s option, at: (i) an Alternate Base Rate (“ABR”) equal to the greater of (a) the prime rate of Bank of America, N.A., (b) the federal funds rate plus 0.50% per annum, and (c) the Eurodollar rate for an interest period of one-month beginning on such day plus 100 basis points, plus between 0.75% and 1.75% dependent on the Company's Net Leverage Ratio (provided that the Eurodollar rate applicable to the Term Loan Facility shall not be less than 0.00% per annum); or (ii) the Eurodollar rate (provided that the Eurodollar rate applicable to the Term Loan Facility shall not be less than 0.00% per annum), plus between 1.75% and 2.75%, dependent on the Company's Net Leverage Ratio. The interest rate as of March 31, 2021 was 2.36%. The Company is also required to pay an unused commitment fee to the lenders under the Senior Revolver at a rate between 0.30% and 0.50% of the average daily unutilized commitments thereunder dependent on the Company's net leverage ratio.

The Credit Agreement contains a number of covenants that, among other things, restrict, subject to certain exceptions, the Company’s ability and the ability of its subsidiaries to: (i) incur additional indebtedness; (ii) create liens on assets; (iii) engage in mergers or consolidations; (iv) sell assets; (v) pay dividends and distributions or repurchase the Company’s capital stock; (vi) make investments, loans or advances; (vii) repay certain junior indebtedness; (viii) engage in certain transactions with affiliates; (ix) enter into sale and leaseback transactions; (x) amend material agreements governing certain of the Company’s junior indebtedness; (xi) change the Company’s lines of business; (xii) make certain acquisitions; and (xiii) limitations on the letter of credit cash collateral account. The Credit Agreement contains customary affirmative covenants and events of default. In addition, the Company is required to maintain minimum consolidated total net leverage and consolidated interest coverage ratios. The Company was in compliance with all of the covenants in the Credit Agreement as of March 31, 2021.

Debt Maturities

Scheduled maturities of the Company’s long-term debt are summarized as follows (in millions):

	Scheduled Maturities
Remainder of 2021	$	25.8
2022	38.7
2023	45.2
2024	438.4
Total	$	548.1

For further details on the Company's debt, refer to Note 13 of the Company's 2020 Form 10-K.

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Share-Based Compensation

3 Months Ended

Mar. 31, 2021

Share-based Payment Arrangement [Abstract]

Share-Based Compensation

Share-Based Compensation

The share-based compensation expense relating to the Company’s stock options, restricted stock units (“RSUs”), and performance-based restricted stock units (“PBRSUs”) for the three months ended March 31, 2021 and 2020 was $12.7 million and $4.8 million, respectively, with related tax benefits of approximately $2.2 million and $0.7 million, respectively.

The Company accounts for forfeitures as they occur. Excess tax benefits and shortfalls for share-based payments are recognized in income tax expense (benefit) and included in operating activities. The Company recognized $2.3 million and $0.6 million of income tax benefit from windfalls associated with vesting and exercises of equity awards for the three months ended March 31, 2021 and 2020, respectively.

Total share-based compensation costs that have been included in the Company’s consolidated statements of operations were as follows (in millions):

	Three Months Ended March 31,
	2021		2020
Share-Based Compensation Expense Allocation Details:
Cost of services	$	7.3	$	1.9
Selling, general and administrative	5.4		2.9
Other	—		—
Total share-based compensation expense	$	12.7	$	4.8

The Company uses the Black-Scholes option pricing model to estimate the fair value of its service-based options as of their grant dates. Monte Carlo simulations are used to estimate the fair value of its market-based PBRSUs. The market-based PBRSUs vest upon satisfaction of both time-based requirements and market targets based on share price. Expected life is based on the market condition to which the vesting is tied. The Company assesses current performance on performance-based PBRSUs by reviewing historical performance to date, along with any adjustments which have been approved to the reported performance, and changes to the projections to determine the probable outcome of the awards. The current estimates are then compared to the scoring metrics and any necessary adjustments are reflected in the current period to update share-based compensation expense to the current performance expectations.

The following table sets forth the significant assumptions used in the Black-Scholes option pricing model and the Monte Carlo simulations and the calculation of share-based compensation expense for the three months ended March 31, 2021 and 2020:

	Three Months Ended March 31,
	2021	2020
Expected dividend yield	—%	—%
Risk-free interest rate	0.4%	1.7%
Expected volatility	43%	43%
Expected term (in years)	5.5	5.5

The risk-free interest rate input is based on U.S. Treasury instruments, and the expected volatility of the share price is based on review of the historical volatility levels of the Company’s common stock in conjunction with that of public companies that operate in similar industries or are similar in terms of stage of development or size and a projection of this information toward its future expected volatility. The Company used the simplified method to estimate the expected option life. The simplified method was used due to the lack of sufficient historical data available to provide a reasonable basis upon which to estimate the expected term of each stock option.

Stock options

A summary of the options activity during the three months ended March 31, 2021 is shown below:

	Options	Weighted- Average Exercise Price
Outstanding at December 31, 2020	6,220,971	$	3.68
Granted	1,625	23.49
Exercised	(539,795)	6.47
Canceled/forfeited	(1,040)	3.85
Expired	—	—
Outstanding at March 31, 2021	5,681,761	$	3.42
Outstanding, vested and exercisable at March 31, 2021	4,782,897	$	3.41
Outstanding, vested and exercisable at December 31, 2020	5,230,690	$	3.73

Restricted stock units and performance-based restricted stock units    

A summary of the RSU and PBRSU activity during the three months ended March 31, 2021 is shown below:

					Weighted- Average Grant Date Fair Value
	RSUs		PBRSUs		RSU		PBRSU
Outstanding and unvested at December 31, 2020	2,108,447		2,917,071		$	9.87	$	11.35
Granted	2,719		290,354		23.77		25.09
Vested	(6,497)		—		10.80		—
Forfeited	(41,381)		(646)		12.99		5.34
Outstanding and unvested at March 31, 2021	2,063,288		3,206,779		$	9.82	$	12.59
Shares surrendered for taxes for the three months ended March 31, 2021	2,201		—
Cost of shares surrendered for taxes for the three months ended March 31, 2021 (in millions)	$	—	$	—
Shares surrendered for taxes for the three months ended March 31, 2020	545		—
Cost of shares surrendered for taxes for the three months ended March 31, 2020 (in millions)	$	—	$	—

Outstanding PBRSUs issued prior to April 2019 vest upon satisfaction of both time-based requirements and market targets based on share price. Depending on the percentage level at which the market-based condition is satisfied, the number of shares vesting could be between 0% and 150% of the number of PBRSUs originally granted. PBRSUs issued subsequent to April 2019 vest upon satisfaction of both time-based and performance-based conditions. Depending on the award, performance condition targets may include cumulative adjusted EBITDA, end-to-end RCM agreement growth, scored revenue growth, or other specific performance factors. Depending on the percentage level at which the performance-based conditions are satisfied, the number of shares vesting could be between 0% and 200% of the number of PBRSUs originally granted. Based on the established targets, the maximum number of shares that could vest for all outstanding PBRSUs is 5,943,470.

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Other Expenses

3 Months Ended

Mar. 31, 2021

Other Income and Expenses [Abstract]

Other Expenses

Other Expenses

Other expenses consist of the following (in millions):

	Three Months Ended March 31,
	2021		2020
Severance and related employee benefits	$	1.5	$	1.1
Strategic initiatives (1)	6.5		3.2
Facility-exit charges (2)	1.5		0.4
Other (3)	3.5		4.0
Total other expenses	$	13.0	$	8.7

(1) Costs related to evaluating, pursuing, and integrating acquisitions, performing portfolio and capital structure analyses and transactions, and other inorganic business projects as part of the Company’s growth strategy. Costs include vendor spend, employee time and expenses spent on activities, severance and retention amounts associated with integration activities, and changes to contingent consideration related to acquisitions. For the three months ended March 31, 2021, $0.5 million of contingent consideration changes were included.

(2) As part of evaluating the Company’s footprint, R1 has exited certain leased facilities. Costs include asset impairment charges and other costs related to exited leased facilities.

(3) For the three months ended March 31, 2021 and 2020, includes $1.7 million and $2.6 million, respectively, of expenses related to the COVID-19 pandemic, inclusive of appreciation bonuses for the Company’s front-line employees, pandemic response mobilization efforts, telemedicine and testing costs for employees, and other costs related to the COVID-19 pandemic.

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Income Taxes

3 Months Ended

Mar. 31, 2021

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Income tax provisions for interim periods are based on estimated annual income tax rates, adjusted to reflect the effects of any significant and infrequent or unusual items which are required to be discretely recognized within the current interim period. The effective tax rates in the periods presented are largely based upon the projected annual pre-tax earnings by jurisdiction and the allocation of certain expenses in various taxing jurisdictions where the Company conducts its business. These taxing jurisdictions apply a broad range of statutory income tax rates. The global intangible low-taxed income (“GILTI”) provisions impose taxes on foreign income in excess of a deemed return on tangible assets of foreign corporations. The Company elected to account for GILTI tax in the period in which it is incurred.

The Company recognized income tax expense for the three months ended March 31, 2021 on the year-to-date pre-tax income. The deviation from the federal statutory tax rate of 21% is primarily attributable to recognizing the provisions for state taxes, GILTI, non-deductible compensation, and discrete items.

The Company recognized income tax expense for the three months ended March 31, 2020 on the year-to-date pre-tax income. The deviation from the federal statutory tax rate of 21% is primarily attributable to recognizing the provisions for GILTI plus the geographical mix of earnings, permanent differences, and discrete items.

The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax of multiple state and foreign jurisdictions. U.S. federal income tax returns since 2017 are currently open for examination. State jurisdictions vary for open tax years. The statute of limitations for most states ranges from three to six years.

At December 31, 2020, the Company had gross deferred tax assets of $146.1 million, of which $81.6 million related to net operating loss (“NOL”) carryforwards. The majority of the Company's carryforwards were generated in 2014 and 2016. The Company expects to be profitable, allowing the Company to utilize its NOL carryforward and other deferred tax assets.

The Company's completed acquisition of SCI and purchase accounting included $10.9 million of net deferred tax liabilities. In this amount is a deferred tax asset related to net operating loss carryforwards of approximately $10.4 million generated since 2002. Since a portion of state net operating loss will not be realizable, partial valuation allowance was established for the net operating loss. Through the SCI Acquisition, the Company also acquired a deferred tax asset related to research and experimentation credits of approximately $3.7 million that management believes will not be realized, and a full valuation allowance was established.

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8.00% Series A Convertible Preferred Stock

3 Months Ended

Mar. 31, 2021

Temporary Equity Disclosure [Abstract]

8.00% Series A Convertible Preferred Stock

8.00% Series A Convertible Preferred Stock

On January 15, 2021, TCP-ASC ACHI Series LLLP (“TCP-ASC”), a limited liability limited partnership jointly owned by Ascension Health Alliance and investment funds affiliated with TowerBrook (the “Investor”), a related party, converted all of its 294,266 shares (the “Current Shares”) of preferred stock into 117,706,400 shares of common stock of the Company into which the Current Shares were convertible pursuant to the Certificate of Designation of the preferred stock, and, in consideration therefor, the Company (i) issued 21,582,800 additional shares of common stock to the Investor, and (ii) paid the Investor $105.0 million in cash. On January 19, 2021, the Company filed a Certificate of Elimination of 8.00% Series A Convertible Preferred Stock with the Secretary of State of the State of Delaware to eliminate the Certificate of Designations of the 8.00% Series A Convertible Preferred Stock. The consideration paid to induce the conversion was recorded as a dividend of $592.3 million and reduced income available to common shareholders in our earnings per share calculation. The dividend was calculated as the cash paid of $105.0 million plus the fair value on the conversion date of the additional 21,582,800 shares of common stock issued as consideration for the conversion.

The following summarizes the preferred stock activity for the three months ended March 31, 2021 (in millions, except per share data):

	Preferred Stock
	Shares Issued and Outstanding	Carrying Value
Balance at December 31, 2020	288,497	$	251.5
Dividends paid/accrued dividends	5,769	—
Conversion of preferred stock	(294,266)	(251.5)
Balance at March 31, 2021	—	$	—

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Earnings (Loss) Per Share

3 Months Ended

Mar. 31, 2021

Earnings Per Share [Abstract]

Earnings (Loss) Per Share

Earnings (Loss) Per Share

Basic net income per share is computed by dividing net income, less any dividends, accretion or decretion, redemption or induced conversion on the preferred stock, by the weighted average number of common shares outstanding during the period. As the preferred stock participates in dividends alongside the Company’s common stock (per their participating dividends), the preferred stock would constitute participating securities under ASC 260-10 and are applied to earnings per share using the two-class method. Under this method, all earnings (distributed and undistributed) are allocated to common shares and participating securities based on their respective rights to receive dividends.

Diluted net income per share is calculated using the more dilutive of the if-converted or the two-class method. For the three months ended March 31, 2021 and 2020, the two-class method was more dilutive and was computed by adjusting the denominator used in the basic net income per share computation by potentially dilutive securities outstanding during the period plus, when their effect is dilutive, incremental shares consisting of shares subject to stock options, shares issuable upon vesting of RSUs and PBRSUs, and shares issuable upon conversion of preferred stock.

Basic and diluted net income (loss) per common share are calculated as follows (in millions, except share and per share data):

	Three Months Ended March 31,
	2021		2020
Basic EPS:
Net income	$	25.8	$	18.2
Less dividends on preferred shares (1)	(592.3)		(5.4)
Less income allocated to preferred shareholders	—		(6.2)
Net income (loss) available/(allocated) to common shareholders - basic	$	(566.5)	$	6.6
Diluted EPS:
Net income	$	25.8	$	18.2
Less dividends on preferred shares (1)	(592.3)		(5.4)
Less income allocated to preferred shareholders	—		(5.0)
Net income (loss) available/(allocated) to common shareholders - diluted	$	(566.5)	$	7.8
Basic weighted-average common shares	239,290,145		114,441,043
Add: Effect of dilutive equity awards	—		11,893,514
Add: Effect of dilutive warrants	—		43,285,621
Diluted weighted average common shares	239,290,145		169,620,178
Net income (loss) per common share (basic)	$	(2.37)	$	0.06
Net income (loss) per common share (diluted)	$	(2.37)	$	0.05

(1) The 2021 dividend on preferred shares includes amounts related to the conversion of the preferred shares. See Note 15, 8.00% Series A Convertible Preferred Stock, to the consolidated financial statements included in this Quarterly Report on Form 10-Q for more information.

Because of their anti-dilutive effect, 13,688,519 common share equivalents comprised of stock options, PBRSUs, and RSUs have been excluded from the diluted earnings per share calculation for the three months ended March 31, 2021. Additionally, for the three months ended March 31, 2021, the Investor's and Intermountain's exercisable warrants to acquire up to 60 million and 1.5 million shares, respectively, of the Company's common stock have been excluded from the diluted earnings per share calculation because they are anti-dilutive. For the three months ended March 31, 2021, the exercisable warrants equate to 53,206,631 dilutive shares under the treasury stock method.

For the three months ended March 31, 2020, 525,414 common share equivalents have been excluded from the diluted earnings per share calculation because of their anti-dilutive effect.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2021

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Legal Proceedings

Other than as described below, the Company is not presently a party to any material litigation or regulatory proceeding and is not aware of any pending or threatened litigation or regulatory proceeding against the Company which, individually or in the aggregate, could have a material adverse effect on its business, operating results, financial condition or cash flows.

In May 2016, the Company was served with a False Claims Act case brought by a former emergency department service associate who worked at a hospital of one of the Company’s customers, MedStar Inc.’s Washington Hospital Center (“WHC”), along with WHC and three other hospitals that were PAS customers and a place holder, John Doe hospital, representing all PAS customers (U.S. ex rel. Graziosi vs. Accretive Health, Inc. et. al.), and seeking money damages, False Claims Act penalties, and plaintiff’s attorneys’ fees. The Third Amended Complaint alleges that the Company’s PAS business violates the federal False Claims Act. The case was originally filed under seal in 2013 in the federal district court in Chicago, was presented to the U.S. Attorney in Chicago, and the U.S. Attorney declined to intervene. The Company believes that it has meritorious defenses to all claims in the case and intends to vigorously defend itself against these claims. Both the Company’s and plaintiff’s motions for summary judgment were denied in December 2020, and the parties are presently conducting damages and expert discovery. Discovery and dispositive motions are expected to extend through January 2022, with trial, if necessary, in mid-to-late 2022.

On April 13, 2021 and April 19, 2021, respectively, certain purported stockholders of the Company filed two complaints in the Delaware Court of Chancery regarding the Company’s January 15, 2021 recapitalization transaction with TCP-ASC, an investment vehicle owned jointly by Ascension and TowerBrook. Both complaints allege that TCP-ASC, Ascension, and TowerBrook controlled the Company and breached their fiduciary duties by using that alleged control to force the Company to overpay in redeeming TCP-ASC’s preferred stock as part of the recapitalization transaction. The plaintiffs seek an unspecified amount of damages against TCP-ASC, Ascension, and TowerBrook. The plaintiffs also allege that the Company and TCP-ASC entered into amendments to the Investor Rights Agreement that the plaintiffs contend contains provisions that are void under the Company’s charter, bylaws, and the Delaware General Corporation Law. The plaintiffs seek a declaratory judgment that these amendments are invalid, as well as attorneys’ fees and costs. The Company believes that it has meritorious defenses to all claims against the Company and intends to vigorously defend itself against these claims.

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Related Party Transactions

3 Months Ended

Mar. 31, 2021

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

This note encompasses transactions between Ascension and its affiliates, including AMITA Health, and the Company pursuant to the amended and restated Master Professional Services Agreement (“A&R MPSA”), including all supplements, amendments, and other documents entered into in connection therewith. For further details on the Company's agreements with Ascension, see Note 1 and Note 18 of the Company's 2020 Form 10-K.

Net services revenue from services provided to Ascension included in the Company’s consolidated statements of operations were (in millions):

	Three Months Ended March 31,
	2021		2020
Ascension	$	215.5	$	208.4

Amounts included in the Company's consolidated balance sheets for Ascension are (in millions):

	March 31, 2021		December 31, 2020
Accounts receivable, net of $0.1 million and $0.1 million allowance - related party	$	31.8	$	30.9
Current portion of customer liabilities	$	10.6	$	15.3
Non-current portion of customer liabilities	$	15.4	$	16.3
Total customer liabilities	$	26.0	$	31.6

Since Ascension is the Company's largest customer, a significant percentage of the Company's cost of services is associated with providing services to Ascension. However, due to the nature of the Company's global business services and information technology operations, it is impractical to assign the dollar amount associated with services provided to Ascension.

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Deferred Contract Costs

3 Months Ended

Mar. 31, 2021

Revenue from Contract with Customer [Abstract]

Deferred Contract Costs

Revenue Recognition

The Company follows the guidance under Topic 606, Revenue from Contracts with Customers (“Topic 606”). Revenue is measured based on consideration specified in a contract with a customer, and excludes any sales incentives and amounts collected on behalf of third parties. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a service to a customer, which is typically over the contact term. Estimates of variable consideration are included in revenue to the extent that it is probable that a significant reversal of cumulative revenue will not occur once the uncertainty is resolved.

Disaggregation of Revenue

In the following table, revenue is disaggregated by source (in millions):

	Three Months Ended March 31,
	2021		2020
Net operating fees	$	286.1	$	280.9
Incentive fees	29.0		16.8
Other	27.5		22.8
Net services revenue	$	342.6	$	320.5

Contract Balances

The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers (in millions):

	March 31, 2021		December 31, 2020
Receivables (1)	$	129.4	$	122.2
Contract assets (2)	6.7		—
Contract liabilities (2)	25.7		28.6

(1) Receivables are included in accounts receivable, net. The balance includes accounts receivable, net - related party.

(2) Contract assets and contract liabilities are included in other current assets and customer liabilities, respectively. The contract liabilities balance contains related party amounts, including $3.9 million and $5.6 million of current customer liabilities and $15.4 million and $16.3 million of non-current customer liabilities for the three months ended March 31, 2021 and year ended December 31, 2020, respectively.

A receivable is recognized in the period the Company provides services when the Company’s right to consideration is unconditional. Payment terms on invoiced amounts are typically 30-60 days.

The Company recognized revenue of $93.7 million and $86.0 million during the three months ended March 31, 2021 and 2020, which amounts were included in contract liabilities at the beginning of the respective periods. These revenue amounts include $88.1 million and $85.0 million for the three months ended March 31, 2021 and 2020, respectively, related to advanced billings which become accounts receivable and contract liabilities on the first day of the respective service period.

Transaction Price Allocated to the Remaining Performance Obligation

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period (in millions). The estimated revenue does not include amounts of variable consideration that are constrained.

	Net operating fees		Incentive fees		Other
Remainder of 2021	$	83.9	$	31.4	$	1.7
2022	70.0		—		—
2023	55.0		—		—
2024	35.0		—		—
2025	11.7		—		—
2026	5.6		—		—
Thereafter	—		—		—
Total	$	261.2	$	31.4	$	1.7

The amounts presented in the table above include variable fee estimates for the non-cancellable term of the Company's physician groups RCM services contracts, fixed fees which are typically recognized ratably as the performance obligation is satisfied, and incentive fees which are measured cumulatively over the contractually defined performance period.

Estimates of revenue expected to be recognized in future periods exclude unexercised customer options to purchase services within the Company's physician advisory services (“PAS”) contracts that do not represent material rights to the customer. Customer options that do not represent a material right are only accounted for in accordance with Topic 606 when the customer exercises its option to purchase additional goods or services. Deferred Contract Costs

Certain costs associated with the initial phases of customer contracts and the related transition of customer hospitals and physician groups are deferred. These fulfillment costs relate directly to the Company’s responsibilities under the corresponding customer contracts, generate or enhance resources of the Company that will be used in satisfying its performance obligations in the future, and are expected to be recovered through the margins realized. The following table summarizes the breakout of deferred contract costs (in millions):

	March 31, 2021		December 31, 2020
Prepaid expenses and other current assets	$	4.7	$	4.5
Other assets	19.5		19.6
Total deferred contract costs	$	24.2	$	24.1

The associated assets are amortized as services are transferred to the customer over the remaining life of the contracts. For the three months ended March 31, 2021 and 2020, total amortization was $1.2 million and $1.1 million, respectively, and there were no associated impairment losses.

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Segments and Customer Concentrations

3 Months Ended

Mar. 31, 2021

Segment Reporting [Abstract]

Segments and Customer Concentrations

Segments and Customer Concentrations

The Company has determined that it has a single operating segment in accordance with how its business activities are managed and evaluated. All of the Company’s significant operations are organized around the single business of providing end-to-end management services of revenue cycle operations for U.S.-based healthcare providers. Accordingly, for purposes of segment disclosures, the Company has only one reportable segment.

Healthcare providers affiliated with Ascension have accounted for a significant portion of the Company’s net services revenue each year since the Company’s formation. For the three months ended March 31, 2021 and 2020, net services revenue from healthcare organizations affiliated with Ascension accounted for 63% and 65% of the Company's total net services revenue, respectively. The loss of customers within the Ascension health system could have a material adverse impact on the Company’s operations. For the three months ended March 31, 2021 and 2020, Intermountain Healthcare accounted for 14% and 15% of the Company's total net services revenue, respectively.

As of March 31, 2021 and December 31, 2020, the Company had a concentration of credit risk with Ascension accounting for 25% and 25% of accounts receivable, respectively.

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Derivative Financial Instruments

3 Months Ended

Mar. 31, 2021

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial InstrumentsThe Company utilizes cash flow hedges to mitigate its currency risk arising from its global delivery resources and to reduce variability in interest cash flows from its outstanding debt. As of March 31, 2021, the Company has recorded $0.6 million of existing gains and $1.8 million of existing losses in accumulated other comprehensive income for the foreign currency hedges and interest rate swaps, respectively. The Company estimates that $0.6 million of gains and $1.3 million of losses reported in accumulated other comprehensive income are expected to be reclassified into earnings within the next 12 months for the foreign currency hedges and interest rate swaps, respectively. The amounts related to foreign currency hedges that were reclassified into cost of services were a net gain of $0.4 million and a net loss of $0.1 million during the three month periods ended March 31, 2021 and 2020, respectively. The amounts related to the interest rate swaps that were reclassified into interest expense were a net loss of $0.5 million and a net gain of $0.1 million during the three month periods ended March 31, 2021 and 2020, respectively.

The Company classifies cash flows from its derivative programs as cash flows from operating activities in the consolidated statements of cash flows. As of March 31, 2021, the Company’s currency forward contracts have maturities extending no later than March 31, 2022. The Company's interest rate swaps extend no later than August of 2022.

As of March 31, 2021, the notional amounts of the Company's open foreign currency forward contracts and interest rate swaps were approximately $95.1 million and $100.0 million, respectively. As of December 31, 2020, the notional amounts of the Company's open foreign currency forward contracts and interest rate swaps were approximately $55.9 million and $200.0 million, respectively. As of March 31, 2021, the Company held no derivatives, or non-derivative hedging instruments, that were designated in fair value or net investment hedges. Fair values for derivative financial instruments are based on prices computed using third-party valuation models and are classified as Level 2 in accordance with the three-level hierarchy of fair value measurements.

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Subsequent Events

3 Months Ended

Mar. 31, 2021

Subsequent Events [Abstract]

Subsequent Events

Subsequent Events

On April 30, 2021, the Company entered into an agreement with Ascension amending the A&R MPSA. The agreement expands R1’s role as the provider of patient experience technologies, and extends R1’s revenue cycle management services agreement with Ascension to 2031.

On May 3, 2021, the Company entered into a definitive agreement to acquire VisitPay Inc. (“VisitPay”), a provider of digital payment solutions. The Company will acquire VisitPay for $298.0 million in cash, subject to customary adjustments for working capital, cash, and debt. The Company intends to fund the acquisition and related fees and expenses with the proceeds from additional borrowings and cash on hand. Concurrent with the entry into the definitive agreement to acquire VisitPay, the Company obtained a debt financing commitment letter from Bank of America in the amount of $300.0 million. There is no financing condition linked to the consummation of the acquisition. The agreement contains customary representations, warranties, and closing conditions. The transaction is expected to close in the third quarter of 2021.

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Recent Accounting Pronouncements (Policies)

3 Months Ended

Mar. 31, 2021

Accounting Policies [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited consolidated financial statements reflect the Company's financial position as of March 31, 2021, the results of operations of the Company for the three months ended March 31, 2021 and 2020, and the cash flows of the Company for the three months ended March 31, 2021 and 2020. These financial statements include the accounts of R1 RCM Inc. and its wholly-owned subsidiaries. All material intercompany amounts have been eliminated in consolidation. These financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial reporting and as required by the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, certain information and footnote disclosures required for complete financial statements are not included herein. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the interim financial information, have been included. Operating results for the three months ended March 31, 2021 are not necessarily indicative of the results that may be expected for any other interim period or for the fiscal year ending December 31, 2021.

When preparing financial statements in conformity with GAAP, the Company must make estimates and assumptions that affect the reported amounts of assets, liabilities, revenues, expenses, and related disclosures at the date of the financial statements. Actual results could differ from those estimates.

Recently Issued Accounting Standards and Disclosures

Recently Issued Accounting Standards and Disclosures

No new accounting pronouncements issued or effective during the fiscal year had, or is expected to have, a material impact on the Company’s consolidated financial statements.

Accounts Receivable and Allowance for Credit Losses

Accounts Receivable and Allowance for Credit LossesAccounts receivable is comprised of unpaid balances pertaining to modular services and end-to-end revenue cycle management (“RCM”) customers, net receivable balances for end-to-end RCM customers after considering cost reimbursements owed to such customers, including related accrued balances, and amounts due from physician RCM and practice management customers.

Revenue Recognition

Revenue RecognitionThe Company follows the guidance under Topic 606, Revenue from Contracts with Customers (“Topic 606”). Revenue is measured based on consideration specified in a contract with a customer, and excludes any sales incentives and amounts collected on behalf of third parties. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a service to a customer, which is typically over the contact term. Estimates of variable consideration are included in revenue to the extent that it is probable that a significant reversal of cumulative revenue will not occur once the uncertainty is resolved.

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Acquisitions (Tables)

3 Months Ended

Mar. 31, 2021

Business Combinations [Abstract]

Schedule of Assets Acquired and Liabilities Assumed

The fair value of assets acquired and liabilities assumed is (in millions):

	Purchase Price Allocation
Total purchase consideration	$	197.0
Allocation of consideration to assets acquired and liabilities assumed:
Cash and cash equivalents	$	2.9
Accounts receivable	2.8
Prepaid expenses and other current assets	1.2
Property, equipment and software	0.3
Operating lease right-of-use assets	1.2
Intangible assets	86.1
Goodwill	125.8
Accounts payable	(0.2)
Current portion of customer liabilities	(4.0)
Accrued compensation and benefits	(1.6)
Current portion of operating lease liabilities	(0.5)
Other accrued expenses	(0.4)
Non-current portion of operating lease liabilities	(0.7)
Other non-current liabilities	(5.0)
Deferred income tax liabilities	(10.9)
Net assets acquired	$	197.0

Schedule of Pro Forma Results

The following table summarizes, on a pro forma basis, the combined results of the Company as though the SCI and RevWorks acquisitions had occurred as of January 1, 2019. These pro forma results are not necessarily indicative of either the actual consolidated results had the acquisitions occurred as of January 1, 2019 or of the future consolidated operating results for any period. Pro forma results are (in millions):

	Three Months Ended March 31, 2020
Net services revenue	$	349.6
Net income	$	17.3

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Accounts Receivable and Allowance for Credit Losses (Tables)

3 Months Ended

Mar. 31, 2021

Receivables [Abstract]

Schedule of Allowance for Credit Losses

Movements in the allowance for credit losses are as follows (in millions):

	Three Months Ended March 31,
	2021		2020
Beginning balance	$	3.8	$	2.8
Cumulative effect of ASC 326 adoption	—		1.1
Provision (recoveries)	0.1		0.8
Ending balance	$	3.9	$	4.7

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Property, Equipment, and Software (Tables)

3 Months Ended

Mar. 31, 2021

Property, Plant and Equipment [Abstract]

Schedule of Property, Equipment and Software

Property, equipment and software consist of the following (in millions):

	March 31, 2021		December 31, 2020
Buildings and land	$	4.6	$	4.6
Computer and other equipment	56.6		55.0
Leasehold improvements	23.3		23.2
Software	142.3		135.7
Office furniture	6.4		6.4
Property, equipment and software, gross	233.2		224.9
Less accumulated depreciation and amortization	(144.2)		(131.2)
Property, equipment and software, net	$	89.0	$	93.7

Summary Depreciation and Amortization Expense

The following table summarizes the allocation of depreciation and amortization expense between cost of services and selling, general and administrative expenses (in millions):

	Three Months Ended March 31,
	2021		2020
Cost of services	$	12.7	$	10.9
Selling, general and administrative	0.8		1.3
Total depreciation and amortization	$	13.5	$	12.2

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Leases (Tables)

3 Months Ended

Mar. 31, 2021

Leases [Abstract]

Schedules of Components of Lease Costs and Supplemental Cash Flow Information

The components of lease costs are as follows (in millions):

	Three Months Ended March 31,
	2021		2020
Operating lease cost	$	4.1	$	4.9
Finance lease cost:
Amortization of right-of-use (“ROU”) assets	0.1		0.2
Interest on lease liabilities	—		0.1
Sublease income	(0.6)		(0.6)
Total lease cost	$	3.6	$	4.6

Supplemental cash flow information related to leases are as follows (in millions):

	Three Months Ended March 31,
	2021		2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	9.4	$	4.9
Operating cash flows for finance leases	—		0.1
Financing cash flows for finance leases	—		0.6
ROU assets obtained in exchange for lease obligations:
Operating leases	5.6		1.7

Schedule of Supplemental Balance Sheet Information

Supplemental balance sheet information related to leases are as follows:

	March 31, 2021		December 31, 2020
Weighted average remaining lease term:
Operating leases	7 years		7 years
Finance leases	3 years		2 years
Weighted average incremental borrowing rate:
Operating leases	8.99	%	8.94	%
Finance leases	6.71	%	6.62	%

Schedule of Operating Lease Maturity

Maturities of lease liabilities as of March 31, 2021 are as follows (in millions):

	Operating Leases		Finance Leases
Remainder of 2021	$	14.0	$	0.1
2022	16.0		0.1
2023	15.2		—
2024	15.3		—
2025	15.2		—
2026	12.0		—
Thereafter	22.1		—
Total	109.8		0.2
Less:
Imputed interest	29.3		—
Present value of lease liabilities	$	80.5	$	0.2

Schedule of Finance Lease Maturity

Maturities of lease liabilities as of March 31, 2021 are as follows (in millions):

	Operating Leases		Finance Leases
Remainder of 2021	$	14.0	$	0.1
2022	16.0		0.1
2023	15.2		—
2024	15.3		—
2025	15.2		—
2026	12.0		—
Thereafter	22.1		—
Total	109.8		0.2
Less:
Imputed interest	29.3		—
Present value of lease liabilities	$	80.5	$	0.2

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Intangible Assets (Tables)

3 Months Ended

Mar. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Intangible Assets

The following table provides the gross carrying value and accumulated amortization for each major class of intangible asset at March 31, 2021 and December 31, 2020 (in millions):

	March 31, 2021						December 31, 2020
	Gross Carrying Value		Accumulated Amortization		Net Book Value		Gross Carrying Value		Accumulated Amortization		Net Book Value
Customer relationships	$	97.7	$	(16.2)	$	81.5	$	97.7	$	(14.7)	$	83.0
Technology	101.7		(16.5)		85.2		101.7		(13.6)		88.1
Total intangible assets	$	199.4	$	(32.7)	$	166.7	$	199.4	$	(28.3)	$	171.1

Schedule of Estimated Annual Amortization Expense

Estimated annual amortization expense related to intangible assets with definite lives as of March 31, 2021 is as follows (in millions):

Remainder of 2021	$	12.9
2022	17.3
2023	17.3
2024	15.5
2025	14.5
2026	14.5
Thereafter	74.7
Total	$	166.7

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Goodwill (Tables)

3 Months Ended

Mar. 31, 2021

Goodwill and Intangible Assets Disclosure [Abstract]

Schedule of Changes in Carrying Value of Goodwill

Changes in the carrying amount of goodwill for the three months ended March 31, 2021 were (in millions):

	Goodwill
Balance as of December 31, 2020	$	375.3
Measurement period adjustments	0.2
Balance as of March 31, 2021	$	375.5

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Revenue Recognition (Tables)

3 Months Ended

Mar. 31, 2021

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregated Revenue By Source

In the following table, revenue is disaggregated by source (in millions):

	Three Months Ended March 31,
	2021		2020
Net operating fees	$	286.1	$	280.9
Incentive fees	29.0		16.8
Other	27.5		22.8
Net services revenue	$	342.6	$	320.5

Schedule of Assets and Liabilities

The following table provides information about receivables, contract assets, and contract liabilities from contracts with customers (in millions):

	March 31, 2021		December 31, 2020
Receivables (1)	$	129.4	$	122.2
Contract assets (2)	6.7		—
Contract liabilities (2)	25.7		28.6

(1) Receivables are included in accounts receivable, net. The balance includes accounts receivable, net - related party.

(2) Contract assets and contract liabilities are included in other current assets and customer liabilities, respectively. The contract liabilities balance contains related party amounts, including $3.9 million and $5.6 million of current customer liabilities and $15.4 million and $16.3 million of non-current customer liabilities for the three months ended March 31, 2021 and year ended December 31, 2020, respectively.

Schedule of Transaction Price Allocated to the Remaining Performance Obligation

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period (in millions). The estimated revenue does not include amounts of variable consideration that are constrained.

	Net operating fees		Incentive fees		Other
Remainder of 2021	$	83.9	$	31.4	$	1.7
2022	70.0		—		—
2023	55.0		—		—
2024	35.0		—		—
2025	11.7		—		—
2026	5.6		—		—
Thereafter	—		—		—
Total	$	261.2	$	31.4	$	1.7

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Debt (Tables)

3 Months Ended

Mar. 31, 2021

Debt Disclosure [Abstract]

Schedule of Carrying Values Long-Term Debt

The carrying amounts of debt consist of the following (in millions):

	March 31, 2021		December 31, 2020
Senior Revolver	$	70.0	$	70.0
Senior Term Loan	478.1		484.6
Unamortized discount and issuance costs	(2.4)		(2.6)
Total debt	545.7		552.0
Less: Current maturities	(35.5)		(32.3)
Total long-term debt	$	510.2	$	519.7

Scheduled Maturities of Long-term Debt

Scheduled maturities of the Company’s long-term debt are summarized as follows (in millions):

	Scheduled Maturities
Remainder of 2021	$	25.8
2022	38.7
2023	45.2
2024	438.4
Total	$	548.1

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Share-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2021

Share-based Payment Arrangement [Abstract]

Schedule of Share-based Compensation Expense

Total share-based compensation costs that have been included in the Company’s consolidated statements of operations were as follows (in millions):

	Three Months Ended March 31,
	2021		2020
Share-Based Compensation Expense Allocation Details:
Cost of services	$	7.3	$	1.9
Selling, general and administrative	5.4		2.9
Other	—		—
Total share-based compensation expense	$	12.7	$	4.8

Summary of Valuation Assumptions

The following table sets forth the significant assumptions used in the Black-Scholes option pricing model and the Monte Carlo simulations and the calculation of share-based compensation expense for the three months ended March 31, 2021 and 2020:

	Three Months Ended March 31,
	2021	2020
Expected dividend yield	—%	—%
Risk-free interest rate	0.4%	1.7%
Expected volatility	43%	43%
Expected term (in years)	5.5	5.5

Schedule of Stock Options Activity

A summary of the options activity during the three months ended March 31, 2021 is shown below:

	Options	Weighted- Average Exercise Price
Outstanding at December 31, 2020	6,220,971	$	3.68
Granted	1,625	23.49
Exercised	(539,795)	6.47
Canceled/forfeited	(1,040)	3.85
Expired	—	—
Outstanding at March 31, 2021	5,681,761	$	3.42
Outstanding, vested and exercisable at March 31, 2021	4,782,897	$	3.41
Outstanding, vested and exercisable at December 31, 2020	5,230,690	$	3.73

Schedule of Non-Options Awards Activity

A summary of the RSU and PBRSU activity during the three months ended March 31, 2021 is shown below:

					Weighted- Average Grant Date Fair Value
	RSUs		PBRSUs		RSU		PBRSU
Outstanding and unvested at December 31, 2020	2,108,447		2,917,071		$	9.87	$	11.35
Granted	2,719		290,354		23.77		25.09
Vested	(6,497)		—		10.80		—
Forfeited	(41,381)		(646)		12.99		5.34
Outstanding and unvested at March 31, 2021	2,063,288		3,206,779		$	9.82	$	12.59
Shares surrendered for taxes for the three months ended March 31, 2021	2,201		—
Cost of shares surrendered for taxes for the three months ended March 31, 2021 (in millions)	$	—	$	—
Shares surrendered for taxes for the three months ended March 31, 2020	545		—
Cost of shares surrendered for taxes for the three months ended March 31, 2020 (in millions)	$	—	$	—

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Other Expenses (Tables)

3 Months Ended

Mar. 31, 2021

Other Income and Expenses [Abstract]

Schedule of Other Expenses

Other expenses consist of the following (in millions):

	Three Months Ended March 31,
	2021		2020
Severance and related employee benefits	$	1.5	$	1.1
Strategic initiatives (1)	6.5		3.2
Facility-exit charges (2)	1.5		0.4
Other (3)	3.5		4.0
Total other expenses	$	13.0	$	8.7

(1) Costs related to evaluating, pursuing, and integrating acquisitions, performing portfolio and capital structure analyses and transactions, and other inorganic business projects as part of the Company’s growth strategy. Costs include vendor spend, employee time and expenses spent on activities, severance and retention amounts associated with integration activities, and changes to contingent consideration related to acquisitions. For the three months ended March 31, 2021, $0.5 million of contingent consideration changes were included.

(2) As part of evaluating the Company’s footprint, R1 has exited certain leased facilities. Costs include asset impairment charges and other costs related to exited leased facilities.

(3) For the three months ended March 31, 2021 and 2020, includes $1.7 million and $2.6 million, respectively, of expenses related to the COVID-19 pandemic, inclusive of appreciation bonuses for the Company’s front-line employees, pandemic response mobilization efforts, telemedicine and testing costs for employees, and other costs related to the COVID-19 pandemic.

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8.00% Series A Convertible Preferred Stock (Tables)

3 Months Ended

Mar. 31, 2021

Temporary Equity Disclosure [Abstract]

Summary of Preferred Stock Activity

The following summarizes the preferred stock activity for the three months ended March 31, 2021 (in millions, except per share data):

	Preferred Stock
	Shares Issued and Outstanding	Carrying Value
Balance at December 31, 2020	288,497	$	251.5
Dividends paid/accrued dividends	5,769	—
Conversion of preferred stock	(294,266)	(251.5)
Balance at March 31, 2021	—	$	—

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Earnings (Loss) Per Share (Tables)

3 Months Ended

Mar. 31, 2021

Earnings Per Share [Abstract]

Schedule of Basic and Diluted Net Income (Loss) Per Common Share

Basic and diluted net income (loss) per common share are calculated as follows (in millions, except share and per share data):

	Three Months Ended March 31,
	2021		2020
Basic EPS:
Net income	$	25.8	$	18.2
Less dividends on preferred shares (1)	(592.3)		(5.4)
Less income allocated to preferred shareholders	—		(6.2)
Net income (loss) available/(allocated) to common shareholders - basic	$	(566.5)	$	6.6
Diluted EPS:
Net income	$	25.8	$	18.2
Less dividends on preferred shares (1)	(592.3)		(5.4)
Less income allocated to preferred shareholders	—		(5.0)
Net income (loss) available/(allocated) to common shareholders - diluted	$	(566.5)	$	7.8
Basic weighted-average common shares	239,290,145		114,441,043
Add: Effect of dilutive equity awards	—		11,893,514
Add: Effect of dilutive warrants	—		43,285,621
Diluted weighted average common shares	239,290,145		169,620,178
Net income (loss) per common share (basic)	$	(2.37)	$	0.06
Net income (loss) per common share (diluted)	$	(2.37)	$	0.05

(1) The 2021 dividend on preferred shares includes amounts related to the conversion of the preferred shares. See Note 15, 8.00% Series A Convertible Preferred Stock, to the consolidated financial statements included in this Quarterly Report on Form 10-Q for more information.

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Related Party Transactions (Tables)

3 Months Ended

Mar. 31, 2021

Related Party Transactions [Abstract]

Schedule of Related Party Transactions

Net services revenue from services provided to Ascension included in the Company’s consolidated statements of operations were (in millions):

	Three Months Ended March 31,
	2021		2020
Ascension	$	215.5	$	208.4

Amounts included in the Company's consolidated balance sheets for Ascension are (in millions):

	March 31, 2021		December 31, 2020
Accounts receivable, net of $0.1 million and $0.1 million allowance - related party	$	31.8	$	30.9
Current portion of customer liabilities	$	10.6	$	15.3
Non-current portion of customer liabilities	$	15.4	$	16.3
Total customer liabilities	$	26.0	$	31.6

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Deferred Contract Costs (Tables)

3 Months Ended

Mar. 31, 2021

Revenue from Contract with Customer [Abstract]

Summary of Deferred Contract Costs

The following table summarizes the breakout of deferred contract costs (in millions):

	March 31, 2021		December 31, 2020
Prepaid expenses and other current assets	$	4.7	$	4.5
Other assets	19.5		19.6
Total deferred contract costs	$	24.2	$	24.1

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Business Description and Basis of Presentation - Narrative (Details) - Disposal Group, Disposed of by Sale, Not Discontinued Operations - EMS Disposition $ in Millions	Oct. 30, 2020 USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Sale of EMS business, disposition price	$ 140.0
Sale of EMS business, hold-back amount included in disposition price	$ 5.0
Sale of EMS business, hold-back amount, settlement period from date of the disposition	1 year
Sale of EMS business, total sale price, net of cost to sell	$ 132.7
Sale of EMS business, goodwill	7.1
Sale of EMS business, gain recognized	$ 55.7

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Acquisitions - Narrative (Details)					12 Months Ended
	Sep. 03, 2022 USD ($)	Sep. 03, 2021 USD ($)	Aug. 03, 2020 USD ($) payment	Apr. 01, 2020 USD ($)	Sep. 03, 2022 USD ($)	Mar. 31, 2021 USD ($)	Dec. 31, 2020 USD ($)
Business Acquisition [Line Items]
Goodwill						$ 375,500,000	$ 375,300,000
SCI Acquisition
Business Acquisition [Line Items]
Purchase price				$ 190,000,000.0
Other non-current liabilities, note payable				5,000,000.0
Purchase consideration				197,000,000.0
Goodwill				125,800,000
SCI Acquisition | Earn-out Provision
Business Acquisition [Line Items]
Earn-out provision, value				$ 4,800,000		$ 10,000,000.0
RevWorks
Business Acquisition [Line Items]
Purchase consideration			$ 30,000,000.0
Purchase price, payment			$ 5,000,000.0
Number of deferred payments | payment			2
Contractual deferred payments			$ 24,300,000
Goodwill			3,600,000
RevWorks | Customer relationships
Business Acquisition [Line Items]
Assets acquired			2,800,000
RevWorks | Subsequent Event | Forecast
Business Acquisition [Line Items]
Purchase price, payment	$ 12,500,000	$ 12,500,000			$ 25,000,000.0
RevWorks | Cerner
Business Acquisition [Line Items]
Contingent consideration asset, (up to)			25,000,000.0
Asset, contingently returnable consideration			22,300,000
RevWorks | Cerner | Prepaid expenses and other current assets
Business Acquisition [Line Items]
Asset, contingently returnable consideration			11,500,000
RevWorks | Cerner | Other noncurrent assets
Business Acquisition [Line Items]
Asset, contingently returnable consideration			$ 10,800,000

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Acquisitions - Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions	Apr. 01, 2020	Mar. 31, 2021	Dec. 31, 2020
Allocation of consideration to assets acquired and liabilities assumed:
Goodwill		$ 375.5	$ 375.3
SCI Acquisition
Business Acquisition [Line Items]
Total purchase consideration	$ 197.0
Allocation of consideration to assets acquired and liabilities assumed:
Cash and cash equivalents	2.9
Accounts receivable	2.8
Prepaid expenses and other current assets	1.2
Property, equipment and software	0.3
Operating lease right-of-use assets	1.2
Intangible assets	86.1
Goodwill	125.8
Accounts payable	(0.2)
Current portion of customer liabilities	(4.0)
Accrued compensation and benefits	(1.6)
Current portion of operating lease liabilities	(0.5)
Other accrued expenses	(0.4)
Non-current portion of operating lease liabilities	(0.7)
Other non-current liabilities	(5.0)
Deferred income tax liabilities	(10.9)	$ (10.9)
Net assets acquired	$ 197.0

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Acquisitions - Pro Forma Results (Details) - RevWorks $ in Millions	3 Months Ended
	Mar. 31, 2020 USD ($)
Business Acquisition [Line Items]
Net services revenue	$ 349.6
Net income	$ 17.3

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Accounts Receivable and Allowance for Credit Losses - Schedule of Allowance for Credit Losses (Details) - USD ($) $ in Millions	3 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2019
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	$ 3.8	$ 2.8
Cumulative effect of ASC 326 adoption	$ 3.9	$ 4.7	$ 2.8
Accounting Standards Update [Extensible List]	us-gaap:AccountingStandardsUpdate201613Member	us-gaap:AccountingStandardsUpdate201613Member	us-gaap:AccountingStandardsUpdate201613Member
Provision (recoveries)	$ 0.1	$ 0.8
Ending balance	3.9	4.7	$ 2.8
Cumulative Effect, Period of Adoption, Adjustment
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	0.0	1.1
Cumulative effect of ASC 326 adoption	$ 0.0	$ 1.1	1.1
Ending balance			$ 1.1

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Property, Equipment, and Software - Schedule of Property, Equipment and Software (Details) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
Property, Plant and Equipment [Line Items]
Property, equipment and software, gross	$ 233.2	$ 224.9
Less accumulated depreciation and amortization	(144.2)	(131.2)
Property, equipment and software, net	89.0	93.7
Buildings and land
Property, Plant and Equipment [Line Items]
Property, equipment and software, gross	4.6	4.6
Computer and other equipment
Property, Plant and Equipment [Line Items]
Property, equipment and software, gross	56.6	55.0
Leasehold improvements
Property, Plant and Equipment [Line Items]
Property, equipment and software, gross	23.3	23.2
Software
Property, Plant and Equipment [Line Items]
Property, equipment and software, gross	142.3	135.7
Office furniture
Property, Plant and Equipment [Line Items]
Property, equipment and software, gross	$ 6.4	$ 6.4

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Property, Equipment, and Software - Allocation of Depreciation and Amortization Expense between Cost of Services and Selling, General and Administrative Expenses (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Property, Plant and Equipment [Line Items]
Total depreciation and amortization	$ 13.5	$ 12.2
Cost of services
Property, Plant and Equipment [Line Items]
Total depreciation and amortization	12.7	10.9
Selling, general and administrative
Property, Plant and Equipment [Line Items]
Total depreciation and amortization	$ 0.8	$ 1.3

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Leases - Schedule of Lease Costs (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Leases [Abstract]
Operating lease cost	$ 4.1	$ 4.9
Finance lease cost:
Amortization of right-of-use (“ROU”) assets	0.1	0.2
Interest on lease liabilities	0.0	0.1
Sublease income	(0.6)	(0.6)
Total lease cost	$ 3.6	$ 4.6

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Leases - Schedule of Supplemental Cash Flow Information (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$ 9.4	$ 4.9
Operating cash flows for finance leases	0.0	0.1
Financing cash flows for finance leases	0.0	0.6
ROU assets obtained in exchange for lease obligations:
Operating leases	$ 5.6	$ 1.7

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Leases - Schedule of Supplemental Balance Sheet Information (Details)	Mar. 31, 2021	Dec. 31, 2020
Weighted average remaining lease term:
Operating leases	7 years	7 years
Finance leases	3 years	2 years
Weighted average incremental borrowing rate:
Operating leases	8.99%	8.94%
Finance leases	6.71%	6.62%

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Leases - Schedule of Operating and Finance Lease Maturity (Details) $ in Millions	Mar. 31, 2021 USD ($)
Operating Leases
Remainder of 2021	$ 14.0
2022	16.0
2023	15.2
2024	15.3
2025	15.2
2026	12.0
Thereafter	22.1
Total	109.8
Less:
Imputed interest	29.3
Present value of lease liabilities	80.5
Finance Leases
Remainder of 2021	0.1
2022	0.1
2023	0.0
2024	0.0
2025	0.0
2026	0.0
Thereafter	0.0
Total	0.2
Less:
Imputed interest	0.0
Present value of lease liabilities	$ 0.2

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Intangible Assets - Components of Intangible Assets (Details) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	$ 199.4	$ 199.4
Accumulated Amortization	(32.7)	(28.3)
Total	166.7	171.1
Customer relationships
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	97.7	97.7
Accumulated Amortization	(16.2)	(14.7)
Total	81.5	83.0
Technology
Finite-Lived Intangible Assets [Line Items]
Gross Carrying Value	101.7	101.7
Accumulated Amortization	(16.5)	(13.6)
Total	$ 85.2	$ 88.1

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Intangible Assets - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Goodwill and Intangible Assets Disclosure [Abstract]
Intangible asset amortization expense	$ 4.4	$ 3.5

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Intangible Assets - Future Amortization (Details) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
Finite-Lived Intangible Assets, Amortization Expense, Maturity Schedule [Abstract]
Remainder of 2021	$ 12.9
2022	17.3
2023	17.3
2024	15.5
2025	14.5
2026	14.5
Thereafter	74.7
Total	$ 166.7	$ 171.1

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Goodwill - Schedule of Changes in Carrying Value of Goodwill (Details) $ in Millions	3 Months Ended
	Mar. 31, 2021 USD ($)
Goodwill [Roll Forward]
Balance as of December 31, 2020	$ 375.3
Measurement period adjustments	0.2
Balance as of March 31, 2021	$ 375.5

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Revenue Recognition - Schedule of Disaggregated Revenue by Source (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Disaggregation of Revenue [Line Items]
Net services revenue	$ 342.6	$ 320.5
Net operating fees
Disaggregation of Revenue [Line Items]
Net services revenue	286.1	280.9
Incentive fees
Disaggregation of Revenue [Line Items]
Net services revenue	29.0	16.8
Other
Disaggregation of Revenue [Line Items]
Net services revenue	$ 27.5	$ 22.8

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Revenue Recognition - Schedule of Contract Balances (Details) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
Disaggregation of Revenue [Line Items]
Receivables, including related party	$ 129.4	$ 122.2
Contract assets	6.7	0.0
Non-current customer liabilities, related party	15.4	16.3
Contract With Customer Liability
Disaggregation of Revenue [Line Items]
Contract liabilities	25.7	28.6
Investor
Disaggregation of Revenue [Line Items]
Current customer liabilities, related party	$ 3.9	$ 5.6

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Revenue Recognition - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Disaggregation of Revenue [Line Items]
Revenue recognized	$ 93.7	$ 86.0
Accounts Receivable
Disaggregation of Revenue [Line Items]
Revenue recognized, advanced billings	$ 88.1	$ 85.0

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Revenue Recognition - Transaction Price Allocated to the Remaining Performance Obligation (Details) $ in Millions	Mar. 31, 2021 USD ($)
Net operating fees
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, amount	$ 261.2
Incentive fees
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, amount	31.4
Other
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, amount	$ 1.7
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, period	3 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01 | Net operating fees
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, amount	$ 83.9
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01 | Incentive fees
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, amount	31.4
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2021-04-01 | Other
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, amount	$ 1.7
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | Net operating fees
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, amount	$ 70.0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | Incentive fees
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, amount	0.0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-01-01 | Other
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, amount	$ 0.0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | Net operating fees
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, amount	$ 55.0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | Incentive fees
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, amount	0.0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-01-01 | Other
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, amount	$ 0.0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | Net operating fees
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, amount	$ 35.0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | Incentive fees
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, amount	0.0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | Other
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, amount	$ 0.0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | Net operating fees
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, amount	$ 11.7
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | Incentive fees
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, amount	0.0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | Other
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, amount	$ 0.0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | Net operating fees
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, amount	$ 5.6
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | Incentive fees
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, amount	0.0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | Other
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, amount	$ 0.0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, period
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01 | Net operating fees
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, amount	$ 0.0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01 | Incentive fees
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, amount	0.0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01 | Other
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, amount	$ 0.0

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Debt - Carrying Amounts of Debt (Details) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
Debt Instrument [Line Items]
Long-term Debt	$ 548.1
Unamortized discount and issuance costs	(2.4)	$ (2.6)
Total debt	545.7	552.0
Less: Current maturities	(35.5)	(32.3)
Total long-term debt	510.2	519.7
Line of Credit | Senior Revolver
Debt Instrument [Line Items]
Long-term Debt	70.0	70.0
Line of Credit | Senior Term Loan
Debt Instrument [Line Items]
Long-term Debt	$ 478.1	$ 484.6

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Debt - Narrative (Details) - USD ($)				3 Months Ended		12 Months Ended
	Jan. 19, 2021	Jan. 15, 2021	Jun. 26, 2019	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020	Jan. 13, 2021	Mar. 20, 2020
Debt Instrument [Line Items]
Cash paid, stock conversion (not to exceed)				$ 105,000,000.0	$ 0
Long-term debt				$ 548,100,000
Redeemable Convertible Preferred Stock
Debt Instrument [Line Items]
Preferred stock, dividend rate (percentage)				8.00%		8.00%
TCP-ASC ACHI Series LLLP
Debt Instrument [Line Items]
Cash paid, stock conversion (not to exceed)		$ 105,000,000.0
TCP-ASC ACHI Series LLLP | Redeemable Convertible Preferred Stock
Debt Instrument [Line Items]
Preferred stock, dividend rate (percentage)	8.00%	8.00%
Disposal Group, Disposed of by Sale, Not Discontinued Operations | EMS Disposition
Debt Instrument [Line Items]
Net proceeds from disposition, obligation waived							$ 135,000,000.0
Line of Credit
Debt Instrument [Line Items]
Interest rate				2.36%
Line of Credit | Minimum
Debt Instrument [Line Items]
Commitment fee			0.30%
Line of Credit | Maximum
Debt Instrument [Line Items]
Commitment fee			0.50%
Line of Credit | Federal Funds Rate
Debt Instrument [Line Items]
Basis spread on variable rate basis			0.50%
Line of Credit | Eurodollar Rate
Debt Instrument [Line Items]
Variable rate basis, minimum			0.00%
Line of Credit | Eurodollar Rate | Interest Rate Option - Basis Spread One
Debt Instrument [Line Items]
Basis spread on variable rate basis			1.00%
Line of Credit | Eurodollar Rate | Interest Rate Option - Basis Spread One | Minimum
Debt Instrument [Line Items]
Basis spread on variable rate basis			0.75%
Line of Credit | Eurodollar Rate | Interest Rate Option - Basis Spread One | Maximum
Debt Instrument [Line Items]
Basis spread on variable rate basis			1.75%
Line of Credit | Eurodollar Rate | Interest Rate Option Two
Debt Instrument [Line Items]
Variable rate basis, minimum			0.00%
Line of Credit | Eurodollar Rate | Interest Rate Option Two | Minimum
Debt Instrument [Line Items]
Basis spread on variable rate basis			1.75%
Line of Credit | Eurodollar Rate | Interest Rate Option Two | Maximum
Debt Instrument [Line Items]
Basis spread on variable rate basis			2.75%
Line of Credit | Senior Term Loan
Debt Instrument [Line Items]
Credit agreement, maximum borrowing capacity			$ 325,000,000.0
Credit agreement, issuance percentage of par			99.66%
Long-term debt				$ 478,100,000		$ 484,600,000
Line of Credit | Senior Revolver
Debt Instrument [Line Items]
Principle of debt issued			$ 100,000,000.0
Long-term debt				70,000,000.0		$ 70,000,000.0
Line of Credit | Line of Credit
Debt Instrument [Line Items]
Long-term debt				70,000,000.0
Borrowing availability				30,000,000.0
Line of Credit | Incremental Term Loan
Debt Instrument [Line Items]
Additional borrowing capacity								$ 191,100,000
Line of credit, reduction to availability of funds for certain investments, debt prepayments or restricted payments							$ 105,000,000.0
Line of Credit | Letter of Credit
Debt Instrument [Line Items]
Long-term debt				$ 0

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Debt - Scheduled Maturities of Long-Term Debt (Details) $ in Millions	Mar. 31, 2021 USD ($)
Debt Disclosure [Abstract]
Remainder of 2021	$ 25.8
2022	38.7
2023	45.2
2024	438.4
Total	$ 548.1

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Share-Based Compensation - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Mar. 31, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense	$ 12.7	$ 4.8
Related tax benefits	2.2	0.7
Income tax benefit	$ 2.3	$ 0.6
PBRSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum exercisable (in shares)	5,943,470
Minimum | PBRSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vesting if targets conditions met, potential percentage	0.00%		0.00%
Maximum | PBRSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vesting if targets conditions met, potential percentage	200.00%		150.00%

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Share-Based Compensation - Compensation Expense Allocation (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total share-based compensation expense	$ 12.7	$ 4.8
Cost of services
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total share-based compensation expense	7.3	1.9
Selling, general and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total share-based compensation expense	5.4	2.9
Other
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total share-based compensation expense	$ 0.0	$ 0.0

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Share-Based Compensation - Assumptions (Details)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Share-based Payment Arrangement [Abstract]
Expected dividend yield	0.00%	0.00%
Risk-free interest rate	0.40%	1.70%
Expected volatility	43.00%	43.00%
Expected term (in years)	5 years 6 months	5 years 6 months

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Share-Based Compensation - Stock Option Activity (Details) - $ / shares	3 Months Ended
	Mar. 31, 2021	Dec. 31, 2020
Options
Outstanding at beginning of period (in shares)	6,220,971
Granted (in shares)	1,625
Exercised (in shares)	(539,795)
Canceled/forfeited (in shares)	(1,040)
Expired (in shares)	0
Outstanding at end of period (in shares)	5,681,761
Outstanding, vested and exercisable at end of period (in shares)	4,782,897	5,230,690
Weighted- Average Exercise Price
Outstanding at beginning of period (in dollars per share)	$ 3.68
Granted (in dollars per share)	23.49
Exercised (in dollars per share)	6.47
Canceled/forfeited (in dollars per share)	3.85
Expired (in dollars per share)	0
Outstanding at end of period (in dollars per share)	3.42
Outstanding, vested and exercisable at end of period (in dollars per share)	$ 3.41	$ 3.73

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Share-Based Compensation - Other Than Stock Options Activity (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
RSUs
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Outstanding and unvested at beginning of period (in shares)	2,108,447
Granted (in shares)	2,719
Vested (in shares)	(6,497)
Forfeited (in shares)	(41,381)
Outstanding and unvested at end of period (in shares)	2,063,288
Weighted- Average Grant Date Fair Value
Outstanding and unvested at beginning of period (in dollars per share)	$ 9.87
Granted (in dollars per share)	23.77
Vested (in dollars per share)	10.80
Forfeited (in dollars per share)	12.99
Outstanding and unvested at end of period (in dollars per share)	$ 9.82
Shares surrendered for taxes (in shares)	2,201	545
Cost of shares surrendered for taxes	$ 0.0	$ 0.0
PBRSUs
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Outstanding and unvested at beginning of period (in shares)	2,917,071
Granted (in shares)	290,354
Vested (in shares)	0
Forfeited (in shares)	(646)
Outstanding and unvested at end of period (in shares)	3,206,779
Weighted- Average Grant Date Fair Value
Outstanding and unvested at beginning of period (in dollars per share)	$ 11.35
Granted (in dollars per share)	25.09
Vested (in dollars per share)	0
Forfeited (in dollars per share)	5.34
Outstanding and unvested at end of period (in dollars per share)	$ 12.59
Shares surrendered for taxes (in shares)	0	0
Cost of shares surrendered for taxes	$ 0.0	$ 0.0

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Other Expenses - Schedule of Other Expenses (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Other Income and Expenses [Abstract]
Severance and related employee benefits	$ 1.5	$ 1.1
Strategic initiatives	6.5	3.2
Facility-exit charges	1.5	0.4
Other	3.5	4.0
Total other expenses	13.0	8.7
Contingent consideration changes included in strategic initiatives	0.5
COVID-19 related costs, included in Other	$ 1.7	$ 2.6

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Income Taxes - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020	Apr. 01, 2020
Income Tax Contingency [Line Items]
Federal statutory tax rate	21.00%	21.00%
Statute of limitations minimum	3 years
Statute of limitations maximum	6 years
Gross deferred tax assets			$ 146.1
Deferred tax assets related to operating loss carryforwards			$ 81.6
SCI Acquisition
Income Tax Contingency [Line Items]
Deferred tax assets related to operating loss carryforwards	$ 10.4
Deferred income tax liabilities, net	10.9			$ 10.9
Deferred tax assets related to research and experimentation credits	$ 3.7

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8.00% Series A Convertible Preferred Stock - Narrative (Details) - USD ($)			3 Months Ended		12 Months Ended
	Jan. 19, 2021	Jan. 15, 2021	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Temporary Equity [Line Items]
Cash paid, stock conversion (not to exceed)			$ 105,000,000.0	$ 0
Dividends			$ 592,300,000	$ 5,400,000
TCP-ASC ACHI Series LLLP
Temporary Equity [Line Items]
Cash paid, stock conversion (not to exceed)		$ 105,000,000.0
Redeemable Convertible Preferred Stock
Temporary Equity [Line Items]
Number of shares converted (in shares)			294,266
Preferred stock, dividend rate (percentage)			8.00%		8.00%
Redeemable Convertible Preferred Stock | TCP-ASC ACHI Series LLLP
Temporary Equity [Line Items]
Number of shares converted (in shares)		294,266
Preferred stock, dividend rate (percentage)	8.00%	8.00%
Common Stock | TCP-ASC ACHI Series LLLP
Temporary Equity [Line Items]
Number of shares issued in stock conversion (in shares)		117,706,400
Additional shares issued (in shares)		21,582,800

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8.00% Series A Convertible Preferred Stock - Schedule of Preferred Stock Activity (Details) - Redeemable Convertible Preferred Stock $ in Millions	3 Months Ended
	Mar. 31, 2021 USD ($) shares
Shares Issued and Outstanding
Beginning Balance (in shares) | shares	288,497
Dividends paid/accrued dividends (in shares) | shares	5,769
Conversion of preferred stock (in shares) | shares	(294,266)
Ending Balance (in shares) | shares	0
Carrying Value
Beginning Balance | $	$ 251.5
Dividends paid/accrued dividends | $	0.0
Conversion of preferred stock | $	(251.5)
Ending Balance | $	$ 0.0

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Earnings (Loss) Per Share - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions			3 Months Ended		12 Months Ended
	Jan. 19, 2021	Jan. 15, 2021	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Basic EPS:
Net income			$ 25.8	$ 18.2
Less dividends on preferred shares			(592.3)	(5.4)
Less income allocated to preferred shareholders			0.0	(6.2)
Net income (loss) available/allocated to common shareholders - basic			(566.5)	6.6
Diluted EPS:
Less income allocated to preferred shareholders			0.0	(5.0)
Net income (loss) available/(allocated) to common shareholders - diluted			$ (566.5)	$ 7.8
Basic weighted-average common shares (in shares)			239,290,145	114,441,043
Add: Effect of dilutive equity awards (in shares)			0	11,893,514
Add: Effect of dilutive warrants (in shares)			0	43,285,621
Diluted weighted average common shares (in shares)			239,290,145	169,620,178
Net income (loss) per common share (basic) (in dollars per share)			$ (2.37)	$ 0.06
Net income (loss) per common share (diluted) (in dollars per share)			$ (2.37)	$ 0.05
Redeemable Convertible Preferred Stock
Diluted EPS:
Preferred stock, dividend rate (percentage)			8.00%		8.00%
TCP-ASC ACHI Series LLLP | Redeemable Convertible Preferred Stock
Diluted EPS:
Preferred stock, dividend rate (percentage)	8.00%	8.00%

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Earnings (Loss) Per Share - Narrative (Details) - shares	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive common share equivalents (in shares)	13,688,519	525,414
Warrant
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Dilutive shares (in shares)	53,206,631
Warrant | Investor's
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive common share equivalents (in shares)	60,000,000
Warrant | Intermountain
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items]
Antidilutive common share equivalents (in shares)	1,500,000

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Commitments and Contingencies - Narrative (Details)	Apr. 19, 2021 claim
TCP-ASC Recapitalization Litigation | Pending Litigation | Subsequent Event
Loss Contingencies [Line Items]
Number of complaints filed	2

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Related Party Transactions - Net Services Revenue (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Related Party Transactions [Abstract]
Ascension	$ 215.5	$ 208.4

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Related Party Transactions - Summary Amounts Included in Balance Sheet (Details) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
Related Party Transaction [Line Items]
Accounts receivable, net of $0.1 million and $0.1 million allowance - related party	$ 31.8	$ 30.9
Accounts receivable, allowance - related party	3.8	3.7
Ascension
Related Party Transaction [Line Items]
Accounts receivable, net of $0.1 million and $0.1 million allowance - related party	31.8	30.9
Accounts receivable, allowance - related party	0.1	0.1
Current portion of customer liabilities	10.6	15.3
Non-current portion of customer liabilities	15.4	16.3
Total customer liabilities	$ 26.0	$ 31.6

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Deferred Contract Costs - Summary of Deferred Contract Costs (Details) - USD ($) $ in Millions	Mar. 31, 2021	Dec. 31, 2020
Capitalized Contract Cost [Line Items]
Total deferred contract costs	$ 24.2	$ 24.1
Prepaid expenses and other current assets
Capitalized Contract Cost [Line Items]
Total deferred contract costs	4.7	4.5
Other assets
Capitalized Contract Cost [Line Items]
Total deferred contract costs	$ 19.5	$ 19.6

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Deferred Contract Costs - Narrative (Details) - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020
Revenue from Contract with Customer [Abstract]
Capitalized contract cost, amortization	$ 1,200,000	$ 1,100,000
Impairment losses	$ 0	$ 0

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Segments and Customer Concentrations - Narrative (Details) - segment	3 Months Ended		12 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Segment Reporting Information [Line Items]
Number of operating segments	1
Number of reportable segments	1
Customer Concentration Risk | Revenue | Ascension
Segment Reporting Information [Line Items]
Concentration percentage	63.00%	65.00%
Customer Concentration Risk | Revenue | Intermountain Healthcare
Segment Reporting Information [Line Items]
Concentration percentage	14.00%	15.00%
Customer Concentration Risk | Accounts Receivable | Ascension
Segment Reporting Information [Line Items]
Concentration percentage	25.00%		25.00%

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Derivative Financial Instruments - Narrative (Details) - Designated as Hedging Instrument - Cash Flow Hedging - USD ($)	3 Months Ended
	Mar. 31, 2021	Mar. 31, 2020	Dec. 31, 2020
Foreign Currency Hedges
Derivative [Line Items]
Gains (losses) reported in accumulated other comprehensive income	$ 600,000
Gains (losses) to be reclassified within next 12 months	600,000
Derivatives, net gain (loss) reclassified into cost of services	400,000	$ (100,000)
Notional amount	95,100,000		$ 55,900,000
Interest Rate Swap
Derivative [Line Items]
Gains (losses) reported in accumulated other comprehensive income	(1,800,000)
Gains (losses) to be reclassified within next 12 months	(1,300,000)
Derivatives, net gain (loss) reclassified into cost of services	(500,000)	$ 100,000
Notional amount	$ 100,000,000.0		$ 200,000,000.0

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Subsequent Events - Narrative (Details) - Subsequent Event - VisitPay - USD ($)	3 Months Ended
	Sep. 30, 2021	May 03, 2021
Bank of America
Subsequent Event [Line Items]
Debt refinancing commitment letter obtained		$ 300,000,000.0
Forecast
Subsequent Event [Line Items]
Purchase consideration	$ 298,000,000.0
Financing condition linked to consummation of the acquisition	$ 0