Accounts Receivable and Allowance for Credit Losses

9 Months Ended

Sep. 30, 2021

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.

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.

Even though the full effects of the 2019 Novel Coronavirus (“COVID-19”) on the Company’s customers continue to be uncertain, at this time, the Company does not believe there is incremental collection risk for customer receivables as a result of COVID-19.

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 September 30,				Nine Months Ended September 30,
	2021		2020		2021		2020
Beginning balance	$	2.3	$	5.2	$	3.8	$	2.8
Cumulative effect of ASC 326 adoption	—		—		—		1.1
Provision (recoveries)	0.4		(0.8)		0.6		0.5
Amounts reclassified to held for sale (1)	—		(0.6)		—		(0.6)
Write-offs	(0.3)		(0.1)		(2.0)		(0.1)
Ending balance	$	2.4	$	3.7	$	2.4	$	3.7

(1) Relates to the disposition of the Company’s emergency medical services (“EMS”) business in October 2020. The EMS business was classified as held for sale as of September 30, 2020.