Revenue Recognition

3 Months Ended

Mar. 31, 2022

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue Recognition

Revenue is measured based on consideration specified in a contract with a customer, and presented net of 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 of revenue:

	Three Months Ended March 31,
	2022		2021
Net operating fees	$	322.8	$	286.1
Incentive fees	30.2		29.0
Other (1)	32.7		27.5
Net services revenue	$	385.7	$	342.6

(1) Other revenue primarily consists of physician advisory services (“PAS”), practice management services, subscription revenue, and revenue related to Entri and VisitPay modular services.

Contract Balances

The following table provides information about contract assets and contract liabilities from contracts with customers:

	March 31, 2022		December 31, 2021
Contract assets	$	1.9	$	—
Contract liabilities	26.9		29.0

Contract assets and contract liabilities are included in other current assets and customer liabilities, respectively. The contract liabilities balance contains related party amounts, including $2.4 million and $2.5 million of current customer liabilities and $15.3 million and $15.4 million of non-current customer liabilities as of March 31, 2022 and December 31, 2021, 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 $89.0 million and $93.7 million during the three months ended March 31, 2022 and 2021, which amounts were included in contract liabilities on January 1 of the respective periods. These revenue amounts include $85.8 million and $88.1 million for the three months ended March 31, 2022 and 2021, 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. The estimated revenue does not include amounts of variable consideration that are constrained.

	Net operating fees		Incentive fees
Remainder of 2022	$	86.6	$	39.5
2023	88.7		—
2024	79.5		—
2025	31.4		—
2026	30.9		—
2027	29.5		—
Thereafter	114.1		—
Total	$	460.7	$	39.5

The amounts presented in the table above include variable fee estimates for the non-cancellable term of the Company's physician groups revenue cycle management (“RCM”) services contracts, fixed fees, and forecasted incentive fees. Fixed fees are typically recognized ratably as the performance obligation is satisfied and forecasted incentive fees 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 PAS contracts that do not represent material rights to the customer.

The Company does not disclose information about remaining performance obligations with an original expected duration of one year or less and has elected an exemption to the disclosure requirements related to estimate variable consideration.