Revenue

9 Months Ended

Sep. 30, 2022

Revenue from Contract with Customer [Abstract]

Revenue

Note 4 – Revenue

We disaggregate revenue from contracts with customers into types of services or products, consistent with our reportable segments, as follows:

	Three months ended September 30				Nine months ended September 30
	2022		2021		2022		2021
Hospital Division:
Net patient service revenue	$	20,821,725	$	117,416,373	$	150,866,044	$	266,677,307
Management fees		422,580		555,359		1,110,182		1,452,339
Total Hospital Division revenue		21,244,305		117,971,732		151,976,226		268,129,646
Population Health Management Division:
Capitation revenue, net		4,888,094		-		10,038,436		-
Management fees		1,701,719		-		2,704,519		-
SaaS revenue		560,940		-		851,052		-
Total Population Health Management Division revenue		7,150,753		-		13,594,007		-
Total revenue	$	28,395,058	$	117,971,732	$	165,570,233	$	268,129,646

Net patient service revenue. We receive payment for facility services rendered by us from federal agencies, private insurance carriers, and patients. The Physician LLCs receive payment for doctor services from these same sources. On average, greater than 90% of our net patient service revenue is paid by insurers, federal agencies, and other non-patient third parties. The remaining revenues are paid by our patients in the form of copays, deductibles, and self-payment. The following tables present the allocation of the estimated transaction price with the patient between the primary patient classification of insurance coverage:

	Three months ended September 30				Nine months ended September 30
	2022		2021		2022		2021
Insurance		91%		95%		94%		96%
Self pay		7%		4%		5%		3%
Workers compensation		1%		1%		1%		1%
Medicare/Medicaid		1%		0%		0%		0%
Total		100%		100%		100%		100%

Contract balances. Cash payments for SaaS-based subscriptions received in advance of the satisfaction of our performance obligations are reported as deferred revenue and subsequently recognized as revenue over the period in which the performance obligations are satisfied. The Company completes its contractual performance obligations through providing its customers access to specified data through subscriptions for a service period, and training on consulting associated with the subscriptions. We primarily invoice our customers on a monthly basis and do not provide any refunds, rights of return, or warranties. Deferred revenue is presented as current liabilities and totaled $49,349 as of September 30, 2022 and $0 as of December 31, 2021. We expect to recognize revenue for these amounts within the next twelve months.

Changes in estimate. The No Surprises Act (“NSA”) is a federal law that took effect January 1, 2022, to protect consumers from most instances of “surprise” balance billing. The legislation was included in the Consolidated Appropriations Act, 2021, which was passed by Congress and signed into law by President Trump on December 27, 2020. With respect to the Company, ‎the NSA limits the amount an insured patient will pay for emergency services furnished by an out-of-network ‎provider. The NSA addresses the payment of these out-of-network providers by group health plans or health ‎insurance issuers (collectively, “insurers”). In particular, the NSA requires insurers to reimburse out-of-network ‎providers at a statutorily calculated “out-of-network rate.” In states without an all-payor model agreement or ‎specified state law, the out-of-network rate is either the amount agreed to by the insurer and the out-of-network ‎provider or an amount determined through an independent dispute resolution (“IDR”) process.

Under the NSA, insurers must issue an initial payment or notice of denial of payment to a provider within ‎thirty days after the provider submits a bill for an out-of-network service. If the provider disagrees with the ‎insurer’s determination, the provider may initiate a thirty-day period of open negotiation with the insurer over the ‎claim. If the parties cannot resolve the dispute through negotiation, the parties may then proceed to IDR ‎arbitration.

Since the NSA became effective January 1, 2022, our average payment by insurers of patient claims for emergency services has declined by approximately 30%. In our experience, insurers often initially pay amounts lower than the QPA without regard for other information relevant to the claim. This requires us to make more appeals using the IDR process. While we are working within the established processes for IDR, we have had varying successes at achieving collections higher than the established QPA.

The average payment by insurers for patient claims for emergency services has declined by approximately 30% in 2022 because of the NSA compared to prior periods. We have also experienced a decrease in collection for the remaining amounts of account receivable for periods before 2022. We believe this decline is caused, in part, by insurers underpaying these claims in the same way we are experiencing claim payments since the NSA became effective.

For these reasons, we reduced our estimate of the ultimate amounts of accounts receivable we will collect for prior periods. This change in estimate reduced revenue for the three and nine months ended September 30, 2022 by approximately $29.0 million and $38.6 million, respectively.