Stock-Based Compensation (Tables)

12 Months Ended

Dec. 31, 2019

Share-based Payment Arrangement [Abstract]

Schedule of stock-based compensation expense

The following table presents the stock‑based compensation expense and related income tax benefit included in the Company’s Consolidated Statements of Operations for the years ended December 31: 

	2019		2018		2017
Patient care costs	$	694	$	714	$	2,773
General and administrative	4,051		5,007		13,099
Total stock‑based compensation	$	4,745	$	5,721	$	15,872
Income tax benefit	$	1,234	$	1,493	$	6,349

Schedule of assumptions used for options granted to acquire Common Stock and the fair value at the date of grant

The weighted‑average assumptions used in the option valuation models for awards granted in 2019, 2018 and 2017 are as follows. 

	2019			2018			2017
Expected volatility(1)	50		%	30 - 35%			30 - 35%
Expected term in years(2)	6.0			6.0			6.0
Risk-free interest rate(3)	1.71		%	2.74 - 2.99%			1.92 - 2.26%
Expected annual dividend yield(4)	—		%	—		%	—		%
Weighted-average grant-date fair value	$	4.97		$	7.14		$	5.52

(1) Since the Company does not have sufficient history as a public company and does not have sufficient trading history for its common stock, the expected volatility was largely estimated based on the historical equity volatility of common

stock of comparable publicly traded entities over a period equal to the expected term of the stock option grants. For each of the comparable publicly traded entities, the historical equity volatility and the capital structure of the entity were used to calculate the implied stock volatility. The average implied stock volatility of the comparable publicly traded entities was then used to calculate a relevered equity volatility for the Company based on the Company’s own capital structure. In the first quarter of 2018, the Company utilized the relevered equity volatility based on the comparable publicly traded entities for the Company, and beginning in the second quarter of 2018, the Company began weighting in its own historical equity volatility to arrive at the concluded weighted-average equity volatility for the option valuation model. The comparable entities from the healthcare sector were chosen based on area of specialty. The Company will continue to apply this process until a sufficient amount of historical information regarding the volatility of the Company’s own stock price becomes available.

(2) Expected term of 6.0 years for a service‑based option is based on the “short‑cut method” as prescribed by Securities and Exchange Commission’s Staff Accounting Bulletin No. 110.

(3) The risk‑free interest rate is based on the yield of zero‑coupon U.S. Treasury securities for a period that is commensurate with the expected option term at the time of grant.

(4)

Expected dividend yield is based on management’s expectations.

Schedule of information concerning options activity for options to acquire Common Stock

The following table summarizes the combined stock option activity under the Company’s stock option plans for the year ended December 31, 2019:

	Number of Shares		Weighted - average exercise price		Weighted - average remaining contractual term (in years)	Aggregate intrinsic value
Options outstanding as of January 1, 2019	5,011,191		$	12.38
Granted	329,710		10.19
Exercised	(129,917	)	2.99
Forfeited/Cancelled	(407,838	)	16.98
Options outstanding as of December 31, 2019	4,803,146		$	12.29	4.37	$	12,919
Vested and expected to vest as of December 31, 2019	4,803,146		$	12.29	4.37	$	12,919
Exercisable as of December 31, 2019	3,203,220		$	9.38	3.50	$	12,866

Schedule of restricted stock award activity

A summary of restricted stock award activity is as follows: 

	Number of Shares		Weighted -  average  grant date fair value
Unvested as of January 1, 2019	441,063		$	20.68
Granted	324,801		10.19
Vested	(147,641	)	19.98
Forfeited/Cancelled	(38,940	)	20.24
Unvested as of December 31, 2019	579,283		$	15.01