We recognize revenue in accordance with ASC 606 - Revenue from Contracts with Customers (“ASC 606”), which requires revenue recognized to represent the transfer of promised goods or services to customers at an amount that reflects the consideration that a company expects to receive in exchange for those goods or services.

We disaggregate revenue from contracts with customers by payor type and major service line. We determined that disaggregating revenue into these categories achieves the disclosure objective of illustrating the differences in the nature, amount, timing and uncertainty of our revenue streams. Disaggregated revenue by payor type and major service line was as follows:



	Three Months Ended March 31, 2020
	Reporting Segment						Total Consolidated
(in thousands)	Healthcare		Research		Other		Total Consolidated
Payor/Service Line
Remote cardiac monitoring services - Medicare	$	40,128	$	—	$	—	$	40,128
Remote cardiac monitoring services - commercial payors	55,579		—		—		55,579
Clinical trial support and related services	—		13,820		—		13,820
Technology devices, consumables and related services	—		—		3,504		3,504
Total	$	95,707	$	13,820	$	3,504	$	113,031



	Three Months Ended March 31, 2019
	Reporting Segment						Total Consolidated
(in thousands)	Healthcare		Research		Other		Total Consolidated
Payor/Service Line
Remote cardiac monitoring services - Medicare	$	33,935	$	—	$	—	$	33,935
Remote cardiac monitoring services - commercial payors	54,074		—		—		54,074
Clinical trial support and related services	—		12,964		—		12,964
Technology devices, consumables and related services	—		—		3,006		3,006
Total	$	88,009	$	12,964	$	3,006	$	103,979

Healthcare segment revenue is generated by remote cardiac monitoring to identify cardiac arrhythmias or heart rhythm disorders and monitoring the functionality of implantable cardiac devices. We offer cardiologists, electrophysiologists, neurologists and primary care physicians a full spectrum of solutions, which provides them with a single source of cardiac monitoring services.

Performance obligations are determined based on the nature of the services provided. With our remote cardiac monitoring services, the patient receives the benefits of the service over time, resulting in revenue recognition over time based on the output method. We believe that this method provides an accurate depiction of the transfer of value over the term of the performance obligation because the level of effort in providing these services is consistent during the service period.

We are utilizing the portfolio approach practical expedient in ASC 606 for our patient contracts in the Healthcare segment. We account for the contracts within each portfolio as a collective group, rather than individual contracts. Based on our history with these portfolios and the similar nature and characteristics of the patients within each portfolio, we have concluded that the financial statement effects are not materially different than if accounting for revenue on a contract-by-contract basis.

For the contracted portfolio, we have historical experience of collecting substantially all of the negotiated contractual rates and determined at contract inception that these customers have the intention and ability to pay the promised consideration. We have also concluded that historical information is largely representative of forward-looking information. As such, we are not providing an implicit price concession but, rather, have chosen to accept the risk of default, and adjustments to the transaction price are recorded as credit loss expense.

For our non-contracted portfolio, we are providing an implicit price concession because we do not have a contract with the underlying payor, the result of which requires us to estimate our transaction price based on historical cash collections utilizing the expected value method. Subsequent adjustments to the transaction price are recorded as an adjustment to Healthcare segment revenue and not as credit loss expense.

We have not made any significant changes to judgments in applying ASC 606 to the Healthcare segment during the three months ended March 31, 2020 and 2019.

Research segment revenue is generated by providing centralized core laboratory services, including cardiac monitoring, imaging services, scientific consulting and data management services for drug and medical device trials. These amounts are due from pharmaceutical companies and contract research organizations. We bill our customers on a fee-for-service basis. Under a typical contract, some customers pay us a portion of our fee upon contract execution as an upfront refundable deposit. Upfront deposits are deferred and then recognized as the services are performed. If a contract is canceled prior to service being provided, the upfront deposit is refunded.

Performance obligations are determined based on the nature of the services provided. Our core laboratory services are provided over time as the customer receives benefits resulting in revenue recognition over the term of the contract. Our research customer contracts have legally enforceable terms that are predominately thirty days due to termination for convenience clauses, which are held by the customer with no significant penalty. Given the short-term nature of these contracts and the structure of our billing practices, our billing practices approximate our performance if measured by an output method, where each output is an individual occurrence of each performance obligation. Accordingly, we utilize the invoice

We have historical experience of collecting substantially all of the fees for services incurred and thus believe that no material loss has been incurred as of the measurement date. As such, we are not providing an implicit price concession but, rather, have chosen to accept the risk of default, and adjustments to the transaction price are recorded as credit loss expense.

We have not made any significant changes to judgments in applying ASC 606 to the Research segment during the three months ended March 31, 2020 and 2019.

Our Other category revenue is primarily derived from the sale of non-invasive cardiac monitors to healthcare companies, wireless blood glucose meters and test strips to wholesale distributors of diabetes supplies and diabetic patients, as well as product repairs. Performance obligations are primarily the sale of devices, related goods and repairs provided by us. These contracts transfer control to a customer at a point in time based on the transfer of title for the underlying good or service. We provide standard warranty provisions.

We determine the transaction price based on fixed consideration in our contractual agreements with our customers and allocate the transaction price to each performance obligation based on the relative stand-alone selling price. We determine the relative stand-alone selling price utilizing our observable prices for the sale of the underlying goods. We have historical experience of collecting substantially all and thus believe that no material loss has been incurred as of the measurement date. As such, we are not providing an implicit price concession but, rather, have chosen to accept the risk of default, and adjustments to the transaction price are recorded as credit loss expense.

We have not made any significant changes to judgments in applying ASC 606 to the Other category during the three months ended March 31, 2020 and 2019.

ASC 606 requires an entity to present a revenue contract as a contract asset when the entity performs its obligations under the contract by transferring goods or services to a customer before the customer pays consideration or before payment is due. ASC 606 also requires an entity to present a revenue contract as a contract liability in instances when a customer pays consideration, or an entity has a right to an amount of consideration that is unconditional (e.g., receivable), before the entity transfers a good or service to the customer.

As of March 31, 2020 and December 31, 2019, we had contract assets of $18.4 million and $15.1 million, respectively, related to cardiac monitoring services, which are included as a component of Healthcare accounts receivable on our consolidated balance sheets. We also had contract assets of $1.9 million and $1.7 million, respectively, related to our Other category revenue contracts, which are included as a component of other accounts receivable on our consolidated balance sheets.

As of March 31, 2020 and December 31, 2019, we had contract liabilities of $1.5 million and $1.6 million, respectively, primarily related to the Research segment where customers paid upfront deposits upon contract execution for future services to be performed by us. If the contract is canceled, these upfront

deposits are refundable if service was not yet provided. Our contract liabilities are included as a component of accrued liabilities on our consolidated balance sheets.

For the three months ended March 31, 2020, the amount recognized as revenue from the contract liabilities balance as of December 31, 2019 was $0.5 million. Similarly, for the three months ended March 31, 2019, the amount recognized as revenue from the contract liabilities balance as of December 31, 2018 was $3.1 million. There were no significant changes or impairment losses incurred related to contract balances during the three months ended March 31, 2020.

We record an allowance for credit losses based on historical collection trends, the current state of the healthcare market and current and projected future industry trends. Disaggregated allowance by portfolio was as follows:



	Three Months Ended March 31, 2020
	Portfolio				Total Consolidated
(in thousands)	Healthcare		Other		Total Consolidated
Beginning balance	$	31,780	$	201	$	31,981
Cumulative effect of change in accounting principle	—		347		347
Current period credit loss expense^*	6,020		—		6,020
Write-offs	—		—		—
Recoveries collected	180		—		180
Ending Balance	$	37,980	$	548	$	38,528