Segment Information

9 Months Ended

Sep. 30, 2017

Segment Information

Segment Information

Note 15. Segment Information

We conduct our business through two reportable business segments: Healthcare and Global Retail and Other. Through our Healthcare segment, we offer prospective and retrospective claims accuracy solutions to healthcare payers in the United States. We also provide analytics-based solutions unrelated to our healthcare payment accuracy solutions, on a limited basis in the United States and a network efficiency solution to payers and providers. Through our Global Retail and Other segment, we provide retrospective claims accuracy solutions to retailers primarily in the United States, Canada and the United Kingdom, as well as solutions that improve efficiency and effectiveness of payment networks for a limited number of clients.

We evaluate the performance of each segment based on segment net revenue and segment operating income. Operating income is calculated as net revenue less operating expenses and is not affected by other expense (income) or by income taxes. Indirect costs are generally allocated to the segments based on the segments’ proportionate share of revenue and expenses directly related to the operation of the segment. We do not allocate interest expense, other non-operating (income) expense or the provision for income taxes, since these items are not considered in evaluating the segment’s overall operating performance. Our Chief Operating Decision Maker does not receive or utilize asset information to evaluate performance of operating segments. Accordingly, asset-related information has not been presented.

Our operating segment results for the periods presented were as follows:

	Three Months Ended				Nine Months Ended
	September 30,				September 30,
	2017		2016		2017		2016
	(unaudited)				(unaudited)
Net Revenue
Healthcare	$	156,219	$	138,470	$	447,581	$	403,643
Global Retail and Other		17,969		17,771		54,351		53,607
Consolidated net revenue	$	174,188	$	156,241	$	501,932	$	457,250
Operating Income
Healthcare	$	38,094	$	22,544	$	107,944	$	85,879
Global Retail and Other		2,948		1,611		7,176		6,452
Consolidated operating income	$	41,042	$	24,155	$	115,120	$	92,331

Operating segment net revenue by product type for the periods presented was as follows:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2017		%	2016		%	2017		%	2016		%
	(unaudited)						(unaudited)
Healthcare
Retrospective claims accuracy	$	88,396	50.7	$	78,133	50.0	$	252,538	50.3	$	224,335	49.1
Prospective claims accuracy		62,628	36.0		57,233	36.6		184,365	36.8		169,632	37.1
Other		5,195	3.0		3,104	2.0		10,678	2.1		9,676	2.1
Total Healthcare		156,219	89.7		138,470	88.6		447,581	89.2		403,643	88.3
Global Retail and Other
Retrospective claims accuracy		17,470	10.0		17,039	10.9		52,529	10.5		51,730	11.3
Other		499	0.3		732	0.5		1,822	0.3		1,877	0.4
Total Global Retail and Other		17,969	10.3		17,771	11.4		54,351	10.8		53,607	11.7
Consolidated net revenue	$	174,188	100.0	$	156,241	100.0	$	501,932	100.0	$	457,250	100.0