Accounts Receivable, Net

3 Months Ended

Mar. 31, 2020

Accounting policy. The Company's accounts receivable balances primarily include amounts due from clients, third-party payors, customers and pharmaceutical manufacturers, and are presented net of allowances. The Company's adoption of ASU 2016-13, Measurement of Credit Losses on Financial Instruments (ASU 2016-13), as of January 1, 2020 did not have a material impact on our accounts receivable credit loss allowance, as there were no substantive changes to our methodology for this class of assets. The allowance for expected credit losses for current accounts receivable is based primarily on past collections experience relative to the length of time receivables are past due; however, when available evidence reasonably supports an assumption that counterparty credit risk over the expected payment period will differ from current and historical payment collections, a forecasting adjustment is reflected in the allowance for expected credit losses.

All other (non-credit) allowances are based on the current status of each customer's receivable balance as well as current economic and market conditions and a variety of other factors, including the length of time the receivables are past due, the financial health of customers and our past experience. We bill pharmaceutical manufacturers based on management's interpretation of contractual terms and estimate a contractual allowance based on the best information available at the time a claim is processed. Contractual allowances for certain rebates receivable from pharmaceutical manufacturers are determined by reviewing payment experience and specific known items that could be adjusted under contract terms. The Company's estimation process for contractual allowances for pharmaceutical manufacturer receivables generally results in an allowance for balances outstanding greater than 90 days.

Contractual allowances for certain receivables from third-party payors are based on their contractual terms and are estimates based on the Company's best information available at the time revenue is recognized.

Receivables are written off only when all collection attempts have failed and such amounts are determined unrecoverable. We regularly review the adequacy of these allowances based on a variety of factors, including age of the outstanding receivable and collection history. When circumstances related to specific collection patterns change, estimates of the recoverability of receivables are adjusted.

The following amounts were included within accounts receivable, net:


(In millions)	March 31, 2020		December 31, 2019
Noninsurance customer receivables	$	5,522	$	5,143
Pharmaceutical manufacturers receivable⁽¹⁾	3,631		3,439
Insurance customer receivables	2,839		2,321
Other receivables	359		334
Total	12,351		11,237
Accounts receivable, net classified as assets of business held for sale	(616)		(521)
Accounts receivable, net per Consolidated Balance Sheets	$	11,735	$	10,716

(1)Includes receivables from service contracts with customers of $222 million at March 31, 2020 and $285 million at December 31, 2019 .

These receivables are reported net of our allowances of $928 million as of March 31, 2020 and $778 million as of December 31, 2019. These allowances include contractual allowances for certain rebates receivable with pharmaceutical manufacturers and certain receivables from third-party payors, discounts and claims adjustments issued to customers in the form of client credits, an allowance for the balance of our ACA risk corridor receivables, an allowance for current expected credit losses and other non-credit adjustments. The Company's allowance for current expected credit losses was $61 million as of March 31, 2020 and $39 million as of January 1, 2020 (no change to allowance for credit losses from December 31, 2019). The allowance for current expected credit losses as of March 31, 2020 includes an additional forecasting adjustment of $13 million related to COVID-19 (see Note 2).