10-Q

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

Form 10-Q

(Mark One)

☑    QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

    For the quarterly period ended March 31, 2023

OR

☐    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

    For the transition period from to

COMMISSION FILE NUMBER: 001-41428

R1 RCM INC.

(Exact name of registrant as specified in its charter)

Delaware	87-4340782
(State or other jurisdiction of incorporation or organization)	(I.R.S. Employer Identification Number)
433 W. Ascension Way	84123
Suite 200
Murray
Utah
(Address of principal executive offices)	(Zip code)

(312) 324-7820

(Registrant’s telephone number, including area code)

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Common stock, par value $0.01 per share	RCM	NASDAQ

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.  Yes þ     No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).  Yes þ    No  ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ý
Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).  Yes ☐     No ☑

As of April 28, 2023, the registrant had 418,202,601 shares of common stock, par value $0.01 per share, outstanding.

Table of Contents

Part I.	Financial Information
Item 1.	Financial Statements	3
	Consolidated Balance Sheets	4
	Consolidated Statements of Operations and Comprehensive Income (Loss)	5
	Consolidated Statements of Stockholders' Equity	6
	Consolidated Statements of Cash Flows	7
	Notes to Consolidated Financial Statements (Unaudited)	8
Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	23
Item 3.	Qualitative and Quantitative Disclosures About Market Risk	31
Item 4.	Controls and Procedures	32
Part II.	Other Information
Item 1.	Legal Proceedings	33
Item 1A.	Risk Factors	33
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	33
Item 5.	Other Information	34
Item 6.	Exhibits	35
SIGNATURES		36

PART I — FINANCIAL INFORMATION

Item 1. Financial Statements

3

R1 RCM Inc.

Consolidated Balance Sheets

(In millions, except share and per share data)

	(Unaudited)
	March 31,		December 31,
	2023		2022
Assets
Current assets:
Cash and cash equivalents	$	104.2	$	110.1
Accounts receivable, net of $16.0 million and $15.1 million allowance as of March 31, 2023 and December 31, 2022, respectively	229.4		235.2
Accounts receivable, net of $0.1 million and $0.1 million allowance - related party as of March 31, 2023 and December 31, 2022, respectively	24.9		25.0
Current portion of contract assets, net	81.8		83.9
Prepaid expenses and other current assets	105.2		110.3
Total current assets	545.5		564.5
Property, equipment and software, net	173.8		164.8
Operating lease right-of-use assets	81.0		80.5
Non-current portion of contract assets, net	37.3		32.0
Non-current portion of deferred contract costs	28.2		26.7
Intangible assets, net	1,464.4		1,514.5
Goodwill	2,648.5		2,658.2
Deferred tax assets	10.5		10.4
Other assets	83.4		88.2
Total assets	$	5,072.6	$	5,139.8
Liabilities
Current liabilities:
Accounts payable	$	24.6	$	33.4
Current portion of customer liabilities	45.6		57.5
Current portion of customer liabilities - related party	9.4		7.4
Accrued compensation and benefits	84.7		109.0
Current portion of operating lease liabilities	18.8		18.0
Current portion of long-term debt	58.3		53.9
Accrued expenses and other current liabilities	76.7		70.6
Total current liabilities	318.1		349.8
Non-current portion of customer liabilities	5.2		5.0
Non-current portion of customer liabilities - related party	13.2		13.7
Non-current portion of operating lease liabilities	92.7		94.4
Long-term debt	1,707.0		1,732.6
Deferred tax liabilities	192.1		200.7
Other non-current liabilities	24.9		23.1
Total liabilities	2,353.2		2,419.3
Stockholders’ equity:
Common stock, $0.01 par value, 750,000,000 shares authorized, 442,439,169 shares issued and 418,176,363 shares outstanding at March 31, 2023; 750,000,000 shares authorized, 439,950,125 shares issued and 416,597,885 shares outstanding at December 31, 2022	4.4		4.4
Additional paid-in capital	3,136.2		3,123.2
Accumulated deficit	(121.6)		(121.9)
Accumulated other comprehensive loss	(4.6)		(3.4)
Treasury stock, at cost, 24,262,806 shares as of March 31, 2023; 23,352,240 shares as of December 31, 2022	(295.0)		(281.8)
Total stockholders’ equity	2,719.4		2,720.5
Total liabilities and stockholders’ equity	$	5,072.6	$	5,139.8

See accompanying notes to consolidated financial statements.

4

R1 RCM Inc.

Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited)

(In millions, except share and per share data)

	Three Months Ended March 31,
	2023		2022
Net services revenue ($216.8 million and $216.7 million for the three months ended March 31, 2023 and 2022, from related party, respectively)	$	545.6	$	385.7
Operating expenses:
Cost of services	434.7		296.5
Selling, general and administrative	47.0		28.9
Other expenses	30.2		17.1
Total operating expenses	511.9		342.5
Income from operations	33.7		43.2
Net interest expense	30.7		4.7
Income before income tax provision	3.0		38.5
Income tax provision	2.7		9.1
Net income	$	0.3	$	29.4
Net income per common share:
Basic	$	—	$	0.11
Diluted	$	—	$	0.09
Weighted average shares used in calculating net income per common share:
Basic	417,346,840		278,747,261
Diluted	452,925,789		321,043,371
Consolidated statements of comprehensive income (loss)
Net income	$	0.3	$	29.4
Other comprehensive income (loss):
Net change on derivatives designated as cash flow hedges, net of tax	(1.7)		0.1
Foreign currency translation adjustments	0.5		(1.4)
Total other comprehensive income (loss), net of tax	$	(1.2)	$	(1.3)
Comprehensive income (loss)	$	(0.9)	$	28.1

See accompanying notes to consolidated financial statements.

5

R1 RCM Inc.

Consolidated Statements of Stockholders’ Equity (Unaudited)

(In millions, except share and per share data)

	Common Stock			Treasury Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total
	Shares	Amount		Shares	Amount
Balance at December 31, 2022	439,950,125	$	4.4	(23,352,240)	$	(281.8)	$	3,123.2	$	(121.9)	$	(3.4)	$	2,720.5
Share-based compensation expense	—	—		—	—		10.7		—		—		10.7
CoyCo 2 share-based compensation expense	—	—		—	—		1.8		—		—		1.8
Issuance of common stock related to share-based compensation plans	2,308,591	—		—	—		—		—		—		—
Exercise of vested stock options	180,453	—		—	—		0.5		—		—		0.5
Acquisition of treasury stock related to share-based compensation plans	—	—		(910,566)	(13.2)		—		—		—		(13.2)
Net change on derivatives designated as cash flow hedges, net of tax of $0.5 million	—	—		—	—		—		—		(1.7)		(1.7)
Foreign currency translation adjustments	—	—		—	—		—		—		0.5		0.5
Net income	—	—		—	—		—		0.3		—		0.3
Balance at March 31, 2023	442,439,169	$	4.4	(24,262,806)	$	(295.0)	$	3,136.2	$	(121.6)	$	(4.6)	$	2,719.4

See accompanying notes to consolidated financial statements.

	Common Stock			Treasury Stock			Additional Paid-In Capital		Accumulated Deficit		Accumulated Other Comprehensive Loss		Total
	Shares	Amount		Shares	Amount
Balance at December 31, 2021	298,320,928	$	3.0	(20,094,686)	$	(215.2)	$	628.5	$	(64.3)	$	(5.3)	$	346.7
Share-based compensation expense	—	—		—	—		10.2		—		—		10.2
Issuance of common stock related to share-based compensation plans	1,757,955	—		—	—		—		—		—		—
Exercise of vested stock options	77,438	—		—	—		0.4		—		—		0.4
Acquisition of treasury stock related to share-based compensation plans	—	—		(727,768)	(18.7)		—		—		—		(18.7)
Repurchase of common stock	—	—		(8,000)	(0.2)		—		—		—		(0.2)
Net change on derivatives designated as cash flow hedges, net of tax of $0.0 million	—	—		—	—		—		—		0.1		0.1
Foreign currency translation adjustments	—	—		—	—		—		—		(1.4)		(1.4)
Net income	—	—		—	—		—		29.4		—		29.4
Balance at March 31, 2022	300,156,321	$	3.0	(20,830,454)	$	(234.1)	$	639.1	$	(34.9)	$	(6.6)	$	366.5

See accompanying notes to consolidated financial statements.

6

R1 RCM Inc.

Consolidated Statements of Cash Flows (Unaudited)

(In millions)

	Three Months Ended March 31,
	2023		2022
Operating activities
Net income	$	0.3	$	29.4
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization	66.0		18.9
Amortization of debt issuance costs	1.4		0.3
Share-based compensation	10.5		10.1
CoyCo 2 share-based compensation	1.8		—
Loss on disposal and right-of-use asset write-downs	—		2.0
Provision for credit losses	1.5		—
Deferred income taxes	1.8		7.3
Non-cash lease expense	2.9		3.2
Other	—		1.5
Changes in operating assets and liabilities:
Accounts receivable and related party accounts receivable	4.7		22.1
Contract assets	(4.0)		—
Prepaid expenses and other assets	8.2		(20.5)
Accounts payable	(10.9)		3.2
Accrued compensation and benefits	(24.5)		(27.5)
Lease liabilities	(4.4)		(2.1)
Other liabilities	9.7		1.7
Customer liabilities and customer liabilities - related party	(10.3)		(18.7)
Net cash provided by operating activities	54.7		30.9
Investing activities
Purchases of property, equipment, and software	(23.4)		(10.0)
Other	(2.2)		—
Net cash used in investing activities	(25.6)		(10.0)
Financing activities
Repayment of senior secured debt	(12.4)		(4.4)
Repayments on revolver	(10.0)		—
Exercise of vested stock options	0.5		0.4
Purchase of treasury stock	—		(0.6)
Shares withheld for taxes	(13.4)		(21.5)
Other	(0.1)		(0.1)
Net cash used in financing activities	(35.4)		(26.2)
Effect of exchange rate changes in cash, cash equivalents and restricted cash	0.4		(0.9)
Net decrease in cash, cash equivalents and restricted cash	(5.9)		(6.2)
Cash, cash equivalents and restricted cash, at beginning of period	110.1		130.1
Cash, cash equivalents and restricted cash, at end of period	$	104.2	$	123.9
Supplemental disclosures of cash flow information
Property, equipment and software purchases not paid	$	28.0	$	23.3

See accompanying notes to consolidated financial statements.

7

R1 RCM Inc.

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in millions, except per share data)

1. Business Description and Basis of Presentation

Business Description

R1 RCM Inc. (the “Company”) is a leading provider of technology-driven solutions that transform the patient experience and financial performance of healthcare providers. The Company helps healthcare providers generate sustainable improvements in their operating margins and cash flows while also enhancing patient, physician, and staff satisfaction for its customers.

Basis of Presentation

The accompanying unaudited consolidated financial statements reflect the Company’s financial position as of March 31, 2023, the results of operations of the Company for the three months ended March 31, 2023 and 2022, and the cash flows of the Company for the three months ended March 31, 2023 and 2022. These financial statements include the accounts of R1 RCM Inc. and its wholly-owned subsidiaries. All material intercompany amounts have been eliminated in consolidation. These financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial reporting and as required by the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, certain information and footnote disclosures required for complete financial statements are not included herein. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the interim financial information, have been included. Operating results for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for any other interim period or for the fiscal year ending December 31, 2023.

When preparing financial statements in conformity with GAAP, the Company makes a number of significant estimates, assumptions, and judgments in the preparation of the financial statements. Actual results could differ from those estimates. For a more complete discussion of the Company’s significant accounting policies and other information, the unaudited consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements included in the Company’s 2022 Form 10-K.

Recently Issued Accounting Standards and Disclosures

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”). ASU 2022-03 clarifies that a contractual sale restriction on an equity security should not be considered in measuring the security’s fair value. The Company will adopt ASU 2022-03 prospectively effective January 1, 2024 and is currently evaluating the impact of the standard on its consolidated financial statements.

2. Acquisitions

Assets acquired and liabilities assumed in a business combination are recorded at their estimated fair value on the date of the acquisition. The difference between the purchase price amount and the net fair value of assets acquired and liabilities assumed is recognized as goodwill on the balance sheet if the purchase price exceeds the estimated net fair value or as a bargain purchase gain on the income statement if the purchase price is less than the estimated net fair value. The allocation of the purchase price may be modified up to one year after the acquisition date as more information is obtained about the fair value of assets acquired and liabilities assumed.

8

Prior Acquisitions

During 2022, the Company acquired the following business:

Company Name	Description of the Business	Description of the Acquisition
Revint Holdings, LLC (“Cloudmed”)	Provider of revenue intelligence solutions	Purchased all outstanding equity interests in exchange for shares of common stock of the Company and cash. The shares of common stock received by the Cloudmed sellers are subject to an 18-month lock-up period, which expires December 21, 2023. In addition, the Company replaced certain pre-acquisition awards held by certain Cloudmed sellers with restricted stock units (“RSUs”) of the Company.

The purchase price has been provisionally allocated to assets acquired and liabilities assumed based on their fair value as of the acquisition date. The fair value estimate of assets acquired and liabilities assumed is pending the completion of various elements, including gathering further information to ensure the completeness of assets acquired and liabilities assumed and the finalization of an independent appraisal of their respective fair values, which is subject to final review by the Company’s management. Accordingly, management considers the balances shown in the following table to be preliminary, and there could be adjustments to the consolidated financial statements, including changes in our amortization expense related to the valuation of intangible assets acquired and their respective useful lives, among other adjustments.

The preliminary fair value of assets acquired and liabilities assumed is:

	Purchase Price Allocation
Total purchase consideration	$	3,281.6
Allocation of consideration to assets acquired and liabilities assumed:
Cash and cash equivalents	$	32.1
Accounts receivable	61.8
Current portion of contract assets	68.2
Property, equipment and software	5.0
Operating lease right-of-use assets	25.3
Non-current portion of contract assets	23.8
Intangible assets	1,366.6
Goodwill	2,093.9
Other assets	6.7
Accounts payable	(31.9)
Customer liabilities	(3.3)
Accrued compensation and benefits	(93.4)
Operating lease liabilities	(25.4)
Deferred income tax liabilities	(235.6)
Other liabilities	(12.2)
Net assets acquired	$	3,281.6

9

Measurement period adjustments

The Company had various measurement period adjustments due to additional information received since December 31, 2022. The significant adjustments included a reduction to deferred income tax liabilities and a corresponding decrease to goodwill of $9.8 million related to updated tax return information.

RevWorks

In 2020, the Company purchased certain assets relating to the RevWorks services business from Cerner Corporation. In accordance with the purchase agreement, the Company paid the first deferred payment of $12.5 million in the third quarter of 2021. The remaining deferred payment of $12.5 million was payable on the second anniversary of the closing date (August 2022) and is included in other accrued expenses on the Consolidated Balance Sheet as of March 31, 2023 as it had not been paid as of such date.

The two deferred payments related to the RevWorks acquisition were contractual obligations of the Company; however, they are refundable to the Company if certain RevWorks customer revenue targets defined in the purchase agreement for the first two years following the acquisition are not achieved. The parties are currently engaged in arbitration to finalize the remaining deferred payment and contingently refundable consideration amounts. The contingently refundable consideration is stated at an amount approximating the amount expected to be realized and is included in other current assets on the Consolidated Balance Sheet as of March 31, 2023.

Pro Forma Results

The following table summarizes, on a pro forma basis, the combined results of the Company as though the Cloudmed acquisition had occurred as of January 1, 2021. These pro forma results are not necessarily indicative of the actual consolidated results had the acquisition occurred as of that date or of the future consolidated operating results for any period. Pro forma results are:

	Three Months Ended March 31, 2022
Net services revenue	$	486.4
Net income	$	1.4

Adjustments were made to earnings to adjust depreciation and amortization to reflect the fair value of identified assets acquired, to adjust share-based compensation expense for awards granted in connection with the acquisition, to record the effects of extinguishing the debt of the acquired company and replacing it with the debt of the Company, to adjust timing of acquisition related costs incurred by the Company, and to record the income tax effect of these adjustments.

3. Revenue Recognition

Revenue is measured based on consideration specified in a contract with a customer, and presented net of any sales incentives and amounts collected on behalf of third parties. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a service to a customer, which is typically over the contact term. Estimates of variable consideration are included in revenue to the extent that it is probable that a significant reversal of cumulative revenue will not occur once the uncertainty is resolved.

Disaggregation of Revenue

In the following table, revenue is disaggregated by source of revenue:

10

	Three Months Ended March 31,
	2023		2022
Net operating fees	$	361.0	$	322.8
Incentive fees	23.6		30.2
Modular and other (1)	161.0		32.7
Net services revenue	$	545.6	$	385.7

(1) Modular and other revenue primarily consists of $125.8 million in service fees related to Cloudmed for the three months ended March 31, 2023, revenue integrity solutions, practice management (“PM”) services, physician advisory services (“PAS”), and software subscription revenue.

Contract Balances

The following table provides information about contract assets, net and contract liabilities from contracts with customers:

	March 31, 2023		December 31, 2022
Contract assets, net
Current	$	81.8	$	83.9
Non-current	37.3		32.0
Total contract assets, net	$	119.1	$	115.9
Contract liabilities
Current (1)	$	11.0	$	9.7
Non-current (2)	18.4		18.7
Total contract liabilities	$	29.4	$	28.4

(1) Current contract liabilities include $8.8 million and $7.6 million classified in the current portion of customer liabilities and $2.2 million and $2.1 million classified in the current portion of customer liabilities - related party as of March 31, 2023 and December 31, 2022, respectively.

(2) Non-current contract liabilities include $5.2 million and $5.0 million classified in the non-current portion of customer liabilities and $13.2 million and $13.7 million classified in the non-current portion of customer liabilities - related party as of March 31, 2023 and December 31, 2022, respectively.

The contract assets, net balance will increase or decrease based on the timing of invoices and recognition of revenue. Prior to the Cloudmed acquisition, the Company did not have significant contract assets. Significant changes in the carrying amount of contract assets, net for the three months ended March 31, 2023 were as follows:

	Contract Assets, net
Balance as of December 31, 2022	$	115.9
Revenue recognized	86.0
Amounts billed	(82.6)
Other (1)	(0.2)
Balance as of March 31, 2023	$	119.1

(1) Other primarily includes adjustments made during the period to the allowance for credit losses.

11

	Contract Liabilities
Balance as of December 31, 2022	$	(28.4)
Advanced billings - January 1, 2023 (1)	(91.3)
Advanced billings recognized	91.3
Additions	(3.9)
Revenue recognized	2.9
Balance as of March 31, 2023	$	(29.4)

(1) The Company records advanced billings to contract liabilities and accounts receivable on the first day of the respective service period, which are earned during the quarter.

Transaction Price Allocated to the Remaining Performance Obligation

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period. The estimated revenue does not include amounts of variable consideration that are constrained.

	Net operating fees		Incentive fees
Remainder of 2023	$	90.0	$	33.0
2024	78.1		—
2025	45.7		—
2026	35.6		—
2027	31.2		—
2028	29.8		—
Thereafter	83.6		—
Total	$	394.0	$	33.0

The amounts presented in the table above include variable fee estimates of the Company’s physician groups revenue cycle management (“RCM”) services contracts, fixed fees, and forecasted incentive fees. Fixed fees are typically recognized ratably as the performance obligation is satisfied and forecasted incentive fees are measured cumulatively over the contractually defined performance period.

Estimates of revenue expected to be recognized in future periods exclude unexercised customer options to purchase services within the Company’s PAS contracts that do not represent material rights to the customer.

The Company does not disclose information about remaining performance obligations with an original expected duration of one year or less and has elected an exemption to the disclosure requirements related to estimate variable consideration and an exemption where the Company has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the entity’s performance completed to date.

4. Accounts Receivable and Allowance for Credit Losses

Accounts receivable is comprised of invoiced and unbilled balances due from modular services and end-to-end RCM customers, which are presented net after considering cost reimbursements owed to end-to-end RCM customers.

12

The Company evaluates its accounts receivable for expected credit losses quarterly. The Company maintains an estimated allowance for credit losses to reduce its accounts receivable to the amount that it believes will be collected. This allowance is based on the Company’s historical experience, its assessment of each customer’s ability to pay, the length of time a balance has been outstanding, input from key Company resources assigned to each customer, the status of any ongoing operations with each applicable customer, and business and industry factors such as significant shifts in the healthcare environment which the Company believes may have impacted or will impact its customers’ financial health and ability to pay.

The Company has presented the rollforward below on a consolidated basis as the currently expected credit losses for its large integrated healthcare system customers are not anticipated to be material.

Movements in the allowance for credit losses related to accounts receivable are as follows:

	Three Months Ended March 31,
	2023		2022
Beginning balance (1)	$	15.2	$	2.5
Provision (recoveries)	1.1		—
Write-offs	(0.2)		(0.1)
Ending balance (1)	$	16.1	$	2.4

(1) The 2023 balance includes an allowance for credit losses related to a physician customer of $10.1 million that was established in the third quarter of 2022. Management continues to monitor collections and the financial condition of this customer. No changes were made in the current period.

The Company acquired contract assets through the Cloudmed acquisition. As of March 31, 2023, there was an allowance for credit losses of $2.6 million against total contract assets.

5. Debt

The carrying amounts of debt consist of the following:

	March 31, 2023		December 31, 2022
Senior Revolver (1)	$	90.0	$	100.0
Term A Loans	1,200.3		1,211.4
Term B Loan	497.5		498.7
Unamortized discount and issuance costs	(22.5)		(23.6)
Total debt	1,765.3		1,786.5
Less: Current maturities	(58.3)		(53.9)
Total long-term debt	$	1,707.0	$	1,732.6

(1) As of March 31, 2023, the Company had $90.0 million in borrowings, $0.9 million letters of credit outstanding, and $509.1 million of availability under the $600.0 million senior secured revolving credit facility (“Senior Revolver ”).

13

Second Amended and Restated Senior Secured Credit Facilities

On June 21, 2022, the Company, R1 RCM Holdco Inc. (f/k/a R1 RCM Inc.), and certain of its subsidiaries entered into a second amended and restated senior credit agreement (the “Second A&R Credit Agreement”) with Bank of America, N.A., as administrative agent, and the lenders named therein, governing the Company’s second amended and restated senior secured credit facilities (the “Senior Secured Credit Facilities”), consisting of the $691.3 million existing senior secured term loan A facility (the “Existing Term A Loan”), a $540.0 million senior secured incremental term loan A facility (the “Incremental Term A Loan,” and together with the Existing Term A Loan, the “Term A Loans”), a $500.0 million senior secured term loan B facility (the “Term B Loan,” and together with the Term A Loans, the “Senior Term Loans”), and the $600.0 million Senior Revolver. In conjunction with entering into the Second A&R Credit Agreement, the Company incurred $7.2 million and capitalized $6.4 million of debt issuance costs.

The interest rate as of March 31, 2023 was 7.31% for the Term A Loans and Senior Revolver and 7.81% for the Term B Loan.

The Second A&R Credit Agreement contains a number of financial and non-financial covenants. The Company was in compliance with all of the covenants in the Second A&R Credit Agreement as of March 31, 2023. The obligations under the Second A&R Credit Agreement are secured by a pledge of 100% of the capital stock of certain domestic subsidiaries owned by the Company and a security interest in substantially all of the Company’s tangible and intangible assets and the tangible and intangible assets of certain domestic subsidiaries.

Debt Maturities

Scheduled maturities of the Company’s long-term debt are summarized as follows:

	Scheduled Maturities
Remainder of 2023	$	41.5
2024	67.0
2025	67.0
2026	708.3
2027	430.2
2028	5.0
Thereafter	468.8
Total	$	1,787.8

For further details on the Second A&R Credit Agreement, refer to Note 10 of the Company’s 2022 Form 10-K.

6. Derivative Financial Instruments

The Company utilizes cash flow hedges to manage its currency risk arising from its global business services centers. As of March 31, 2023, the Company has recorded $1.1 million of unrealized gains in accumulated other comprehensive loss related to foreign currency hedges. The Company estimates that $1.1 million of gains reported in accumulated other comprehensive loss are expected to be reclassified into earnings within the next 9 months. Amounts reclassified into cost of services were a net gain of $0.3 million and $0.2 million during the three months ended March 31, 2023 and 2022, respectively. As of March 31, 2023, the Company’s foreign currency forward contracts have maturities extending no later than December 31, 2023, and had a total notional value of $90.2 million.

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The Company also utilizes cash flow hedges to reduce variability in interest cash flows from its outstanding debt. As of March 31, 2023, the Company has recorded $9.9 million of unrealized gains in accumulated other comprehensive loss related to interest rate swaps. The Company estimates that $8.3 million of gains reported in accumulated other comprehensive loss are expected to be reclassified into earnings within the next 12 months. Amounts reclassified into interest expense were a net gain of $1.9 million and a net loss of $0.3 million during the three months ended March 31, 2023 and 2022, respectively. As of March 31, 2023, the Company’s interest rate swaps extend no later than June 30, 2025, and had a total notional value of $500.0 million.

The location and fair value of derivative instruments designated as hedges in the Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022 are as follows:

	March 31, 2023		December 31, 2022
Foreign currency forward contracts
Prepaid expenses and other current assets	$	1.1	$	0.1
Other accrued expenses	—		0.5
Total foreign current forward contracts	$	1.1	$	0.6
Interest rate swaps
Prepaid expenses and other current assets	$	8.3	$	8.7
Other assets	1.6		5.0
Other accrued expenses	—		—
Total interest rate swaps	$	9.9	$	13.7

As of March 31, 2023 and December 31, 2022, the accumulated gain, net of tax, recognized in accumulated other comprehensive loss was $8.2 million and $9.9 million, respectively.

The Company classifies cash flows from its derivative programs as cash flows from operating activities in the Consolidated Statements of Cash Flows. Fair values for derivative financial instruments are based on prices computed using third-party valuation models and are classified as Level 2 in accordance with the three-level hierarchy of fair value measurements.

On July 5, 2022, the Company and Sutter Health (“Sutter”) entered into an agreement regarding the potential purchase of a business that would expand the Company’s service capabilities (the “Sutter Put Right Agreement”). This agreement is effective through approximately the end of 2023 and allows Sutter to sell the business to the Company for $150.0 million, subject to the negotiation of a definitive agreement and the satisfaction of agreed upon closing conditions, including the requirement that the purchase price be deemed to be fair value at the time of the potential transaction. Assuming an agreement is reached, the Company and Sutter would also need to reach agreement as to whether the purchase price would be paid in cash or shares of the Company’s common stock.

7. Share-Based Compensation

The share-based compensation expense relating to the Company’s stock options, RSUs, and performance-based restricted stock units (“PBRSUs”) for the three months ended March 31, 2023 and 2022 was $12.3 million and $10.1 million, respectively, with related tax benefits of approximately $2.6 million and $1.8 million, respectively.

The Company accounts for forfeitures as they occur. Excess tax benefits and shortfalls for share-based payments are recognized in income tax expense and included in operating activities. The Company recognized $0.5 million and $2.5 million of income tax benefit from windfalls associated with vesting and exercises of equity awards for the three months ended March 31, 2023 and 2022, respectively.

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Total share-based compensation costs that have been included in the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss) were as follows:

	Three Months Ended March 31,
	2023		2022
Share-Based Compensation Expense Allocation Details:
Cost of services	$	6.9	$	4.3
Selling, general and administrative	5.4		5.8
Total share-based compensation expense (1)	$	12.3	$	10.1

(1) Included in the share-based compensation expense above is $1.8 million of CoyCo 2, L.P. (“CoyCo 2”) share-based compensation expense for the three months ended March 31, 2023. See further discussion below.

The Company uses the Black-Scholes option pricing model to estimate the fair value of its service-based options as of their grant dates. The volatility for the options was calculated based on an analysis of historical volatility. The Company assesses current performance on performance-based PBRSUs by reviewing historical performance to date, along with any adjustments which have been approved to the reported performance, and changes to the projections to determine the probable outcome of the awards. The current estimates are then compared to the scoring metrics and any necessary adjustments are reflected in the current period to update share-based compensation expense to the current performance expectations. A Monte Carlo simulation was used to estimate the fair value of the Unvested Units (as defined below), which are being amortized over a period of 4 years on a straight-line basis. The volatility for the Unvested Units was calculated based on an analysis of historical and implied volatility.

Stock options

A summary of the options activity during the three months ended March 31, 2023 is shown below:

	Options	Weighted- Average Exercise Price
Outstanding at December 31, 2022	3,104,413	$	3.38
Granted	—	—
Exercised	(180,453)	3.05
Canceled/forfeited	(45,865)	2.59
Expired	—	—
Outstanding at March 31, 2023	2,878,095	$	3.41
Outstanding, vested and exercisable at March 31, 2023	2,855,175	$	3.26
Outstanding, vested and exercisable at December 31, 2022	3,080,069	$	3.23

Restricted stock units and performance-based restricted stock units    

A summary of the RSU and PBRSU activity during the three months ended March 31, 2023 is shown below:

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					Weighted- Average Grant Date Fair Value
	RSUs		PBRSUs		RSU		PBRSU
Outstanding and unvested at December 31, 2022	3,232,002		6,876,797		$	19.07	$	19.48
Granted	192,268		—		10.95		—
Performance factor adjustment	—		792,189		—		15.95
Vested	(21,705)		(2,286,886)		20.21		15.95
Forfeited	(110,733)		(455,875)		20.56		20.28
Outstanding and unvested at March 31, 2023	3,291,832		4,926,225		$	18.54	$	20.48
Shares surrendered for taxes for the three months ended March 31, 2023	6,908		903,658
Cost of shares surrendered for taxes for the three months ended March 31, 2023 (in millions)	$	0.1	$	13.1
Shares surrendered for taxes for the three months ended March 31, 2022	2,198		725,570
Cost of shares surrendered for taxes for the three months ended March 31, 2022 (in millions)	$	—	$	18.7

Upon consummation of the Cloudmed acquisition, outstanding restricted units of Cloudmed were replaced by an aggregate 1,536,220 RSUs of the Company. The Company also issued an aggregate of 3,173,184 inducement RSUs and PBRSUs to certain employees of Cloudmed under Nasdaq Listing Rule 5635(c)(4) pursuant to its newly adopted 2022 Inducement Plan.

The Company’s RSU and PBRSU agreements allow employees to surrender to the Company shares of common stock upon vesting of their RSUs and PBRSUs in lieu of their payment of the required personal employment-related taxes. Shares surrendered for payment of personal employment-related taxes are held in treasury.

Outstanding PBRSUs vest upon satisfaction of both time-based and performance-based conditions. Depending on the award, performance condition targets may include cumulative adjusted EBITDA, end-to-end RCM agreement growth, modular sales revenue, or other specific performance factors. Depending on the percentage level at which the performance-based conditions are satisfied, the number of shares vesting could be between 0% and 200% of the number of PBRSUs originally granted. Based on the established targets, the maximum number of shares that could vest for all outstanding PBRSUs is 9,852,450.

CoyCo 2, L.P. Limited Partnership Units    

As part of the transactions contemplated by the Cloudmed acquisition, equity awards held by certain employees of Cloudmed (“Former Class P Units”) were modified, through a series of transactions, into awards (“Management Units”) of CoyCo 2. The Management Units issued by CoyCo 2 are treated as share-based compensation under ASC 718, Compensation — Stock Compensation.

The Former Class P Units were originally issued to employees of Cloudmed and its affiliates (“Participants”) in connection with and as a part of the compensation and incentive arrangements between Cloudmed and such Participants prior to the consummation of the Cloudmed acquisition. A portion of the Former Class P Units immediately vested upon the closing of the Cloudmed acquisition; however, certain Former Class P Units that were subject to performance-based vesting conditions did not become vested upon the closing of the Cloudmed acquisition (“Unvested Units”). In connection with the Cloudmed acquisition, Cloudmed caused the Former Class P Units, including the Unvested Units, to be converted into Management Units. At the time of the closing of the Cloudmed acquisition, 97,875 Unvested Units were converted into 514,986 Management Units.

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In general, Unvested Units vest upon the achievement of certain performance criteria, including achievement by CoyCo 2’s owner, New Mountain Capital, L.L.C. (“New Mountain”), of (i) specified multiples of Base Equity Value (“BEV”) (i.e., generally the aggregate equity value of New Mountain’s investment in Cloudmed as of the original grant date), or (ii) specified Multiples on Invested Capital (“MIC”) with respect to New Mountain Capital’s pre-Cloudmed acquisition investment in Cloudmed, and subject to continued service with the Company and its affiliates, including Cloudmed through the applicable vesting date. The Unvested Units are not awards of the Company and the participants will receive no additional shares of the Company upon satisfaction of the vesting criteria. However, GAAP requires the Company recognize the cost of share-based compensation granted by an investor (CoyCo 2) to the Company’s employees and service providers for services that benefit the Company’s operations (hereafter, “CoyCo 2 share-based compensation expense”), and a corresponding capital contribution because the costs are incurred on the Company’s behalf.

8. Other Expenses

Other expenses are incurred in connection with acquisition and integration costs, various exit activities, transformation initiatives, and organizational changes to improve our business alignment and cost structure. The following table summarizes the other expenses recognized for the three months ended March 31, 2023 and 2022.

	Three Months Ended March 31,
	2023		2022
Business acquisition costs (1)	$	0.1	$	6.3
Integration costs (2)	15.8		0.4
Strategic initiatives (3)	8.0		0.3
Global business services center expansion project in the Philippines (4)	—		3.1
Facility-exit charges (5)	1.2		4.8
Other (6)	5.1		2.2
Total other expenses	$	30.2	$	17.1

(1) These are costs, including legal, consulting, and bank fees, that are directly related to the closing of business acquisitions and include changes to contingent consideration, if applicable.

(2) These costs reflect efforts to integrate acquisitions from a systems, processes, and people perspective and to achieve synergies expected from business acquisitions. Costs include consulting fees, IT vendor spend, severance, retention, and certain payroll costs.

(3) These costs relate to performing portfolio and capital structure analyses and transactions and other business transformation projects (including large scale system projects) as part of the Company’s growth strategy. Costs include vendor spend, employee time and expenses spent on activities, severance, and retention amounts.

(4) These costs include legal and consulting fees related to the establishment of the Company’s inaugural global business services center in the Philippines as well as severance costs for personnel whose roles are being relocated. The entry into the Philippines was the first new organic global business services center country expansion by the Company in approximately 15 years. The Company completed the expansion project in 2022.

(5) As part of evaluating its footprint, the Company has exited certain leased facilities. Costs include asset impairment charges, early termination fees, and other costs related to exited leased facilities.

(6) For the three months ended March 31, 2023 and 2022, other includes $5.5 million and $1.1 million, respectively, of expenses related to the Company’s ongoing litigation matters. For further details, refer to Note 11, Commitments and Contingencies.

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9. Income Taxes

Income tax provisions for interim periods are based on estimated annual income tax rates, adjusted to reflect the effects of any significant and infrequent or unusual items which are required to be discretely recognized within the current interim period. The effective tax rates in the periods presented are largely based upon the projected annual pre-tax earnings by jurisdiction and the allocation of certain expenses in various taxing jurisdictions where the Company conducts its business. These taxing jurisdictions apply a broad range of statutory income tax rates. The global intangible low-taxed income (“GILTI”) provisions impose taxes on foreign income in excess of a deemed return on tangible assets of foreign corporations. The Company elected to account for GILTI tax in the period in which it is incurred.

The Company recognized income tax expense for the three months ended March 31, 2023 on the year-to-date pre-tax income. The deviation from the federal statutory tax rate of 21% is primarily attributable to recognizing the provisions for foreign taxes, state taxes, non-deductible expenses, and discrete items.

The Company recognized income tax expense for the three months ended March 31, 2022 on the year-to-date pre-tax income. The deviation from the federal statutory tax rate of 21% is primarily attributable to recognizing the provisions for state taxes, GILTI, non-deductible expenses, and discrete items.

The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax of multiple state and foreign jurisdictions. U.S. federal income tax returns since 2019 are currently open for examination. State jurisdictions vary for open tax years. The statute of limitations for most states ranges from three to six years.

At December 31, 2022, the Company had gross deferred tax assets of $147.6 million, of which $50.0 million related to net operating loss (“NOL”) carryforwards. The Company expects to be profitable, allowing the Company to utilize its NOL carryforwards and other deferred tax assets.

10. Earnings Per Share

Basic net income per share is computed by dividing net income by the weighted average number of common shares outstanding during the period.

Diluted net income per share is calculated by adjusting the denominator used in the basic net income per share computation by potentially dilutive securities outstanding during the period plus, when their effect is dilutive, incremental shares consisting of shares subject to stock options and shares issuable upon vesting of RSUs and PBRSUs.

Basic and diluted net income per common share are calculated as follows:

	Three Months Ended March 31,
	2023		2022
Net income	$	0.3	$	29.4
Basic weighted-average common shares	417,346,840		278,747,261
Add: Effect of dilutive equity awards	4,621,205		6,472,685
Add: Effect of dilutive warrants	30,957,744		35,823,425
Diluted weighted average common shares	452,925,789		321,043,371
Net income per common share (basic)	$	—	$	0.11
Net income per common share (diluted)	$	—	$	0.09

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Because of their anti-dilutive effect, 768,030 common share equivalents comprised of stock options, PBRSUs, and RSUs have been excluded from the diluted earnings per share calculation for the three months ended March 31, 2023.

For the three months ended March 31, 2022, 43,206 common share equivalents have been excluded from the diluted earnings per share calculation because of their anti-dilutive effect.

11. Commitments and Contingencies

Legal Proceedings

Other than as described below, the Company is not presently a party to any material litigation or regulatory proceeding and is not aware of any pending or threatened litigation or regulatory proceeding against the Company which, individually or in the aggregate, could have a material adverse effect on its business, operating results, financial condition or cash flows.

On April 13, 2021 and April 19, 2021, respectively, certain purported stockholders of the Company filed two complaints in the Delaware Court of Chancery regarding the Company’s January 15, 2021 recapitalization transaction with TCP-ASC. Both complaints allege that TCP-ASC, Ascension Health (“Ascension”), and TowerBrook Capital Partners (“TowerBrook”) controlled the Company and breached their fiduciary duties by using that alleged control to force the Company to overpay in redeeming TCP-ASC’s preferred stock as part of the recapitalization transaction. The plaintiffs seek an unspecified amount of damages against TCP-ASC, Ascension, and TowerBrook. The plaintiffs also allege that the Company and TCP-ASC entered into amendments to the Investor Rights Agreement that the plaintiffs contend contain provisions that are void under the Company’s charter, bylaws, and the Delaware General Corporation Law. The cases have since been consolidated into a single action. All defendants have answered the complaint and discovery has commenced.

On February 18, 2022, plaintiffs filed a supplement to their complaint, naming certain additional defendants and asserting additional claims related to the Company’s agreement to acquire Cloudmed, which was announced on January 10, 2022. The additional claims assert that: (i) TCP-ASC, Ascension, and TowerBrook, along with the Company’s directors (“Individual Defendants”), breached their fiduciary duties by causing the Company to enter into and approving the Cloudmed acquisition, respectively, which plaintiffs claim will perpetuate TCP-ASC’s, Ascension’s, and TowerBrook’s control over the Company and entrench the Individual Defendants by virtue of certain agreements entered into as part of the transaction, including a Second Amended Investor Rights Agreement with TCP-ASC (the “Seconded Amended Investor Rights Agreement”) and an Investor Rights Agreement with Cloudmed (the “Cloudmed Investor Rights Agreement”); and (ii) Cloudmed’s stockholders aided and abetted such breaches. Plaintiffs also allege that certain provisions in the Cloudmed Investor Rights Agreement and the Second Amended Investor Rights Agreement are void under the Company’s charter, bylaws, and the Delaware General Corporation law. The plaintiffs seek a declaratory judgment and an unspecified amount of damages, as well as attorneys’ fees and costs. Trial is scheduled for November 2023. The Company believes it has meritorious defenses to all claims against it and intends to vigorously defend itself against these claims.

In May 2016, the Company was served with a False Claims Act case brought by a former emergency department service associate who worked at a hospital of one of the Company’s customers, MedStar Inc.’s Washington Hospital Center (“WHC”), along with WHC and three other hospitals that were PAS customers and a place holder, John Doe hospital, representing all PAS customers (U.S. ex rel. Graziosi vs. Accretive Health, Inc. et. al.), and seeking money damages, False Claims Act penalties, and plaintiff’s attorneys’ fees. The Third Amended Complaint alleges that the Company’s PAS business violates the federal False Claims Act. The case was originally filed under seal in 2013 in the federal district court in Chicago and was presented to the U.S. Attorney in Chicago, and the U.S. Attorney declined to intervene. Both the Company’s and plaintiff’s motions for summary judgment were denied in December 2020, and the parties have completed damage and expert discovery. Additional dispositive motions are expected to extend into 2023, with trial, if necessary, likely to be scheduled in 2024. The Company believes it has meritorious defenses to all claims in the case and intends to vigorously defend itself against these claims.

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12. Related Party Transactions

This note encompasses transactions between Ascension and its affiliates, including AMITA Health, and the Company pursuant to the Master Professional Services Agreement, including all supplements, amendments, and other documents entered into in connection therewith. For further details on the Company’s agreements with Ascension, see Note 1 and Note 19 of the Company’s 2022 Form 10-K. In conjunction with the Cloudmed acquisition, New Mountain became a new related party. There were no material transactions with New Mountain subsequent to the Cloudmed acquisition.

Net services revenue from services provided to Ascension, as well as corresponding accounts receivable and customer liabilities are presented in the Consolidated Statements of Operations and Comprehensive Income (Loss) and the Consolidated Balance Sheets. Since Ascension is the Company’s largest customer, a significant percentage of the Company’s cost of services is associated with providing services to Ascension. However, due to the nature of the Company’s global business services and information technology operations, it is impractical to assign the dollar amount associated with services provided to Ascension.

13. Segments and Customer Concentrations

The Company has determined that it has a single operating segment in accordance with the way that management operates and views the business. All of the Company’s significant operations are organized around the single business of providing management services of revenue cycle operations for U.S.-based healthcare providers. Accordingly, for purposes of segment disclosures, the Company has only one operating and reportable segment.

Customers comprising greater than 10% of net services revenue are as follows:

	Three Months Ended March 31,
Customer Name	2023		2022
Ascension and its affiliates	40	%	56	%
Intermountain Healthcare	11	%	14	%

The loss of customers within the Ascension health system or Intermountain network could have a material adverse impact on the Company’s operations.

As of March 31, 2023 and December 31, 2022, the Company had a concentration of credit risk with Ascension, representing 10% of accounts receivable.

14. Supplemental Financial Information

The following table summarizes the allocation of depreciation and amortization expense related to property, equipment and software between cost of services and selling, general and administrative expenses:

	Three Months Ended March 31,
	2023		2022
Cost of services	$	15.5	$	11.5
Selling, general and administrative	0.4		0.3
Total depreciation and amortization	$	15.9	$	11.8

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Intangible asset amortization expense was $50.1 million and $7.1 million for the three months ended March 31, 2023 and 2022, respectively. Amortization expense for intangible assets is included in cost of services on the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss).

Supplemental cash flow information related to leases are as follows:

	Three Months Ended March 31,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	6.2	$	3.4
Right-of-use assets obtained in exchange for operating lease obligations:	3.1		6.0

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Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Unless the context indicates otherwise, references in this Quarterly Report on Form 10-Q to “R1,” “the Company,” “we,” “our,” and “us” mean R1 RCM Inc. and its subsidiaries.

The following discussion and analysis is an integral part of understanding our financial results and is provided as an addition to, and should be read in connection with, our consolidated financial statements and the accompanying notes.

This Quarterly Report on Form 10-Q contains “forward-looking statements” within the meaning of the Private Securities Litigation Reform Act of 1995, as amended. Undue reliance should not be placed on these statements. All statements, other than statements of historical facts, included in this Quarterly Report on Form 10-Q are forward-looking statements. The words “anticipate,” “believe,” “designed,” “estimate,” “expect,” “forecast,” “intend,” “may,” “plan,” “predict,” “project,” “target,” “will” or “would” and similar expressions or variations are intended to identify forward-looking statements, although not all forward-looking statements contain these identifying words. Such forward-looking statements include, among other things, statements about the acquisition of Cloudmed, our strategic initiatives, our capital plans, our costs, our ability to successfully implement new technologies, our future financial performance, and our liquidity. Such forward-looking statements are based on management’s current expectations about future events as of the date hereof and involve many risks and uncertainties that could cause our actual results to differ materially from those expressed or implied in our forward-looking statements. Subsequent events and developments, including actual results or changes in our assumptions, may cause our views to change. We do not undertake to update our forward-looking statements except to the extent required by applicable law. Readers are cautioned not to place undue reliance on such forward-looking statements. All forward-looking statements included herein are expressly qualified in their entirety by these cautionary statements. Our actual results and outcomes could differ materially from those included in these forward-looking statements as a result of various factors, including, but not limited to, economic downturns and market conditions beyond our control, including periods of inflation; the quality of global financial markets; our ability to timely and successfully achieve the anticipated benefits and potential synergies of the acquisition of Cloudmed; our ability to retain existing customers or acquire new customers; the development of markets for the our revenue cycle management offering; variability in the lead time of prospective customers; competition within the market; breaches or failures of our information security measures or unauthorized access to a customer’s data; delayed or unsuccessful implementation of our technologies or services, or unexpected implementation costs; disruptions in or damages to our global business services centers and third-party operated data centers; the volatility of our stock price; our substantial indebtedness; the ongoing impact of the 2019 Novel Coronavirus (“COVID-19”) pandemic on our business, operating results, and financial condition; and the factors discussed elsewhere in this Quarterly Report on Form 10-Q, and those set forth in Part I, Item 1A of our 2022 Form 10-K and our other filings with the SEC.

The forward-looking statements in this Quarterly Report on Form 10-Q represent our views as of the date of this Quarterly Report on Form 10-Q. Subsequent events and developments may cause our views to change. While we may elect to update these forward-looking statements at some point in the future, we have no current intention of doing so except to the extent required by applicable law. You should, therefore, not rely on these forward-looking statements as representing our views as of any date subsequent to the date of this Quarterly Report on Form 10-Q.

Overview

Our Business

We are a leading provider of technology-driven solutions that transform the patient experience and financial performance of healthcare providers. We help healthcare providers generate sustainable improvements in their operating margins and cash flows while also enhancing patient, physician, and staff satisfaction for our customers.

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We achieve these results for our customers by managing healthcare providers’ revenue cycle operations, which encompass patient registration, insurance and benefit verification, scheduling, medical treatment documentation and coding, bill preparation, and collections from patients and payers. We do so by deploying a unique operating model that leverages our extensive healthcare domain expertise, innovative technology and intelligent automation, and process excellence. We assist our revenue cycle management (“RCM”) customers in managing their revenue cycle operating costs while simultaneously increasing the portion of the maximum potential services revenue they receive. Together, these benefits can generate significant and sustainable improvements in operating margins and cash flows for our customers.

Our largest service offering consists of end-to-end RCM services, which we deploy through an operating partner relationship or a co-managed relationship. Under an operating partner relationship, we provide comprehensive revenue cycle infrastructure to providers, including all revenue cycle personnel, technology solutions, and process workflow. Under a co-managed relationship, we leverage our customers’ existing RCM staff and processes, and supplement them with our infused management, subject matter specialists, proprietary technology solutions, and other resources. Under the operating partner model, our employees are the revenue cycle personnel providing services and we typically control third party vendors either through direct contracts or the assumption of the customer’s vendor contracts. As a result, under the operating partner model, we record higher expenses as well as higher revenues related to the negotiated cost to collect. Under the co-managed model, the revenue cycle personnel and third party vendors remain with the customer and those costs do not impact our financial results. For the three months ended March 31, 2023, substantially all of our net operating and incentive fees from end-to-end RCM services were generated under the operating partner model.

We also offer modular solutions, allowing customers to engage us to address specific revenue cycle improvement opportunities, such as revenue intelligence solutions (which were enhanced through the acquisition of Revint Holdings, LLC (“Cloudmed”)), automation solutions, revenue integrity solutions, practice management (“PM”), accounts receivables and denials recovery, physician advisory services (“PAS”), clinical documentation integrity (“CDI”), coding management, business office services, and patient experience.

While we cannot control the changes in the regulatory environment imposed on our customers, we believe that our role becomes increasingly more important to our customers as macroeconomic, regulatory, and healthcare industry conditions continue to impose financial pressure on healthcare providers to manage their operations effectively and efficiently.

We operate our business as a single segment configured with our significant operations and offerings organized around the business of providing RCM services to healthcare providers.

Trends and Economic Conditions

Revenue cycle is a critical function for healthcare providers as they seek to increase process efficiency and maximize cash collected from health insurance companies and patients. Healthcare providers operate their revenue cycle with a combination of labor, software, and services vendors. Third-party vendors offer various solutions including consulting services, software, and other services, including point solutions that cover one or multiple components of the revenue cycle and full outsourcing services, among others. The Centers for Medicare and Medicaid Services projects hospital care and physician care expenditures in the U.S. to amount to $1.5 trillion and $959 billion in 2023, respectively. We estimate the cost of hospital and physician revenue cycle operations to be approximately 5% of revenue, resulting in a market size of approximately $115 billion. According to Research and Markets data as of April 27, 2022, revenue cycle spend is projected to grow at a compounded annual growth rate of 11.6% through 2030.

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Health systems are currently facing challenges in their revenue cycle operations based on several factors including: (1) more complex and clinical-outcomes based reimbursement, (2) industry consolidation amongst hospitals and across the continuum of care, (3) increasing patient responsibility for their medical bills, (4) healthcare labor shortage, and (5) capital constraints to invest in the revenue cycle given financial difficulties and requirements to invest in improving clinical care. We believe these trends provide opportunities for external RCM vendors that will result in further growth for the industry and our Company.

Growth in economic activity and demand for goods and services, alongside labor shortages and supply chain complications, contributed to high levels of inflation in 2022. We expect inflation to persist in 2023, which may impact our costs for wages and other materials. Inflation may also impact the economic health of our customers, including their ability to pay amounts owed to us. In response to rising inflation, the Federal Reserve Board has raised interest rates and signaled that it may continue to raise rates. Our credit facility interest, in part, is based on a variable interest rate structure which can result in increased cost in periods of rising interest rates. To date, rising interest rates have not had a material impact on our results of operations.

Our incentive fees were impacted by deterioration in payer-reimbursement turnaround times in the second half of 2022. We anticipate modest improvement in payer turnaround times in 2023, relative to the second half of 2022. In addition, we are observing the following trends, which we expect will persist in 2023: (i) we expect reduced growth in our physician business serving emergency department physicians due to regulatory changes that are impacting some of the large groups in the industry and (ii) with recessionary concerns increasing, we could see potential weakness in consumer collections as healthcare bills are de-prioritized.

Other adverse macroeconomic conditions, including but not limited to changes to fiscal and monetary policy and currency fluctuations, could impact macro-level consumer spending trends, which could affect the volume processed on our platform and result in fluctuations to our revenue streams. Certain of our customers may be negatively impacted by these events. In addition, our business and customers continue to face challenges relating to a tight labor market and increased turnover rates. In particular, the current labor market combined with heightened inflation across the globe may increase cost of labor for both us and our customers in 2023 and over time. We plan to continue to invest in technology to help us offset these costs and expect to continue hiring talented employees and providing competitive compensation. Furthermore, recent bank failures and the flow-on effects of those events, including systematic pressures, may cause instability in the banking industry or result in failures at other banks or financial institutions to which we or our customers may face direct or indirect exposure. The bank failures that occurred during the first quarter of 2023 did not directly impact R1 financially. 95% of our cash as of March 31, 2023 was held at four of the five largest banks in the U.S. (by deposits). We maintain the remainder of our cash, which is fully accessible, at smaller or regional banks. The extent to which these macroeconomic conditions will affect our business is uncertain and will depend on political, social, economic, and regulatory forces that are outside of our control. We continue to assess fluctuating macroeconomic events to manage our response.

CONSOLIDATED RESULTS OF OPERATIONS

The following table provides consolidated operating results and other operating data for the periods indicated:

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		Three Months Ended March 31,				2023 vs. 2022 Change
		2023		2022		Amount		%
	(In millions, except percentages)
Consolidated Statement of Operations Data:
Net operating fees		$	361.0	$	322.8	$	38.2	12	%
Incentive fees		23.6		30.2		(6.6)		(22)	%
Modular and other		161.0		32.7		128.3		392	%
Total net services revenue		545.6		385.7		159.9		41	%
Operating expenses:
Cost of services		434.7		296.5		138.2		47	%
Selling, general and administrative		47.0		28.9		18.1		63	%
Other expenses		30.2		17.1		13.1		77	%
Total operating expenses		511.9		342.5		169.4		49	%
Income from operations		33.7		43.2		(9.5)		(22)	%
Net interest expense		30.7		4.7		26.0		553	%
Net income before income tax provision		3.0		38.5		(35.5)		(92)	%
Income tax provision		2.7		9.1		(6.4)		(70)	%
Net income		$	0.3	$	29.4	$	(29.1)	(99)	%
Adjusted EBITDA (1)		$	142.2	$	89.3	$	52.9	59	%

(1) Refer to the Non-GAAP Financial Measures section below for a reconciliation of our financial results reported in accordance with GAAP to non-GAAP financial results.

Use of Non-GAAP Financial Information

In order to provide a more comprehensive understanding of the information used by our management team in financial and operational decision-making, we supplement our consolidated financial statements that have been prepared in accordance with GAAP with the non-GAAP financial measure of adjusted EBITDA. Adjusted EBITDA is utilized by our Board and management team as (i) one of the primary methods for planning and forecasting overall expectations and for evaluating actual results against such expectations; and (ii) as a performance evaluation metric in determining achievement of certain executive incentive compensation programs, as well as for incentive compensation plans for employees.

Adjusted EBITDA

We define adjusted EBITDA as net income (loss) before net interest income/expense, income tax provision/benefit, depreciation and amortization expense, share-based compensation expense, CoyCo 2, L.P. (“CoyCo 2”) share-based compensation expense, and other expense items detailed in Note 8, Other Expenses, to the consolidated financial statements included in this Quarterly Report on Form 10-Q, including business acquisition costs, integration costs, strategic initiatives, and the global business services center expansion project in the Philippines.

Although non-GAAP measures are frequently used by investors, securities analysts, and others in their evaluation of companies, these measures have limitations as analytical tools, and you should not consider them in isolation or as a substitute for analysis of our results of operations as reported under GAAP. Some of these limitations are:

•Adjusted EBITDA does not reflect:

•Changes in, or cash requirements for, our working capital needs;

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•Share-based compensation expense (including CoyCo 2 share-based compensation expense);

•Income tax expenses or cash requirements to pay taxes;

•Interest expenses or cash required to pay interest;

•Certain other expenses which may require cash payments;

•Although depreciation and amortization charges are non-cash charges, the assets being depreciated and amortized will often have to be replaced in the future, and adjusted EBITDA does not reflect cash requirements for such replacements or other purchase commitments, including lease commitments; and

•Other companies in our industry may calculate adjusted EBITDA differently than we do, limiting its usefulness as a comparative measure.

Reconciliation of GAAP and Non-GAAP Measures

The following table represents a reconciliation of adjusted EBITDA to net income, the most closely comparable GAAP measure, for each of the periods indicated:

		Three Months Ended March 31,				2023 vs. 2022 Change
		2023		2022		Amount		%
	(In millions, except percentages)
Net income		$	0.3	$	29.4	$	(29.1)	(99)	%
Net interest expense		30.7		4.7		26.0		553	%
Income tax provision		2.7		9.1		(6.4)		(70)	%
Depreciation and amortization expense		66.0		18.9		47.1		249	%
Share-based compensation expense (1)		10.5		10.1		0.4		4	%
CoyCo 2 share-based compensation expense (2)		1.8		—		1.8		100	%
Other expenses (3)		30.2		17.1		13.1		77	%
Adjusted EBITDA (non-GAAP)		$	142.2	$	89.3	$	52.9	59	%

(1)Share-based compensation expense represents the expense associated with stock options, restricted stock units, and performance-based restricted stock units, as reflected in our Consolidated Statements of Operations and Comprehensive Income (Loss). See Note 7, Share-Based Compensation, to the consolidated financial statements included in this Quarterly Report on Form 10-Q for the detail of the amounts of share-based compensation expense.

(2)CoyCo 2 share-based compensation expense represents the expense associated with CoyCo 2 limited partnership units, as reflected in our Consolidated Statements of Operations and Comprehensive Income (Loss). See Note 7, Share-Based Compensation, to the consolidated financial statements included in this Quarterly Report on Form 10-Q for the detail of the amounts of CoyCo 2 share-based compensation expense.

(3)Other expenses are incurred in connection with acquisition and integration costs, various exit activities, transformation initiatives, and organizational changes to improve our business alignment and cost structure. See Note 8, Other Expenses, to the consolidated financial statements included in this Quarterly Report on Form 10-Q for the detail of the amounts included in other expenses.

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Three Months Ended March 31, 2023 Compared to Three Months Ended March 31, 2022

Net Services Revenue

Net services revenue increased by $159.9 million, or 41%, from $385.7 million for the three months ended March 31, 2022, to $545.6 million for the three months ended March 31, 2023. The increase was driven by a $125.8 million contribution from Cloudmed and net operating fees from new end-to-end customers, partially offset by lower incentive fees.

Cost of Services

Costs of services primarily consists of wages and benefits of personnel that perform services for our customers and any related supplies, equipment, or facility costs utilized by these employees, which includes our global shared service centers in India and the Philippines. It also includes cost of services provided to our customers by vendors directly contracted by R1 or assigned to R1 at contract inception. Cost of services increased by $138.2 million, or 47%, from $296.5 million for the three months ended March 31, 2022, to $434.7 million for the three months ended March 31, 2023. The increase in cost of services was primarily driven by the Cloudmed acquisition and onboarding of new customers, which are reflected in our current revenue growth.

Selling, General and Administrative Expenses

Selling, general and administrative expenses increased by $18.1 million, or 63%, from $28.9 million for the three months ended March 31, 2022, to $47.0 million for the three months ended March 31, 2023. The increase was driven by the Cloudmed acquisition, specifically compensation costs and software licensing and maintenance costs,

and incremental spend in corporate functions to support business growth.

Other Expenses

Other expenses increased by $13.1 million, or 77%, from $17.1 million for the three months ended March 31, 2022, to $30.2 million for the three months ended March 31, 2023. See Note 8, Other Expenses, to the consolidated financial statements included in this Quarterly Report on Form 10-Q for the details of the costs included in this total for the comparative periods.

Income Taxes

Income tax expense decreased by $6.4 million from $9.1 million for the three months ended March 31, 2022, to $2.7 million for the three months ended March 31, 2023, primarily due to lower pre-tax income. Our effective tax rate (including discrete items) was approximately 90% and 24% for the three months ended March 31, 2023 and 2022, respectively. Our tax rate is also affected by discrete items that may occur in any given year, but are not necessarily consistent from year to year.

CRITICAL ACCOUNTING ESTIMATES

Management considers an accounting estimate to be critical if the accounting estimate requires management to make particularly difficult, subjective, or complex judgments about matters that are inherently uncertain. A summary of our critical accounting estimates is included in Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations - Application of Critical Accounting Estimates” of our 2022 Form 10-K. There have been no material changes to the critical accounting estimates disclosed in our 2022 Form 10-K.

NEW ACCOUNTING PRONOUNCEMENTS

For additional information regarding new accounting guidance, see Note 1, Business Description and Basis of Presentation, to our consolidated financial statements included in this Quarterly Report on Form 10-Q, which provides a summary of our recently adopted accounting standards and disclosures.

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LIQUIDITY AND CAPITAL RESOURCES

Our primary sources of liquidity include our cash flows from operations and borrowings under our second amended and restated senior credit agreement (the “Second A&R Credit Agreement”). As of March 31, 2023 and December 31, 2022, we had total available liquidity of $613.3 million and $609.2 million, respectively, reflecting our cash and cash equivalents as well as remaining availability under our senior secured revolving credit facility (the “Senior Revolver”).

Our liquidity is influenced by many factors, including timing of revenue and corresponding cash collections, the amount and timing of investments in strategic initiatives, transaction costs related to business acquisitions, our investments in property, equipment and software, and the use of cash to pay tax withholding obligations upon surrender of shares upon vesting of equity awards. We continue to invest capital in order to achieve our strategic initiatives and successfully integrate acquired companies. As part of our strategic initiatives, we plan to continue to invest in technology to increase the scalability and resiliency of our systems and drive additional value for our customers. We also expect to continue to invest in our global business services infrastructure and capabilities, including further expansion in the Philippines and India, and selectively pursue acquisitions and/or strategic relationships that will enable us to broaden or further enhance our offerings. New business development remains a priority as we plan to continue to boost our sales and marketing efforts. Additionally, we expect to incur costs associated with implementation and transition costs to onboard new customers.

We expect cash and cash equivalents, cash flows from operations, and our availability under the Senior Revolver to continue to be sufficient to fund our operating activities and cash commitments for investing and financing activities, including debt maturities and material capital expenditures, for at least the next 12 months and beyond. Similar to previous material acquisitions, future potential acquisitions may be funded through the incurrence of additional debt if our current credit facilities do not have the required capacity.

Our material cash requirements include the following contractual and other obligations:

Debt

Our indebtedness significantly increased as a result of the Cloudmed acquisition. As of March 31, 2023, we had outstanding debt of $1.8 billion with contractual payments extending through 2029, with $58.3 million payable within 12 months. Future interest payments associated with our debt total $478.4 million, with $124.1 million payable within the next 12 months, based on the floating rates as of March 31, 2023.

Leases

Our significant leasing activity encompasses leases for real estate, including corporate offices, operational facilities, and global business services centers. As of March 31, 2023, we had fixed future lease payments of $137.3 million, with $25.3 million payable within 12 months.

Software Purchase and Services Obligations

Our primary purchase obligations relate to contracts entered into with vendors that supply various software services and products. As of March 31, 2023, we had purchase obligations related to software and service contracts of $283.8 million, with $62.8 million payable within 12 months.

As of March 31, 2023 and December 31, 2022, we had cash and cash equivalents of $104.2 million and $110.1 million, respectively. Cash flows from operating, investing, and financing activities, as reflected in our Consolidated Statements of Cash Flows, are summarized in the following table:

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	Three Months Ended March 31,
	2023		2022
	(In millions)
Net cash provided by operating activities	$	54.7	$	30.9
Net cash used in investing activities	$	(25.6)	$	(10.0)
Net cash used in financing activities	$	(35.4)	$	(26.2)

Cash Flows from Operating Activities

Cash provided by operating activities increased by $23.8 million from $30.9 million for the three months ended March 31, 2022, to $54.7 million for the three months ended March 31, 2023. Cash provided by operating activities primarily increased due to improved operating results (exclusive of non-cash depreciation and amortization).

Cash Used in Investing Activities

Cash used in investing activities primarily includes our investments in property, equipment and software and our inorganic growth initiatives. Outflows for significant acquisitions have typically been offset by cash inflows from financing activities related to obtaining new debt.

Cash used in investing activities increased by $15.6 million from $10.0 million for the three months ended March 31, 2022, to $25.6 million for the three months ended March 31, 2023. The increase in cash usage is primarily due to higher property, equipment and software spend related to our strategic initiatives and capitalization of software.

Cash Flows from Financing Activities

Cash flows from financing activities primarily relate to borrowings and repayments of debt. In conjunction with acquisitions, we typically borrow additional debt to fund the consideration, either by increasing our existing facilities or refinancing with new facilities. We utilize our revolver to ensure we have sufficient cash on hand to support the needs of the business at any given point in time. Cash flows from financing activities also include cash received from exercises of stock options and the use of cash to pay tax withholding obligations on shares surrendered upon vesting of equity awards, as well as other financing activities.

Cash used in financing activities increased by $9.2 million from $26.2 million for the three months ended March 31, 2022, to $35.4 million for the three months ended March 31, 2023. This change is primarily due to an $18.0 million increase to debt and revolver repayments in 2023 compared to 2022, partially offset by lower amounts of cash required to pay tax withholding obligations for surrendered shares upon vesting of equity awards in 2023.

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Debt and Financing Arrangements

On June 21, 2022, we entered into a Second A&R Credit Agreement with Bank of America, N.A., as administrative agent, and the lenders named therein, governing the Company’s second amended and restated senior secured credit facilities (the “Senior Secured Credit Facilities”), consisting of the $691.3 million existing senior secured term loan A facility (the “Existing Term A Loan”), a $540.0 million senior secured incremental term loan A facility (the “Incremental Term A Loan,” and together with the Existing Term A Loan, the “Term A Loans”), a $500.0 million senior secured term loan B facility (the “Term B Loan,” and together with the Term A Loans, the “Senior Term Loans”), and a $600.0 million Senior Revolver. The Existing Term A Loan requires quarterly payments. Commencing December 31, 2022, we are also required to repay the Incremental Term A Loan and Term B Loan in quarterly principal installments. The Senior Secured Credit Facilities bear interest at a floating rate, which was 7.31% for the Term A Loans and Senior Revolver and 7.81% for the Term B Loan as of March 31, 2023. See Note 6, Derivative Financial Instruments, to our consolidated financial statements included in this Quarterly Report on Form 10-Q for discussion on our interest rate hedging transactions.

As of March 31, 2023, we had drawn $90.0 million and had $509.1 million of remaining availability on our Senior Revolver.

The proceeds from the new Senior Secured Credit Facilities were or will be used, in addition to cash on hand, (1) to refinance, in full, all existing indebtedness under the Amended and Restated Credit Agreement, dated as of July 1, 2021, by and among R1 RCM Holdco Inc. (f/k/a R1 RCM Inc.), now a wholly-owned subsidiary of the Company, and certain of its subsidiaries, Bank of America, N.A., as administrative agent, and the lenders named therein, and amend and restate all commitments thereunder (the “Refinancing”), (2) to pay certain fees and expenses incurred in connection with the entry into the Second A&R Credit Agreement and the Refinancing, (3) to fund the acquisition of Cloudmed and a holding company reorganization, and to pay the fees, premiums, expenses and other transaction costs incurred in connection therewith, and (4) to finance our working capital needs for general corporate purposes.

The Second A&R Credit Agreement contains a number of financial and non-financial covenants. We are required to maintain minimum consolidated total net leverage and consolidated interest coverage ratios. The Company was in compliance with all of the covenants in the Second A&R Credit Agreement as of March 31, 2023.

See Note 5, Debt, to our consolidated financial statements included in this Quarterly Report on Form 10-Q for additional information.

Item 3. Qualitative and Quantitative Disclosures about Market Risk

Interest Rate Sensitivity. Our results of operations and cash flows are subject to fluctuations due to changes in interest rates due to our debt and banking arrangements, which can result in fluctuations in our interest income and expense. As of March 31, 2023, we have hedged $500.0 million of our $1.8 billion outstanding floating rate debt to a fixed rate of 3.01% plus the applicable spread defined in the Second A&R Credit Agreement. The remaining $1.3 billion outstanding is subject to average variable rates of 7.31% for the Term A Loans and Senior Revolver and 7.81% for the Term B Loan as of March 31, 2023. Assuming the current level of borrowings, a one percentage point increase or decrease in interest rates would increase or decrease our annual interest expense on the $1.3 billion subject to variable rates by approximately $13.0 million.

Our interest income is primarily generated from variable rate interest earned on operating cash accounts.

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Foreign Currency Exchange Risk. Our results of operations and cash flows are subject to fluctuations due to changes in the Indian rupee and Philippine peso because a portion of our operating expenses are incurred by our subsidiaries in India and the Philippines and are denominated in Indian rupees and Philippine pesos, respectively. We do not generate significant revenues outside of the United States. For the three months ended March 31, 2023 and 2022, 9% and 10% of our expenses were denominated in foreign currencies, respectively. As of March 31, 2023 and 2022, we had net assets of $89.3 million and $72.3 million in foreign entities, respectively. Before the impact of our foreign currency hedging activities discussed below, the reduction in earnings from a 10% change in foreign currency spot rates would be $5.1 million and $3.7 million at March 31, 2023 and 2022, respectively.

We have hedge positions that are designated cash flow hedges of certain intercompany charges which have maturities not exceeding December 31, 2023 and are intended to partially offset the impact of foreign currency movements on future costs relating to our global business service centers. For additional information, see Note 6, Derivative Financial Instruments to our consolidated financial statements included in this Quarterly Report on Form 10-Q. These instruments are subject to fluctuations in foreign currency exchange rates and credit risk. Credit risk is managed through careful selection and ongoing evaluation of the financial institutions utilized as counterparties.

For designated cash flow hedges, gains and losses currently recorded in accumulated other comprehensive loss will be reclassified into earnings at the time when certain anticipated intercompany charges are accrued as cost of services. As of March 31, 2023, it was anticipated that approximately $0.8 million of gains, net of tax, currently recorded in accumulated other comprehensive loss will be reclassified into cost of services within the next 9 months.

We use sensitivity analysis to determine the effects that market foreign currency exchange rate fluctuations may have on the fair value of our hedge portfolio. The sensitivity of the hedge portfolio is computed based on the market value of future cash flows as affected by changes in exchange rates. This sensitivity analysis represents the hypothetical changes in value of the hedge position and does not reflect the offsetting gain or loss on the underlying exposure. A 10% change in the levels of foreign currency exchange rates against the U.S. dollar (or other base currency of the hedge if not a U.S. dollar hedge) with all other variables held constant would have resulted in a change in the fair value of our hedge instruments of approximately $8.3 million as of March 31, 2023.

Item 4. Controls and Procedures

Evaluation of Disclosure Controls and Procedures

Disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) of the Exchange Act) are designed to ensure that information required to be disclosed by us in reports filed or submitted under the Exchange Act is recorded, processed, summarized, and reported within the time periods specified in SEC rules and forms and that such information is accumulated and communicated to management including its principal executive officer and principal financial officer to allow timely decisions regarding required disclosures.

In connection with the preparation of this report, our management, under the supervision and with the participation of the Chief Executive Officer and Chief Financial Officer, evaluated the effectiveness of our disclosure controls and procedures as of March 31, 2023. Our Chief Executive Officer and Chief Financial Officer concluded that, as of March 31, 2023, our disclosure controls and procedures were effective.

Changes in Internal Control Over Financial Reporting

There have been no changes in our internal control over financial reporting during the first quarter of 2023 that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting.

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PART II — OTHER INFORMATION

Item 1. Legal Proceedings

Other than the litigation described in Note 11, Commitments and Contingencies, to our consolidated financial statements included in this Quarterly Report on Form 10-Q, we are presently not a party to any material litigation or regulatory proceeding and are not aware of any pending or threatened litigation or regulatory proceeding against us which, individually or in the aggregate, could have a material adverse effect on our business, operating results, financial condition or cash flows.

Item 1A. Risk Factors

There have been no material changes in our risk factors from those disclosed in our 2022 Form 10-K. The risk factors disclosed in Part I, Item 1A of our 2022 Form 10-K, in addition to the other information set forth in this Quarterly Report on Form 10-Q, could materially affect our business, financial condition or future results. Additional risks and uncertainties not currently known to us or that we currently deem to be immaterial also may materially and adversely affect our business, financial condition, and/or operating results.

Item 2. Unregistered Sales of Equity Securities and Use of Proceeds

Unregistered Sale of Equity Securities

None.

Issuer Purchases of Equity Securities

The following table provides information about our repurchases of common stock during the periods indicated:

Period	Total Number of Shares  Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs (1)	Maximum Dollar Value of Shares that May Yet be Purchased Under Publicly Announced Plans or Programs (in millions) (1)
January 1, 2023 through January 31, 2023	—	$	—	—	$	453.2
February 1, 2023 through February 28, 2023	—	—		—	453.2
March 1, 2023 through March 31, 2023	—	—		—	453.2

(1) On October 22, 2021, the Board adopted a new repurchase program and authorized the repurchase of up to $200.0 million of our common stock from time to time in the open market or in privately negotiated transactions (the “2021 Repurchase Program”). On January 9, 2022, the Board increased the authorization under the 2021 Repurchase Program to an aggregate amount of up to $500.0 million. The average price paid per share of common stock repurchased under the 2021 Repurchase Program is the execution price, including commissions paid to brokers. The timing and amount of any shares repurchased under the 2021 Repurchase Program will be determined by our management based on its evaluation of market conditions and other factors. The 2021 Repurchase Program may be suspended or discontinued at any time.

33

Item 5. Other Information

Pursuant to the amended and restated offer letter agreement, dated as of November 7, 2022, between Lee Rivas, our Chief Executive Officer, and the Company, Mr. Rivas was entitled to an initial grant of PBRSUs with a target grant date fair value of $6,120,000 with terms to be determined by the Human Capital Committee of the Board of Directors. On May 2, 2023, the Human Capital Committee approved the grant of such award and determined that the award would consist of a mix of PBRSUs and RSUs. The PBRSUs comprise 75% of the target grant date fair value of the award and will vest and be earned upon our achievement of performance-based vesting conditions (which are materially consistent with previously disclosed conditions) on December 31, 2025. The remaining 25% of the target grant date fair value of the award consists of RSUs, which will vest ratably over a three-year period. The Human Capital Committee also approved Mr. Rivas’ annual equity award, which consists of a mix of PBRSUs and RSUs, with terms materially consistent with previously disclosed terms.

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Item 6. Exhibits

The following are filed or incorporated by reference as a part of this Quarterly Report on Form 10-Q:

(a)

Exhibit Number	Exhibit Description
3.1	Amended and Restated Certificate of Incorporation of the Company (incorporated by reference to Exhibit 3.2 to the Current Report on Form 8-K (File No. 001-41428) filed on June 21, 2022)
3.2	Amended and Restated Bylaws of the Company (incorporated by reference to Exhibit 3.3 to the Current Report on Form 8-K (File No. 001-41428) filed on June 21, 2022)
10.1	Offer Letter Agreement, dated January 5, 2023, by and between the Company and Jennifer Williams (incorporated by reference to Exhibit 10.1 to the Current Report on Form 8-K (File No. 001-41428) filed on January 5, 2023)
10.2	Form of Restricted Stock Unit Award Agreement under the Company’s Third Amended and Restated 2010 Stock Incentive Plan
10.3	Form of Restricted Stock Unit Award Agreement under the Company’s Third Amended and Restated 2010 Stock Incentive Plan (to be used for short-term awards)
31.1	Certification of Chief Executive Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	Certification of Chief Financial Officer pursuant to Rule 13a-14(a) or 15d-14(a) of the Securities Exchange Act of 1934, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1*	Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2*	Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
101.INS	XBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document
101.SCH	XBRL Taxonomy Extension Schema Document
101.CAL	XBRL Taxonomy Extension Calculation Linkbase Document
101.LAB	XBRL Taxonomy Extension Label Linkbase Document
101.DEF	XBRL Taxonomy Extension Definition Linkbase Document
101.PRE	XBRL Taxonomy Extension Presentation Linkbase Document
104	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101)

* Furnished herewith.

35

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	R1 RCM INC.
By:	/s/ Lee Rivas
	Lee Rivas
	Chief Executive Officer
By:	/s/ Jennifer Williams
	Jennifer Williams
	Chief Financial Officer and Treasurer

Date: May 4, 2023

36

EX-10.2

Exhibit 10.2

GRANT OF RESTRICTED STOCK UNITS

PURSUANT TO THE

R1 RCM INC.

THIRD AMENDED AND RESTATED 2010 STOCK INCENTIVE PLAN

* * * * *

Participant: ###PARTICIPANT_NAME###

Grant Date:###GRANT_DATE###

Number of Restricted Stock Units Granted: ###TOTAL_AWARDS###

* * * * *

THIS RESTRICTED STOCK UNIT AWARD AGREEMENT (this “Agreement”), dated as of the Grant Date specified above, is entered into by and between R1 RCM Inc., a corporation organized in the State of Delaware (the “Company”), and the Participant specified above, pursuant to the R1 RCM Inc. Third Amended and Restated 2010 Stock Incentive Plan, as in effect and as amended from time to time (the “Plan”), which is administered by the Board; and

WHEREAS, it has been determined under the Plan that it would be in the best interests of the Company to grant the Restricted Stock Units (“RSUs”) provided herein to the Participant.

NOW, THEREFORE, in consideration of the mutual covenants and promises hereinafter set forth and for other good and valuable consideration, receipt of which is acknowledged, the parties hereto hereby mutually covenant and agree as follows:

1.Grant of Restricted Stock Units. In consideration of services rendered and to be rendered to the Company by the Participant, the Company has granted to the Participant, subject to the terms and conditions set forth in this Agreement and in the Plan, as of the Grant Date specified above, an Award consisting of the number of RSUs specified above. Except as otherwise provided by the Plan, the Participant agrees and understands that nothing contained in this Agreement provides, or is intended to provide, the Participant with any protection against potential future dilution of the Participant’s interest in the Company for any reason, and no adjustments shall be made for dividends in cash or other property, distributions or other rights in respect of the shares of common stock underlying the RSUs, except as otherwise specifically provided for in the Plan or this Agreement.

2.Vesting.

(a)Vesting. Subject to the provisions of Sections 2(b), 2(c) and 2(d) below, the RSUs subject to this Award shall become vested as follows, provided that the Participant has not ceased to perform services to the Company for any reason or no reason, with or without cause, prior to each such vesting date:

###VEST_SCHEDULE_TABLE###

Except as provided in Section 2(d) below, there shall be no proportionate or partial vesting in the periods prior to each vesting date and all vesting shall occur only on the appropriate vesting date, subject to the Participant’s continued performance of services to the Company through each applicable vesting date.

(b)Board Discretion to Accelerate Vesting. In addition to the foregoing, the Board may, in its sole discretion, accelerate vesting of the RSUs at any time and for any reason.

(c)Forfeiture. Except as provided in Section 2(d) below, in the event that the Participant ceases to perform services to the Company for any reason or no reason, with or without cause, all of the RSUs that are unvested as of the time of such cessation shall be forfeited immediately and automatically to the Company, without the payment of any consideration to the Participant, effective as of such cessation. The Participant shall have no further rights with respect to any RSUs that are so forfeited. If the Participant provides services to a subsidiary of the Company, any references in this Agreement to provision of services to the Company shall instead be deemed to refer to service with such subsidiary.

(d)Good Leaver Treatment. If the Participant incurs a Good Leaver Termination (as defined below) on or after the first anniversary of the Grant Date but prior to the final vesting date, provided that the Participant has continuously provided services to the Company between the Grant Date and the effective date of the Good Leaver Termination, then the vesting condition shall be deemed satisfied with respect to the next tranche of RSUs vesting on the immediately following vesting date for a pro-rata amount of the RSUs (the “Pro-Rata Shares”), with such amount to be determined by multiplying the RSUs that would vest on the next vesting date absent termination by a fraction, the numerator of which is the number of days from the last vesting date through and including the effective date of termination, and the denominator of which is 365. The Pro Rata Shares shall vest on the effective date of such termination. For purposes of this Section 2(d), the following terms shall have the meanings set forth opposite such terms below:

i.“Cause,” with respect to the Participant, shall be defined as that term is defined in the Participant’s offer letter, employment agreement, change in control agreement, or other similar agreement; or if there is no such definition, “Cause” means any of: (A) the Participant’s conviction for, or plea of guilty or nolo contendere to, a felony; (B) the Participant engaging in conduct that constitutes gross neglect or willful misconduct and that, in either case, results in material economic or reputational harm to the Company; (C) the Participant’s willful breach of any provision of this Agreement or any applicable non-disclosure, non-competition, non-solicitation or other similar restrictive covenant obligation owed to the Company; (D) the Participant’s repeated refusal, or failure to undertake good faith efforts, to perform his or her material employment duties and responsibilities for the Company; or (E) the Participant engaging in willful misconduct resulting in or intended to result in direct personal gain to him or her at the Company’s expense.

ii.“Disability,” with respect to the Participant, means the Participant has been unable, with or without reasonable accommodation and due to physical or mental incapacity, to substantially and satisfactorily perform his or her duties and responsibilities hereunder for a period of one hundred eighty days out of any consecutive three hundred sixty-five days, as determined by the Committee in its reasonable discretion.

iii. “Good Leaver Termination,” with respect to the Participant, means any termination of the Participant’s services to the Company that is: (A) due to the Participant’s death, (B) due to the Participant’s Disability, or (C) due to a termination of services by the Company without Cause, but only if, in the case of each of the foregoing clauses (A) through (C), circumstances constituting Cause do not exist at the time of termination.

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3.Delivery of Shares.

(a)General. Subject to the provisions of Section 3(b) hereof, within thirty (30) days following the vesting of the RSUs, the Participant shall receive the number of shares of common stock that correspond to the number of RSUs that have become vested on the applicable vesting date, less any shares withheld by the Company pursuant to Section 8 hereof.

(b)Blackout Periods. If the Participant is subject to any Company “blackout” policy or other trading restriction imposed by the Company on the date such distribution would otherwise be made pursuant to Section 3(a) hereof, such distribution shall be instead made on the earlier of (i) the date that the Participant is not subject to any such policy or restriction and (ii) the later of (A) the end of the calendar year in which such distribution would otherwise have been made and (B) a date that is immediately prior to the expiration of two and one-half months following the date such distribution would otherwise have been made hereunder.

4.Restrictions on Transfer. No portion of the RSUs may be sold, assigned, transferred, encumbered, hypothecated or pledged by the Participant, other than to the Company as a result of forfeiture of the RSUs as provided herein, except that the Participant may transfer such unvested RSUs: (a) to or for the benefit of any spouse, children, parents, uncles, aunts, siblings, grandchildren and any other relatives approved by the Compensation Committee (collectively, “Approved Relatives”) or to a trust established solely for the benefit of the Participant and/or Approved Relatives, provided that such RSUs shall remain subject to this Agreement (including without limitation the vesting and forfeiture provisions set forth in Section 2 and the restrictions on transfer set forth in this Section 4) and such permitted transferee shall, as a condition to such transfer, deliver to the Company a written instrument confirming that such transferee shall be bound by all of the terms and conditions of this Agreement; or (b) as part of the sale of all or substantially all of the shares of capital stock of the Company (including pursuant to a merger or consolidation). The Company shall not be required (i) to transfer on its books any of the RSUs which have been transferred in violation of any of the provisions of this Agreement or (ii) to treat as owner of the RSUs or to pay dividends to any transferee to whom such RSUs have been transferred in violation of any of the provisions of this Agreement.

5.Restrictive Legends. The Company may at any time place legends referencing any applicable federal, state or foreign securities law restrictions on all certificates, if any, representing shares of common stock issued pursuant to this Agreement. The Participant shall, at the request of the Company, promptly present to the Company any and all certificates, if any, representing shares of common stock acquired pursuant to this Agreement in the possession of the Participant in order to carry out the provisions of this Section 5.

6.Rights as Stockholder. Except as otherwise provided herein, the Participant shall have no rights as a stockholder with respect to any shares of common stock covered by any RSU unless and until the Participant has become the holder of record of such shares. Cash dividends on the number of shares of common stock issuable hereunder shall be credited to a dividend book entry account on behalf of the Participant with respect to each RSU granted to the Participant, provided that such cash dividends shall not be deemed to be reinvested in shares of common stock and shall be held uninvested and without interest and paid in cash at the same time that the shares of common stock underlying the RSUs are delivered to the Participant in accordance with the provisions hereof. Stock dividends on shares of common stock shall be credited to a dividend book entry account on behalf of the Participant with respect to each RSU granted to the Participant, provided that such stock dividends shall be paid in shares of common stock at the same time that the shares of common stock underlying the RSUs are delivered to the Participant in accordance with the provisions hereof.

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7.Provisions of the Plan. This Agreement is subject to the provisions of the Plan (including, without limitation, any amendments thereto adopted at any time and from time to time unless such amendments are expressly intended not to apply to the RSUs awarded hereunder), a copy of which is furnished to the Participant with this Agreement. Except as provided otherwise herein, any capitalized term not defined in this Agreement shall have the same meaning as is ascribed thereto in the Plan. The Participant hereby acknowledges receipt of a true copy of the Plan and that the Participant has read the Plan carefully and fully understands its content. In the event of any conflict between the terms of this Agreement and the terms of the Plan, the terms of the Plan shall control.

8.Withholding. The Participant acknowledges and agrees that the Company has the right to deduct from payments of any kind otherwise due to the Participant any federal, state, local or other taxes of any kind required by law to be withheld with respect to the vesting of the RSUs. On each date on which the RSUs vest, the Company shall deliver written notice to the Participant of the amount of withholding taxes due with respect to the vesting of the RSUs that vest on such date. The Participant shall satisfy such tax withholding obligations by transferring to the Company, on each date on which RSUs vest under this Agreement, such number of shares that are issuable on such date as have a fair market value (calculated using the last reported sale price of the common stock of the Company on the New York Stock Exchange or the NASDAQ, as applicable (or, if the Company’s common stock is not then traded on the New York Stock Exchange or the NASDAQ, then on any other United States stock exchange upon which the Company’s common stock is then listed, or otherwise as reported through the facilities of the OTC Markets Group, Inc.) on the trading date immediately prior to such vesting date) equal to the amount of the Company’s tax withholding obligation in connection with the vesting of such RSUs (such withholding method, a “Surrender”), unless, prior to any vesting date, the Compensation Committee determines that a Surrender shall not be available to the Participant, in which case, the Participant shall be required to satisfy the Participant’s tax obligations hereunder in a manner permitted by the Plan upon the vesting date.

9.Restrictive Covenants.

(a)General. This award represents a substantial economic benefit to the Participant. The Participant, by virtue of such Participant's role with the Company, has access to, and is involved in the formulation of, certain confidential and secret information of the Company regarding its operations and each Participant could materially harm the business of the Company by competing with the Company or soliciting employees or customers of the Company

(b)Non-Solicitation. During the time in which Participant performs services for the Company and for a period of eighteen (18) months after the Participant ceases to perform services for the Company, regardless of the reason, Participant shall not, directly or indirectly, either alone or in conjunction with any person, firm, association, company or corporation:

ii.Hire, recruit, solicit or otherwise attempt to employ or retain or enter into any business relationship with, any person who is or was an employee of the Company within the twelve (12) month period immediately preceding the cessation of Participant’s service with the Company; or

(i) Solicit the sale of any products or services that are similar to or competitive with products or services offered by, manufactured by, designed by, or distributed by Company, to any person, company or entity which was or is a customer or potential customer of Company for such products or services.

(c)Non-Disclosure.

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(i) Participant will not, without the Company’s prior written permission, directly or indirectly, utilize for any purpose other than for a legitimate business purpose solely on behalf of the Company, or directly or indirectly, disclose to anyone outside of the Company, either during or after Participant’s relationship with the Company ends, the Company’s Confidential Information, as long as such matters remain Confidential Information.

(ii) This Agreement shall not prohibit Participant from (A) revealing evidence of criminal wrongdoing to law enforcement, (B) disclosing or discussing concerns regarding regulatory or legal compliance with any governmental agency or entity to the extent that such disclosures or discussions are protected under any whistleblower protection provisions of Federal or state laws or regulations or (C) divulging the Company’s Confidential Information by order of court or agency of competent jurisdiction. However, Participant shall promptly inform the Company of any such situations and shall take such reasonable steps to prevent disclosure of the Company’s Confidential Information until the Company has been informed of such requested disclosure and the Company has had an opportunity to respond to the court or agency.

(d)Return of Company Property. Participant agrees that, in the event that Participant’s service to the Company is terminated for any reason, Participant shall immediately return all of the Company’s property, including without limitation, (i) tools, pagers, computers, printers, key cards, documents or other tangible property of the Company, and (ii) the Company’s Confidential Information in any media, including paper or electronic form, and Participant shall not retain in Participant’s possession any copies of such information.

(e)Ownership of Software and Inventions. All discoveries, designs, improvements, ideas, inventions, software, whether patentable or copyrightable or not, shall be works-made-for-hire and Company shall be deemed the sole owner throughout the universe of any and all rights of whatsoever nature therein, with the rights to use the same in perpetuity in any manner the Company determines in its sole discretion without any further payment to Participant whatsoever. If, for any reason, any of such results and proceeds which relate to the business shall not legally be a work-for-hire and/or there are any rights which do not accrue to the Company under the preceding sentence, then Participant hereby irrevocably assigns and agrees to quitclaim any and all of Participant’s right, title and interest thereto including, without limitation, any and all copyrights, patents, trade secrets, trademarks and/or other rights of whatsoever nature therein, whether or not now or hereafter known, existing, contemplated, recognized or developed to the Company, and the Company shall have the right to use the same in perpetuity throughout the universe in any manner the Company determines without any further payment to Participant whatsoever. Participant shall, from time to time, as may be reasonably requested by the Company, at the Company’s expense, do any and all things which the Company may deem useful or desirable to establish or document the Company’s exclusive ownership of any and all rights in any such results and proceeds, including, without limitation, the execution of appropriate copyright and/or patent applications or assignments. To the extent Participant has any rights in the results and proceeds of Participant’s services that cannot be assigned in the manner described above, Participant unconditionally and irrevocably waives the enforcement of such rights. Notwithstanding anything to the contrary set forth herein, works developed by the Participant (i) which are developed independently from the work developed for the Company regardless of whether such work was developed before or after the Participant performed services for the Company; or (ii) applications independently developed which are unrelated to the business and which Participant develops during non-business hours using non-business property shall not be deemed work for hire and shall not be the exclusive property of the Company.

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(f)Non-Competition.

(i) During the time in which Participant performs services for the Company and for a period of twelve (12) months after the cessation of Participant’s service to the Company, regardless of the reason, Participant shall not, directly or indirectly, either alone or in conjunction with any person, firm, association, company or corporation, within the Restricted Area, own, manage, operate, or participate in the ownership, management, operation, or control of, or be employed by or provide services to, any entity which is in competition with the Company.

(ii) Notwithstanding anything to the contrary, nothing in this Paragraph (f) prohibits Participant from being a passive owner of not more than one percent (1%) of the outstanding stock of any class of a corporation which is publicly traded, so long as Participant has no active participation in the business of such corporation.

(g)Acknowledgments. Participant acknowledges and agrees that the restrictions contained in this Agreement with respect to time, geographical area and scope of activity are reasonable and do not impose a greater restraint than is necessary to protect the goodwill and other legitimate business interests of the Company and that the Participant has had the opportunity to review the provisions of this Agreement with his legal counsel. In particular, the Participant agrees and acknowledges (i) that the Company is currently engaging in business and actively marketing its services and products throughout the United States, (ii) that Participant’s duties and responsibilities for the Company are co-extensive with the entire scope of the Company's business, (iii) that the Company has spent significant time and effort developing and protecting the confidentiality of its methods of doing business, technology, customer lists, long term customer relationships and trade secrets, and (iv) that such methods, technology, customer lists, customer relationships and trade secrets have significant value.

(h)Enforcement. The Participant agrees that the restrictions contained in this Agreement are necessary for the protection of the business, the Confidential Information, customer relationships and goodwill of the Company and are considered by the Participant to be reasonable for that purpose and that the scope of restricted activities, the geographic scope and the duration of the restrictions set forth in this Agreement are considered by the Participant to be reasonable. The Participant further agrees that any breach of any of the restrictive covenants in this Agreement would cause the Company substantial, continuing and irrevocable harm for which money damages would be inadequate and therefore, in the event of any such breach or any threatened breach, in addition to such other remedies as may be available, the Company shall be entitled to specific performance and injunctive relief. This Agreement shall not in any way limit the remedies in law or equity otherwise available to the Company or its Affiliates. The Participant further agrees that to the extent any provision or portion of the restrictive covenants of this Agreement shall be held, found or deemed to be unreasonable, unlawful or unenforceable by a court of competent jurisdiction, then any such provision or portion thereof shall be deemed to be modified to the extent necessary in order that any such provision or portion thereof shall be legally enforceable to the fullest extent permitted by applicable law. Without limitation to any other remedies available hereunder or at law in the event of any breach of any of the restrictive covenants in this Agreement by Participant, the Participant agrees that (i) any shares of Restricted Stock issued by the Company to the Participant pursuant to this Agreement shall be forfeited for no consideration and (ii) in the event that the Participant sold the shares of Restricted Stock issued to the Participant pursuant to this Agreement, then the Participant shall be required to pay to the Company in cash, within thirty (30) days of a request by the Company for such payment, the price at which the Participant sold the shares.

(i)Severability; Modification. It is expressly agreed by Participant that:

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(i) Modification. If, at the time of enforcement of this Agreement, a court holds that the duration, geographical area or scope of activity restrictions stated herein are unreasonable under circumstances then existing or impose a greater restraint than is necessary to protect the goodwill and other business interests of the Company, Participant agrees that the maximum duration, scope or area reasonable under such circumstances will be substituted for the stated duration, scope or area and that the court will be allowed to revise the restrictions contained herein to cover the maximum duration, scope and area permitted by law, in all cases giving effect to the intent of the parties that the restrictions contained herein be given effect to the broadest extent possible; and

(ii) Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under applicable law, such invalidity, illegality or unenforceability will not affect any other provision, but this Agreement will be reformed, construed and enforced as if such invalid, illegal or unenforceable provision had never been contained herein.

(j)Non-Disparagement. Participant understands and agrees that Participant will not disparage the Company, its officers, directors, administrators, representatives, employees, contractors, consultants or customers and will not engage in any communications or other conduct which might interfere with the relationship between the Company and its current, former, or prospective employees, contractors, consultants, customers, suppliers, regulatory entities, and/or any other persons or entities.

(k)Definitions.

(i) Confidential Information. “Confidential Information” as used in this Agreement shall include the Company’s trade secrets as defined under Illinois law, as well as any other information or material which is not generally known to the public, and which (A) is generated, collected by or utilized in the operations of the Company’s business and relates to the actual or anticipated business, research or development of the Company; or (B) is suggested by or results from any task assigned to Participant by the Company or work performed by Participant for or on behalf of the Company. Confidential Information shall not be considered generally known to the public if Participant or others improperly reveal such information to the public without the Company’s express written consent and/or in violation of an obligation of confidentiality to the Company. Examples of Confidential Information include, but are not limited to, all customer, client, supplier and vendor lists, budget information, contents of any database, contracts, product designs, technical know-how, engineering data, pricing and cost information, research and development work, software, business plans, proprietary data, projections, market research, perceptual studies, strategic plans, marketing information, financial information (including financial statements), sales information, training manuals, employee lists and compensation of employees, and all other competitively sensitive information with respect to the Company, whether or not it is in tangible form, and including without limitation any of the foregoing contained or described on paper or in computer software or other storage devices, as the same may exist from time to time.

(ii) Restricted Area. For purposes of this Agreement, the term “Restricted Area” shall mean the United States of America.

10.Miscellaneous.

(a)Compliance with Laws. The grant of RSUs and the issuance of shares of common stock hereunder shall be subject to, and shall comply with, any applicable requirements

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of any foreign and U.S. federal and state securities laws, rules and regulations (including, without limitation, the provisions of the Securities Act, the Exchange Act and in each case any respective rules and regulations promulgated thereunder) and any other law, rule regulation or exchange requirement applicable thereto. The Company shall not be obligated to issue the RSUs or any shares of common stock pursuant to this Agreement if any such issuance would violate any such requirements. As a condition to the settlement of the RSUs, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate to evidence compliance with any applicable law or regulation.

(b)Authority of Compensation Committee. In making any decisions or taking any actions with respect to the matters covered by this Agreement, the Compensation Committee shall have all of the authority and discretion, and shall be subject to all of the protections, provided for in the Plan. All decisions and actions by the Compensation Committee with respect to this Agreement shall be made in the Compensation Committee’s discretion and shall be final and binding on the Participant.

(c)No Right to Continued Service. The Participant acknowledges and agrees that this Agreement does not constitute an express or implied promise of continued service relationship with the Participant or confer upon the Participant any rights with respect to a continued service relationship with the Company.

(d)Acquired Rights. The Participant acknowledges and agrees that: (a) the Company may terminate or amend the Plan at any time; (b) the award of RSUs made under this Agreement is completely independent of any other award or grant and is made at the sole discretion of the Company; (c) no past grants or awards (including, without limitation, the RSUs awarded hereunder) give the Participant any right to any grants or awards in the future whatsoever; and (d) any benefits granted under this Agreement are not part of the Participant’s ordinary salary, and shall not be considered as part of such salary in the event of severance, redundancy or resignation.

(e)Governing Law. This Agreement shall be construed, interpreted and enforced in accordance with the internal laws of the State of Delaware without regard to any applicable conflicts of laws provisions.

(f)Exclusive Jurisdiction/Venue. All disputes that arise from or relate to this Agreement shall be decided exclusively by binding arbitration in Cook County, Illinois under the Commercial Arbitration Rules of the American Arbitration Association. The parties agree that the arbitrator’s award shall be final, and may be filed with and enforced as a final judgment by any court of competent jurisdiction. Notwithstanding the foregoing, any disputes related to the enforcement of the restrictive covenants contained in Section 9 of this Agreement shall be subject to and determined under Delaware law and adjudicated in Illinois courts.

(g)Notices. Any notice hereunder by the Participant shall be given to the Company in writing and such notice shall be deemed duly given only upon receipt thereof by the General Counselof the Company. Any notice hereunder by the Company shall be given to the Participant in writing and such notice shall be deemed duly given only upon receipt thereof at such address as the Participant may have on file with the Company.

(h)Headings. The titles and headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of this Agreement.

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(i)Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same instrument.

(j)Severability. The invalidity or unenforceability of any provisions of this Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Agreement in such jurisdiction or the validity, legality or enforceability of any provision of this Agreement in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law.

(k)Binding Agreement; Assignment. This Agreement shall inure to the benefit of, be binding upon, and be enforceable by the Company and its successors and assigns. The Participant shall not assign any part of this Agreement without the prior express written consent of the Company.

(l)Entire Agreement; Amendment. This Agreement, together with the Plan, contains the entire agreement between the parties hereto with respect to the subject matter contained herein, and supersedes all prior agreements or prior understandings, whether written or oral, between the parties relating to such subject matter. The Committee shall have the right, in its sole discretion, to modify or amend this Agreement from time to time in accordance with and as provided in the Plan. This Agreement may also be modified or amended by a writing signed by both the Company and the Participant. The Company shall give written notice to the Participant of any such modification or amendment of this Agreement as soon as practicable after the adoption thereof.

(m)Further Assurances. Each party hereto shall do and perform (or shall cause to be done and performed) all such further acts and shall execute and deliver all such other agreements, certificates, instruments and documents as either party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the Plan and the consummation of the transactions contemplated thereunder.

[Remainder of Page Intentionally Left Blank]

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IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

R1 RCM INC.

By:

Name:

Title:

I hereby acknowledge that I have read this Agreement, have received and read the Plan, and understand and agree to comply with the terms and conditions of this Agreement and the Plan.

PARTICIPANT ACCEPTANCE

__________________________________
                        
###PARTICIPANT_NAME###

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EX-10.3

Exhibit 10.3

GRANT OF RESTRICTED STOCK UNITS
PURSUANT TO THE
R1 RCM INC.
THIRD AMENDED AND RESTATED 2010 STOCK INCENTIVE PLAN

* * * * *

Participant: ###PARTICIPANT_NAME###

Grant Date: ###GRANT_DATE###

Number of Restricted Stock Units Granted: ###TOTAL_AWARDS###

* * * * *

THIS RESTRICTED STOCK UNIT AWARD AGREEMENT (this “Agreement”), dated as of the Grant Date specified above, is entered into by and between R1 RCM Inc., a corporation organized in the State of Delaware (the “Company”), and the Participant specified above, pursuant to the R1 RCM Inc. Third Amended and Restated 2010 Stock Incentive Plan, as in effect and as amended from time to time (the “Plan”), which is administered by the Board; and

WHEREAS, it has been determined under the Plan that it would be in the best interests of the Company to grant the Restricted Stock Units (“RSUs”) provided herein to the Participant.

NOW, THEREFORE, in consideration of the mutual covenants and promises hereinafter set forth and for other good and valuable consideration, receipt of which is acknowledged, the parties hereto hereby mutually covenant and agree as follows:

1.Grant of Restricted Stock Units. In consideration of services rendered and to be rendered to the Company by the Participant, the Company has granted to the Participant, subject to the terms and conditions set forth in this Agreement and in the Plan, as of the Grant Date specified above, an Award consisting of the number of RSUs specified above. Except as otherwise provided by the Plan, the Participant agrees and understands that nothing contained in this Agreement provides, or is intended to provide, the Participant with any protection against potential future dilution of the Participant’s interest in the Company for any reason, and no adjustments shall be made for dividends in cash or other property, distributions or other rights in respect of the shares of common stock underlying the RSUs, except as otherwise specifically provided for in the Plan or this Agreement.

2.Vesting.

(a)Vesting. Subject to the provisions of Sections 2(b), 2(c) and 2(d) below, the RSUs subject to this Award shall become vested as follows, provided that the Participant has not ceased to perform services to the Company for any reason or no reason, with or without cause, prior to each such Vesting Date:

###VEST_SCHEDULE_TABLE###

Except as provided in Section 2(d) below, there shall be no proportionate or partial vesting in the periods prior to each Vesting Date and all vesting shall occur only on the appropriate Vesting Date, subject to the Participant’s continued performance of services to the Company through each applicable Vesting Date.

(b)Board Discretion to Accelerate Vesting. In addition to the foregoing, the Board may, in its sole discretion, accelerate vesting of the RSUs at any time and for any reason.

(c)Forfeiture. Except as provided in Section 2(d) below, in the event that the Participant ceases to perform services to the Company for any reason or no reason, with or without cause, all of the RSUs that are unvested as of the time of such cessation shall be forfeited immediately and automatically to the Company, without the payment of any consideration to the Participant, effective as of such cessation. The Participant shall have no further rights with respect to any RSUs that are so forfeited. If the Participant provides services to a subsidiary of the Company, any references in this Agreement to provision of services to the Company shall instead be deemed to refer to service with such subsidiary.

(d)Good Leaver Treatment. If the Participant incurs a Good Leaver Termination (as defined below) prior to the final Vesting Date, provided that the Participant has continuously provided services to the Company between the Grant Date and the effective date of the Good Leaver Termination, then the vesting condition shall be deemed satisfied with respect to 100% of the RSUs. For purposes of this Section 2(d), the following terms shall have the meanings set forth opposite such terms below:

i.“Cause,” with respect to the Participant, shall be defined as that term is defined in the Participant’s offer letter, employment agreement, change in control agreement, or other similar agreement; or if there is no such definition, “Cause” means any of: (A) the Participant’s conviction for, or plea of guilty or nolo contendere to, a felony; (B) the Participant engaging in conduct that constitutes gross neglect or willful misconduct and that, in either case, results in material economic or reputational harm to the Company; (C) the Participant’s willful breach of any provision of this Agreement or any applicable non-disclosure, non-competition, non- solicitation or other similar restrictive covenant obligation owed to the Company; (D) the Participant’s repeated refusal, or failure to undertake good faith efforts, to perform his or her material employment duties and responsibilities for the Company; or (E) the Participant engaging in willful misconduct resulting in or intended to result in direct personal gain to him or her at the Company’s expense.

ii.“Disability,” with respect to the Participant, means the Participant has been unable, with or without reasonable accommodation and due to physical or mental incapacity, to substantially and satisfactorily perform his or her duties and responsibilities hereunder for a period of one hundred eighty days out of any consecutive three hundred sixty-five days, as determined by the Human Capital Committee in its reasonable discretion.

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iii.“Good Leaver Termination,” with respect to the Participant, means any termination of the Participant’s services to the Company that is: (A) due to the Participant’s death, (B) due to the Participant’s Disability, or (C) due to a termination of services by the Company (x) because the Company determines in its sole discretion to eliminate or otherwise restructure the Participant’s position, unless the Participant is offered another position within the Company, or (y) due to the sale of a facility, division, or subsidiary, unless the Participant is offered another position by the purchaser, but only if, in the case of each of the foregoing clauses (A) through (C), circumstances constituting Cause do not exist at the time of termination.

3.Delivery of Shares.

(a)General. Subject to the provisions of Section 3(b) hereof, within thirty (30) days following each Vesting Date, the Participant shall receive the number of shares of common stock that correspond to the number of RSUs that have become vested on the applicable Vesting Date, less any shares withheld by the Company pursuant to Section 8 hereof.

(b)Blackout Periods. If the Participant is subject to any Company “blackout” policy or other trading restriction imposed by the Company on the date such distribution would otherwise be made pursuant to Section 3(a) hereof, such distribution shall be instead made on the earlier of (i) the date that the Participant is not subject to any such policy or restriction and (ii) the later of (A) the end of the calendar year in which such distribution would otherwise have been made and (B) a date that is immediately prior to the expiration of two and one-half months following the date such distribution would otherwise have been made hereunder.

4.Restrictions on Transfer. No portion of the RSUs may be sold, assigned, transferred, encumbered, hypothecated or pledged by the Participant, other than to the Company as a result of forfeiture of the RSUs as provided herein, except that the Participant may transfer such unvested RSUs: (a) to or for the benefit of any spouse, children, parents, uncles, aunts, siblings, grandchildren and any other relatives approved by the Human Capital Committee (collectively, “Approved Relatives”) or to a trust established solely for the benefit of the Participant and/or Approved Relatives, provided that such RSUs shall remain subject to this Agreement (including without limitation the vesting and forfeiture provisions set forth in Section 2 and the restrictions on transfer set forth in this Section 4) and such permitted transferee shall, as a condition to such transfer, deliver to the Company a written instrument confirming that such transferee shall be bound by all of the terms and conditions of this Agreement; or (b) as part of the sale of all or substantially all of the shares of capital stock of the Company (including pursuant to a merger or consolidation). The Company shall not be required (i) to transfer on its books any of the RSUs which have been transferred in violation of any of the provisions of this Agreement or (ii) to treat as owner of the RSUs or to pay dividends to any transferee to whom such RSUs have been transferred in violation of any of the provisions of this Agreement.

5.Restrictive Legends. The Company may at any time place legends referencing any applicable federal, state or foreign securities law restrictions on all certificates, if any, representing shares of common stock issued pursuant to this Agreement. The Participant shall, at the request of the Company, promptly present to the Company any and all certificates, if any, representing shares of common stock acquired pursuant to this Agreement in the possession of the Participant in order to carry out the provisions of this Section 5.

3

6.Rights as Stockholder. Except as otherwise provided herein, the Participant shall have no rights as a stockholder with respect to any shares of common stock covered by any RSU unless and until the Participant has become the holder of record of such shares. Cash dividends on the number of shares of common stock issuable hereunder shall be credited to a dividend book entry account on behalf of the Participant with respect to each RSU granted to the Participant, provided that such cash dividends shall not be deemed to be reinvested in shares of common stock and shall be held uninvested and without interest and paid in cash at the same time that the shares of common stock underlying the RSUs are delivered to the Participant in accordance with the provisions hereof. Stock dividends on shares of common stock shall be credited to a dividend book entry account on behalf of the Participant with respect to each RSU granted to the Participant, provided that such stock dividends shall be paid in shares of common stock at the same time that the shares of common stock underlying the RSUs are delivered to the Participant in accordance with the provisions hereof.

7.Provisions of the Plan. This Agreement is subject to the provisions of the Plan (including, without limitation, any amendments thereto adopted at any time and from time to time unless such amendments are expressly intended not to apply to the RSUs awarded hereunder), a copy of which is furnished to the Participant with this Agreement. Except as provided otherwise herein, any capitalized term not defined in this Agreement shall have the same meaning as is ascribed thereto in the Plan. The Participant hereby acknowledges receipt of a true copy of the Plan and that the Participant has read the Plan carefully and fully understands its content. In the event of any conflict between the terms of this Agreement and the terms of the Plan, the terms of the Plan shall control.

8.Withholding. The Participant acknowledges and agrees that the Company has the right to deduct from payments of any kind otherwise due to the Participant any federal, state, local or other taxes of any kind required by law to be withheld with respect to the vesting of the RSUs. On each date on which the RSUs vest, the Company shall deliver written notice to the Participant of the amount of withholding taxes due with respect to the vesting of the RSUs that vest on such date. The Participant shall satisfy such tax withholding obligations by transferring to the Company, on each date on which RSUs vest under this Agreement, such number of shares that are issuable on such date as have a fair market value (calculated using the last reported sale price of the common stock of the Company on the New York Stock Exchange or the NASDAQ, as applicable (or, if the Company’s common stock is not then traded on the New York Stock Exchange or the NASDAQ, then on any other United States stock exchange upon which the Company’s common stock is then listed, or otherwise as reported through the facilities of the OTC Markets Group, Inc.) on the trading date immediately prior to such Vesting Date) equal to the amount of the Company’s tax withholding obligation in connection with the vesting of such RSUs (such withholding method, a “Surrender”), unless, prior to any Vesting Date, the Human Capital Committee determines that a Surrender shall not be available to the Participant, in which case, the Participant shall be required to satisfy the Participant’s tax obligations hereunder in a manner permitted by the Plan upon the Vesting Date.

9.Restrictive Covenants.

(a)General. This award represents a substantial economic benefit to the Participant. The Participant, by virtue of such Participant’s role with the Company, has access to, and is involved in the formulation of, certain confidential and secret information of the Company regarding its operations and each Participant could materially harm the business of the Company by competing with the Company or soliciting employees or customers of the Company

4

(b)Non-Solicitation. During the time in which Participant performs services for the Company and for a period of eighteen (18) months after the Participant ceases to perform services for the Company, regardless of the reason, Participant shall not, directly or indirectly, either alone or in conjunction with any person, firm, association, company or corporation:

(i)Hire, recruit, solicit or otherwise attempt to employ or retain or enter into any business relationship with, any person who is or was an employee of the Company within the twelve (12) month period immediately preceding the cessation of Participant’s service with the Company; or

(ii)Solicit the sale of any products or services that are similar to or competitive with products or services offered by, manufactured by, designed by, or distributed by Company, to any person, company or entity which was or is a customer or potential customer of Company for such products or services.

(c)Non-Disclosure.

(i)Participant will not, without the Company’s prior written permission, directly or indirectly, utilize for any purpose other than for a legitimate business purpose solely on behalf of the Company, or directly or indirectly, disclose to anyone outside of the Company, either during or after Participant’s relationship with the Company ends, the Company’s Confidential Information, as long as such matters remain Confidential Information.

(ii)This Agreement shall not prohibit Participant from (A) revealing evidence of criminal wrongdoing to law enforcement, (B) disclosing or discussing concerns regarding regulatory or legal compliance with any governmental agency or entity to the extent that such disclosures or discussions are protected under any whistleblower protection provisions of Federal or state laws or regulations or (C) divulging the Company’s Confidential Information by order of court or agency of competent jurisdiction. However, Participant shall promptly inform the Company of any such situations and shall take such reasonable steps to prevent disclosure of the Company’s Confidential Information until the Company has been informed of such requested disclosure and the Company has had an opportunity to respond to the court or agency.

(d)Return of Company Property. Participant agrees that, in the event that Participant’s service to the Company is terminated for any reason, Participant shall immediately return all of the Company’s property, including without limitation, (i) tools, pagers, computers, printers, key cards, documents or other tangible property of the Company, and (ii) the Company’s Confidential Information in any media, including paper or electronic form, and Participant shall not retain in Participant’s possession any copies of such information.

5

(e)Ownership of Software and Inventions. All discoveries, designs, improvements, ideas, inventions, software, whether patentable or copyrightable or not, shall be works-made-for-hire and Company shall be deemed the sole owner throughout the universe of any and all rights of whatsoever nature therein, with the rights to use the same in perpetuity in any manner the Company determines in its sole discretion without any further payment to Participant whatsoever. If, for any reason, any of such results and proceeds which relate to the business shall not legally be a work-for-hire and/or there are any rights which do not accrue to the Company under the preceding sentence, then Participant hereby irrevocably assigns and agrees to quitclaim any and all of Participant’s right, title and interest thereto including, without limitation, any and all copyrights, patents, trade secrets, trademarks and/or other rights of whatsoever nature therein, whether or not now or hereafter known, existing, contemplated, recognized or developed to the Company, and the Company shall have the right to use the same in perpetuity throughout the universe in any manner the Company determines without any further payment to Participant whatsoever. Participant shall, from time to time, as may be reasonably requested by the Company, at the Company’s expense, do any and all things which the Company may deem useful or desirable to establish or document the Company’s exclusive ownership of any and all rights in any such results and proceeds, including, without limitation, the execution of appropriate copyright and/or patent applications or assignments. To the extent Participant has any rights in the results and proceeds of Participant’s services that cannot be assigned in the manner described above, Participant unconditionally and irrevocably waives the enforcement of such rights. Notwithstanding anything to the contrary set forth herein, works developed by the Participant (i) which are developed independently from the work developed for the Company regardless of whether such work was developed before or after the Participant performed services for the Company; or (ii) applications independently developed which are unrelated to the business and which Participant develops during non-business hours using non- business property shall not be deemed work for hire and shall not be the exclusive property of the Company.

(f)Non-Competition.

(i)During the time in which Participant performs services for the Company and for a period of twelve (12) months after the cessation of Participant’s service to the Company, regardless of the reason, Participant shall not, directly or indirectly, either alone or in conjunction with any person, firm, association, company or corporation, within the Restricted Area, own, manage, operate, or participate in the ownership, management, operation, or control of, or be employed by or provide services to, any entity which is in competition with the Company.

(ii)Notwithstanding anything to the contrary, nothing in this Paragraph (f) prohibits Participant from being a passive owner of not more than one percent (1%) of the outstanding stock of any class of a corporation which is publicly traded, so long as Participant has no active participation in the business of such corporation.

6

(g)Acknowledgments. Participant acknowledges and agrees that the restrictions contained in this Agreement with respect to time, geographical area and scope of activity are reasonable and do not impose a greater restraint than is necessary to protect the goodwill and other legitimate business interests of the Company and that the Participant has had the opportunity to review the provisions of this Agreement with his legal counsel. In particular, the Participant agrees and acknowledges (i) that the Company is currently engaging in business and actively marketing its services and products throughout the United States, (ii) that Participant’s duties and responsibilities for the Company are co-extensive with the entire scope of the Company’s business, (iii) that the Company has spent significant time and effort developing and protecting the confidentiality of its methods of doing business, technology, customer lists, long term customer relationships and trade secrets, and (iv) that such methods, technology, customer lists, customer relationships and trade secrets have significant value.

(h)Enforcement. The Participant agrees that the restrictions contained in this Agreement are necessary for the protection of the business, the Confidential Information, customer relationships and goodwill of the Company and are considered by the Participant to be reasonable for that purpose and that the scope of restricted activities, the geographic scope and the duration of the restrictions set forth in this Agreement are considered by the Participant to be reasonable. The Participant further agrees that any breach of any of the restrictive covenants in this Agreement would cause the Company substantial, continuing and irrevocable harm for which money damages would be inadequate and therefore, in the event of any such breach or any threatened breach, in addition to such other remedies as may be available, the Company shall be entitled to specific performance and injunctive relief. This Agreement shall not in any way limit the remedies in law or equity otherwise available to the Company or its Affiliates. The Participant further agrees that to the extent any provision or portion of the restrictive covenants of this Agreement shall be held, found or deemed to be unreasonable, unlawful or unenforceable by a court of competent jurisdiction, then any such provision or portion thereof shall be deemed to be modified to the extent necessary in order that any such provision or portion thereof shall be legally enforceable to the fullest extent permitted by applicable law. Without limitation to any other remedies available hereunder or at law in the event of any breach of any of the restrictive covenants in this Agreement by Participant, the Participant agrees that (i) any shares of Restricted Stock issued by the Company to the Participant pursuant to this Agreement shall be forfeited for no consideration and (ii) in the event that the Participant sold the shares of Restricted Stock issued to the Participant pursuant to this Agreement, then the Participant shall be required to pay to the Company in cash, within thirty (30) days of a request by the Company for such payment, the price at which the Participant sold the shares.

(i)Severability; Modification. It is expressly agreed by Participant that:

(i)Modification. If, at the time of enforcement of this Agreement, a court holds that the duration, geographical area or scope of activity restrictions stated herein are unreasonable under circumstances then existing or impose a greater restraint than is necessary to protect the goodwill and other business interests of the Company, Participant agrees that the maximum duration, scope or area reasonable under such circumstances will be substituted for the stated duration, scope or area and that the court will be allowed to revise the restrictions contained herein to cover the maximum duration, scope and area permitted by law, in all cases giving effect to the intent of the parties that the restrictions contained herein be given effect to the broadest extent possible; and

7

(ii)Severability. Whenever possible, each provision of this Agreement will be interpreted in such manner as to be effective and valid under applicable law, but if any provision of this Agreement is held to be invalid, illegal or unenforceable in any respect under applicable law, such invalidity, illegality or unenforceability will not affect any other provision, but this Agreement will be reformed, construed and enforced as if such invalid, illegal or unenforceable provision had never been contained herein.

(j)Non-Disparagement. Participant understands and agrees that Participant will not disparage the Company, its officers, directors, administrators, representatives, employees, contractors, consultants or customers and will not engage in any communications or other conduct which might interfere with the relationship between the Company and its current, former, or prospective employees, contractors, consultants, customers, suppliers, regulatory entities, and/or any other persons or entities.

(k)Definitions.

(i)Confidential Information. “Confidential Information” as used in this Agreement shall include the Company’s trade secrets as defined under Illinois law, as well as any other information or material which is not generally known to the public, and which (A) is generated, collected by or utilized in the operations of the Company’s business and relates to the actual or anticipated business, research or development of the Company; or (B) is suggested by or results from any task assigned to Participant by the Company or work performed by Participant for or on behalf of the Company. Confidential Information shall not be considered generally known to the public if Participant or others improperly reveal such information to the public without the Company’s express written consent and/or in violation of an obligation of confidentiality to the Company. Examples of Confidential Information include, but are not limited to, all customer, client, supplier and vendor lists, budget information, contents of any database, contracts, product designs, technical know-how, engineering data, pricing and cost information, research and development work, software, business plans, proprietary data, projections, market research, perceptual studies, strategic plans, marketing information, financial information (including financial statements), sales information, training manuals, employee lists and compensation of employees, and all other competitively sensitive information with respect to the Company, whether or not it is in tangible form, and including without limitation any of the foregoing contained or described on paper or in computer software or other storage devices, as the same may exist from time to time.

(ii)Restricted Area. For purposes of this Agreement, the term “Restricted Area” shall mean the United States of America.

10.Miscellaneous.

(a)Compliance with Laws. The grant of RSUs and the issuance of shares of common stock hereunder shall be subject to, and shall comply with, any applicable requirements of any foreign and U.S. federal and state securities laws, rules and regulations (including, without limitation, the provisions of the Securities Act, the Exchange Act and in each case any respective rules and regulations promulgated thereunder) and any other law, rule regulation or exchange requirement applicable thereto. The Company shall not be obligated to issue the RSUs or any shares of common stock pursuant to this Agreement if any such issuance would violate any such requirements. As a condition to the settlement of the RSUs, the Company may require the Participant to satisfy any qualifications that may be necessary or appropriate to evidence compliance with any applicable law or regulation.

8

(b)Authority of Human Capital Committee. In making any decisions or taking any actions with respect to the matters covered by this Agreement, the Human Capital Committee shall have all of the authority and discretion, and shall be subject to all of the protections, provided for in the Plan. All decisions and actions by the Human Capital Committee with respect to this Agreement shall be made in the Human Capital Committee’s discretion and shall be final and binding on the Participant.

(c)No Right to Continued Service. The Participant acknowledges and agrees that this Agreement does not constitute an express or implied promise of continued service relationship with the Participant or confer upon the Participant any rights with respect to a continued service relationship with the Company.

(d)Acquired Rights. The Participant acknowledges and agrees that: (a) the Company may terminate or amend the Plan at any time; (b) the award of RSUs made under this Agreement is completely independent of any other award or grant and is made at the sole discretion of the Company; (c) no past grants or awards (including, without limitation, the RSUs awarded hereunder) give the Participant any right to any grants or awards in the future whatsoever; and (d) any benefits granted under this Agreement are not part of the Participant’s ordinary salary, and shall not be considered as part of such salary in the event of severance, redundancy or resignation.

(e)Governing Law. This Agreement shall be construed, interpreted and enforced in accordance with the internal laws of the State of Delaware without regard to any applicable conflicts of laws provisions.

(f)Exclusive Jurisdiction/Venue. All disputes that arise from or relate to this Agreement shall be decided exclusively by binding arbitration in Cook County, Illinois under the Commercial Arbitration Rules of the American Arbitration Association. The parties agree that the arbitrator’s award shall be final, and may be filed with and enforced as a final judgment by any court of competent jurisdiction. Notwithstanding the foregoing, any disputes related to the enforcement of the restrictive covenants contained in Section 9 of this Agreement shall be subject to and determined under Delaware law and adjudicated in Illinois courts.

(g)Notices. Any notice hereunder by the Participant shall be given to the Company in writing and such notice shall be deemed duly given only upon receipt thereof by the General Counsel of the Company. Any notice hereunder by the Company shall be given to the Participant in writing and such notice shall be deemed duly given only upon receipt thereof at such address as the Participant may have on file with the Company.

(h)Headings. The titles and headings of the various sections of this Agreement have been inserted for convenience of reference only and shall not be deemed to be a part of this Agreement.

(i)Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be deemed to be an original, but all of which shall constitute one and the same instrument.

(j)Severability. The invalidity or unenforceability of any provisions of this Agreement in any jurisdiction shall not affect the validity, legality or enforceability of the remainder of this Agreement in such jurisdiction or the validity, legality or enforceability of any provision of this Agreement in any other jurisdiction, it being intended that all rights and obligations of the parties hereunder shall be enforceable to the fullest extent permitted by law.

9

(k)Binding Agreement; Assignment. This Agreement shall inure to the benefit of, be binding upon, and be enforceable by the Company and its successors and assigns. The Participant shall not assign any part of this Agreement without the prior express written consent of the Company.

(l)Entire Agreement; Amendment. This Agreement, together with the Plan, contains the entire agreement between the parties hereto with respect to the subject matter contained herein, and supersedes all prior agreements or prior understandings, whether written or oral, between the parties relating to such subject matter. The Human Capital Committee shall have the right, in its sole discretion, to modify or amend this Agreement from time to time in accordance with and as provided in the Plan. This Agreement may also be modified or amended by a writing signed by both the Company and the Participant. The Company shall give written notice to the Participant of any such modification or amendment of this Agreement as soon as practicable after the adoption thereof.

(m)Further Assurances. Each party hereto shall do and perform (or shall cause to be done and performed) all such further acts and shall execute and deliver all such other agreements, certificates, instruments and documents as either party hereto reasonably may request in order to carry out the intent and accomplish the purposes of this Agreement and the Plan and the consummation of the transactions contemplated thereunder.

[Remainder of Page Intentionally Left Blank]

10

IN WITNESS WHEREOF, the parties hereto have executed this Agreement as of the date first written above.

R1 RCM INC.

By:

Name:

Title:

I hereby acknowledge that I have read this Agreement, have received and read the Plan, and understand and agree to comply with the terms and conditions of this Agreement and the Plan.

PARTICIPANT ACCEPTANCE

###PARTICIPANT_NAME###

[Name of Participant]

EX-31.1

Exhibit 31.1

Certification of Chief Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a), as adopted

pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Lee Rivas, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of R1 RCM Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 4, 2023

/s/ Lee Rivas     

Lee Rivas

Chief Executive Officer

(Principal Executive Officer)

EX-31.2

Exhibit 31.2

Certification of Chief Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a), as adopted

pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

I, Jennifer Williams, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of R1 RCM Inc.;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant's other certifying officer and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and

5. The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.

Date: May 4, 2023

/s/ Jennifer Williams

Jennifer Williams

Chief Financial Officer and Treasurer

(Principal Financial Officer)

EX-32.1

Exhibit 32.1

Certification of Chief Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted

pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of R1 RCM Inc. (the “Company”) for the period ended March 31, 2023 as filed with the Securities and Exchange Commission on or about the date hereof (the “Report”), the undersigned, Lee Rivas, Chief Executive Officer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, that:

1.the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 4, 2023

/s/ Lee Rivas     

Lee Rivas

Chief Executive Officer

(Principal Executive Officer)

EX-32.2

Exhibit 32.2

Certification of Chief Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted

pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

In connection with the Quarterly Report on Form 10-Q of R1 RCM Inc. (the “Company”) for the period ended March 31, 2023 as filed with the Securities and Exchange Commission on or about the date hereof (the “Report”), the undersigned, Jennifer Williams, Chief Financial Officer and Treasurer of the Company, hereby certifies, pursuant to 18 U.S.C. Section 1350, that:

1.the Report fully complies with the requirements of Section 13(a) or 15(d) of the Securities Exchange Act of 1934; and

2.the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Date: May 4, 2023

/s/ Jennifer Williams       

Jennifer Williams

Chief Financial Officer and Treasurer

(Principal Financial Officer)

XML

Cover Page - shares	3 Months Ended
	Mar. 31, 2023	Apr. 28, 2023
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Mar. 31, 2023
Document Transition Report	false
Entity File Number	001-41428
Entity Registrant Name	R1 RCM Inc. /DE
Entity Incorporation, State or Country Code	DE
Entity Tax Identification Number	87-4340782
Entity Address, Address Line One	433 W. Ascension Way
Entity Address, Address Line Two	Suite 200
Entity Address, City or Town	Murray
Entity Address, State or Province	UT
Entity Address, Postal Zip Code	84123
City Area Code	312
Local Phone Number	324-7820
Title of 12(b) Security	Common stock, par value $0.01 per share
Trading Symbol	RCM
Security Exchange Name	NASDAQ
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filter Category	Large Accelerated Filer
Smaller Reporting Company	false
Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding (in shares)		418,202,601
Amendment Flag	false
Document Fiscal Year Focus	2023
Document Fiscal Period Focus	Q1
Entity Central Index Key	0001910851
Current Fiscal Year End Date	--12-31

XML

Consolidated Balance Sheets - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Current assets:
Cash and cash equivalents	$ 104.2	$ 110.1
Accounts receivable, net of $16.0 million and $15.1 million allowance as of March 31, 2023 and December 31, 2022, respectively	229.4	235.2
Accounts receivable, net of $0.1 million and $0.1 million allowance - related party as of March 31, 2023 and December 31, 2022, respectively	24.9	25.0
Current portion of contract assets, net	81.8	83.9
Prepaid expenses and other current assets	105.2	110.3
Total current assets	545.5	564.5
Property, equipment and software, net	173.8	164.8
Operating lease right-of-use assets	81.0	80.5
Non-current portion of contract assets, net	37.3	32.0
Non-current portion of deferred contract costs	28.2	26.7
Intangible assets, net	1,464.4	1,514.5
Goodwill	2,648.5	2,658.2
Deferred tax assets	10.5	10.4
Other assets	83.4	88.2
Total assets	5,072.6	5,139.8
Current liabilities:
Accounts payable	24.6	33.4
Current portion of customer liabilities	45.6	57.5
Current portion of customer liabilities - related party	9.4	7.4
Accrued compensation and benefits	84.7	109.0
Current portion of operating lease liabilities	18.8	18.0
Current portion of long-term debt	58.3	53.9
Accrued expenses and other current liabilities	76.7	70.6
Total current liabilities	318.1	349.8
Non-current portion of customer liabilities	5.2	5.0
Non-current portion of customer liabilities - related party	13.2	13.7
Non-current portion of operating lease liabilities	92.7	94.4
Long-term debt	1,707.0	1,732.6
Deferred tax liabilities	192.1	200.7
Other non-current liabilities	24.9	23.1
Total liabilities	2,353.2	2,419.3
Stockholders’ equity:
Common stock, $0.01 par value, 750,000,000 shares authorized, 442,439,169 shares issued and 418,176,363 shares outstanding at March 31, 2023; 750,000,000 shares authorized, 439,950,125 shares issued and 416,597,885 shares outstanding at December 31, 2022	4.4	4.4
Additional paid-in capital	3,136.2	3,123.2
Accumulated deficit	(121.6)	(121.9)
Accumulated other comprehensive loss	(4.6)	(3.4)
Treasury Stock, Common, Value	(295.0)	(281.8)
Total stockholders’ equity	2,719.4	2,720.5
Total liabilities and stockholders’ equity	$ 5,072.6	$ 5,139.8

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Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Accounts receivable, allowance	$ 16.0	$ 15.1
Common stock, par value (in dollars per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	750,000,000	750,000,000
Common stock, shares issued (in shares)	442,439,169	439,950,125
Common stock, shares outstanding (in shares)	418,176,363	416,597,885
Treasury stock, shares (in shares)	24,262,806	23,352,240
Related Party
Accounts receivable, allowance	$ 0.1	$ 0.1

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Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Statement [Abstract]
Net services revenue ($216.8 million and $216.7 million for the three months ended March 31, 2023 and 2022, from related party, respectively)	$ 545.6	$ 385.7
Operating expenses:
Cost of services	434.7	296.5
Selling, general and administrative	47.0	28.9
Other expenses	30.2	17.1
Total operating expenses	511.9	342.5
Income from operations	33.7	43.2
Net interest expense	30.7	4.7
Income before income tax provision	3.0	38.5
Income tax provision	2.7	9.1
Net income	$ 0.3	$ 29.4
Net income per common share:
Basic (in dollars per share)	$ 0	$ 0.11
Diluted (in dollars per share)	$ 0	$ 0.09
Weighted average shares used in calculating net income per common share:
Basic (in shares)	417,346,840	278,747,261
Diluted (in shares)	452,925,789	321,043,371
Consolidated statements of comprehensive income (loss)
Net income	$ 0.3	$ 29.4
Other comprehensive income (loss):
Net change on derivatives designated as cash flow hedges, net of tax	(1.7)	0.1
Foreign currency translation adjustments	0.5	(1.4)
Total other comprehensive income (loss), net of tax	(1.2)	(1.3)
Comprehensive income (loss)	$ (0.9)	$ 28.1

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Consolidated Statements of Operations and Comprehensive Income (Loss) (Unaudited) (Parenthetical) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Income Statement [Abstract]
Net services revenue, from related parties	$ 216.8	$ 216.7

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Consolidated Statements of Stockholders' Equity (Unaudited) - USD ($) $ in Millions	Total	CoyCo 2	Common Stock	Treasury Stock	Additional Paid-In Capital	Additional Paid-In Capital CoyCo 2	Accumulated Deficit	Accumulated Other Comprehensive Loss
Beginning Balance (in shares) at Dec. 31, 2021			298,320,928
Beginning Balance (in shares) at Dec. 31, 2021				(20,094,686)
Beginning Balance at Dec. 31, 2021	$ 346.7		$ 3.0	$ (215.2)	$ 628.5		$ (64.3)	$ (5.3)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation expense	10.2				10.2
Issuance of common stock related to share-based compensation plans (in shares)			1,757,955
Exercise of vested stock options (in shares)			77,438
Exercise of vested stock options	0.4				0.4
Acquisition of treasury stock related to share-based compensation plans (in shares)				(727,768)
Acquisition of treasury stock related to share-based compensation plans	(18.7)			$ (18.7)
Repurchases of common stock (in shares)				(8,000)
Repurchases of common stock	(0.2)			$ (0.2)
Net change on derivatives designated as cash flow hedges, net of tax	0.1							0.1
Foreign currency translation adjustments	(1.4)							(1.4)
Net income	29.4						29.4
Ending Balance (in shares) at Mar. 31, 2022			300,156,321
Ending Balance (in shares) at Mar. 31, 2022				(20,830,454)
Ending Balance at Mar. 31, 2022	$ 366.5		$ 3.0	$ (234.1)	639.1		(34.9)	(6.6)
Beginning Balance (in shares) at Dec. 31, 2022	439,950,125		439,950,125
Beginning Balance (in shares) at Dec. 31, 2022	(23,352,240)			(23,352,240)
Beginning Balance at Dec. 31, 2022	$ 2,720.5		$ 4.4	$ (281.8)	3,123.2		(121.9)	(3.4)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Share-based compensation expense	$ 10.7	$ 1.8			10.7	$ 1.8
Issuance of common stock related to share-based compensation plans (in shares)			2,308,591
Exercise of vested stock options (in shares)	180,453		180,453
Exercise of vested stock options	$ 0.5				0.5
Acquisition of treasury stock related to share-based compensation plans (in shares)				(910,566)
Acquisition of treasury stock related to share-based compensation plans	(13.2)			$ (13.2)
Net change on derivatives designated as cash flow hedges, net of tax	(1.7)							(1.7)
Foreign currency translation adjustments	0.5							0.5
Net income	$ 0.3						0.3
Ending Balance (in shares) at Mar. 31, 2023	442,439,169		442,439,169
Ending Balance (in shares) at Mar. 31, 2023	(24,262,806)			(24,262,806)
Ending Balance at Mar. 31, 2023	$ 2,719.4		$ 4.4	$ (295.0)	$ 3,136.2		$ (121.6)	$ (4.6)

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Consolidated Statements of Stockholders' Equity (Unaudited) (Parenthetical) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Accumulated Other Comprehensive Loss
Net change on derivatives designated as cash flow hedges, tax	$ 0.5	$ 0.0

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Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Operating activities
Net income	$ 0.3	$ 29.4
Adjustments to reconcile net income to net cash provided by operations:
Depreciation and amortization	66.0	18.9
Amortization of debt issuance costs	1.4	0.3
Share-based compensation	10.5	10.1
CoyCo 2 share-based compensation	1.8	0.0
Loss on disposal and right-of-use asset write-downs	0.0	2.0
Provision for credit losses	1.5	0.0
Deferred income taxes	1.8	7.3
Non-cash lease expense	2.9	3.2
Other	0.0	1.5
Changes in operating assets and liabilities:
Accounts receivable and related party accounts receivable	4.7	22.1
Contract assets	(4.0)	0.0
Prepaid expenses and other assets	8.2	(20.5)
Accounts payable	(10.9)	3.2
Accrued compensation and benefits	(24.5)	(27.5)
Lease liabilities	(4.4)	(2.1)
Other liabilities	9.7	1.7
Customer liabilities and customer liabilities - related party	(10.3)	(18.7)
Net cash provided by operating activities	54.7	30.9
Investing activities
Purchases of property, equipment, and software	(23.4)	(10.0)
Other	(2.2)	0.0
Net cash used in investing activities	(25.6)	(10.0)
Financing activities
Exercise of vested stock options	0.5	0.4
Purchase of treasury stock	0.0	(0.6)
Shares withheld for taxes	(13.4)	(21.5)
Other	(0.1)	(0.1)
Net cash used in financing activities	(35.4)	(26.2)
Effect of exchange rate changes in cash, cash equivalents and restricted cash	0.4	(0.9)
Net decrease in cash, cash equivalents and restricted cash	(5.9)	(6.2)
Cash, cash equivalents and restricted cash, at beginning of period	110.1	130.1
Cash, cash equivalents and restricted cash, at end of period	104.2	123.9
Supplemental disclosures of cash flow information
Property, equipment and software purchases not paid	28.0	23.3
Senior Term Loan
Financing activities
Repayment of senior secured debt and Repayments on revolver	(12.4)	(4.4)
Senior Revolver
Financing activities
Repayment of senior secured debt and Repayments on revolver	$ (10.0)	$ 0.0

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Business Description and Basis of Presentation

3 Months Ended

Mar. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Business Description and Basis of Presentation

Business Description and Basis of Presentation

Business Description

R1 RCM Inc. (the “Company”) is a leading provider of technology-driven solutions that transform the patient experience and financial performance of healthcare providers. The Company helps healthcare providers generate sustainable improvements in their operating margins and cash flows while also enhancing patient, physician, and staff satisfaction for its customers.

Basis of Presentation

The accompanying unaudited consolidated financial statements reflect the Company’s financial position as of March 31, 2023, the results of operations of the Company for the three months ended March 31, 2023 and 2022, and the cash flows of the Company for the three months ended March 31, 2023 and 2022. These financial statements include the accounts of R1 RCM Inc. and its wholly-owned subsidiaries. All material intercompany amounts have been eliminated in consolidation. These financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial reporting and as required by the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, certain information and footnote disclosures required for complete financial statements are not included herein. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the interim financial information, have been included. Operating results for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for any other interim period or for the fiscal year ending December 31, 2023.

When preparing financial statements in conformity with GAAP, the Company makes a number of significant estimates, assumptions, and judgments in the preparation of the financial statements. Actual results could differ from those estimates. For a more complete discussion of the Company’s significant accounting policies and other information, the unaudited consolidated financial statements and notes thereto should be read in conjunction with the audited consolidated financial statements included in the Company’s 2022 Form 10-K.

Recently Issued Accounting Standards and Disclosures

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”). ASU 2022-03 clarifies that a contractual sale restriction on an equity security should not be considered in measuring the security’s fair value. The Company will adopt ASU 2022-03 prospectively effective January 1, 2024 and is currently evaluating the impact of the standard on its consolidated financial statements.

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Acquisitions

3 Months Ended

Mar. 31, 2023

Business Combination and Asset Acquisition [Abstract]

Acquisitions

AcquisitionsAssets acquired and liabilities assumed in a business combination are recorded at their estimated fair value on the date of the acquisition. The difference between the purchase price amount and the net fair value of assets acquired and liabilities assumed is recognized as goodwill on the balance sheet if the purchase price exceeds the estimated net fair value or as a bargain purchase gain on the income statement if the purchase price is less than the estimated net fair value. The allocation of the purchase price may be modified up to one year after the acquisition date as more information is obtained about the fair value of assets acquired and liabilities assumed.

Prior Acquisitions

During 2022, the Company acquired the following business:

Company Name	Description of the Business	Description of the Acquisition
Revint Holdings, LLC (“Cloudmed”)	Provider of revenue intelligence solutions	Purchased all outstanding equity interests in exchange for shares of common stock of the Company and cash. The shares of common stock received by the Cloudmed sellers are subject to an 18-month lock-up period, which expires December 21, 2023. In addition, the Company replaced certain pre-acquisition awards held by certain Cloudmed sellers with restricted stock units (“RSUs”) of the Company.

The purchase price has been provisionally allocated to assets acquired and liabilities assumed based on their fair value as of the acquisition date. The fair value estimate of assets acquired and liabilities assumed is pending the completion of various elements, including gathering further information to ensure the completeness of assets acquired and liabilities assumed and the finalization of an independent appraisal of their respective fair values, which is subject to final review by the Company’s management. Accordingly, management considers the balances shown in the following table to be preliminary, and there could be adjustments to the consolidated financial statements, including changes in our amortization expense related to the valuation of intangible assets acquired and their respective useful lives, among other adjustments.

The preliminary fair value of assets acquired and liabilities assumed is:

	Purchase Price Allocation
Total purchase consideration	$	3,281.6
Allocation of consideration to assets acquired and liabilities assumed:
Cash and cash equivalents	$	32.1
Accounts receivable	61.8
Current portion of contract assets	68.2
Property, equipment and software	5.0
Operating lease right-of-use assets	25.3
Non-current portion of contract assets	23.8
Intangible assets	1,366.6
Goodwill	2,093.9
Other assets	6.7
Accounts payable	(31.9)
Customer liabilities	(3.3)
Accrued compensation and benefits	(93.4)
Operating lease liabilities	(25.4)
Deferred income tax liabilities	(235.6)
Other liabilities	(12.2)
Net assets acquired	$	3,281.6

Measurement period adjustments

The Company had various measurement period adjustments due to additional information received since December 31, 2022. The significant adjustments included a reduction to deferred income tax liabilities and a corresponding decrease to goodwill of $9.8 million related to updated tax return information.

RevWorks

In 2020, the Company purchased certain assets relating to the RevWorks services business from Cerner Corporation. In accordance with the purchase agreement, the Company paid the first deferred payment of $12.5 million in the third quarter of 2021. The remaining deferred payment of $12.5 million was payable on the second anniversary of the closing date (August 2022) and is included in other accrued expenses on the Consolidated Balance Sheet as of March 31, 2023 as it had not been paid as of such date.

The two deferred payments related to the RevWorks acquisition were contractual obligations of the Company; however, they are refundable to the Company if certain RevWorks customer revenue targets defined in the purchase agreement for the first two years following the acquisition are not achieved. The parties are currently engaged in arbitration to finalize the remaining deferred payment and contingently refundable consideration amounts. The contingently refundable consideration is stated at an amount approximating the amount expected to be realized and is included in other current assets on the Consolidated Balance Sheet as of March 31, 2023.

Pro Forma Results

The following table summarizes, on a pro forma basis, the combined results of the Company as though the Cloudmed acquisition had occurred as of January 1, 2021. These pro forma results are not necessarily indicative of the actual consolidated results had the acquisition occurred as of that date or of the future consolidated operating results for any period. Pro forma results are:

	Three Months Ended March 31, 2022
Net services revenue	$	486.4
Net income	$	1.4

Adjustments were made to earnings to adjust depreciation and amortization to reflect the fair value of identified assets acquired, to adjust share-based compensation expense for awards granted in connection with the acquisition, to record the effects of extinguishing the debt of the acquired company and replacing it with the debt of the Company, to adjust timing of acquisition related costs incurred by the Company, and to record the income tax effect of these adjustments.

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Revenue Recognition

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

Revenue Recognition

Revenue Recognition

Revenue is measured based on consideration specified in a contract with a customer, and presented net of any sales incentives and amounts collected on behalf of third parties. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a service to a customer, which is typically over the contact term. Estimates of variable consideration are included in revenue to the extent that it is probable that a significant reversal of cumulative revenue will not occur once the uncertainty is resolved.

Disaggregation of Revenue

In the following table, revenue is disaggregated by source of revenue:

	Three Months Ended March 31,
	2023		2022
Net operating fees	$	361.0	$	322.8
Incentive fees	23.6		30.2
Modular and other (1)	161.0		32.7
Net services revenue	$	545.6	$	385.7

(1) Modular and other revenue primarily consists of $125.8 million in service fees related to Cloudmed for the three months ended March 31, 2023, revenue integrity solutions, practice management (“PM”) services, physician advisory services (“PAS”), and software subscription revenue.

Contract Balances

The following table provides information about contract assets, net and contract liabilities from contracts with customers:

	March 31, 2023		December 31, 2022
Contract assets, net
Current	$	81.8	$	83.9
Non-current	37.3		32.0
Total contract assets, net	$	119.1	$	115.9
Contract liabilities
Current (1)	$	11.0	$	9.7
Non-current (2)	18.4		18.7
Total contract liabilities	$	29.4	$	28.4

(1) Current contract liabilities include $8.8 million and $7.6 million classified in the current portion of customer liabilities and $2.2 million and $2.1 million classified in the current portion of customer liabilities - related party as of March 31, 2023 and December 31, 2022, respectively.

(2) Non-current contract liabilities include $5.2 million and $5.0 million classified in the non-current portion of customer liabilities and $13.2 million and $13.7 million classified in the non-current portion of customer liabilities - related party as of March 31, 2023 and December 31, 2022, respectively.

The contract assets, net balance will increase or decrease based on the timing of invoices and recognition of revenue. Prior to the Cloudmed acquisition, the Company did not have significant contract assets. Significant changes in the carrying amount of contract assets, net for the three months ended March 31, 2023 were as follows:

	Contract Assets, net
Balance as of December 31, 2022	$	115.9
Revenue recognized	86.0
Amounts billed	(82.6)
Other (1)	(0.2)
Balance as of March 31, 2023	$	119.1

(1) Other primarily includes adjustments made during the period to the allowance for credit losses.

	Contract Liabilities
Balance as of December 31, 2022	$	(28.4)
Advanced billings - January 1, 2023 (1)	(91.3)
Advanced billings recognized	91.3
Additions	(3.9)
Revenue recognized	2.9
Balance as of March 31, 2023	$	(29.4)

(1) The Company records advanced billings to contract liabilities and accounts receivable on the first day of the respective service period, which are earned during the quarter.

Transaction Price Allocated to the Remaining Performance Obligation

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period. The estimated revenue does not include amounts of variable consideration that are constrained.

	Net operating fees		Incentive fees
Remainder of 2023	$	90.0	$	33.0
2024	78.1		—
2025	45.7		—
2026	35.6		—
2027	31.2		—
2028	29.8		—
Thereafter	83.6		—
Total	$	394.0	$	33.0

The amounts presented in the table above include variable fee estimates of the Company’s physician groups revenue cycle management (“RCM”) services contracts, fixed fees, and forecasted incentive fees. Fixed fees are typically recognized ratably as the performance obligation is satisfied and forecasted incentive fees are measured cumulatively over the contractually defined performance period.

Estimates of revenue expected to be recognized in future periods exclude unexercised customer options to purchase services within the Company’s PAS contracts that do not represent material rights to the customer.

The Company does not disclose information about remaining performance obligations with an original expected duration of one year or less and has elected an exemption to the disclosure requirements related to estimate variable consideration and an exemption where the Company has a right to consideration from a customer in an amount that corresponds directly with the value to the customer of the entity’s performance completed to date.

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Accounts Receivable and Allowance for Credit Losses

3 Months Ended

Mar. 31, 2023

Receivables [Abstract]

Accounts Receivable and Allowance for Credit Losses

Accounts Receivable and Allowance for Credit LossesAccounts receivable is comprised of invoiced and unbilled balances due from modular services and end-to-end RCM customers, which are presented net after considering cost reimbursements owed to end-to-end RCM customers.

The Company evaluates its accounts receivable for expected credit losses quarterly. The Company maintains an estimated allowance for credit losses to reduce its accounts receivable to the amount that it believes will be collected. This allowance is based on the Company’s historical experience, its assessment of each customer’s ability to pay, the length of time a balance has been outstanding, input from key Company resources assigned to each customer, the status of any ongoing operations with each applicable customer, and business and industry factors such as significant shifts in the healthcare environment which the Company believes may have impacted or will impact its customers’ financial health and ability to pay.

The Company has presented the rollforward below on a consolidated basis as the currently expected credit losses for its large integrated healthcare system customers are not anticipated to be material.

Movements in the allowance for credit losses related to accounts receivable are as follows:

	Three Months Ended March 31,
	2023		2022
Beginning balance (1)	$	15.2	$	2.5
Provision (recoveries)	1.1		—
Write-offs	(0.2)		(0.1)
Ending balance (1)	$	16.1	$	2.4

(1) The 2023 balance includes an allowance for credit losses related to a physician customer of $10.1 million that was established in the third quarter of 2022. Management continues to monitor collections and the financial condition of this customer. No changes were made in the current period.

The Company acquired contract assets through the Cloudmed acquisition. As of March 31, 2023, there was an allowance for credit losses of $2.6 million against total contract assets.

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Debt

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Debt

Debt

The carrying amounts of debt consist of the following:

	March 31, 2023		December 31, 2022
Senior Revolver (1)	$	90.0	$	100.0
Term A Loans	1,200.3		1,211.4
Term B Loan	497.5		498.7
Unamortized discount and issuance costs	(22.5)		(23.6)
Total debt	1,765.3		1,786.5
Less: Current maturities	(58.3)		(53.9)
Total long-term debt	$	1,707.0	$	1,732.6

(1) As of March 31, 2023, the Company had $90.0 million in borrowings, $0.9 million letters of credit outstanding, and $509.1 million of availability under the $600.0 million senior secured revolving credit facility (“Senior Revolver ”).

Second Amended and Restated Senior Secured Credit Facilities

On June 21, 2022, the Company, R1 RCM Holdco Inc. (f/k/a R1 RCM Inc.), and certain of its subsidiaries entered into a second amended and restated senior credit agreement (the “Second A&R Credit Agreement”) with Bank of America, N.A., as administrative agent, and the lenders named therein, governing the Company’s second amended and restated senior secured credit facilities (the “Senior Secured Credit Facilities”), consisting of the $691.3 million existing senior secured term loan A facility (the “Existing Term A Loan”), a $540.0 million senior secured incremental term loan A facility (the “Incremental Term A Loan,” and together with the Existing Term A Loan, the “Term A Loans”), a $500.0 million senior secured term loan B facility (the “Term B Loan,” and together with the Term A Loans, the “Senior Term Loans”), and the $600.0 million Senior Revolver. In conjunction with entering into the Second A&R Credit Agreement, the Company incurred $7.2 million and capitalized $6.4 million of debt issuance costs.

The interest rate as of March 31, 2023 was 7.31% for the Term A Loans and Senior Revolver and 7.81% for the Term B Loan.

The Second A&R Credit Agreement contains a number of financial and non-financial covenants. The Company was in compliance with all of the covenants in the Second A&R Credit Agreement as of March 31, 2023. The obligations under the Second A&R Credit Agreement are secured by a pledge of 100% of the capital stock of certain domestic subsidiaries owned by the Company and a security interest in substantially all of the Company’s tangible and intangible assets and the tangible and intangible assets of certain domestic subsidiaries.

Debt Maturities

Scheduled maturities of the Company’s long-term debt are summarized as follows:

	Scheduled Maturities
Remainder of 2023	$	41.5
2024	67.0
2025	67.0
2026	708.3
2027	430.2
2028	5.0
Thereafter	468.8
Total	$	1,787.8

For further details on the Second A&R Credit Agreement, refer to Note 10 of the Company’s 2022 Form 10-K.

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Derivative Financial Instruments

3 Months Ended

Mar. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Derivative Financial Instruments

Derivative Financial InstrumentsThe Company utilizes cash flow hedges to manage its currency risk arising from its global business services centers. As of March 31, 2023, the Company has recorded $1.1 million of unrealized gains in accumulated other comprehensive loss related to foreign currency hedges. The Company estimates that $1.1 million of gains reported in accumulated other comprehensive loss are expected to be reclassified into earnings within the next 9 months. Amounts reclassified into cost of services were a net gain of $0.3 million and $0.2 million during the three months ended March 31, 2023 and 2022, respectively. As of March 31, 2023, the Company’s foreign currency forward contracts have maturities extending no later than December 31, 2023, and had a total notional value of $90.2 million.

The Company also utilizes cash flow hedges to reduce variability in interest cash flows from its outstanding debt. As of March 31, 2023, the Company has recorded $9.9 million of unrealized gains in accumulated other comprehensive loss related to interest rate swaps. The Company estimates that $8.3 million of gains reported in accumulated other comprehensive loss are expected to be reclassified into earnings within the next 12 months. Amounts reclassified into interest expense were a net gain of $1.9 million and a net loss of $0.3 million during the three months ended March 31, 2023 and 2022, respectively. As of March 31, 2023, the Company’s interest rate swaps extend no later than June 30, 2025, and had a total notional value of $500.0 million.

The location and fair value of derivative instruments designated as hedges in the Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022 are as follows:

	March 31, 2023		December 31, 2022
Foreign currency forward contracts
Prepaid expenses and other current assets	$	1.1	$	0.1
Other accrued expenses	—		0.5
Total foreign current forward contracts	$	1.1	$	0.6
Interest rate swaps
Prepaid expenses and other current assets	$	8.3	$	8.7
Other assets	1.6		5.0
Other accrued expenses	—		—
Total interest rate swaps	$	9.9	$	13.7

As of March 31, 2023 and December 31, 2022, the accumulated gain, net of tax, recognized in accumulated other comprehensive loss was $8.2 million and $9.9 million, respectively.

The Company classifies cash flows from its derivative programs as cash flows from operating activities in the Consolidated Statements of Cash Flows. Fair values for derivative financial instruments are based on prices computed using third-party valuation models and are classified as Level 2 in accordance with the three-level hierarchy of fair value measurements.

On July 5, 2022, the Company and Sutter Health (“Sutter”) entered into an agreement regarding the potential purchase of a business that would expand the Company’s service capabilities (the “Sutter Put Right Agreement”). This agreement is effective through approximately the end of 2023 and allows Sutter to sell the business to the Company for $150.0 million, subject to the negotiation of a definitive agreement and the satisfaction of agreed upon closing conditions, including the requirement that the purchase price be deemed to be fair value at the time of the potential transaction. Assuming an agreement is reached, the Company and Sutter would also need to reach agreement as to whether the purchase price would be paid in cash or shares of the Company’s common stock.

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Share-Based Compensation

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

Share-Based Compensation

Share-Based Compensation

The share-based compensation expense relating to the Company’s stock options, RSUs, and performance-based restricted stock units (“PBRSUs”) for the three months ended March 31, 2023 and 2022 was $12.3 million and $10.1 million, respectively, with related tax benefits of approximately $2.6 million and $1.8 million, respectively.

The Company accounts for forfeitures as they occur. Excess tax benefits and shortfalls for share-based payments are recognized in income tax expense and included in operating activities. The Company recognized $0.5 million and $2.5 million of income tax benefit from windfalls associated with vesting and exercises of equity awards for the three months ended March 31, 2023 and 2022, respectively.

Total share-based compensation costs that have been included in the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss) were as follows:

	Three Months Ended March 31,
	2023		2022
Share-Based Compensation Expense Allocation Details:
Cost of services	$	6.9	$	4.3
Selling, general and administrative	5.4		5.8
Total share-based compensation expense (1)	$	12.3	$	10.1

(1) Included in the share-based compensation expense above is $1.8 million of CoyCo 2, L.P. (“CoyCo 2”) share-based compensation expense for the three months ended March 31, 2023. See further discussion below.

The Company uses the Black-Scholes option pricing model to estimate the fair value of its service-based options as of their grant dates. The volatility for the options was calculated based on an analysis of historical volatility. The Company assesses current performance on performance-based PBRSUs by reviewing historical performance to date, along with any adjustments which have been approved to the reported performance, and changes to the projections to determine the probable outcome of the awards. The current estimates are then compared to the scoring metrics and any necessary adjustments are reflected in the current period to update share-based compensation expense to the current performance expectations. A Monte Carlo simulation was used to estimate the fair value of the Unvested Units (as defined below), which are being amortized over a period of 4 years on a straight-line basis. The volatility for the Unvested Units was calculated based on an analysis of historical and implied volatility.

Stock options

A summary of the options activity during the three months ended March 31, 2023 is shown below:

	Options	Weighted- Average Exercise Price
Outstanding at December 31, 2022	3,104,413	$	3.38
Granted	—	—
Exercised	(180,453)	3.05
Canceled/forfeited	(45,865)	2.59
Expired	—	—
Outstanding at March 31, 2023	2,878,095	$	3.41
Outstanding, vested and exercisable at March 31, 2023	2,855,175	$	3.26
Outstanding, vested and exercisable at December 31, 2022	3,080,069	$	3.23

Restricted stock units and performance-based restricted stock units    

A summary of the RSU and PBRSU activity during the three months ended March 31, 2023 is shown below:

					Weighted- Average Grant Date Fair Value
	RSUs		PBRSUs		RSU		PBRSU
Outstanding and unvested at December 31, 2022	3,232,002		6,876,797		$	19.07	$	19.48
Granted	192,268		—		10.95		—
Performance factor adjustment	—		792,189		—		15.95
Vested	(21,705)		(2,286,886)		20.21		15.95
Forfeited	(110,733)		(455,875)		20.56		20.28
Outstanding and unvested at March 31, 2023	3,291,832		4,926,225		$	18.54	$	20.48
Shares surrendered for taxes for the three months ended March 31, 2023	6,908		903,658
Cost of shares surrendered for taxes for the three months ended March 31, 2023 (in millions)	$	0.1	$	13.1
Shares surrendered for taxes for the three months ended March 31, 2022	2,198		725,570
Cost of shares surrendered for taxes for the three months ended March 31, 2022 (in millions)	$	—	$	18.7

Upon consummation of the Cloudmed acquisition, outstanding restricted units of Cloudmed were replaced by an aggregate 1,536,220 RSUs of the Company. The Company also issued an aggregate of 3,173,184 inducement RSUs and PBRSUs to certain employees of Cloudmed under Nasdaq Listing Rule 5635(c)(4) pursuant to its newly adopted 2022 Inducement Plan.

The Company’s RSU and PBRSU agreements allow employees to surrender to the Company shares of common stock upon vesting of their RSUs and PBRSUs in lieu of their payment of the required personal employment-related taxes. Shares surrendered for payment of personal employment-related taxes are held in treasury.

Outstanding PBRSUs vest upon satisfaction of both time-based and performance-based conditions. Depending on the award, performance condition targets may include cumulative adjusted EBITDA, end-to-end RCM agreement growth, modular sales revenue, or other specific performance factors. Depending on the percentage level at which the performance-based conditions are satisfied, the number of shares vesting could be between 0% and 200% of the number of PBRSUs originally granted. Based on the established targets, the maximum number of shares that could vest for all outstanding PBRSUs is 9,852,450.

CoyCo 2, L.P. Limited Partnership Units    

As part of the transactions contemplated by the Cloudmed acquisition, equity awards held by certain employees of Cloudmed (“Former Class P Units”) were modified, through a series of transactions, into awards (“Management Units”) of CoyCo 2. The Management Units issued by CoyCo 2 are treated as share-based compensation under ASC 718, Compensation — Stock Compensation.

The Former Class P Units were originally issued to employees of Cloudmed and its affiliates (“Participants”) in connection with and as a part of the compensation and incentive arrangements between Cloudmed and such Participants prior to the consummation of the Cloudmed acquisition. A portion of the Former Class P Units immediately vested upon the closing of the Cloudmed acquisition; however, certain Former Class P Units that were subject to performance-based vesting conditions did not become vested upon the closing of the Cloudmed acquisition (“Unvested Units”). In connection with the Cloudmed acquisition, Cloudmed caused the Former Class P Units, including the Unvested Units, to be converted into Management Units. At the time of the closing of the Cloudmed acquisition, 97,875 Unvested Units were converted into 514,986 Management Units.

In general, Unvested Units vest upon the achievement of certain performance criteria, including achievement by CoyCo 2’s owner, New Mountain Capital, L.L.C. (“New Mountain”), of (i) specified multiples of Base Equity Value (“BEV”) (i.e., generally the aggregate equity value of New Mountain’s investment in Cloudmed as of the original grant date), or (ii) specified Multiples on Invested Capital (“MIC”) with respect to New Mountain Capital’s pre-Cloudmed acquisition investment in Cloudmed, and subject to continued service with the Company and its affiliates, including Cloudmed through the applicable vesting date. The Unvested Units are not awards of the Company and the participants will receive no additional shares of the Company upon satisfaction of the vesting criteria. However, GAAP requires the Company recognize the cost of share-based compensation granted by an investor (CoyCo 2) to the Company’s employees and service providers for services that benefit the Company’s operations (hereafter, “CoyCo 2 share-based compensation expense”), and a corresponding capital contribution because the costs are incurred on the Company’s behalf.

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Other Expenses

3 Months Ended

Mar. 31, 2023

Other Income and Expenses [Abstract]

Other Expenses

Other Expenses

Other expenses are incurred in connection with acquisition and integration costs, various exit activities, transformation initiatives, and organizational changes to improve our business alignment and cost structure. The following table summarizes the other expenses recognized for the three months ended March 31, 2023 and 2022.

	Three Months Ended March 31,
	2023		2022
Business acquisition costs (1)	$	0.1	$	6.3
Integration costs (2)	15.8		0.4
Strategic initiatives (3)	8.0		0.3
Global business services center expansion project in the Philippines (4)	—		3.1
Facility-exit charges (5)	1.2		4.8
Other (6)	5.1		2.2
Total other expenses	$	30.2	$	17.1

(1) These are costs, including legal, consulting, and bank fees, that are directly related to the closing of business acquisitions and include changes to contingent consideration, if applicable.

(2) These costs reflect efforts to integrate acquisitions from a systems, processes, and people perspective and to achieve synergies expected from business acquisitions. Costs include consulting fees, IT vendor spend, severance, retention, and certain payroll costs.

(3) These costs relate to performing portfolio and capital structure analyses and transactions and other business transformation projects (including large scale system projects) as part of the Company’s growth strategy. Costs include vendor spend, employee time and expenses spent on activities, severance, and retention amounts.

(4) These costs include legal and consulting fees related to the establishment of the Company’s inaugural global business services center in the Philippines as well as severance costs for personnel whose roles are being relocated. The entry into the Philippines was the first new organic global business services center country expansion by the Company in approximately 15 years. The Company completed the expansion project in 2022.

(5) As part of evaluating its footprint, the Company has exited certain leased facilities. Costs include asset impairment charges, early termination fees, and other costs related to exited leased facilities.

(6) For the three months ended March 31, 2023 and 2022, other includes $5.5 million and $1.1 million, respectively, of expenses related to the Company’s ongoing litigation matters. For further details, refer to Note 11, Commitments and Contingencies.

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Income Taxes

3 Months Ended

Mar. 31, 2023

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

Income tax provisions for interim periods are based on estimated annual income tax rates, adjusted to reflect the effects of any significant and infrequent or unusual items which are required to be discretely recognized within the current interim period. The effective tax rates in the periods presented are largely based upon the projected annual pre-tax earnings by jurisdiction and the allocation of certain expenses in various taxing jurisdictions where the Company conducts its business. These taxing jurisdictions apply a broad range of statutory income tax rates. The global intangible low-taxed income (“GILTI”) provisions impose taxes on foreign income in excess of a deemed return on tangible assets of foreign corporations. The Company elected to account for GILTI tax in the period in which it is incurred.

The Company recognized income tax expense for the three months ended March 31, 2023 on the year-to-date pre-tax income. The deviation from the federal statutory tax rate of 21% is primarily attributable to recognizing the provisions for foreign taxes, state taxes, non-deductible expenses, and discrete items.

The Company recognized income tax expense for the three months ended March 31, 2022 on the year-to-date pre-tax income. The deviation from the federal statutory tax rate of 21% is primarily attributable to recognizing the provisions for state taxes, GILTI, non-deductible expenses, and discrete items.

The Company and its subsidiaries are subject to U.S. federal income tax as well as income tax of multiple state and foreign jurisdictions. U.S. federal income tax returns since 2019 are currently open for examination. State jurisdictions vary for open tax years. The statute of limitations for most states ranges from three to six years.

At December 31, 2022, the Company had gross deferred tax assets of $147.6 million, of which $50.0 million related to net operating loss (“NOL”) carryforwards. The Company expects to be profitable, allowing the Company to utilize its NOL carryforwards and other deferred tax assets.

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Earnings Per Share

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

Basic net income per share is computed by dividing net income by the weighted average number of common shares outstanding during the period.

Diluted net income per share is calculated by adjusting the denominator used in the basic net income per share computation by potentially dilutive securities outstanding during the period plus, when their effect is dilutive, incremental shares consisting of shares subject to stock options and shares issuable upon vesting of RSUs and PBRSUs.

Basic and diluted net income per common share are calculated as follows:

	Three Months Ended March 31,
	2023		2022
Net income	$	0.3	$	29.4
Basic weighted-average common shares	417,346,840		278,747,261
Add: Effect of dilutive equity awards	4,621,205		6,472,685
Add: Effect of dilutive warrants	30,957,744		35,823,425
Diluted weighted average common shares	452,925,789		321,043,371
Net income per common share (basic)	$	—	$	0.11
Net income per common share (diluted)	$	—	$	0.09

Because of their anti-dilutive effect, 768,030 common share equivalents comprised of stock options, PBRSUs, and RSUs have been excluded from the diluted earnings per share calculation for the three months ended March 31, 2023. For the three months ended March 31, 2022, 43,206 common share equivalents have been excluded from the diluted earnings per share calculation because of their anti-dilutive effect.

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Commitments and Contingencies

3 Months Ended

Mar. 31, 2023

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Legal Proceedings

Other than as described below, the Company is not presently a party to any material litigation or regulatory proceeding and is not aware of any pending or threatened litigation or regulatory proceeding against the Company which, individually or in the aggregate, could have a material adverse effect on its business, operating results, financial condition or cash flows.

On April 13, 2021 and April 19, 2021, respectively, certain purported stockholders of the Company filed two complaints in the Delaware Court of Chancery regarding the Company’s January 15, 2021 recapitalization transaction with TCP-ASC. Both complaints allege that TCP-ASC, Ascension Health (“Ascension”), and TowerBrook Capital Partners (“TowerBrook”) controlled the Company and breached their fiduciary duties by using that alleged control to force the Company to overpay in redeeming TCP-ASC’s preferred stock as part of the recapitalization transaction. The plaintiffs seek an unspecified amount of damages against TCP-ASC, Ascension, and TowerBrook. The plaintiffs also allege that the Company and TCP-ASC entered into amendments to the Investor Rights Agreement that the plaintiffs contend contain provisions that are void under the Company’s charter, bylaws, and the Delaware General Corporation Law. The cases have since been consolidated into a single action. All defendants have answered the complaint and discovery has commenced.

On February 18, 2022, plaintiffs filed a supplement to their complaint, naming certain additional defendants and asserting additional claims related to the Company’s agreement to acquire Cloudmed, which was announced on January 10, 2022. The additional claims assert that: (i) TCP-ASC, Ascension, and TowerBrook, along with the Company’s directors (“Individual Defendants”), breached their fiduciary duties by causing the Company to enter into and approving the Cloudmed acquisition, respectively, which plaintiffs claim will perpetuate TCP-ASC’s, Ascension’s, and TowerBrook’s control over the Company and entrench the Individual Defendants by virtue of certain agreements entered into as part of the transaction, including a Second Amended Investor Rights Agreement with TCP-ASC (the “Seconded Amended Investor Rights Agreement”) and an Investor Rights Agreement with Cloudmed (the “Cloudmed Investor Rights Agreement”); and (ii) Cloudmed’s stockholders aided and abetted such breaches. Plaintiffs also allege that certain provisions in the Cloudmed Investor Rights Agreement and the Second Amended Investor Rights Agreement are void under the Company’s charter, bylaws, and the Delaware General Corporation law. The plaintiffs seek a declaratory judgment and an unspecified amount of damages, as well as attorneys’ fees and costs. Trial is scheduled for November 2023. The Company believes it has meritorious defenses to all claims against it and intends to vigorously defend itself against these claims.

In May 2016, the Company was served with a False Claims Act case brought by a former emergency department service associate who worked at a hospital of one of the Company’s customers, MedStar Inc.’s Washington Hospital Center (“WHC”), along with WHC and three other hospitals that were PAS customers and a place holder, John Doe hospital, representing all PAS customers (U.S. ex rel. Graziosi vs. Accretive Health, Inc. et. al.), and seeking money damages, False Claims Act penalties, and plaintiff’s attorneys’ fees. The Third Amended Complaint alleges that the Company’s PAS business violates the federal False Claims Act. The case was originally filed under seal in 2013 in the federal district court in Chicago and was presented to the U.S. Attorney in Chicago, and the U.S. Attorney declined to intervene. Both the Company’s and plaintiff’s motions for summary judgment were denied in December 2020, and the parties have completed damage and expert discovery. Additional dispositive motions are expected to extend into 2023, with trial, if necessary, likely to be scheduled in 2024. The Company believes it has meritorious defenses to all claims in the case and intends to vigorously defend itself against these claims.

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Related Party Transactions

3 Months Ended

Mar. 31, 2023

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

This note encompasses transactions between Ascension and its affiliates, including AMITA Health, and the Company pursuant to the Master Professional Services Agreement, including all supplements, amendments, and other documents entered into in connection therewith. For further details on the Company’s agreements with Ascension, see Note 1 and Note 19 of the Company’s 2022 Form 10-K. In conjunction with the Cloudmed acquisition, New Mountain became a new related party. There were no material transactions with New Mountain subsequent to the Cloudmed acquisition.

Net services revenue from services provided to Ascension, as well as corresponding accounts receivable and customer liabilities are presented in the Consolidated Statements of Operations and Comprehensive Income (Loss) and the Consolidated Balance Sheets. Since Ascension is the Company’s largest customer, a significant percentage of the Company’s cost of services is associated with providing services to Ascension. However, due to the nature of the Company’s global business services and information technology operations, it is impractical to assign the dollar amount associated with services provided to Ascension.

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Segments and Customer Concentrations

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

Segments and Customer Concentrations

Segments and Customer Concentrations

The Company has determined that it has a single operating segment in accordance with the way that management operates and views the business. All of the Company’s significant operations are organized around the single business of providing management services of revenue cycle operations for U.S.-based healthcare providers. Accordingly, for purposes of segment disclosures, the Company has only one operating and reportable segment.

Customers comprising greater than 10% of net services revenue are as follows:

	Three Months Ended March 31,
Customer Name	2023		2022
Ascension and its affiliates	40	%	56	%
Intermountain Healthcare	11	%	14	%

The loss of customers within the Ascension health system or Intermountain network could have a material adverse impact on the Company’s operations.

As of March 31, 2023 and December 31, 2022, the Company had a concentration of credit risk with Ascension, representing 10% of accounts receivable.

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Supplemental Financial Information

3 Months Ended

Mar. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Supplemental Financial Information

Supplemental Financial Information

The following table summarizes the allocation of depreciation and amortization expense related to property, equipment and software between cost of services and selling, general and administrative expenses:

	Three Months Ended March 31,
	2023		2022
Cost of services	$	15.5	$	11.5
Selling, general and administrative	0.4		0.3
Total depreciation and amortization	$	15.9	$	11.8

Intangible asset amortization expense was $50.1 million and $7.1 million for the three months ended March 31, 2023 and 2022, respectively. Amortization expense for intangible assets is included in cost of services on the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss).

Supplemental cash flow information related to leases are as follows:

	Three Months Ended March 31,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	6.2	$	3.4
Right-of-use assets obtained in exchange for operating lease obligations:	3.1		6.0

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Business Description and Basis of Presentation (Policies)

3 Months Ended

Mar. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Basis of Presentation

Basis of Presentation

The accompanying unaudited consolidated financial statements reflect the Company’s financial position as of March 31, 2023, the results of operations of the Company for the three months ended March 31, 2023 and 2022, and the cash flows of the Company for the three months ended March 31, 2023 and 2022. These financial statements include the accounts of R1 RCM Inc. and its wholly-owned subsidiaries. All material intercompany amounts have been eliminated in consolidation. These financial statements have been prepared in accordance with United States generally accepted accounting principles (“GAAP”) for interim financial reporting and as required by the rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”). Accordingly, certain information and footnote disclosures required for complete financial statements are not included herein. In the opinion of management, all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the interim financial information, have been included. Operating results for the three months ended March 31, 2023 are not necessarily indicative of the results that may be expected for any other interim period or for the fiscal year ending December 31, 2023.

When preparing financial statements in conformity with GAAP, the Company makes a number of significant estimates, assumptions, and judgments in the preparation of the financial statements. Actual results could differ from those estimates.

Recently Issued Accounting Standards and Disclosures

Recently Issued Accounting Standards and Disclosures

In June 2022, the FASB issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”). ASU 2022-03 clarifies that a contractual sale restriction on an equity security should not be considered in measuring the security’s fair value. The Company will adopt ASU 2022-03 prospectively effective January 1, 2024 and is currently evaluating the impact of the standard on its consolidated financial statements.

Revenue Recognition

Revenue RecognitionRevenue is measured based on consideration specified in a contract with a customer, and presented net of any sales incentives and amounts collected on behalf of third parties. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a service to a customer, which is typically over the contact term. Estimates of variable consideration are included in revenue to the extent that it is probable that a significant reversal of cumulative revenue will not occur once the uncertainty is resolved.

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Acquisitions (Tables)

3 Months Ended

Mar. 31, 2023

Business Combination and Asset Acquisition [Abstract]

Schedule of Fair Value of Total Consideration Paid and Schedule of Acquisitions

During 2022, the Company acquired the following business:

Company Name	Description of the Business	Description of the Acquisition
Revint Holdings, LLC (“Cloudmed”)	Provider of revenue intelligence solutions	Purchased all outstanding equity interests in exchange for shares of common stock of the Company and cash. The shares of common stock received by the Cloudmed sellers are subject to an 18-month lock-up period, which expires December 21, 2023. In addition, the Company replaced certain pre-acquisition awards held by certain Cloudmed sellers with restricted stock units (“RSUs”) of the Company.

Schedule of Fair Value of Assets Acquired and Liabilities Assumed

The preliminary fair value of assets acquired and liabilities assumed is:

	Purchase Price Allocation
Total purchase consideration	$	3,281.6
Allocation of consideration to assets acquired and liabilities assumed:
Cash and cash equivalents	$	32.1
Accounts receivable	61.8
Current portion of contract assets	68.2
Property, equipment and software	5.0
Operating lease right-of-use assets	25.3
Non-current portion of contract assets	23.8
Intangible assets	1,366.6
Goodwill	2,093.9
Other assets	6.7
Accounts payable	(31.9)
Customer liabilities	(3.3)
Accrued compensation and benefits	(93.4)
Operating lease liabilities	(25.4)
Deferred income tax liabilities	(235.6)
Other liabilities	(12.2)
Net assets acquired	$	3,281.6

Schedule of Pro Forma Results

The following table summarizes, on a pro forma basis, the combined results of the Company as though the Cloudmed acquisition had occurred as of January 1, 2021. These pro forma results are not necessarily indicative of the actual consolidated results had the acquisition occurred as of that date or of the future consolidated operating results for any period. Pro forma results are:

	Three Months Ended March 31, 2022
Net services revenue	$	486.4
Net income	$	1.4

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Revenue Recognition (Tables)

3 Months Ended

Mar. 31, 2023

Revenue from Contract with Customer [Abstract]

Schedule of Disaggregated Revenue By Source

In the following table, revenue is disaggregated by source of revenue:

	Three Months Ended March 31,
	2023		2022
Net operating fees	$	361.0	$	322.8
Incentive fees	23.6		30.2
Modular and other (1)	161.0		32.7
Net services revenue	$	545.6	$	385.7

(1) Modular and other revenue primarily consists of $125.8 million in service fees related to Cloudmed for the three months ended March 31, 2023, revenue integrity solutions, practice management (“PM”) services, physician advisory services (“PAS”), and software subscription revenue.

Schedule of Contract Assets and Contract Liabilities

The following table provides information about contract assets, net and contract liabilities from contracts with customers:

	March 31, 2023		December 31, 2022
Contract assets, net
Current	$	81.8	$	83.9
Non-current	37.3		32.0
Total contract assets, net	$	119.1	$	115.9
Contract liabilities
Current (1)	$	11.0	$	9.7
Non-current (2)	18.4		18.7
Total contract liabilities	$	29.4	$	28.4

(1) Current contract liabilities include $8.8 million and $7.6 million classified in the current portion of customer liabilities and $2.2 million and $2.1 million classified in the current portion of customer liabilities - related party as of March 31, 2023 and December 31, 2022, respectively.

(2) Non-current contract liabilities include $5.2 million and $5.0 million classified in the non-current portion of customer liabilities and $13.2 million and $13.7 million classified in the non-current portion of customer liabilities - related party as of March 31, 2023 and December 31, 2022, respectively.

The contract assets, net balance will increase or decrease based on the timing of invoices and recognition of revenue. Prior to the Cloudmed acquisition, the Company did not have significant contract assets. Significant changes in the carrying amount of contract assets, net for the three months ended March 31, 2023 were as follows:

	Contract Assets, net
Balance as of December 31, 2022	$	115.9
Revenue recognized	86.0
Amounts billed	(82.6)
Other (1)	(0.2)
Balance as of March 31, 2023	$	119.1

(1) Other primarily includes adjustments made during the period to the allowance for credit losses.

	Contract Liabilities
Balance as of December 31, 2022	$	(28.4)
Advanced billings - January 1, 2023 (1)	(91.3)
Advanced billings recognized	91.3
Additions	(3.9)
Revenue recognized	2.9
Balance as of March 31, 2023	$	(29.4)

(1) The Company records advanced billings to contract liabilities and accounts receivable on the first day of the respective service period, which are earned during the quarter.

Schedule of Transaction Price Allocated to the Remaining Performance Obligation

The following table includes estimated revenue expected to be recognized in the future related to performance obligations that are unsatisfied (or partially unsatisfied) at the end of the reporting period. The estimated revenue does not include amounts of variable consideration that are constrained.

	Net operating fees		Incentive fees
Remainder of 2023	$	90.0	$	33.0
2024	78.1		—
2025	45.7		—
2026	35.6		—
2027	31.2		—
2028	29.8		—
Thereafter	83.6		—
Total	$	394.0	$	33.0

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Accounts Receivable and Allowance for Credit Losses (Tables)

3 Months Ended

Mar. 31, 2023

Receivables [Abstract]

Schedule of Allowance for Credit Losses

Movements in the allowance for credit losses related to accounts receivable are as follows:

	Three Months Ended March 31,
	2023		2022
Beginning balance (1)	$	15.2	$	2.5
Provision (recoveries)	1.1		—
Write-offs	(0.2)		(0.1)
Ending balance (1)	$	16.1	$	2.4

(1) The 2023 balance includes an allowance for credit losses related to a physician customer of $10.1 million that was established in the third quarter of 2022. Management continues to monitor collections and the financial condition of this customer. No changes were made in the current period.

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Debt (Tables)

3 Months Ended

Mar. 31, 2023

Debt Disclosure [Abstract]

Schedule of Carrying Values Long-Term Debt

The carrying amounts of debt consist of the following:

	March 31, 2023		December 31, 2022
Senior Revolver (1)	$	90.0	$	100.0
Term A Loans	1,200.3		1,211.4
Term B Loan	497.5		498.7
Unamortized discount and issuance costs	(22.5)		(23.6)
Total debt	1,765.3		1,786.5
Less: Current maturities	(58.3)		(53.9)
Total long-term debt	$	1,707.0	$	1,732.6

(1) As of March 31, 2023, the Company had $90.0 million in borrowings, $0.9 million letters of credit outstanding, and $509.1 million of availability under the $600.0 million senior secured revolving credit facility (“Senior Revolver ”).

Scheduled Maturities of Long-term Debt

Scheduled maturities of the Company’s long-term debt are summarized as follows:

	Scheduled Maturities
Remainder of 2023	$	41.5
2024	67.0
2025	67.0
2026	708.3
2027	430.2
2028	5.0
Thereafter	468.8
Total	$	1,787.8

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Derivative Instruments and Hedging Activities (Tables)

3 Months Ended

Mar. 31, 2023

Derivative Instruments and Hedging Activities Disclosure [Abstract]

Schedule of Derivatives Instruments Statements of Financial Performance and Financial Position, Location

The location and fair value of derivative instruments designated as hedges in the Consolidated Balance Sheets as of March 31, 2023 and December 31, 2022 are as follows:

	March 31, 2023		December 31, 2022
Foreign currency forward contracts
Prepaid expenses and other current assets	$	1.1	$	0.1
Other accrued expenses	—		0.5
Total foreign current forward contracts	$	1.1	$	0.6
Interest rate swaps
Prepaid expenses and other current assets	$	8.3	$	8.7
Other assets	1.6		5.0
Other accrued expenses	—		—
Total interest rate swaps	$	9.9	$	13.7

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Share-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2023

Share-Based Payment Arrangement [Abstract]

Schedule of Share-based Compensation Expense

Total share-based compensation costs that have been included in the Company’s Consolidated Statements of Operations and Comprehensive Income (Loss) were as follows:

	Three Months Ended March 31,
	2023		2022
Share-Based Compensation Expense Allocation Details:
Cost of services	$	6.9	$	4.3
Selling, general and administrative	5.4		5.8
Total share-based compensation expense (1)	$	12.3	$	10.1

(1) Included in the share-based compensation expense above is $1.8 million of CoyCo 2, L.P. (“CoyCo 2”) share-based compensation expense for the three months ended March 31, 2023. See further discussion below.

Schedule of Stock Options Activity

A summary of the options activity during the three months ended March 31, 2023 is shown below:

	Options	Weighted- Average Exercise Price
Outstanding at December 31, 2022	3,104,413	$	3.38
Granted	—	—
Exercised	(180,453)	3.05
Canceled/forfeited	(45,865)	2.59
Expired	—	—
Outstanding at March 31, 2023	2,878,095	$	3.41
Outstanding, vested and exercisable at March 31, 2023	2,855,175	$	3.26
Outstanding, vested and exercisable at December 31, 2022	3,080,069	$	3.23

Schedule of Non-Options Awards Activity

A summary of the RSU and PBRSU activity during the three months ended March 31, 2023 is shown below:

					Weighted- Average Grant Date Fair Value
	RSUs		PBRSUs		RSU		PBRSU
Outstanding and unvested at December 31, 2022	3,232,002		6,876,797		$	19.07	$	19.48
Granted	192,268		—		10.95		—
Performance factor adjustment	—		792,189		—		15.95
Vested	(21,705)		(2,286,886)		20.21		15.95
Forfeited	(110,733)		(455,875)		20.56		20.28
Outstanding and unvested at March 31, 2023	3,291,832		4,926,225		$	18.54	$	20.48
Shares surrendered for taxes for the three months ended March 31, 2023	6,908		903,658
Cost of shares surrendered for taxes for the three months ended March 31, 2023 (in millions)	$	0.1	$	13.1
Shares surrendered for taxes for the three months ended March 31, 2022	2,198		725,570
Cost of shares surrendered for taxes for the three months ended March 31, 2022 (in millions)	$	—	$	18.7

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Other Expenses (Tables)

3 Months Ended

Mar. 31, 2023

Other Income and Expenses [Abstract]

Schedule of Other Expenses

The following table summarizes the other expenses recognized for the three months ended March 31, 2023 and 2022.

	Three Months Ended March 31,
	2023		2022
Business acquisition costs (1)	$	0.1	$	6.3
Integration costs (2)	15.8		0.4
Strategic initiatives (3)	8.0		0.3
Global business services center expansion project in the Philippines (4)	—		3.1
Facility-exit charges (5)	1.2		4.8
Other (6)	5.1		2.2
Total other expenses	$	30.2	$	17.1

(1) These are costs, including legal, consulting, and bank fees, that are directly related to the closing of business acquisitions and include changes to contingent consideration, if applicable.

(2) These costs reflect efforts to integrate acquisitions from a systems, processes, and people perspective and to achieve synergies expected from business acquisitions. Costs include consulting fees, IT vendor spend, severance, retention, and certain payroll costs.

(3) These costs relate to performing portfolio and capital structure analyses and transactions and other business transformation projects (including large scale system projects) as part of the Company’s growth strategy. Costs include vendor spend, employee time and expenses spent on activities, severance, and retention amounts.

(4) These costs include legal and consulting fees related to the establishment of the Company’s inaugural global business services center in the Philippines as well as severance costs for personnel whose roles are being relocated. The entry into the Philippines was the first new organic global business services center country expansion by the Company in approximately 15 years. The Company completed the expansion project in 2022.

(5) As part of evaluating its footprint, the Company has exited certain leased facilities. Costs include asset impairment charges, early termination fees, and other costs related to exited leased facilities.

(6) For the three months ended March 31, 2023 and 2022, other includes $5.5 million and $1.1 million, respectively, of expenses related to the Company’s ongoing litigation matters. For further details, refer to Note 11, Commitments and Contingencies.

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Earnings Per Share (Tables)

3 Months Ended

Mar. 31, 2023

Earnings Per Share [Abstract]

Schedule of Basic and Diluted Net Income (Loss) Per Common Share

Basic and diluted net income per common share are calculated as follows:

	Three Months Ended March 31,
	2023		2022
Net income	$	0.3	$	29.4
Basic weighted-average common shares	417,346,840		278,747,261
Add: Effect of dilutive equity awards	4,621,205		6,472,685
Add: Effect of dilutive warrants	30,957,744		35,823,425
Diluted weighted average common shares	452,925,789		321,043,371
Net income per common share (basic)	$	—	$	0.11
Net income per common share (diluted)	$	—	$	0.09

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Segments and Customer Concentrations (Tables)

3 Months Ended

Mar. 31, 2023

Segment Reporting [Abstract]

Schedule of Customer Concentration, Net Services Revenue

Customers comprising greater than 10% of net services revenue are as follows:

	Three Months Ended March 31,
Customer Name	2023		2022
Ascension and its affiliates	40	%	56	%
Intermountain Healthcare	11	%	14	%

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Supplemental Financial Information (Tables)

3 Months Ended

Mar. 31, 2023

Organization, Consolidation and Presentation of Financial Statements [Abstract]

Summary Depreciation and Amortization Expense

The following table summarizes the allocation of depreciation and amortization expense related to property, equipment and software between cost of services and selling, general and administrative expenses:

	Three Months Ended March 31,
	2023		2022
Cost of services	$	15.5	$	11.5
Selling, general and administrative	0.4		0.3
Total depreciation and amortization	$	15.9	$	11.8

Schedule of Cash Flow, Supplemental Cash Flow Information

Supplemental cash flow information related to leases are as follows:

	Three Months Ended March 31,
	2023		2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$	6.2	$	3.4
Right-of-use assets obtained in exchange for operating lease obligations:	3.1		6.0

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Acquisitions - Narrative (Details) $ in Millions		1 Months Ended		3 Months Ended		12 Months Ended
	Jun. 21, 2022 USD ($)	Aug. 31, 2022 USD ($)	Aug. 31, 2020 payment	Mar. 31, 2022 USD ($)	Sep. 30, 2021 USD ($)	Dec. 31, 2022
Cloudmed
Business Acquisition [Line Items]
Total purchase consideration	$ 3,281.6
Decrease in deferred income tax liability				$ 9.8
Decrease in goodwill				$ 9.8
RevWorks
Business Acquisition [Line Items]
Payments to acquire business		$ 12.5			$ 12.5
Number of deferred payments | payment			2
Payments to acquire business, number of payments, refund period, if circumstances met			2 years
Cloudmed | Cloudmed
Business Acquisition [Line Items]
Lock-up period						18 months

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Acquisitions - Fair Value of Assets Acquired and Liabilities Assumed (Details) - USD ($) $ in Millions	Jun. 21, 2022	Mar. 31, 2023	Dec. 31, 2022
Allocation of consideration to assets acquired and liabilities assumed:
Goodwill		$ 2,648.5	$ 2,658.2
Cloudmed
Business Combination, Recognized Identifiable Assets Acquired, Goodwill, and Liabilities Assumed, Net [Abstract]
Total purchase consideration	$ 3,281.6
Allocation of consideration to assets acquired and liabilities assumed:
Cash and cash equivalents	32.1
Accounts receivable	61.8
Current portion of contract assets	68.2
Property, equipment and software	5.0
Operating lease right-of-use assets	25.3
Non-current portion of contract assets	23.8
Intangible assets	1,366.6
Goodwill	2,093.9
Other assets	6.7
Accounts payable	(31.9)
Customer liabilities	(3.3)
Accrued compensation and benefits	(93.4)
Operating lease liabilities	(25.4)
Deferred income tax liabilities	(235.6)
Other liabilities	(12.2)
Net assets acquired	$ 3,281.6

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Acquisitions - Pro Forma Results (Details) - Cloudmed and VisitPay Acquisitions $ in Millions	3 Months Ended
	Mar. 31, 2022 USD ($)
Business Acquisition [Line Items]
Net services revenue	$ 486.4
Net income	$ 1.4

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Revenue Recognition - Schedule of Disaggregated Revenue by Source (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Disaggregation of Revenue [Line Items]
Net services revenue	$ 545.6	$ 385.7
Net operating fees
Disaggregation of Revenue [Line Items]
Net services revenue	361.0	322.8
Incentive fees
Disaggregation of Revenue [Line Items]
Net services revenue	23.6	30.2
Modular and other
Disaggregation of Revenue [Line Items]
Net services revenue	161.0	$ 32.7
Cloudmed
Disaggregation of Revenue [Line Items]
Net services revenue	$ 125.8

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Revenue Recognition - Schedule of Contract Balances (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Contract assets, net
Current	$ 81.8	$ 83.9
Non-current	37.3	32.0
Total contract assets, net	119.1	115.9
Contract liabilities
Current	11.0	9.7
Non-current	18.4	18.7
Total contract liabilities	29.4	28.4
Current portion of customer liabilities	8.8	7.6
Non-current portion of customer liabilities	5.2	5.0
Investor
Contract liabilities
Current portion of customer liabilities	2.2	2.1
Non-current portion of customer liabilities	$ 13.2	$ 13.7

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Revenue Recognition - Changes to Contract Assets (Details) $ in Thousands	3 Months Ended
	Mar. 31, 2023 USD ($)
Contract with Customer, Asset [Roll Forward]
Balance as of December 31, 2022	$ 115,900
Revenue recognized	86,000
Amounts billed	(82,600)
Other	(200)
Balance as of March 31, 2023	119,100
Contract with Customer, Liabilities [Roll Forward]
Balance as of December 31, 2022	(28,400)
Advanced billings	(91,300)
Advanced billings recognized	91,300
Additions	(3,900)
Revenue recognized	2,900
Balance as of March 31, 2023	$ (29,400)

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Revenue Recognition - Transaction Price Allocated to the Remaining Performance Obligation (Details) $ in Millions	Mar. 31, 2023 USD ($)
Net operating fees
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, amount	$ 394.0
Incentive fees
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, amount	$ 33.0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, period	9 months
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01 | Net operating fees
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, amount	$ 90.0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2023-04-01 | Incentive fees
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, amount	$ 33.0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | Net operating fees
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, amount	$ 78.1
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2024-01-01 | Incentive fees
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, amount	$ 0.0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | Net operating fees
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, amount	$ 45.7
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2025-01-01 | Incentive fees
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, amount	$ 0.0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | Net operating fees
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, amount	$ 35.6
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2026-01-01 | Incentive fees
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, amount	$ 0.0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01 | Net operating fees
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, amount	$ 31.2
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2027-01-01 | Incentive fees
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, amount	$ 0.0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, period	1 year
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-01-01 | Net operating fees
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, amount	$ 29.8
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2028-01-01 | Incentive fees
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, amount	$ 0.0
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2029-01-01
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, period
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2029-01-01 | Net operating fees
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, amount	$ 83.6
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2029-01-01 | Incentive fees
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items]
Revenue expected to be recognized in the future related to unsatisfied performance obligations, amount	$ 0.0

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Accounts Receivable and Allowance for Credit Losses - Rollforward (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Sep. 30, 2022	Mar. 31, 2022
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Beginning balance	$ 15.2		$ 2.5
Provision (recoveries)	1.1		0.0
Write-offs	(0.2)		(0.1)
Ending balance	16.1		2.4
Increase in allowance	$ 1.1		$ 0.0
Physician Customer
Accounts Receivable, Allowance for Credit Loss [Roll Forward]
Provision (recoveries)		$ 10.1
Increase in allowance		$ 10.1

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Accounts Receivable and Allowance for Credit Losses - Narratives (Details) $ in Millions	Mar. 31, 2023 USD ($)
Receivables [Abstract]
Contract assets, allowance	$ 2.6

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Debt - Carrying Amounts of Debt (Details) - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Debt Instrument [Line Items]
Long-term debt	$ 1,787.8
Unamortized discount and issuance costs	(22.5)	$ (23.6)
Total debt	1,765.3	1,786.5
Less: Current maturities	(58.3)	(53.9)
Total long-term debt	1,707.0	1,732.6
Line of Credit | Senior Revolver
Debt Instrument [Line Items]
Long-term debt	90.0	100.0
Borrowing availability	509.1
Line of Credit | Term A Loans
Debt Instrument [Line Items]
Long-term debt	1,200.3	1,211.4
Line of Credit | Term B Loan
Debt Instrument [Line Items]
Long-term debt	497.5	$ 498.7
Line of Credit | Letters of Credit
Debt Instrument [Line Items]
Long-term debt	$ 0.9

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Debt - Narrative (Details) - Line of Credit - Second A&R Credit Agreement - USD ($)	Mar. 31, 2023	Jun. 21, 2022
Debt Instrument [Line Items]
Debt covenant, secured obligation pledged, capital stock of certain domestic subsidiaries, percent		100.00%
Term A Loans
Debt Instrument [Line Items]
Interest rate	7.31%
Existing Term A Loan
Debt Instrument [Line Items]
Credit agreement, maximum borrowing capacity		$ 691,300,000
Incremental Term A Loan
Debt Instrument [Line Items]
Credit agreement, maximum borrowing capacity		540,000,000
Term B Loan
Debt Instrument [Line Items]
Credit agreement, maximum borrowing capacity		500,000,000
Interest rate	7.81%
Senior Revolver
Debt Instrument [Line Items]
Credit agreement, maximum borrowing capacity		600,000,000
Debt issuance costs incurred		7,200,000
Debt issuance costs, capitalized		$ 6,400,000

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Debt - Scheduled Maturities of Long-Term Debt (Details) $ in Millions	Mar. 31, 2023 USD ($)
Debt Disclosure [Abstract]
Remainder of 2023	$ 41.5
2024	67.0
2025	67.0
2026	708.3
2027	430.2
2028	5.0
Thereafter	468.8
Total	$ 1,787.8

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Derivative Financial Instruments - Narrative (Details) - USD ($)		3 Months Ended		12 Months Ended
	Jul. 05, 2022	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Derivative [Line Items]
Accumulated gain, net of tax, recognized in other comprehensive loss		$ 8,200,000		$ 9,900,000
Third Party
Derivative [Line Items]
Potential business combination, expected purchase price	$ 150,000,000
Designated as Hedging Instrument | Cash Flow Hedging | Foreign Currency Hedges
Derivative [Line Items]
Unrealized gains reported in accumulated other comprehensive loss		1,100,000
Gains to be reclassified within next 12 months		1,100,000
Derivatives, net gain (loss) reclassified		300,000	$ 200,000
Notional amount		90,200,000
Designated as Hedging Instrument | Cash Flow Hedging | Interest rate swaps
Derivative [Line Items]
Unrealized gains reported in accumulated other comprehensive loss		9,900,000
Gains to be reclassified within next 12 months		8,300,000
Derivatives, net gain (loss) reclassified		1,900,000	$ (300,000)
Notional amount		$ 500,000,000

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Derivative Financial Instruments- Schedule Of Derivative Instruments as Hedged on Consolidated Balance Sheets (Details) - Cash Flow Hedging - Designated as Hedging Instrument - USD ($) $ in Millions	Mar. 31, 2023	Dec. 31, 2022
Foreign currency forward contracts
Derivative [Line Items]
Derivative asset, current	$ 1.1	$ 0.1
Derivative liability	0.0	0.5
Derivative, fair value, net	1.1	0.6
Interest rate swaps
Derivative [Line Items]
Derivative asset, current	8.3	8.7
Derivative asset, noncurrent	1.6	5.0
Derivative liability	0.0	0.0
Derivative, fair value, net	$ 9.9	$ 13.7

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Share-Based Compensation - Narrative (Details) - USD ($) $ in Millions		3 Months Ended		12 Months Ended
	Jun. 21, 2022	Mar. 31, 2023	Mar. 31, 2022	Dec. 31, 2022
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share-based compensation expense		$ 12.3	$ 10.1
Related tax benefits		2.6	1.8
Income tax benefit		$ 0.5	$ 2.5
RSUs and PBRSUs | Cloudmed
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Replacement awards issued to Cloudmed equity award holders (in shares)				3,173,184
RSUs | Cloudmed
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Replacement awards issued to Cloudmed equity award holders (in shares)				1,536,220
PBRSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Maximum exercisable (in shares)		9,852,450
PBRSUs | Minimum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vesting if targets conditions met, potential percentage		0.00%
PBRSUs | Maximum
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of shares vesting if targets conditions met, potential percentage		200.00%
Former Class P Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Number of units converted in Transaction Agreement (in shares)	97,875
Management Units
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Nonvested award, cost not yet recognized, period for recognition		4 years
Number of units converted in Transaction Agreement (in shares)	514,986

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Share-Based Compensation - Compensation Expense Allocation (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total share-based compensation expense	$ 12.3	$ 10.1
CoyCo 2
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Share-based compensation expense capitalized to deferred contract costs	1.8
Cost of services
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total share-based compensation expense	6.9	4.3
Selling, general and administrative
Employee Service Share-based Compensation, Allocation of Recognized Period Costs [Line Items]
Total share-based compensation expense	$ 5.4	$ 5.8

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Share-Based Compensation - Stock Options Activity (Details) - $ / shares	3 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Options
Outstanding at beginning of period (in shares)	3,104,413
Granted (in shares)	0
Exercised (in shares)	(180,453)
Canceled/forfeited (in shares)	(45,865)
Expired (in shares)	0
Outstanding at end of period (in shares)	2,878,095
Outstanding, vested and exercisable at end of period (in shares)	2,855,175	3,080,069
Weighted- Average Exercise Price
Outstanding at beginning of period (in dollars per share)	$ 3.38
Granted (in dollars per share)	0
Exercised (in dollars per share)	3.05
Canceled/forfeited (in dollars per share)	2.59
Expired (in dollars per share)	0
Outstanding at end of period (in dollars per share)	3.41
Outstanding, vested and exercisable at end of period (in dollars per share)	$ 3.26	$ 3.23

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Share-Based Compensation - Other Than Stock Options Activity (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
RSUs
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Outstanding and unvested at beginning of period (in shares)	3,232,002
Granted (in shares)	192,268
Performance factor adjustment (in shares)	0
Vested (in shares)	(21,705)
Forfeited (in shares)	(110,733)
Outstanding and unvested at end of period (in shares)	3,291,832
Weighted- Average Grant Date Fair Value
Outstanding and unvested at beginning of period (in dollars per share)	$ 19.07
Granted (in dollars per share)	10.95
Performance factor adjustment (in dollars per share)	0
Vested (in dollars per share)	20.21
Forfeited (in dollars per share)	20.56
Outstanding and unvested at end of period (in dollars per share)	$ 18.54
Shares surrendered for taxes (in shares)	6,908	2,198
Cost of shares surrendered for taxes	$ 0.1	$ 0.0
PBRSUs
Share-based Compensation Arrangement by Share-based Payment Award, Equity Instruments Other than Options, Nonvested, Number of Shares [Roll Forward]
Outstanding and unvested at beginning of period (in shares)	6,876,797
Granted (in shares)	0
Performance factor adjustment (in shares)	792,189
Vested (in shares)	(2,286,886)
Forfeited (in shares)	(455,875)
Outstanding and unvested at end of period (in shares)	4,926,225
Weighted- Average Grant Date Fair Value
Outstanding and unvested at beginning of period (in dollars per share)	$ 19.48
Granted (in dollars per share)	0
Performance factor adjustment (in dollars per share)	15.95
Vested (in dollars per share)	15.95
Forfeited (in dollars per share)	20.28
Outstanding and unvested at end of period (in dollars per share)	$ 20.48
Shares surrendered for taxes (in shares)	903,658	725,570
Cost of shares surrendered for taxes	$ 13.1	$ 18.7

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Other Expenses - Schedule of Other Expenses (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Other Income and Expenses [Abstract]
Business acquisition costs	$ 0.1	$ 6.3
Integration costs	15.8	0.4
Strategic initiatives	8.0	0.3
Global business services center expansion project in the Philippines	0.0	3.1
Facility-exit charges	1.2	4.8
Other	5.1	2.2
Total other expenses	$ 30.2	17.1
Number of years since new country entry	15 years
Litigation expenses	$ 5.5	$ 1.1

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Income Taxes - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Income Tax Disclosure [Abstract]
Federal statutory tax rate	21.00%
Statute of limitations minimum	3 years
Statute of limitations maximum	6 years
Gross deferred tax assets		$ 147.6
Deferred tax assets related to operating loss carryforwards		$ 50.0

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Earnings Per Share - Computation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Earnings Per Share [Abstract]
Net income (loss) available to common stockholders, basic	$ 0.3	$ 29.4
Net income (loss) available to common stockholders, diluted	$ 0.3	$ 29.4
Basic weighted-average common shares (in shares)	417,346,840	278,747,261
Add: Effect of dilutive equity awards (in shares)	4,621,205	6,472,685
Add: Effect of dilutive warrants (in shares)	30,957,744	35,823,425
Diluted weighted average common shares (in shares)	452,925,789	321,043,371
Net income per common share (basic) (in dollars per share)	$ 0	$ 0.11
Net income per common share (diluted) (in dollars per share)	$ 0	$ 0.09

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Earnings Per Share - Narrative (Details) - shares	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Earnings Per Share [Abstract]
Antidilutive common share equivalents (in shares)	768,030	43,206

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Commitments and Contingencies - Narrative (Details)	Apr. 19, 2021 claim
TCP-ASC Recapitalization Litigation | Pending Litigation
Loss Contingencies [Line Items]
Number of complaints filed	2

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Segments and Customer Concentrations - Narrative (Details) - segment	3 Months Ended	12 Months Ended
	Mar. 31, 2023	Dec. 31, 2022
Segment Reporting Information [Line Items]
Number of operating segments	1
Number of reporting segments	1
Customer Concentration Risk | Accounts Receivable | Ascension and its affiliates
Segment Reporting Information [Line Items]
Concentration percentage	10.00%	10.00%

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Segments and Customer Concentrations - Concentration Risk by Customer (Details) - Revenue - Customer Concentration Risk	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Ascension and its affiliates
Concentration Risk [Line Items]
Concentration percentage	40.00%	56.00%
Intermountain Healthcare
Concentration Risk [Line Items]
Concentration percentage	11.00%	14.00%

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Supplemental Financial Information - Schedule of Prepaid Expenses and Other Current Assets (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Property, Plant and Equipment [Line Items]
Total depreciation and amortization	$ 15.9	$ 11.8
Cost of services
Property, Plant and Equipment [Line Items]
Total depreciation and amortization	15.5	11.5
Selling, general and administrative
Property, Plant and Equipment [Line Items]
Total depreciation and amortization	$ 0.4	$ 0.3

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Supplemental Financial Information - Narrative (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Deferred Costs, Capitalized, Prepaid, and Other Assets Disclosure [Abstract]
Intangible asset amortization expense	$ 50.1	$ 7.1

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Supplemental Financial Information - Schedule of Supplemental Cash Flow Information Related to Leases (Details) - USD ($) $ in Millions	3 Months Ended
	Mar. 31, 2023	Mar. 31, 2022
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows for operating leases	$ 6.2	$ 3.4
Right-of-use assets obtained in exchange for operating lease obligations	$ 3.1	$ 6.0