Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2011

Summary of Significant Accounting Policies

Schedule of customers generating in excess of ten percent of net revenues for respective segment

• By Segment

        In addition to the Maricopa Contract previously discussed, the following customers generated in excess of ten percent of net revenues for the respective segment for the years ended December 31, 2009, 2010, and 2011 (in thousands):

Segment	Term Date	2009			2010			2011
Commercial
Customer A	December 31, 2012	$	235,002		$	243,399		$	171,109
Customer B	June 30, 2014		85,842			71,338			67,049
Customer C	December 31, 2012 to December 14, 2013(1)		40,697	*		65,175	*		111,607
Public Sector
Customer D	June 30, 2012(2)		147,734			153,650			191,063
Radiology Benefits Management
WellPoint, Inc.	December 31, 2010(3)		155,933			159,644			—
Customer E	November 30, 2012 to April 30, 2013(1)		—			121,401			134,257
Customer F	June 30, 2011 to November 30, 2011(1)(3)		80,368			66,970			38,297
Customer G	June 30, 2014		23,331	*		51,877			55,197
Customer H	March 31, 2013		—			10,448	*		36,293
Specialty Pharmaceutical Management
Customer I	March 31, 2012 to January 1, 2013(1)		85,725			86,850			90,563
Customer J	April 29, 2012 to September 1, 2012(1)		43,937			57,198			56,115
Customer E	February 1, 2012 to April 30, 2013(1)		30,856			32,877			25,006	*
Customer Q	December 31, 2012		42,465			24,897	*		18,943	*
Medicaid Administration
Customer K	December 4, 2011(3)		11,353			31,145			28,060
Customer L	September 30, 2013(4)		—			26,108			82,770
Customer M	March 16, 2012 to June 30, 2017(1)		10,528			24,432			23,683
Customer N	June 30, 2012 to June 30, 2013(1)		8,995			22,000			18,924	*
Customer O	June 30, 2010(3)		8,815			10,319	*		—
Customer P	June 30, 2013 to September 30, 2014(1)		6,036	*		16,249	*		22,084

*

Revenue amount did not exceed ten percent of net revenues for the respective segment for the year presented. Amount is shown for comparative purposes only.

(1)

The customer has more than one contract. The individual contracts are scheduled to terminate at various points during the time period indicated above.

(2)

Contract has options for the customer to extend the term for three additional one-year periods.

(3)

The contract has terminated.

(4)

This customer represents a subcontract with a Public Sector customer and is eliminated in consolidation.

Schedule of significant restricted assets

	2010		2011
Restricted cash	$	116,734	$	185,794
Restricted short-term investments		114,903		129,599
Restricted deposits (included in other current assets)		21,302		20,453
Restricted long-term investments		84,950		7,956
Total	$	337,889	$	343,802

Summary of short-term and long-term "available-for-sale" investments

	December 31, 2010
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S. Government and agency securities	$	2,178	$	1	$	—		$	2,179
Obligations of government-sponsored enterprises(1)		10,142		7		(11	)		10,138
Corporate debt securities		268,739		245		(215	)		268,769
Certificates of deposit		750		—		—			750
Taxable municipal bonds		2,680				(12	)		2,668
Total investments at December 31, 2010	$	284,489	$	253	$	(238	)	$	284,504

	December 31, 2011
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S. Government and agency securities	$	697	$	—	$	—		$	697
Obligations of government-sponsored enterprises(2)		8,293		3		(3	)		8,293
Corporate debt securities		192,059		31		(277	)		191,813
Certificates of deposit		100		—		—			100
Total investments at December 31, 2011	$	201,149	$	34	$	(280	)	$	200,903

(1)

Includes investments in notes issued by the Federal Home Loan Mortgage Corporation, and the Federal Home Loan Bank.

(2)

Includes investments in notes issued by the Federal Home Loan Bank.

Summary of maturity dates of investments

	Amortized Cost		Estimated Fair Value
2012	$	193,147	$	192,947
2013		8,002		7,956
Total investments at December 31, 2011	$	201,149	$	200,903

Schedule of net property and equipment

	2010			2011
Buildings and improvements	$	5,321		$	5,037
Equipment		141,427			150,874
Capitalized internal-use software		195,223			224,190
		341,971			380,101
Accumulated depreciation		(230,157	)		(262,079	)
Property and equipment, net	$	111,814		$	118,022

Schedule of allocation of goodwill by reporting units

	December 31,
	2010		2011
Commercial	$	120,485	$	120,485
Radiology Benefits Management		104,549		104,549
Specialty Pharmaceutical Management		142,291		142,291
Medicaid Administration		59,614		59,614
Total	$	426,939	$	426,939

Schedule of changes in carrying amount of goodwill

	2010		2011
Balance as of beginning of period	$	426,471	$	426,939
Adjustment related to acquisition of Medicaid Administration		468		—
Balance as of end of period	$	426,939	$	426,939

Schedule of intangible assets

	December 31, 2010
Asset	Estimated Useful Life	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer agreements and lists	3 to 18 years	$	121,490	$	(71,165	)	$	50,325
Provider networks and other	5 to 16 years		7,430		(3,758	)		3,672
		$	128,920	$	(74,923	)	$	53,997

	December 31, 2011
Asset	Estimated Useful Life	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer agreements and lists	3 to 18 years	$	121,490	$	(81,388	)	$	40,102
Provider networks and other	5 to 16 years		8,743		(4,256	)		4,487
		$	130,233	$	(85,644	)	$	44,589

Schedule of changes in medical claims payable

	2009			2010			2011
Claims payable and IBNR, beginning of period	$	184,422		$	168,851		$	166,095
Cost of care:
Current year		1,771,213			1,919,785			1,790,124
Prior years		(5,900	)		(11,800	)		(5,400	)
Total cost of care		1,765,313			1,907,985			1,784,724
Claim payments and transfers to other medical liabilities(1):
Current year		1,624,626			1,777,356			1,657,291
Prior years		156,258			133,385			136,429
Total claim payments and transfers to other medical liabilities		1,780,884			1,910,741			1,793,720
Claims payable and IBNR, end of period		168,851			166,095			157,099
Withhold receivables, end of period(2)		(25,182	)		(23,424	)		(19,126	)
Medical claims payable, end of period	$	143,669		$	142,671		$	137,973

(1)

For any given period, a portion of unpaid medical claims payable could be covered by reinvestment liability (discussed below) and may not impact the Company's results of operations for such periods.

(2)

Medical claims payable is offset by customer withholds from capitation payments in situations in which the customer has the contractual requirement to pay providers for care incurred.

Schedule of fair value of financial assets and liabilities

	Level 1		Level 2		Level 3		Total
Cash and Cash Equivalents(1)	$	—	$	68,726	$	—	$	68,726
Restricted Cash(2)		—		72,698		—		72,698
Investments:
U.S. Government and agency securities		2,179		—		—		2,179
Obligations of government-sponsored enterprises(3)		—		10,138		—		10,138
Corporate debt securities		—		268,769		—		268,769
Taxable municipal bonds		—		2,668		—		2,668
Certificates of deposit		—		750		—		750
December 31, 2010	$	2,179	$	423,749	$	—	$	425,928

	Level 1		Level 2		Level 3		Total
Cash and Cash Equivalents(4)	$	—	$	1,296	$	—	$	1,296
Restricted Cash(5)		—		47,972		—		47,972
Investments:
U.S. Government and agency securities		697		—		—		697
Obligations of government-sponsored enterprises(6)		—		8,293		—		8,293
Corporate debt securities		—		191,813		—		191,813
Taxable municipal bonds		—		—		—		—
Certificates of deposit		—		100		—		100
December 31, 2011	$	697	$	249,474	$	—	$	250,171

(1)

Excludes $268.5 million of cash held in bank accounts by the Company.

(2)

Excludes $44.0 million of restricted cash held in bank accounts by the Company.

(3)

Includes investments in notes issued by the Federal Home Loan Mortgage Corporation, and the Federal Home Loan Bank.

(4)

Excludes $118.6 million of cash held in bank accounts by the Company.

(5)

Excludes $137.8 million of restricted cash held in bank accounts by the Company.

(6)

Includes investments in notes issued by the Federal Home Loan Bank.