Summary of Significant Accounting Policies (Tables)

12 Months Ended

Dec. 31, 2015

Summary of Significant Accounting Policies

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

        In addition to the Iowa Contracts and 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, 2013, 2014 and 2015 (in thousands):

Segment	Term Date	2013			2014			2015
Healthcare
Customer A	December 31, 2018(1)	$	128,607	*	$	253,661	*	$	439,481
Pharmacy Management
Customer B	November 30, 2016 to December 31, 2016(2)		133,724			123,812			130,200	*
Customer C	December 31, 2016		—			171,936			324,809
Customer D	December 31, 2013		92,647			2,612	*		—

*	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 Company had behavioral healthcare contracts with various areas in the State of Florida (the "Florida Areas") which were part of the Florida Medicaid program. The State of Florida implemented a new system of mandated managed care through which Medicaid enrollees receive integrated healthcare services, and phased out the behavioral healthcare programs under which the Florida Areas' contracts operated. The Company has a contract with the State of Florida to provide integrated healthcare services under the new program.
(2)	The customer has more than one contract. The individual contracts are scheduled to terminate at various points during the time period indicated above.

Schedule of significant restricted assets

Significant restricted assets of the Company as of December 31, 2014 and 2015 were as follows (in thousands):

	2014		2015
Restricted cash	$	215,325	$	133,597
Restricted short-term investments		132,808		277,556
Restricted deposits (included in other current assets)		30,620		27,752
Restricted long-term investments		43,293		3,826
Total	$	422,046	$	442,731

Schedule of fair value of financial assets and liabilities

        In accordance with the fair value hierarchy described above, the following table shows the fair value of the Company's financial assets and liabilities that are required to be measured at fair value as of December 31, 2014 and 2015 (in thousands):

	Fair Value Measurements at December 31, 2014
	Level 1		Level 2		Level 3		Total
Assets
Cash and cash equivalents(1)	$	—	$	139,280	$	—	$	139,280
Restricted cash(2)		—		65,992		—		65,992
Investments:
U.S. Government and agency securities		4,303		—		—		4,303
Obligations of government-sponsored enterprises(3)		—		15,315		—		15,315
Corporate debt securities		—		246,886		—		246,886
Certificates of deposit		—		1,150		—		1,150
Total assets held at fair value	$	4,303	$	468,623	$	—	$	472,926
Liabilities
Contingent consideration	$	—	$	—	$	58,153	$	58,153
Total liabilities held at fair value	$	—	$	—	$	58,153	$	58,153

	Fair Value Measurements at December 31, 2015
	Level 1		Level 2		Level 3		Total
Assets
Cash and cash equivalents(4)	$	—	$	6,009	$	—	$	6,009
Restricted cash(5)		—		82,808		—		82,808
Investments:
U.S. Government and agency securities		5,514		—		—		5,514
Obligations of government-sponsored enterprises(6)		—		50,525		—		50,525
Corporate debt securities		—		268,976		—		268,976
Certificates of deposit		—		1,150		—		1,150
Total assets held at fair value	$	5,514	$	409,468	$	—	$	414,982
Liabilities
Contingent consideration	$	—	$	—	$	92,426	$	92,426
Total liabilities held at fair value	$	—	$	—	$	92,426	$	92,426

(1)	Excludes $116.0 million of cash held in bank accounts by the Company.
(2)	Excludes $149.3 million of restricted cash held in bank accounts by the Company.
(3)	Includes investments in notes issued by the Federal Home Loan Bank.
(4)	Excludes $109.4 million of cash held in bank accounts by the Company.
(5)	Excludes $50.8 million of restricted cash held in bank accounts by the Company.
(6)	Includes investments in notes issued by the Federal Home Loan Bank and Federal Farm Credit Banks.

Summary of the Company's liability for contingent consideration

        The following table summarizes the Company's liability for contingent consideration (in thousands):

	December 31, 2014		December 31, 2015
Balance as of beginning of period	$	—	$	58,153
Acquisition of CDMI		45,778		—
Acquisition of Cobalt		3,071		—
Acquisition of 4D		—		19,290
Changes in fair value		9,304		44,257
Payments		—		(29,274	)
Balance as of end of period	$	58,153	$	92,426

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

The following is a summary of short-term and long-term investments at December 31, 2014 and 2015 (in thousands):

	December 31, 2014
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S. Government and agency securities	$	4,305	$	—	$	(2	)	$	4,303
Obligations of government-sponsored enterprises(1)		15,318		1		(4	)		15,315
Corporate debt securities		247,118		8		(240	)		246,886
Certificates of deposit		1,150		—		—			1,150
Total investments at December 31, 2014	$	267,891	$	9	$	(246	)	$	267,654

	December 31, 2015
	Amortized Cost		Gross Unrealized Gains		Gross Unrealized Losses			Estimated Fair Value
U.S. Government and agency securities	$	5,524	$	—	$	(10	)	$	5,514
Obligations of government-sponsored enterprises(2)		50,575		4		(54	)		50,525
Corporate debt securities		269,340		—		(364	)		268,976
Certificates of deposit		1,150		—		—			1,150
Total investments at December 31, 2015	$	326,589	$	4	$	(428	)	$	326,165

(1)	Includes investments in notes issued by the Federal Home Loan Bank.
(2)	Includes investments in notes issued by the Federal Home Loan Bank and Federal Farm Credit Banks.

Summary of maturity dates of investments

        The maturity dates of the Company's investments as of December 31, 2015 are summarized below (in thousands):

	Amortized Cost		Estimated Fair Value
2016	$	322,747	$	322,339
2017		3,842		3,826
Total investments at December 31, 2015	$	326,589	$	326,165

Schedule of net property and equipment

        Property and equipment, net, consisted of the following at December 31, 2014 and 2015 (in thousands):

	2014			2015
Building improvements	$	13,416		$	13,655
Equipment		185,391			207,667
Capital leases—property		26,945			26,945
Capital leases—equipment		7,883			12,335
Capitalized internal-use software		351,978			396,794
		585,613			657,396
Accumulated depreciation		(413,697	)		(482,651	)
Property and equipment, net	$	171,916		$	174,745

Schedule of allocation of goodwill by reporting units

        Goodwill for each of the Company's reporting units with goodwill at December 31, 2014 and 2015 were as follows (in thousands):

	2014		2015
Commercial	$	233,591	$	242,255
Government		20,879		18,363
Pharmacy Management		311,636		360,772
Total	$	566,106	$	621,390

Summary changes in the carrying amount of goodwill

        The changes in the carrying amount of goodwill for the years ended December 31, 2014 and 2015 are reflected in the table below (in thousands):

	2014		2015
Balance as of beginning of period	$	488,206	$	566,106
Acquisition of CDMI		69,092		—
Acquisition of 4D		—		49,136
Other acquisitions and measurement period adjustments		8,808		6,148
Balance as of end of period	$	566,106	$	621,390

Schedule of intangible assets

        The following is a summary of intangible assets at December 31, 2014 and 2015, and the estimated useful lives for such assets (in thousands):

	December 31, 2014
Asset	Estimated Useful Life	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer agreements and lists	2.5 to 18 years	$	249,390	$	(121,788	)	$	127,602
Provider networks and other	1 to 16 years		13,013		(6,897	)		6,116
		$	262,403	$	(128,685	)	$	133,718

	December 31, 2015
Asset	Estimated Useful Life	Gross Carrying Amount		Accumulated Amortization			Net Carrying Amount
Customer agreements and lists	2.5 to 18 years	$	274,790	$	(148,795	)	$	125,995
Provider networks and other	1 to 16 years		16,663		(9,284	)		7,379
		$	291,453	$	(158,079	)	$	133,374

Schedule of changes in medical claims payable

       The following table presents the components of the change in medical claims payable for the years ended December 31, 2013, 2014 and 2015 (in thousands):

	2013			2014			2015
Claims payable and IBNR, beginning of period	$	222,929		$	242,229		$	278,803
Cost of care:
Current year		2,264,276			2,097,395			2,297,255
Prior years(3)		(31,300	)		(8,800	)		(22,500	)
Total cost of care		2,232,976			2,088,595			2,274,755
Claim payments and transfers to other medical liabilities(1):
Current year		2,053,274			1,845,325			2,077,729
Prior years		160,402			206,696			222,530
Total claim payments and transfers to other medical liabilities		2,213,676			2,052,021			2,300,259
Claims payable and IBNR, end of period		242,229			278,803			253,299
Withhold receivables, end of period(2)		(13,888	)		(321	)		(2,850	)
Medical claims payable, end of period	$	228,341		$	278,482		$	250,449

(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.
(3)	Favorable development in 2013, 2014 and 2015 was $31.3 million, $8.8 million and $22.5 million, respectively.