We recognize revenue when we transfer promised goods or services to customers in an amount that reflects the consideration to which we expect to be entitled in exchange for those goods or services. Our estimate for amounts not expected to be collected based on historical experience will continue to be recognized as a reduction to net revenue. However, subsequent changes in estimate of collectability due to a change in the financial status of a payer, for example a bankruptcy, will be recognized as bad debt expense in operating charges.

The performance obligation is separately identifiable from other promises in the customer contract. As the performance obligations are met (i.e.: room, board, ancillary services, level of care), revenue is recognized based upon allocated transaction price. The transaction price is allocated to separate performance obligations based upon the relative standalone selling price. In instances where we determine there are multiple performance obligations across multiple months, the transaction price will be allocated by applying an estimated implicit and explicit rate to gross charges based on the separate performance obligations.

In assessing collectability, we have elected the portfolio approach. This portfolio approach is being used as we have large volume of similar contracts with similar classes of customers. We reasonably expect that the effect of applying a portfolio approach to a group of contracts would not differ materially from considering each contract separately. Management’s judgment to group the contracts by portfolio is based on the payment behavior expected in each portfolio category. As a result, aggregating all of the contracts (which are at the patient level) by the particular payer or group of payers, will result in the recognition of the same amount of revenue as applying the analysis at the individual patient level.

We group our revenues into categories based on payment behaviors. Each component has its own reimbursement structure which allows us to disaggregate the revenue into categories that share the nature and timing of payments. The other patient revenue consists primarily of self-pay, government-funded non-Medicaid, and other.

The following table disaggregates our revenue by major source for the three-month periods ended March 31, 2024 and 2023 (in thousands):


	For the three months ended March 31, 2024
	Acute Care				Behavioral Health				Other		Total
Medicare	$	349,087	16	%	$	76,816	5	%			$	425,903	11	%
Managed Medicare		373,401	17	%		96,074	6	%				469,475	12	%
Medicaid		234,862	11	%		248,363	15	%				483,225	13	%
Managed Medicaid		159,359	7	%		423,308	26	%				582,667	15	%
Managed Care (HMO and PPOs)		698,785	32	%		404,173	24	%				1,102,958	29	%
UK Revenue		0	0	%		207,796	13	%				207,796	5	%
Other patient revenue and adjustments, net		123,333	6	%		144,131	9	%				267,464	7	%
Other non-patient revenue		246,254	11	%		55,406	3	%		2,434		304,094	8	%
Total Net Revenue	$	2,185,081	100	%	$	1,656,067	100	%	$	2,434	$	3,843,582	100	%

	For the three months ended March 31, 2023
	Acute Care				Behavioral Health				Other		Total
Medicare	$	329,446	17	%	$	76,544	5	%			$	405,990	12	%
Managed Medicare		344,032	17	%		75,077	5	%				419,109	12	%
Medicaid		110,009	6	%		206,473	14	%				316,482	9	%
Managed Medicaid		192,298	10	%		398,951	27	%				591,249	17	%
Managed Care (HMO and PPOs)		654,795	33	%		391,297	26	%				1,046,092	30	%
UK Revenue		0	0	%		167,789	11	%				167,789	5	%
Other patient revenue and adjustments, net		120,957	6	%		121,677	8	%				242,634	7	%
Other non-patient revenue		221,995	11	%		52,681	4	%		3,497		278,173	8	%
Total Net Revenue	$	1,973,532	100	%	$	1,490,489	100	%	$	3,497	$	3,467,518	100	%