Fair Value Measurements

12 Months Ended

Dec. 31, 2014

Note 3 — Fair Value Measurements

The following tables represent the Company’s fair value hierarchy for its financial assets measured at fair value on a recurring basis (in thousands):



	Fair Value Measurements as of December 31, 2014 Using

		Quoted Prices in		Significant
		Active Markets		Other		Significant
		for		Observable		Unobservable		Balance
		Identical Assets		Inputs		Inputs		as of
Description		(Level 1)		(Level 2)		(Level 3)		December 31, 2014
Certificate of deposit	$	—	$	75	$	—	$	75
Money market funds		19,678		—		—		19,678
Total	$	19,678	$	75	$	—	$	19,753



	Fair Value Measurements as of December 31, 2013 Using

		Quoted Prices in		Significant
		Active Markets		Other		Significant
		for		Observable		Unobservable		Balance
		Identical Assets		Inputs		Inputs		as of
Description		(Level 1)		(Level 2)		(Level 3)		December 31, 2013
Certificate of deposit	$	—	$	75	$	—	$	75
Money market funds		28,262		—		—		28,262
Total	$	28,262	$	75	$	—	$	28,337

The following table provides a summary of changes in fair value of the Company’s level 3 liability during fiscal 2012 (in thousands):



	Contingent
	Consideration
Balance as of January 1, 2012	$	15,400
Change in the estimated fair value of the contingent consideration liability		(15,422)
Translation adjustments		22
Balance as of December 31, 2012	$	—

Contingent Consideration

As part of the acquisition of NovaMed which occurred on April 18, 2011, the Company would have been required to pay up to an additional $43.0 million in earn-out payments on the successful achievement of revenue and earnings targets for the 2011 and 2012 fiscal years (the “earn out” or “contingent consideration”).

The earn-out period ended on December 31, 2012 with none of the targets met. Through September 30, 2012, the Company used the assistance of a third-party valuation expert to estimate the fair value of the contingent consideration using a Monte Carlo simulation model. The fair value of the contingent consideration was remeasured each period, and changes to the fair value were recorded as expense or gains. As of December 31, 2012, the Company estimated the fair value of the contingent consideration to be $0, given none of the performance targets were met, resulting in a non-cash gain of $15.4 million for the year ended December 31, 2012. The Company subsequently settled various matters with the former stockholders of NovaMed, confirming among other things, that the Company had no liability for earn-out contingent payments.