Note 6. – Revenue Recognition and Accounts Receivables

The Company’s subsidiaries recognize revenues in the period in which services are provided. Accounts receivable primarily consist of amounts due from third-party payors and patients. The Company’s subsidiaries’ ability to collect outstanding receivables is critical to their results of operations and cash flows. Amounts the Company’s subsidiaries receive for treatment of patients covered by governmental programs such as Medicare and Medicaid and other third-party payors such as health maintenance organizations (“HMOs”), preferred provider organizations (“PPOs”) and other private insurers are generally less than the Company’s subsidiaries’ established billing rates. Additionally, to provide for accounts receivable that could become uncollectible in the future an allowance for doubtful accounts is established to reduce the carrying value of such receivables to their estimated net realizable value. Accordingly, the revenues and accounts receivable reported in the accompanying unaudited condensed consolidated financial statements are recorded at the net amount expected to be received.

Revenues by payor were as follows for the three and nine months ended March 31, 2017 and 2016:


	Three Months Ended						Nine Months Ended
	March 31,						March 31,
	2017			2016			2017			2016
Healthcare Facilities Segment:
Medicare	$	2,079		$	3,199		$	6,447		$	9,202
Medicaid		2,285			3,006			7,185			9,235
Self-pay		86			107			356			1,231
Managed Care & Other Insurance		871			1,411			2,248			5,840
Other		92			35			374			102

Revenues before provision for doubtful accounts		5,413			7,758			16,610			25,610
Provision for doubtful accounts		(184	)		(213	)		(321	)		(1,461	)

Healthcare Facilities Segment Net Revenues		5,229			7,545			16,289			24,149
Pharmacy Segment Net Revenues		8,198			8,509			23,946			24,644
Other Revenues		272			151			765			580

Total Net Revenues	$	13,699		$	16,205		$	41,000		$	49,373

The net revenues of the Healthcare Facilities Segments included increases of $38 and $385 resulting from prior years’ Medicare cost report settlements for the three and nine months ended March 31, 2017 and increases (reductions) of $140 and ($662) resulting from prior years’ Medicare cost report settlements for the three and nine months ended March 31, 2016. The net revenues of the Pharmacy Segment are presented net of contractual adjustments. The provision for bad debts of the Pharmacy Segment is presented as a component of operating expenses in the Condensed Consolidated Statements of Operations and Comprehensive Loss.

Summary information for accounts receivable is as follows:


	March 31			June 30,
	2017			2016
Accounts receivable (net of contractual allowances)	$	7,010		$	7,157
Less allowance for doubtful accounts		(710	)		(991	)

Patient accounts receivable - net	$	6,300		$	6,166

The following is a summary of the activity in the allowance for doubtful accounts for the Healthcare Facilities Segment and the Pharmacy Segment for the three and nine months ended March 31, 2017 and 2016:


Three Months Ended March 31, 2017	Healthcare
	Facilities			Pharmacy			Total
Balance at January 1, 2017	$	332		$	400		$	732
Additions recognized as a reduction to revenues:
Continuing Operations		184			126			310
Discontinued Operations		(14	)		—			(14	)
Accounts written off, net of recoveries		(180	)		(138	)		(318	)

Balance at March 31, 2017	$	322		$	388		$	710


NIne Months Ended March 31, 2017	Healthcare
	Facilities			Pharmacy			Total
Balance at July 1, 2016	$	624		$	367		$	991
Additions recognized as a reduction to revenues:
Continuing Operations		321			342			663
Discontinued Operations		378			—			378
Accounts written off, net of recoveries		(1,001	)		(321	)		(1,322	)

Balance at March 31, 2017	$	322		$	388		$	710


Three Months Ended March 31, 2016	Healthcare
	Facilities			Pharmacy			Total
Balance at January 1, 2016	$	4,055		$	432		$	4,487
Additions recognized as a reduction to revenues:
Continuing Operations		213			69			282
Discontinued Operations		530			—			530
Accounts written off, net of recoveries		(1,698	)		(146	)		(1,844	)

Balance at March 31, 2016	$	3,100		$	355		$	3,455


Nine Months Ended March 31, 2016	Healthcare
	Facilities			Pharmacy			Total
Balance at July 1, 2015	$	4,962		$	385		$	5,347
Additions recognized as a reduction to revenues:
Continuing Operations		1,461			429			1,890
Discontinued Operations		2,116			—			2,116
Accounts written off, net of recoveries		(5,439	)		(459	)		(5,898	)

Balance at March 31, 2016	$	3,100		$	355		$	3,455