XML 44 R29.htm IDEA: XBRL DOCUMENT v3.8.0.1
Summary of Significant Accounting Policies (Tables)
 12 Months Ended
Dec. 31, 2017
Accounting Policies [Abstract]  
Concentration of Net Operating Revenues and Net Patient Service Accounts Receivable by Payor and Payor Class
Our inpatient rehabilitation segment derived its Net operating revenues from the following payor sources:
 
For the Year Ended December 31,
 
2017
 
2016
 
2015
Medicare
73.2
%
 
73.3
%
 
73.2
%
Medicare Advantage
8.4
%
 
7.7
%
 
7.9
%
Managed care
10.9
%
 
11.2
%
 
11.1
%
Medicaid
3.1
%
 
3.0
%
 
2.5
%
Other third-party payors
1.6
%
 
1.8
%
 
2.0
%
Workers’ compensation
0.9
%
 
1.0
%
 
1.1
%
Patients
0.6
%
 
0.6
%
 
0.7
%
Other income
1.3
%
 
1.4
%
 
1.5
%
Total
100.0
%
 
100.0
%
 
100.0
%
Our home health and hospice segment derived its Net operating revenues from the following payor sources:
 
For the Year Ended December 31,
 
2017
 
2016
 
2015
Medicare
85.1
%
 
82.9
%
 
83.7
%
Medicare Advantage
9.7
%
 
8.7
%
 
7.7
%
Managed care
3.8
%
 
3.9
%
 
3.0
%
Medicaid
1.2
%
 
4.3
%
 
5.5
%
Other third-party payors
—
%
 
—
%
 
—
%
Workers’ compensation
—
%
 
—
%
 
—
%
Patients
0.1
%
 
0.1
%
 
0.1
%
Other income
0.1
%
 
0.1
%
 
—
%
Total
100.0
%
 
100.0
%
 
100.0
%
We derived consolidated Net operating revenues from the following payor sources:
 
For the Year Ended December 31,
 
2017
 
2016
 
2015
Medicare
75.5
%
 
75.2
%
 
74.9
%
Medicare Advantage
8.7
%
 
7.9
%
 
7.9
%
Managed care
9.5
%
 
9.8
%
 
9.8
%
Medicaid
2.7
%
 
3.2
%
 
3.0
%
Other third-party payors
1.3
%
 
1.4
%
 
1.7
%
Workers' compensation
0.7
%
 
0.8
%
 
0.9
%
Patients
0.5
%
 
0.5
%
 
0.6
%
Other income
1.1
%
 
1.2
%
 
1.2
%
Total
100.0
%
 
100.0
%
 
100.0
%
The concentration of net patient service accounts receivable by payor class, as a percentage of total net patient service accounts receivable, is as follows:
 
As of December 31,
 
2017
 
2016
Medicare
75.1
%
 
73.0
%
Managed care and other discount plans, including Medicare Advantage
17.4
%
 
18.5
%
Medicaid
2.4
%
 
2.7
%
Other third-party payors
2.9
%
 
3.3
%
Workers' compensation
1.3
%
 
1.6
%
Patients
0.9
%
 
0.9
%
Total
100.0
%
 
100.0
%
Useful Lives of Property and Equipment
Useful lives are generally as follows:
 
Years
Buildings
10 to 30
Leasehold improvements
2 to 15
Vehicles
5
Furniture, fixtures, and equipment
3 to 10
Assets under capital lease obligations:
 
Real estate
15 to 25
Vehicles
3
Equipment
3 to 5
Property and equipment consists of the following (in millions):
 
As of December 31,
 
2017
 
2016
Land
$
125.4

 
$
125.3

Buildings
1,712.4

 
1,601.4

Leasehold improvements
138.1

 
115.2

Vehicles
16.2

 
11.8

Furniture, fixtures, and equipment
461.5

 
425.3

 
2,453.6

 
2,279.0

Less: Accumulated depreciation and amortization
(1,097.8
)
 
(982.4
)
 
1,355.8

 
1,296.6

Construction in progress
161.3

 
95.2

Property and equipment, net
$
1,517.1

 
$
1,391.8
Estimated Useful Lives and Amortization Basis of Other Finite-lived Intangible Assets
The range of estimated useful lives and the amortization basis for our intangible assets, excluding goodwill, are generally as follows:
 
Estimated Useful Life
and Amortization Basis
Certificates of need
10 to 30 years using straight-line basis
Licenses
10 to 20 years using straight-line basis
Noncompete agreements
1 to 18 years using straight-line basis
Trade names:
 
Encompass
indefinite-lived asset
All other
1 to 20 years using straight-line basis
Internal-use software
3 to 7 years using straight-line basis
Market access assets
20 years using accelerated basis
The following table provides information regarding our other intangible assets (in millions):
 
Gross Carrying Amount
 
Accumulated Amortization
 
Net
Certificates of need:
 
 
 
 
 
2017
$
113.7

 
$
(19.5
)
 
$
94.2

2016
98.6

 
(12.9
)
 
85.7

Licenses:
 

 
 

 
 

2017
$
146.0

 
$
(71.6
)
 
$
74.4

2016
142.0

 
(62.1
)
 
79.9

Noncompete agreements:
 

 
 

 
 

2017
$
63.5

 
$
(55.4
)
 
$
8.1

2016
62.2

 
(47.3
)
 
14.9

Trade name - Encompass:
 
 
 
 
 
2017
$
135.2

 
$
—

 
$
135.2

2016
135.2

 
—

 
135.2

Trade names - all other:
 

 
 

 
 

2017
$
35.1

 
$
(16.4
)
 
$
18.7

2016
34.6

 
(13.9
)
 
20.7

Internal-use software:
 

 
 

 
 

2017
$
201.6

 
$
(132.3
)
 
$
69.3

2016
181.4

 
(110.2
)
 
71.2

Market access assets:
 
 
 
 
 
2017
$
13.2

 
$
(10.0
)
 
$
3.2

2016
13.2

 
(9.5
)
 
3.7

Total intangible assets:
 

 
 

 
 

2017
$
708.3

 
$
(305.2
)
 
$
403.1

2016
667.2

 
(255.9
)
 
411.3
Estimated Basis of Other Indefinite-lived Intangible Assets
The range of estimated useful lives and the amortization basis for our intangible assets, excluding goodwill, are generally as follows:
 
Estimated Useful Life
and Amortization Basis
Certificates of need
10 to 30 years using straight-line basis
Licenses
10 to 20 years using straight-line basis
Noncompete agreements
1 to 18 years using straight-line basis
Trade names:
 
Encompass
indefinite-lived asset
All other
1 to 20 years using straight-line basis
Internal-use software
3 to 7 years using straight-line basis
Market access assets
20 years using accelerated basis
Schedule of New Accounting Pronouncements and Changes in Accounting Principles [Table Text Block]
As a result of adopting ASC 606 on January 1, 2018 using the full retrospective transition method, we estimate the following impact to our consolidated statements of operations (in millions):
 
 
For the Year Ended December 31, 2017
 
For the Year Ended December 31, 2016
 
 
As Reported
 
Adjustment for ASC 606
 
Recasted
 
As Reported
 
Adjustment for ASC 606
 
Recasted
Net operating revenues
 
$
3,971.4

 
$
(52.4
)
 
$
3,919.0

 
$
3,707.2

 
$
(61.2
)
 
$
3,646.0

Provision for doubtful accounts
 
$
52.4

 
$
(52.4
)
 
$
—

 
$
61.2

 
$
(61.2
)
 
$
—

Net income attributable to Encompass Health
 
$
256.3

 
$
—

 
$
256.3

 
$
247.6

 
$
—

 
$
247.6