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Revenue | 9 Months Ended
--- | ---
Sep. 30, 2021
Revenue From Contract With Customer [Abstract] |
Revenue |
4. | Revenue
Revenue is primarily derived from services rendered to patients for inpatient psychiatric and substance abuse care, outpatient psychiatric care and residential treatment. The services provided by the Company have no fixed duration and can be terminated by the patient or the facility at any time, and therefore, each treatment is its own stand-alone contract. As our performance obligations relate to contracts with a duration of one year or less, the Company elected the optional exemption in Accounting Standards Codification (“ASC”) ASC 606-10-50-14(a). Therefore, the Company is not required to disclose the transaction price for the remaining performance obligations at the end of the reporting period or when the Company expects to recognize the revenue. The Company has minimal unsatisfied performance obligations at the end of the reporting period as our patients typically are under no obligation to remain admitted in our facilities. The Company disaggregates revenue from contracts with customers by service type and by payor. The Company’s facilities in the United States (the “U.S. Facilities”) and services provided by the facilities can generally be classified into the following categories: acute inpatient psychiatric facilities; specialty treatment facilities; residential treatment centers; and outpatient community-based facilities. Acute inpatient psychiatric facilities. Acute inpatient psychiatric facilities provide a high level of care in order to stabilize patients that are either a threat to themselves or to others. The acute setting provides 24-hour observation, daily intervention and monitoring by psychiatrists. Specialty treatment facilities. Specialty treatment facilities include residential recovery facilities, eating disorder facilities and comprehensive treatment centers. The Company provides a comprehensive continuum of care for adults with addictive disorders and co-occurring mental disorders. Inpatient, including detoxification and rehabilitation, partial hospitalization and outpatient treatment programs give patients access to the least restrictive level of care. Residential treatment centers. Residential treatment centers treat patients with behavioral disorders in a non-hospital setting, including outdoor programs. The facilities balance therapy activities with social, academic and other activities. Outpatient community-based facilities. Outpatient community-based programs are designed to provide therapeutic treatment to children and adolescents who have a clinically-defined emotional, psychiatric or chemical dependency disorder while enabling the youth to remain at home and within their community. The table below presents total revenue attributed to each category (in thousands):
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
Acute inpatient psychiatric facilities |  | $ | 284,143 |  |  | $ | 259,353 |  |  | $ | 832,692 |  |  | $ | 723,611 |
Specialty treatment facilities |  |  | 230,753 |  |  |  | 211,796 |  |  |  | 669,552 |  |  |  | 597,886 |
Residential treatment centers |  |  | 71,006 |  |  |  | 71,153 |  |  |  | 211,377 |  |  |  | 210,432 |
Outpatient community-based facilities |  |  | 1,657 |  |  |  | 5,659 |  |  |  | 7,293 |  |  |  | 16,724 |
Revenue |  | $ | 587,559 |  |  | $ | 547,961 |  |  | $ | 1,720,914 |  |  | $ | 1,548,653 |
The Company receives payments from the following sources for services rendered in our facilities: (i) state governments under their respective Medicaid and other programs; (ii) commercial insurers; (iii) the federal government under the Medicare program administered by the Centers for Medicare and Medicaid Services (“CMS”); and (iv) individual patients and clients. The Company determines the transaction price based on established billing rates reduced by contractual adjustments provided to third-party payors, discounts provided to uninsured patients and implicit price concessions. Contractual adjustments and discounts are based on contractual agreements, discount policies and historical experience. Implicit price concessions are based on historical collection experience. Most of our facilities have contracts containing variable consideration. However, it is unlikely a significant reversal of revenue will occur when the uncertainty is resolved, and therefore, the Company has included the variable consideration in the estimated transaction price. Subsequent changes resulting from a patient’s ability to pay are recorded as bad debt expense, which is included as a component of other operating expenses in the condensed consolidated statements of operations. Bad debt expense for the three and nine months ended September 30, 2021 and 2020 was not significant. The following table presents the Company’s revenue by payor type and as a percentage of revenue (in thousands):
|  | Three Months Ended September 30, |  |  | Nine Months Ended September 30, |
|  | 2021 |  |  | 2020 |  |  | 2021 |  |  | 2020 |
|  | Amount |  |  | % |  |  | Amount |  |  | % |  |  | Amount |  |  | % |  |  | Amount |  |  | % |
Commercial |  | $ | 170,427 |  |  |  | 29.0 | % |  | $ | 156,741 |  |  |  | 28.6 | % |  | $ | 511,975 |  |  |  | 29.8 | % |  | $ | 439,911 |  |  |  | 28.4 | %
Medicare |  |  | 97,529 |  |  |  | 16.6 | % |  |  | 96,536 |  |  |  | 17.6 | % |  |  | 274,208 |  |  |  | 15.9 | % |  |  | 244,721 |  |  |  | 15.9 | %
Medicaid |  |  | 288,092 |  |  |  | 49.0 | % |  |  | 261,341 |  |  |  | 47.7 | % |  |  | 845,128 |  |  |  | 49.1 | % |  |  | 767,075 |  |  |  | 49.4 | %
Self-Pay |  |  | 25,998 |  |  |  | 4.4 | % |  |  | 26,060 |  |  |  | 4.8 | % |  |  | 71,875 |  |  |  | 4.2 | % |  |  | 75,570 |  |  |  | 4.9 | %
Other |  |  | 5,513 |  |  |  | 1.0 | % |  |  | 7,283 |  |  |  | 1.3 | % |  |  | 17,728 |  |  |  | 1.0 | % |  |  | 21,376 |  |  |  | 1.4 | %
Revenue |  | $ | 587,559 |  |  |  | 100.0 | % |  | $ | 547,961 |  |  |  | 100.0 | % |  | $ | 1,720,914 |  |  |  | 100.0 | % |  | $ | 1,548,653 |  |  |  | 100.0 | %
Contract liabilities primarily consisted of unearned revenue from CMS’ Accelerated and Advance Payment Program. In April 2020, the Company received approximately $45 million from CMS’ Accelerated and Advance Payment Program for Medicare providers. The Company repaid approximately $7 million and $10 million of the $45 million of advance payments during the second and third quarters of 2021, respectively, via recoupment from the Company’s new Medicare claims and will continue to repay the remaining balance on a monthly basis through September 2022. Contract liabilities of $32.9 million are included in other accrued liabilities at September 30, 2021 and, at December 31, 2020, $35.9 million was included in other accrued liabilities and $11.3 million in other liabilities on the condensed consolidated balance sheets. A summary of the activity in contract liabilities is as follows (in thousands):
Balance at December 31, 2020 |  | $ | 47,196 |
Payments received |  |  | 5,385 |
Revenue recognized |  |  | (2,724 | )
Medicare advance repayments |  |  | (16,931 | )
Balance at September 30, 2021 |  | $ | 32,926 |

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- Definition The entire disclosure of revenue from contract with customer to transfer good or service and to transfer nonfinancial asset. Includes, but is not limited to, disaggregation of revenue, credit loss recognized from contract with customer, judgment and change in judgment related to contract with customer, and asset recognized from cost incurred to obtain or fulfill contract with customer. Excludes insurance and lease contracts. + References Reference 1: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -URI http://asc.fasb.org/topic&trid=49130388 Reference 2: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 10 -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130551-203045 Reference 3: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 13 -Subparagraph (b)(2) -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130556-203045 Reference 4: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (b) -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045 Reference 5: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 9 -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130550-203045 Reference 6: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (e) -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045 Reference 7: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (a) -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045 Reference 8: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (d) -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045 Reference 9: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 15 -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130558-203045 Reference 10: http://www.xbrl.org/2003/role/disclosureRef -Publisher FASB -Name Accounting Standards Codification -Topic 606 -SubTopic 10 -Section 50 -Paragraph 12 -Subparagraph (c) -URI http://asc.fasb.org/extlink&oid=123351226&loc=SL49130554-203045 + Details
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