XML 84 R13.htm IDEA: XBRL DOCUMENT
v2.4.1.9

Allowance For Doubtful Accounts | 12 Months Ended
--- | ---
Dec. 31, 2014
Receivables [Abstract] |
Allowance for Doubtful Accounts | Allowance for Doubtful Accounts The allowance for doubtful accounts is established as losses are estimated to have occurred through a provision for bad debts charged to earnings and is included in the costs of services provided caption in our consolidated statements of comprehensive income. The allowance for doubtful accounts is evaluated based on our periodic review of accounts and notes receivable and is inherently subjective as it requires estimates that are susceptible to significant revision as more information becomes available. State Medicaid programs are experiencing increased demand, and with lower revenues than projected, they have fewer resources to support their Medicaid programs. In addition, comprehensive health care legislation under the Act was signed into law in March 2010. The Act will significantly impact the governmental healthcare programs in which our clients participate, and reimbursements received thereunder from governmental or third-party payors. Furthermore, in the coming year and beyond, new proposals or additional changes in existing regulations could be made to the Act which could directly impact the governmental reimbursement programs in which our clients participate. As a result, some state Medicaid programs are reconsidering previously approved increases in nursing home reimbursement or are considering delaying or foregoing those increases. A few states have indicated it is possible they will run out of cash to pay Medicaid providers, including nursing homes. Any negative changes in our clients’ reimbursements may negatively impact our results of operations. Although we are currently evaluating the Act’s effect on our client base, we may not know the full effect until such time as these laws are fully implemented and the Centers for Medicare and Medicaid Services (“CMS”) and other agencies issue applicable regulations or guidance. In 2009 and 2010, Federal economic stimulus legislation was enacted to counter the impact of the economic crisis on state budgets. The legislation included the temporary provision of additional federal matching funds to help states maintain their Medicaid programs. This legislation to provide states with an extension of this fiscal relief was extended through June 2011, but at a reduced reimbursement rate. In July 2011, CMS issued a final rule that reduced Medicare payments to nursing centers by 11.1% and changed the reimbursement for the provision of group rehabilitation therapy services to Medicare beneficiaries. This new rule was effective as of October 1, 2011. Even if federal or state legislation is enacted that provides additional funding to Medicaid providers, given the volatility of the economic environment, it is difficult to predict the impact of this legislation on our clients’ liquidity and their ability to make payments to us as agreed. In January 2013, the U.S. Congress enacted the American Taxpayer Relief Act of 2012, which delayed automatic spending cuts, including reduced Medicare payments to plans and providers up to 2%. These discretionary spending caps were originally enacted under provisions in the Budget Control Act of 2011, an initiative to reduce the federal deficit through the year 2021, also known as “sequestration.” The sequestration went into effect starting March 2013. In December 2013, the U.S. Congress enacted the Bipartisan Budget Act of 2013, which reduces the impact of the sequestration over the next two years. This began in fiscal year 2014 and extended the reduction in Medicare payments to plans and providers for two years through the year 2023. We have had varying collection experience with respect to our accounts and notes receivable. When contractual terms are not met, we generally encounter difficulty in collecting amounts due from certain of our clients. Therefore, we have sometimes been required to extend the period of payment for certain clients beyond contractual terms. These clients include those who have terminated service agreements and slow payers experiencing financial difficulties. In order to provide for these collection problems and the general risk associated with the granting of credit terms, we have recorded the following bad debt provisions (in an Allowance for Doubtful Accounts):
| Year Ended December 31,
| 2014 |  | 2013 |  | 2012
Bad debt provision | $ | 4,470,000 |  |  | $ | 1,990,000 |  |  | $ | 2,160,000 |
In making our credit evaluations, in addition to analyzing and anticipating, where possible, the specific cases described above, we consider the general collection risk associated with trends in the long-term care industry. We also establish credit limits, perform ongoing credit evaluation and monitor accounts to minimize the risk of loss. Notwithstanding our efforts to minimize credit risk exposure, our clients could be adversely affected if future industry trends change in such a manner as to negatively impact their cash flows. If our clients experience a negative impact in their cash flows, it would have a material adverse effect on our results of operations and financial condition. Impaired Notes Receivable We evaluate our notes receivable for impairment quarterly and on an individual client basis. Notes receivable considered impaired are generally attributable to clients that are either in bankruptcy, are subject to collection activity or those slow payers that are experiencing financial difficulties. In the event that our evaluation results in a determination that a note receivable is impaired, it is valued at the present value of expected cash flows or market value of related collateral. Summary schedules of impaired notes receivable, and the related reserve, for the years ended December 31, 2014, 2013 and 2012 are as follows:
| Impaired Notes Receivable
Year ended December 31, | Balance Beginning of Year |  | Additions |  | Deductions |  | Balance End of Year |  | Average Outstanding Balance
2014 | $ | 2,892,000 |  |  | $ | 9,124,000 |  |  | $ | 1,808,000 |  |  | $ | 10,208,000 |  |  | $ | 6,550,000 |
2013 | $ | 1,639,000 |  |  | $ | 1,267,000 |  |  | $ | 14,000 |  |  | $ | 2,892,000 |  |  | $ | 2,266,000 |
2012 | $ | 1,855,000 |  |  | $ | — |  |  | $ | 216,000 |  |  | $ | 1,639,000 |  |  | $ | 1,747,000 |
| Reserve for Impaired Notes Receivable
Year ended December 31, | Balance Beginning of Year |  | Additions |  | Deductions |  | Balance End of Year
2014 | $ | 2,019,000 |  |  | $ | 2,489,000 |  |  | $ | 1,477,000 |  |  | $ | 3,031,000 |
2013 | $ | 958,000 |  |  | $ | 1,072,000 |  |  | $ | 11,000 |  |  | $ | 2,019,000 |
2012 | $ | 1,066,000 |  |  | $ | 108,000 |  |  | $ | 216,000 |  |  | $ | 958,000 |
For impaired notes receivable, interest income is recognized on a cost recovery basis only. As a result, no interest income was recognized on impaired notes receivable. We follow an income recognition policy on all other notes receivable that does not recognize interest income until cash payments are received. This policy was established, recognizing the environment of the long-term care industry, and not because such notes receivable are necessarily impaired. The difference between income recognition on a full accrual basis and cash basis, for notes receivable that are not considered impaired, is not material.

X
- Definition The entire disclosure for allowance for credit losses. + References No definition available. + Details
Name: | us-gaap_AllowanceForCreditLossesTextBlock
Namespace Prefix: | us-gaap_
Data Type: | nonnum:textBlockItemType
Balance Type: | na
Period Type: | duration

X
- Details
Name: | us-gaap_ReceivablesAbstract
Namespace Prefix: | us-gaap_
Data Type: | xbrli:stringItemType
Balance Type: | na
Period Type: | duration