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Goodwill and Other Intangible Assets | 6 Months Ended
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Jun. 30, 2023
Goodwill and Intangible Assets Disclosure [Abstract] |
Goodwill and Other Intangible Assets | Goodwill and Other Intangible Assets: We are required to test our goodwill for impairment at least annually, as of October 1, absent any triggering events that would accelerate an impairment assessment. During the preparation of our consolidated financial statements for the year ended December 31, 2022, we identified potential impairment triggering events in the fourth quarter and determined a quantitative analysis of our two reporting units should be performed. These triggering events included lower than expected fourth quarter operating results, a change in our acquisition strategy and declining collections, which we believe is in part a result of the growing shift in our third‑party payor mix, and specifically, an increase in Medicare Advantage payors. During the three months ended June 30, 2023, we identified potential impairment triggering events in the quarter and determined a quantitative analysis of our two reporting units should be performed. These triggering events included our performance against the 2023 forecast, a decrease in our share price and market capitalization, and the release of the 2024 proposed rule for home health on June 30, 2023, which included a net negative home health payment update. We estimated the fair value of our reporting units using both the income approach and market approach. The assumptions used in the income approach incorporate a number of significant estimates and judgments, including revenue growth rates, timing of acquisitions and de novo openings, forecasted operating margins, and the weighted-average cost of capital. The market approach utilizes the guideline public company methodology, which uses valuation indicators, including market multiples of earnings before interest, taxes, depreciation and amortization, from other businesses that are similar to each reporting unit and implied control premiums. While management believes the assumptions used are reasonable and commensurate with the views of a market participant, there is also uncertainty in current general economic and market conditions. The result of the analysis is sensitive to changes in key assumptions, such as assumed future reimbursement rates, rising interest rates and labor costs and delays in our ability to complete acquisitions and de novo openings, which could negatively impact our forecasted cash flows and result in an impairment charge in future periods. Based on the quantitative analysis in the fourth quarter of 2022, we recorded an impairment charge of $109.0 million in the three months ended December 31, 2022 to reflect a decrease in the carrying value of our home health reporting unit. As of December 31, 2022, the fair value of our hospice reporting unit exceeded its carrying value by less than 15%. As of December 31, 2022, the hospice reporting unit had an allocated goodwill balance of $303.6 million. Based on the quantitative analysis in the second quarter of 2023, we recorded an impairment charge of $85.8 million for the three months ended June 30, 2023 to reflect a decrease in the carrying value of our hospice reporting unit. As of June 30, 2023, the hospice reporting unit had an allocated goodwill balance of $217.8 million. As of June 30, 2023, the home health reporting unit had an allocated goodwill balance of $843.9 million. The cumulative impairments to our goodwill totaled $109.0 million as of December 31, 2022 and $194.8 million as of June 30, 2023.

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- Definition The entire disclosure for goodwill and intangible assets. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 350 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org//350/tableOfContent + Details
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