Community Health Systems 2015 Annual Report Download - page 26

believes the information provides investors with useful information about the hospital admissions, adjusted
admissions and net operating revenues had the HMA facilities been owned for the indicated periods. This
same-store information for the hospitals acquired in the HMA merger for the period from January 1 through
December 31, 2014 is non-GAAP financial information and may not be comparable to the information
provided for the comparable 2015 period due to the aforementioned purchase accounting adjustments not
having been applied. In addition, same-store comparisons exclude our hospitals that have previously been
classified as discontinued operations for accounting purposes.
Sources of Revenue
We receive payment for healthcare services provided by our hospitals from:
• the federal Medicare program,
• state Medicaid or similar programs,
• healthcare insurance carriers, health maintenance organizations or “HMOs,” preferred provider
organizations or “PPOs,” and other managed care programs, and
• patients directly.
The following table presents the approximate percentages of operating revenues, net of contractual allowances
and discounts (but before provision for bad debts), by payor source for the periods indicated. The data for the
years presented are not strictly comparable due to the effect that hospital acquisitions have had on these statistics.
Year Ended December 31,
2015 2014 2013
Medicare ......................................... 24.1 % 24.7 % 24.8 %
Medicaid ......................................... 11.2 10.8 9.7
Managed Care and other third-party payors .............. 52.4 51.5 51.9
Self-pay .......................................... 12.3 13.0 13.6
Total .......................................... 100.0 % 100.0 % 100.0 %
As shown above, we receive a substantial portion of our revenues from the Medicare and Medicaid programs.
Included in Managed Care and other third-party payors is operating revenues from insurance companies with
which we have insurance provider contracts, Medicare managed care, insurance companies for which we do not
have insurance provider contracts, workers’ compensation carriers and non-patient service revenue, such as
rental income and cafeteria sales. The Patient Protection and Affordable Care Act, as amended by the Health
Care and Education Reconciliation Act of 2010, collectively, the Reform Legislation, has increased and is
expected to continue to increase the number of insured patients particularly in states that have expanded
Medicaid, which, in turn, has reduced and is expected to continue to reduce the percentage of our revenues from
self-pay patients. However, other aspects of the Reform Legislation, including payment reductions and
uncertainty regarding implementation and potential changes to the law, create uncertainty regarding the law’s
ultimate impact.
Medicare is a federal program that provides medical insurance benefits to persons age 65 and over, some
disabled persons, and persons with end-stage renal disease. Medicaid is a federal-state funded program,
administered by the states, which provides medical benefits to individuals who are unable to afford healthcare.
All of our hospitals are certified as providers of Medicare and Medicaid services. In the future, we generally
expect revenues received from the Medicare and Medicaid programs to increase due to the general aging of the
population. However, amounts received under the Medicare and Medicaid programs are generally significantly
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