SEC Filings

10-Q
ENVISION HEALTHCARE CORP filed this Form 10-Q on 11/03/2017
Entire Document
 
Item 1. Financial Statements - (continued)

(11) Insurance Reserves

Insurance reserves are established for professional and general liability claims utilizing policies with both fully-insured and self-insured components. This includes the use of an off-shore captive insurance program through wholly owned subsidiaries for certain professional (medical malpractice) and general liability programs. In those instances where the Company has obtained third-party insurance coverage, the Company normally retains liability for the first $1 million to $3 million of the loss. Insurance reserves cover known claims and incidents within the level of Company retention that may result in the assertion of additional claims, as well as claims from unknown incidents that may be asserted arising from activities through September 30, 2017.

The Company establishes reserves for claims based upon an assessment of claims reported and claims incurred but not reported. The reserves are established based on consultation with third-party independent actuaries using actuarial principles and assumptions that consider a number of factors, including historical claim payment patterns (including legal costs) and changes in case reserves and the assumed rate of inflation in health care costs and property damage repairs. Claims are not discounted.

Provisions for insurance expense included in the statements of operations include provisions determined in consultation with third-party actuaries and premiums paid to third-party insurers.

At September 30, 2017 and December 31, 2016, the Company's accrued professional liabilities are presented in the accompanying consolidated balance sheets as a component of other accrued liabilities and insurance reserves as follows (in millions):
 
September 30, 2017
 
December 31, 2016
Third-party insurance reserves
$
106.0

 
$
92.8

Estimated losses under self-insured programs
174.8

 
170.0

Incurred but not reported losses
104.1

 
94.3

Total accrued insurance reserves
384.9

 
357.1

Less estimated losses payable within one year
76.3

 
78.2

Total
$
308.6

 
$
278.9


The changes to the Company's estimated losses under insurance programs as of September 30, 2017 were as follows (in millions):
Balance at December 31, 2016
$
357.1

Assumed liabilities through acquisitions
32.7

Provision related to current period reserves
50.9

Payments for current period reserves
(0.6
)
Benefit related to changes in prior period reserves
(4.0
)
Payments for prior period reserves
(54.6
)
Change in third-party insurance reserves
4.3

Other, net including post-acquisition adjustments
(0.9
)
Balance at September 30, 2017
$
384.9


(12) Stockholders’ Equity

a. Common Stock

On December 1, 2016, the Company completed the Merger. Upon completion of the Merger, each share of AmSurg common stock was converted into one share of Company common stock, par value of $0.01 per share, and each share of EHH common stock was converted into 0.334 shares of Company common stock. Pursuant to the Merger, the Company issued 62,582,161 shares of common stock to the former stockholders of EHH, which represented the conversion of all outstanding common stock of EHH as of December 1, 2016.

The Company repurchases shares by withholding a portion of employee restricted stock that vests to cover payroll withholding taxes in accordance with the restricted stock agreements. During the nine months ended September 30, 2017 and 2016, the Company repurchased approximately 135,532 shares and 83,587 shares, respectively, of common stock for approximately $9.4 million and $6.1 million, respectively.


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