SEC – ‘UPLOAD’ from 5/3/18 re: R1 RCM Inc. – ‘TEXT-EXTRACT’

On:  Thursday, 5/3/18, at 9:54am ET   ·   Delayed-Release:  Filing ¶  –  Release Delayed to:  12/17/18   ·   Accession #:  0-18-13728

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Delayed-Release Comment or Other Letter from the SEC
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: LETTER      Comment or Other Letter from the SEC                 PDF    106K 
 2: TEXT-EXTRACT  Comment or Other Letter from the SEC (PDF Text)      3±    17K 

‘TEXT-EXTRACT’   —   Comment or Other Letter from the SEC (PDF Text)
Document Table of Contents

Mail Stop 3233                                                                  
                                                 May 3, 2018

Via E-mail                                                                      
Christopher Ricaurte                                                            
Chief Financial Officer                                                         
R1 RCM, Inc.                                                                    
401 North Michigan Ave, Suite 2700                                              
Chicago, IL 60611                                                               

Re:    R1 RCM, Inc.                                               
Form 10-K for the Year Ended December 31, 2017      
Filed March 9, 2018                                 
File No. 1-34746                                    

Dear Mr. Ricaurte:                                                              

   We have limited our review of your filing to the financial statements
and related                                                                     
disclosures and have the following comments. In some of our comments, we may    
ask you to                                                                      
provide us with information so we may better understand your disclosure.        

    Please respond to these comments within ten business days by providing
the requested                                                                   
information or advise us as soon as possible when you will respond. If you do   
not believe our                                                                 
comments apply to your facts and circumstances, please tell us why in your      
response.                                                                       

     After reviewing your response to these comments, we may have additional
comments.                                                                       

Item 6. Selected Financial Data                                                 

Adjusted EBITDA, page 47                                                        
1. We note your disclosure that the use of adjusted EBITDA to measure     
operating and                                                                   
  financial performance was limited by your revenue recognition criteria
prior to 2017 and                                                               
that the measure did not adequately match corresponding cash flows  
resulting from                                                                  
    customer contracting activities. Based on this disclosure along with the
adjustments                                                                     
     made to arrive at Adjusted EBITDA, it appears that you may consider it to
be a liquidity                                                                  
     measure. Please revise to provide a reconciliation from the most directly
comparable                                                                      
    GAAP measure, Cash Flows from Operating Activities. Please also refer to
Item                                                                            
10(e)(1)(ii)(A) of Regulation S-K, which prohibits the exclusion of 
charges or liabilities                                                          
   that required, or will require, cash settlement from non-GAAP liquidity
measures.                                                                       
Christopher Ricaurte                                                          
R1 RCM, Inc.                                                                    
May 3, 2018                                                                     
Page 2                                                                          

Reconciliation of GAAP and Non-GAAP Measures, page 47                           
2. Please clarify how your measures, "gross cash generated from customer
contracting                                                                     
activities" and "net cash generated from customer contracting     
activities," are                                                                
      appropriately titled given that these measures include an adjustment for
the change in                                                                   
invoiced or accrued net operating fees that do not meet revenue   
recognition criteria.                                                           

Item 7. Management's Discussion and Analysis of Financial Condition and Results 
of                                                                              
Operations                                                                      

Management's Discussion and Analysis of Financial Condition and Results of      
Operations, page                                                                
49                                                                              
 3. We note that you deploy your RCM services through an operating partner
relationship or                                                                 
 a co-managed relationship. Please discuss how the two relationships
affect the financial                                                            
      statements differently (i.e., the operating partner agreements result in
greater revenue and                                                             
      costs vis- -vis the co-managed agreements), and describe the mix between
the two                                                                         
relationships for the periods presented.                          

Net Services Revenue (2017) (GAAP) compared to Gross Cash Generated from        
Customer                                                                        
Contracting Activities (2016) (non-GAAP), page 59                               
4. We note your comparison of 2017 net revenues to "gross cash generated
from customer                                                                   
    contracting activities." This measure, along with your presentation of
"net cash                                                                       
     generated from customer contracting activities, appear to be calculated
using individually                                                              
      tailored revenue recognition and measurement methods. Please tell us how
you                                                                             
    determined that these non-GAAP measures comply with Question 100.04 of
the Non-                                                                        
GAAP Compliance and Disclosure Interpretations.                   
Revenue Recognition, page F-8                                                   

Periods commencing January 1, 2017, page F-9                                    
5. We note you constrain estimates of variable consideration. Please    
explain to us the                                                               
judgments used in assessing whether an estimate of variable       
consideration is constrained.                                                   
In this regard, describe to us the factors that resulted in the   
constraint of variable                                                          
      consideration and how the constraint will be resolved. In addition, tell
us how you                                                                      
considered ASC 606-10-50-17 and 50-20 related to disclosures of   
significant judgments                                                           
used in determining the transaction price.                        
Christopher Ricaurte                                                          
R1 RCM, Inc.                                                                    
May 3, 2018                                                                     
Page 3                                                                          

Note 16. Related Party Transactions, page F-40                                  
   6. We note that you reimburse Ascension for certain severance and retention
costs related to                                                                
     certain Ascension employees who will not be transitioned to you. Please
tell us the                                                                     
amount of these costs incurred in 2017 and 2016, and whether you  
classified the costs as                                                         
expense or a reduction in transaction price and the basis for that
classification.                                                                 

Note 18. Segments and Customer Concentrations, page F-41                        
7. We note that Ascension and its affiliated hospitals accounted for 66%
and 31%,                                                                        
respectively, of your accounts receivable at December 31, 2017 and
December 31, 2016;                                                              
   and 90% and 78% of your total net services revenue for the years then
ended. Please tell                                                              
  us what consideration you gave to including financial statements for
Ascension in your                                                               
Form 10-K.                                                        

     We remind you that the company and its management are responsible for
the accuracy                                                                    
and adequacy of their disclosures, notwithstanding any review, comments, action 
or absence of                                                                   
action by the staff.                                                            

    You may contact William Demarest, Staff Accountant at 202-551-3432 or me
at 202-                                                                         
551-3856 with any questions.                                                    

                                                Sincerely,

                                                         /s/ Shannon Sobotka

                                                     Shannon Sobotka
                                                      Staff Accountant
                                                    Office of Real
Estate                                                                          
                                                   & Commodities

Dates Referenced Herein   and   Documents Incorporated by Reference

This ‘UPLOAD’ Filing		Date		Other Filings
Release Delayed to:		12/17/18		UPLOAD
Filed on:		5/3/18		SC 13D/A,  UPLOAD
		3/9/18		10-K,  8-K,  UPLOAD
		12/31/17		10-K
		1/1/17
		12/31/16		10-K,  10-K/A
				List all Filings

1 Previous Filing that this Filing References

  As Of               Filer                 Filing    For·On·As Docs:Size             Issuer                      Filing Agent

 3/09/18  R1 RCM Holdco Inc.                10-K       12/31/17  109:12M