Emdeon Inc.

Change Healthcare Holdings, Inc. (the “Company”) is filing this Amendment No. 1 to its Quarterly Report on Form 10-Q (this “Amendment”) to restate and amend the Company’s previously issued condensed consolidated financial statements and related financial information as of and for the three and nine months ended September 30, 2016 and 2015 previously included in its Quarterly Report on Form 10-Q for the quarter ended September 30, 2016 (the “Original Filing”), which was previously filed with the Securities and Exchange Commission (the “SEC”) on November 10, 2016 (the “Original Filing Date”). This Amendment also amends the following items in the Original Filing: Item 1 of Part I “Financial Statements”; Item 2 of Part I “Management’s Discussion and Analysis of Financial Condition and Results of Operations”; and Item 4 of Part I “Controls and Procedures”.

Except as described below, this Amendment does not amend, update or change any other items or disclosures in the Original Filing and does not purport to reflect any information or events subsequent to the Original Filing Date. As such, this Amendment speaks only as of the Original Filing Date, and the Company has not undertaken to amend, supplement or update any information contained in the Original Filing to give effect to any subsequent events. Accordingly, this Amendment should be read in conjunction with the Company’s filings made with the SEC subsequent to the filing of the Original Filing, including any amendment to those filings.

In January 2014, the Company effected a change in the tax status of EBS Master LLC (“EBS Master”), one of its wholly-owned subsidiaries, from a partnership to a corporation. Prior to the tax status change, the Company recognized a deferred tax liability for the difference in the book and tax basis of its investment in EBS Master (i.e. outside basis). Following the tax status change, the Company’s deferred tax balances were required to reflect the differences in the book and tax bases of the individual assets and liabilities included in the corporation (i.e. inside basis).

In January 2017, following the re-evaluation in connection with the Transaction, the Company determined that a portion of the deferred tax liability previously related to the outside basis was attributable to the excess of book over tax basis goodwill for which no deferred tax liability would be permitted under generally accepted accounting principles when calculated using the inside basis. Because the Company’s consolidated financial statements for the year ended December 31, 2014 included such a deferred tax liability, the Company has restated its consolidated financial statements as of and for the year ended December 31, 2014 to reflect the removal of this deferred tax liability and restated its consolidated financial statements as of and for the year ended December 31, 2015 and as of and for the three and nine months ended September 30, 2016 and 2015 to adjust for the effect of this 2014 adjustment on the subsequent periods. In addition, the Company will also revise the financial statements for other adjustments related to deferred tax liabilities. The impact of these adjustments is immaterial to all periods presented.

A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting such that there is a reasonable possibility that a material misstatement of the annual or interim financial statements will not be prevented or detected on a timely basis. Our management, including our CEO and CFO, previously concluded that we maintained effective internal control over financial reporting as of September 30, 2016. Because management has subsequently concluded that the material weakness described below existed, we have concluded that we did not maintain effective internal control over financial reporting based on the criteria in Internal Control – Integrated Framework (2013) issued by the COSO. Specifically, because of the highly complex nature of the underlying legal entity restructuring, the Company’s internal control over financial reporting was not effective due to certain deferred tax positions resulting from purchase accounting and the conversion of a consolidated partnership subsidiary into a corporation for U.S. federal tax purposes. To address this matter, the Company has determined that, for future highly complex transactions for which the determination of the appropriate accounting treatment is unclear, the Company will assess whether to engage an accounting firm with sufficient expertise to properly evaluate and interpret the applicable accounting literature, if any, and to assist management to reach the appropriate accounting conclusion.