21 unchanged sentences
We believe our model provides significant value to managed care organizations.
−Removed: States continue to implement managed care programs for Medicaid enrollees, and, as a result, managed care organizations have been increasingly responsible for the healthcare needs and the related healthcare costs of our consumers.
+Added: States predominantly deliver services to Medicaid enrollees through comprehensive managed care models, most of which are administered by managed care organizations.
+Added: As a result, managed care organizations have assumed significant responsibility for the healthcare needs and the related healthcare costs of our consumers.
Managed care organizations have an economic incentive to better manage the healthcare expenditures of their members, lower costs and improve outcomes.
4 unchanged sentences
Personal care services are a significant component of home and community-based services (“HCBS”), which have grown in significance and demand in recent years.
−Removed: In particular, the demand for personal care services is growing from managed care delivery models, including Medicaid Long-Term Services and Supports (“LTSS”) programs and Medicare Advantage plans.
+Added: In particular, the demand for personal care services is growing from managed care delivery models, including Medicaid Long-Term Services and Supports programs and Medicare Advantage plans.
Managed care plans aim to manage cost, utilization and quality through collaboration of health insurance plans and healthcare providers.
4 unchanged sentences
The personal care, hospice and home health service industries have developed in a fragmented manner, with many small participants and a few larger participants that have a significant market share across multiple regions or states.
−Removed: The historic lack of licensure or certification requirements in some states makes it difficult to estimate the number of home-based services agencies, although these requirements and other barriers to entry are now increasing.
+Added: The historic lack of licensure or certification requirements in some states makes it difficult to estimate the number of home-based services agencies, although these requirements and other barriers to entry such as the operational requirements discussed in the next paragraph are increasing.
We expect ongoing consolidation within our industry, driven by the desire of healthcare systems and managed care organizations to narrow their networks of service providers, and also by the industry’s increasingly complex regulatory, operating and technology requirements.
1 unchanged sentence
The personal care services industry is subject to increasing regulation.
+Added: Many states require providers to register with regulatory authorities or obtain licenses.
At the federal level, efforts have focused on improved coordination of regulation across the various types of Medicaid programs through which personal care services are offered.
For example, federal standards require states to mandate that providers use an electronic visit verification (“EVV”) system to collect certain data from Medicaid-funded home visits.
+Added: States that do not comply face incremental reductions in federal Medicaid funding.
States have flexibility in the model they use to implement the mandate, which means EVV systems, vendors and contracting processes can vary significantly by state.
−Removed: States increasingly require providers to register with regulatory authorities or obtain licenses.
−Removed: Providers must dedicate substantial resources to ensure continuing compliance with all applicable laws and regulations, and significant expenditures may be necessary to offer new services or to expand into new markets.
+Added: Providers must dedicate substantial resources toward continuing compliance with all applicable laws and regulations, and significant expenditures may be necessary to offer new services or to expand into new markets.
We believe licensing and other operational requirements and regulations, the increasing focus on improving health outcomes, the rising cost and complexity of operations and technology and pressure on reimbursement rates may discourage new providers and may encourage industry consolidation.
−Removed: The Medicare-Medicaid Coordination Office (“MMCO”) was established within the Centers for Medicare & Medicaid Services (“CMS”) to improve services for consumers who are eligible for both Medicare and Medicaid, also known as “dual eligibles,” and improve coordination between the federal government and states to enhance access to quality services to which they are entitled.
+Added: Our consumers are predominantly “dual eligibles,” meaning they are eligible for both Medicare and Medicaid.
+Added: Most dual-eligible individuals have full Medicaid benefits, covered either through Medicaid fee-for-service or Medicaid managed care, and most of these individuals have Medicare benefits separately covered under traditional Medicare or Medicare Advantage.
+Added: The Medicare-Medicaid Coordination Office (“MMCO”) was established within the Centers for Medicare & Medicaid Services (“CMS”) to improve services for dual-eligible individuals and improve coordination between the federal government and states to enhance access to quality services to which they are entitled.
The MMCO works with state Medicaid agencies, other federal and state agencies, physicians and others, to make available technical assistance and educational tools to improve care coordination between Medicare and Medicaid and to reduce costs and improve beneficiary experience while reducing administrative and regulatory barriers between the programs.
−Removed: In addition, the MMCO and the CMS Innovation Center are considering or have implemented demonstration projects affecting reimbursement for services provided to dual eligibles.
+Added: In addition, the MMCO and the CMS Innovation Center are considering or have implemented demonstration projects affecting reimbursement for services provided to dual eligibles, and some members of Congress and the presidential administration have raised potential changes such as integrating Medicare and Medicaid coverage for dual eligibles in a single plan or program.
We believe that our personal care program and our technology make us well-suited to partner with managed care organizations to address the needs of the dual-eligible population, and we believe that our ability to identify changes in our consumers’ health and condition before acute intervention is required will lower the overall cost of care.
−Removed: We believe this approach to care delivery and the integration of our services into the broader healthcare continuum are particularly attractive to managed care organizations and others who are ultimately responsible for the healthcare needs of our consumers and over time will increase our business with them.
+Added: We believe this approach to care delivery and the integration of our services into the broader healthcare continuum are particularly attractive to managed care organizations and others who are ultimately responsible for the healthcare needs of our consumers and over time will increase our business with these organizations.
Our Growth Strategy
18 unchanged sentences
Market to Managed Care Organizations
−Removed: As a large-scale provider of home-based care, we are partnering with managed care organizations, taking advantage of an industry shift from traditional fee-for-service Medicare and Medicaid and toward managed care models which aim to better coordinate care, among other goals.
+Added: As a large-scale provider of home-based care, we market to and partner with managed care organizations, taking advantage of an industry shift from traditional fee-for-service Medicare and Medicaid toward managed care models that aim to better coordinate care, among other goals.
We expect this shift to lead to narrower provider networks where we can be competitive by offering a larger, more experienced partner to these organizations, as well as by providing more sophisticated technology, electronic visit records and an outcomes-driven approach to service.
4 unchanged sentences
We completed two acquisitions in 2024:
+Added: the personal care business of Curo Health Services, LLC, a Delaware limited liability company that does business as Gentiva, consisting of certain equity interests and assets and liabilities, on December 2, 2024 (collectively, the “Gentiva Acquisition”), and Upstate Home Care Solutions (“Upstate”) on March 9, 2024 .
+Added: Acquisitions completed in 2024 accounted for $22.6 million in net service revenues for the year ended December 31, 2024.
+Added: We completed two acquisitions in 2023:
Coastal Nursecare of Florida, Inc.
1 unchanged sentence
Acquisitions completed in 2023 accounted for $18.8 million in net service revenues for the year ended December 31, 2023.
−Removed: We also completed two acquisitions in 2022:
−Removed: JourneyCare Inc.
−Removed: (“JourneyCare”) on February 1, 2022 and Apple Home Healthcare, LTD (“Apple Home”) on October 1, 2022.
Our active pipeline and strong financial position support additional acquisitions.
3 unchanged sentences
personal care, hospice and home health.
−Removed: Without our services, many of our consumers would be at increased risk of placement in a long-term care institution.
+Added: Without our services, many of our consumers would be at increased risk of hospitalization or placement in a long-term care institution.
Personal Care
12 unchanged sentences
Our payor clients are principally federal, state and local governmental agencies and managed care organizations.
−Removed: The federal, state and local programs under which the agencies operate are subject to legislative and budgetary restrictions, changes and other risks that can influence reimbursement rates.
−Removed: Managed care organizations that operate as an extension of government payors are subject to similar economic pressures.
+Added: The federal, state and local programs under which the agencies operate are subject to legislative, administrative and budgetary restrictions, changes and other risks that can influence reimbursement rates.
+Added: Managed care organizations that effectively operate as an extension of government payors are subject to similar economic pressures.
Our commercial insurance payor clients are typically for-profit companies and are continuously seeking opportunities to control costs.
3 unchanged sentences
Reimbursement rates and methods vary by state and service type, but are typically based on an hourly or unit-of-service basis.
−Removed: Managed care organizations are becoming an increasing portion of our personal care segment payor mix as states shift from administering fee-for-service programs to utilizing managed care models.
+Added: Managed care organizations are a significant portion of our personal care segment payor mix as a result of states shifting from administering fee-for-service programs to utilizing managed care models.
See “ Management’s Discussion and Analysis of Financial Condition and Results of Operations—Overview ” for our revenue mix by payor type.
1 unchanged sentence
Each local market has its own competitive profile, and no single competitor has significant market share across all of our markets.
+Added: Other providers, entities and individuals in the communities we serve provide services similar to those we offer.
Our competition consists of personal care service providers, home health providers, hospice providers, private caregivers, publicly held companies, privately held companies, privately held single-site agencies, hospital-based agencies, not-for-profit organizations, community-based organizations, managed care organizations and self-directed care programs.
−Removed: In addition, payors, including governmental agencies, contract with other providers for services we offer.
+Added: Some of our competitors and/or competitive care models may have greater financial, technical, political and marketing resources, as well as name recognition with consumers and payors.
We have experienced, and expect to continue to experience, competition from new entrants into our markets.
Increased competition may result in pricing pressures, loss of or failure to gain market share or loss of consumers or payors, any of which could harm our business.
−Removed: In addition, some of our competitors and/or competitive care models may have greater financial, technical, political and marketing resources, as well as name recognition with consumers and payors.
+Added: Our strategies are designed to help our service lines remain competitive.
+Added: Factors that impact our competitive position include the quality of care and services we provide, our ability to attract and retain caregivers and other personnel, our relationships with potential referral sources and our ability to retain and renew our contracts with payors and enter into new contracts on favorable terms.
+Added: The trend toward increased consolidation among payors tends to increase payor bargaining power over fee structures.
+Added: Trends toward clinical and pricing transparency may also impact our competitive position, ability to obtain and maintain favorable contract terms and consumer volumes.
+Added: A number of states have adopted their own healthcare price transparency requirements.
+Added: CMS websites make available to the public data submitted by home health agencies, hospices and other Medicare-certified providers in connection with Medicare reimbursement claims, including performance data on quality measures and patient satisfaction.
+Added: In addition, federal and state regulations, including state certificate of need (“CON”) laws, which limit the expansion of healthcare facilities or services, may affect the competitive landscape.
Sales and Marketing
−Removed: We focus on initiating and maintaining working relationships with state and local governmental agencies responsible for the provision of the services we offer.
+Added: We focus on initiating and maintaining working relationships with state and local governmental agencies responsible for the oversight and provision of the services we offer.
We target these agencies in our current markets and in geographical areas that we have identified as potential markets for expansion.
We also seek to identify service needs or changes in the service delivery or reimbursement systems of governmental entities and attempt to work with and provide input to the responsible government personnel, provider associations and consumer advocacy groups.
−Removed: We establish new referral relationships with various managed care organizations that contract with the states to service the Medicaid programs.
−Removed: We have met with many contracted managed care organizations in markets we serve and believe we are building the relationships necessary to generate continued referrals of new clients.
−Removed: We receive substantially all of our personal care consumers through third-party referrals, including state departments on aging, rehabilitation, mental health and children’s services, county departments of social services, managed care organizations, the Veterans Health Administration and city departments on aging.
−Removed: Generally, family members of potential consumers are made aware of available in-home or alternative living arrangements through state or local case management systems.
−Removed: These systems are operated by governmental or private agencies.
−Removed: We provide ongoing education and outreach in our target communities in order to inform the community about state and locally-subsidized care options and to communicate our role in providing quality personal care services.
+Added: We also focus on establishing new and maintaining existing referral relationships with various managed care organizations that contract with the states to service the Medicaid programs.
+Added: We believe these relationships are necessary to generate continued referrals of new clients in markets we serve.
+Added: We receive substantially all of our personal care consumers through third-party referrals, including state departments and local government agencies on aging, social services, rehabilitation, mental health and children’s services, managed care organizations and the Veterans Health Administration.
+Added: Generally, family members of potential consumers are made aware of available in-home services or alternative living arrangements through state or local case management systems, which may be operated by governmental or private agencies.
+Added: In addition, we provide ongoing education and outreach in our target communities in order to inform the community about state and locally-subsidized care options and to communicate our role in providing quality personal care services.
We also utilize consumer-directed sales, marketing and advertising programs designed to attract consumers.
2 unchanged sentences
Payment for Services
−Removed: We are reimbursed for substantially all of our services by federal, state and local government programs, such as Medicare and Medicaid state programs, managed care organizations, other state agencies and the Veterans Health Administration.
+Added: Substantially all of the reimbursement we receive for services we provide comes from federal, state and local government programs, such as Medicare, Medicaid and other state programs, managed care organizations and the Veterans Health Administration.
In addition, we are reimbursed by commercial insurance and private pay consumers.
Depending on the type of service, coverage for services may be predicated on a case manager, physician or nurse determination that the care is necessary or on the development of a plan for care in the home.
−Removed: Medicare is a federal program that provides certain medical insurance benefits to persons aged 65 or older and other qualified persons.
+Added: Medicare is a federal program that provides certain medical insurance benefits to persons aged 65 or older, some disabled persons, persons with end-stage renal disease and persons with amyotrophic lateral sclerosis.
Each of our hospice and home care agencies must comply with the extensive conditions of participation in the Medicare program in order to continue receiving Medicare reimbursement.
+Added: In addition to the reimbursement adjustments and policies discussed below, the Budget Control Act of 2011 requires automatic spending reductions to reduce the federal deficit, resulting in a uniform percentage reduction across all Medicare programs of 2%.
+Added: These cuts continue through the first eight months of federal fiscal year 2032.
Medicare beneficiaries who have a terminal illness and a life expectancy of six months or less may elect to receive hospice benefits (i.e., palliative services for management of a terminal illness) in lieu of standard Medicare coverage for treatment.
Hospice services are paid under the Medicare Hospice Prospective Payment System (“HPPS”), under which CMS sets a daily rate for each day a patient is enrolled in the hospice benefit.
+Added: The daily rate depends on the level of care provided to a patient (routine home care, continuous home care, inpatient respite care, or general inpatient care).
CMS requires hospice providers to submit quality reporting data each year and updates hospice payment rates annually using a market basket index.
Hospices that do not satisfy quality reporting requirements are subject to a 4 percentage point reduction to the market basket percentage update.
−Removed: Beginning in federal fiscal year 2024, the reduction to the market basket update for failure to satisfy quality reporting requirements will increase to 4 percentage points.
Additionally, hospice providers are subject to two specific payment limit caps under the Medicare program each federal fiscal year:
−Removed: the inpatient cap and the aggregate cap, as discussed further in Note 1 to the Notes to Consolidated Financial Statements.
+Added: the inpatient cap and the aggregate cap.
CMS reimburses home health agencies under a prospective payment system, paying a national, standardized 30-day period payment rate if a period of care meets a threshold of home health visits.
4 unchanged sentences
Home health agencies that do not submit required quality data are subject to a 2 percentage point reduction to the market basket update.
−Removed: CMS began implementing a nationwide expansion of the Home Health Value-Based Purchasing (“HHVBP”) Model in 2022.
−Removed: Under the HHVBP Model, home health agencies receive increases or reductions to their Medicare fee-for-service payments of up to 5% based on performance against specific quality measures relative to the performance of other home health providers.
+Added: Under the Home Health Value-Based Purchasing (“HHVBP”) Model, home health agencies receive increases or reductions to their Medicare fee-for-service payments of up to 5%, based on performance against specific quality measures relative to the performance of other home health providers.
Data collected in each performance year impacts Medicare payments two years later.
−Removed: Calendar year 2023 was the first performance year under the expanded HHVBP Model, which will affect payments in calendar year 2025.
Medicare requires home health agencies to submit a one-time Notice of Admission (“NOA”) for each patient that establishes that the beneficiary is under a Medicare home health period of care.
1 unchanged sentence
Medicaid Programs
−Removed: Medicaid is a state-administered program that provides certain social and medical services to qualified low-income individuals and is jointly funded by the federal government and individual states.
−Removed: Reimbursement rates and methods vary by state and service type, but are typically based on an hourly or unit-of-service basis.
+Added: Medicaid is a state-administered program that provides certain social and medical services to qualifying low-income individuals and is jointly funded by the federal government and individual states.
+Added: The federal government pays a percentage match for state Medicaid expenditures that varies by state and other factors, with no pre-set limit on federal spending.
+Added: Reimbursement rates and methods vary by state and service type, but are typically based on an hourly or unit-of-service rate.
Rates are subject to adjustment based on statutory and regulatory changes, administrative rulings, government funding limitations and interpretations of policy by individual state agencies.
2 unchanged sentences
Payment models vary by state.
−Removed: Currently, home health services are often reimbursed by state Medicaid programs on a fee-for-service basis.
+Added: Home health services are often reimbursed by state Medicaid programs on a fee-for-service basis.
For hospice services, the state pays an amount for each day that a beneficiary is under the care of a hospice provider based on the type and intensity of services furnished.
−Removed: Many states are moving the administration of their Medicaid hospice and home healthcare programs to managed care organizations in order to effectively manage costs.
−Removed: Currently, personal care services and other HCBS are largely reimbursed on a fee-for-service basis.
−Removed: Some states have received permission from CMS to provide HCBS under waivers of traditional Medicaid requirements.
−Removed: In an effort to control escalating Medicaid costs, states are increasingly requiring Medicaid beneficiaries to enroll in managed care plans for better coordination of HCBS and healthcare services.
−Removed: For example, over three-quarters of Medicaid beneficiaries in Illinois are a part of the Health Choice Illinois statewide managed care program, which is serviced by various managed care organizations.
−Removed: Reimbursement from the managed care organizations for personal care services is generally on an hourly, fee-for-service basis with rates consistent with or as a percentage of the individual state funded rates, where applicable.
+Added: Many states are moving the administration of their Medicaid hospice and home healthcare programs to managed care organizations in order to effectively manage costs by making spending more predictable for states.
+Added: Personal care services and other HCBS are largely reimbursed on a fee-for-service basis.
+Added: In states that deliver HCBS through managed care, reimbursement can be set as a percentage of the Medicaid fee-for-service rates or otherwise tied to state fee-for-service schedules.
+Added: Some states use supplemental payment arrangements to make additional payments to providers that are separate from base payments and not specifically tied to an individual’s care.
+Added: For example, some supplemental payments are intended to address the difference between Medicaid fee-for-service payments and Medicare reimbursement rates, or payments under other state-specific programs.
+Added: These supplemental reimbursement arrangements are generally authorized by CMS for a specified period of time and require CMS’ approval to be extended.
+Added: The federal government and many states are using or considering various strategies to reduce Medicaid expenditures.
+Added: Outside of the government response to the COVID-19 pandemic, federal and state budgetary pressures have, in recent years, resulted, and likely will continue to result, in decreased spending or decreased spending growth for Medicaid programs.
+Added: For example, many states have adopted, or are considering, legislation that may reduce coverage and/or enroll Medicaid recipients in managed care programs.
+Added: Managed Medicaid programs enable states to contract with entities for patient enrollment, care management and claims adjudication, with states usually retaining program responsibilities for financing, eligibility criteria and core benefit plan design.
+Added: Many states have implemented state-directed payment (“SDP”) arrangements to direct certain Medicaid managed care plan expenditures.
+Added: These arrangements, which are subject to approval by CMS, allow states to implement delivery system and provider payment initiatives by requiring Medicaid managed care organizations to pay providers according to specific rates or methods.
+Added: For example, SDP arrangements may require managed care plans to implement value-based purchasing models or performance improvement initiatives or may direct managed care plans to adopt specific payment parameters, such as minimum or maximum fee schedules for specific types of providers.
+Added: Some states have converted supplemental payment programs to SDP arrangements, diverting previously available funding.
+Added: SDP arrangements can be limited to a specific subset of providers, and providers that do not satisfy applicable criteria may be ineligible for payments.
+Added: The use and nature of SDP arrangements are subject to policy changes.
+Added: For example, CMS published a rule (the “Medicaid Managed Care Rule”) in May 2024 that addresses access, financing and quality within Medicaid managed care programs.
+Added: The rule includes new and updated requirements for SDP arrangements designed for a more consistent and transparent approach for participating states.
+Added: The rule removes regulatory barriers to help states use SDP arrangements to implement value-based purchasing payment arrangements and include non-network providers in SDP arrangements.
+Added: Further, the rule requires states to ensure each provider receiving an SDP attest by January 1, 2028, that they do not participate in any arrangement that holds taxpayers harmless for the cost of a tax.
+Added: The various elements of the rule take effect between issuance and early 2028.
+Added: In addition, some states use, or have applied to use, waivers granted by CMS to impose non-standard eligibility or enrollment restrictions, implement Medicaid expansion under the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, the “ACA”), or otherwise implement programs that vary from federal standards.
+Added: For example, over three-quarters of Medicaid beneficiaries in Illinois are a part of the HealthChoice Illinois statewide managed care program, which is serviced by various managed care organizations and includes senior citizens, adults with disabilities who are not eligible for Medicare, and dual eligibles receiving certain long-term services and supports.
+Added: In recent years, aspects of existing or proposed Medicaid programs have been subject to legal challenge, resulting in uncertainty.
+Added: In addition, federal legislation and administrative policies that shape administration of the Medicaid programs at the state level are subject to change, including as a result of changes in the presidential administration and legal challenges.
+Added: Changes to the federal funding formula for Medicaid could also have a significant impact on Medicaid programs and enrollment, particularly if federal contributions for Medicaid programs decrease and states are unable to offset the reductions.
Illinois Department on Aging
−Removed: A significant amount of our net service revenues from our personal care segment are derived from once specific payor client, the Illinois Department on Aging, which accounted for 20.9% and 20.7% of our net service revenues for 2023 and 2022, respectively.
+Added: A significant amount of our net service revenues from our personal care segment are derived from one specific payor client, the Illinois Department on Aging, which accounted for 21.0% and 20.9% of our net service revenues for 2024 and 2023, respectively.
The Illinois Department on Aging coordinates programs and community-based services intended to improve quality of life and preserve the independence of older individuals.
−Removed: The Illinois Department on Aging is funded by Medicaid, Illinois’s Commitment to Human Services Fund, and general revenue funds of the state of Illinois, and also receives funding available under the federal Older Americans Act (“OAA”).
−Removed: The Department on Aging’s Community Care Program (“CCP”) provides adult day services, emergency home response, automated medication dispenser services, and in-home services, which consist of personal care services, to individuals who are age 60 and over and meet other eligibility requirements.
−Removed: Some of these services are provided through Medicaid waivers granted by CMS.
−Removed: Consumers are identified by “care coordinators” contracted independently with the Illinois Department on Aging.
+Added: The Illinois Department on Aging is funded by Medicaid, Illinois’ Commitment to Human Services Fund, and general revenue funds of the state of Illinois, and also receives funding available under the federal Older Americans Act (“OAA”).
+Added: The Illinois Department on Aging’s Community Care Program (“CCP”) provides adult day services, emergency home response, automated medication dispenser services, and in-home services, which include personal care services, to individuals who are age 60 and over and meet other eligibility requirements.
+Added: Some of these services are provided through a Medicaid waiver granted by CMS.
+Added: Consumers are identified by “care coordinators” contracted independently with local organizations affiliated with the Illinois Department on Aging.
Once a consumer has been evaluated and determined to be eligible for a program, an assigned care coordinator refers the consumer to a list of authorized providers, from which the consumer selects the provider.
16 unchanged sentences
Other private payors include workers’ compensation programs/insurance, preferred provider organizations and employers.
+Added: Value-Based Care Arrangements
+Added: CMS has indicated that promoting value-based, person-centered care is among its top priorities, and commercial payors are also increasingly using value-based care arrangements.
+Added: Generally, value-based care aims to hold providers accountable for delivering efficient, effective care by tying provider reimbursement to patient outcomes or related measures.
+Added: Value-based care arrangements vary in the method for determining payments and the level of risk assumed, among other factors.
+Added: For example, Medicare reimbursement may be adjusted based on quality and efficiency measures and/or compliance with quality reporting requirements.
+Added: In addition, CMS websites make available to the public data submitted by home health agencies, hospices, and other Medicare-certified providers in connection with Medicare reimbursement claims, including performance data on quality measures and patient satisfaction.
+Added: CMS uses quality information to administer other value-based care models, such as the HHVBP Model, under which home health agencies receive increases or reductions to their Medicare fee-for-service payments based on their performance against specific quality measures, relative to the performance of other home health agencies.
+Added: CMS also identifies hospices for the Hospice Special Focus Program based on quality information.
+Added: Through this program, which the agency launched in late 2024 to increase accountability for quality of care, CMS monitors hospices identified as poor performers, providing additional health and safety oversight intended to enable improvement.
+Added: The CMS website makes publicly available information about hospices selected for the program.
+Added: Hospices that fail to complete the Hospice Special Focus Program by demonstrating compliance with program requirements may be subject to enforcement actions, including termination from the Medicare program.
+Added: By 2030, the CMS Innovation Center aims to have all fee-for-service Medicare beneficiaries and most Medicaid beneficiaries in a care relationship with accountability for quality and total cost of care.
+Added: An accountable care organization (“ACO”), an example of a value-based care model, is a group of providers and suppliers that work together to invest in infrastructure and redesign delivery processes to achieve high quality and efficient delivery of services.
+Added: ACOs are intended to produce savings through improved quality and operational efficiency.
+Added: ACOs that achieve quality performance standards established by HHS are eligible to share in a portion of the amounts saved by the Medicare program.
+Added: Several private third-party payors are also increasingly employing alternative payment models, which may increasingly shift financial risk to providers or increase payments for quality improvement.
+Added: We expect value-based purchasing programs, including models that condition reimbursement on patient outcome measures, to become more common with both governmental and non-governmental payors.
Insurance Programs and Costs
15 unchanged sentences
In our most recent annual employee engagement survey, our workforce scored work-life balance at an 80% satisfaction rating.
−Removed: Two corporate support centers house a total of 542 administrative and professional employees.
+Added: We have over 600 administrative and professional employees at our two corporate support centers.
Approximately 17,283 or 34.8% of our total employees are represented by labor unions.
3 unchanged sentences
We believe in a strong workplace culture focused on people development.
−Removed: We have named this initiative “Addus CARES”, which represents our commitment to creating a culture that attracts, retains, and engages people to serve our important mission.We aspire to create a workplace that values and listens to its employees, provides ample opportunities for their skills development, and effectively recognizes their achievements.
+Added: We have named this initiative “Addus CARES”, which represents our commitment to creating a culture that attracts, retains, and engages people to serve our important mission.
+Added: We aspire to create a workplace that values and listens to its employees, provides ample opportunities for their skills development, and effectively recognizes their achievements.
By leveraging our People Development and Experience Department, we aspire to create a workplace that values and listens to its employees, provides ample opportunities for their skills development, and effectively recognizes their achievements throughout the employee life cycle.
−Removed: Addus prioritizes a robust listening strategy that allows for regular opportunities for feedback throughout an employee’s tenure.
−Removed: People experience surveys serve as a foundation of this strategy.
−Removed: In the most recent such survey, company management received an 82% satisfaction rating among all employee respondents, and 80% of our caregiver respondents indicated they would recommend Addus as a great place to work.
−Removed: Our dedication to workforce experience is also reflected in the breadth of our training programs and our ongoing commitment to employee development.
−Removed: Addus has recently introduced new innovative initiatives such as our Ignite and Emerge employee development programs.
+Added: Addus prioritizes a robust listening strategy that offers regular feedback opportunities throughout an employee’s tenure.
+Added: We leverage tools such as our annual engagement survey and a newly introduced innovative tool for conducting more effective one-on-one conversations between supervisors and employees, allowing for more open communication and the opportunity to better address our employees’ needs and concerns.
+Added: Our dedication to workforce experience is also reflected in the breadth of our training programs and our ongoing commitment to employee development, including our Ignite and Emerge employee development programs.
Ignite equips new leaders with the necessary skills, tools, and resources to lead within our organizational culture and values.
2 unchanged sentences
The Addus Learning Academy allows employees to access online resources needed to build and enhance the important skills related to their respective roles at Addus and to provide beneficial soft-skills training for personal growth.
−Removed: With recent investments in new learning management platforms and additional investments in existing platforms, Addus’ clinical learning management systems provide a growing catalog of continuing learning opportunities for patient-facing employees to improve their clinical skills and promote consistent, quality care.
+Added: Addus’ clinical learning management systems provide a catalog of continuing learning opportunities for patient-facing employees to improve their clinical skills and promote consistent, quality care.
We believe it is important to acknowledge our employees and managers who are carrying our mission and values forward every day, and we are committed to fostering employee engagement through effective recognition programs and communications.
18 unchanged sentences
Clinical ladder initiatives focus on clinical certification advancement of existing employees.
−Removed: External recruitment has been bolstered by new investments in job search efforts, programmatic job advertising, and new recruitment technologies, most recently with the introduction of a new mobile-optimized Applicant Tracking System.
+Added: External recruitment has been bolstered by new investments in job search efforts, programmatic job advertising, and new recruitment technologies, most recently with the introduction of an artificial intelligence (“AI”) powered conversation and scheduling assistant designed to engage in real-time with potential job candidates.
Recruitment strategies, including company-wide hiring events, local partnerships with colleges and nursing schools, sponsored clinical rotations, and student scholarships have better positioned the company to attract top talent.
14 unchanged sentences
Our business is subject to extensive federal, state and local regulation.
−Removed: Changes in the laws and regulations, or new interpretations of existing laws and regulations, may have a material impact on the scope of services offered (including the definition of permissible activities), the relative cost of doing business, and the methods and amounts of payment for care by both governmental and other payors.
+Added: New laws and regulations, or changes to or new interpretations of existing laws and regulations, may have a material impact on the scope of services offered (including the definition of permissible activities), the relative cost of doing business, and the methods and amounts of payment for care by both governmental and other payors.
In addition, differences among state laws may impede our ability to expand into certain markets.
−Removed: If we fail to comply with applicable laws and regulations, we could suffer administrative civil or criminal penalties, including substantial fines, the loss of our licenses to operate and our ability to participate in federal or state programs.
+Added: If we fail to comply with applicable laws and regulations, we could suffer administrative civil or criminal penalties, including substantial fines, the loss of our licenses to operate and the loss of our ability to participate in federal or state programs.
In addition, the healthcare industry has experienced, and is expected to continue to experience, extensive and dynamic change.
5 unchanged sentences
If we were to violate the applicable federal and state regulations governing Medicare or Medicaid participation, we could be excluded from participation in federal and state healthcare programs and be subject to substantial administrative, civil and criminal penalties.
−Removed: Healthcare Reform
−Removed: The healthcare industry is subject to changing political, regulatory, and economic influences at the federal and state level, along with scientific and technological initiatives and innovations that may affect our business.
−Removed: In recent years, the healthcare industry has undergone significant changes, many of which have been aimed at reducing costs and government spending and increasing access to health insurance.
−Removed: The most prominent of these efforts, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (collectively, the “ACA”), affects how healthcare services are covered, delivered and reimbursed.
−Removed: The ACA increased health insurance coverage through a combination of public program expansion, private sector health insurance requirements and other reforms.
−Removed: However, the law has been, and continues to be, subject to legislative and regulatory changes and court challenges.
−Removed: States continue to explore payment and delivery reform initiatives, including quality of care incentives.
−Removed: Some states use or have applied to use Medicaid waivers granted by CMS to implement the ACA’s Medicaid expansion provisions, impose different eligibility or enrollment restrictions, or otherwise implement programs that vary from federal standards.
−Removed: Some of these program changes may reduce the number of current and/or future Medicaid enrollees in certain states.
−Removed: For example, Georgia imposes work and community engagement requirements under a Medicaid demonstration program for new enrollees that launched in mid-2023 with the permission of a federal court, while the current presidential administration and several courts have rejected similar initiatives in other states, making it difficult to predict the nature and success of potential changes.
−Removed: In addition, enrollment in managed Medicaid plans has increased in recent years, as state governments seek to control the cost of Medicaid programs.
−Removed: Managed Medicaid programs enable states to contract with one or more entities for patient enrollment, care management and claims adjudication.
−Removed: The states usually do not relinquish program responsibilities for financing, eligibility criteria and core benefit plan design.
+Added: Developments in Healthcare Policy
+Added: The healthcare industry is subject to changing political, regulatory, economic and other influences at the federal and state level, along with scientific and technological initiatives and innovations that may affect our business.
+Added: Healthcare reform efforts at the federal and state levels have been aimed at reducing costs and government spending and increasing access to health insurance.
+Added: For example, the ACA increased health insurance coverage through a combination of public program expansion, private sector health insurance requirements and other reforms.
+Added: However, changes in the law’s implementation, subsequent legislation and regulations, state initiatives and other factors have affected or may affect the number of individuals that elect or are able to obtain public or private health insurance and the scope of such coverage, if purchased.
+Added: Federal law, for instance, temporarily enhanced subsidies available for individuals to purchase coverage through ACA health exchange marketplaces by lowering premiums and raising income eligibility thresholds.
+Added: The enhanced subsidies are available through 2025, but further extension is uncertain, and their expiration may increase the uninsured population.
+Added: Other legislative and executive branch initiatives related to health insurance, such as permitting the sale of insurance plans that lack currently required consumer protections, could significantly affect insurance markets.
+Added: In May 2024, CMS finalized a rule intended to improve access to services and quality of care for Medicaid beneficiaries across fee-for-service and managed care delivery systems, but which could negatively impact our business and financial condition.
+Added: The final rule includes significant provisions related to HCBS, including the “80/20” or “payment adequacy” requirement, which will require states to ensure that at least 80% of all Medicaid payments a provider receives for homemaker, home health aide, and personal care services, less certain excluded costs, under specified programs are spent on total compensation (including benefits) for direct care workers furnishing these services, rather than administrative overhead or profit, subject to limited exceptions.
+Added: States are required to ensure compliance with the 80/20 requirement by mid-2030.
+Added: The final rule also includes several other measures intended to promote transparency and enhance quality and access to services, including a variety of reporting requirements for states.
+Added: However, due to legal challenges and administration changes, it is unclear whether the rule will be implemented as finalized.
+Added: The outcome of the 2024 federal elections, affecting both the executive and legislative branches, increases regulatory uncertainty and the potential for significant policy changes.
+Added: President Trump has issued executive orders that impact or may impact the healthcare industry, including an order establishing a presidential advisory commission focused on restructuring and streamlining government agencies and reducing or eliminating regulations and federal government programs and other expenditures.
+Added: Further, some members of Congress and the presidential administration have raised potential measures that may impact our operations, such as those intended to accelerate the shift from traditional Medicare to Medicare Advantage or eliminating some or all of the consumer protections established by the ACA.
+Added: The federal and state governments also continue to explore other payment and delivery system reform initiatives.
+Added: For example, comprehensive managed care models, most of which are administered by managed care organizations, have in recent years become the dominant way in which states deliver services to Medicaid enrollees, as state governments seek to control the cost of Medicaid programs.
+Added: Payment and delivery reform initiatives also include value-based purchasing models and related initiatives that incentivize reporting of and improvements in quality of care and cost-effectiveness.
The CMS Innovation Center tests innovative payment and service delivery systems to reduce Medicare and Medicaid program expenditures while maintaining or enhancing quality.
−Removed: For example, the CMS Innovation Center has supported testing of new models of care for “dual eligibles,” funding of home health providers that offer chronic care management services, and establishment of pilot programs that bundle acute care hospital services with physician services and post-acute care services, which may include home health services for certain patients.
−Removed: In addition, the Improving Medicare Post-Acute Care Transformation Act of 2014 (the “IMPACT Act”) required HHS, in conjunction with the Medicare Payment Advisory Commission, to consider and propose a unified post-acute care payment model for post-acute care services.
−Removed: Currently, home health agencies, skilled nursing facilities, inpatient rehabilitation facilities, and long-term care hospitals are reimbursed under four distinct Medicare payment systems.
−Removed: In contrast, a unified post-acute care payment model would pay these post-acute care providers under a single framework according to a patient’s characteristics, rather than the post-acute care setting where the patient receives treatment.
−Removed: As required by the IMPACT Act, CMS and the HHS Office of the Assistant Secretary for Planning and Evaluation issued a report in July 2022 that presented an initial prototype, and MedPAC issued a report in June 2023 evaluating a prototype design.
−Removed: Although both CMS and MedPAC determined that designing a unified prospective payment system for post-acute care providers is feasible, MedPAC concluded that implementation would require significant policy changes and considerable agency resources and noted that CMS may consider smaller-scale site-neutral policies to address some of the overlap in patients treated in different settings.
−Removed: Other recent reform initiatives and proposals at the federal and state levels include those focused on price transparency, which may impact prices and the relationships between providers, patients, and payors.
−Removed: For example, among other consumer protections, the No Surprises Act imposes various requirements on providers and health plans intended to prevent “surprise” medical bills.
−Removed: It requires providers to send an insured patient’s health plan a good faith estimate of expected charges, including billing and diagnostic codes, prior to when the patient is scheduled to receive the item or service.
−Removed: HHS is deferring enforcement of the good faith estimate requirement for insured patients until it issues additional regulations.
−Removed: The No Surprises Act also generally requires providers to provide a good faith estimate of expected charges to uninsured or self-pay individuals in advance of the scheduled services or upon request.
−Removed: HHS is delaying enforcement with regard to good faith estimates that do not include expected charges for co-providers or co-facilities until the agency issues additional regulations.
−Removed: A number of states have adopted their own healthcare price transparency requirements.
−Removed: In addition, trends toward transparency and value-based pricing may impact our competitive position and patient volumes.
−Removed: For example, the CMS Care Compare website makes publicly available certain data on home health agency and hospice performance on quality measures and patient satisfaction.
−Removed: Further, Medicare reimbursement is tied to reporting of quality measures.
−Removed: In May 2023, CMS published a proposed rule, intended to improve access to services for Medicaid beneficiaries, that includes provisions related to HCBS payments.
−Removed: Specifically, in an effort to address workforce shortages, the proposed rule would (if finalized in its proposed form) require that a minimum of 80% of Medicaid payments in a state for home health aide, personal care services and some similar services be spent on compensation to direct care workers, in addition to related payment transparency requirements.
−Removed: CMS has proposed allowing states four years to implement changes required by a final rule.
−Removed: The ultimate impact of the 80% requirement, if finalized as proposed, could be adverse for periods after implementation, but other aspects of the rule could also benefit our business by improving access to services, depending on the policies ultimately set forth in any final rule.
−Removed: The comment period for the proposed rule ended July 1, 2023.
−Removed: The Company filed a comment letter on the proposed rule before this deadline, as did many other organizations, states and stakeholders.
−Removed: On January 26, 2024, CMS sent a final rule to the Office of Management and Budget (OMB) for review and clearance.
−Removed: The contents of the final rule are unknown at this time, and the final rule may be significantly different than the proposed rule.
−Removed: OMB review is the last step in the process prior to release of the regulation in the Federal Register.
−Removed: The final rule’s timetable on the OMB website projects a release by April 2024.
−Removed: There is uncertainty regarding the potential impact of health reform efforts at the federal and state levels.
−Removed: For example, some members of Congress have proposed measures that would expand government-sponsored coverage, including single-payor models.
−Removed: Some states have implemented or are considering measures such as individual health insurance mandates and public health insurance options.
−Removed: Other industry participants, such as private payors and large employer groups and their affiliates, may also introduce financial or delivery system reforms.
−Removed: Health reform initiatives and proposals from the government or the private sector may impact prices, our relationships with patients, payors or ancillary providers, and our competitive position, among other effects.
+Added: For example, the CMS Innovation Center has established pilot programs that bundle acute care hospital services with physician services and post-acute care services, which may include home health services for certain patients.
+Added: In addition, the CMS Innovation Center collaborates with the Medicare-Medicaid Coordination Office to support care coordination models for dually eligible individuals that aim to integrate benefits and better align financing of the Medicare and Medicaid programs.
+Added: Other congressional and administrative initiatives and proposals have also focused on the dual-eligible population, including proposals to enroll all dual-eligible individuals in a single plan or program that provides both Medicare and Medicaid benefits.
+Added: Other industry participants, such as private payors and large employer groups and their affiliates, may introduce or encourage additional financial or delivery system reforms.
+Added: For example, in recent years, private and/or public payer policies have encouraged or required enrollment in managed care programs, favored outpatient care over inpatient care, and resulted in provider consolidation.
+Added: There is uncertainty regarding the potential impact of further health-related public policy developments at the federal and state levels.
+Added: Regulatory uncertainty has increased as a result of recent U.S.
+Added: Supreme Court decisions that increase judicial scrutiny of agency authority, shift greater responsibility for statutory interpretation to courts and expand the timeline in which a plaintiff can sue regulators.
+Added: Recent decisions of the U.S.
+Added: Supreme Court are expected to have significant impacts on government agency regulation, particularly within the heavily regulated healthcare industry, in part through an increase in legal challenges to healthcare regulations and agency guidance and decisions.
+Added: Federal agencies oversee, regulate and otherwise affect many aspects of our business, including through Medicare and Medicaid payment and coverage policies, policies affecting size of the uninsured population, administration of state Medicaid programs, and enforcement and interpretation of fraud and abuse laws.
+Added: The recent Supreme Court decisions may also result in inconsistent judicial interpretations and delays in and other impacts to the agency rulemaking and legislative processes.
Permits, Licensure and Certificate of Need
3 unchanged sentences
We believe we are currently licensed appropriately as required by the laws of the states in which we operate in all material respects, but additional licensing requirements may be imposed upon us in existing markets or markets that we enter in the future.
−Removed: Some states also require a provider to obtain a certificate of need or permit of approval (“CON”) before establishing, constructing, acquiring or expanding certain health services, operations or facilities or making certain capital expenditures.
+Added: Some states also require a provider to obtain a CON or permit of approval before establishing, constructing, acquiring or expanding certain health services, operations or facilities or making certain capital expenditures.
These requirements are intended to avoid unnecessary duplication of services.
17 unchanged sentences
The scope and interpretation of these state laws vary, and in some cases apply to items or services reimbursed by any payor, including patients and commercial insurers.
−Removed: For instance, the Illinois Insurance Claims Fraud Prevention Act penalizes the knowing offer or payment of remuneration to induce a person to procure client or patients under a contract of insurance, including commercial insurance plans.
+Added: For instance, the Illinois Insurance Claims Fraud Prevention Act penalizes the knowing offer or payment of remuneration to induce a person to procure clients or patients under a contract of insurance, including commercial insurance plans.
Penalties for violation of various fraud and abuse laws or other failure to substantially comply with the numerous conditions of participation in the Medicare or Medicaid programs may result in criminal penalties, civil sanctions, including substantial civil monetary penalties, and exclusion from participation in federal healthcare programs, including Medicare and Medicaid.
10 unchanged sentences
Working across five geographic jurisdictions, UPICs collaborate with states and coordinate provider investigations across the Medicare and Medicaid programs.
−Removed: From time to time, various federal and state agencies, such as HHS, issue pronouncements that identify practices and provider types that may be subject to heightened scrutiny, as well as practices that may violate fraud and abuse laws.
−Removed: We believe, but cannot assure you, that our operations comply with the principles expressed by HHS in these reports, advisories and guidance.
−Removed: HIPAA and Other Privacy and Security and Data Exchange Requirements
+Added: From time to time, various federal and state agencies, such as HHS, issue guidance that identifies practices and provider types that may be subject to heightened scrutiny, as well as practices that may violate fraud and abuse laws.
+Added: We believe, but cannot assure you, that our operations comply with the principles expressed by these agencies.
+Added: HIPAA and Other Privacy and Security, Data Exchange and AI Requirements
The Health Insurance Portability and Accountability Act of 1996, as amended (“HIPAA”) and its implementing regulations require the use of uniform electronic data transmission standards and code sets for certain healthcare claims and reimbursement payment transactions submitted or received electronically.
1 unchanged sentence
As a “covered entity” subject to HIPAA, we are required to maintain privacy and security policies, train workforce members, maintain physical, administrative, and technical safeguards, enter into confidentiality agreements with vendors that handle protected health information (“business associates”), and permit individuals to access and amend their protected health information.
−Removed: In addition, we must report any breaches of unsecured protected health information.
+Added: In addition, we must report any breaches of unsecured protected health information to affected individuals, to HHS and, in situations involving large breaches, to the media.
HIPAA violations may result in criminal penalties and significant civil penalties.
−Removed: Other federal and state laws and regulations that apply to the collection, use, retention, protection, security, disclosure, transfer and other processing of personal data, such as the California Consumer Protection Act, which was recently significantly modified by the California Privacy Rights Act, may also impose additional or inconsistent obligations and/or result in additional penalties.
−Removed: Virginia and certain other states have also passed comprehensive privacy legislation, and several privacy bills have been proposed both at the federal and state level that may result in additional legal requirements that impact our business.
−Removed: The potential effects of these laws are far-reaching and may require us to modify our data processing practices and policies and to incur substantial costs and expenses in order to comply.
+Added: Other federal and state laws and regulations that apply to the collection, use, retention, protection, security, disclosure, transfer and other processing of personal data may impose additional or inconsistent obligations and/or result in additional penalties.
+Added: For example, various state laws and regulations require us to notify affected individuals in the event of a data breach involving individually identifiable information.
+Added: Several states have passed comprehensive privacy legislation, and several privacy bills have been proposed both at the federal and state levels that may result in additional legal requirements that impact our business.
+Added: The potential effects of these laws are far-reaching and may require us to incur substantial expenses, including costs associated with modifying our data processing practices and policies.
Healthcare providers and industry participants are also subject to a growing number of requirements intended to promote the interoperability and exchange of patient health information, including prohibitions on information blocking.
For example, certain healthcare providers and other entities are subject to information blocking restrictions pursuant to the 21st Century Cures Act that prohibit practices that are likely to interfere with the access, exchange or use of electronic health information, except as required by law or specified by HHS as a reasonable and necessary activity.
−Removed: Violations may result in penalties or other negative financial impacts.
+Added: Violations may result in penalties or other disincentives.
+Added: In July 2024, HHS finalized a rule establishing disincentives for information blocking by hospitals, clinicians eligible for the Merit-based Incentive Payment System (“MSSP”) and ACOs, ACO participants, and ACO providers or suppliers under the MSSP.
+Added: We use AI in connection with recruitment and are considering other uses.
+Added: The regulatory framework for AI is rapidly evolving as many federal and state legislatures and agencies have adopted, introduced or are currently considering additional laws and regulations that impact the use of AI, particularly in the employment and health care space.
+Added: Additionally, existing laws and regulations may be interpreted in ways that could impact our use of AI.
+Added: The cost to comply with such laws and regulations could be significant and would increase our operating expenses.
Environmental, Health and Safety Laws
18 unchanged sentences
Our growth strategy depends on our ability to manage growing and effectively integrating operations and we may not be successful in managing this growth.
−Removed: Our business plan calls for significant growth in business over the next several years through the expansion of our services in existing markets and the potential establishment of a presence in new markets.
+Added: Our business plan calls for significant growth over the next several years through the expansion of our services in existing markets and the potential establishment of a presence in new markets.
This growth has placed and continues to place significant demands on our management team, systems, internal controls and financial and professional resources.
−Removed: In addition, we will need to further develop our financial controls and reporting systems to accommodate our growth.
−Removed: This could require us to incur expenses for hiring additional qualified personnel, retaining professionals to assist in developing the appropriate control systems and expanding our information technology infrastructure.
+Added: Meeting our growth plans requires us to continue to develop our financial control and reporting system and could require us to incur expenses for hiring additional qualified personnel, retaining professionals to assist in developing the appropriate control systems and expanding our information technology infrastructure.
Our inability to effectively manage growth could have a material adverse effect on our financial results.
−Removed: Previously completed or future acquisitions, or growth initiatives, may be unsuccessful and could expose us to unforeseen liabilities.
+Added: Completed or future acquisitions, or growth initiatives, may be unsuccessful and could expose us to unforeseen liabilities.
Our growth strategy includes potential geographical expansion into new markets and the addition of new services in existing markets through the acquisition of local service providers.
4 unchanged sentences
We have grown our business opportunistically through de novo offices and we may in the future selectively open new offices in existing and new states.
−Removed: De novo offices involve risks, including those relating to licensing, accreditation, and payor program enrollment, hiring new personnel, establishing relationships with referral sources and delays or difficulty in installing our operating and information systems.
+Added: De novo offices involve risks, including those relating to licensing, accreditation, payor program enrollment, hiring new personnel, establishing relationships with referral sources and delays or difficulty in installing our operating and information systems.
We may not be successful in generating sufficient business activity to sustain the operating costs of such de novo operations.
1 unchanged sentence
At December 31, 2024 and 2023, we had cash balances of $98.9 million and $64.8 million, respectively, and $223.0 million and $126.4 million, respectively, of outstanding debt on our credit facility.
−Removed: After giving effect to the amount drawn on our credit facility, approximately $8.0 million and $8.2 million of outstanding letters of credit at December 31, 2023 and 2022, respectively, and borrowing limits based on an advanced multiple of Adjusted EBITDA (as defined in the Credit Agreement), we had $335.6 million and $237.2 million available for borrowing under our credit facility as of December 31, 2023 and 2022, respectively.
+Added: After giving effect to the amount drawn on our credit facility, approximately $8.0 million of outstanding letters of credit at each of December 31, 2024 and 2023, and borrowing limits based on an advanced multiple of Adjusted EBITDA (as defined in the Credit Agreement), we had $346.6 million and $335.6 million available for borrowing under our credit facility as of December 31, 2024 and 2023, respectively.
Since our credit facility provides for borrowings based on a multiple of an Adjusted EBITDA ratio, any declines in our Adjusted EBITDA would result in a decrease in our available borrowings under our credit facility.
9 unchanged sentences
Our financial results have been, and may continue to be, adversely impacted by negative macroeconomic conditions.
−Removed: Economic conditions in the United States continue to be challenging in various respects, and the United States economy continues to experience significant inflationary pressures, elevated interest rates, challenging labor market conditions, potential adverse effects associated with current geopolitical conditions.
+Added: Economic conditions in the United States continue to be challenging in certain respects, including as a result of inflationary pressures, elevated interest rates, challenging labor market conditions and potential adverse effects associated with current geopolitical conditions.
Taking into account these factors, we have incurred, and may continue to incur, increased competition for new caregivers and skilled healthcare staff, which will continue to impact our ability to attract and retain new employees.
Further, the inflationary conditions have resulted in, and may continue to result in, increased operating costs, particularly as the result of increased wages we have paid and may continue to pay our caregivers and other personnel and our ability to attract and retain personnel.
−Removed: Our ability to realize rate increases from government programs and private payors, which represent most of our revenue, might be limited despite inflation.
+Added: We might not be able to realize rate increases from government programs and private payors, which represent most of our revenue, and any rate increases obtained may not be sufficient to offset increases to operating expenses.
Higher interest rates also raise our financing costs.
These factors had an unfavorable impact on our financial results during the year ended December 31, 2024, and may have an unfavorable impact on our financial results in future periods which could be material.
−Removed: Moreover, we anticipate that the federal deficit, the growing magnitude of Medicare and Medicaid expenditures and the aging of the U.S.
−Removed: population will continue to place pressure on government healthcare programs, and it is possible that future deficit reduction legislation will mandate additional Medicare spending reductions.
−Removed: In addition, if economic conditions in the United States significantly deteriorate, any such developments could materially and adversely affect our results of operations, financial position, and/or our cash flows, even if interest rates fall.
−Removed: For example, states could face significant fiscal challenges and revise their revenue forecasts and adjust their budgets, and sales tax collections and income tax receipts could be depressed.
+Added: If economic conditions in the United States significantly deteriorate, any such developments could materially and adversely affect our results of operations, financial position, and/or our cash flows.
Negative macroeconomic conditions could also disrupt financial markets and capital markets and the businesses of financial institutions, potentially causing a slowdown in the decision-making of these institutions.
This may affect the timing on which we may obtain any additional funding and there can be no assurance that we will be able to raise additional funds on terms acceptable to us, if at all.
+Added: Moreover, there is ongoing uncertainty regarding the federal budget and federal spending levels, and we anticipate that the federal deficit, the magnitude of Medicare and Medicaid expenditures and the aging of and health status trends within the U.S.
+Added: population will continue to place pressure on government healthcare programs.
+Added: It is difficult to predict whether, when, or what additional deficit reduction initiatives may be proposed by Congress, but it is possible that future deficit reduction legislation will mandate additional Medicare and/or Medicaid spending reductions.
+Added: There is uncertainty regarding the impact of any failure to increase the “debt ceiling,” and any U.S.
+Added: government default on its debt could have broad macroeconomic effects.
+Added: Further, any shutdown of the federal government, failure to enact annual appropriations, hold on congressionally authorized spending or interruptions in the distribution of governmental funds could adversely affect our financial results.
+Added: States may also face significant fiscal challenges and revise their revenue forecasts and adjust their budgets, and sales tax collections and income tax receipts could be depressed, which may place further pressure on government healthcare program spending, among other effects.
Timing differences in reimbursement may cause liquidity problems.
1 unchanged sentence
These delays may result from such factors as changes by payors to data submission requirements, requests by fiscal intermediaries for additional data or documentation, other Medicare or Medicaid issues, or information system problems.
−Removed: Further, many of the states in which we operate are operating with budget deficits for the 2023 fiscal year and fiscal year 2024 state budgets could be impacted to the extent economic conditions in the United States are challenging in 2024.
−Removed: Various states may in the future delay reimbursement, which would adversely affect our liquidity.
+Added: Further, state budgets could be impacted to the extent economic conditions in the United States are challenging in 2025.
+Added: To address fiscal challenges, various states may in the future delay reimbursement, which would adversely affect our liquidity.
In addition, from time to time, procedural issues require us to resubmit claims before payment is remitted, which contributes to our aged receivables.
Additionally, we may experience unanticipated delays in receiving reimbursement from state programs due to changes in their policies or billing or audit procedures.
−Removed: Delays in receiving reimbursement or payments from Medicare, Medicaid and other payors may adversely impact our working capital.
+Added: Delays in receiving reimbursement or payments from Medicare, Medicaid and other payors, including as a result of delays or issues implementing reimbursement-related rules, such as periodic payment updates for government programs, may adversely impact our working capital.
As a result, working capital management, including prompt and diligent billing and collection, is an important factor in our results of operations and liquidity.
5 unchanged sentences
In certain states, payment of home health claims may be impacted by the Review Choice Demonstration for Home Health Services, a program intended to identify and prevent fraud, reduce the number of Medicare appeals, and improve provider compliance with Medicare program requirements.
−Removed: The program is currently limited to home health agencies in in certain states, including Illinois, Ohio, Oklahoma, North Carolina, Florida and Texas.
−Removed: Providers in these states may initially select from the following claims review and approval processes:
−Removed: pre-claim review, post-payment review, or a minimal post-payment review with a 25% payment reduction.
−Removed: Home health agencies that maintain high compliance levels will be eligible for additional, less burdensome options.
Private third-party payors may also conduct audits and investigations, and we also perform internal audits and monitoring.
4 unchanged sentences
Our revenues are concentrated in a small number of states, which makes us particularly sensitive to regulatory and economic changes in those states.
−Removed: Our revenues are particularly sensitive to regulatory and economic changes in states in which we generate a significant portion of our revenues including Illinois, New Mexico and New York.
+Added: Our revenues are particularly sensitive to regulatory and economic changes in states in which we generate a significant portion of our revenues including Illinois and New Mexico.
+Added: We expect to derive a significant portion of our revenues from Texas going forward as a result of the Gentiva Acquisition.
Accordingly, any change in the current demographic, economic, competitive or regulatory conditions in these states could have an adverse effect on our business, financial condition or results of operations.
−Removed: Changes to the Medicaid programs in these states could also have a disproportionately adverse effect on our business, financial condition, results of operations or cash flows.
+Added: Changes to the Medicaid programs in these states, each of which has implemented Medicaid expansion under the ACA, could also have a disproportionately adverse effect on our business, financial condition, results of operations or cash flows.
+Added: For example, if federal funding for the expansion population is reduced, trigger laws in Illinois and New Mexico would end Medicaid expansion in those states or require other changes, and states without such trigger laws may be unable to offset federal regulations and/or be required to make cuts to their Medicaid programs.
Future efforts to reduce the costs of the Illinois Department on Aging programs could adversely affect our service revenues and profitability.
1 unchanged sentence
State government officials have in the past attempted, and in the future may attempt, to reduce government spending by proposing changes aimed at reducing expenditures by this department.
−Removed: The nature and extent of any proposed future cost reduction initiatives is unknown.
+Added: The nature and extent of any proposed future cost reduction initiatives is difficult to predict.
If future reforms impact the eligibility of consumers for services, the number of hours authorized or otherwise restrict services provided to existing consumers, our service revenues, results of operations, financial position and growth may be adversely affected.
2 unchanged sentences
Our ability to renew or retain our agreements depends on our quality of service and reputation, as well as other factors over which we have little or no control, such as state appropriations and changes in provider eligibility requirements.
−Removed: Additionally, failure to satisfy any of the numerous technical renewal requirements in connection with our proposals for agreements could result in a proposal being rejected even if it contains favorable pricing terms.
+Added: Additionally, failure to satisfy any of the numerous technical renewal requirements in connection with the proposals we submit for agreements could result in a proposal being rejected even if it contains favorable pricing terms.
Failure to obtain, renew or retain agreements with major payors may negatively impact our results of operations and revenue.
We can give no assurance these agreements will be renewed on commercially reasonable terms or at all.
−Removed: Negative publicity or changes in public perception of our services may adversely affect our ability to receive referrals, obtain new agreements and renew existing agreements.
+Added: Negative publicity or changes in public perception of our services may decrease consumer volumes and adversely affect our ability to receive referrals, obtain new agreements and renew existing agreements, any of which could adversely affect our business.
Our success in receiving referrals, obtaining new agreements and renewing our existing agreements depends upon maintaining our reputation as a quality service provider among governmental authorities, physicians, hospitals, discharge planning departments, case managers, nursing homes, rehabilitation centers, advocacy groups, consumers and their families, other referral sources and the public.
1 unchanged sentence
Use of these HCBS measures by states, managed care organizations and other entities involved in HCBS is voluntary.
−Removed: In addition, the CMS Care Compare website makes publicly available certain data on home health agency and hospice performance on quality measures and patient satisfaction.
+Added: In addition, the CMS websites make publicly available certain data on home health agency and hospice performance on quality measures and patient satisfaction.
Medicare reimbursement for these provider types is tied to reporting of quality measures.
While we believe that the services that we provide are of high quality, if our quality measures, some of which are published online by CMS, are deemed to be unsatisfactory or not of the highest value in relation to those of our competitors, our reputation could be negatively affected.
−Removed: Negative publicity, changes in public perceptions of our services or government investigations of our operations could damage our reputation and hinder our ability to receive referrals, retain agreements or obtain new agreements.
−Removed: Increased government scrutiny may also contribute to an increase in compliance costs and could discourage consumers from using our services.
−Removed: Any of these events could have a negative effect on our business, financial condition and operating results.
+Added: Negative publicity, changes in public perceptions of our services or government investigations of our operations could damage our reputation, hinder our ability to receive referrals, retain agreements or obtain new agreements and discourage consumers from using our services.
+Added: Increased government scrutiny may also contribute to an increase in compliance costs.
+Added: Any of these events could reduce consumer volumes and have a negative effect on our business, financial condition and operating results.
Our business may be harmed by labor relations matters.
5 unchanged sentences
A strike, work stoppage or other slowdown could result in a disruption of our operations and/or higher ongoing labor costs, which could adversely affect our business.
−Removed: Moreover, potential changes to federal labor laws and regulations, including those supported by the current presidential administration, could increase the likelihood of employee unionization activity and the ability of employees to unionize.
+Added: Moreover, potential changes to federal labor laws and regulations, could increase the likelihood of employee unionization activity and the ability of employees to unionize.
Labor costs are the most significant component of our total expenditures and, therefore, an increase in the cost of labor could significantly harm our business.
15 unchanged sentences
Regulatory Risks
−Removed: Compliance with changing laws and regulations including specific program compliance may result in additional expenses and pose challenges for our management team.
−Removed: Our industry is subject to extensive government regulation.
−Removed: For example, the state agencies that contract for our services require us to comply with various laws and regulations affecting the services we provide.
−Removed: We have a compliance department, headed by our chief compliance officer, that monitors and reports on our compliance efforts.
−Removed: The laws and regulations governing our operations are subject to change.
−Removed: The implementation of these changes may require us to modify our operations or increase our efforts to remain compliant, may reduce the authorizations for services to be provided, and may result in certain consumers no longer being eligible for our services, any of which may result in lower revenues and increased costs, reducing our operating performance and profitability.
−Removed: If we continue to serve our consumers without addressing changes in laws and regulations, we are at risk for non-compliance with program requirements and potential penalties, which may be significant.
Our hospice operations are subject to annual Medicare caps.
If we exceed the caps, our business and consolidated financial condition, results of operations and cash flows could be materially adversely affected.
−Removed: Overall payments made by Medicare to each hospice provider number (generally corresponding to each of our hospice agencies) are subject to an inpatient cap and an aggregate cap, which are set each federal fiscal year.
−Removed: The inpatient cap limits the number of days of inpatient care to no more than 20% of total patient care days.
−Removed: The aggregate cap limits the amount of Medicare reimbursement a hospice may receive, based on the number of Medicare patients served.
−Removed: If a hospice’s Medicare payments exceed its inpatient or aggregate caps, it must repay Medicare for the excess amount.
+Added: Overall payments made by Medicare to each hospice provider number (generally corresponding to each of our hospice agencies) are subject to an inpatient cap and an aggregate cap, which CMS sets each federal fiscal year.
+Added: The inpatient cap limits the number of days of inpatient care for which Medicare will pay to no more than 20% of total patient care days.
+Added: The aggregate cap limits the amount of Medicare reimbursement a hospice may receive each year, based on the number of Medicare patients served.
+Added: If a hospice’s Medicare payments exceed its inpatient or aggregate caps, it must repay to Medicare the excess amount.
If payments received under any of our hospice provider numbers exceed these caps, we may be required to reimburse Medicare such excess amounts, which could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows.
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As federal healthcare expenditures continue to increase and as many state governments navigate budgetary pressures, federal and state governments have made, and may continue to make, significant changes to the Medicare and Medicaid programs and reimbursement received for services rendered to beneficiaries of such programs.
−Removed: For example, the Budget Control Act of 2011 (“BCA”) requires automatic spending reductions to reduce the federal deficit, resulting in a uniform reduction across all Medicare programs of 2% per fiscal year that extends through the first seven months of 2032.
−Removed: As a result of the American Rescue Plan Act of 2021 (“ARPA”), an additional Medicare payment reduction of up to 4% was required to take effect in January 2022, although Congress has delayed implementation of this reduction until 2025.
+Added: For example, the Budget Control Act of 2011 (“BCA”) requires automatic spending reductions to reduce the federal deficit, resulting in a uniform reduction across all Medicare programs of 2% per fiscal year that extends through the first eight months of 2032.
It is difficult to predict whether, when, or what other deficit reduction initiatives may be proposed by Congress, but future legislation may include additional Medicare spending reductions.
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Almost all of the states in which we operate have experienced periodic financial pressures and budgetary shortfalls due to challenging economic conditions and the rising costs of healthcare, among other factors.
−Removed: Reductions to federal support for state Medicaid or other programs could also result in budgetary shortfalls.
As a result, many states have made, are considering or may consider making changes in their Medicaid or other state and local medical and social programs, including enacting legislation designed to reduce Medicaid expenditures.
−Removed: Changes that may occur at the federal or state level to contain costs include, for example:
+Added: Changes that have occurred or that may occur at the federal or state level to contain costs include, for example:
• limiting increases in, or decreasing, reimbursement rates;
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• implementing demonstration projects and alternative payment models.
−Removed: Certain of these measures have been implemented by, or are proposed in, states in which we operate.
−Removed: For example, we provide support services as a fiscal intermediary to the New York Consumer Directed Personal Assistance Program (“CDPAP”), a self-directed care alternative program that allows eligible individuals who need help with activities of daily living or skilled nursing services to choose their caregivers.
−Removed: In 2019, New York initiated a new Request For Offer (“RFO”) process to competitively procure CDPAP fiscal intermediaries.
−Removed: The Company was not selected in the initial RFO process.
−Removed: We submitted a formal protest in response to the selection process, which was filed and accepted in March 2021.
−Removed: In April 2022, the New York legislature passed its fiscal year 2023 state budget, which amended the Fiscal Intermediary RFO process to authorize all fiscal intermediaries that submitted an RFO application and served at least 200 clients in New York City or 50 clients in other counties between January 1, 2020, and March 31, 2020, but that were not initially awarded a contract, to contract with the New York State Department of Health (“NYSDOH”).
−Removed: These fiscal intermediaries are permitted to continue operating in all counties contained in their RFO application, provided they submitted an attestation and supporting information to the NYSDOH no later than November 29, 2022.
−Removed: The Company submitted an attestation on November 22, 2022, which allowed the Company to continue its CDPAP fiscal intermediary operations.
−Removed: However, the Company decided at that time to suspend materially all of its new fee-for-service patient admissions in the CDPAP through County Social Service Departments.
−Removed: On June 6, 2023, the NYSDOH notified the Company that it had received a contract award.
−Removed: Under this contract, the Company is providing services to all current payors and has resumed new fee-for-service patient admissions through County Social Service Departments in the CDPAP.
−Removed: The CDPAP continues to be targeted for changes by New York governmental authorities, however.
−Removed: For example, the governor’s most recent update on the state budget contained proposals that could adversely affect the Company’s ability to participate in the CDPAP.
−Removed: These proposals may not be adopted in their current form, or at all.
−Removed: The Company recognized approximately $40.7 million and $3.5 million in net service revenue and operating income, respectively, from the CDPAP for the year ended December 31, 2023.
−Removed: In 2023, we derived approximately 44.5% of our net service revenues from services provided in Illinois, 17.0% of our net service revenues in New Mexico and 8.7% of our net service revenues in New York.
+Added: Further, legislation and administrative actions at the federal level may impact the funding for, or structure of, the Medicaid program, and may shape the administration of the Medicaid program at the state level, including by affecting provider reimbursement rates and eligibility and coverage policies.
+Added: For example, some members of Congress and the presidential administration have raised, and Congress may in the future adopt, proposals intended to reduce Medicaid expenditures such as restructuring the Medicaid program to give states a “block grant” or fixed amount of overall funding for their respective Medicaid programs or to impose spending caps such as per Medicaid beneficiary limits on federal contributions.
+Added: Reductions in federal funding or changes to the federal funding formula for Medicaid could have a significant impact, particularly in states that expanded Medicaid under the ACA and especially if federal contributions for Medicaid expansion populations decrease and states are unable to offset the reductions.
+Added: Further, some states have trigger laws that would end their Medicaid expansion or require other changes if federal funding for the expansion populations is reduced.
+Added: In 2024, we derived approximately 43.7% of our net service revenues from services provided in Illinois and 15.3% of our net service revenues in New Mexico.
+Added: We expect to derive a significant portion of our revenues from Texas going forward as a result of the Gentiva Acquisition.
Because a substantial portion of our business is concentrated in these states, any significant reduction in state expenditures that pay for our services or other significant changes in these states may have a disproportionately negative impact on our future operating results.
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In recent years, federal and state legislatures have considered or passed various proposals impacting the size of the uninsured population.
−Removed: For example, Medicaid enrollment increased as a result of COVID-19 relief legislation that authorized a temporary increase in federal funds for certain Medicaid expenditures in states that maintained continuous Medicaid enrollment, among other requirements.
−Removed: The end of the continuous enrollment condition in 2023, including the resumption of redeterminations for Medicaid enrollees, has resulted in significant coverage disruptions and dis-enrollments of enrollees, and Medicaid enrollment is generally expected to decline through fiscal year 2024 (which ends June 30, 2024, in most states).
−Removed: While we believe the population targeted by our model will be less affected than other Medicaid enrollees, there is uncertainty regarding how enrollment will ultimately change as unwinding continues and states return to normal eligibility and enrollment operations.
+Added: For example, federal legislation temporarily enhanced subsidies available for purchasing coverage through the federal and state-based health insurance marketplaces by lowering premiums and raising income eligibility thresholds.
+Added: These subsidies were extended through 2025, but further extension is uncertain, and their expiration would adversely impact enrollment through these health insurance marketplaces and may increase the uninsured rate.
+Added: In addition, the number of individuals enrolled in Medicaid declined in 2024 in comparison to 2023.
+Added: This decline reversed a trend of increased enrollment that occurred as a result of COVID-19 relief legislation that authorized a temporary increase in federal funds for certain Medicaid expenditures in states that maintained continuous Medicaid enrollment, among other requirements.
+Added: The end of the continuous enrollment condition in 2023, including the resumption of redeterminations for Medicaid enrollees, resulted in significant coverage disruptions and dis-enrollments of enrollees.
+Added: While we believe the population targeted by our business model was less affected than other Medicaid enrollees, we experienced some negative impact from redeterminations in 2024.
+Added: We believe states in which we operate have substantially completed redeterminations associated with the unwinding of the continuous coverage requirement and do not anticipate any additional material impact to our business from the unwinding process.
Congress, CMS and state authorities may implement changes to reimbursement for or coverage of items and services that affect our business and operations.
−Removed: For example, from time to time, CMS revises the reimbursement systems used to reimburse healthcare providers, including through changes to the home health and hospice reimbursement systems, which may result in reduced Medicare and/or Medicaid payments.
+Added: For example, CMS periodically revises the reimbursement systems used to reimburse healthcare providers, including through changes to the home health and hospice reimbursement systems, which may result in reduced Medicare and/or Medicaid payments.
+Added: In addition, delays or issues implementing reimbursement-related rules, including periodic payment updates for government programs, and interruptions in the distribution of governmental funds, could have an adverse impact on our business.
The shift toward value-based care continues, including through the implementation of alternative payment models and various demonstration projects.
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Federal and state laws and regulations may adversely impact our ability to acquire or open new start-up agencies, and the change of ownership processes for Medicare, Medicaid and other payors can be complex.
−Removed: For example, a Medicare regulation known as the “36 Month Rule” restricts buyers from assuming Medicare billing privileges of Medicare-certified home health agencies and, effective January 1, 2024, hospices.
+Added: For example, a Medicare regulation known as the “36 Month Rule” restricts the assumption by a new majority owner of a Medicare-certified home health agency or hospice provider’s Medicare provider agreement and billing privileges.
The 36 Month Rule applies if the acquired home health agency or hospice either enrolled in Medicare or underwent a change in majority ownership fewer than 36 months prior to the acquisition, subject to certain exceptions.
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The 36 Month Rule can increase competition for acquisition targets that are not subject to the rule and may cause significant Medicare billing delays for the purchases of home health agencies and hospices that are subject to the rule.
−Removed: Home health agencies and (effective January 1, 2024) hospices undergoing changes of ownership are considered a “high-risk” provider type, subjecting provider enrollment applications to increased scrutiny, which may result in delays in processing.
+Added: Home health agencies and hospices undergoing changes of ownership are considered a “high-risk” provider type, subjecting provider enrollment applications to increased scrutiny, which may result in delays in processing.
Further, in the past, CMS has limited enrollment of new home health agencies.
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Our ability to expand operations in a state will also depend, where required, on our ability to obtain a state license to operate and, in some cases, CON approval.
−Removed: States may limit the number of licenses they issue.
−Removed: In addition, some states require disclosures by healthcare entities to state attorneys general or other designated entities in advance of sales or other transactions.
−Removed: The failure to obtain any required CON or license or other required approvals could impair our ability to operate or expand our business.
+Added: States may limit the number of new licenses they issue or restrict changes of ownership of existing licensed entities.
+Added: For example, California law prohibits the California Department of Public Health from approving a change of ownership of a hospice agency license within five years of its initial issuance.
+Added: In addition, some states require healthcare entities to make disclosures to or receive approval from state attorneys general or other designated entities in advance of sales or other transactions.
+Added: The failure to obtain any required CON or license or other required approvals or make required disclosure could impair our ability to operate or expand our business.
The increasingly challenging regulatory environment may negatively impact our ability to acquire healthcare businesses if they are found to have material unresolved compliance issues.
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Many government and commercial payors are transitioning providers to alternative payment models that are designed to promote cost-efficiency, quality and coordination of care.
−Removed: For example, accountable care organizations (“ACOs”) incentivize hospitals, physician groups, and other providers to organize and coordinate patient care while reducing unnecessary costs.
−Removed: Several states have implemented, or plan to implement, accountable care models for their Medicaid populations.
+Added: For example, ACOs incentivize hospitals, physician groups, and other providers to organize and coordinate patient care while reducing unnecessary costs.
+Added: Some states have implemented, or plan to implement, accountable care models for their Medicaid populations.
If we are not included in these programs, or if ACOs establish programs that overlap with our services, we are at risk for losing market share and for a loss of our current business.
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We may be similarly impacted by increased enrollment of Medicare and Medicaid beneficiaries in managed care plans, which is part of the general shift away from traditional fee-for-service models.
−Removed: Under the managed Medicare program, also known as Medicare Advantage, the federal government contracts with private health insurers to provide Medicare benefits.
+Added: Under the managed Medicare program, known as Medicare Advantage, the federal government contracts with private health insurers to provide Medicare benefits.
Insurers may choose to offer supplemental benefits, including in-home support services, and impose higher plan costs on beneficiaries.
Approximately half of Medicare beneficiaries are enrolled in a Medicare Advantage plan, a figure that continues to grow.
−Removed: While hospice services are currently reimbursed as a traditional fee-for-service program under Medicare Part A, CMS is testing the inclusion of the Part A hospice benefit with the Medicare Advantage benefits package.
−Removed: Under the Hospice Benefit Component of the Value-Based Insurance Design Model, Medicare Advantage plans are financially responsible for all traditional Medicare services, including hospice care.
−Removed: If hospice services are offered more widely under Medicare Advantage plans, the change could result in reduced reimbursement, limited utilization, and increased competition for managed care contracts.
−Removed: Enrollment in managed Medicaid plans is also growing, as states are increasingly relying on managed care organizations to deliver Medicaid program services as a strategy to control costs and manage resources.
+Added: If more of our services are offered under Medicare Advantage plans in the future, we could experience reduced reimbursement, limited utilization, and increased competition for managed care contracts.
+Added: States predominantly deliver services to Medicaid enrollees through managed Medicaid plans as a strategy to control costs and manage resources.
We may experience increased competition for managed care contracts due to state regulation and limitations.
−Removed: For instance, New York law limits the number of home care providers with which a managed Medicaid long-term care plan can contract.
We cannot assure you that we will be successful in our efforts to be included in plan networks, that we will be able to secure favorable contracts with all or some of the managed care organizations, that our reimbursement under these programs will remain at current levels, that the authorizations for services will remain at current levels or that our profitability will remain at levels consistent with past performance.
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Licensure is generally required of agencies providing home health and hospice services, though requirements vary by state.
−Removed: Some states also require a provider to obtain a CON before establishing certain health services, operations or facilities.
+Added: Some states also require a provider to obtain a CON or other type of approval before establishing, purchasing, or expanding certain health services, operations or facilities.
CON restrictions may reduce the level of competition in a given industry or in a particular geographic region.
+Added: Changes in licensure and CON requirements and recognition of new provider types or payment models could remove or reduce barriers to entry.
In addition, economic changes such as increases in minimum wage and changes in Department of Labor rules can also impact the ease of entry into a market.
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Local competitors may develop strategic relationships with referral sources and payors.
−Removed: Further, consolidation within the payor industry, vertical integration efforts involving payors and healthcare providers, and cost-reduction strategies by payors continue to increase, which may affect our competitive position.
+Added: Further, consolidation within the payor industry, vertical integration efforts involving payors and healthcare providers, and cost-reduction strategies by payors continue to increase.
In addition, existing competitors may offer new or enhanced services that we do not provide or be viewed by consumers as a more desirable local alternative.
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Further, the introduction of new and enhanced service offerings, in combination with the development of strategic relationships by our competitors, could cause a decline in revenue, a loss of market acceptance of our services and a negative impact on our results of operations.
−Removed: Trends toward price transparency and value-based purchasing may have an impact on our competitive position, ability to obtain and maintain favorable contract terms, and consumer volumes.
+Added: Trends toward clinical and price transparency and value-based purchasing may have an impact on our competitive position, ability to obtain and maintain favorable contract terms, and consumer volumes.
For example, health insurers must provide online price comparison tools to help individuals get personalized cost estimates for covered items and services.
HHS also requires health insurers to publish online the charges negotiated with providers for healthcare services.
−Removed: In addition, the CMS Care Compare website makes publicly available certain data on home health agency and hospice performance on quality measures and patient satisfaction.
+Added: In addition, CMS websites make publicly available certain data on home health agency and hospice performance on quality measures and patient satisfaction.
It is unclear how price transparency requirements, value-based purchasing and similar initiatives will affect consumer behavior, our relationships with payors, or our ability to set and negotiate prices.
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If we are unable to compete effectively, consumers may seek services from other providers, which could have a negative impact on our business and results of operations.
−Removed: If we fail to comply with the laws and extensive regulations governing our business, we could be subject to penalties or be required to make changes to our operations, which could negatively impact our profitability.
−Removed: The federal government and the states in which we operate regulate our industry extensively.
−Removed: The laws and regulations governing our operations, along with the terms of participation in various government programs, impose certain requirements on the way in which we do business, the services we offer, and our interactions with providers and consumers.
−Removed: These requirements include matters related to:
−Removed: • licensure and certification and enrollment with government programs;
+Added: If we fail to comply with the extensive laws and regulations governing our business, we could be subject to penalties or be required to make changes to our operations, which could negatively impact our business and profitability.
+Added: Our industry is extensively regulated at the federal and state government levels.
+Added: The laws and regulations governing our operations, along with the terms of participation in various government programs, affect the way in which we do business, the services we offer, and our interactions with providers and consumers.
+Added: These legal and regulatory requirements relate to, among other matters:
+Added: • facility and personnel licensure, and certification and enrollment with government programs;
• eligibility for services;
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• adequacy and quality of services;
−Removed: • qualifications and training of personnel;
−Removed: • confidentiality, maintenance, interoperability, data breach, identity theft, security, access and exchange of medical records and other health-related and personal information including information blocking, data breach, ransomware, identify theft and online tracking of personal information;
+Added: • qualifications, training and supervision of personnel;
+Added: • confidentiality, maintenance, interoperability, exchange and security of medical records and other health-related and personal information, including information blocking, data breach, ransomware, identify theft and online tracking of personal information;
+Added: • the provision of services via telehealth, including technological standards and coverage restrictions or other limitations on reimbursement;
+Added: • the development and use of AI and other predictive algorithms, including those used in clinical decision support tools;
• environmental protection, health and safety;
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Further, we may fail to discover instances of noncompliance by businesses we acquire.
−Removed: If we fail to comply with applicable laws and regulations, which are subject to change, we could be subject to civil sanctions and criminal penalties, including substantial monetary penalties, the termination of rights to participate in federal and state healthcare programs, exclusion from federal healthcare programs, the suspension or revocation of licenses, and we could face nonpayment or encounter delays in our ability to bill and collect for services provided, any of which could adversely affect our business, results of operations, or financial results.
+Added: If we fail to comply with applicable laws and regulations, which are subject to change, we could be subject to civil sanctions and criminal penalties, including substantial monetary penalties, exclusion from participation in Medicare, Medicaid and other federal and state healthcare programs, the suspension or revocation of licenses, we could face nonpayment or encounter delays in our ability to bill and collect for services provided, and we could be subject to civil lawsuits, any of which could adversely affect our business, results of operations, or financial results.
Actions taken against one of our entities may subject our other entities to adverse consequences.
−Removed: While we endeavor to comply with applicable laws and regulations, we cannot ensure you that our practices are fully compliant or that courts or regulatory agencies will not interpret those laws and regulations in ways that will adversely affect our practices.
−Removed: Further, the laws and regulations governing our business are subject to change, interpretations may evolve and enforcement focus may shift.
+Added: While we endeavor to comply with applicable laws and regulations and government program requirements, we cannot ensure you that our practices are fully compliant or that courts or regulatory agencies will not interpret those laws and regulations in ways that will adversely affect our practices.
+Added: Further, the laws and regulations and program requirements governing our business are subject to change, interpretations may evolve and enforcement focus may shift.
These changes could subject us to allegations of impropriety or illegality, require restructuring of relationships with referral sources and recipients or otherwise require changes to our operations.
−Removed: The costs of compliance with, and the other burdens imposed by, applicable laws and regulations may be substantial and could increase our operational costs, result in interruptions or delays in the availability of systems and/or result in a patient volume decline.
+Added: Changes could also reduce authorizations for services to be provided or result in reductions in consumer eligibility for our services, which could decrease our revenues and operating performance.
+Added: The costs of compliance with, and the other burdens imposed by, applicable laws and regulations and program requirements may be substantial and could increase our operational costs, pose challenges for our management team, result in interruptions or delays in the availability of systems and/or result in a patient volume decline, any of which could adversely affect our business.
Federal and state government agencies have heightened and coordinated civil and criminal enforcement efforts throughout the healthcare industry.
We may face audits or investigations by government agencies or third parties, including under certain of our contractual relationships.
−Removed: An adverse outcome under any such audit or investigation, a determination that we have violated applicable laws and regulations, or a public announcement that we are being investigated for possible violations could result in liability, result in adverse publicity, require us to change our operations to implement plans of correction for alleged deficiencies, and result in other negative consequences that could adversely affect our business, financial condition, or results of operations.
+Added: An adverse outcome under any such audit or investigation, a determination that we have violated applicable laws and regulations, or a public announcement that we are being investigated for possible violations could result in liability, result in adverse publicity, require us to change our operations and/or to implement plans of correction for alleged deficiencies, and result in other negative consequences that could adversely affect our business, financial condition, or results of operations.
We are subject to federal, state and local laws and regulations that govern our employment practices, including minimum wage, living wage, and paid time-off requirements.
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Each of our subsidiaries that employ an average of at least 50 full-time employees in a calendar year are required to offer a minimum level of health coverage for 95% of our full-time employees in 2024 or be subject to an annual penalty, for example.
−Removed: Since our personal care operations are concentrated in Illinois, New Mexico and New York, we are also particularly sensitive to changes in laws and regulations in these states.
−Removed: Additionally, the current presidential administration has signaled its support for increases in minimum wage.
+Added: Since our personal care operations are concentrated in Illinois and New Mexico, we are also particularly sensitive to changes in laws and regulations in these states.
We may not be able to offset any increased costs and expenses.
3 unchanged sentences
These modifications may result in increased operational costs to us, which may adversely impact our financial performance.
−Removed: In addition, certain individuals and entities, known as excluded persons, are prohibited from receiving payment for their services rendered to Medicaid, Medicare and other federal and state healthcare program beneficiaries.
−Removed: If we inadvertently hire or contract with an excluded person, or if any of our current employees or contractors becomes an excluded person in the future without our knowledge, we may be subject to substantial civil penalties, including civil monetary penalties, an assessment of up to three times the amount claimed and exclusion from the program.
−Removed: Our business may be adversely impacted by healthcare reform efforts.
−Removed: In recent years, the healthcare industry has undergone significant changes, many of which have been aimed at reducing costs and government spending.
−Removed: Congress and certain state legislatures have considered and passed a large number of laws affecting the healthcare industry, including laws intended to impact access to health insurance.
−Removed: The most prominent of these legislative reform efforts, the ACA affects how healthcare services are covered, delivered, and reimbursed, and expanded health insurance coverage through a combination of public program expansion and private sector health insurance reforms.
−Removed: However, the ACA has been, and continues to be, subject to legislative and regulatory changes and court challenges.
−Removed: It is possible that changes by Congress or government agencies could eliminate or alter provisions beneficial to us, while leaving in place provisions reducing our reimbursement or otherwise negatively impacting our business.
−Removed: In addition, CMS administrators may make changes to Medicaid payment models or impose new limitations on the use of Medicaid funds.
−Removed: For example, in May 2023, CMS published a proposed rule that, if finalized in its current form, would require that a minimum of 80% of Medicaid payments in a state for home health aide, personal care services and some similar services be spent on compensation to direct care workers, in addition to related payment transparency requirements.
−Removed: If adopted, this requirement could negatively impact our business and financial performance by, among other things, increasing our labor costs.
−Removed: Likewise, CMS administrators may grant various flexibilities to states in the administration of state Medicaid programs, including by modifying the scope of waivers under which states may implement Medicaid expansion provisions, impose different eligibility or enrollment restrictions, or otherwise implement programs that vary from federal standards.
−Removed: Some of these program changes may reduce the number of Medicaid enrollees in certain states.
+Added: In addition, individuals and entities excluded by the OIG from federal healthcare programs, including Medicare and Medicaid, are prohibited from receiving payment from federal healthcare programs for any items or services they furnish, order or provide, and providers who employ or contract with excluded individuals are subject to significant penalties.
+Added: If we inadvertently hire or contract with an excluded person, or if any of our current employees or contractors becomes an excluded person in the future without our knowledge, we may be subject to substantial civil penalties, including civil monetary penalties, an assessment of up to three times the amount claimed and exclusion from the program, and may also face liability under the FCA.
+Added: Our business may be adversely impacted by changes and uncertainty in the healthcare industry, including healthcare public policy developments and other changes to laws and regulations.
+Added: The healthcare industry is subject to changing political, regulatory and other influences.
+Added: Regulatory uncertainty has increased as a result of decisions issued by the U.S.
+Added: Supreme Court in June 2024 that affect review of federal agency actions.
+Added: These decisions increase judicial scrutiny of agency authority, shift greater responsibility for statutory interpretation to courts, expand the time period during which a plaintiff can sue regulators, and may result in inconsistent judicial interpretations and delays in agency rulemaking processes.
+Added: In Loper Bright Enterprises v.
+Added: Raimondo , the Court overruled a legal framework that gave significant judicial deference to federal agency interpretations of federal statutes.
+Added: The Court held that courts must instead exercise independent judgment when deciding whether an agency has acted within its statutory authority and that courts may not defer to an agency interpretation simply because a statute is ambiguous.
+Added: The Loper Bright decision and other recent decisions of the U.S.
+Added: Supreme Court could have significant impacts on government agency regulation, particularly within the heavily-regulated healthcare industry, and may have broad implications for our business.
+Added: While the effects of these decisions will become apparent over the coming months and years, we anticipate an increase in legal challenges to healthcare regulations and agency guidance and decisions, including but not limited to those issued by HHS and its agencies, including CMS, the FDA, and the OIG.
+Added: Federal agencies oversee, regulate and otherwise affect many aspects of our business, including through Medicare and Medicaid payment and coverage policies, policies affecting size of the uninsured population, administration of state Medicaid programs, and enforcement and interpretation of fraud and abuse laws.
+Added: Impacts of the recent Supreme Court decisions could require us to make changes to our operations and have a material negative impact on our business.
+Added: The outcome of the 2024 federal elections, affecting both the executive and legislative branches, also increases regulatory uncertainty and the potential for significant policy changes.
+Added: The healthcare industry has been and continues to be impacted by healthcare reform efforts.
+Added: For example, the ACA affects how healthcare services are covered, delivered, and reimbursed, and expanded health insurance coverage through a combination of public program expansion and private sector health insurance reforms.
+Added: Changes in the law’s implementation, subsequent legislation and regulations, state initiatives and other factors have affected and may continue to affect the number of individuals that elect to obtain public or private health insurance or the scope of such coverage, if purchased, and may impact our payor mix.
+Added: Reductions in the number of insured individuals or the scope of insurance coverage, or an increase in patients covered under governmental health programs or other health plans with lower reimbursement levels, may have an adverse effect on our business.
+Added: For example, federal legislation temporarily enhanced subsidies available for purchasing coverage through the ACA health insurance marketplaces by lowering premiums and raising income eligibility thresholds.
+Added: Subsequent legislation extended these enhanced subsidies through 2025, but further extension is uncertain, and their expiration may increase the uninsured rate.
+Added: Other legislative and executive branch initiatives related to health insurance, such as permitting the sale of insurance plans that lack currently required consumer protections, could significantly affect insurance markets.
+Added: In addition, the Medicare and Medicaid programs are subject to change, including as a result of changes in the presidential administration.
+Added: For example, some members of Congress and the presidential administration have raised potential changes intended to accelerate the shift from traditional Medicare to Medicare Advantage, repealing the ACA or eliminating some of its consumer protections.
+Added: Further, changes in governmental administration, including changes in agency structures and staffing, such as reduction or elimination of personnel and agencies, may result in changes to established rulemaking conventions and timelines, including for regularly-issued reimbursement rules, among other effects.
+Added: Legislation and administrative actions at the federal level may also impact funding for, or the structure of, the Medicaid program and may shape administration of the Medicaid program at the state level.
+Added: For example, in May 2024, CMS finalized a rule that requires states to ensure by mid-2030 that at least 80% of all Medicaid payments a provider receives for homemaker, home health aide, and personal care services, less excluded costs, under specified programs are spent on total compensation for direct care workers furnishing these services, subject to limited exceptions.
+Added: If implemented in its current form, the final rule could negatively impact our business and financial performance by, among other things, increasing our labor costs.
+Added: In addition, CMS may change Medicaid payment models and grant states additional flexibilities in the administration of state Medicaid programs, including by modifying the scope of waivers under which states may implement Medicaid expansion provisions, impose different eligibility or enrollment restrictions, or otherwise implement programs that vary from federal standards.
+Added: Further, changes to the federal funding formula for Medicaid could significantly impact states that expanded Medicaid under the ACA, especially if federal contributions for Medicaid expansion populations decrease or are eliminated and states are unable to offset the reductions.
+Added: Some states have trigger laws that would end their Medicaid expansion or require other changes if federal funding is reduced.
+Added: Some of these Medicaid changes may decrease Medicaid enrollment, result in reductions to various state healthcare programs or have other effects that could adversely affect our business.
Other recent reform initiatives and proposals at the federal and state levels include those focused on price transparency and value-based pricing, which may impact our competitive position, patient volumes, and the relationships between providers, patients, and payors.
−Removed: For example, the CMS Care Compare website makes publicly available certain data on home health agency and hospice performance on quality measures and patient satisfaction.
−Removed: Medicare reimbursement is tied to reporting of quality measures.
−Removed: In addition, among other consumer protections, the No Surprises Act imposes various requirements on providers and health plans that are intended to prevent “surprise” medical bills.
−Removed: The law generally requires providers to send an insured patient’s health plan a good faith estimate of expected charges, including billing and diagnostic codes, prior to when the patient is scheduled to receive the item or service.
−Removed: There is uncertainty regarding whether, when and what other health reform measures will be adopted through governmental avenues and/or the private sector, the timing and implementation of any such efforts, and the impact of those efforts on providers as well as other healthcare industry participants.
−Removed: Some members of Congress have proposed expanding government-funded coverage, including proposals to expand coverage of federally-funded insurance programs as an alternative to private insurance or to establish a single payor system (such reforms are often referred to as “Medicare for All”), and some states have implemented or proposed public health insurance options.
−Removed: We are unable to predict the nature and success of current and future healthcare reform initiatives, any of which may have an adverse effect on our business, financial condition, and operating results.
+Added: For example, CMS websites make publicly available certain data on home health agency and hospice performance on quality measures and patient satisfaction, and Medicare reimbursement is tied to reporting of quality measures.
+Added: Other industry participants, such as private payors and large employer groups and their affiliates, may introduce additional financial or delivery system reforms.
+Added: There is uncertainty regarding whether, when and what other public policy initiatives will be adopted by federal and state governments and/or the private sector, the timing and implementation of any such efforts, and the impact of those efforts on providers as well as other healthcare industry participants.
+Added: It is difficult to predict the nature and/or success of current and future public policy changes, any of which may have an adverse effect on our business, financial condition, and operating results.
The industry trend toward value-based purchasing may negatively impact our revenues.
−Removed: There is a trend in the healthcare industry toward value-based purchasing of healthcare services among both government and commercial payors.
−Removed: Generally, value-based purchasing programs emphasize quality of outcome and efficiency of care provided, rather than quantity of care provided.
+Added: There is a trend toward value-based purchasing of healthcare services among both government and commercial payors.
+Added: Generally, value-based purchasing programs tie payment to the quality and efficiency of care provided.
For example, Medicare requires hospices and home health agencies to report certain quality data in order to receive full reimbursement.
Failure to report quality data or poor performance may negatively impact the amount of reimbursement received.
−Removed: In addition, CMS publishes home health and hospice quality measure data online, through its Care Compare website, to allow consumers and others to search and compare data for Medicare-certified providers.
+Added: In addition, CMS publishes home health and hospice quality measure data online to allow consumers and others to search and compare data for Medicare-certified providers.
Alongside this quality and public reporting effort, home health agencies receive, under the HHVBP Model, increases or decreases to their Medicare fee-for-service payments of up to 5% based on performance against specific quality measures relative to the performance of other home health providers.
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From time to time, we are subject to claims alleging that we did not properly treat or care for a consumer, that we failed to follow internal or external procedures, resulting in death or harm to a consumer, or that our employees mistreated our consumers, resulting in death or harm.
−Removed: We are also subject to claims arising out of accidents involving vehicle collisions brought by consumers whom we are transporting, from employees driving to or from home visits or other affected individuals.
+Added: We are also subject to claims arising out of accidents involving vehicle collisions brought by consumers whom we transport, from employees driving to or from home visits or other affected individuals.
We may also be subject to lawsuits from patients, employees and others exposed to contagious diseases in connection with the services provided by our workforce in client residences and third party facilities.
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Our professional and general liability insurance may not cover all claims against us.
−Removed: In addition, regulatory agencies have previously brought and may in the future initiate administrative proceedings alleging violations of statutes and regulations arising from our services and seek to impose monetary penalties on us.
+Added: In addition, regulatory agencies have previously brought and may in the future initiate administrative proceedings alleging violations of statutes and regulations arising from our services and seek to impose monetary penalties or other sanctions on us.
We could be required to pay substantial amounts to respond to regulatory investigations or, if we do not prevail, damages or penalties arising from these legal proceedings.
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Information systems may be vulnerable to damage from a variety of sources, including telecommunications or network failures, human acts and natural disasters.
−Removed: The number of administrative employees working remotely has increased substantially in recent years, increasing our dependence on systems that facilitate remote access, and we may experience increased risks as a result.
+Added: We have a significant number of administrative employees working remotely, increasing our dependence on systems that facilitate remote access to our system, and we may experience increased risks as a result.
To the extent providers fail to support the software or systems we use, or if we lose our software licenses, our operations could be negatively affected.
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Under the 21st Century Cures Act, states must require the use of EVV for all Medicaid-funded personal care services and home health services that require an in-home visit by a provider.
−Removed: States that failed to meet the deadlines for implementation may be subject to incremental reductions in federal funding, absent approval of a good faith exemption.
−Removed: If any states in which we operate fail to properly and timely implement EVV and lose an amount of their funding, or if those states adopt standards for EVV that are not compatible with our operations, our internal operations could be negatively affected.
+Added: States that failed to meet the deadlines for implementation, which include some states in which we operate, are subject to incremental reductions in federal Medicaid funding, which may negatively impact the reimbursement we receive for our services.
+Added: In addition, if states adopt new or modify existing standards for EVV that are not compatible with our operations, our internal operations could be negatively affected.
Further, to the extent that the EVV solutions that we use are determined to be noncompliant with federal or state EVV requirements, we could be subject to penalties.
−Removed: The COVID-19 pandemic also led to a substantial increase in administrative employees working remotely and, consequently, accessing our system remotely.
−Removed: As a result, we are more dependent on our systems that facilitate remote access and potentially could experience increased risks.
−Removed: We have taken precautionary measures designed to prevent problems that could affect our information systems.
+Added: We have taken and continue to take precautionary measures designed to prevent problems that could affect our information systems.
We have implemented backup of our key information systems that are designed to allow our operations to failover to our geographically separate disaster recovery datacenter with a quick return to operations for all sites and systems in the event our main datacenter becomes inoperable because of a natural disaster, attacks or other cause.
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The occurrence of any system failure could result in interruptions, delays, the loss or corruption of data and cessations or interruptions in the availability of systems, all of which could have a material, adverse effect on our financial position and results of operations and harm our business reputation.
−Removed: A cyber-attack or security breach could cause a loss of confidential consumer data, give rise to remediation and other expenses, expose us to liability under HIPAA, consumer protection laws, common law and other legal theories, subject us to litigation and federal and state governmental inquiries, damage our reputation, adversely impact our financial results, and otherwise be disruptive to our business.
+Added: A cyber-attack or security breach could cause a loss of confidential consumer data, give rise to remediation and other expenses, expose us to liability under privacy laws, consumer protection laws, common law and other legal theories, subject us to litigation and federal and state governmental inquiries, damage our reputation, result in interruptions or delays to services, adversely impact our financial results, and otherwise be disruptive to our business.
+Added: We, directly and through our vendors and other third parties, collect and store sensitive information, including proprietary business information, protected health information of our patients and personally identifiable information of our employees, patients and consumers.
We rely extensively on computer systems to manage clinical and financial data, to communicate with our consumers, payors, vendors and other third parties, and to summarize and analyze our operating results.
−Removed: We frequently exchange clinical and financial data with third parties in connection with our routine operations and in order to meet our contractual and regulatory obligations.
−Removed: We are required to comply with the federal and state privacy and security laws and requirements, including HIPAA.
−Removed: In addition, various states, including California, Colorado, Illinois, Nevada, New York, Massachusetts and Virginia have enacted, and other states are expected to enact, laws and regulations concerning privacy, data protection and information security.
−Removed: To the extent we are subject to such legislation, including as a result of any creation, use or deployment of artificial intelligence, we may be required to modify our data processing practices and policies and to incur substantial costs and expenses in an effort to comply.
−Removed: These laws often provide for civil penalties for violations, as well as a private right of action for data breaches that may increase data breach litigation.
−Removed: We have invested in security measures designed to protect against the threat of security breaches and cyber-attacks, including email phishing schemes, malware and ransomware.
−Removed: However, our technology, and that of our third-party service providers, may fail to adequately secure the protected health information and personally identifiable information we create, receive, transmit and maintain in our databases.
+Added: Our personnel use devices that store or transmit information integral to the provision of services, and we frequently exchange clinical and financial data with third parties in connection with our routine operations and in order to meet our contractual and regulatory obligations.
+Added: The secure maintenance of this information and technology is critical to our business operations, and we are required to comply with the federal and state privacy and security laws and requirements, including HIPAA and state privacy laws.
+Added: We have invested in security measures designed to protect against the threat of security breaches and cyber-attacks, as well as cybersecurity systems, protocols and monitoring procedures.
+Added: Each of these steps is intended to protect the confidentiality, integrity and availability of our data and the systems and devices that store and transmit such data.
+Added: However, despite these efforts, our technology, and that of our third-party service providers, may fail to adequately secure the protected health information and personally identifiable information we create, receive, transmit and maintain in our databases.
We may be at increased risk because we outsource certain services or functions to, or have systems that interface with, third parties.
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The information systems of third parties are also subject to various risks, and a breach or attack affecting any of these third parties could harm our business.
−Removed: Furthermore, because the techniques used in cyber-attacks change frequently, they may not be immediately recognized, and we may experience or be affected by security or data breaches that remain undetected for an extended time.
+Added: In addition, the rapid evaluation and increased adoption of artificial intelligence technologies may heighten our cybersecurity risks by making cybersecurity attacks more difficult to detect, contain and mitigate.
The current cyber threat environment presents increased risk for all companies, including companies in our industry.
−Removed: We are regularly the target of attempted cybersecurity and other threats that could have a security impact, and we expect to continue to experience an increase in cybersecurity threats in the future.
+Added: Threats from malicious persons and groups, new vulnerabilities and advanced new attacks against our, or our vendors’, information systems and devices create risk of cybersecurity incidents, including ransomware, malware and phishing incidents, in which third parties attempt to fraudulently induce our employees or our vendors’ employees into disclosing usernames, passwords or other sensitive information, which can in turn be used for unauthorized access to our or our vendors’ systems.
+Added: We are regularly the target of attempted cybersecurity and other threats that could have a security impact, and we expect to continue to experience an increase in cybersecurity threats in the future, as the volume and intensity of cyberattacks on healthcare entities and vendors continue to increase.
+Added: Furthermore, because the tools and techniques used in cyber-attacks change frequently and may not be immediately recognized, we may be unable to anticipate techniques or implement adequate preventative measures, and we may experience or be affected by security or data breaches that remain undetected for an extended time.
+Added: Even if identified, we may be unable to adequately investigate or remediate incidents or breaches due to attackers increasingly using tools and techniques that are designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence.
+Added: The rapid evolution and increased adoption of artificial intelligence technologies may intensify cybersecurity risks by making cyber-attacks more difficult to detect, contain or mitigate.
+Added: Internal access management failures or vulnerabilities in hardware, software or applications could also result in the compromise of confidential data.
+Added: We continue to prioritize the development and enhancement of controls and processes designed to protect our business, information systems and data from attack, damage or unauthorized access.
+Added: As cyber threats continue to evolve and increase in volume and sophistication, we may be required to expend significant additional resources to continue to enhance our protective measures or to investigate and remediate security incidents or vulnerabilities.
+Added: We may also be required to expend additional resources to comply with evolving federal and state requirements related to cybersecurity.
In spite of our policies, procedures and other security measures used to protect our computer systems and data, occasionally, we have experienced breaches that have required us to notify affected consumers and the government, and we have worked with consumers and the government to resolve such issues.
While these past breaches have not had a significant adverse impact on our business or results of operations, there can be no assurance that we will not be subject to additional and/or more severe cyber-attacks or security breaches in the future.
−Removed: If we or any of our third-party service providers or certain other third-parties are subject to cyber-attacks or experience security or data breaches in the future, this could result in harm to consumers, loss, misappropriation, corruption, or unauthorized access of protected patient medical data or other information subject to privacy laws, disruption to our information technology systems and/or business, reputational harm.
+Added: If we or any of our third-party service providers or certain other third-parties are subject to cyber-attacks or experience security or data breaches in the future, this could result in harm to consumers, interruptions and delays in services provided to consumers, loss, misappropriation, corruption, or unauthorized access of protected patient medical data or other information subject to privacy laws, disruption to our information technology systems and/or business, the inability to access data, reputational harm, or adversely impact our financial results.
We may also be subject us to litigation and governmental enforcement actions (including under HIPAA and other applicable laws) as a result of cyber-attacks or security or data breaches, which could result in fines, settlement agreements, corrective action plans, and of which could have a material adverse effect on our business, financial position and results of operations.
Some state laws provide a private right of action for data breaches, which may increase data breach litigation.
+Added: In addition, any significant cybersecurity event may require us to devote significant management time and resources to address and respond to any such event, interfere with the pursuit of other important business strategies and initiatives, and cause us to incur additional expenditures, which could be material, including to investigate such events, remedy cybersecurity problems, recover lost data, prevent future compromises and adapt systems and practices in response to such events.
+Added: Moreover, there is no assurance that any remedial actions will meaningfully limit the success of future attempts to breach our information systems, particularly because malicious actors are increasingly sophisticated and utilize tools and techniques specifically designed to circumvent security measures, avoid detection and obfuscate forensic evidence, which means we may be unable to identify, investigate or remediate effectively or in a timely manner.
Further, our insurance coverage intended to address cybersecurity and data breach risks may not be sufficient to cover all losses or the types of claims that may arise.
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In addition, the competition for skilled healthcare staff has increased significantly, which continues to impact our ability to attract and retain qualified skilled healthcare staff.
−Removed: To the extent that the United States continues to have low unemployment levels and shortages of caregivers and skilled healthcare staff, it may continue to hinder our ability to attract and retain sufficient caregivers and skilled healthcare staff to meet the continuing demand for both our non-clinical and clinical services.
−Removed: Moreover, the increased staffing challenges have resulted in, and may continue to result in, increased labor cost to satisfy our staffing requirements.
+Added: To the extent that the United States experiences low unemployment levels and shortages of caregivers and skilled healthcare staff, it may continue to hinder our ability to attract and retain sufficient caregivers and skilled healthcare staff to meet the continuing demand for both our non-clinical and clinical services.
+Added: Staffing challenges may be exacerbated by the implementation of a final rule issued by CMS in May 2024 that establishes minimum staffing standards for Medicare- and Medicaid-certified long-term care facilities, to be phased in over five years.
+Added: Moreover, increased staffing challenges have resulted in, and may continue to result in, increased labor costs to satisfy our staffing requirements.
We may not be able to offset higher labor costs by increasing the rates we charge for our services.
2 unchanged sentences
Our ability to attract and retain personnel depends on several factors, including our ability to provide employees with attractive assignments and competitive benefits and salaries.
−Removed: The loss of one or more of the members of the executive management team or the inability of a new management team to successfully execute our strategies may adversely affect our business.
If we are unable to attract and retain qualified personnel, we may be unable to provide our services, the quality of our services may decline, and we could lose consumers and referral sources.
2 unchanged sentences
Moreover, the current competitive labor market may make it more difficult to retain or hire members of our executive team.
−Removed: The departure of any member of our executive team may materially adversely affect our operations.
+Added: The departure of any member of our executive team may materially adversely affect our operations, and any replacement for a departed member of our executive team may be unable to execute our strategies at the same level.
Risk Related to Our Indebtedness
7 unchanged sentences
• enter into transactions with affiliates;
−Removed: • engage in any line of additional line of business;
+Added: • engage in any additional line of business;
• amend our organization documents;
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• engage in a sale leaseback or similar transaction.
−Removed: • make certain capital expenditures.
In addition, our credit facility contains restrictive covenants and requires us to maintain specified financial ratios and satisfy other financial condition tests.
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Furthermore, prolonged disruptions as a result of such events in the markets in which we operate could disrupt our relationships with consumers, patients, caregivers and employees and referral sources located in affected areas and, in the case of our corporate office, our ability to provide administrative support services, including billing and collection services.
−Removed: For example, one of our support centers and a number of our agencies are located in the Midwestern United States, New York and California, increasing our exposure to blizzards and other major snowstorms, ice storms, tornadoes, flooding, wildfires and earthquakes.
The impact of disasters and similar events is inherently uncertain.
Moreover, adverse weather conditions may become more frequent and/or severe as the result of climate change.
−Removed: Moreover, we could be affected by climate change and other environmental issues to the extent such issues adversely affect the general economy, adversely impact our supply chain or increase the costs of supplies needed for our operations, or otherwise result in disruptions impacting the communities in which our facilities are located.
+Added: We could be affected by climate change and other environmental issues to the extent such issues adversely affect the general economy, adversely impact our supply chain or increase the costs of supplies needed for our operations, or otherwise result in disruptions impacting the communities in which our facilities are located.
In addition, legal requirements regulating greenhouse gas emissions and energy inputs or otherwise associated with the transition to a lower carbon economy may increase in the future, which could increase our costs associated with compliance and otherwise disrupt and adversely affect our operations.
The impact of these or other factors beyond our control could have an adverse effect on our business, financial position and results of operations.
−Removed: The emergence and effects related to a potential future pandemic, epidemic, or outbreak of infectious disease could adversely impact our business and future results of operations and financial condition.
−Removed: As a provider of healthcare and personal care services, we have been and continue to be affected by the health and economic effects of COVID-19.
−Removed: COVID-19 continues to evolve, and we may not be able to predict or effectively respond to future developments and any such developments could materially affect our business, results of operations, financial position, and cash flows.
−Removed: The extent of any ongoing and future impact will depend on, among other factors, the duration and severity of any severe or widespread outbreaks of COVID-19;
−Removed: the availability, acceptance and effectiveness of medical treatments and vaccines;
−Removed: the impact of any mutations of the virus;
−Removed: and the impact of COVID-19 and related government actions on the healthcare industry and broader economy.
−Removed: Moreover, in response to the COVID-19 pandemic, the federal government authorized financial relief for eligible healthcare providers through the Provider Relief Fund.
−Removed: Although recipients are not required to repay funding received, provided that they attest to and comply with certain terms and conditions, changes to interpretations of guidance on the underlying terms and conditions may result in derecognition of amounts previously received.
−Removed: We received amounts from the Provider Relief Fund and returned any unused funds.
−Removed: We have also acquired and may in the future acquire companies that received funds from the Provider Relief Fund.
−Removed: We believe we have structured our use of these funds in accordance with the terms and conditions.
−Removed: However, we may be subject to or incur costs from related government actions including payment recoupment, audits and inquiries by governmental authorities, and criminal, civil or administrative penalties.
−Removed: In addition, if a future pandemic, epidemic, or outbreak of an infectious disease or other public health crisis were to affect our markets, our business could be adversely affected.
+Added: The emergence and effects related to a potential future pandemic, epidemic, or outbreak of infectious disease could adversely impact our business and future results of operations and financial condition, and we may be more vulnerable to the effects of a public health emergency than other businesses due to the nature of our business and consumers.
+Added: As a provider of healthcare and personal care services, we are subject to the health and economic effects of public health conditions.
+Added: If a pandemic, epidemic, or outbreak of an infectious disease or other public health crisis were to affect our markets, our business could be adversely affected.
Any such crisis could diminish public trust in healthcare providers, particularly those that are treating or have treated patients affected by contagious diseases.
1 unchanged sentence
Further, a pandemic, epidemic or outbreak could adversely impact our business by causing a temporary shutdown or difficulty accessing patients, particularly facility-based patients, by causing disruption or delays in supply chains for materials and products, or by causing staffing shortages.
−Removed: Although we have contingency plans in place, including infection control plans, the potential impact of, as well as the public’s response and governmental responses to, any such future pandemic, epidemic or outbreak of infectious disease with respect to our markets is difficult to predict and could adversely impact our business and future results of operations and financial condition.
−Removed: We may be more vulnerable to the effects of a public health emergency than other businesses due to the nature of our consumers and the physical proximity required by our operations.
−Removed: The majority of our consumers and patients are older individuals, many of whom may be more vulnerable than the general public during a pandemic or in a public health emergency due to complex medical conditions or socioeconomic factors.
+Added: Our business may be more vulnerable to the effects of a public health crisis than other businesses due to the health status of our typical consumer and patient populations.
+Added: The majority of our consumers and patients are older individuals who may experience complex medical conditions or socioeconomic factors.
Our employees may also be at greater risk of contracting contagious diseases due to their increased exposure to vulnerable consumers.
−Removed: Due to the physical proximity required to offer many of our services, our employees could have difficulty attending to our consumers if social distancing policies or quarantines are instituted in response to a public health emergency.
−Removed: In addition, the Company may expand existing internal policies in a manner that may have a similar effect.
−Removed: If another pandemic occurs, we could again suffer losses to our consumer population or a reduction in the availability of our employees.
+Added: Due to the physical proximity required to offer many of our services, our employees could have difficulty attending to our consumers if social distancing policies or quarantines are instituted in response to a public health crisis.
Further, we could face litigation if our employees or customers contract contagious diseases while our employees perform their duties.
−Removed: Accordingly, certain public health emergencies could have a material adverse effect on our financial condition and results of operations.
+Added: Although we have contingency plans in place, including infection control plans, the potential impact of, as well as the public’s response and governmental responses to, any such future pandemic, epidemic or outbreak of infectious disease with respect to our markets is difficult to predict and could adversely impact our business and future results of operations and financial condition.
UNRESOLVE D STAFF COMMENTS
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We do not believe that risks from cybersecurity threats of which we are currently aware, including as a result of any previous cybersecurity incidents, have materially affected or are reasonably likely to materially affect us, including our business strategy, results of operations or financial condition.
−Removed: For additional information, see “A cyber-attack or security breach could cause a loss of confidential consumer data, give rise to remediation and other expenses, expose us to liability under HIPAA, consumer protection laws, common law and other legal theories, subject us to litigation and federal and state governmental inquiries, damage our reputation, adversely impact our financial results, and otherwise be disruptive to our business.” included in Part I, Item 1A of this Form 10-K.
+Added: For additional information, see “A cyber-attack or security breach could cause a loss of confidential consumer data, give rise to remediation and other expenses, expose us to liability under privacy laws, consumer protection laws, common law and other legal theories, subject us to litigation and federal and state governmental inquiries, damage our reputation, result in interruptions or delays to services, adversely impact our financial results, and otherwise be disruptive to our business” included in Part I, Item 1A of this Form 10-K.
Our cybersecurity risk management program is integrated into our overall risk management system and processes.
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The Chief Information Officer has extensive IT and program management experience and works closely with our Chief Information Security Officer, who oversees our cybersecurity program on a day-to-day basis .
−Removed: The Chief Information Security Officer has extensive cybersecurity experience, including more than 15 years working in senior IT infrastructure and IT security roles in the healthcare sector (seven of which years were spent as the Chief Information Security Officer).
+Added: The Chief Information Security Officer has extensive cybersecurity experience, including more than 15 years working in senior IT infrastructure and IT security roles in the healthcare se ctor (seven of which years were spent as the Chief Information Security Officer).
Our cybersecurity incident response plan provides that the Chief Information Security Officer will work with our IT Department and the impacted segment of our business to investigate and respond to any identified incident (including by escalating the incident to the Company’s senior management and the Board depending on the nature and scope ).
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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.