47 unchanged sentences
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: Our consumers are predominantly “dual eligibles,” meaning they are eligible for both Medicare and Medicaid.
−Removed: 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.
−Removed: 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.
−Removed: 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, 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.
+Added: As discussed in more detail below, our consumers are predominantly “dual eligibles,” meaning they are eligible for both Medicare and Medicaid.
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.
5 unchanged sentences
We believe there are several market opportunities for growth as the population ages.
−Removed: Moreover, individuals generally prefer to receive care in their homes, and we believe the COVID-19 pandemic heightened this preference due to health concerns that may be associated with institutional settings for long-term care, along with concerns about the re-imposition of visitor restrictions that were imposed in many long-term care facilities in response to the pandemic.
+Added: Individuals generally prefer to receive care in their homes, and we believe the COVID-19 pandemic heightened this preference due to health concerns that may be associated with institutional settings for long-term care, along with concerns about the imposition of visitor restrictions that may be imposed during a public health crisis.
Finally, we believe the provision of home-based services is more cost-effective than the provision of similar services in institutional settings for long-term care.
12 unchanged sentences
Market to Managed Care Organizations
−Removed: 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.
−Removed: 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.
−Removed: We believe our coordinated care model and integration of services into the broader healthcare industry are particularly attractive to managed care organizations.
+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 and typically have narrower provider networks.
+Added: We believe we are attractive to managed care organizations due to our coordinated care model and integration of services into the broader healthcare industry, our status as a larger, more experienced partner than our competition and our ability to provide sophisticated technology, electronic visit records and an outcomes-driven approach to service.
In particular, our expansion from primarily personal care services into hospice and home health has increased our value to our managed care partners by diversifying our home-based care offerings.
1 unchanged sentence
In addition to our organic growth, we have been growing through acquisitions that have expanded our presence in current markets or facilitated our entry into new markets.
−Removed: We completed two acquisitions in 2024:
−Removed: 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: We completed four acquisitions in 2025:
+Added: Gold Horses, LLC, a Texas limited liability company (the “Gold Horses Acquisition”) on October 1, 2025;
+Added: Helping Hands Home Care Service, Inc., a Pennsylvania corporation (the “Helping Hands Acquisition”) on August 1, 2025;
+Added: Great Lakes Home Care Unlimited, LLC (the “Great Lakes Acquisition”) on March 1, 2025;
+Added: and our Jacksonville affiliate (the “Jacksonville Acquisition”) on January 1, 2025.
Acquisitions completed in 2025 accounted for $11.8 million in net service revenues for the year ended December 31, 2025.
We completed two acquisitions in 2024:
−Removed: Coastal Nursecare of Florida, Inc.
−Removed: (“CareStaff”) on January 1, 2023 and American Home Care, LLC, a Tennessee limited liability company (“AHC”), and its subsidiaries, Homecare, LLC, a Tennessee limited liability company (“Homecare”), Tennessee Valley Home Care, LLC (d/b/a Tennessee Quality Care – Home Health), a Tennessee limited liability company (“TQC – Home Health”), and Tri-County Home Health and Hospice, LLC (d/b/a Tennessee Quality Care - Hospice), a Tennessee limited liability company (“TQC – Hospice”, and collectively with AHC, Homecare and TQC – Home Health, “Tennessee Quality Care”) on August 1, 2023.
−Removed: Acquisitions completed in 2023 accounted for $18.8 million in net service revenues for the year ended December 31, 2023.
+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 (the “Upstate Acquisition”) on March 9, 2024.
+Added: Acquisitions completed in 2024 accounted for $22.6 million in net service r evenues for the year ended December 31, 2024.
Our active pipeline and strong financial position support additional acquisitions.
36 unchanged sentences
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.
−Removed: The trend toward increased consolidation among payors tends to increase payor bargaining power over fee structures.
+Added: Increased consolidation among payors has increased payor bargaining power.
+Added: Laws and regulations may also impact our contract terms or ability to contract with third-party payors, such as state laws that permit payors to guide patients to particular providers and eliminate restrictions on placing providers into preferred tiers.
Trends toward clinical and pricing transparency may also impact our competitive position, ability to obtain and maintain favorable contract terms and consumer volumes.
+Added: The current federal administration has signaled its commitment to advancing price transparency initiatives, including through an executive order issued in February 2025 addressing implementation and enforcement of price transparency rules.
A number of states have adopted their own healthcare price transparency requirements.
−Removed: 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: The Centers for Medicare & Medicaid Services (“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.
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.
+Added: Changes in licensure or other laws and regulations and recognition of new provider types or payment models could also impact our competitive position.
Sales and Marketing
14 unchanged sentences
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, some disabled persons, persons with end-stage renal disease and persons with amyotrophic lateral sclerosis.
+Added: Medicare is a federal program that provides 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.
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%.
−Removed: These cuts continue through the first eight months of federal fiscal year 2032.
+Added: These cuts continue through the first eleven 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.
15 unchanged sentences
Failure to submit the NOA within five calendar days from the start of care date will result in a reduction to the 30-day period payment amount for each day from the start of care date until the date the NOA is submitted.
−Removed: Medicaid Programs
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.
3 unchanged sentences
Within guidelines established by federal statutes and regulations, and subject to federal oversight, each state establishes its own eligibility standards, determines the type, amount, duration and scope of services, sets the rate of payment for services and administers its own program.
−Removed: States typically cover intermittent home health services for Medicaid beneficiaries, but cover continuous services for children and young adults with complicated medical conditions and home and community-based services for seniors and people with disabilities.
+Added: Most states currently provide coverage for hospice services and HCBS for seniors and people with disabilities, although federal regulations do not require states to cover these services.
+Added: In contrast, federal Medicaid rules generally require states to cover certain home health services (part-time or intermittent nursing services, home health aide services, and medical supplies, equipment and appliances), although other home health services, such as occupational therapy, physical therapy, and speech therapy are optional.
+Added: States must cover more extensive home health services for some children and young adults with complicated medical conditions.
+Added: Services offered through a Medicaid state plan must be offered to all eligible individuals, but services provided under waivers may be restricted to specific groups.
+Added: In addition, states may limit the number of people receiving waiver services.
Payment models vary by state.
1 unchanged sentence
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 by making spending more predictable for states.
+Added: Many states have transitioned the administration of their Medicaid hospice and home health programs to managed care organizations in order to effectively manage costs by making spending more predictable for states.
Personal care services and other HCBS are largely reimbursed on a fee-for-service basis.
3 unchanged sentences
These supplemental reimbursement arrangements are generally authorized by CMS for a specified period of time and require CMS’ approval to be extended.
−Removed: The federal government and many states are using or considering various strategies to reduce Medicaid expenditures.
−Removed: 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.
−Removed: For example, many states have adopted, or are considering, legislation that may reduce coverage and/or enroll Medicaid recipients in managed care programs.
−Removed: 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.
−Removed: Many states have implemented state-directed payment (“SDP”) arrangements to direct certain Medicaid managed care plan expenditures.
−Removed: 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: The budget reconciliation legislation enacted on July 4, 2025, commonly known as the “One Big Beautiful Bill Act” (“OBBBA”), is expected to decrease federal Medicaid spending, including as a result of changes to Medicaid eligibility policies and changes to Medicaid financing mechanisms, such as limitations on provider tax arrangements.
+Added: The federal government and many states are using or considering various strategies to reduce Medicaid expenditures, and most states have adopted broad taxes on healthcare providers to fund the non-federal share of Medicaid programs.
+Added: For states to be able to draw down federal Medicaid matching funds based on the revenues from provider taxes, the taxes must satisfy federal requirements including that the taxes be broad-based, uniform, and not hold taxpayers “harmless,” subject to limited exceptions.
+Added: The OBBBA includes restrictions on provider tax arrangements intended to reduce the federal matching funds received by state Medicaid programs.
+Added: The OBBBA effectively prohibits states from establishing new provider taxes or increasing rates of existing provider taxes, with greater restrictions in states that have expanded Medicaid, including states with waiver-based expansions.
+Added: In addition, the OBBBA limits the structure and applicability of provider taxes, such that some taxes on managed care organizations and providers permitted prior to the enactment of the OBBBA are no longer permissible, subject to transition periods.
+Added: The law also impacts state directed payment (“SDP”) arrangements, as further discussed below.
+Added: Many states are facing increasing or evolving budgetary pressures, including as a result of the OBBBA and other recent federal actions.
+Added: Because most states must operate with balanced budgets and because the Medicaid program is often a state’s largest budget expenditure, many states have adopted, or are considering, various strategies to reduce their Medicaid expenditures.
+Added: State strategies to control Medicaid expenditures may include legislation designed to reduce coverage, change patient eligibility requirements and/or enroll Medicaid recipients in managed care programs.
+Added: 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, most states provide Medicaid HCBS through waivers that offer benefits targeted to people in specific populations, such as adults over age 65 who have physical disabilities, and waiver coverage of different home care services varies by the target population served.
+Added: In recent years, aspects of existing or proposed Medicaid programs have been subject to legal challenge, resulting in uncertainty.
+Added: Federal legislation and administrative policies that shape administration of the Medicaid programs at the state level are also subject to change.
+Added: CMS administrators may in the future make various changes impacting eligibility or enrollment conditions and other aspects of waiver programs.
+Added: Reductions in federal Medicaid funds and increases to state administrative burdens could have a significant impact on Medicaid programs, such as limitations on eligibility or coverage, particularly if states are unable to offset federal funding reductions.
+Added: Medicare and Medicaid Managed Care
+Added: Managed Medicare, also known as Medicare Part C or Medicare Advantage, and managed Medicaid programs remain common strategies as the federal and state governments seek to control healthcare costs.
+Added: Under the Medicare Advantage program, the federal government contracts with private health plans to provide members with Medicare benefits.
+Added: In addition to covering Medicare Part A and Part B benefits, the plans may choose to offer supplemental benefits, including in-home support services, and impose higher premiums and cost-sharing obligations.
+Added: Managed Medicaid programs enable states to contract with private entities to handle program responsibilities like patient enrollment, care management and claims adjudication.
+Added: The states usually retain program responsibilities for financing, eligibility criteria and core benefit plan design.
+Added: Managed care is the predominant delivery system for Medicaid enrollees, with the majority of beneficiaries enrolled in managed care organizations.
+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: States are increasingly using SDP arrangements to direct certain Medicaid managed care plan expenditures, and states have converted supplemental payment programs to SDP arrangements, diverting previously available funding.
+Added: SDP arrangements are subject to approval by CMS and 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.
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.
−Removed: Some states have converted supplemental payment programs to SDP arrangements, diverting previously available funding.
SDP arrangements can be limited to a specific subset of providers, and providers that do not satisfy applicable criteria may be ineligible for payments.
The use and nature of SDP arrangements are subject to policy changes.
−Removed: 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.
−Removed: The rule includes new and updated requirements for SDP arrangements designed for a more consistent and transparent approach for participating states.
−Removed: 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: For example, the OBBBA directs HHS to revise regulations governing SDP arrangements by tying caps on total payment rates paid by Medicaid managed care organizations for hospital and other specified services to Medicare payment rates instead of average commercial rates.
+Added: CMS issued a final rule in May 2024 that revised SDP arrangement requirements, including changes intended to help states use the arrangements to implement value-based payment arrangements and include non-network providers in SDP arrangements.
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.
The various elements of the rule take effect between issuance and early 2028.
−Removed: 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.
−Removed: 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.
−Removed: In recent years, aspects of existing or proposed Medicaid programs have been subject to legal challenge, resulting in uncertainty.
−Removed: 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.
−Removed: 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.
+Added: Dual Eligibles
+Added: “Dual eligibles” are individuals who are eligible for both Medicare and Medicaid by virtue of their age or disability and low income.
+Added: Most dual-eligible individuals have full Medicaid benefits, covered either through Medicaid fee-for-service or Medicaid managed care, but some are partial-benefit dual eligibles who are not eligible for full Medicaid benefits but receive assistance with Medicare premiums and, in some cases, cost-sharing.
+Added: Most dual eligibles have Medicare benefits separately covered under traditional Medicare or Medicare Advantage, but there are some single coverage arrangements that provide both Medicare and Medicaid benefits under one program.
+Added: Medicare is generally the primary payor for services covered by the Medicare program, while Medicaid covers services not included in the Medicare benefit.
+Added: The Medicare-Medicaid Coordination Office (“MMCO”) was established within CMS to enhance access to services for dual-eligible individuals by improving coordination between the federal government and states.
+Added: The MMCO works with state Medicaid agencies, other federal and state agencies and other stakeholders to more effectively integrate benefits between Medicare and Medicaid and to improve care coordination, quality and cost-effectiveness.
+Added: The MMCO and the CMS Innovation Center collaborate to support care coordination models for dually eligible individuals, including by implementing demonstration projects affecting reimbursement for services provided to dual eligibles.
+Added: Some members of Congress and the federal administration have raised potential changes such as requiring integrated Medicare and Medicaid coverage for dual eligibles in a single plan or program.
Illinois Department on Aging
1 unchanged sentence
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’ 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 is funded by Medicaid, Illinois’ Commitment to Human Services Fund and general revenue funds of the state of Illinois and historically has received funding available under the federal Older Americans Act (“OAA”), although OAA funding expired in 2025.
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.
8 unchanged sentences
Services are funded by local Veterans Medical Centers and the aid and attendance pension, which reimburses veterans for their otherwise unreimbursed health and long-term care expenses.
−Removed: We currently have relationships and agreements with the Veterans Health Administration to provide personal care services in several states, principally in New Mexico, Illinois and California.
+Added: We currently have relationships and agreements with the Veterans Health Administration to provide personal care services in several states, principally in Texas, New Mexico, Illinois and California.
Other sources of funding are available to support personal care, hospice and home health services in different states and localities.
2 unchanged sentences
Commercial Insurance
−Removed: Most long-term care insurance policies contain benefits for in-home services.
−Removed: Policies are generally subject to dollar limitations on the amount of daily, weekly or monthly coverage provided.
+Added: Health insurance coverage offered by private-sector insurance companies is the most common form of health coverage in the United States.
+Added: Most private plans have a managed care approach, involving a limited network of providers and attempting to control costs and utilization with strategies such as financial incentives and utilization management.
+Added: Most private health insurance plans cover the same types of services as Medicare, meaning long-term care coverage under these plans is typically limited to skilled, short-term, medically necessary care.
+Added: Long-term care insurance, which is separate from health insurance, is intended to cover costs of care associated with a chronic condition or disability that requires extended or long-term care.
+Added: Long-term care insurance policies may cover services provided in a variety of settings, and most policies include benefits for in-home services.
+Added: Policies are generally subject to dollar limitations on the amount of daily, weekly or monthly coverage provided, and many policies have limits on the duration of coverage.
Our private pay services are provided on an hourly or type of services basis.
1 unchanged sentence
We bill our private pay consumers for services rendered weekly, bi-monthly or monthly.
−Removed: Other private payors include workers’ compensation programs/insurance, preferred provider organizations and employers.
+Added: Other private payors include some workers’ compensation programs/insurance and employers.
Value-Based Care Arrangements
−Removed: 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: There is a trend toward value-based purchasing of healthcare services across the industry among both governmental and commercial payors.
Generally, value-based care aims to hold providers accountable for delivering efficient, effective care by tying provider reimbursement to patient outcomes or related measures.
3 unchanged sentences
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.
−Removed: CMS also identifies hospices for the Hospice Special Focus Program based on quality information.
−Removed: 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.
−Removed: The CMS website makes publicly available information about hospices selected for the program.
−Removed: 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.
−Removed: 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.
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.
ACOs are intended to produce savings through improved quality and operational efficiency.
−Removed: ACOs that achieve quality performance standards established by HHS are eligible to share in a portion of the amounts saved by the Medicare program.
−Removed: 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: Medicare-approved 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: Under some payment tracks, ACOs may be required to pay shared losses if quality-adjusted Medicare expenditures exceed an established benchmark.
+Added: The CMS Innovation Center is responsible for establishing demonstration projects and other initiatives in order to identify, develop, test and encourage the adoption of new methods of delivering and paying for health care that create savings under the Medicare and Medicaid programs, while improving quality of care.
+Added: In recent years, the CMS Innovation Center has implemented several bundled payment models, which are intended to lead to high quality, more coordinated care at a lower cost.
+Added: Providers participating in bundled payment initiatives receive one payment for services provided to patients for certain medical conditions or episodes of care, accepting accountability for costs and quality of care.
+Added: The CMS Innovation Center released a new strategic direction in 2025, which continues to support the transition from Medicare fee-for-service models to value-based payment and care delivery models.
+Added: The new strategy is based on three pillars:
+Added: promoting disease prevention, empowering individuals through information and processes, and driving choice and competition in health care markets.
+Added: The CMS Innovation Center indicated it will update existing value-based models and release new models consistent with these pillars.
+Added: Model reviews and new model designs may require that all alternative payment models involve downside risk and that a growing proportion of Medicare and Medicaid beneficiaries are in global downside risk arrangements, among other requirements.
+Added: The CMS Innovation Center also indicated that it plans to test improvements in Medicare Advantage and Medicaid.
+Added: Several state Medicaid programs and 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.
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.
74 unchanged sentences
In addition, the healthcare industry has experienced, and is expected to continue to experience, extensive and dynamic change.
−Removed: It is difficult to predict the effect of these changes on budgetary allocations for our services.
−Removed: See further discussion at “ Management’s Discussion and Analysis of Financial Condition and Results of Operations—“Liquidity and Capital Resources .”
+Added: It is difficult to predict the effect of these changes on budgetary allocations and demand for our services.
Medicare and Medicaid Participation
−Removed: To participate in and qualify for reimbursement under Medicare, our home health agencies and hospices must comply with extensive conditions of participation.
−Removed: Likewise, to participate in Medicaid programs, our personal care services, hospices and home health agencies are subject to various requirements imposed by federal and state authorities.
−Removed: 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.
+Added: To participate in and qualify for reimbursement under Medicare, our home health agencies and hospices must enroll and comply with extensive conditions of participation.
+Added: Likewise, to participate in and qualify for reimbursement under Medicaid programs, our personal care services, hospices and home health agencies are subject to various federal and state requirements.
+Added: If we were to violate the applicable federal and state regulations governing Medicare or Medicaid participation, we could be subject to substantial administrative, civil and criminal penalties, including exclusion from participation in federal and state healthcare programs.
Developments in Healthcare Policy
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.
−Removed: Healthcare reform efforts at the federal and state levels have been aimed at reducing costs and government spending and increasing access to health insurance.
−Removed: For example, the ACA increased health insurance coverage through a combination of public program expansion, private sector health insurance requirements and other reforms.
−Removed: 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.
−Removed: 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.
−Removed: The enhanced subsidies are available through 2025, but further extension is uncertain, and their expiration may increase the uninsured population.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: States are required to ensure compliance with the 80/20 requirement by mid-2030.
−Removed: 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.
−Removed: However, due to legal challenges and administration changes, it is unclear whether the rule will be implemented as finalized.
−Removed: The outcome of the 2024 federal elections, affecting both the executive and legislative branches, increases regulatory uncertainty and the potential for significant policy changes.
−Removed: 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.
−Removed: 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.
−Removed: The federal and state governments also continue to explore other payment and delivery system reform initiatives.
−Removed: 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.
−Removed: 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.
+Added: The outcome of the 2024 federal elections has increased regulatory uncertainty and the potential for significant policy changes.
+Added: Actions by the executive branch have resulted in holds on or cancellations of congressionally authorized spending as well as interruptions in the distribution of government funds.
+Added: In addition, the executive branch has significant influence over healthcare policy changes through government agency regulation.
+Added: Federal agencies oversee, regulate and otherwise affect many aspects of our business, including through Medicare and Medicaid policies, policies affecting the size of the uninsured population and interpretation and enforcement of fraud and abuse laws.
+Added: In March 2025, HHS announced a significant agency restructuring intended to reduce the HHS workforce and consolidate divisions of the agency, including by integrating some functions of the Administration for Community Living, which administers programs that support older adults, into other HHS agencies.
+Added: HHS also announced a change in its policy on public participation in rulemaking that may negatively affect the ability of industry participants to receive advance notice of and offer feedback on some policy changes.
+Added: Regulatory uncertainty has also 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: These decisions may increase legal challenges to healthcare regulations and agency guidance and decisions, and may result in inconsistent judicial interpretations and delays in and other impacts to the agency rulemaking and legislative processes.
+Added: In recent years, the U.S.
+Added: Congress and certain state legislatures have introduced and passed a large number of proposals and legislation affecting the healthcare system, including laws intended to reduce healthcare costs and government spending and increase or, more recently, decrease access to health insurance.
+Added: For example, the OBBBA includes several healthcare policy changes that are expected to decrease access to health insurance.
+Added: Further, healthcare providers may be significantly impacted by reforms to the Medicaid program, including changes resulting from legislation and administrative actions at the federal and state levels.
+Added: Changes at the federal level may impact funding for, or the structure of, the Medicaid program, including through changes to Medicaid waiver programs, and may shape provider reimbursement rates, eligibility and coverage policies, waiver programs and other aspects of the Medicaid program at the state level.
+Added: For example, as further discussed in Item 1, “Business – Payment for Services – Medicaid Programs,” the OBBBA includes provisions that are expected to result in Medicaid spending reductions and changes in administration of state Medicaid programs.
+Added: The law requires changes to Medicaid financing mechanisms, including limitations on provider tax arrangements, a mandate that HHS revise regulations governing state-directed payment arrangements to cap total payment rates paid by Medicaid managed care organizations for specified services and additional restrictions on federal funding for eligibility-related erroneous Medicaid payments.
+Added: Some of these changes are intended to reduce the federal matching funds received by state Medicaid programs.
+Added: In addition, the OBBBA limits Medicaid eligibility and increases administrative and financial obligations for states and enrollees, particularly with regard to the Medicaid expansion population, which consists of low-income, non-elderly adults.
+Added: In addition to implementing changes mandated through legislation, CMS administrators may modify Medicaid payment models and may impose new restrictions or grant states additional flexibility in the administration of state Medicaid programs.
+Added: For example, 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.
+Added: The final rule includes significant provisions related to HCBS, including the “80/20” or “payment adequacy” requirement, which will require 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 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: The final rule includes several other measures intended to promote transparency and enhance quality and access to services, including a variety of reporting requirements for states.
+Added: Some states have adopted or may consider adopting similar caregiver compensation restrictions.
+Added: In addition, some states use, or have applied to use, waivers granted by CMS to impose different eligibility or enrollment conditions, implement Medicaid expansion, or otherwise implement programs that vary from federal standards, such as HCBS waiver programs.
+Added: The Medicaid landscape is constantly evolving as federal and state governments consider and test various models of delivery and payment system reform.
+Added: The federal and state governments also continue to explore other payment and delivery system reform initiatives, including 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.
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.
−Removed: 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: In addition, the CMS Innovation Center collaborates with the Medicare-Medicaid Coordination Office to support care coordination models for dually eligible individuals.
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.
1 unchanged sentence
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.
−Removed: There is uncertainty regarding the potential impact of further health-related public policy developments at the federal and state levels.
−Removed: Regulatory uncertainty has increased as a result of recent U.S.
−Removed: 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.
−Removed: Recent decisions of the U.S.
−Removed: 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.
−Removed: 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.
−Removed: 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.
+Added: There is also uncertainty regarding the potential impact of further health-related public policy developments at the federal and state levels.
+Added: For example, some members of Congress and the executive branch 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.
Permits, Licensure and Certificate of Need
−Removed: Our hospice, home health and personal care services are authorized and/or licensed in accordance with various state and county requirements, which also address a variety of operational issues including standards for the provision of medical or care services, clinical records, personnel, infection control and care plans.
+Added: Our hospice, home health and personal care services are authorized and/or licensed in accordance with various state and local requirements, which also address a variety of operational issues including standards for the provision of medical or care services, clinical records, personnel, infection control and care plans.
Additionally, healthcare professionals at our agencies are required to be individually licensed or certified under state law.
−Removed: Although our personal care service caregivers are generally not subject to licensure requirements, certain states require them to complete pre- and post-employment training programs, background checks, and, in certain instances, maintain state certification.
+Added: Although our personal care service caregivers are generally not subject to licensure requirements, certain states require them to complete varying degrees of pre- and post-employment training programs, continuing education, background checks and maintain state certification.
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.
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.
−Removed: These requirements are intended to avoid unnecessary duplication of services.
−Removed: In order to obtain a CON, a state health planning agency must determine that a need exists for the project.
+Added: These CON requirements, which are intended to avoid unnecessary duplication of services, generally require a state health planning agency to determine that a need exists for the project before granting approval.
+Added: Failure to obtain necessary state approvals or provide required notices may result in the inability to expand services or facilities, complete an acquisition or expenditure or change ownership or other penalties.
Fraud and Abuse Laws
16 unchanged sentences
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.
+Added: Some state laws include whistleblower provisions, allowing for enforcement by private parties on the government’s behalf.
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.
5 unchanged sentences
For example, CMS and state Medicaid agencies contract with recovery audit contractors (“RACs”) on a contingency fee basis to conduct post-payment reviews to detect and correct improper payments in the Medicare and Medicaid programs.
−Removed: RACs review claims submitted to Medicare for billing compliance, including correct coding and medical necessity.
−Removed: The RAC program’s scope also includes Medicaid claims.
+Added: RACs review claims submitted to these programs for billing compliance, including correct coding and medical necessity.
States may coordinate with Medicaid RACs regarding recoupment of overpayments and refer suspected fraud and abuse to appropriate law enforcement agencies.
1 unchanged sentence
Working across five geographic jurisdictions, UPICs collaborate with states and coordinate provider investigations across the Medicare and Medicaid programs.
+Added: CMS is implementing a new payment integrity program, the Wasteful and Inappropriate Service Reduction (“WISeR”) model, in six states in 2026, including Arizona, Ohio, Texas and Washington.
+Added: Under the WISeR model, CMS will contract with technology vendors tasked with using enhanced technologies, including AI, to streamline medical necessity review for selected items and services under traditional fee-for-service Medicare.
+Added: Providers will be required to submit prior authorization requests for the selected items and services or claims will be subject to post-service, pre-payment medical review.
+Added: Participating technology vendors will receive a percentage of the cost savings resulting from their reviews, adjusted based on performance measures.
+Added: The model will run for six performance years.
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.
6 unchanged sentences
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 may impose additional or inconsistent obligations and/or result in additional penalties.
+Added: Other federal and state laws and regulations that apply to the collection, use, retention, protection, security, disclosure, transfer and storage of personal information, including restrictions on the offshoring of data, and other processing of personal data may impose additional or inconsistent obligations and/or result in additional penalties.
For example, various state laws and regulations require us to notify affected individuals in the event of a data breach involving individually identifiable information.
−Removed: 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.
−Removed: 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.
+Added: Several states have passed or are considering comprehensive privacy legislation.
+Added: Others have enacted “offshoring” prohibitions that restrict the transfer, storage and access of patient data outside of the United States or North America.
+Added: Providers subject to those laws may not be able to rely on outside vendors who operate overseas to store or handle patient records.
+Added: Further, several privacy bills have been proposed at the federal level that may result in additional legal requirements that impact our business.
+Added: Laws, regulations, regulatory guidance and industry standards related to privacy, data protection, and security continue to evolve, often have far-reaching effects, could impact our operations, and have required, and will continue to require, us to incur substantial expenses to comply, 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.
4 unchanged sentences
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: For example, California enacted Assembly Bill 3030, known as the Artificial Intelligence in Health Care Services Bill (“AB 3030”), which requires that any health care facility using generative AI to create patient communications pertaining to patient clinical information ensure that the communications include (i) a disclaimer that the communication was generated by generative AI and (ii) clear instructions describing how a patient may contact a human health care provider or other appropriate person at the health care facility.
+Added: Further, Texas enacted the Texas Electronic Health Record Requirements Act, which allows healthcare practitioners to use AI for diagnostic purposes, including recommendations on diagnosis or treatment, provided the practitioner is licensed, reviews all AI-generated records in accordance with Texas Medical Board standards, and discloses AI use to patients.
Additionally, existing laws and regulations may be interpreted in ways that could impact our use of AI.
The cost to comply with such laws and regulations could be significant and would increase our operating expenses.
+Added: There is further uncertainty in the effectiveness of state AI laws given the Executive Order issued on December 11, 2025, entitled “Ensuring a National Policy Framework for Artificial Intelligence”, which directs federal regulators to challenge and preempt state laws that the administration views as obstructive to AI innovation.
+Added: As a result, implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, and we cannot yet completely determine the impact future laws, regulations, standards, or market perception of their requirements may have on our business and may not always be able to anticipate how to respond to these laws or regulations.
Environmental, Health and Safety Laws
10 unchanged sentences
The references to our website address in this Form 10-K do not constitute incorporation by reference of the information contained on the website and should not be considered part of this document.
−Removed: RI SK FACTORS
−Removed: Any of the risks described below, and the risks described elsewhere in this Form 10-K, could have a material adverse effect on our business and consolidated financial condition, results of operations and cash flows, cause the trading price of our common stock to decline and cause the actual outcome of matters to differ materially from our current expectations as reflected in forward-looking statements made in this Form 10-K.
−Removed: The considerations and risks that follow are organized within relevant headings but may be relevant to other headings as well.
−Removed: The risk factors described below and elsewhere in this Form 10-K are not the only risks we face.
−Removed: Our business and consolidated financial condition, results of operations and cash flows may also be materially adversely affected by factors that are not currently known to us, by factors that we currently consider immaterial or by factors that are not specific to us, such as general economic conditions.
−Removed: You should refer to the explanation of the qualifications and limitations on forward-looking statements under “Special Caution Concerning Forward-Looking Statements.” All forward-looking statements made by us are qualified by the risk factors described below.
−Removed: Risks Related to our Growth Strategy
−Removed: 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 over the next several years through the expansion of our services in existing markets and the potential establishment of a presence in new markets.
−Removed: This growth has placed and continues to place significant demands on our management team, systems, internal controls and financial and professional resources.
−Removed: 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.
−Removed: Our inability to effectively manage growth could have a material adverse effect on our financial results.
−Removed: Completed or future acquisitions, or growth initiatives, may be unsuccessful and could expose us to unforeseen liabilities.
−Removed: 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.
−Removed: These acquisitions involve significant risks and uncertainties, including difficulties assimilating acquired personnel and other corporate cultures into our business, the potential loss of key employees or consumers of acquired providers, regulatory risks, the assumption of liabilities, exposure to unforeseen liabilities of acquired providers and the diversion of the management team’s attention.
−Removed: In addition, our due diligence review of acquired businesses may not successfully identify all potential issues.
−Removed: Further, following completion of an acquisition, we may not be able to maintain the growth rate, levels of revenue, earnings or operating efficiency that we and the acquired business have achieved or might achieve separately.
−Removed: The failure to effectively integrate future acquisitions could have a material adverse impact on our operations.
−Removed: 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, payor program enrollment, hiring new personnel, establishing relationships with referral sources and delays or difficulty in installing our operating and information systems.
−Removed: We may not be successful in generating sufficient business activity to sustain the operating costs of such de novo operations.
−Removed: We may be unable to pursue acquisitions or expand into new geographic regions without obtaining additional capital or consent from our lenders.
−Removed: 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 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.
−Removed: 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.
−Removed: We cannot predict the timing, size and success of our acquisition efforts, our efforts to expand into new geographic regions or the associated capital commitments.
−Removed: If we do not have sufficient cash resources or availability under our credit facility, our growth could be limited unless we obtain additional equity or debt financing.
−Removed: In the future, we may elect to issue additional equity securities in conjunction with raising capital, completing an acquisition or expanding into a new geographic region.
−Removed: Such issuances could be dilutive to existing shareholders.
−Removed: In addition, our ability under our credit facility to consummate acquisitions is restricted if we exceed certain Total Net Leverage Ratio (as defined in the Credit Agreement, and subject to adjustments as provided therein) thresholds, without the consent of the lenders;
−Removed: provided, however, in certain circumstances, in connection with a Material Acquisition (as defined in the Credit Agreement), we can elect to increase our Total Net Leverage Ratio compliance covenant for the then current fiscal quarter and the three succeeding fiscal quarters.
−Removed: Further, our credit facility requires, among other things, that we are in pro forma compliance with the financial covenants set forth therein and that no event of default exists before and after giving effect to any proposed acquisition.
−Removed: Our ability to expand in a manner consistent with historic practices may be limited if we are unable to obtain such consent from our lenders.
−Removed: Business Risks
−Removed: 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 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.
−Removed: 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.
−Removed: 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: 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.
−Removed: Higher interest rates also raise our financing costs.
−Removed: 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: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: population will continue to place pressure on government healthcare programs.
−Removed: 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.
−Removed: There is uncertainty regarding the impact of any failure to increase the “debt ceiling,” and any U.S.
−Removed: government default on its debt could have broad macroeconomic effects.
−Removed: 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.
−Removed: 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.
−Removed: Timing differences in reimbursement may cause liquidity problems.
−Removed: We fund operations primarily through the collection of accounts receivable, but there is a delay between the time that we provide services and the time that we receive reimbursement or payment for these services.
−Removed: 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, state budgets could be impacted to the extent economic conditions in the United States are challenging in 2025.
−Removed: To address fiscal challenges, various states may in the future delay reimbursement, which would adversely affect our liquidity.
−Removed: In addition, from time to time, procedural issues require us to resubmit claims before payment is remitted, which contributes to our aged receivables.
−Removed: 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, 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.
−Removed: As a result, working capital management, including prompt and diligent billing and collection, is an important factor in our results of operations and liquidity.
−Removed: Our working capital management procedures may not successfully negate this risk.
−Removed: We face routine and periodic surveys, audits and investigations by governmental agencies and private payors, which could have adverse findings that may negatively impact our business.
−Removed: We are and have been subject to routine and periodic surveys, audits and investigations by various governmental agencies.
−Removed: In addition to surveys to determine compliance with the conditions of participation, CMS has engaged a number of contractors (including Medicare Administrative Contractors (“MACs”), RACs and UPICs) to conduct audits and investigations to evaluate billing practices and identify overpayments.
−Removed: In addition, individual states have similar integrity programs, including Medicaid RAC Programs.
−Removed: 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: Private third-party payors may also conduct audits and investigations, and we also perform internal audits and monitoring.
−Removed: These audits and investigations can result and have resulted in recoupments by Medicare, state programs and other payors of amounts previously paid to us if we fail to comply with applicable laws or program requirements.
−Removed: Depending on the nature of the conduct found in such audits and investigations and whether the underlying conduct could be considered systemic, the resolution of these audits and investigations could have a material, adverse effect on our financial position, results of operations and liquidity.
−Removed: Private third-party payors may also conduct audits and investigations, and we also perform internal audits and monitoring.
−Removed: Depending on the nature of the conduct found in such audits and whether the underlying conduct could be considered systemic, the resolution of these audits could have a material, adverse effect on our financial position, results of operations and liquidity.
−Removed: 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 and New Mexico.
−Removed: We expect to derive a significant portion of our revenues from Texas going forward as a result of the Gentiva Acquisition.
−Removed: 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, 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.
−Removed: 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.
−Removed: Future efforts to reduce the costs of the Illinois Department on Aging programs could adversely affect our service revenues and profitability.
−Removed: For the years ended December 31, 2024 and 2023, we derived approximately 21.0% and 20.9%, respectively, of our revenue from the Illinois Department on Aging programs.
−Removed: 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 difficult to predict.
−Removed: 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.
−Removed: Failure to renew a significant payor agreement or group of related payor agreements may materially impact our revenue.
−Removed: Each of our agreements is generally in effect for a specific term, but they are also generally terminable with 60 days’ notice.
−Removed: 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 the proposals we submit for agreements could result in a proposal being rejected even if it contains favorable pricing terms.
−Removed: Failure to obtain, renew or retain agreements with major payors may negatively impact our results of operations and revenue.
−Removed: 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 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.
−Removed: 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.
−Removed: The HCBS Quality Measure Set, published by CMS, is intended to promote more common and consistent use of nationally standardized quality measures within and across state HCBS programs.
−Removed: Use of these HCBS measures by states, managed care organizations and other entities involved in HCBS is voluntary.
−Removed: In addition, the CMS websites make publicly available certain data on home health agency and hospice performance on quality measures and patient satisfaction.
−Removed: Medicare reimbursement for these provider types is tied to reporting of quality measures.
−Removed: 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, hinder our ability to receive referrals, retain agreements or obtain new agreements and discourage consumers from using our services.
−Removed: Increased government scrutiny may also contribute to an increase in compliance costs.
−Removed: Any of these events could reduce consumer volumes and have a negative effect on our business, financial condition and operating results.
−Removed: Our business may be harmed by labor relations matters.
−Removed: We are subject to a risk of work stoppages and other labor relations matters because our hourly workforce is highly unionized.
−Removed: As of December 31, 2024, 34.8% of our workforce was represented by labor unions.
−Removed: We have numerous agreements with local SEIU affiliates which are renegotiated from time to time.
−Removed: These negotiations are often initiated when we receive increases in our hourly rates from various state agencies.
−Removed: Upon expiration of these collective bargaining agreements, we may not be able to negotiate labor agreements on satisfactory terms with these labor unions.
−Removed: 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, could increase the likelihood of employee unionization activity and the ability of employees to unionize.
−Removed: 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.
−Removed: If we were required to write down all or part of our goodwill and/or our intangible assets, our net earnings and net worth could be materially adversely affected.
−Removed: Goodwill and intangible assets with finite lives represent a significant portion of our assets.
−Removed: Goodwill represents the excess of cost over the fair market value of net assets acquired in business combinations.
−Removed: For example, if our market capitalization drops significantly below the amount of net equity recorded on our balance sheet, it might indicate a decline in our fair value and would require us to further evaluate whether our goodwill has been impaired.
−Removed: If as part of our annual review of goodwill and intangibles, we were required to write down all or a significant part of our goodwill and/or intangible assets, our net earnings and net worth could be materially adversely affected, which could affect our flexibility to obtain additional financing.
−Removed: In addition, if our assumptions used in preparing our valuations for purposes of impairment testing differ materially from actual future results, we may record impairment charges in the future and our financial results may be materially adversely affected.
−Removed: We had $970.6 million and $663.0 million of goodwill and $109.6 million and $92.0 million of intangible assets recorded on our Consolidated Balance Sheets at December 31, 2024 and 2023, respectively.
−Removed: It is not possible at this time to determine if there will be any future impairment charge, or if there is, whether such charges would be material.
−Removed: We will continue to review our goodwill and other intangible assets for possible impairment.
−Removed: We cannot be certain that a downturn in our business or changes in market conditions will not result in an impairment of goodwill or other intangible assets and the recognition of resulting expenses in future periods, which could adversely affect our results of operations for those periods.
−Removed: If we fail to maintain an effective system of internal control over financial reporting, such failure could adversely impact our business and stock price.
−Removed: Section 404 of the Sarbanes-Oxley Act of 2002, or the Sarbanes-Oxley Act, requires our management to report on, and requires our independent registered public accounting firm to attest to, the effectiveness of our internal control over financial reporting.
−Removed: Compliance with SEC regulations adopted pursuant to Section 404 of the Sarbanes Oxley Act requires annual management assessments of the effectiveness of our internal control over financial reporting.
−Removed: Compliance with Section 404(b) of the Sarbanes-Oxley Act has increased our legal and financial compliance costs making some activities more difficult, time-consuming or costly and may also place strain on our personnel, systems and resources.
−Removed: To the extent that we now or in the future have deficiencies in our internal control over financial reporting that are not remediated, our ability to accurately and timely report our financial position, results of operations, cash flows or key operating metrics could be impaired, which could result in a material misstatement in our financial statements, late filings of our annual and quarterly reports under the Exchange Act, restatements of our consolidated financial statements or other corrective disclosures, or other material adverse effects on our business, reputation, results of operations, financial condition or liquidity and could create a perception that our financial results do not fairly state our financial condition or results of operations, any of which could have an adverse effect on the value of our stock.
−Removed: Regulatory Risks
−Removed: Our hospice operations are subject to annual Medicare caps.
−Removed: 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 CMS sets each federal fiscal year.
−Removed: 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.
−Removed: The aggregate cap limits the amount of Medicare reimbursement a hospice may receive each year, based on the number of Medicare patients served.
−Removed: If a hospice’s Medicare payments exceed its inpatient or aggregate caps, it must repay to Medicare the excess amount.
−Removed: 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.
−Removed: Reductions in reimbursement and other changes to Medicare, Medicaid, and other federal, state and local medical and social programs could adversely affect our consumer caseload, units of service, revenues, gross profit and profitability.
−Removed: A significant portion of our caseload and revenues are derived from government healthcare programs, primarily Medicare and Medicaid.
−Removed: For the year ended December 31, 2024, we derived approximately 61.8% of our net service revenues from state and local governmental agencies, primarily through Medicaid state programs and 22.2% from Medicare.
−Removed: However, changes in government healthcare programs may decrease the reimbursement we receive or limit access to, or utilization of, our services.
−Removed: 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 eight months of 2032.
−Removed: 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.
−Removed: The Medicaid program, which is jointly funded by the federal and state governments, is often a state’s largest program.
−Removed: Governmental agencies generally condition their agreements upon a sufficient budgetary appropriation.
−Removed: 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: 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 have occurred or that may occur at the federal or state level to contain costs include, for example:
−Removed: • limiting increases in, or decreasing, reimbursement rates;
−Removed: • redefining eligibility standards or coverage criteria for social and medical programs or the receipt of services under those programs;
−Removed: • increasing consumer responsibility, including through increased co-payment requirements;
−Removed: • decreasing benefits, such as limiting the number of hours of personal care services that will be covered;
−Removed: • changing reimbursement methodology and program participation eligibility;
−Removed: • slowing payments to providers;
−Removed: • increasing utilization of self-directed care alternatives or “all inclusive” programs;
−Removed: • shifting beneficiaries to managed care organizations;
−Removed: • implementing demonstration projects and alternative payment models.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: We expect to derive a significant portion of our revenues from Texas going forward as a result of the Gentiva Acquisition.
−Removed: 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.
−Removed: We cannot predict whether states material to our operating results will experience changes or other challenges that negatively impact our ability to be reimbursed for our services in a timely manner.
−Removed: Changes in the volume of uninsured patients could adversely affect our cash flows and results of operations.
−Removed: In recent years, federal and state legislatures have considered or passed various proposals impacting the size of the uninsured population.
−Removed: 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.
−Removed: 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.
−Removed: In addition, the number of individuals enrolled in Medicaid declined in 2024 in comparison to 2023.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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, 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.
−Removed: 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.
−Removed: The shift toward value-based care continues, including through the implementation of alternative payment models and various demonstration projects.
−Removed: Some states have obtained CMS approval to test new or existing approaches to payment and delivery of Medicaid benefits.
−Removed: Payment policies for different types of providers and for various items and services continue to evolve, and future health reform efforts could impact both federal and state programs.
−Removed: If changes in Medicare, Medicaid or other state and local medical and social programs result in a reduction in available funds for the services we offer, a reduction in the number of beneficiaries eligible for our services or a reduction in the number of hours or amount of services that beneficiaries eligible for our services may receive, then our revenues and profitability could be negatively impacted.
−Removed: Our profitability depends principally on the levels of government-mandated payment rates and our ability to manage the cost of providing services.
−Removed: In some cases, commercial insurance companies and other private payors rely on government payment systems to determine payment rates and policies.
−Removed: As a result, changes to government healthcare programs that reduce Medicare, Medicaid or other payments may negatively impact payments from private payors, as well.
−Removed: Any reduction in reimbursements from governmental or private payors or policies that negatively affect utilization of our services, such as the imposition of copayments or prior authorization requirements, could also materially adversely affect our profitability.
−Removed: Federal and state regulation may impair our ability to consummate acquisitions or open new agencies.
−Removed: 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 the assumption by a new majority owner of a Medicare-certified home health agency or hospice provider’s Medicare provider agreement and billing privileges.
−Removed: 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.
−Removed: Instead, the buyer must enroll as a new provider with Medicare.
−Removed: 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 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.
−Removed: Further, in the past, CMS has limited enrollment of new home health agencies.
−Removed: If another moratorium is imposed on enrollment of new providers in a geographic area we desire to service, our ability to expand operations may be impacted.
−Removed: 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 new licenses they issue or restrict changes of ownership of existing licensed entities.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: The increasingly challenging regulatory environment may negatively impact our ability to acquire healthcare businesses if they are found to have material unresolved compliance issues.
−Removed: Resolving any such issues and completing applicable review or approval processes could significantly delay or prevent us from acquiring other businesses and increase our acquisition costs.
−Removed: The implementation of alternative payment models and the transition of Medicaid and Medicare beneficiaries to managed care organizations may limit our market share and could adversely affect our revenues.
−Removed: 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, ACOs incentivize hospitals, physician groups, and other providers to organize and coordinate patient care while reducing unnecessary costs.
−Removed: Some states have implemented, or plan to implement, accountable care models for their Medicaid populations.
−Removed: 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.
−Removed: Further, if we fail to effectively provide or coordinate the efficient delivery of quality services, our reputation may be negatively impacted, we may receive reduced reimbursement amounts and we may owe repayments to payors, which could cause our revenues to decline.
−Removed: 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, known as Medicare Advantage, the federal government contracts with private health insurers to provide Medicare benefits.
−Removed: Insurers may choose to offer supplemental benefits, including in-home support services, and impose higher plan costs on beneficiaries.
−Removed: Approximately half of Medicare beneficiaries are enrolled in a Medicare Advantage plan, a figure that continues to grow.
−Removed: 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.
−Removed: States predominantly deliver services to Medicaid enrollees through managed Medicaid plans as a strategy to control costs and manage resources.
−Removed: We may experience increased competition for managed care contracts due to state regulation and limitations.
−Removed: 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.
−Removed: In addition, operational processes may not be well defined as a state transitions beneficiaries to managed care.
−Removed: For example, membership, new referrals and the related authorization for services to be provided may be delayed, which may result in delays in service delivery to consumers or in payment for services rendered.
−Removed: Difficulties with operational processes may negatively affect our revenue growth rates, cash flow and profitability for services provided.
−Removed: Other alternative payment models may be presented by the government and commercial payors that subject our Company to financial risk.
−Removed: It is difficult to predict the nature and success of any such models.
−Removed: We cannot predict at this time what effect alternative payment models may have on our Company.
−Removed: Our industry is highly competitive, fragmented and market-specific.
−Removed: The healthcare and long-term care industries are highly competitive among service providers and care models.
−Removed: We compete with personal care service providers, hospice providers, home health providers, private caregivers, publicly held companies, privately held companies, privately held single-site agencies, hospital-based agencies, not-for-profit organizations, community-based organizations and self-directed care programs.
−Removed: Some of these providers and competitive care models may have greater financial, technical, political and marketing resources, name recognition or a larger number of consumers and payors than we do.
−Removed: In addition, some of our competitors offer more services than we do in the markets in which we operate.
−Removed: These competitive advantages may limit our ability to attract and retain referrals in local markets and to increase our overall market share.
−Removed: In many states, there are limited barriers to entry in providing personal care services.
−Removed: However, some states require entities to obtain a license before providing home care services.
−Removed: 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 or other type of approval before establishing, purchasing, or expanding certain health services, operations or facilities.
−Removed: CON restrictions may reduce the level of competition in a given industry or in a particular geographic region.
−Removed: Changes in licensure and CON requirements and recognition of new provider types or payment models could remove or reduce barriers to entry.
−Removed: 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.
−Removed: These factors may affect competition in the states in which we operate.
−Removed: Often our contracts with payors are not exclusive.
−Removed: 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.
−Removed: 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.
−Removed: These and other factors could impact our ability to contract with payors on favorable terms, result in pricing pressures, loss of or failure to gain market share or loss of consumers or payors, or otherwise affect our competitive position.
−Removed: 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 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.
−Removed: For example, health insurers must provide online price comparison tools to help individuals get personalized cost estimates for covered items and services.
−Removed: HHS also requires health insurers to publish online the charges negotiated with providers for healthcare services.
−Removed: In addition, CMS websites make publicly available certain data on home health agency and hospice performance on quality measures and patient satisfaction.
−Removed: 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.
−Removed: We expect these competitive trends to continue.
−Removed: 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 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.
−Removed: Our industry is extensively regulated at the federal and state government levels.
−Removed: 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.
−Removed: These legal and regulatory requirements relate to, among other matters:
−Removed: • facility and personnel licensure, and certification and enrollment with government programs;
−Removed: • eligibility for services;
−Removed: • appropriateness and necessity of services provided;
−Removed: • adequacy and quality of services;
−Removed: • qualifications, training and supervision of personnel;
−Removed: • 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;
−Removed: • the provision of services via telehealth, including technological standards and coverage restrictions or other limitations on reimbursement;
−Removed: • the development and use of AI and other predictive algorithms, including those used in clinical decision support tools;
−Removed: • environmental protection, health and safety;
−Removed: • relationships with physicians, other referral sources and recipients of referrals;
−Removed: • operating policies and procedures;
−Removed: • addition of, and changes to, facilities and services;
−Removed: • adequacy and manner of documentation for services provided;
−Removed: • billing and coding for services;
−Removed: • timely and proper handling of overpayments;
−Removed: • debt collection and communications with consumers.
−Removed: These laws include, but are not limited to, the federal Anti-Kickback Statute, the federal Stark Law, the federal FCA, the federal Civil Monetary Penalties Law, other federal and state fraud and abuse, insurance fraud, and fee-splitting laws, which may extend to services reimbursable by any payor, including private insurers, the No Surprises Act, and federal and state laws governing the security and privacy of health information.
−Removed: We currently have contractual relationships with current and potential referral sources and recipients, including hospitals and health systems, skilled nursing facilities and certain physicians who provide medical director and clinical services to our Company.
−Removed: We attempt to structure our relationships to meet applicable regulatory requirements, but we cannot provide assurance that every relationship is fully compliant.
−Removed: 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, 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.
−Removed: 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 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.
−Removed: Further, the laws and regulations and program requirements governing our business are subject to change, interpretations may evolve and enforcement focus may shift.
−Removed: 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: 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.
−Removed: 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.
−Removed: Federal and state government agencies have heightened and coordinated civil and criminal enforcement efforts throughout the healthcare industry.
−Removed: 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 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.
−Removed: 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.
−Removed: Failure to comply with these laws and regulations, or changes to these laws and regulations that increase our employment-related expenses, could adversely impact our operations.
−Removed: We are required to comply with all applicable federal, state and local laws and regulations relating to employment, including OSHA requirements, wage and hour and other compensation requirements (including disclosure requirements), employee benefits, providing leave and sick pay, employment insurance, proper classification of workers as employees or independent contractors, immigration and equal employment opportunity laws.
−Removed: These laws and regulations can vary significantly among jurisdictions and can be highly technical.
−Removed: Costs and expenses related to these requirements are a significant operating expense and may increase as a result of, among other things, changes in federal, state or local laws or regulations, or the interpretation thereof, requiring employers to provide specified benefits or rights to employees, increases in the minimum wage and local living wage ordinances, increases in the level of existing benefits or the lengthening of periods for which unemployment benefits are available.
−Removed: 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 and New Mexico, we are also particularly sensitive to changes in laws and regulations in these states.
−Removed: We may not be able to offset any increased costs and expenses.
−Removed: Furthermore, any failure to comply with these laws, including even a seemingly minor infraction, can result in significant penalties which could harm our reputation and have a material adverse effect on our business.
−Removed: The COVID-19 pandemic increased some of these risks, with certain states modifying occupational health and safety guidelines in a manner that increases scrutiny and complexity of operations with respect to appropriate training and use in the workplace of PPE and the possibility of corresponding regulatory audit activity with respect to the adequacy of our practices and procedures.
−Removed: The COVID-19 pandemic also resulted in states modifying standards associated with payment amounts and required justifications to qualify for sick leave and unemployment benefits.
−Removed: These modifications may result in increased operational costs to us, which may adversely impact our financial performance.
−Removed: 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.
−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, and may also face liability under the FCA.
−Removed: 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.
−Removed: The healthcare industry is subject to changing political, regulatory and other influences.
−Removed: Regulatory uncertainty has increased as a result of decisions issued by the U.S.
−Removed: Supreme Court in June 2024 that affect review of federal agency actions.
−Removed: 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.
−Removed: In Loper Bright Enterprises v.
−Removed: Raimondo , the Court overruled a legal framework that gave significant judicial deference to federal agency interpretations of federal statutes.
−Removed: 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.
−Removed: The Loper Bright decision and other recent decisions of the U.S.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: The healthcare industry has been and continues to be impacted by healthcare reform efforts.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: Subsequent legislation extended these enhanced subsidies through 2025, but further extension is uncertain, and their expiration may increase the uninsured rate.
−Removed: 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.
−Removed: In addition, the Medicare and Medicaid programs are subject to change, including as a result of changes in the presidential administration.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: Some states have trigger laws that would end their Medicaid expansion or require other changes if federal funding is reduced.
−Removed: 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.
−Removed: 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, 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.
−Removed: Other industry participants, such as private payors and large employer groups and their affiliates, may introduce additional financial or delivery system reforms.
−Removed: 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.
−Removed: 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.
−Removed: The industry trend toward value-based purchasing may negatively impact our revenues.
−Removed: There is a trend toward value-based purchasing of healthcare services among both government and commercial payors.
−Removed: Generally, value-based purchasing programs tie payment to the quality and efficiency of care provided.
−Removed: For example, Medicare requires hospices and home health agencies to report certain quality data in order to receive full reimbursement.
−Removed: 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 to allow consumers and others to search and compare data for Medicare-certified providers.
−Removed: 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.
−Removed: Data collected in each performance year impacts Medicare payments two years later.
−Removed: In the future, CMS may establish new value-based purchasing programs affecting a broader range of providers, some of which may be mandatory.
−Removed: Initiatives aimed at improving quality and cost of care include alternative payment models, such as ACOs and bundled payment arrangements.
−Removed: The CMS Innovation Center is aiming 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 by 2030.
−Removed: There are also several state-driven value-based care initiatives.
−Removed: For example, some states have aligned quality metrics across payors through legislation or regulation.
−Removed: Commercial payors are shifting toward value-based reimbursement arrangements as well.
−Removed: We expect value-based purchasing programs, including programs that condition reimbursement on patient outcome measures, to become more common and to involve a higher percentage of reimbursement amounts.
−Removed: It is unclear whether alternative models will successfully coordinate care and reduce costs or whether they will decrease overall reimbursement.
−Removed: While we believe we are adapting our business strategies to compete in a value-based reimbursement environment, we are unable at this time to predict how this trend will affect our results of operations.
−Removed: If we perform at a level below the outcomes demonstrated by our competitors, fail to satisfy quality data reporting requirements, are unable to meet or exceed quality performance standards under any applicable value-based purchasing program, or otherwise fail to effectively provide or coordinate the efficient delivery of quality healthcare services, our reputation in the industry may be negatively impacted, we may receive reduced reimbursement amounts and we may owe repayments to payors, causing our revenues, financial position, results of operations and cash flows to decline.
−Removed: Liability Risks
−Removed: Our operations subject us to risk of litigation.
−Removed: Operating in the healthcare and personal care services industries exposes us to an inherent risk of wrongful death, personal injury, professional malpractice and other potential claims or litigation brought by our consumers and employees.
−Removed: 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 transport, from employees driving to or from home visits or other affected individuals.
−Removed: 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.
−Removed: Some of the actions brought against us may seek large sums of money as damages and involve significant defense costs.
−Removed: 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 or other sanctions on us.
−Removed: 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.
−Removed: We also are subject to potential lawsuits under the federal FCA or other federal and state whistleblower statutes designed to combat fraud and abuse in our industry.
−Removed: These and other similar lawsuits can involve significant defense costs, as well as significant monetary awards or penalties that may not be covered by our insurance.
−Removed: If our third-party insurance coverage and self-insurance coverage reserves are not adequate to cover these claims, it could have a material adverse effect on our business, results of operations and financial condition.
−Removed: Even if we are successful in our defense, lawsuits or regulatory proceedings could distract us from running our business or irreparably damage our reputation.
−Removed: Our insurance liability coverage may not be sufficient for our business needs.
−Removed: Although we maintain insurance consistent with industry practice, the insurance we maintain may not be sufficient to satisfy all claims made against us.
−Removed: We cannot assure you that claims will not be made in the future in excess of the limits of our insurance, and any such claims, if successful and in excess of such limits, may have a material adverse effect on our business or assets.
−Removed: We utilize historical data to estimate our reserves for our insurance programs.
−Removed: If losses on asserted claims exceed the current insurance coverage and accrued reserves, our business, results of operations and financial condition could be adversely affected.
−Removed: Changes in our annual insurance costs and self-insured retention limits depend in large part on the insurance market, and insurance coverage may not continue to be available to us at commercially reasonable rates, in adequate amounts or on satisfactory terms.
−Removed: Data Security and Privacy Risks
−Removed: Our business depends on the proper functioning, availability, and security of our information systems.
−Removed: Our operations may be disrupted if we are unable to effectively integrate, manage and maintain the security of our information systems.
−Removed: Our business depends on effective and secure information systems that assist us in, among other things, gathering information to improve the quality of consumer care, optimizing financial performance, adjusting consumer mix, monitoring regulatory compliance and enhancing staff efficiency.
−Removed: We rely on external service providers to provide continual maintenance, upgrading, and enhancement of our primary information systems used for our operational needs.
−Removed: The software we license for our various patient information systems supports intake, personnel scheduling, office clinical and centralized billing and receivables management in an integrated database, enabling us to standardize the care delivered across our network of offices and monitor our performance and consumer outcomes.
−Removed: Information systems may be vulnerable to damage from a variety of sources, including telecommunications or network failures, human acts and natural disasters.
−Removed: 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.
−Removed: 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.
−Removed: Our business also depends on a comprehensive payroll and human resources system for basic payroll functions and reporting, payroll tax reporting, managing wage assignments and garnishments.
−Removed: We rely on an external service provider, ADP, to provide continual maintenance, upgrading and enhancement of our primary human resource and payroll systems.
−Removed: To the extent that ADP fails to support the software or systems, or any of the related support services provided by them, our internal operations could be negatively affected.
−Removed: Our business supports the use of EVV to electronically collect visit information when our caregivers and providers deliver home care services.
−Removed: Our solution uses a combination of IVR and GPS enabled smartphones to capture time in and time out, mileage and travel time, as well as the completed care plan tasks.
−Removed: We license this software through CellTrak and partner with states that utilize other software.
−Removed: We rely on these vendors to provide continual maintenance and enhancements, as well as security of any protected data.
−Removed: To the extent that our EVV vendors fail to support these processes, our internal operations could be negatively affected.
−Removed: 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, 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.
−Removed: 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.
−Removed: 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: We have taken and continue to take precautionary measures designed to prevent problems that could affect our information systems.
−Removed: 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.
−Removed: All of our sites and branch offices have redundant connections to our primary and backup datacenters using data lines and cellular connections through VPN or MPLS.
−Removed: The key business functions for our main sites also have redundancies with key functions geographically split between our two main facilities, should one not be available due to the above-mentioned scenarios.
−Removed: While we believe these measures are reasonable, no system of information security is able to eliminate the risk of business disruptions, and we or our third-party vendors that we rely upon may experience system failures.
−Removed: If we experience a reduction in the performance, reliability, or availability of our information systems, our operations and ability to process transactions and produce timely and accurate reports could be adversely affected.
−Removed: If we experience difficulties with the transition and integration of information systems or are unable to implement, maintain, or expand our systems properly, we could suffer from, among other things, operational disruptions, regulatory problems, and increases in administrative expenses.
−Removed: 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 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.
−Removed: 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.
−Removed: 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: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: We may be at increased risk because we outsource certain services or functions to, or have systems that interface with, third parties.
−Removed: These third parties may store or have access to our data.
−Removed: 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: 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.
−Removed: The current cyber threat environment presents increased risk for all companies, including companies in our industry.
−Removed: 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.
−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, as the volume and intensity of cyberattacks on healthcare entities and vendors continue to increase.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: Internal access management failures or vulnerabilities in hardware, software or applications could also result in the compromise of confidential data.
−Removed: 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.
−Removed: 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.
−Removed: We may also be required to expend additional resources to comply with evolving federal and state requirements related to cybersecurity.
−Removed: 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.
−Removed: 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, 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.
−Removed: 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.
−Removed: Some state laws provide a private right of action for data breaches, which may increase data breach litigation.
−Removed: 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.
−Removed: 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.
−Removed: 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.
−Removed: Human Capital Risks
−Removed: We may not be able to attract and retain qualified personnel or we may incur increased costs in doing so.
−Removed: We must attract and retain qualified non-executive personnel in the markets in which we operate in order to provide our services.
−Removed: We compete for personnel with other providers of social and medical services as well as companies in other service-based industries.
−Removed: As the labor market continues to be tight and unemployment remains at low levels, the competition for employees has increased, which will continue to impact our ability to attract and retain new caregivers.
−Removed: 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 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.
−Removed: 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.
−Removed: Moreover, increased staffing challenges have resulted in, and may continue to result in, increased labor costs to satisfy our staffing requirements.
−Removed: We may not be able to offset higher labor costs by increasing the rates we charge for our services.
−Removed: In addition, if we fail to attract and retain qualified and skilled personnel, our ability to conduct our business operations effectively and our results of operations would be harmed.
−Removed: Competition may be greater for managers, such as regional and agency directors.
−Removed: 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: 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.
−Removed: We depend on the services of our executive team members.
−Removed: Our success depends upon the continued employment of certain members of our executive team to manage several of our key functional areas, including operations, business development, accounting, finance, human resources, marketing, information systems, contracting and compliance.
−Removed: 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, and any replacement for a departed member of our executive team may be unable to execute our strategies at the same level.
−Removed: Risk Related to Our Indebtedness
−Removed: Restrictive covenants in the agreements governing our indebtedness may adversely affect us.
−Removed: Our credit facility contains various covenants that limit our ability to take certain actions, including our ability to:
−Removed: • make, create, incur, assume or suffer to exist any lien;
−Removed: • sell or otherwise dispose of assets, including capital stock of subsidiaries;
−Removed: • merge, consolidate, sell or otherwise dispose of all or substantially all our assets;
−Removed: • make restricted payments, including paying dividends and making certain loans and investments;
−Removed: • create, incur, assume, permit to exist, or otherwise become or remain directly or indirectly liable with respect to any additional indebtedness;
−Removed: • enter into transactions with affiliates;
−Removed: • engage in any additional line of business;
−Removed: • amend our organization documents;
−Removed: • make a change in accounting treatment or reporting practices, change our name or change our jurisdiction of organization or formation;
−Removed: • make any payment or prepayment of certain subordinated indebtedness;
−Removed: • enter into agreements that restrict dividends and certain other payments from subsidiaries;
−Removed: • engage in a sale leaseback or similar transaction.
−Removed: In addition, our credit facility contains restrictive covenants and requires us to maintain specified financial ratios and satisfy other financial condition tests.
−Removed: Our ability to meet these restrictive covenants and financial ratios and tests may be affected by events beyond our control, and we cannot assure you that we will meet those tests.
−Removed: A breach of any of these covenants could result in a default under our credit facility.
−Removed: Upon the occurrence of an event of default under our credit facility, all amounts outstanding under our credit facility may become immediately due and payable and all commitments under our credit facility to extend further credit may be terminated.
−Removed: The acceleration of any such indebtedness will result in an event of default under all of our other long-term indebtedness.
−Removed: General Risks
−Removed: Factors beyond our control, including inclement weather, natural disasters, acts of terrorism, pandemics, riots, civil insurrection or social unrest, looting, protests, strikes and street demonstrations, may impact our ability to provide services.
−Removed: Adverse weather conditions, natural disasters, acts of terrorism, military conflict, pandemics, riots, civil insurrection or social unrest, looting, protests, strikes or street demonstrations may prevent our employees from providing authorized services.
−Removed: We are not paid for authorized services that are not delivered due to these events.
−Removed: 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: The impact of disasters and similar events is inherently uncertain.
−Removed: Moreover, adverse weather conditions may become more frequent and/or severe as the result of climate change.
−Removed: 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.
−Removed: 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.
−Removed: 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, 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.
−Removed: As a provider of healthcare and personal care services, we are subject to the health and economic effects of public health conditions.
−Removed: 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.
−Removed: Any such crisis could diminish public trust in healthcare providers, particularly those that are treating or have treated patients affected by contagious diseases.
−Removed: Patient volumes may decline or volumes of uninsured and underinsured patients may increase, depending on the economic circumstances surrounding the pandemic, epidemic or outbreak.
−Removed: 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: 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.
−Removed: The majority of our consumers and patients are older individuals who may experience complex medical conditions or socioeconomic factors.
−Removed: 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 crisis.
−Removed: Further, we could face litigation if our employees or customers contract contagious diseases while our employees perform their duties.
−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: UNRESOLVE D STAFF COMMENTS
−Removed: CYBERSECURITY
−Removed: Risk Management and Strategy
−Removed: We recognize that cybersecurity threats pose a risk to our business.
−Removed: As part of the Company’s overall risk management systems and processes, we employ a risk management framework designed with the goals of identifying, assessing and managing material risks from cybersecurity threats.
−Removed: Key aspects of this risk management framework include, but are not limited to:
−Removed: • Maintaining a cybersecurity incident response plan, coordinated by the Company’s IT department and Chief Information Security Officer, which includes controls and procedures for identifying, reporting and responding to cybersecurity incidents;
−Removed: • Partnering with outside cybersecurity vendors periodically to gain an independent view of our cybersecurity and information security program ;
−Removed: • Providing our employees with regular training on cybersecurity and the protection of our information systems;
−Removed: • Maintaining and testing a business continuity and disaster recovery program;
−Removed: • Database activity monitoring, encryption, secure file transfer protocols and application firewalls;
−Removed: • Maintaining insurance coverage intended to address cybersecurity and data breach risks.
−Removed: We have also implemented processes to help identify, assess and manage cybersecurity risks associated with our use of third-party service providers.
−Removed: 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 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.
−Removed: Our cybersecurity risk management program is integrated into our overall risk management system and processes.
−Removed: Together with the Board’s standing committees, the Company’s Board of Directors is responsible for ensuring that material risks, including material cybersecurity risks, are identified and managed appropriately.
−Removed: The Board receives updates at least bi-annually from our Chief Information Officer concerning our information security and cyber risk strategy, cyber defense initiatives, cyber event preparedness and cybersecurity risk assessments.
−Removed: 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 se ctor (seven of which years were spent as the Chief Information Security Officer).
−Removed: 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 ).
−Removed: We do not own any real property.
−Removed: We lease administrative offices for our local branches, none of which are individually material.
−Removed: We lease approximately 59,000 and 75,000 square feet of office space in Downers Grove, Illinois and Frisco, Texas, respectively, which serve as our support centers.
−Removed: We sublease approximately 21,000 and 37,400 square feet of our office space in Downers Grove and Frisco, respectively, to third parties.
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.