13 unchanged sentences
In a number of our markets, we have partnered with local physicians, for-profit entities and/or not-for-profit providers in the ownership of our facilities.
−Removed: Throughout this Form 10-K, we refer to Community Health Systems, Inc., or the Parent Company, and its consolidated subsidiaries in a simplified manner and on a collective basis, using words like “we,” “our,” “us” and the “Company.” This drafting style is suggested by the Securities and Exchange Commission, or SEC, and is not meant to indicate that the publicly-traded Parent Company or any particular subsidiary of the Parent Company owns or operates any asset, business or property.
+Added: Throughout this Annual Report on Form 10-K, or Form 10-K, we refer to Community Health Systems, Inc., or the Parent Company, and its consolidated subsidiaries in a simplified manner and on a collective basis, using words like “we,” “our,” “us” and the “Company.” This drafting style is suggested by the Securities and Exchange Commission, or SEC, and is not meant to indicate that the publicly-traded Parent Company or any particular subsidiary of the Parent Company owns or operates any asset, business or property.
The hospitals, operations and businesses described in this filing are owned and operated by distinct and indirect subsidiaries of Community Health Systems, Inc.
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While we continue to provide health services across a broad spectrum, we have focused our attention and resources on service lines we believe have the greatest potential for growth, including primary care, emergency medicine, orthopedics, neuroscience, cardiovascular care, surgical services and behavioral health.
−Removed: Significant investments have been made in existing markets to expand the scale of inpatient offerings, including through increasing bed capacity and constructing new surgical and procedural suites.
+Added: We have made significant investments in existing markets to expand the scale of inpatient offerings, including through increasing bed capacity and constructing new surgical and procedural suites.
As the shift to delivering health services in outpatient settings accelerates, we continue to expand our care offerings beyond hospital walls to include more outpatient access through primary care practices, urgent care centers, freestanding emergency departments, ambulatory surgery centers, imaging and diagnostic centers and direct-to-consumer virtual health visits.
We endeavor to advance the scale and breadth of inpatient and outpatient capabilities through both direct investments and strategic partnerships.
−Removed: We believe expanding our patient access footprint can attract new patients and increase patient retention, as well as our ability to connect patients from one episode of care to the next appropriate care setting.
+Added: We believe expanding our patient access footprint can attract new patients and increase patient retention, as well as improve our ability to connect patients from one episode of care to the next appropriate care setting.
We also believe our investments will enhance our long-term growth and generate increased revenue, earnings and operating margins by providing a solid return on investment.
7 unchanged sentences
We currently participate in 11 Medicare Shared Savings Program accountable care organizations, which include approximately 2,900 employed and independent physicians in our communities.
−Removed: We look forward to continuing to realize the benefits of these organizations, including opportunities to improve quality, deepen clinical collaboration and demonstrate performance under a reimbursement system moving toward more value-based care arrangements.
+Added: We look forward to continuing to realize the benefits of these organizations, including opportunities to improve quality, deepen clinical collaboration, strengthen physician engagement and demonstrate performance under a reimbursement system moving toward more value-based care arrangements.
Developing a More Consumer-Centric Experience and Facilitating Connections between Episodes of Care.
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The rise in consumerism is highlighting customer expectations that have not always been prioritized in the healthcare setting.
−Removed: We are working on ways to create more enduring relationships with our patients by providing services that help people navigate their healthcare journeys and enable more seamless connections across episodes of care in our healthcare systems, hospitals, and physician practices.
+Added: We are working on ways to enhance the patient experience by providing services that help people navigate their healthcare journeys and enable more seamless connections across episodes of care in our healthcare systems, hospitals, and physician practices.
Some of these initiatives include:
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• patient navigation and next appointment scheduling from existing points of care;
−Removed: • expanding our network of outpatient services to create greater access and more convenience, including significant expansion of our ability to provide remote patient care;
+Added: • expansion of our outpatient services network to create greater access and more convenience, including significant expansion of our ability to provide remote patient care;
• availability of virtual healthcare for certain services provided in the hospital and for direct-to-consumer, on-demand virtual visits with physicians and other healthcare practitioners;
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• training with evidence-based tools for improving patient safety and quality of care and patient, physician and employee satisfaction;
−Removed: • leveraging technology and information sharing around evidence-based clinical best practices;
+Added: • technology and information sharing based on evidence-based clinical best practices;
• training programs for hospital management and clinical staff regarding regulatory and reporting requirements;
8 unchanged sentences
Industry Overview
−Removed: According to the Centers for Medicare & Medicaid Services, or CMS, national healthcare expenditures grew 7.5% in 2023 to over $4.8 trillion, an increase from the growth of 4.6% experienced in 2022.
−Removed: The increase in 2023 reflected growth in non-price factors, such as increased use and intensity of healthcare goods and services, influencing strong growth in both Medicare and private health insurance spending.
+Added: According to the Centers for Medicare & Medicaid Services, or CMS, national healthcare expenditures grew 7.2% in 2024 to nearly $5.3 trillion, similar to the growth of 7.4% experienced in 2023.
+Added: The increase in expenditures in 2024 reflected continued growth in the use of healthcare goods and services, that has influenced strong growth in both Medicare and private health insurance spending.
National healthcare expenditures accounted for approximately 18.0% of total U.S.
−Removed: gross domestic product in 2023.
+Added: gross domestic product, or GDP, in 2024.
CMS projections indicate that total U.S.
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healthcare annual expenditures will exceed $8.5 trillion by 2033, accounting for approximately 20.3% of the total U.S.
−Removed: gross domestic product.
−Removed: The CMS projections of healthcare spending are constructed using a current-law framework.
−Removed: The most recent historical data was published in December 2024, and the most recent projections for future years were published in June 2024, and do not take into account the actual expenditures in 2024.
Through 2027, CMS expects expenditures to be influenced by the health sector’s transition away from pandemic-related policies, including expected declines in Medicaid enrollment and the expiration of enhanced subsidies available for purchasing health insurance through Affordable Care Act marketplaces.
−Removed: Following this transition, from 2027 through 2032, CMS expects health spending patterns to be driven by a greater extent by traditional economic and demographic factors, with growth in spending reflecting personal healthcare price inflation and increased use of healthcare goods and services.
+Added: From 2028 through 2033, CMS expects spending growth to be driven by factors including growth in health prices and increased use and intensity of healthcare goods and services.
Hospital services, the market within the healthcare industry in which we primarily operate, is the largest single category of healthcare expenditures.
−Removed: Hospital care expenditures totaled over $1.5 trillion in 2023, an increase of 10.4% over 2022, increasing in comparison to the growth rate of 3.2% in 2022.
−Removed: The growth rate in 2023 was driven by strong growth in spending for hospital care by all major payors, including private health insurance, Medicare and Medicaid, and non-price factors including the use and intensity of services.
+Added: Hospital care expenditures increased to over $1.6 trillion in 2024, an increase of 8.9% over 2023, compared to growth of 10.4% in 2023.
+Added: The decrease in this level of growth was mostly driven by slower projected growth in private insurance hospital spending.
CMS projects that the hospital services category will grow at an average of 5.4% annually from 2026 through 2033, reaching over $2.6 trillion by 2033.
+Added: The CMS projections of healthcare spending outlined above are constructed using a current-law framework, which means that the projections assume no further changes to the law will be enacted during the time period of the projection.
+Added: The most recent historical data was published in December 2024 and the most recent projections were published in June 2025, incorporating legislation and finalized administrative actions as of late March 2025.
+Added: CMS has cautioned that future legislative and regulatory health policy changes could have a significant impact on the projections of health insurance coverage, health spending trends, and related cost-sharing requirements, and could ultimately affect the percentage of the GDP attributable to healthcare expenditures in the future.
+Added: Significantly, the projections above do not reflect the anticipated effects of the federal budget reconciliation legislation enacted on July 4, 2025, or the 2025 Reconciliation Law, which is expected to decrease access to health insurance and result in reductions to federal healthcare spending.
Hospital Industry.
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The number of people aged 65 or older in these service areas grew by 16.8% from 2020 to 2025 and is expected to grow by 12.0% from 2025 to 2030.
−Removed: People aged 65 or older comprised 19.0% of the total population in our service areas in 2024, and they may comprise an estimated 20.9% of the total population in our service areas by 2029.
+Added: People aged 65 or older comprised 19.5% of the total population in our service areas in 2025, and they are expected to comprise an estimated 21.1% of the total population in our service areas by 2030.
Consolidation.
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Government and private third-party payors are increasingly adopting and exploring value-based purchasing initiatives, which typically emphasize the cost-effective delivery of care and quality of outcomes.
−Removed: In addition, health insurance coverage models continue to evolve, with increased enrollment in Medicare Managed Care and Medicaid managed care programs and in high-deductible health plans.
Shift to Outpatient Services.
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Changes to Medicare policy affecting the reimbursement methodology for certain items and services provided by off-campus provider-based hospital departments have generally resulted in reduced payment rates for these hospital outpatient settings.
−Removed: In addition, CMS makes annual updates to the Inpatient Only List, which is a list of procedures eligible to be reimbursed by Medicare only if performed in an inpatient setting.
−Removed: To the extent procedures become eligible to be reimbursed by Medicare if performed in outpatient settings, demand for outpatient services may increase in comparison to demand for inpatient services.
+Added: In addition, CMS has historically made annual updates to the Inpatient Only List, which is a list of procedures eligible to be reimbursed by Medicare only if performed in an inpatient setting.
+Added: In November 2025, CMS finalized a rule that will phase out the Inpatient Only List over three years.
+Added: As a result, all procedures previously included in the list will also be eligible for Medicare reimbursement if performed in an outpatient setting.
+Added: To the extent these procedures become eligible to be reimbursed by Medicare if performed in outpatient settings, demand for outpatient services may increase in comparison to demand for inpatient services.
Selected Operating Data
The following table sets forth operating statistics for each of the years presented for our hospitals.
+Added: Statistics for 2025 include a full year of operations for 69 hospitals as well as partial periods for four hospitals that were divested during the year and three hospitals in which we sold a majority ownership during the year, reflecting the operations of these hospitals prior to divestiture.
Statistics for 2024 include a full year of operations for 76 hospitals and partial periods for two hospitals that were divested during the year, reflecting the operations of these hospitals prior to divestiture.
−Removed: Statistics for 2023 include a full year of operations for 78 hospitals and partial periods for eight hospitals that were divested during the year, and one hospital in which we sold a majority ownership during the year, reflecting the operations of these hospitals prior to divestiture.
−Removed: Statistics for 2022 include a full year of operations for 86 hospitals and partial periods for one hospital that was divested during the year, one hospital that opened and three hospitals that were closed during the year, reflecting the operations of these hospitals prior to divestiture, opening, or closure as applicable.
+Added: Statistics for 2023 include a full year of operations for 78 hospitals as well as partial periods for eight hospitals that were divested during the year, and one hospital in which we sold a majority ownership during the year, reflecting the operations of these hospitals prior to divestiture.
Year Ended December 31,
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Net outpatient revenues as a % of net operating revenues
−Removed: Net (loss) income attributable to Community Health Systems, Inc.
−Removed: Net (loss) income attributable to Community Health Systems, Inc.
+Added: Net income (loss) attributable to Community Health Systems, Inc.
+Added: Net income (loss) attributable to Community Health Systems, Inc.
stockholders as a % of net operating revenues
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operating revenues
−Removed: Net cash flows used in investing activities
+Added: Net cash flows provided by (used in) investing activities
Net cash flows used in financing activities
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(7) We calculated occupancy rate percentages by dividing the average daily number of inpatients by the weighted-average number of beds in service.
−Removed: (8) EBITDA is a non-GAAP financial measure which consists of net (loss) income attributable to Community Health Systems, Inc.
+Added: (8) EBITDA is a non-GAAP financial measure which consists of net income (loss) attributable to Community Health Systems, Inc.
before interest, income taxes, and depreciation and amortization.
−Removed: Adjusted EBITDA, also a non-GAAP financial measure, is EBITDA adjusted to add back net income attributable to noncontrolling interests and to exclude loss (gain) from early extinguishment of debt, impairment and (gain) loss on sale of businesses, expense from third-party consulting costs associated with significant process and systems redesign across multiple functions as part of the Company’s previously disclosed multi-year initiative to modernize and consolidate technology platforms and associated processes, expense related to government and other legal matters and related costs, expense related to employee termination benefits and other restructuring charges, the impact of a change in estimate to increase the professional liability claims accrual recorded during the fourth quarter of 2022 with respect to claims incurred in prior years related to divested locations as well as a change in estimate to increase such accrual recorded during the third quarter of 2024, and the gain on sale by HealthTrust of a majority interest in CoreTrust completed during the fourth quarter of 2022.
+Added: Adjusted EBITDA, also a non-GAAP financial measure, is EBITDA adjusted to add back net income attributable to noncontrolling interests and to exclude loss (gain) from early extinguishment of debt, impairment and (gain) loss on sale of businesses, expense from third-party consulting costs associated with significant process and systems redesign across multiple functions as part of the Company’s previously disclosed multi-year initiative to modernize and consolidate technology platforms and associated processes, expense related to government and other legal matters and related costs, expense related to employee termination benefits and other restructuring charges and the impact of a change in estimate to increase the professional liability claims accrual recorded during the third quarter of 2024.
The Company has from time to time sold noncontrolling interests in certain of its subsidiaries or acquired subsidiaries with existing noncontrolling interest ownership positions.
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Additionally, this calculation of Adjusted EBITDA may not be comparable to similarly titled measures disclosed by other companies.
−Removed: The following table reflects the reconciliation of Adjusted EBITDA, as defined, to net (loss) income attributable to Community Health Systems, Inc.
+Added: The following table reflects the reconciliation of Adjusted EBITDA, as defined, to net income (loss) attributable to Community Health Systems, Inc.
stockholders from our Consolidated Financial Statements for the years ended December 31, 2025, 2024 and 2023 (in millions):
Year Ended December 31,
−Removed: Net (loss) income attributable to Community Health Systems, Inc.
+Added: Net income (loss) attributable to Community Health Systems, Inc.
Provision for income taxes
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Gain from early extinguishment of debt
−Removed: Gain from CoreTrust Transaction
Impairment and (gain) loss on sale of businesses, net
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(9) Same-store operating results and statistical information include the results of businesses operated in the comparable current year and prior year periods and exclude businesses divested or closed in the periods presented.
−Removed: (10) Effective December 31, 2024, the number of hospitals reflected in the chart above was updated to separately distinguish facilities providing inpatient, acute-care services other than on the primary hospital campus.
−Removed: The number of hospitals presented for the prior-year comparative periods has been updated to conform with the aforementioned change.
Sources of Revenue
6 unchanged sentences
Included in Managed Care and other third-party payors is net operating revenues from insurance companies with which we have insurance provider contracts, insurance companies for which we do not have insurance provider contracts, workers’ compensation carriers and non-patient service revenue, such as gain (loss) on investments, rental income and cafeteria sales.
−Removed: We generally expect the portion of revenues received from the Medicare, Medicare Managed Care and Medicaid programs to increase
−Removed: over the long-term due to the general aging of the population and other factors.
−Removed: There has been a trend toward increased enrollment in Medicare Managed Care and Medicaid managed care programs, which may adversely affect our net operating revenues.
+Added: We generally expect the portion of revenues received from the Medicare and Medicare Managed Care programs to increase over the long-term due to the general aging of the population and other factors.
+Added: In November 2025, CMS finalized a rule that will, beginning in calendar year 2026, phase out the Inpatient Only List over three years.
+Added: As a result, all procedures previously included in the list will also become eligible for Medicare reimbursement if performed in an outpatient setting.
+Added: To the extent these procedures become eligible to be reimbursed by Medicare if performed in outpatient settings, demand for outpatient services may increase in comparison to demand for inpatient services.
We may also be impacted by regulatory requirements imposed on insurers, such as minimum medical-loss ratios and specific benefit requirements.
Furthermore, in the normal course of business, managed care programs, insurance companies and employers actively negotiate the amounts paid to hospitals.
−Removed: Our relationships with payors may be impacted by price transparency initiatives and out-of-network billing restrictions, including those in the No Surprises Act.
+Added: Our relationships with payors may be impacted by policy developments, such as price transparency initiatives and out-of-network billing restrictions, including those in the No Surprises Act.
There can be no assurance that we will retain our existing reimbursement arrangements or that third-party payors will not attempt to further reduce the rates they pay for our services.
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These programs are funded with a combination of state and federal resources, including, in certain instances, fees or taxes levied on the providers.
−Removed: The programs are generally authorized by CMS for a specified period of time and require CMS’s approval to be extended.
−Removed: We are unable to predict whether or on what terms CMS will extend the supplemental programs in the states in which we operate.
Under these supplemental programs, we recognize revenue and related expenses in the period in which amounts are estimable and payment is reasonably assured.
Reimbursement under these programs is reflected in net operating revenues and included as Medicaid revenue in the table above, and fees, taxes or other program related costs are reflected in other operating expenses.
−Removed: As of December 31, 2024, Indiana, Alabama, Texas and Florida represented our only areas of significant geographic concentration.
+Added: As of December 31, 2025, Indiana, Alabama, Texas, Florida and Tennessee represented our only areas of significant geographic concentration.
Net operating revenues generated by our hospitals in Indiana, as a percentage of consolidated net operating revenues, were 16.8% in 2025, 16.7% in 2024 and 17.1% in 2023.
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Net operating revenues generated by our hospitals in Florida, as a percentage of consolidated net operating revenues, were 8.2% in 2025, 9.6% in 2024 and 11.1% in 2023.
+Added: Net operating revenues generated by the Company’s hospitals in Tennessee, as a percentage of consolidated net operating revenues, were 8.3% in 2025, 7.7% in 2024, and 7.7% in 2023.
Hospital revenues depend upon inpatient occupancy levels, the volume of outpatient procedures and the payment rates for hospital services provided, which are a function of amounts charged, rates negotiated with third-party payors and rates determined by government payors.
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The healthcare industry is subject to changing political, regulatory, economic and other influences that may affect our business.
−Removed: Regulatory uncertainty has increased as a result of recent decisions issued by the U.S.
−Removed: Supreme Court that affect review of federal agency actions, and the outcome of the 2024 federal elections.
+Added: The outcome of the 2024 federal elections, including Republican control of both the executive and legislative branches, has increased regulatory uncertainty and the potential for significant policy changes.
+Added: President Trump has issued executive orders that impact or may impact the healthcare industry, including orders focused on price transparency and tariffs and an order establishing a presidential advisory commission tasked with restructuring government agencies and reducing government expenditures, although this commission was disbanded in mid-2025.
+Added: Other actions by the presidential administration 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 presidential administration has significant influence on 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 enforcement and interpretation 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.
+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 decisions issued by the U.S.
+Added: Supreme Court that affect review of federal agency actions including Loper Bright Enterprises v.
Supreme Court decisions 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: 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 are expected to significantly impact 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 the 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 agency rulemaking and legislative processes.
−Removed: The outcome of the 2024 federal elections, including Republican control of 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.
+Added: These decisions may increase legal challenges to healthcare regulations and agency guidance and decisions, and result in inconsistent judicial interpretations and delays in and other impacts to agency rulemaking and legislative processes.
The healthcare industry has been and continues to be impacted by healthcare reform efforts at the federal and state levels.
−Removed: Many recent changes have sought to increase access to health insurance and reduce healthcare costs and government spending.
−Removed: For example, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, collectively known as the Affordable Care Act, increased health insurance coverage through a combination of public program expansion and private sector health insurance 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 obtained.
−Removed: For example, federal law temporarily enhanced subsidies available for individuals to purchase coverage through Affordable Care Act 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 would increase the price of coverage for many consumers and may significantly increase the uninsured rate.
−Removed: Other legislative and executive branch initiatives related to health insurance could also result in increased prices for consumers
−Removed: purchasing health insurance coverage or may permit the sale of insurance plans that do not satisfy current Affordable Care Act consumer protections, which could increase rates of uninsured and underinsured individuals and destabilize insurance markets.
+Added: Many recent changes have sought to reduce healthcare costs and government spending and increase or, more recently, decrease access to health insurance.
+Added: For example, the Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010, collectively known as the Affordable Care Act, increased health insurance coverage through a combination of public program expansion and private sector health insurance reforms, but 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 or are able to obtain public or private health insurance and the scope of such coverage, if obtained.
+Added: Federal law temporarily enhanced subsidies available for individuals to purchase coverage through Affordable Care Act health insurance marketplaces, but these enhanced subsidies expired at the end of 2025.
+Added: Their expiration is expected to increase the price of coverage
+Added: for many consumers and may significantly increase the uninsured rate.
+Added: To address anticipated increases in health insurance premiums for consumers, CMS announced in September 2025 expanded eligibility for high-deductible catastrophic health insurance plans.
+Added: Further, CMS issued a final rule in June 2025 that standardizes and shortens the open enrollment period for individual marketplace coverage, both on and off the Affordable Care Act marketplaces, and requires stricter income-verification measures, among other changes.
+Added: This rule is currently the subject of legal challenges.
+Added: The 2025 Reconciliation Law also includes several healthcare policy changes that are expected to decrease access to health insurance.
+Added: Among other provisions, the 2025 Reconciliation Law makes changes to Affordable Care Act marketplace insurance, including effectively ending automatic renewals of coverage by requiring pre-enrollment verification of eligibility and restricting subsidized marketplace coverage and Medicare and Medicaid eligibility based on immigration status.
+Added: Other legislative and executive branch initiatives related to health insurance could also result in increased prices for consumers purchasing health insurance coverage or may permit the sale of insurance plans that do not satisfy current Affordable Care Act consumer protections.
+Added: Any of these developments could increase rates of uninsured and underinsured individuals and destabilize insurance markets.
Healthcare providers may be significantly impacted by changes specific to the Medicaid program, including changes resulting from legislative and administrative actions at the federal and state levels.
−Removed: Changes at the federal level may impact funding for, or the structure of, the Medicaid program and may shape administration of the program at the state level.
−Removed: The Affordable Care Act expands the categories of individuals eligible for Medicaid coverage, permits individuals with relatively higher incomes to qualify and provides states with enhanced funding for expansion populations.
−Removed: The majority of states have adopted Medicaid expansion, including nine of the 15 states in which we operated hospitals at December 31, 2024.
−Removed: The states with the greatest reductions in the number of uninsured adult residents have been the expansion states.
−Removed: However, a number of states have opted out of the Medicaid expansion provisions, including Florida, Alabama, Tennessee, Mississippi and Texas, where we operated a significant number of hospitals as of December 31, 2024.
−Removed: Changes to the federal funding formula for Medicaid could have a particularly significant impact in states that expanded Medicaid, 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 is reduced.
−Removed: CMS administrators may also make changes to Medicaid payment models and may grant states additional flexibility in the administration of state Medicaid programs, including by allowing additional states to condition Medicaid enrollment on work or other community engagement or permitting other eligibility restrictions.
+Added: Federal actions may impact funding for, or the structure of, the Medicaid program and may shape provider reimbursement rates, eligibility and coverage policies and other aspects of the program at the state level.
+Added: For example, as further discussed in Item 1, “Business – Payment – Medicaid,” the 2025 Reconciliation Law includes policy changes that are expected to result in Medicaid spending reductions and changes in administration of state Medicaid programs.
+Added: The law limits eligibility for Medicaid, including by imposing work or community engagement requirements for adults in Medicaid expansion states, and limits some Medicaid financing mechanisms, including through restrictions intended to reduce the federal matching funds received by state Medicaid programs.
+Added: Reductions in federal matching funds and increased state obligations and administrative burden could have significant effects, such as resulting in state limitations on eligibility or coverage or changes to Medicaid expansion programs, particularly if states are unable to offset reductions.
+Added: The effects of the 2025 Reconciliation Law could be particularly significant in states that expanded Medicaid under the Affordable Care Act, especially if a significant number of individuals formerly covered under Medicaid expansion lose Medicaid eligibility but do not obtain other health insurance coverage.
+Added: Of the 14 states in which we operated hospitals at December 31, 2025, eight states have taken action to expand their Medicaid programs.
+Added: The other six states in which we operated hospitals as of December 31, 2025, have opted out of Medicaid expansion, including Florida, Alabama, Tennessee, Mississippi and Texas.
+Added: In addition to implementing changes mandated through legislation, CMS administrators may make changes to Medicaid payment models and may impose new restrictions or grant states additional flexibility in the administration of state Medicaid programs.
Some states use, or have applied to use, waivers granted by CMS to implement expansion, impose different eligibility or enrollment conditions, or otherwise implement programs that vary from federal standards.
The Medicaid landscape is constantly evolving as the federal and state governments consider and test various models of delivery and payment system reform.
−Removed: In addition, there is uncertainty regarding the potential impact of other reform efforts at the federal and state levels.
+Added: There is uncertainty regarding the potential impact of other reform efforts at the federal and state levels.
For example, some members of Congress have proposed measures intended to accelerate the shift from traditional Medicare to Medicare Advantage or eliminating some or all of the consumer protections established by the Affordable Care Act.
3 unchanged sentences
The CMS Innovation Center has highlighted the need to accelerate the movement to value-based care and drive broader system transformation.
+Added: Other industry participants, such as private payors and large employer groups and their affiliates, may also introduce financial or delivery system reforms.
+Added: For example, in recent years there have been trends influenced by private and/or public payors toward enrollment in managed care programs, favoring outpatient care over inpatient care, and provider consolidation.
Fraud and Abuse Laws.
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• rental of space in physician offices, at other than fair market value;
−Removed: • physician-owned entities (often referred to as physician-owned distributorships ) that derive revenue from selling, or arranging for the sale of, implantable medical devices ordered by their physician-owners for use on procedures that physician-owners perform on their own patients at hospitals or ASCs.
+Added: • physician-owned entities (often referred to as physician-owned distributorships) that derive revenue from selling, or arranging for the sale of, implantable medical devices ordered by their physician-owners for use on procedures that physician-owners perform on their own patients at hospitals or ambulatory surgery centers.
We have a variety of financial relationships with physicians who refer patients to our hospitals.
−Removed: Physicians own interests in a number of our facilities.
−Removed: Physicians may also own our stock.
+Added: Physicians own interests in a number of our facilities and may also own our stock.
We also have contracts with physicians providing for a variety of financial arrangements, including employment contracts, leases, management agreements and professional service agreements.
16 unchanged sentences
Physician-owned hospitals must disclose their physician ownership in writing to patients and must make a list of their physician owners available upon request.
−Removed: Additionally, each physician owner who is a member of a physician-owned hospital’s medical staff must agree, as a condition of continued medical staff membership or admitting privileges, to disclose in writing to all patients whom
−Removed: they refer to the hospital their (or an immediate family member’s) ownership interest in the hospital.
+Added: Additionally, each physician owner who is a member of a physician-owned hospital’s medical staff must agree, as a condition of continued medical staff membership or admitting privileges, to disclose in writing to all patients whom they refer to the hospital their (or an immediate family member’s) ownership interest in the hospital.
If a hospital fails to comply with these regulations, the hospital could lose its Medicare provider agreement and be unable to participate in Medicare.
36 unchanged sentences
Possible sanctions for violations of these restrictions include loss of a healthcare provider’s license, civil and criminal penalties and rescission of business arrangements.
−Removed: These laws vary from state to state, are often vague and have seldom been interpreted by the courts or regulatory agencies.
+Added: These restrictions vary from state to state, are often vague and have seldom been interpreted by the courts or regulatory agencies.
We structure our arrangements with healthcare providers to comply with the relevant state law.
−Removed: However, we cannot provide assurance that governmental officials responsible for enforcing these laws will not assert that we, or transactions in which we are involved, are in violation of these laws.
+Added: However, we cannot provide assurance that governmental officials responsible for enforcing these laws will not assert that we, or transactions in which we are involved, are in violation of these restrictions.
These laws may also be interpreted by the courts in a manner inconsistent with our interpretations.
5 unchanged sentences
A medical facility that suffers a financial loss as a direct result of another participating hospital’s violation of the law also has a similar right.
−Removed: Although we believe that our practices comply with the law, we can give no assurance that governmental officials responsible for enforcing the law will not assert we are in violation of this law or that interpretations of the law will not change.
−Removed: In particular, hospitals may face conflicting interpretations as to the requirements imposed by EMTALA as interpreted by HHS in relation to state laws that limit access to abortion or other reproductive health services.
−Removed: For example, CMS has provided guidance regarding EMTALA obligations specific to patients who are pregnant or are experiencing pregnancy loss and the preemption of state law.
−Removed: This guidance is the subject of legal challenges.
−Removed: The final ruling from a Texas case limits application of the HHS guidance in Texas.
+Added: Hospitals may face conflicting interpretations by courts and federal and state law enforcement agencies regarding the requirements imposed by EMTALA especially with respect to state laws that limit access to abortion or other reproductive health services.
+Added: For example, in May 2025, CMS rescinded guidance issued to hospitals under the previous presidential administration regarding EMTALA and the preemption of state laws restricting abortion.
Conversion Legislation.
3 unchanged sentences
While these reviews and, in some instances, approval processes can add additional time to the closing of a hospital acquisition, we have not had any significant difficulties or delays in completing the acquisition process.
−Removed: There can be no assurance, however, that future actions on the state level will not seriously delay or even prevent our ability to acquire hospitals.
−Removed: If these activities are widespread, they could limit our ability to acquire hospitals.
+Added: There can be no assurance, however, that future actions on the state level will not seriously delay acquisitions or even prevent us from acquiring hospitals.
Antitrust Laws .
1 unchanged sentence
These laws prohibit price fixing, market allocation, bid-rigging, concerted refusal to deal, market monopolization, price discrimination, tying arrangements, acquisitions of competitors and other practices that have, or may have, an adverse effect on competition.
−Removed: In addition, some states have also passed legislation requiring for-profit healthcare entities, including hospitals, to notify the state attorneys general or other designated entities in advance of sales or other transactions.
+Added: In addition, some states have also passed legislation requiring for-profit healthcare entities, including hospitals, to notify or obtain approval from the state attorneys general or other designated entities in advance of sales or other transactions.
Violations of federal or state antitrust laws can result in various sanctions, including criminal and civil penalties.
4 unchanged sentences
The construction of new facilities, the acquisition of existing facilities, significant capital expenditures and the addition of new services at our facilities may be subject to state laws that require prior approval by state regulatory agencies.
−Removed: These certificate of need, or CON, laws generally require that a state agency determine the public need and give approval prior to the construction or acquisition of facilities, significant capital expenditure or the addition of new services.
+Added: These certificate of need, or CON, laws generally require that a state agency evaluate the public need for facilities or services and give approval prior to the construction or acquisition of facilities, significant capital expenditures or the addition of new services.
We currently operate healthcare facilities in a number of states that have adopted CON laws.
−Removed: If we fail to obtain necessary state approval, we will not be able to expand our facilities, complete acquisitions or significant capital expenditures or add new services in these states.
+Added: If we fail to obtain a necessary CON or other state approval or provide a required notice, such failure may impair our ability to operate or to expand our facilities, complete acquisitions or significant capital expenditures or add new services in these states.
Violation of these state laws may result in the imposition of civil sanctions or the revocation of a provider’s licenses.
−Removed: HIPAA Administrative Simplification, Privacy and Security Standards and Interoperability Requirements.
−Removed: The Health Insurance Portability and Accountability Act of 1996, or HIPAA, requires the use of uniform transaction standards for healthcare claims and payment transactions submitted or received electronically.
−Removed: These provisions are intended to encourage electronic commerce in the healthcare industry.
−Removed: HHS has established transaction standards and code sets that all healthcare providers must use when submitting or receiving certain healthcare transactions electronically and has issued operating rules to promote uniformity in the implementation of each standardized electronic transaction.
−Removed: HIPAA also requires that each provider use a National Provider Identifier.
−Removed: As required by HIPAA, HHS has issued privacy and security regulations that extensively regulate the use and disclosure of protected health information, and require covered entities, including health plans and most healthcare providers, to implement administrative, physical and technical safeguards to protect the security of individually identifiable health information that is electronically maintained or transmitted.
−Removed: Business associates (entities that handle protected health information on behalf of covered entities) are subject to direct liability for violation of applicable provisions of the regulations.
−Removed: In addition, a covered entity may be subject to penalties as a result of a business associate violating HIPAA, if the business associate is found to be an agent of the covered entity.
+Added: Health Information Privacy, Security and Interoperability.
+Added: We are subject to many federal and state laws and regulations that apply to the collection, use, retention, protection, security, disclosure, transfer and other processing of personal information.
+Added: The Health Insurance Portability and Accountability Act of 1996, or HIPAA, and implementing regulations require covered entities, including health plans and most healthcare providers, to protect the privacy and security of individually identifiable health information, known as “protected health information,” facilitate individual rights with respect to protected health information, including the right to access such information, and use uniform transaction standards and code sets for healthcare claims and payment transactions submitted or received electronically.
+Added: Certain provisions of the privacy and security regulations apply directly to business associates, which are entities that handle protected health information on behalf of covered entities.
+Added: A covered entity may be subject to penalties as a result of a business associate violating HIPAA, if the business associate is found to be an agent of the covered entity.
Covered entities must report breaches of unsecured protected health information to affected individuals without unreasonable delay, but not to exceed 60 days of discovery of the breach by the covered entity or its agents.
2 unchanged sentences
All non-permitted uses or disclosures of unsecured protected health information are presumed to be breaches unless the covered entity or business associate establishes that there is a low probability the information has been compromised.
−Removed: Various state laws and regulations may also require us to notify affected individuals in the event of a data breach involving individually identifiable information.
Violations of the HIPAA privacy and security regulations may result in criminal penalties and in substantial civil penalties per violation.
The civil penalties are adjusted annually based on updates to the consumer price index.
−Removed: HHS is required to perform compliance audits.
+Added: HHS enforces the regulations and is required to perform compliance audits.
In addition to enforcement by HHS, state attorneys general are authorized to bring civil actions seeking either injunction or damages in response to violations of HIPAA privacy and security regulations that threaten the privacy of state residents.
HHS may resolve HIPAA violations through informal means, such as allowing a covered entity to implement a corrective action plan, but HHS has the discretion to move directly to impose monetary penalties and is required to impose penalties for violations resulting from willful neglect.
−Removed: We are also subject to many federal or state privacy-related laws that are more restrictive than the privacy regulations issued under HIPAA or that apply to other types of information.
−Removed: These laws vary and could impose additional penalties and subject us to additional privacy and security restrictions.
−Removed: For example, the FTC uses its consumer protection authority to initiate enforcement actions in response to data breaches.
−Removed: In addition, various states have enacted, and other states are considering, laws and regulations concerning the privacy and security of consumer and other personal information.
−Removed: To the extent we are subject to such requirements, these laws and regulations often have far-reaching effects, are subject to amendments and changing requirements and updates to regulators’ enforcement priorities, may require us to modify our data processing practices and policies, and may subject our business to a risk of increased potential liability.
−Removed: These laws and regulations often provide for civil penalties for violations, and some provide a private right of action for data breaches, which may increase the likelihood or impact of data breach litigation.
+Added: Other federal and state laws and regulations that apply to our operations may be more restrictive than HIPAA or apply to other types of information.
+Added: For example, the FTC uses its consumer protection authority to initiate enforcement actions in response to data breaches, and various state laws and regulations require us to notify affected individuals in the event of a data breach involving individually identifiable information.
+Added: Several states in which we operate have enacted or are considering comprehensive privacy legislation, and several states, including Florida and Texas, have adopted or are considering “offshoring” prohibitions, which restrict the transfer, storage and access of patient data outside of the United States or North America.
+Added: Providers subject to these laws may not be able to rely on outside vendors who operate overseas to store or handle patient records.
+Added: Privacy and security-related state laws and regulations often provide for civil penalties for violations, and some provide a private right of action for data breaches, which may increase the likelihood or impact of data breach litigation.
+Added: Laws and regulations related to privacy and security continue to evolve, often have far-reaching effects and have required, and will continue to require, us to incur significant expenses to comply.
We have developed and utilize an information privacy and security compliance plan as part of our effort to comply with HIPAA and other federal and state privacy and security requirements.
−Removed: The privacy regulations and security laws and regulations have imposed, and will continue to impose, significant costs on us in order to comply with these standards.
Healthcare providers and industry participants are also subject to an increasing number of requirements intended to promote the interoperability and exchange of patient health information.
1 unchanged sentence
Violations may result in penalties or other significant disincentives.
−Removed: In a final rule published in July 2024, HHS established disincentives for hospitals, clinicians (including group practices) eligible for the Merit-Based Incentive Payment System, or MIPS, and ACOs and ACO providers that commit information blocking.
Hospitals found to have committed information blocking will not qualify as “meaningful electronic health record users” under the Medicare Promoting Interoperability Program and as a result will lose 75% of the annual market basket increase they would otherwise receive.
−Removed: Similar penalties apply to MIPS-eligible clinicians and ACOs, ACO participants, and ACO providers or suppliers under the Medicare Shared Savings Program.
+Added: Similar penalties apply to clinicians eligible under the Merit-Based Incentive Payment System, or MIPS, and ACOs, ACO participants, and ACO providers or suppliers under the Medicare Shared Savings Program.
Price Transparency and Consumer Billing Limitations .
The healthcare industry is subject to various federal and state initiatives and requirements related to price transparency and out-of-network charges, which may impact prices, our competitive position and the relationships between hospitals, insurers, patients, and ancillary providers.
−Removed: For example, federal regulations require hospitals to publish a list of their standard charges for all items and services, including discounted cash prices and payer-specific and de-identified negotiated charges, in a machine-readable, publicly accessible online file.
−Removed: Hospitals are required to publish a consumer-friendly list of standard charges for certain “shoppable” services (i.e., services that can be scheduled by a patient in advance) and associated ancillary services or, alternatively, maintain an online price estimator tool.
+Added: For example, federal regulations require hospitals to publish a list of their standard charges for all items and services, including discounted cash prices and payor-specific and de-identified negotiated charges, in a machine-readable, publicly accessible online file.
+Added: The current presidential administration has signaled its commitment to advancing price transparency initiatives, including through an executive order issued in February 2025 and a final rule issued in November 2025 that updates the requirements for data elements in the machine-readable file, among other changes.
+Added: Hospitals also are required to publish a consumer-friendly list of standard charges for certain “shoppable” services (i.e., services that can be scheduled by a patient in advance) and associated ancillary services or, alternatively, maintain an online price estimator tool.
CMS may impose civil monetary penalties for noncompliance with these price transparency requirements.
4 unchanged sentences
The No Surprises Act also impacts the payment received by an out-of-network provider from a health plan for items and services to which the prohibitions on balance billing apply.
−Removed: For items and services for which balance billing is prohibited (even when no balance billing occurs), the No Surprises Act establishes an independent dispute resolution, or IDR, process for providers and payers to handle payment disputes that cannot be resolved through direct negotiations.
+Added: For items and services for which balance billing is prohibited (even when no balance billing occurs), the No Surprises Act establishes an independent dispute resolution, or IDR, process for providers and payors to handle payment disputes that cannot be resolved through direct negotiations.
The final rule establishing the IDR process is currently the subject of legal challenges, and government agencies have proposed various changes, creating uncertainty and resulting in delays in claims resolution.
The No Surprises Act also requires providers to provide a good faith estimate of expected charges to uninsured or self-pay individuals in connection with scheduled items or services, in advance of the date of the scheduled item or service, or upon request of the individual.
−Removed: HHS is delaying enforcement with regard to good faith estimates to uninsured individuals that do not include expected charges for co-providers or co-facilities until the agency issues additional regulations.
−Removed: If the actual charges to an uninsured or self-pay patient exceed the good faith estimate by an amount deemed to be substantial by regulation (which is currently $400) or the provider furnishes an item or service that was not included in the good faith estimate, the patient may invoke a patient-provider dispute resolution process established by regulation to challenge the higher amount.
+Added: HHS is indefinitely delaying enforcement with regard to good faith estimates to uninsured individuals that do not include expected charges for co-providers or co-facilities until the agency issues additional regulations.
+Added: If the actual charges to an uninsured or self-pay patient exceed the good faith estimate by an amount deemed to be substantial by regulation (which is currently $400), the patient may invoke a patient-provider dispute resolution process established by regulation to challenge the higher amount.
Medicare is a federal health insurance program that provides certain hospital and medical insurance benefits to persons aged 65 and over, some disabled persons, persons with end-stage renal disease and persons with amyotrophic lateral sclerosis, also known as ALS or Lou Gehrig’s Disease.
15 unchanged sentences
The policy had funded an increase to the wage index value for hospitals with low wage indexes by decreasing reimbursement for all other hospitals.
−Removed: CMS addressed the impact of the decision prospectively in its final rule updating inpatient hospital payment rates and policies for federal fiscal year 2025, but it is not yet clear how the agency will address the impact the low wage policy had in 2020 through 2024.
+Added: CMS has discontinued the low wage index policy and addressed the impact of the court decisions prospectively in its final rule updating inpatient hospital payment rates and policies for federal fiscal year 2026, but it is not yet clear how the agency will address the impact the low wage policy had in 2020 through 2024.
The MS-DRG payment rates are also adjusted to promote value-based purchasing, linking payments to quality and efficiency.
5 unchanged sentences
Third, the bottom quartile of hospitals based on the national risk-adjusted hospital acquired condition, or HAC, rates in the previous year have their total inpatient operating Medicare payments reduced by 1%.
−Removed: Moreover, Medicare does not reimburse for care
−Removed: related to certain HACs.
+Added: Moreover, Medicare does not reimburse for care related to certain HACs.
For cases in which a designated HAC was not present on admission, CMS does not allow the discharge to be assigned to a higher-paying MS-DRG based on the HAC, and the case is paid as though the secondary diagnosis (HAC) was not present.
1 unchanged sentence
A majority of our hospitals qualify to receive these adjustments.
−Removed: The methodology for calculating DSH payment adjustments is affected by shifts in CMS payment policy.
−Removed: For example, in August 2023, CMS changed the DSH formula by altering how days of care provided to patients who are eligible for benefits from Section 1115 Demonstrations are included in the Medicaid fraction and by excluding from the Medicaid fraction days of care of patients for which hospitals are paid from demonstration-authorized uncompensated or undercompensated care pools in a manner that will effectively decrease DSH payments for many hospitals.
−Removed: However, in August 2024, a district court in Texas vacated the regulation effecting this change.
−Removed: Separately, in November 2024, the U.S.
−Removed: Supreme Court heard oral arguments in a dispute focused on whether all patients enrolled in Supplemental Security Income, or SSI, assistance, even if no SSI payments were made during the month of a patient’s hospital admission, should be counted in the DSH methodology.
−Removed: These and other regulatory changes and court rulings could adversely impact our results of operations.
+Added: The methodology for calculating DSH payment adjustments is affected by shifts in CMS payment policy and is also subject to frequent, ongoing litigation.
+Added: For example, lawsuits filed in April 2025 allege that the Medicare DSH calculation inappropriately reduces hospital reimbursement by counting only fee-for-service Medicare patients who received SSI cash assistance during the inpatient stay, excluding beneficiaries covered under Medicare Advantage and other Medicare and SSI categories.
+Added: The plaintiffs argue this policy resembles rulemaking previously vacated by the U.S.
+Added: Supreme Court.
CMS also distributes an additional payment to each DSH hospital for its proportion of uncompensated care costs relative to the uncompensated care amount of other DSH hospitals.
14 unchanged sentences
Supreme Court invalidated past payment cuts for hospitals participating in the 340B Drug Pricing Program.
−Removed: In light of the U.S.
−Removed: Supreme Court decision and to achieve budget neutrality, CMS reduced payment rates for non-drug services under the outpatient PPS for calendar year 2023, and distributed lump sum payments to affected 340B providers as the remedy for calendar years 2018 through 2022.
−Removed: In order to comply with budget neutrality requirements, HHS finalized a corresponding offset in future non-drug item and service payments for all outpatient PPS providers (except new providers) that will reduce the outpatient PPS conversion factor by 0.5% annually beginning in calendar year 2026 and continuing for approximately 16 years.
−Removed: CMS has implemented an expanded site-neutral payment policy for off-campus provider-based departments paid under the outpatient PPS.
+Added: As a result and to achieve budget neutrality, CMS reduced payment rates for non-drug services under the outpatient PPS for calendar year 2023, and distributed lump sum payments to affected 340B providers as the remedy for calendar years 2018 through 2022.
+Added: In order to comply with budget neutrality requirements, HHS finalized a corresponding offset in future non-drug item and service payments for all outpatient PPS providers (except new providers) that will reduce the outpatient PPS conversion factor by 0.5% annually until the past invalidated payments are offset.
+Added: This 0.5% reduction began in calendar year 2026 and was expected to continue for approximately 16 years, but CMS has indicated that it may accelerate this timeline by implementing a larger reduction beginning in calendar year 2027.
+Added: CMS finalized a rule in November 2025 that will phase out over three years, beginning in calendar year 2026, the Medicare inpatient only list, which is a list of procedures eligible to be reimbursed by Medicare only if performed in an inpatient setting.
+Added: These procedures will also be eligible for Medicare reimbursement if performed in outpatient settings.
+Added: Further, CMS has implemented an expanded site-neutral payment policy for off-campus provider-based departments paid under the outpatient PPS.
Under the policy, all off-campus provider-based departments are paid the Medicare Physician Fee Schedule, or MPFS, -equivalent rate for clinic visits, which is generally substantially lower than the outpatient PPS rate.
+Added: Beginning in calendar year 2026, CMS expanded this policy by also applying the Physician Fee Schedule rate to drug administration services furnished in excepted off-campus provider-based departments.
The MPFS-equivalent rate for calendar year 2026 is approximately 40% of the outpatient PPS rate.
CMS uses fee schedules to pay for physician services, physical, occupational and speech therapies, durable medical equipment, clinical diagnostic laboratory services, freestanding surgery center services, and certain other items and services.
−Removed: Under the MPFS, CMS has assigned a national relative value unit, or RVU, to most medical procedures and services that reflects the resources required to provide the services relative to all other services.
+Added: Under the MPFS, CMS has assigned a national relative value unit, or RVU, to most medical procedures and services that reflects the resources required for a physician to provide the services relative to all other services.
Each RVU is calculated based on a combination of the time and intensity of work required, overhead expense attributable to the service, and professional liability insurance expense.
These elements are each modified by a geographic adjustment factor to account for local practice costs and are then aggregated.
−Removed: To determine the payment rate for a particular service, the sum of the geographically adjusted RVUs is multiplied by a conversion factor.
−Removed: For calendar year 2025, CMS decreased the conversion factor by approximately 2.83%.
−Removed: CMS requires physicians and certain other healthcare clinicians paid under Medicare Part B to participate in one of two tracks under the Quality Payment Program, or QPP, which is a value-based payment program intended to reward high-quality patient care.
−Removed: Under both tracks, performance data collected each performance year affects Medicare payments two years later.
+Added: To determine the payment rate for a particular service, the sum of the geographically adjusted RVUs is multiplied by a conversion factor, which is adjusted annually.
+Added: Medicare payments paid under Medicare Part B are adjusted based on participation in the Quality Payment Program, or QPP, which is a value-based payment program intended to reward high-quality patient care.
CMS expects to transition increasing financial risk to providers as QPP evolves.
−Removed: The Advanced Alternative Payment Model, or Advanced APM, encourages participation in specific innovative payment models approved by CMS through financial incentives.
−Removed: Incentive payments for participation in an Advanced APM were initially set to expire after the 2023 performance year (with associated payments in 2025), but were extended for one year at a lower rate.
−Removed: After the 2024 performance year and associated payments in 2026, Advanced APM incentive payments will no longer be available.
−Removed: Instead, qualifying providers will receive positive adjustments to their MPFS payment rates.
−Removed: In addition, providers are exempt from the reporting requirements and payment adjustments imposed under the Merit-Based Incentive Payment System, or MIPS, if the provider has sufficient participation in an Advanced APM.
−Removed: Alternatively, providers may participate in the MIPS track, under which physicians receive performance-based payment incentives or payment reductions based on their performance with respect to clinical quality, resource use, clinical improvement activities and meeting Promoting Interoperability standards related to the meaningful use of EHRs.
−Removed: In addition to the Medicare reimbursement reductions and adjustment discussed above, the Budget Control Act of 2011, or BCA, requires automatic spending reductions to reduce the federal deficit, resulting in a uniform percentage reduction across all Medicare programs of 2% per fiscal year that extends through the first eight months of federal fiscal year 2032.
+Added: CMS requires physicians and certain other healthcare clinicians to participate in one of two QPP tracks.
+Added: The Advanced Alternative Payment Model, or APM, track encourages participation in specific innovative payment models approved by CMS through financial incentives, which are paid two years after the relevant performance period.
+Added: These financial incentives are not available for calendar year 2027 but restart for calendar year 2028.
+Added: In addition, starting in calendar year 2026, APM qualifying practitioners receive positive adjustments to their MPFS rates through a conversion factor specific to qualifying APM participants.
+Added: Beginning in calendar year 2026, CMS has established two separate conversion factors:
+Added: one for items and services furnished by qualifying APM participants and another for non-qualifying practitioners.
+Added: For calendar year 2026, CMS increased the qualifying APM conversion factor by approximately 3.8% and increased the non-qualifying practitioner conversion factor by approximately 3.3%.
+Added: These positive updates are driven by, among other factors, adjustments mandated by statute, including a temporary 2.5% increase for calendar year 2026 required by the 2025 Reconciliation Law.
+Added: Providers participating in the APM track are exempt from the reporting requirements and payment adjustments imposed under MIPS, the other QPP participation track.
+Added: Providers electing the MIPS track receive payment incentives or payment reductions based on their performance with respect to clinical quality, resource use, clinical improvement activities and meeting Promoting Interoperability standards related to the meaningful use of EHRs.
+Added: For payments for services reimbursed under the MPFS in calendar year 2026, CMS has also finalized an efficiency adjustment of negative 2.5% that will apply to several thousand non-time-based billing codes for services that CMS believes are likely to have become more efficient over time, such as surgical procedures, diagnostic imaging interpretation, and orthopedic services.
+Added: Time-based codes, such as those for evaluation and management services, and other codes on an exemption list are not subject to the adjustment.
+Added: CMS intends to calculate and apply an efficiency adjustment every three years.
+Added: In addition to the Medicare reimbursement reductions and adjustments discussed above, the Budget Control Act of 2011, or BCA, requires automatic spending reductions to reduce the federal deficit, resulting in a uniform percentage reduction across all Medicare programs of 2% per fiscal year that extends through the first five months of federal fiscal year 2033.
These reductions apply to certain other federally funded healthcare programs, including TRICARE.
−Removed: We anticipate that the federal deficit will continue to place pressure on government healthcare programs, and it is possible that future deficit reduction legislation will impose additional spending reductions.
+Added: We anticipate that the federal deficit will continue to place pressure on government healthcare programs, and it is possible that future legislation will impose additional spending reductions.
Medicaid is a program funded jointly by state and federal governments, and administered by the states, that provides hospital and medical benefits to qualifying low-income individuals.
The number of individuals enrolled in Medicaid declined in 2025 in comparison to 2024.
−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 through March 2023, among other requirements.
+Added: This continued decline follows a period of increased enrollment that occurred through mid-2023 as a result of COVID-19 relief legislation that authorized a temporary increase in federal funds in states that maintained continuous Medicaid enrollment through March 2023, among other requirements.
Most state Medicaid payments are made under a PPS or under programs that negotiate payment levels with individual hospitals.
3 unchanged sentences
States generally have broad discretion to define which hospitals qualify for the Medicaid DSH payments and to determine payment amounts, but CMS published a final rule in February 2024 affecting how states calculate hospital-specific caps for the payments.
−Removed: In addition, current law provides for Medicaid DSH payments to be reduced by $8.0 billion for the period from April 1, 2025 through September 30, 2025 and per year in each of federal fiscal years 2026 and 2027.
+Added: In addition, current law provides for Medicaid DSH payments to be reduced by $8.0 billion in federal fiscal year 2028.
Medicaid DSH payments as a percentage of our net operating revenues were 0.24% and 0.19% for the years ended December 31, 2025 and 2024, respectively.
1 unchanged sentence
These supplemental reimbursement programs are generally authorized by CMS for a specified period of time and require CMS’s approval to be extended.
−Removed: Outside of the government response to COVID-19, budgetary pressures have, in recent years, resulted and likely will continue to result in decreased spending, or decreased spending growth, for Medicaid programs in many states.
+Added: Significant changes are expected in state Medicaid programs as a result of the 2025 Reconciliation Law, including decreases in Medicaid enrollment.
+Added: Among other changes, the law limits eligibility for Medicaid by imposing work or community engagement requirements for adults under age 65 in the Medicaid expansion states, including states with waiver-based expansions, subject to limited exceptions.
+Added: State compliance is required by December 31, 2026, but states may choose to implement the mandate earlier.
+Added: In addition, the 2025 Reconciliation Law increases the frequency of eligibility redeterminations to every six months for adults in Medicaid expansion states, including waiver-based expansion states, starting for redeterminations scheduled on or after December 31, 2026, and increases cost-sharing obligations for enrollees in those states beginning in federal fiscal year 2029.
+Added: The 2025 Reconciliation Law 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.
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.
−Removed: Many states have also adopted, or are considering, legislation designed to reduce coverage, enroll Medicaid recipients in managed care programs and/or impose additional taxes on hospitals to help finance or expand the states’ Medicaid systems.
+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 2025 Reconciliation Law includes restrictions on provider tax arrangements intended to reduce the federal matching funds received by state Medicaid programs.
+Added: The 2025 Reconciliation Law prohibits states from establishing new provider taxes or increasing rates of existing provider taxes for fiscal years beginning after October 1, 2026, with greater restrictions in states that have expanded Medicaid, including states with waiver-based expansions.
+Added: For example, beginning in federal fiscal year 2028, the law limits exceptions to the hold harmless prohibition in Medicaid expansion states.
+Added: In addition, the 2025 Reconciliation Law 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 2025 Reconciliation Law are no longer permissible, subject to transition periods.
+Added: The law also impacts state directed payment, or SDP, arrangements, as further discussed below.
+Added: Many states are facing increasing or evolving budgetary pressures, including as a result of the 2025 Reconciliation Law and other recent federal actions.
+Added: Many states have also adopted, or are considering, legislation designed to reduce coverage, change patient eligibility requirements and/or enroll Medicaid recipients in managed care programs.
In addition, many states use, or have applied to CMS to use, waivers granted by CMS to implement Medicaid expansion, impose different eligibility or enrollment restrictions or otherwise implement programs that vary from federal standards.
In recent years, aspects of existing or proposed Medicaid waiver programs have been subject to legal challenge, resulting in uncertainty.
−Removed: Additionally, 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.
−Removed: For example, a federal court permitted Georgia to impose work and community engagement requirements under a Medicaid demonstration program that launched in mid-2023, and CMS administrators may in the future allow states to impose such conditions on enrollment or permit other eligibility restrictions.
−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 expansion populations decrease and those 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 is reduced.
+Added: Additionally, federal legislation and administrative policies that shape administration of the Medicaid programs at the state level are subject to change.
+Added: For example, CMS administrators may in the future allow states to impose additional eligibility or enrollment restrictions.
+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: Further, some Medicaid expansion states have trigger laws that would end their Medicaid expansion or require other actions if the federal funding match rate is reduced or similar reductions are imposed for Medicaid expansion.
+Added: These trigger laws vary and most are not directly implicated by the 2025 Reconciliation Law, but some states nonetheless may consider or make changes to Medicaid expansion programs.
TRICARE is the Department of Defense’s healthcare program for active duty service members of the armed forces and others, including certain family members, retirees, and survivors.
2 unchanged sentences
Annual Cost Reports.
−Removed: Hospitals participating in the Medicare and some Medicaid programs, whether paid on a reasonable cost basis or under a PPS, are required to meet specified financial reporting requirements.
+Added: Hospitals participating in Medicare and some Medicaid programs, whether paid on a reasonable cost basis or under a PPS, are required to meet specified financial reporting requirements.
Federal and, where applicable, state regulations require submission of annual cost reports identifying medical costs and expenses associated with the services provided by each hospital to Medicare beneficiaries and Medicaid recipients.
−Removed: Annual cost reports required under the Medicare and some Medicaid programs are subject to routine governmental audits.
+Added: Annual cost reports required under Medicare and some Medicaid programs are subject to routine governmental audits.
These audits may result in adjustments to the amounts ultimately determined to be due to us under these reimbursement programs.
2 unchanged sentences
Medicare and Medicaid Managed Care.
−Removed: Enrollment in Managed Medicare, also known as Medicare Part C or Medicare Advantage, and managed Medicaid programs has increased in recent years as the federal and state governments seek to control healthcare costs.
+Added: Managed Medicare, also known as Medicare Part C or Medicare Advantage, and managed Medicaid programs remain a common strategy as the federal and state governments seek to control healthcare costs.
Under the Managed Medicare program, the federal government contracts with private health plans to provide members with Medicare benefits.
1 unchanged sentence
Similarly, managed Medicaid programs enable states to contract with private entities to handle program responsibilities like care management and claims adjudication.
+Added: The states usually do not relinquish program responsibilities for financing, eligibility criteria and core benefit plan design.
+Added: Enrollment in managed Medicaid plans has decreased following the end of the continuous enrollment requirement tied to increased federal funding under COVID-19 relief legislation.
Many states have implemented state directed payment, or SDP, arrangements to direct certain Medicaid managed care expenditures.
2 unchanged sentences
The use and nature of SDP arrangements are subject to policy changes.
−Removed: For example, CMS published a rule in May 2024 that addresses access, financing and quality within Medicaid managed care programs, known as the Medicaid Managed Care Rule.
−Removed: The rule, elements of which will be phased in through 2028, includes new and updated requirements for SDP arrangements intended to ensure 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.
−Removed: The rule also requires provider payment levels for SDPs for inpatient and outpatient hospital services and other specified services to not exceed the average commercial rate.
+Added: For example, the 2025 Reconciliation Law 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: Several states in which we operate, including Texas, currently tie caps on total payment rates paid by managed care organizations to average commercial rates.
+Added: Under the revised regulations, rates will be generally capped at 100% of the total published Medicare payment rate in Medicaid expansion states, including states with waiver-based expansions, and at 110% of the total published Medicare payment rate in non-expansion states.
+Added: The revised regulations will apply to SDPs made for services furnished in the rating periods beginning on or after July 4, 2025.
+Added: However, the 2025 Reconciliation Law temporarily grandfathers certain SDP arrangements, including those for which an application was submitted to CMS prior to July 4, 2025, for the rating period occurring within 180 days of July 4, 2025, and those that received approval or made a good faith effort to receive approval from CMS prior to May 1, 2025.
+Added: Beginning with the rating period on or after January 1, 2028, grandfathered SDP arrangements will be reduced by 10 percentage points annually until they reach the allowable payment limits.
+Added: Certain states in which we operate have submitted applications to CMS for approval where the grandfathered payments we receive could be impacted and, in some instances, increased.
+Added: Some states have received approval of grandfathering applications, but we are unable to predict the timing or extent of any additional approvals by CMS and the resulting recognition of the related revenues.
+Added: In addition, CMS issued a final rule in May 2024 that revised SDP arrangement requirements, including removing regulatory barriers to help states use SDP arrangements to implement value-based purchasing payment arrangements and include non-network providers in SDP arrangements.
Further, the rule requires states to ensure that providers receiving SDPs comply with restrictions on participating in arrangements related to healthcare provider taxes that involve the redistribution of Medicaid payments.
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Working across five geographic jurisdictions, UPICs collaborate with states and coordinate provider investigations across the Medicare and Medicaid programs.
−Removed: We maintain policies and procedures to respond to the RAC requests and payment denials.
+Added: CMS has been implementing a new payment integrity program, the Wasteful and Inappropriate Service Reduction, or WISeR, model, in six states in 2026, including Arizona, Oklahoma and Texas.
+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.
+Added: We maintain policies and procedures to respond to the RAC requests and other audits and payment denials.
Payment recoveries resulting from RAC reviews and denials are appealable, and we pursue reversal of adverse determinations at appropriate appeal levels.
−Removed: Depending upon the growth of RAC programs and our success in appealing claims in future periods, our cash flows and results of operations could be negatively impacted.
+Added: Depending upon the growth of the RAC program and similar payment integrity initiatives and our success in appealing claims in future periods, our cash flows and results of operations could be negatively impacted.
Accountable Care Organizations .
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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, but conversely, under some payment tracks, may be required to pay shared losses if quality-adjusted Medicare expenditures exceed an established benchmark.
−Removed: Participation in payment tracks with downside risk is increasing.
−Removed: HHS has significant discretion to determine key elements of Medicare ACO programs.
+Added: HHS has significant discretion to determine key elements of Medicare ACO programs and has implemented strategies intended to increase participation in payment tracks with downside risk.
Certain waivers and exceptions are available from fraud and abuse laws for ACOs.
+Added: Bundled Payment Initiatives and Other Alternative Payment Models.
The Center for Medicare and Medicaid Innovation, or 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 healthcare that create savings under the Medicare and Medicaid programs, while maintaining or improving quality of care.
−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.
−Removed: CMS also indicated it will streamline its payment model portfolio and consider how to ensure broad provider participation.
−Removed: Bundled Payment Initiatives.
−Removed: Providers participating in bundled payment initiatives accept accountability for costs and quality of care by agreeing to receive one payment for services provided to Medicare patients for certain medical conditions or episodes of care.
+Added: For example, providers participating in bundled payment initiatives accept accountability for costs and quality of care by agreeing to receive one payment for services provided to Medicare patients for certain medical conditions or episodes of care.
By rewarding providers for increasing quality and reducing costs and penalizing providers if costs exceed a certain amount, bundled payment models are intended to lead to higher quality, more coordinated care at a lower cost to the Medicare program.
−Removed: The CMS Innovation Center has implemented bundled payment models, including the Bundled Payment for Care Improvement Advanced, or BPCI Advanced, initiative, which is expected to run through December 2025.
−Removed: Generally, participation in bundled payment programs is voluntary, but CMS required hospitals in selected markets to participate in mandatory bundled payment initiatives for specific orthopedic procedures, which ended December 31, 2024, and hospitals in selected markets will be required to participate in the Transforming Episode Accountability Model, a new model focused on five specified surgical procedure episodes, beginning in January 2026.
−Removed: The CMS Innovation Center signaled its intent to increase provider participation through implementation of more mandatory models.
+Added: The CMS Innovation Center has implemented bundled payment models in recent years, including the Bundled Payment for Care Improvement Advanced, or BPCI Advanced, initiative, which ran through December 2025.
+Added: Generally, participation in bundled payment programs is voluntary, but some models are mandatory.
+Added: For example, beginning January 2026, CMS requires hospitals in selected markets to participate in a new mandatory bundled payment initiative, the Transforming Episode Accountability Model, or TEAM, which is focused on five specified surgical procedure episodes.
+Added: An additional mandatory bundled payment program, the Ambulatory Specialty Model, will begin in January 2027.
+Added: Participation in this model will be mandatory for specialists treating heart failure and low back pain Medicare beneficiaries in outpatient settings in selected geographic areas.
+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 private third-party payors are increasingly employing alternative payment models, which may increasingly shift financial risk to providers.
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.
Commercial Insurance and Managed Care Companies .
+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: Private health insurance is subject to a complex regulatory framework at both the federal and state levels, often involving multiple governmental entities with overlapping authority.
+Added: The federal government has taken an increasingly significant regulatory role in recent years, including by establishing various consumer protections applicable to health insurance and through the administration of the federally-facilitated health insurance marketplaces.
+Added: Many recent healthcare reform efforts have been focused on access to health insurance.
+Added: For example, CMS issued a final rule in June 2025 that standardizes and shortens the open enrollment period for individual market coverage, both on and off the Affordable Care Act marketplaces, imposes limitations on eligibility for enrollment through the Affordable Care Act marketplaces and for enhanced subsidies, and requires stricter income verification measures, among other changes.
+Added: However, this rule is currently the subject of legal challenges and, in August 2025, a federal District Court issued a nationwide stay of several provisions.
+Added: In addition, the 2025 Reconciliation Law includes healthcare policy changes that are expected to impact insurance coverage obtained through the Affordable Care Act marketplaces by effectively ending automatic renewals of
+Added: enrollment by requiring pre-enrollment verification and annual re-verification of tax credit eligibility, among other measures.
+Added: The provisions directly impacting the marketplaces under the 2025 Reconciliation Law and the final rule take effect at various times over the next three years.
+Added: To address anticipated increases in health insurance premiums for consumers, in September 2025 CMS announced expanded eligibility for high-deductible catastrophic health insurance plans.
Our hospitals provide services to individuals covered by private healthcare insurance or by health plans administered by managed care companies.
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The current term of this agreement expires in December 2026, with automatic renewal terms of one year unless either party terminates by giving notice of non-renewal.
−Removed: At December 31, 2024, we had a 12.6% ownership interest in HealthTrust.
+Added: At December 31, 2025, we had an 11.7% ownership interest in HealthTrust.
By participating in this organization, we are able to procure items at competitively priced rates for our hospitals.
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The hospital industry is highly competitive.
+Added: Generally, hospitals and other providers compete on the basis of geographic location, quality and range of services, ability to attract and retain quality physicians and other healthcare professionals, price, market reputation, and condition of the facilities, among other factors.
The competition among hospitals and other healthcare providers, including urgent care centers and other outpatient providers, many of which offer similar services, has intensified with the implementation of price transparency initiatives and as patients have become more conscious of rising costs and quality of care in their healthcare decision-making process.
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These hospitals in non-urban service areas may face limited or no direct competition from within their primary service areas.
−Removed: However, these hospitals face competition from hospitals outside of their primary service area, including hospitals in urban areas that provide more complex services.
+Added: However, these hospitals face competition from hospitals outside of their primary service area, including hospitals in urban areas that provide more extensive or complex services.
Patients in those service areas may travel to these other hospitals for a variety of reasons, including the need for services we do not offer, payor networks that exclude our providers or physician referrals.
−Removed: Patients who are required to seek services from these other hospitals may subsequently shift their preferences to those hospitals for services we do provide.
+Added: Patients who seek services from these other hospitals may subsequently shift their preferences to those hospitals for services we do provide.
Our other hospitals, in selected urban service areas, may face competition from hospitals that are more established than our hospitals.
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We believe that we will continue to face increased competition in outpatient service models that become more integrated through acquisitions or partnerships between physicians, specialized care providers, and managed care payors.
−Removed: Cost-reduction strategies by large employer groups and their affiliates may increase this competition.
+Added: Cost-reduction strategies by payors, including large employer groups and their affiliates, may increase this competition.
In most markets in which we are not the sole provider of general acute care health services, our primary competitor is a municipal or not-for-profit hospital.
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We attempt to attract physicians and our physicians’ patients to our hospitals by offering quality services and facilities, convenient locations and state-of-the-art equipment.
−Removed: Some competitors are implementing physician alignment strategies, such as employing physicians, acquiring physician practice groups, and participating in ACOs or other clinical integration models.
+Added: Some competitors are
+Added: implementing physician alignment strategies, such as employing physicians, acquiring physician practice groups, and participating in ACOs or other clinical integration models.
Another significant factor in the competitive position of our hospitals and other facilities is our ability to obtain and maintain favorable contracts with third-party payors.
−Removed: Generally, hospitals and other providers compete for service contracts with third-party payors on the basis of price, market reputation, geographic location, quality and range of services, and medical staff quality, among other factors.
−Removed: Laws and regulations may impact our contract terms and ability to contract with third-party payors, such as laws that permit payors to guide patients to particular providers or eliminate restrictions on placing providers into preferred tiers.
+Added: Laws and regulations may impact our contract terms and ability to contract with third-party payors, such as state laws that permit payors to guide patients to particular providers or eliminate restrictions on placing providers into preferred tiers.
Health plans increasingly utilize narrow networks that restrict the number of participating providers or tiered networks that impose significantly higher cost-sharing obligations on patients who obtain services from providers in a disfavored tier.
Other healthcare providers may also impact our ability to enter into contracts with third-party payors or negotiate favorable terms and conditions, including through their negotiation of exclusivity provisions.
−Removed: Price and clinical transparency initiatives and increasing vertical integration efforts involving third-party payers and healthcare providers, among other factors, may increase these challenges.
−Removed: Moreover, the trend toward consolidation among private third-party payors tends to increase payor bargaining power over fee structures.
+Added: Price and clinical transparency initiatives and increasing vertical integration efforts involving third-party payors and healthcare providers, among other factors, may increase these challenges.
+Added: Moreover, the trend toward consolidation among private third-party payors tends to increase payor bargaining power.
Trends towards clinical and price transparency and value-based purchasing may also impact our competitive position by affecting patient volumes and our ability to attract patients.
1 unchanged sentence
In addition, hospitals are required to publish online a list of their standard charges for all items and services, including gross charges, discounted cash prices and payor-specific and de-identified negotiated charges, in a machine-readable, publicly accessible online file.
+Added: State CON laws, which limit the construction of new facilities, acquisition of existing facilities, significant capital expenditures and the expansion of service offerings, may also impact competition.
+Added: We currently operate healthcare facilities in a number of states with CON laws or that otherwise require approval for the establishment or expansion of certain facility types or services.
+Added: In states that do not require these state approvals, competition in the form of new services, facilities and capital spending may be more prevalent.
+Added: Some states that have historically imposed CON or similar prior approval requirements have removed or are considering removing some of these requirements, which may reduce barriers to entry and increase competition in our service areas.
+Added: In addition, changes in licensure or other laws or regulations and recognition of new provider types or payment models could impact our competitive position.
Compliance Program
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It is possible that union organizing efforts will take place at additional hospitals in the future.
−Removed: We consider our employee relations to be good and have not experienced work stoppages that have materially, adversely affected our business or results of operations.
+Added: We consider our employee relations to be good and have not experienced work stoppages that have materially and adversely affected our business or results of operations.
Our industry has been facing unprecedented workforce challenges, which have given rise to significant operating issues for healthcare providers.
−Removed: To address this challenge, we have implemented several initiatives to improve retention, recruiting, compensation programs and productivity.
+Added: To address these challenges, we have implemented several initiatives to improve retention, recruiting, compensation programs and productivity.
An area that has been particularly challenging for providers is registered nurse, or RN, recruitment and retention.
−Removed: We had a centralized clinical recruiting function in place for a limited number of our markets beginning in 2018 which was later expanded to cover RN roles across all of our health systems.
−Removed: Due to the resulting positive impact on recruiting, we then expanded the function to also cover difficult-to-fill allied health positions.
−Removed: As of late 2024, this centralized team now covers all health system roles and we have also established a centralized onboarding team to gain efficiencies and improve the new hire experience, which we believe will result in improved retention.
+Added: We have a centralized clinical recruiting function for all health system roles, including RNs and difficult-to-fill allied health positions across all of our health systems.
+Added: We have also established a centralized onboarding team design to result in efficiencies and improve the new hire experience.
Since we have implemented our centralized recruiting function, we have seen an increase in clinical position hires and a decreased time-to-fill for these key patient care roles, which has also decreased our level of reliance on higher cost contract labor.
−Removed: In addition to these efforts, we have been working to bring international RNs to our hospitals through the visa process.
−Removed: We have significantly expanded this effort by working with various outside firms specializing in international recruitment, and we are also offering a direct-to-hire model.
−Removed: We believe that these efforts will aid in our ability to take patient transfer requests, shorten emergency department wait times and lessen dependency on high cost contract labor.
−Removed: Finally, we have expanded our hospital-based nursing programs through our partnership with Jersey College and have seven campuses open in six states.
+Added: Finally, we have expanded our hospital-based nursing programs through our partnership with Jersey College and have six campuses open in six states.
Partnerships with other local nursing programs have also been strengthened across the enterprise to expand clinical faculty and increase enrollment.
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We may be required to continue to enhance wages and benefits to recruit and retain nurses and other medical support personnel or to hire more expensive temporary or contract personnel.
−Removed: We also depend on the available labor pool of semi-skilled and unskilled employees in each of the markets in which we operate.
+Added: We also depend on the available labor pool of semi-skilled and unskilled employees in the markets in which we operate.
In some of our markets, employers across various industries have increased their wages for these roles, which has created more competition for this sector of employees.
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In addition, the states in which we operate could adopt mandatory nurse-staffing ratios or could revise mandatory nurse-staffing ratios or related measures already in place.
−Removed: State-mandated nurse-staffing ratios or other measures to regulate staffing could significantly affect labor costs and have an adverse impact on revenues if we are required to limit patient admissions in order to comply with such requirements.
+Added: State-mandated nurse-staffing ratios or other measures to regulate staffing could significantly affect labor costs and have an adverse impact on our net operating revenues if we are required to limit patient admissions in order to comply with such requirements.
Our hospitals are staffed by licensed physicians, including both employed physicians and physicians who are not employees of our hospitals.
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Each huddle consists of a three-part agenda:
−Removed: (1) a look back at any significant safety or quality issues in the
−Removed: past 24 hours, (2) a look ahead to any anticipated safety or quality issues in the next 24 hours, and (3) a follow-up on safety critical issues requiring a rapid response.
+Added: (1) a look back at any significant safety or quality issues in the past 24 hours, (2) a look ahead to any anticipated safety or quality issues in the next 24 hours, and (3) a follow-up on safety critical issues requiring a rapid response.
Environmental Matters
We are subject to a number of federal, state and local environmental laws, rules and regulations that govern, among other things, our disposal of medical waste, as well as our use, storage, transportation and disposal of hazardous and toxic materials.
−Removed: In addition, we could be affected by climate change to the extent that climate change results in severe weather conditions or other disruptions impacting the communities in which our facilities are located or adversely impacts general economic conditions, including in communities in which our facilities are located.
−Removed: Moreover, 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: At the current time, our compliance with environmental legal requirements, including legal requirements relating to climate change, does not have a material effect on our capital expenditures, financial results or operations.
−Removed: However, it is possible that future environmental-related developments may impact us, including as a result of climate change and/or new legal requirements associated with the transition to a lower carbon economy, in a manner that we are currently unable to predict.
+Added: At the current time, our compliance with environmental legal requirements do not have a material effect on our capital expenditures, financial results or operations.
+Added: However, it is possible that future environmental-related developments may impact us, including as a result of new legal requirements or future weather-related events, in a manner that we are currently unable to predict.
We recognize the environment is an exhaustible resource and the importance of using the environment and its resources responsibly.
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• Our revenues are somewhat concentrated in a relatively small number of states.
−Removed: • If the redesign and consolidation of key business functions, including through implementation of a core ERP system, does not achieve targeted outcomes, our business and financial results may be adversely impacted.
Risks Related to Human Capital
1 unchanged sentence
• Our labor costs have been, and may continue to be, adversely affected by competitive labor market conditions and the shortage of qualified nurses and other healthcare personnel.
−Removed: • We may be unable to attract, hire and retain a highly qualified and diverse workforce, including key management.
+Added: • We may be unable to attract, hire and retain a highly qualified and diverse workforce, including senior management personnel and key employees.
• We may be adversely impacted by the inability of third parties with whom we contract to provide hospital-based physicians as the result of industry-wide disruptions in the market for outsourced medical specialists.
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The maximum aggregate principal amount under the ABL Facility is $1.0 billion, subject to borrowing base capacity.
−Removed: At December 31, 2024, we had outstanding borrowings of $341 million and approximately $491 million of additional borrowing capacity (after taking into consideration $66 million of outstanding letters of credit) under the ABL Facility.
+Added: At December 31, 2025, we had no outstanding borrowings and approximately $786 million of additional borrowing capacity (after taking into consideration $34 million of outstanding letters of credit) under the ABL Facility.
Our substantial leverage could have important consequences, including the following:
−Removed: • it may limit our ability to refinance existing indebtedness or obtain additional debt or equity financing for working capital, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes;
+Added: • it may limit our ability to refinance existing indebtedness or obtain additional debt or equity financing on favorable terms, or at all, for working capital, capital expenditures, debt service requirements, acquisitions and general corporate or other purposes;
• a substantial portion of our cash flows from operations will be dedicated to the payment of principal and interest on our indebtedness and will not be available for other purposes, including to fund our operations, capital expenditures, financial obligations and future business opportunities;
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The maximum aggregate principal amount under the ABL Facility is $1.0 billion, subject to borrowing base capacity.
−Removed: At December 31, 2024, we had outstanding borrowings of $341 million and approximately $491 million of additional borrowing capacity (after taking into consideration $66 million of outstanding letters of credit) under the ABL Facility.
+Added: At December 31, 2025, we had no outstanding borrowings and approximately $786 million of additional borrowing capacity (after taking into consideration $34 million of outstanding letters of credit) under the ABL Facility.
The aggregate amount we may draw under the ABL Facility may not exceed the “borrowing base” (as calculated thereunder) less outstanding letters of credit thereunder, which fluctuates from time to time.
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The current high interest rate environment has adversely impacted us, and could continue to adversely impact us.
−Removed: If interest rates remain at their current elevated levels or increase, this could adversely impact our ability to refinance existing indebtedness or obtain additional debt financing on acceptable terms or at all, and otherwise could increase our debt service obligations in connection with future debt refinancings.
+Added: If interest rates remain at their current levels or increase, this could adversely impact our ability to refinance existing indebtedness or obtain additional debt financing on acceptable terms or at all, and otherwise could increase our debt service obligations in connection with future debt refinancings.
In addition, any borrowings under the ABL Facility are at variable rates of interest and expose us to interest rate risk.
−Removed: If interest rates increase, our debt service obligations on such variable rate indebtedness would increase even though the amount borrowed remained the same, and our net income would decrease.
−Removed: As of December 31, 2024, we had outstanding borrowings of $341 million under the ABL Facility.
+Added: If interest rates increase, our debt service obligations on such variable rate indebtedness would increase even though the amount borrowed remained the same, and our profitability would be negatively impacted.
+Added: As of December 31, 2025, we had no outstanding borrowings under the ABL Facility.
If we default on our obligations to pay our indebtedness, or if we otherwise fail to comply with the various covenants in the instruments governing our indebtedness, we could be in default under the terms of the agreements governing our indebtedness.
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Our financial results have been, and may continue to be, adversely impacted by challenging macroeconomic conditions.
−Removed: Economic conditions in the United States continue to be challenging in certain respects, and the United States economy has experienced significant inflationary pressures in recent periods, elevated interest rates, challenging labor market conditions, and uncertainty and possible adverse effects associated with current geopolitical instability.
−Removed: Taking into account these factors, we have incurred in certain recent periods, and may continue to incur, increased expenses arising from factors such as wage inflation for permanent employees, increased rates for and utilization of temporary contract labor (including contract nursing personnel) and increased rates for outsourced medical specialists.
+Added: Economic conditions in the United States continue to be challenging in certain respects, and the United States economy has experienced significant inflationary pressures in recent periods, elevated interest rates, challenging labor market conditions, impacts from the imposition of, or changes in, tariffs, and uncertainty and possible adverse effects associated with political and geopolitical instability.
+Added: Taking into account these factors, we have incurred in certain recent periods, and may continue to incur, increased expenses arising from factors such as wage inflation for permanent employees, and increased rates for outsourced medical specialists.
Moreover, 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: Other risks we face during periods of economic weakness include potential declines in the population covered by commercial insurance, increased patient decisions to postpone or cancel elective and non-emergency healthcare procedures (including delaying surgical procedures), which may lead to poorer health and higher acuity interventions, potential increases in the uninsured and underinsured populations, increased adoption of health plan structures that shift financial responsibility to patients, and increased difficulties in collecting patient receivables for copayment and deductible receivables.
−Removed: In addition, challenging macroeconomic conditions in the United States (including elevated interest rates) have had, and may continue to have, an adverse impact on capital market conditions, which could limit our ability to refinance existing indebtedness or obtain additional debt or equity financing on acceptable terms or at all.
−Removed: Challenging macroeconomic conditions in the United States have also resulted in, and may continue to result in, increased budget deficits at federal, state and local governmental levels, which may negatively impact spending for health and human services programs, including Medicare, Medicaid and similar programs that represent significant third-party payor sources for our healthcare facilities.
−Removed: Moreover, it is difficult to predict whether, when, or what additional deficit reduction initiatives may be proposed by Congress, but future legislation may include additional Medicare spending reductions, which may adversely affect our business and financial results.
+Added: Other risks we face, particularly during periods of economic weakness include potential declines in the population covered by commercial insurance, increased patient decisions to postpone or cancel elective and non-emergency healthcare procedures (including delaying surgical procedures), which may lead to poorer health and higher acuity interventions, potential increases in the uninsured and underinsured populations, increased adoption of health plan structures that shift financial responsibility to patients, and increased difficulties in collecting patient receivables for copayment and deductible receivables.
+Added: In addition, challenging macroeconomic conditions in the United States (including elevated interest rates) have had, and may continue to have, an adverse impact on capital and financial market conditions, which could limit our ability to refinance existing indebtedness or obtain additional debt or equity financing on acceptable terms or at all.
+Added: Challenging macroeconomic conditions in the United States have also resulted in, and may continue to result in, increased budget deficits at federal, state and local governmental levels, which may negatively impact government spending for health and human services programs, including Medicare, Medicaid and similar programs that represent significant third-party payor sources for our healthcare facilities.
+Added: Moreover, it is difficult to predict whether, when, or what additional deficit or other spending reduction initiatives may be proposed by Congress, but future legislation may include or otherwise result in additional Medicare and Medicaid spending reductions, which may adversely affect our business and financial results.
Further, there is ongoing uncertainty regarding the federal budget and federal spending levels, including the possible impacts of a failure to increase the “debt ceiling.” Any U.S.
government default on its debt could have broad macroeconomic effects.
−Removed: In addition, any shutdown of the federal government, failure to enact annual appropriations, hold on congressionally authorized spending or interruptions in the distribution of governmental funds could adversely affect our financial results.
+Added: In addition, any shutdown of the federal government, failure to enact annual appropriations, or other lapses in appropriations, hold on congressionally authorized spending or interruptions in the distribution of governmental funds could adversely affect our financial results.
Risks Related to Our Business
4 unchanged sentences
In addition, we continue to receive interest from potential acquirers for certain of our hospitals and non-hospital businesses.
−Removed: As such, we may sell additional hospitals and/or non-hospital businesses if we consider any such disposition to be in our best interests.
−Removed: However, there is no assurance that potential divestitures will be completed or, if they are completed, the aggregate amount of proceeds we will receive, that potential divestitures will be completed within our targeted timeframe, or that potential divestitures will be completed on terms favorable to us.
+Added: As such, we may divest additional hospitals and/or non-hospital businesses if we consider any such disposition to be in our best interests.
+Added: However, there is no assurance that potential divestitures will be completed or, if they are completed, the aggregate amount of proceeds we will receive, that potential divestitures will be completed within our targeted timeframe, or that potential divestitures will be completed on
+Added: terms favorable to us.
Moreover, the current challenging macroeconomic environment may make it more difficult for us to complete divestitures on acceptable terms, or at all.
11 unchanged sentences
Our business strategy has historically included growth by acquisitions, and we may complete additional acquisitions in the future.
−Removed: However, not-for-profit hospital systems and other for-profit hospital companies generally attempt to acquire the same type of hospitals as we may desire to acquire.
+Added: However, not-for-profit hospital systems and other for-profit hospital companies generally attempt to acquire the same type of hospital as we may desire to acquire.
Some of the competitors for our acquisitions have greater financial resources than we have.
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Changes in licensure or other regulations, recognition of new provider types or payment models and industry consolidation could negatively impact our competitive position.
−Removed: For example, in states with certificate of need or similar prior approval requirements, removal of these requirements could remove
−Removed: barriers to entry and increase competition in our service areas.
−Removed: Our hospitals, our competitors, and other healthcare industry participants are increasingly implementing physician alignment strategies, such as acquiring physician practice groups, employing physicians and participating in ACOs or other clinical integration models.
+Added: For example, in states with CON or similar prior approval requirements, removal of these requirements could remove barriers to entry and increase competition in our service areas.
+Added: Our hospitals, our competitors, and other healthcare industry participants are increasingly implementing physician alignment strategies, such as acquiring physician practice groups, employing physicians and participating in ACOs or other clinical integration models, which may negatively affect our competitive position, including by impacting our recruiting and retention efforts.
Increasing consolidation within the payor industry, vertical integration efforts involving payors and healthcare providers and cost-reduction strategies by payors, large employer groups and their affiliates may impact our ability to contract with payors on favorable terms and participate in favorable payment tiers or provider networks and otherwise may affect our competitive position.
−Removed: Legislative and regulatory initiatives, such as changes in Texas law that eliminated restrictions on tiered networks and steering patients to particular providers, may accelerate or otherwise impact these trends.
+Added: Legislative and regulatory initiatives, such as changes in Texas law that eliminated restrictions on tiered networks and permit insurers to use financial incentives to steer patients to particular providers, may accelerate or otherwise impact these trends.
The majority of our hospitals are located in generally larger non-urban service areas in which we believe we are the primary, if not the sole, provider of general acute care health services.
−Removed: As a result, the most significant competition for providers of general acute care services are hospitals outside of our primary service areas, typically hospitals in larger urban areas that provide more complex services.
+Added: As a result, the most significant competition for providers of general acute care services are hospitals outside of our primary service areas, typically hospitals in larger urban areas that provide more complex
Patients in our primary service areas may travel to other hospitals because of physician referrals, payor networks that exclude our providers or the need for services we do not offer, among other reasons.
9 unchanged sentences
If our competitors are better able to attract patients with these offerings, we may experience an overall decline in patient volume.
−Removed: Trends toward transparency and value-based purchasing may have an impact on our competitive position, ability to obtain and maintain favorable contract terms, and patient volumes in ways that are difficult to predict.
+Added: Trends toward transparency and value-based purchasing may also have an impact on our competitive position, ability to obtain and maintain favorable contract terms, and patient volumes in ways that are difficult to predict.
CMS websites make available to the public certain data that hospitals and various other types of Medicare-certified providers submit in connection with Medicare reimbursement claims, including performance data related to quality measures and patient satisfaction surveys.
−Removed: If any of our hospitals or other provider types achieve poor results (or results that are lower than our competitors) on the quality measures or on patient satisfaction surveys, we may attract fewer patients.
+Added: If any of our hospitals or other provider types achieve poor results (or results that are lower than our competitors) on quality measures or on patient satisfaction surveys, we may attract fewer patients.
Further, every hospital must establish and update annually a public, online listing of the hospital’s standard charges for all items and services, including discounted cash prices and payor-specific charges, and must also publish a consumer-friendly list of standard charges for certain “shoppable” services or maintain an online price estimator tool for the shoppable services.
20 unchanged sentences
To the extent these exclusive supply arrangements are challenged or deemed unenforceable, we could incur higher costs for our medical supplies obtained through HealthTrust.
−Removed: Further, costs of supplies and drugs may continue to increase due to various factors, including market pressure from pharmaceutical companies, new product releases, supply shortages and supply chain disruptions, including as a result of import taxes or trade restrictions.
+Added: Further, costs of supplies and drugs may continue to increase due to various factors, including market pressure from pharmaceutical companies, new product releases, supply shortages and supply chain disruptions, including as a result of the imposition of tariffs or changes in U.S.
+Added: trade policy.
Also, there can be no assurance that our arrangement with HealthTrust will provide the discounts we expect to achieve.
1 unchanged sentence
During the year ended December 31, 2025, 33.4% of our net operating revenues came from the Medicare and Medicaid programs.
−Removed: However, as healthcare expenditures continue to increase, federal and state governments have made, and may continue to make, significant changes in the Medicare and Medicaid programs.
−Removed: These changes may include reductions in reimbursement levels, funding restrictions, limitations on scope of coverage or patient eligibility, changes affecting utilization review and new or modified Medicaid waiver programs.
−Removed: Some of these changes have decreased, or could decrease, the amount of money we receive for our services relating to the Medicare and Medicaid programs.
−Removed: For example, as a result of sequestration measures that extend through the first eight months of federal fiscal year 2032, Medicare payments are automatically reduced by 2% per fiscal year.
+Added: However, as healthcare expenditures continue to increase, federal and state governments have made, and continue to make, significant changes in the Medicare and Medicaid programs.
+Added: These changes may include reductions in reimbursement levels and supplemental payments, funding restrictions, limitations on scope of coverage or patient eligibility, changes affecting utilization review and new or modified Medicaid waiver programs.
+Added: These and other changes may impact the scale and scope of the Medicare and Medicaid programs, may affect the cost of providing services to patients, and may decrease the amount of money we receive for our services relating to the Medicare and Medicaid programs.
+Added: For example, as a result of sequestration measures that extend through the first five months of federal fiscal year 2033, Medicare payments are automatically reduced by 2% per fiscal year.
It is difficult to predict whether, when or what other deficit reduction initiatives may be proposed by Congress, but we anticipate that efforts to address the federal budget deficit will continue to place pressures on government healthcare programs.
2 unchanged sentences
Changes to government healthcare programs that reduce Medicare reimbursement may also negatively impact payments from commercial payors, since, in some cases, commercial payors rely on all or portions of Medicare payment systems to determine commercial payment rates.
−Removed: In addition, government and commercial payors as well as other third parties from whom we receive payment for our services attempt to control healthcare costs by, for example, requiring hospitals and other providers to discount payments for their services in exchange for exclusive or preferred participation in their benefit plans, reducing coverage of inpatient and emergency room services and shifting care to outpatient settings, implementing site-neutral payment policies to align payment for services across care settings, using utilization review tools including prior authorizations and implementing alternative payment models.
+Added: Further, legislation and administrative actions at the federal level may also impact the funding for, or structure of, the Medicaid program, and may shape administration of the Medicaid program at the state level, including in ways that reduce reimbursement.
+Added: For example, the 2025 Reconciliation Law includes significant healthcare policy reforms that are expected to result in Medicaid spending reductions and changes in administration of state programs.
+Added: The law makes significant changes to Medicaid financing mechanisms, including restrictions intended to reduce the federal matching funds received by state Medicaid programs, such as limitations on provider tax arrangements and a mandate that HHS revise regulations governing SDP arrangements to cap total payment rates paid by Medicaid managed care organizations for specified services.
+Added: We are unable to fully assess the ultimate effects of the 2025 Reconciliation Law, as it is a complex law that mandates various changes over time and many details of implementation are not yet clear.
+Added: In addition to changes at the federal level, some states have enacted or may consider enacting legislation designed to reduce their Medicaid expenditures, including through coverage reductions, changes in patient eligibility requirements and/or enrolling Medicaid beneficiaries in managed care programs.
+Added: Budgetary pressures combined with increased spending demands, including as a result of recent federal actions, are creating additional uncertainty and may result in decreased spending, or decreased spending growth, for Medicaid programs in many states.
+Added: Further, we may be impacted by developments at the federal and state levels related to Medicaid supplemental payments and SDP arrangements, which could result in our revenues from such arrangements being reduced or eliminated.
+Added: Government and commercial payors as well as other third parties from whom we receive payment for our services attempt to control healthcare costs by, for example, requiring hospitals and other providers to discount payments for their services in exchange for exclusive or preferred participation in their benefit plans, reducing coverage of inpatient and emergency room services and shifting care to outpatient settings, implementing site-neutral payment policies to align payment for services across care settings, using utilization review tools including prior authorizations and implementing alternative payment models.
We are increasingly involved in disputes with payors, as cost control efforts have resulted in an increase in reimbursement denials and delays by governmental and commercial payors, which may increase operational and administrative costs and decrease the reimbursement we receive.
Efforts to impose more stringent cost controls are expected to continue and may be enhanced by the increasing consolidation of insurance and managed care companies, vertical integration of health insurers with healthcare providers and regulatory changes.
−Removed: These efforts may reduce our revenues and adversely affect our business and financial condition.
+Added: These efforts may reduce our net operating revenues and adversely affect our business and financial condition.
Our ability to maintain and obtain favorable contracts with commercial payors significantly affects the revenues and operating results of our facilities.
During the year ended December 31, 2025, 65.8% of our net operating revenues came from commercial payors.
−Removed: Commercial payors typically reimburse healthcare providers at a higher rate than Medicare, Medicaid, other government
−Removed: healthcare programs or self-pay patients.
+Added: Commercial payors typically reimburse healthcare providers at a higher rate than Medicare, Medicaid, other government healthcare programs or self-pay patients.
Commercial payors continue to demand discounted fee structures, and the trend toward consolidation among private third-party payors tends to increase payor bargaining power.
−Removed: Payors may utilize plan structures such as narrow networks and tiered networks, and other healthcare providers may negotiate exclusivity provisions or otherwise impact our ability to contract with third-party payors.
−Removed: Price and clinical transparency initiatives and increasing vertical integration efforts involving third-party payers and healthcare providers may also impact our ability to obtain or maintain favorable contract terms.
+Added: Payors may utilize plan structures such as narrow networks and tiered networks, which may exclude our facilities and employed physicians or favor other providers, and other healthcare providers may negotiate exclusivity provisions or otherwise impact our ability to contract with third-party payors.
+Added: Price and clinical transparency initiatives and increasing vertical integration efforts involving third-party payors and healthcare providers may also impact our ability to obtain or maintain favorable contract terms.
For example, hospitals are required to publish online payor-specific negotiated charges and de-identified minimum and maximum charges.
−Removed: In addition, alignment efforts between third-party payers and healthcare providers and the requirements of the No Surprises Act provide payers with increased access to performance and pricing data, which may increase payer bargaining power.
−Removed: Enrollment of individuals in high-deductible health plans, sometimes referred to as consumer-directed plans, has increased over the last decade.
−Removed: In comparison to traditional health plans, these plans tend to have lower reimbursement rates for providers along with higher co-pays and deductibles due from the patient, which subjects us to increased collection cost and risk of write-offs of uncollectible amounts.
−Removed: Further, high-deductible health plans may exclude our hospitals and employed physicians from coverage.
+Added: In addition, alignment efforts between third-party payors and healthcare providers and the requirements of the No Surprises Act provide payors with increased access to performance and pricing data, which may increase payor bargaining power.
+Added: Our net operating revenues may be reduced if we experience reductions in the volume of patients with private health insurance coverage, which may be driven by factors such as adverse economic conditions, including elevated unemployment and underemployment rates and inflationary pressures, and legislative or regulatory changes that increase barriers to and costs associated with obtaining or maintaining comprehensive coverage.
+Added: We anticipate that several recent developments may contribute to potential future declines in our volume of patients with private health insurance coverage, including the expiration of the enhanced Affordable Care Act subsidies at the end of 2025, provisions of the 2025 Reconciliation Law that are expected to impact coverage obtained through Affordable Care Act marketplaces, and a final rule issued by CMS in June 2025 focused on health insurance marketplaces and individual market coverage.
Limitations on balance billing may reduce the amount that hospitals and other providers are able to collect for out-of-network services.
2 unchanged sentences
The regulations and related guidance implementing the No Surprises Act, including those establishing the dispute resolution process, are the subject of legal challenges and, potentially, regulatory changes.
−Removed: If we are unable to negotiate increased reimbursement rates, maintain existing rates or other favorable contract terms, effectively respond to payor cost controls and reimbursement policies or comply with the terms of our payor contracts, the payments we receive for our services may be reduced, which may cause our net operating revenues to decline and could adversely affect our business.
−Removed: If we experience continued growth in self-pay volume and revenues or if we experience deterioration in the collectability of patient responsibility accounts, our financial condition or results of operations could be adversely affected.
+Added: If we are unable to negotiate increased reimbursement rates, maintain existing rates or other favorable contract terms, effectively respond to payor cost controls and reimbursement policies or comply with the terms of our payor contracts, or if we experience reductions in the number of patients with private health insurance coverage, the payments we receive for our services may be reduced, which may cause our net operating revenues to decline and could adversely affect our business.
+Added: Any increase in the volume of self-pay patients or deterioration in the collectability of patient responsibility accounts could adversely affect our financial condition or results of operations.
Our primary collection risks relate to uninsured patients and outstanding patient balances for which the primary insurance payor has paid some but not all of the outstanding balance, with the remaining outstanding balance (generally deductibles and co-payments) owed by the patient.
Collections are impacted by the economic ability of patients to pay and the effectiveness of our collection efforts.
−Removed: Significant changes in payor mix, business office operations, economic conditions or trends in federal and state governmental healthcare coverage may affect our collection of accounts receivable and are considered in our estimates of accounts receivable collectability.
+Added: Significant changes in payor mix, business office operations, economic conditions or trends in federal and state governmental healthcare coverage may affect our collection of patient accounts receivable and are considered in our estimates of patient accounts receivable collectability.
In recent years, federal and state legislatures have considered or passed various proposals impacting or potentially impacting the size of the uninsured population.
−Removed: The number and identity of states that choose to expand or otherwise modify Medicaid programs and the terms of expansion and other program modifications continue to evolve.
−Removed: Further, under early COVID-related legislation, states that maintained continuous Medicaid enrollment, among other requirements, were eligible for a temporary increase in federal funds for state Medicaid expenditures.
−Removed: The resumption of Medicaid eligibility redeterminations following the expiration of this continuous coverage requirement in 2023 has resulted in significant Medicaid coverage disruptions and dis-enrollments of Medicaid enrollees, and overall Medicaid enrollment declined in 2024 in comparison to 2023.
−Removed: Medicaid enrollment may also be affected by potential changes to the federal funding formula for Medicaid.
−Removed: For example, some states have trigger laws that would end their Medicaid expansion or require other changes if federal funding for expansion populations is reduced.
−Removed: In addition, COVID-19 relief legislation temporarily increased the value of premium tax credit subsidies for subsidy-eligible individuals purchasing health insurance coverage through the federal and state-run marketplaces and expanded eligibility for the tax credit subsidies to more individuals.
−Removed: Subsequent legislation extended these enhanced subsidies through 2025, but further extension is uncertain.
+Added: For example, federal legislation temporarily enhanced subsidies available for purchasing coverage through Affordable Care Act marketplaces, but these enhanced subsidies expired at the end of 2025.
+Added: Their expiration is expected to adversely impact health insurance exchange enrollment and significantly increase the uninsured rate.
+Added: Further, the end of the continuous enrollment requirement established by COVID-19 relief legislation, and the resumption of Medicaid eligibility redeterminations following the expiration of this continuous coverage requirement in 2023, resulted in significant Medicaid coverage disruptions and dis-enrollments of Medicaid enrollees, and overall Medicaid enrollment declined in 2025 in comparison to 2024.
+Added: The 2025 Reconciliation Law is expected to further adversely affect the uninsured rate, including by requiring pre-enrollment verification of eligibility in a plan with subsidies and restricting subsidized marketplace coverage, effectively ending automatic renewals of coverage, and by limiting Medicare and Medicaid eligibility based on immigration status and other factors, among other measures.
+Added: Rates of uninsured and underinsured individuals may also be influenced by other legislative and regulatory initiatives related to health insurance, such as permitting the sale of insurance plans that lack currently required consumer protections.
Some states impose financial penalties on individuals who fail to maintain health insurance mandates or offer public health insurance options.
−Removed: These variables, among others, make it difficult to predict the number of uninsured individuals and what percentage of our total revenue will be comprised of self-pay revenues.
−Removed: We may be adversely affected by the growth in patient responsibility accounts as a result of the adoption of plan structures, including health savings accounts, narrow networks and tiered networks, that shift greater responsibility for care to individuals through greater exclusions and copayment and deductible amounts.
−Removed: Further, our ability to collect patient responsibility accounts may be limited by statutory, regulatory and investigatory initiatives, including private lawsuits directed at hospital charges and collection practices for uninsured and underinsured patients and regulatory restrictions on charges for out-of-network services.
+Added: variables, among others, make it difficult to predict the number of uninsured individuals and what percentage of our total revenue will be comprised of self-pay revenues.
+Added: We may be adversely affected by the growth in patient responsibility accounts as a result of the adoption of plan structures, including high-deductible health plans and health savings accounts, narrow networks and tiered networks, that shift greater responsibility for care to individuals through greater exclusions and copayment and deductible amounts.
+Added: For example, to address anticipated increases in health insurance premiums for consumers, CMS announced in September 2025 that it would expand eligibility for high-deductible catastrophic health insurance plans.
+Added: Our ability to collect patient responsibility accounts may be limited by statutory, regulatory and investigatory initiatives, including private lawsuits directed at hospital charges and collection practices for uninsured and underinsured patients and regulatory restrictions on charges for out-of-network services.
For example, the No Surprises Act requires providers to send uninsured and self-pay patients a good faith estimate of expected charges for items and services.
−Removed: The estimate must be provided in advance of the scheduled date for the item or service or upon request and cover items and
−Removed: services that are reasonably expected to be provided together with the primary item or services, including those that may be provided by other providers.
−Removed: If the uninsured or self-pay patient receives a bill that is substantially greater than the expected charges in the good faith estimate or the provider furnishes an item or service that was not included in the good faith estimate, they may initiate a patient-provider dispute resolution process established by regulation.
+Added: The estimate must be provided in advance of the scheduled date for the item or service or upon request and cover items and services that are reasonably expected to be provided together with the primary item or services, including those that may be provided by other providers.
+Added: If the uninsured or self-pay patient receives a bill that is substantially greater than the expected charges in the good faith estimate, they may initiate a patient-provider dispute resolution process established by regulation.
In addition, a deterioration of economic conditions in the United States could potentially lead to higher levels of uninsured patients, result in higher levels of patients covered by lower paying government programs, result in fiscal uncertainties for both government payors and private insurers and/or limit the economic ability of patients to make payments for which they are responsible.
−Removed: If we experience continued growth in self-pay volume or deterioration in collectability of patient responsibility accounts, our financial condition or results of operations could be adversely affected.
+Added: Any increase in the volume of self-pay patients or deterioration in collectability of patient responsibility accounts could adversely affect our financial condition or results of operations.
Some of the non-urban communities in which we operate face challenging economic conditions, and the failure of certain employers, or the closure of certain manufacturing and other facilities in our markets, could have a disproportionate impact on our hospitals.
−Removed: Some of the non-urban communities in which we operate have been facing particularly challenging economic conditions, which in certain instances predate, and/or are broader than or disproportionately exacerbated by, the current challenging macroeconomic conditions impacting the United States economy.
−Removed: In addition, the economies in the non-urban communities in which our hospitals primarily operate are often dependent on a small number of large employers, especially manufacturing or similar facilities.
+Added: Some of the non-urban communities in which we operate have been facing particularly challenging economic conditions, or may face such conditions in the future.
+Added: In particular, the economies in the non-urban communities in which our hospitals primarily operate are often dependent on a small number of large employers, especially manufacturing or similar facilities.
These employers often provide income and health insurance for a disproportionately large number of community residents who may depend on our hospitals for care.
3 unchanged sentences
Our admissions and adjusted admissions as well as volume, case-mix and acuity trends may be impacted by factors beyond our control.
−Removed: For example, seasonal fluctuations in the severity of influenza and other critical illnesses, such as COVID-19, unplanned shutdowns or unavailability of our facilities due to weather or other unforeseen events, decreases in trends in high-acuity service offerings, changes in competition from other service providers, turnover in physicians affiliated with our hospitals, governmental restrictions on the provision of medical care and changes in medical practices, treatment regimens and medical technology can have an impact on the demand for services at our hospitals and affiliated providers.
+Added: For example, seasonal fluctuations in the severity of influenza and other illnesses, unplanned shutdowns or unavailability of our facilities due to weather or other unforeseen events, decreases in trends in high-acuity service offerings, changes in competition from other service providers, turnover in physicians affiliated with our hospitals, governmental restrictions on the provision of medical care and changes in medical practices, treatment regimens and medical technology can have an impact on the demand for services at our hospitals and affiliated providers.
In addition, trends in physician treatment protocols and health plan design, such as health plans that shift greater financial responsibility to patients, could result in shifts to lower intensity and lower cost treatment methodologies or in patients seeking care from other providers.
−Removed: Our inpatient admissions may decline if various inpatient hospital procedures become eligible for reimbursement when performed in outpatient settings, and we may also be impacted by expansion of in-home acute care models.
+Added: Efforts to shift treatment to lower-acuity settings, such as the elimination of Medicare’s inpatient-only list over a three year period beginning in 2026, and the expansion of in-home acute care models may reduce inpatient volumes and may result in patients seeking care from other providers.
In addition, certain of our facilities are located in hurricane-prone coastal regions in Florida and other states, and our operations from time to time have been adversely impacted by, and may continue to be adversely impacted by, severe weather conditions, such as hurricanes, tornadoes, floods, and winter storms.
−Removed: For example, certain of our facilities in Florida, Georgia and Tennessee experienced an interruption in their business and incurred additional costs as a direct result of Hurricane Helene, which made landfall in late September 2024 and Hurricane Milton, which made landfall in early October 2024.
−Removed: Further, our hospital in Punta Gorda, Florida, which is contemplated to be sold pursuant to an asset purchase agreement entered into by us in November 2024, has indefinitely suspended inpatient operations due to the effects of Hurricanes Helene and Milton.
−Removed: Adverse weather conditions may be more frequent and/or severe as the result of climate change.
−Removed: Moreover, we could be affected by climate change and other environmental issues to the extent such issues adversely affect the general economy or specific markets, 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.
+Added: For example, certain of our facilities in Florida, Georgia and Tennessee experienced an interruption in their business and incurred additional costs as a direct result of Hurricane Helene, which made landfall in late September 2024 and Hurricane Milton, which made landfall in early October 2024, and a hospital in Florida which was sold by us in 2025 had indefinitely suspended inpatient operations due to the effects of Hurricanes Helene and Milton prior to the completion of such sale.
+Added: We also could be affected by weather-related events or other environmental issues to the extent such issues adversely affect the general economy or specific markets, 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.
The impact of these or other factors beyond our control could have an adverse effect on our business, financial position and results of operations.
The emergence and effects related to a future pandemic, epidemic, outbreak of an infectious disease or other public health crisis could adversely impact our business and operations.
−Removed: As a provider of healthcare services, we are subject to the health, economic and other effects of public health conditions, and were significantly impacted by the public health and economic effects of the COVID-19 pandemic.
+Added: As a provider of healthcare services, we are subject to the health, economic and other effects of public health conditions.
+Added: For example, we were significantly impacted by the public health and economic effects of the COVID-19 pandemic.
If a future pandemic, epidemic, outbreak of an infectious disease or other public health crisis were to occur in a market in which we operate or otherwise affects our markets, our business and operations could be adversely affected.
17 unchanged sentences
An ACO is a care coordination model intended to produce savings as a result of improved quality and operational efficiency.
−Removed: By 2030, the CMS Innovation Center aims to have all fee-for-service Medicare beneficiaries and the vast majority of Medicaid beneficiaries in an accountable care relationship with providers who are responsible for quality and total medical costs.
In bundled payment models, providers accept accountability for costs and quality of care by receiving one payment for services provided to patients for certain medical conditions or episodes of care.
Providers may receive supplemental Medicare payments or owe repayments to CMS depending on whether spending exceeds or falls below a specified spending target and whether certain quality standards are met.
−Removed: Generally, participation in Medicare bundled payment programs is voluntary, but CMS required hospitals in selected markets to participate in a bundled payment initiative for specific orthopedic procedures, which ended December 31, 2024.
−Removed: Hospitals in selected markets will be required to participate in a new model focused on five specified surgical procedure episodes beginning in January 2026.
−Removed: CMS has signaled its intent to streamline its payment models and to increase provider participation through implementation of more mandatory models.
+Added: Generally, participation in Medicare bundled payment programs is voluntary, but some models are mandatory.
+Added: For example, beginning January 2026, CMS requires hospitals in selected markets to participate in TEAM, a new model focused on five specified surgical procedure episodes.
+Added: CMS continues to support the transition from Medicare fee-for-service models to value-based payment and care delivery models and to promote alternative payment models that involve downside risk or that shift some financial risk from conveners to providers.
There are also several state-driven value-based care initiatives.
For example, some states have aligned quality metrics across payors through legislation or regulation.
−Removed: CMS has signaled its intent to support value-based initiatives in the Medicaid context.
−Removed: For example, a final rule issued in May 2024 reduces state burdens for implementing some SDP arrangements, with the intent of helping states use these arrangements to implement value-based initiatives.
−Removed: Commercial payors are transitioning toward value-based reimbursement arrangements as well.
+Added: CMS has signaled its intent to support value-based initiatives in the Medicaid context, such as through its May 2024 final rule revising SDP arrangement requirements, which reduced state burdens to help states use these arrangements to implement value-based initiatives.
+Added: However, the 2025 Reconciliation Law’s limitations on SDP arrangements may affect states’ ability to continue or increase Medicaid value-based initiatives.
+Added: Commercial payors are also transitioning toward value-based reimbursement arrangements.
For example, many commercial payors require hospitals to report quality data and restrict reimbursement for certain preventable adverse events.
−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.
+Added: We expect value-based purchasing programs, including programs that condition reimbursement on patient outcome measures or involve downside risk, to become more common and to involve a higher percentage of reimbursement amounts.
+Added: It may be difficult to predict the nature of these programs, the administrative burden involved, and their effects on our operations.
It is unclear whether these and other alternative payment models will successfully coordinate care and reduce costs and whether they will decrease aggregate 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, are unable to meet or exceed the 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
−Removed: may be negatively impacted, we may receive reduced reimbursement amounts and we may owe repayments to payors, causing our revenues to decline.
+Added: While we believe we are adapting our business strategies to compete in a value-based reimbursement
+Added: environment, we are unable at this time to predict how this trend will affect our results of operations.
+Added: If we perform at a level below the outcomes demonstrated by our competitors, are unable to meet or exceed the 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 net operating revenues to decline.
Our revenues are somewhat concentrated in a relatively 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 Indiana, Alabama, Texas and Florida.
+Added: Our revenues are particularly sensitive to regulatory and economic changes in states in which we generate a significant portion of our revenues, including Indiana, Alabama, Texas, Florida and Tennessee.
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.
2 unchanged sentences
Although CMS has approved the Texas waiver program through 2030, various payment programs operated under the waiver, such as SDP programs, have more limited approval periods.
−Removed: If SDP programs or similar programs in which we participate are modified or not extended or CMS does not continue to approve these programs, our revenues could be negatively impacted.
−Removed: If the redesign and consolidation of key business functions, including through the implementation of an ERP, does not achieve targeted outcomes, our business and financial results may be adversely impacted.
−Removed: The transformative process of redesigning numerous workflows and modernizing and consolidating our technology platforms and associated processes across our organization, which began with implementation of a new ERP starting in the fourth quarter of 2023, was substantially completed by the end of 2024.
−Removed: As part of this process, we created shared business operations to carry out certain financial and operational functions, and completed the phased implementation of supply chain, finance, workforce management and human capital modules of the new ERP.
−Removed: The redesign of various business processes and implementation of this ERP and other aspects of this transformative process required an investment of significant personnel and financial resources, including substantial expenditures for third-party consultants and system hardware and software.
−Removed: Consolidation of key business functions and the redesign of various ERP-enabled processes are expected to enhance the efficiency of our operations and yield cost savings in future periods.
−Removed: However, if our efforts to optimize newly established processes are not successful, such processes do not function as intended, or targeted cost savings are not achieved, our financial position, results of operations and cash flows may be adversely affected.
+Added: The 2025 Reconciliation Law includes limitations on SDP arrangements, directing HHS to revise SDP regulations to tie caps on total payment rates paid by Medicaid managed care organizations for specified services, including hospital services, to Medicare payment rates instead of average commercial rates.
+Added: Several states in which we operate, including Texas, currently tie caps on total payment rates paid by managed care organizations to average commercial rates.
+Added: If SDP programs or similar programs in which we participate are modified or not extended or CMS does not continue to approve these programs, our net operating revenues could be negatively impacted.
Risks Related to Human Capital
6 unchanged sentences
We may face increased challenges recruiting and retaining quality physicians as the physician population reaches retirement age, if there is a shortage of physicians willing and able to provide comparable services.
+Added: Moreover, changes in immigration or visa policies could reduce the availability of international medical graduates.
In some markets, physician recruitment and retention may be affected by a shortage of physicians in certain specialties, difficulties in obtaining professional liability insurance and state law restrictions on the provision of medical care, including reproductive health services.
+Added: Shortages of physicians, particularly within emergency medicine, radiology, and anesthesiology, may adversely affect hospital operations.
The types, amount and duration of compensation and assistance we can provide when recruiting physicians are limited by the federal Physician Self-Referral Law (commonly known as the Stark Law), the federal Anti-Kickback Statute and similar state restrictions.
3 unchanged sentences
The operations of our healthcare facilities depend on the efforts, abilities and experience of our facility management, healthcare professionals, such as nurses, pharmacists, lab technicians, and medical support personnel.
−Removed: We compete with other healthcare
−Removed: providers in recruiting and retaining qualified facility management and personnel responsible for the daily operations of our healthcare facilities, including nurses, other non-physician healthcare professionals and medical support personnel.
−Removed: The healthcare industry has been experiencing a challenging labor market arising out of current macroeconomic conditions.
−Removed: Our hospitals and other healthcare facilities, like many other healthcare providers, have experienced increased labor costs due to labor shortages, public health conditions, inflationary conditions, workforce burnout and other factors.
−Removed: We may be required to continue to enhance wages and benefits to recruit and retain nurses, other healthcare professionals and medical support personnel, and/or to hire more expensive temporary or contract personnel.
+Added: We compete with other healthcare providers in recruiting and retaining qualified facility management and personnel responsible for the daily operations of our healthcare facilities, including nurses, other non-physician healthcare professionals and medical support personnel.
+Added: The healthcare industry has been experiencing challenging labor market conditions.
+Added: Our hospitals and other healthcare facilities, like many other healthcare providers, have experienced, and may continue to experience, increased labor costs due to labor shortages, public health conditions, inflationary conditions, workforce burnout and other factors.
+Added: New limitations on federal loan eligibility and
+Added: other student loan changes imposed pursuant to the 2025 Reconciliation Law may also impact healthcare personnel shortages.
+Added: We may also be required to continue to enhance wages and benefits to recruit and retain nurses, other healthcare professionals and medical support personnel, and/or to hire more expensive temporary or contract personnel.
In addition, in some markets in which we operate, a shortage of available nurses, other healthcare professionals and medical support personnel has been an operating issue.
To the extent we are unable to maintain sufficient staffing levels at our hospitals, we may be required to limit the acute healthcare services provided at certain of our hospitals, which would have a corresponding adverse effect on our net operating revenues.
−Removed: We also depend on the available labor pool of semi-skilled and unskilled employees in each of the markets in which we operate.
+Added: We also depend on the available labor pool of semi-skilled and unskilled employees in each of the markets in which we operate and the available labor pool may not be sufficient for our demands.
In some of our markets, employers across various industries have increased their wages for these roles, which has created more competition for this sector of employees.
2 unchanged sentences
The federal government or the states in which we operate could adopt mandatory nurse-staffing ratios or related measures aimed at regulating staffing or could revise state-level mandatory nurse-staffing ratios or related measures already in place.
−Removed: Any of these measures could significantly affect labor costs and could have an adverse impact on revenues if we are required to limit admissions, hire additional personnel or incur other costs in order to comply with such requirements.
−Removed: We may be unable to attract, hire, and retain a highly qualified and diverse workforce, including key management.
+Added: Any of these measures could significantly affect labor costs and could have an adverse impact on our net operating revenues if we are required to limit admissions, hire additional personnel or incur other costs in order to comply with such requirements.
+Added: We may be unable to attract, hire, and retain a highly qualified and diverse workforce, including senior management personnel and key employees.
+Added: Much of our future success depends on the continued availability and service of senior management personnel.
+Added: The loss or failure to engage in adequate succession planning of any of our executive officers or other key senior management personnel could harm our business and/or our prospects.
+Added: In addition, changes in our leadership, including the changes to the Company’s senior leadership team which occurred during 2025, can be inherently difficult to manage, and if we are unable to implement such changes effectively, our financial results may be adversely impacted.
At December 31, 2025, certain employees at three of our hospitals were represented by various labor unions.
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If our labor costs continue to increase, we may not be able to raise rates to offset these increased costs.
−Removed: Because a significant percentage of our revenues consists of fixed, prospective payments, our ability to pass along increased labor costs is constrained.
+Added: We depend on the ability of these senior management team members and key employees to successfully manage our operations, and on our ability to attract and retain skilled employees.
+Added: Because a significant percentage of our revenues consists of fixed, prospective payments, our ability to pass along increased labor costs to patients is constrained.
In the event we are not entirely effective at recruiting and retaining qualified facility management, nurses and other medical support personnel, or in controlling labor costs, this could continue to have an adverse effect on our results of operations.
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We contract with various third parties who provide hospital-based physicians in a number of specialties, including emergency, anesthesiology, hospitalist/inpatient care, radiology, tele-radiology and surgery.
−Removed: Third-party providers of hospital-based physicians, including those with whom we contract, have experienced significant disruption in the form of regulatory changes, including those stemming from enactment of the No Surprises Act, challenging labor market conditions resulting from a shortage of physicians and inflationary wage-related pressures, as well as increased competition through consolidation of physician groups.
+Added: Third-party providers of hospital-based physicians, including those with whom we contract, have experienced significant disruption in the form of policy changes, including those stemming from enactment of the No Surprises Act, challenging labor market conditions resulting from a shortage of physicians and inflationary wage-related pressures, as well as increased competition through consolidation of physician groups.
In some instances, providers of outsourced medical specialists have become insolvent and unable to fulfill their contracts with us for providing hospital-based physicians.
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Settlements of lawsuits involving Medicare and Medicaid issues routinely require both monetary payments and corporate integrity agreements, each of which could have an adverse effect on our business, financial condition, results of operations and/or cash flows.
+Added: For a further discussion of certain legal matters, see “Legal Proceedings” in Part I, Item 3 of this Form 10-K.
We could be subject to substantial uninsured liabilities or increased insurance costs as a result of significant legal actions.
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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.
+Added: The healthcare industry is subject to changing political, regulatory and other influences and is heavily regulated.
+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 enforcement and interpretation of fraud and abuse laws.
+Added: The outcome of the 2024 federal elections, including Republican control of both the executive and legislative branches, has increased regulatory uncertainty and the potential for significant policy changes.
+Added: President Trump has issued several executive orders that impact or may impact the healthcare industry, including orders focused on price transparency and tariffs, and a presidential advisory commission established by executive order was tasked with restructuring government agencies and eliminating government expenditures, although this commission disbanded in mid-2025.
+Added: Other actions by the presidential administration 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 presidential administration has significant influence on healthcare policy changes through government agency regulation.
+Added: In March 2025, HHS announced a significant agency restructuring intended to reduce the HHS workforce and consolidate divisions of the agency.
+Added: 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 on agency operations.
+Added: HHS also announced a change in its policy in 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 decisions issued by the U.S.
+Added: Supreme Court that affect review of federal agency actions.
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 more apparent in the future, 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 the size of the uninsured population, administration of state Medicaid programs and enforcement and interpretation of fraud and abuse laws.
+Added: These decisions may increase legal challenges to healthcare regulations and agency guidance and decisions, including those issued by
+Added: HHS and its agencies, including CMS, the FDA, and the OIG.
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.
The healthcare industry has been and continues to be impacted by healthcare reform efforts.
−Removed: For example, the Affordable Care Act affects how healthcare services are covered, delivered, and reimbursed, and expanded health insurance coverage through a combination of public program expansion and private sector health insurance reforms.
−Removed: However, changes in the law’s implementation, subsequent legislation and regulations, state initiatives and other factors have and may continue to affect the number of individuals
−Removed: that elect to obtain public or private health insurance or the scope of such coverage, if obtained, and may impact our payer mix.
+Added: Many recent reform initiatives have focused on reducing government spending and increasing or, more recently, decreasing access to health insurance.
+Added: For example, the Affordable Care Act expanded health insurance coverage through a combination of public program expansion and private sector health insurance reforms.
+Added: Changes in the law’s implementation, subsequent legislation and regulations, state initiatives and other factors have 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 obtained, and may impact our payor mix.
+Added: For example, federal legislation temporarily enhanced subsidies available for purchasing coverage through Affordable Care Act marketplaces by lowering premiums and raising income eligibility thresholds, but these enhanced subsidies expired at the end of 2025.
+Added: Their expiration may adversely impact enrollment through the Affordable Care Act marketplaces and significantly raise the uninsured rate.
+Added: Other legislative and executive branch initiatives related to health insurance could also result in increased prices for consumers purchasing health insurance coverage or may permit the sale of insurance plans that do not satisfy current Affordable Care Act consumer protections, which could increase rates of uninsured and underinsured
+Added: individuals and destabilize insurance markets.
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 Affordable Care Act 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 significantly raise the uninsured rate.
−Removed: Other legislative and executive branch initiatives related to health insurance could also result in increased prices for consumers purchasing health insurance coverage or may permit the sale of insurance plans that do not satisfy current Affordable Care Act consumer protections, which could increase rates of uninsured and underinsured individuals and destabilize insurance markets.
−Removed: Reductions in the number of insured individuals or the scope of insurance coverage may have an adverse effect on our business.
−Removed: The Affordable Care Act has been, and continues to be, subject to legislative and regulatory changes and court challenges.
−Removed: There is uncertainty regarding whether, when, and how the Affordable Care Act will be further changed, whether the Affordable Care Act will be repealed or replaced, and how the Affordable Care Act will be interpreted and implemented.
−Removed: Changes to the interpretation or implementation of the Affordable Care Act could eliminate or alter provisions beneficial to us while leaving in place provisions reducing our reimbursement, or otherwise have an adverse effect on our business.
−Removed: In addition, the Medicare and Medicaid programs are subject to change, including as a result of the recent change in the presidential administration.
−Removed: For example, some members of Congress have proposed measures intended to accelerate the shift from traditional Medicare to Medicare Advantage, repealing the Affordable Care Act or eliminating some of its consumer protections.
−Removed: The outcome of the 2024 federal elections, including Republican control of both the executive and legislative branches, increases regulatory uncertainty.
−Removed: Changes in governmental administration, including changes in agency structures and staffing, such as reduction or elimination of personnel and agencies, may result in changes to established rulemaking conventions and timelines, including for regularly issued reimbursement rules, among other effects.
+Added: In addition, the Medicare and Medicaid programs are subject to change, including as a result of legislation and administrative actions.
+Added: For example, some members of Congress have proposed measures intended to accelerate the shift from traditional Medicare to Medicare Advantage.
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: Changes to the federal funding formula for Medicaid could significantly impact states that expanded Medicaid under the Affordable Care Act, 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 is reduced.
−Removed: CMS may make changes to Medicaid payment models and grant states additional flexibility in the administration of state Medicaid programs, including by allowing additional states to condition Medicaid enrollment on work or other community engagement or permitting other eligibility restrictions.
−Removed: Other recent health reform initiatives and proposals at the federal and state levels include those focused on price transparency and out-of-network charges, which may impact prices, our competitive position, patient volumes and the relationships between hospitals, patients, payors, and ancillary providers (such as anesthesiologists, radiologists, and pathologists).
−Removed: For example, among other consumer protections, the No Surprises Act imposes various requirements on providers and health plans intended to prevent “surprise” medical bills.
−Removed: Some states are considering or have imposed rate-setting measures, including limits on hospital rates, or site-neutral pricing requirements.
+Added: For example, the 2025 Reconciliation Law includes significant health care policy reforms that are expected to result in Medicaid spending reductions and changes in administration of state Medicaid programs.
+Added: The law limits eligibility for Medicaid by imposing work or community engagement requirements for adults under age 65 in Medicaid expansion states, including states with waiver-based expansions, subject to limited exceptions.
+Added: The law also makes significant changes to Medicaid financing mechanisms, including restrictions intended to reduce the federal matching funds received by state Medicaid programs, with greater restrictions in states that have expanded Medicaid.
+Added: It is difficult to predict the ultimate effects of the 2025 Reconciliation Law, as it is a complex law that mandates various changes over time, and we expect additional rulemaking and guidance from federal agencies regarding implementation.
+Added: However, reductions in federal matching funds and increased state obligations and administrative burden could result in state limitations on Medicaid eligibility or coverage, among other effects, particularly if states are unable to offset reductions in federal funding.
+Added: Some states have trigger laws that would end their Medicaid expansion or require other changes if the federal funding match rate is reduced or similar funding restrictions are imposed for Medicaid expansion.
+Added: Although most of these trigger laws are not directly implicated by the 2025 Reconciliation Law, some states may nonetheless consider or make changes to Medicaid expansion programs due to related budgetary pressures.
+Added: CMS may make changes to Medicaid payment models and may impose new restrictions or grant states additional flexibility in the administration of state Medicaid programs.
+Added: Other recent health reform initiatives and proposals at the federal and state levels include those focused on price transparency and out-of-network charges, which may impact prices, our competitive position, patient volumes and the relationships between hospitals, patients, payors, and ancillary providers (such as anesthesiologists, radiologists, and pathologists), and site-neutral payment policies, which may reduce the reimbursement we receive.
+Added: Some states are considering or have imposed rate-setting measures, including limits on hospital rates.
Other industry participants, such as private payors and large employer groups and their affiliates, may also introduce financial or delivery system reforms.
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building codes;
−Removed: environmental protection;
+Added: environmental
patient, workforce and public safety;
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For example, the Health Insurance Portability and Accountability Act of 1996, the Health Information Technology for Economic and Clinical Health Act of 2009, each as amended, and the privacy and security regulations that implement these laws (collectively, “HIPAA”) establish national privacy and security standards for the protection of protected health information, or PHI, by health plans, healthcare clearinghouses and certain healthcare providers, referred to as covered entities, and the business associates with whom such covered entities contract for services.
−Removed: HIPAA regulates permissible uses and disclosures of PHI and requires covered entities and business associates to adopt administrative, physical and technical safeguards to protect such information.
+Added: HIPAA regulates permissible uses and disclosures of PHI, establishes individual rights related to PHI, including the right to access PHI, and requires covered entities and business associates to adopt administrative, physical and technical safeguards to protect such information.
Covered entities must notify affected individuals without unreasonable delay of breaches of unsecured PHI, the HHS Office for Civil Rights, or OCR, which enforces HIPAA, and, in the case of larger breaches, the media.
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For example, the FTC uses its consumer protection authority to initiate enforcement actions in response to data breaches.
−Removed: Failing to take appropriate steps to keep consumers’ personal information secure may violate the Federal Trade Commission Act, or the FTCA.
−Removed: For information that is not subject to HIPAA and deemed to be “personal health records,” the FTC may also impose penalties for violations of the Health Breach Notification Rule, or HBNR, to the extent we are considered a “personal health record-related entity” or “third party service provider.” The FTC has taken several enforcement actions under HBNR and indicated that the FTC will continue to protect consumer privacy through greater use of the agency’s enforcement authorities.
+Added: Failing to take appropriate steps to keep consumers’ personal information secure may violate the Federal Trade Commission Act.
+Added: For information that is not subject to HIPAA and deemed to be “personal health records,” the FTC may also impose penalties for violations of the Health Breach
+Added: Notification Rule, or HBNR, to the extent we are considered a “personal health record-related entity” or “third party service provider.” The FTC has taken several enforcement actions under HBNR and indicated that the FTC will continue to protect consumer privacy through greater use of the agency’s enforcement authorities.
As a result, we expect scrutiny by federal and state regulators and others of our collection, use and disclosure of health information.
−Removed: Additionally, federal and state consumer protection laws are increasingly being applied by FTC and states’ attorneys general to regulate the collection, use, storage, and disclosure of
−Removed: personal or personally identifiable information, through websites or otherwise, and to regulate the presentation of website content.
+Added: Additionally, federal and state consumer protection laws are increasingly being applied by FTC and states’ attorneys general to regulate the collection, use, storage, and disclosure of personal or personally identifiable information, through websites or otherwise, and to regulate the presentation of website content.
Our marketing and patient engagement activities are subject to communications laws such as the Telephone Consumer Protection Act, or the TCPA, and the Controlling the Assault of Non-Solicited Pornography and Marketing Act, or CAN-SPAM.
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Eligible healthcare professionals are also subject to positive or negative payment adjustments based, in part, on their use of EHR technology.
−Removed: Thus, if our hospitals and employed professionals are unable to properly adopt, maintain, and utilize certified EHR systems, we could be subject to penalties and lawsuits that may have an adverse effect on our consolidated financial position and consolidated results of operations.
+Added: Thus, any failure by our hospitals and employed professionals to properly adopt, maintain, and utilize certified EHR systems may have an adverse effect on our consolidated financial position and consolidated results of operations.
As EHR technologies have become widespread, the federal government has increased its focus on promoting patient access to healthcare data and interoperability.
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Information blocking is defined as engaging in activities that are likely to interfere with the access, exchange or use of electronic health information, subject to limited exceptions.
−Removed: Under a rule finalized by HHS in July 2024, a hospital found to have engaged in information blocking will not qualify as a “meaningful electronic health record user” under the Medicare Promoting Interoperability Program and as a result will lose 75% of the annual market basket increase it would otherwise receive, and MIPS-eligible clinicians, ACOs and ACO participants face similar disincentives.
+Added: A hospital found to have engaged in information blocking will not qualify as a “meaningful electronic health record user” under the Medicare Promoting Interoperability Program and as a result will lose 75% of the annual market basket increase it would otherwise receive, and MIPS-eligible clinicians, ACOs and ACO participants face similar disincentives.
Current and future initiatives related to healthcare technology (including AI/ML), data sharing, and interoperability may require changes to our operations, impose new and complex obligations on us, affect our relationships with providers, vendors, healthcare information exchanges and other third parties and require investments in infrastructure.
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It is difficult to predict how these initiatives will affect our relationships with providers and vendors, participation in healthcare information exchanges or networks, the exchange of patient data and patient engagement.
−Removed: The legal and regulatory framework with respect to AI/ML initiatives is evolving and remains uncertain.
−Removed: In December 2023, HHS finalized transparency requirements for AI and other predictive algorithms used in certified health information technology, such as decision support interventions.
+Added: We have been allocating significant resources to develop, accelerate and implement our healthcare technology initiatives, including various AI/ML capabilities.
+Added: The development of such AI/ML capabilities is complex and uncertain, and presents various risks and uncertainties.
+Added: Our efforts to integrate AI/ML capabilities into our operations may result in unanticipated consequences and complications, and if we do not successfully implement our AI/ML systems and initiatives, or if we encounter other failures in our AI/ML systems or initiatives, this could result in legal and regulatory risk, and otherwise adversely impact us.
+Added: Further, if we fail to implement AI/ML technologies and systems as effectively or rapidly as our competitors, our operations and financial results could be adversely impacted.
+Added: In addition, the legal, regulatory and ethical framework with respect to AI/ML initiatives is evolving, and remains uncertain.
+Added: For example, HHS imposes transparency requirements for AI and other predictive algorithms used in certified health information technology, such as decision support interventions.
We expect that additional laws, regulations, and policies will be enacted, including as a result of changes in the presidential administration, and existing laws and regulations may be interpreted in new ways, which could affect our operations and the ways in which we may use AI technology (e.g., the use of clinical support decision tools in patient care).
+Added: Further, there is additional uncertainty regarding the effectiveness of state laws related to artificial intelligence as the result of an executive order issued by the current presidential administration in December 2025, which directs federal regulators to challenge and preempt state laws that the administration views as obstructive to artificial intelligence innovation.
If we are unable to use AI/ML as the result of such laws and regulations, regulators restrict our ability to use AI/ML for certain purposes or our confidential information becomes part of a dataset that is accessible by other third-party AI/ML applications and uses, it could make our business less efficient, result in competitive disadvantages, increase our operating costs, hinder our ability to provide services, and subject us to potential liabilities.
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Any such proceedings and any subsequent adverse outcomes may subject us to significant negative publicity.
−Removed: Further, to the extent that we rely on or use the output of AI/ML, any inaccuracies, biases or errors could hinder our ability to provide services and otherwise have adverse impacts on us, our business, our results of operations or financial condition.
+Added: In addition, AI/ML technologies are rapidly changing and present evolving legal, regulatory and ethical issues, including claims of bias, discrimination, a perceived lack of transparency, as well as sometimes unpredictable behaviors or improper use of copyrighted or other protected material, any of which could expose us to reputational or legal risk and inhibit our use of AI/ML technologies.
While the ultimate impact of regulatory and legal risks associated with AI/ML is not fully known, if any of these events were to occur, our business, results of operations and financial condition could be materially adversely affected.
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In assessing the fair value of this reporting unit, we consider, among other things, the most recent price of our common stock and fair value of our long-term debt, our recent financial results, estimates of future revenue and expense growth, estimated market multiples, expected capital expenditures, income tax rates, costs of invested capital and a discount rate.
−Removed: We performed our last annual
−Removed: goodwill impairment evaluation during the fourth quarter of 2024 using the October 31, 2024 measurement date, which indicated no impairment.
+Added: We performed our last annual goodwill impairment evaluation during the fourth quarter of 2025 using the October 31, 2025 measurement date, which indicated no impairment.
We could record material impairment charges in the future if our estimates or assumptions with respect to such fair value determination change in the future.
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We rely on these third-party providers to have appropriate controls to protect confidential information and other sensitive or regulated data.
−Removed: While we take steps to require third-party providers to protect confidential information and sensitive data, we do not control the information systems of third-party providers, and in some cases, we may have difficulty accessing information archived on third-party systems.
+Added: While we take steps to require third-party providers to protect confidential information and sensitive data, we do not control the information systems of third-party providers, and in some cases, we may have difficulty accessing information archived on or otherwise processed by third-party systems.
Our networks and information systems, and the networks and information systems of third parties that we rely upon, are also subject to disruption due to events such as a natural disaster, fire, telecommunications failure, power outages, new system implementations, computer viruses, ransomware or other malware, security breaches, cyber-attacks (including ransomware), human acts (such as inadvertent or intentional misuse by employees), acts of war, terrorist or criminal activities or other catastrophic events.
Disaster recovery planning, whether conducted by us or a third party, cannot account for all eventualities, and may not be sufficient to mitigate against or recover from such events.
−Removed: If the information systems on which we rely fail or are interrupted or if our access to these systems is limited in the future, or if we experience data loss or manipulation, it could result in unauthorized disclosure, misuse, loss or alteration of such data, interruptions and delays in our normal business operations, potential liability under applicable laws, regulatory penalties, and damage to our reputation.
+Added: If the information systems on which we rely fail or are interrupted or if our access to these systems is limited in the future, or if we experience data loss or manipulation, it could result in harm to patients, unauthorized disclosure, misuse, loss or alteration of such data, interruptions and delays in our normal business operations, potential liability under applicable laws, regulatory penalties, and damage to our reputation.
Any of these could have an adverse effect on our business, financial condition or results of operations.
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We have made significant investments in technology to protect our systems, equipment and medical devices and information from cybersecurity risks.
−Removed: These risks include incidents involving ransomware and other malicious software, phishing, advanced persistent threats, social engineering, credential stuffing or distributed denial-of-service attacks, or other attempts by third
−Removed: parties to access, acquire, use, disclose, misappropriate or manipulate our information or disrupt our operations.
+Added: These risks include incidents involving ransomware and other malicious software, phishing, advanced persistent threats, social engineering, credential stuffing or distributed denial-of-service attacks, or other attempts by third parties to access, acquire, use, disclose, misappropriate or manipulate our information or disrupt our operations.
Although we monitor and routinely test our security systems and processes and have redundancies as well as other proactive measures designed to protect the integrity, security and availability of the systems and data we manage and control, there can be no assurance that we, or our third-party vendors and providers, will not be subject to security breaches and other cybersecurity incidents.
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In particular, on February 13, 2023, we disclosed a security incident in which a third-party vendor who provides a secure file transfer software platform utilized by our subsidiaries experienced a security breach whereby PHI and personal information of certain patients of our healthcare facilities were exposed to an unauthorized third party.
−Removed: The current cyber threat environment presents increased risk for all companies, particularly companies in the healthcare industry, as the volume and intensity of cyber-attacks on hospitals and health systems has continued to increase, and we expect to experience an increase in cybersecurity threats in the future.
+Added: The current cyber threat environment presents increased risk for all companies, particularly companies in the healthcare industry, as the volume and intensity of cyber-attacks on hospitals and health systems have continued to increase, and we expect to experience an increase in cybersecurity threats in the future.
Moreover, advanced new attacks against our information systems and devices or those of our third-party vendors create risk of cybersecurity incidents, including ransomware, malware and phishing incidents.
1 unchanged sentence
In addition, cybersecurity threats continue to evolve.
−Removed: Additionally, the rapid evaluation and increased adoption of AI technologies may heighten our cybersecurity risks by making cyber-attacks more difficult to detect, contain and mitigate, particularly with detection devices that use voice recognition or authentication.
+Added: Additionally, the rapid evaluation and increased adoption of AI and ML technologies may heighten our cybersecurity risks by making cyber-attacks more difficult to detect, contain and mitigate, particularly with detection devices that use voice recognition or authentication.
Because the techniques used in cyber-attacks change frequently and may not be immediately recognized, we may experience security or data breaches that remain undetected for an extended time.
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We may also be required to incur additional expenses to comply with evolving federal and state requirements related to cybersecurity, including those focused on healthcare providers.
−Removed: Despite our efforts to minimize our exposure to cyber-attacks, there can be no assurance that our controls and procedures in place will be sufficient or timely.
+Added: Despite our efforts to minimize our exposure to cyber-attacks, there can be no assurance that our controls and procedures, and cyber risk management processes, will be sufficient or timely in protecting our processes and information.
If we or our information, systems are subject to cyber-attacks or security or data breaches in the future, or the information systems of third parties with whom we conduct business are subject to cyber-attacks or security or data breaches in the future in a manner which impacts us or our information systems, this could result in harm to patients;
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federal and state governmental inquiries, civil monetary penalties, settlement agreements, corrective action plans and monitoring requirements, any of which could have an adverse effect on our business, financial condition or results of operations.
−Removed: Moreover, any significant cybersecurity event may require us to devote significant management time and resources to address and respond to any such event, interfere with the pursuit of other important business strategies and initiatives, and cause us to incur additional expenditures, which could be material, including to investigate such events, remedy cybersecurity problems, recover lost data, prevent future compromises and adapt systems and practices in response to such events.
+Added: Moreover, 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
+Added: 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.
Further, 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.
Additionally, we are subject to an increasing number of cybersecurity reporting obligations in different jurisdictions that vary in their scope and application, which may create conflicting reporting obligations and inhibit our ability to quickly provide complete and reliable information to patients, business relations, and regulators, as well as to the public.
−Removed: Moreover, while we have insurance coverage in place designed to address certain aspects of cybersecurity risks, such insurance coverage may be insufficient to cover all losses or all types of claims that may arise.
+Added: Moreover, while we have insurance coverage in place designed to address certain aspects of cybersecurity risks, such insurance coverage may exclude certain types of claims or otherwise be insufficient to cover all losses or all types of claims that may arise.
If we fail to comply with our obligations under license or technology agreements with third parties, we may be required to pay damages and we could lose license rights that are critical to our business.
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We do not believe that risks we have identified to date from cybersecurity threats, 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: However, despite our security measures, there is no assurance that we, or the third parties with which we interact, will not experience a cybersecurity incident in the future that materially affects us.
−Removed: For additional information regarding the risks to us associated with cybersecurity incidents, see “ A cyber-attack or security breach could result in the compromise of our facilities, confidential data or critical data systems and give rise to potential harm to patients, remediation and other expenses, expose us to liability under HIPAA, privacy and data protection laws and regulations, consumer protection laws,
−Removed: common law or other theories, subject us to litigation and federal and state governmental inquiries and actions, damage our reputation, adversely impact our financial results and otherwise be disruptive to our business.
+Added: However, despite our security measures and cyber risk management processes, there is no assurance that we, or the third parties with which we interact, will not experience a cybersecurity incident in the future that materially affects us.
+Added: For additional information regarding the risks to us associated with cybersecurity incidents, see “ A cyber-attack or security breach could result in the compromise of our facilities, confidential data or critical data systems and give rise to potential harm to patients, remediation and other expenses, expose us to liability under HIPAA, privacy and data protection laws and regulations,
+Added: consumer protection laws, common law or other theories, subject us to litigation and federal and state governmental inquiries and actions, damage our reputation, adversely impact our financial results and otherwise be disruptive to our business.
” included in Part I, Item 1A of this Form 10-K.
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The Board of Directors’ oversight of the material risks faced by us occurs at both the full board level and at the committee level.
−Removed: In addition, the Audit and Compliance Committee has primary oversight responsibility regarding our information security, data security, data privacy, and other cybersecurity programs, procedures and risks.
+Added: In addition, the Audit and Compliance Committee has primary oversight responsibility regarding our information security, data security, data privacy, and other cybersecurity programs, procedures and risks , including disaster recovery and business continuity .
Further, the Audit and Compliance Committee and our Board of Directors receive updates at least quarterly from management, including our Chief Digital and Information Officer, or CDIO, covering our programs for managing cybersecurity risks, including data privacy and data protection risks.
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A comprehensive presentation regarding our enterprise risk management process and our key risks is presented to the full Board of Directors on an annual basis.
−Removed: In addition, we have established a Cyber Risk Executive Steering Committee, a multi-disciplinary management-level team chaired by our CDIO which is responsible for assessing and overseeing our information security and cybersecurity risk management policies, practices and priorities and for assessing and monitoring key cybersecurity risks with respect to reporting such risks within the organization.
+Added: In addition, we have a Technology Risk Executive Steering Committee, a multi-disciplinary management-level team chaired by our CDIO which is responsible for assessing and overseeing our information security and cybersecurity risk management policies, practices and priorities and for assessing and monitoring key cybersecurity risks with respect to reporting such risks within the organization.
At a management level, our cybersecurity risk management efforts are led by our Chief Information Security Officer, or CISO, who reports directly to the CDIO.
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A key component of our enterprise risk management program is our incident response plan, which provides for controls and procedures in connection with cybersecurity incidents.
−Removed: Under this plan, we have established a cybersecurity incident command, a multi-disciplinary management-level team led by the CISO.
+Added: Under this plan, we have a cybersecurity incident command, a multi-disciplinary management-level team led by the CISO.
The plan provides that the incident response team will conduct an initial assessment in the event of a cybersecurity incident meeting certain criteria elevated for the review of senior members of the cybersecurity team.
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In addition, some of our hospitals provide skilled nursing and home care services based on individual community needs.
−Removed: The following tables shows the location, date of acquisition or lease inception and the number of licensed beds for the 76 hospitals owned or leased at December 31, 2024.
−Removed: Effective December 31, 2024, facilities operating other than on a main hospital campus that provide inpatient, acute-care services are presented separately.
+Added: The following table shows the location, date of acquisition or lease inception and the number of licensed beds for the 69 hospitals owned or leased at December 31, 2025.
The operating results of hospitals in the following table are consolidated for financial reporting purposes.
19 unchanged sentences
Willow Creek Women’s Hospital
−Removed: Northwest Health Physician’s Specialty Hospital
Siloam Springs Regional Hospital
2 unchanged sentences
North Okaloosa Medical Center
−Removed: Shorepoint Health Port Charlotte
−Removed: Port Charlotte
−Removed: January, 2014
−Removed: Shorepoint Health Punta Gorda
−Removed: January, 2014
Lower Keys Medical Center
26 unchanged sentences
Merit Health River Region
−Removed: Merit Health Biloxi
−Removed: January, 2014
Merit Health Central
2 unchanged sentences
January, 2014
−Removed: Merit Health Madison
−Removed: January, 2014
Merit Health River Oaks
15 unchanged sentences
Mountain View Regional Medical Center
−Removed: North Carolina
−Removed: Lake Norman Regional Medical Center
−Removed: January, 2014
AllianceHealth Madill
28 unchanged sentences
DeTar Healthcare System - North
−Removed: Cedar Park Regional Medical Center
−Removed: December, 2007
Total Licensed Beds at December 31, 2025
10 unchanged sentences
Additionally, qui tam or “whistleblower” actions initiated under the FCA may be pending but placed under seal by the court to comply with the FCA’s requirements for filing such suits.
−Removed: In September 2014, the Criminal Division of the U.S.
−Removed: Department of Justice announced that all qui tam cases will be shared with their Division to determine if a parallel criminal investigation should be opened.
+Added: In September 2014, the Criminal Division of the Department of Justice announced that all qui tam cases will be shared with their Division to determine if a parallel criminal investigation should be opened.
The Criminal Division has also frequently stated an intention to pursue corporations in criminal prosecutions, including in its most recent Memorandum dated September 15, 2022.
From time to time, we detect issues of non-compliance with federal healthcare laws pertaining to claims submission and reimbursement practices and/or financial relationships with physicians.
−Removed: We avail ourselves of various mechanisms to address potential overpayments arising out of these issues, including repayment of claims, rebilling of claims, and participation in voluntary disclosure protocols offered by CMS and the Office of Inspector General.
+Added: We avail ourselves of various mechanisms to address potential overpayments arising out of these issues, including repayment of claims, rebilling of claims, and participation in voluntary disclosure protocols offered by CMS and the OIG.
Participating in voluntary repayments and voluntary disclosure protocols can have the potential for significant settlement obligations or even enforcement action.
20 unchanged sentences
The District Court also awarded the Company its attorneys’ fees and costs.
−Removed: On October 4, 2022, Tower Health filed a Rule 59 motion to alter or amend the District Court’s judgment and a Rule
−Removed: 15 motion to amend its pleadings.
+Added: On October 4, 2022, Tower Health filed a Rule 59 motion to alter or amend the District Court’s judgment and a Rule 15 motion to amend its pleadings.
The Company has filed oppositions to both motions and has separately moved for its attorney’s fees.
On August 11, 2023, the District Court denied Tower Health’s Rule 59 and Rule 15 motions.
−Removed: Tower Health appealed the District Courts judgment to the United States Court of Appeals for the Third Judicial District.
−Removed: The Third Circuit Court of Appeals affirmed the District Court’s opinion, awarded our attorneys’ fees and costs on appeal, and ordered the case remanded to the District Court on October 2, 2024.
−Removed: The District Court will now hear our application for attorneys’ fees.
+Added: Tower Health appealed the District Court’s judgment to the United States Court of Appeals for the Third Judicial District.
+Added: The Third Circuit Court of Appeals affirmed
+Added: the District Court’s opinion, awarded our attorneys’ fees and costs on appeal, and ordered the case remanded to the District Court on October 2, 2024.
+Added: We have reached a settlement of the attorneys’ fees issue, and this matter has been fully resolved.
Golden, as Litigation Trustee of the QHC Litigation Trust, and Wilmington Savings Fund Society, FSB, solely in its capacity as indenture trustee v.
7 unchanged sentences
On March 16, 2023, the District Court granted in part and denied in part our motion to dismiss.
−Removed: We continue to vigorously defend this case.
+Added: On August 25, 2025, we filed a motion for summary judgment, which is pending.
Management of Significant Legal Proceedings
10 unchanged sentences
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.