4 unchanged sentences
Generally, amounts under these contracts cannot be reasonably estimated until a specific claim is asserted.
−Removed: Consequently, because no claims have been asserted, no liabilities have been recorded for these obligations on our balance sheets for any of the periods presented.
+Added: Consequently, because no claims have been asserted, no liabilities have been recorded for any such potential obligation on our balance sheets for any of the periods presented.
Litigation and Regulatory Matters — Laws and regulations governing Medicare and Medicaid programs are complex and subject to review and interpretation.
15 unchanged sentences
Adverse determinations in civil legal proceedings or governmental investigations, whether currently asserted or arising in the future, could have a material adverse effect on our financial position, results of operations, and cash flows.
−Removed: Additionally, such proceedings and/or investigation can be a distraction to the business of our independent subsidiaries.
+Added: Additionally, such proceedings and/or investigations can be a distraction to the business of our independent subsidiaries.
We, on behalf of our independent subsidiaries, received a Civil Investigative Demand (CID) from the U.S.
3 unchanged sentences
We are fully cooperating with the DOJ in response to the CID.
−Removed: However, we cannot predict the outcome of the investigation or its potential impact to the consolidated financial statements.
−Removed: In addition to the potential lawsuits and claims described above, we and our independent subsidiaries are also subject to potential lawsuits under the FCA and comparable state laws alleging submission of fraudulent claims for services to any Federal and State healthcare program (such as Medicare or Medicaid).
+Added: However, we cannot predict the outcome of the investigation or its potential impact on the consolidated financial statements.
+Added: In addition to the potential lawsuits and claims described above, we and our independent subsidiaries are also subject to potential lawsuits under the FCA and comparable state laws alleging the submission of fraudulent claims for services to any Federal and State healthcare program (such as Medicare or Medicaid).
A violation may provide the basis for exclusion from federally funded healthcare programs.
−Removed: Such exclusions could have a correlative negative impact on our financial performance.
+Added: Such exclusions could also have a correlative negative impact on our financial performance.
In addition, and pursuant to the qui tam or "whistleblower" provisions of the FCA, a private individual with knowledge of fraud or potential fraud may bring a claim on behalf of the Federal government, and receive a percentage of any recovery obtained.
6 unchanged sentences
In 2024, we entered into mediation with the involved parties and agreed to settle the civil case for $48.0 million.
−Removed: Following the finalization of the settlement documents and payment of the settlement funds, the qui tam complaint was dismissed and the matter was resolved.
+Added: Following the finalization of the settlement documents and payment of the settlement funds, the qui tam complaint was dismissed and the matter was fully resolved.
The settlement does not include admissions on the part of the Company or our independent subsidiaries, and we maintain that we have consistently complied with and continue to comply with all applicable State and Federal statutes (including but not limited to the FCA and the AKS).
9 unchanged sentences
Healthcare litigation (including class action litigation) is common and is filed based upon a wide variety of claims and theories.
−Removed: We and our independent subsidiaries have been subjected to, and/or are currently involved in, class action litigation alleging violations (alone or in combination) of state and federal wage and hour law related to the alleged failure to pay wages, to timely provide and authorize meal and rest breaks, and other such similar causes of action.
−Removed: Additionally, in July of 2024, two of our independent subsidiaries received a subpoena to produce documents related to alleged environmental matters from the United States’ Attorney’s office for the Western District of Washington.
−Removed: Our independent subsidiaries are fully cooperating with the United States' Attorney’s office in response to the subpoena.
−Removed: We do not believe that the ultimate resolution of this matter will have a material adverse effect on our business, cash flows, financial condition or results of operations.
+Added: We and our independent subsidiaries have been subjected to, and/or are currently involved in, class action litigation alleging violations (alone or in combination) of state and federal wage and hour law related to the alleged failure to pay wages, to timely provide and compensate meal and rest breaks, and other such similar causes of action.
We and our independent subsidiaries have been, and continue to be, subject to claims, findings and legal actions that arise in the ordinary course of the various businesses, including in connection with the delivery of healthcare and non-healthcare services.
These claims include but are not limited to potential claims related to patient care and treatment (professional negligence claims) as well as employment related claims.
−Removed: While we have been able to settle or otherwise resolve many of these types of claims without an ongoing material adverse effect on our business, a significant increase in the number of these claims, or an increase in the amounts owing should plaintiffs be successful in their prosecution of remaining or future claims, could materially adversely affect our business, financial condition, results of operations and cash flows.
In addition, these claims could impact our ability to procure insurance to cover our exposure related to the various services provided by our independent subsidiaries to their residents, customers and patients.
+Added: In 2025, we agreed to settle substantially all alleged wage, hour or labor code-related violations asserted on a class or representative basis against our independent subsidiaries in California for purported violations occurring during the six year period ending December 2025, for $12.0 million, pending court approval.
+Added: While we have been able to settle or otherwise resolve many of these types of claims without an ongoing material adverse effect on our business, a significant increase in the number of these claims, or an increase in the amounts owed should plaintiffs be successful in their prosecution of remaining or future claims, could materially adversely affect our business, financial condition, results of operations and cash flows.
+Added: From time to time, various state or Federal agencies may issue requests for information, including but not limited to a subpoena.
+Added: As an example, OHCA is currently conducting a CMIR with respect to specific components of a proposed transaction involving three of our California operations.
+Added: We provided OHCA with requested information regarding specific components of the proposed transaction as part of the CMIR.
+Added: We have been unable to effect resolution including attempts to narrow the scope, and limit the requests to our independent subsidiaries operating in California.
+Added: We have filed a Petition in the Superior Court of the State of California, County of Orange, seeking a declaration that the CMIR regulations violate the United States Constitution and/or the California Constitution, and is void and unenforceable as applied to us.
+Added: We also have requested that OHCA be ordered to withdraw the subpoena and close the inquiry, so the underlying transaction can be completed.
Both government and private pay sources have instituted cost-containment measures designed to limit payments made to providers of healthcare services, and there can be no assurance that future measures designed to limit payments made to providers will not adversely affect us.
−Removed: Medicare Revenue Recoupments — We and our independent subsidiaries are subject to regulatory reviews relating to the provision of Medicare services, billings and potential overpayments resulting from reviews conducted via RAC, various Program Safeguard Contractors and Medicaid Integrity Contractors (collectively referred to as Reviews).
+Added: Medicare Revenue Recoupments — We and our independent subsidiaries are subject to regulatory reviews relating to the provision of Medicare services, billings and potential overpayments resulting from reviews conducted via RAC, and various Program Safeguard Contractors and Medicaid Integrity Contractors (collectively referred to as Reviews).
Reviews vary in claim selection size and processes, ranging from a single episode/claim to larger, multi-claim batches;
3 unchanged sentences
As of December 31, 2025, and through the filing date of this report, 25 of our independent subsidiaries had multi-claim Reviews scheduled or in process.
−Removed: In June 2023, CMS announced a new nationwide audit, the “SNF 5-Claim Probe & Educate Review,” in which the Medicare Administrative Contractors will review five claims from each SNF to evaluate for claims compliance.
−Removed: In implementing this SNF 5-Claim Probe & Educate Review, CMS acknowledged that the increase in observed improper payments from 2021 to 2022 may have arisen from a “misunderstanding” by SNFs about how to appropriately bill for claims of service after October 1, 2019.
−Removed: All facilities that are not undergoing TPE reviews, or have not recently passed a TPE review, will be subject to the nationwide audit.
−Removed: MACs will complete only one round of probe-and-educate for each SNF, rather than the three rounds that typically occur in the TPE Program.
−Removed: Additionally, CMS’s education for each SNF will be individualized and based on observed claim review errors, with rationales for denial explained to the SNF on a claim-by-claim basis.
−Removed: This program will apply only to claims submitted after October 1, 2019, and will exclude claims containing a COVID-19 diagnosis.
MINE SAFETY DISCLOSURES
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.