23 unchanged sentences
Additionally, such proceedings and/or investigations can be a distraction to the business of our independent subsidiaries.
+Added: Table of C o ntents
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.
+Added: However, we cannot predict the outcome of the investigation or its potential impact on the consolidated financial statements.
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).
7 unchanged sentences
Despite the decision of the DOJ to decline to participate in litigation based on the subject matter of its previously issued CID, the involved qui tam relator moved forward with the complaint in December 2020.
−Removed: From that time until December 2023, and notwithstanding our success in early pre-trial motions, we continued to incur legal defense costs and fees, including significant amounts related to the mandatory exchange of information between the parties in the fourth quarter of 2023.
+Added: From that time until December 2023, and notwithstanding our success in early pre-trial motions, we continued to incur legal defense costs and fees.
In 2024, we entered into mediation with the involved parties and agreed to settle the civil case for $48.0 million.
12 unchanged sentences
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.
−Removed: 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.
−Removed: 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: During the three months ended September 30, 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: For example, 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.
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.
−Removed: 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: Table of C o ntents
+Added: 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.
+Added: These claims include but are not limited to potential claims related to patient care and treatment (professional negligence claims).
+Added: 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.
From time to time, various state or Federal agencies may issue requests for information, including but not limited to a subpoena.
−Removed: As an example, OHCA is currently conducting a CMIR with respect to specific components of a proposed transaction involving several of our California operations.
−Removed: We have been and will continue to communicate with OHCA regarding all correspondence and informational requests related to the CMIR.
+Added: As an example, OHCA is currently conducting a CMIR with respect to specific components of a proposed transaction involving three of our independent subsidiaries in California.
+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;
2 unchanged sentences
We anticipate that these Reviews could increase in frequency in the future.
−Removed: As of September 30, 2025 and through the filing date of this report, 14 of our independent subsidiaries had multi-claim Reviews scheduled or in process.
+Added: As of March 31, 2026, and through the filing date of this report, 22 of our independent subsidiaries had multi-claim Reviews scheduled or in process.
+Added: Table of C o ntents
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.