What changed in this filing

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Item 1A. Risk Factors

2022-02-18 compared with 2021-02-19 · 353 added, 301 removed, 339 unchanged (66% of the section changed)

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Additional risks and uncertainties not presently known to us or that we currently deem immaterial may also affect us.

Our business is subject to the following principal risks and uncertainties.

pandemic amplifies and exacerbates many of the risks we face in our business operations, including those discussed below.

Our business is subject to the following material risks and uncertainties.

Risks related to the COVID-19

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The COVID-19 pandemic

is significantly affecting our operations, business and financial condition.

is significantly affecting our operations and could affect our business and financial condition.

Our liquidity could also be negatively impacted by the COVID-19

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economy remains unstable for a significant amount of time.

On January 31, 2020, HHS declared a national public health emergency (“PHE”) due to a novel coronavirus.

On March 11, 2020, the World Health Organization declared the outbreak of COVID-19,

a disease caused by this novel coronavirus, a pandemic.

This disease continues to spread throughout the United States and other parts of the world.

HHS first declared a PHE due to the COVID-19

pandemic in January 2020 and has since then continuously renewed this declaration.

On March 11, 2020, the World Health Organization designated COVID-19

as a global pandemic.

The COVID-19 pandemic

is significantly affecting our employees, patients, hospitals, communities and business operations, as well as the U.S.

continues to significantly affect our employees, patients, hospitals, communities and business operations, as well as the U.S.

economy and financial markets.

As the COVID-19 crisis

continues to evolve, the full extent to which the COVID-19 outbreak

will impact our business, results of operations, financial condition and liquidity will depend on future developments that are highly uncertain and cannot be accurately predicted.

For example, we are not able to predict or control the severity or duration of the pandemic, including whether there will be additional periods of increases in the number of COVID-19

cases in areas in which we operate, the rollout and availability of effective medical treatments and vaccines, the efficacy of public health controls, including vaccines, or the impact of any mutations of the virus.

Although certain economic conditions improved throughout 2021, the pandemic continues to evolve.

For example, the spread of differing variants of COVID-19

led to the reintroduction of certain public health controls during the second half of 2021.

The full extent to which the COVID-19 pandemic

will impact our business, results of operations, financial condition and liquidity will depend on future developments that are uncertain and cannot be accurately predicted.

We are unable to predict the severity or duration of the pandemic, including whether there will be additional periods of increases in the number of COVID-19

cases in areas in which we operate, the availability, utilization and effectiveness of medical treatments and vaccines (including booster shots), the efficacy of public health controls, or the impact of any mutations of the virus.

Florida and Texas, our two largest markets, have been and may in the future be “hot spots” of the COVID-19

Due to the concentration of our hospitals in Texas and Florida, we are particularly sensitive to the increase in COVID-19

cases in those states where the pandemic could have a disproportionate effect on our business.

We are particularly sensitive to the increase in COVID-19

cases in Texas and Florida, where the pandemic could have a disproportionate effect on our business.

We have been working with federal, state and local health authorities to respond to COVID-19 cases

in the markets we serve and continue to take and support measures to try to limit the spread of the virus and to mitigate

Index to Financial Statements

the burden on the health care system.

in the markets we serve and continue to take and support measures to try to limit the spread of the virus and to mitigate the burden on the health care system.

For example, we are subject to COVID-19

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Further, our management is focused on mitigating the impact of the COVID-19

pandemic, which has required and will continue to require a substantial investment of time and resources across our enterprise, which may impact our ability to properly prioritize and successfully execute on the Company’s other strategic initiatives.

pandemic, which has required and will continue to require a substantial investment of time and resources across our enterprise, and which may affect management focus and impact our ability to properly prioritize and successfully execute on the Company’s other strategic initiatives.

As a front line provider of health care services, we have been and will continue to be impacted by the health and economic effects of COVID-19.

Although we are implementing considerable safety measures, treatment of COVID-19 patients

Although we have implemented considerable safety measures, treatment of COVID-19 patients

has associated risks to our employees, patients and physicians.

These risks, and how clinical staff perceive and respond to them, may adversely affect our operating capacity.

Despite considerable efforts to source vital supplies, we have experienced and may continue to experience supply chain disruptions, including delays and price increases in equipment, pharmaceuticals and medical supplies, particularly PPE, and we may experience shortages.

Our current PPE inventory is satisfactory, but we cannot be certain that our supplies will remain sufficient in the future.

In addition, restrictive measures taken to address the COVID-19

pandemic may impact the availability of employed and contract labor staffing for corporate support services, including, but not limited to, coding, billing, collection and other business office functions, which could adversely affect our execution of established control procedures that may not be sufficiently mitigated through execution of our business continuity plans.

Staffing, equipment, laboratory resources and pharmaceutical and medical supplies shortages may impact our ability to schedule, admit and treat patients.

pandemic has also resulted in an increased number of early retirements in our workforce and resulted in fewer graduate nurses being able to enter the workforce.

The combined impact of these factors, despite our efforts to mitigate their effect, could result in reduced employee morale and increased exposure to labor unrest, work stoppages or other workforce disruptions.

Restrictions on elective procedures, travel bans, social distancing, quarantines and stay-at-home

and shelter-in-place

orders, and other restrictive measures have reduced, and may in the future reduce, the volume of procedures performed at our facilities, as well as the volume of emergency room and physician office visits unrelated to COVID-19.

In the last two weeks of March 2020 and in the second quarter of 2020, we cancelled a substantial amount of elective procedures at our facilities and closed or reduced operating hours at a significant number of our surgery centers that specialize in elective procedures, resulting in significantly reduced patient volumes and operating revenues.

We may continue to cancel elective procedures and close or reduce operating hours at our facilities in the future.

Some state and local governments are limiting hospital volume by requiring a minimum percentage of vacant beds in case of a surge in COVID-19

Although some social contact restrictions have eased across the U.S.

In addition, restrictive measures taken by governmental authorities to address the COVID-19

pandemic have impacted, and may continue to impact, the availability of employed and contract labor staffing for corporate support services, including, but not limited to, coding, billing, collection and other business office functions, which could adversely affect our execution of established control procedures that may not be sufficiently mitigated through execution of our business continuity plans.

Continued staffing, equipment, laboratory resources and pharmaceutical and medical supplies shortages may impact our ability to schedule, admit and treat patients.

In addition, the impact of labor shortages across the health care industry may result in other health care facilities, such as nursing homes, limiting admissions, which may constrain our ability to discharge patients to

such facilities and further exacerbate the demand on our resources, supplies and staffing.

pandemic has also resulted in an increased number of early retirements in our workforce.

Actions taken by governmental authorities in response to the COVID-19

pandemic, including restrictions on elective procedures, and other restrictive measures, have reduced, and may in the future reduce, the volume of procedures performed at our facilities, as well as the volume of emergency room and physician office visits unrelated to COVID-19.

We may be required to cancel elective procedures and close or reduce operating hours at our facilities in the future.

Some state and local governments have issued orders or imposed rules affecting hospital capacity in order to prepare for and manage surges in COVID-19

Although social contact restrictions have eased across the U.S.

and most states have lifted moratoriums on non-emergent

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for an unpredictable amount of time in connection with increasing or fluctuating COVID-19

We are currently selectively suspending elective procedures at certain facilities based upon local COVID-19

We have also selectively suspended elective procedures at certain facilities based upon local COVID-19

volume trends, bed capacity and staffing levels.

It is unclear whether certain markets, such as Florida and Texas, will continue to experience periods of increases or spikes in the number of COVID-19

During the second half of 2020, we believe COVID-19

cases at our hospitals contributed to an increase in patient acuity and led to an increase in reimbursements.

Beginning in 2020 and continuing through 2021, we experienced increased patient acuity as a result of COVID-19

cases at our hospitals, which led to increased reimbursements.

However, the impacts of COVID-19,

in future periods may vary, could exert unpredictable and potentially negative effects on clinical performance metrics that impact reimbursement levels and could adversely affect our results of operations.

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Some individuals may choose to postpone medical care (including long-term care) for an undetermined period of time even in the absence of government or industry-adopted restrictions.

At this time, we believe that certain of the patient volume declines we are experiencing reflect a deferral of health care services utilization to a later period, rather than a permanent reduction in demand for our services;

however, we cannot provide assurances as to the recovery of pre-pandemic patient

volumes or the ultimate impact on demand.

including patient acuity levels, in future periods may vary, and could exert unpredictable and potentially negative effects on clinical performance metrics that impact reimbursement levels and could adversely affect our results of operations.

Even as government or industry-adopted restrictions are lifted, some individuals may choose to postpone medical care (including long-term care) for an undetermined period of time.

While patient volumes began rebounding in the second quarter of 2021 as the effects of the pandemic moderated and pandemic-related restrictions and policies were eased, we experienced a resurgence in COVID-19 cases in the latter half of 2021, further impacting the return to pre-pandemic levels.

As such, we cannot provide assurances as to the continued recovery and stability of pre-pandemic

patient volumes or the ultimate impact on demand.

Further, our patient volumes may be adversely impacted by the expanded use of telehealth services from other providers as a result of reduced regulatory barriers on the use and reimbursement of telehealth services and individuals becoming more comfortable with receiving remote care.

The Company may not be able to timely innovate its strategies and technologies to meet changing consumer demands as a result of the COVID-19

It is possible that the COVID-19

pandemic could impact patient behavior beyond the duration of the pandemic.

Broad economic factors resulting from the current COVID-19 pandemic,

including high unemployment and underemployment rates and reduced consumer spending and confidence, also affect our service mix, revenue mix, payer mix and patient volumes, as well as our ability to collect outstanding receivables.

including inflationary pressures, supply chain disruptions, labor shortages, increased unemployment and underemployment rates and reduced consumer spending and confidence, also affect our service mix, revenue mix, payer mix and patient volumes, as well as our ability to collect outstanding receivables.

Business closings and layoffs in the areas where we operate may lead to increases in the uninsured and underinsured populations and adversely affect demand for our services, as well as the ability of patients and other payers to pay for services rendered.

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In addition, our results and financial condition may be adversely affected by federal, state or local laws, regulations, orders, or other governmental or regulatory actions addressing the current COVID-19 pandemic

health care system, which could result in direct or indirect restrictions to our business, financial condition, results of operations and cash flow.

or otherwise affecting the U.S.

health care system in connection with the pandemic, which could result in direct or indirect restrictions to our business, financial condition, results of operations and cash flow.

We may also be subject to claims from patients, employees and others exposed to COVID-19 at

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Such actions may involve large demands, as well as substantial defense costs, though there is no certainty at this time whether any such claims will be filed or the outcome of such claims if filed.

Our professional and general liability insurance, a portion of which is provided through a 100% owned insurance subsidiary, may not cover all claims against us.

If general economic conditions continue to deteriorate or remain uncertain for an extended period of time, our liquidity and ability to repay our outstanding debt may be harmed and the trading price of our common stock could decline.

Furthermore, the current COVID-19 pandemic

may cause disruption in the financial markets and banking industry.

Our professional and general liability insurance, a portion of which is provided through our insurance subsidiary, may not cover all claims against us.

If general economic conditions, including inflation, deteriorate or remain volatile or uncertain for an extended period of time, our liquidity and ability to repay our outstanding debt may be harmed and the trading price of our common stock could decline.

These factors may affect the availability, terms or timing on which we may obtain any additional funding and our ability to access our cash.

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any of which could have a material, adverse effect on our results of operations and financial position.

There is a high degree of uncertainty regarding the implementation and impact of the CARES Act and other existing or future stimulus legislation, if any.

There can be no assurance as to the total amount of financial assistance or types of assistance we will receive, that we will be able to comply with the applicable terms and conditions to retain such assistance, that we will be able to benefit from provisions intended to increase access to resources and ease regulatory burdens for health care providers or that additional stimulus legislation will be enacted.

The CARES Act is a $2 trillion economic stimulus package signed into law on March 27, 2020, in response to the COVID-19 pandemic.

In an effort to stabilize the U.S.

economy, the CARES Act provides for cash payments to individuals and loans and grants to small businesses, among other measures.

The Paycheck Protection Program and Health Care Enhancement (“PPPHCE”) Act and the CAA, both expansions of the CARES Act that include additional emergency appropriations, were signed into law on April 24, 2020 and December 27, 2020, respectively.

In total, the CARES Act, the PPPHCE Act, and the CAA authorize $178 billion in funding to be distributed to hospitals and other health care providers through the Public Health and Social Services Emergency Fund (“PHSSEF”), also known as the Provider Relief Fund.

These funds are intended to reimburse eligible providers and suppliers for healthcare-related expenses or lost revenues attributable to COVID-19.

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Recipients are not required to repay PHSSEF funds, provided that they attest to and comply with certain terms and conditions, including limitations on balance billing and not using PHSSEF funds to reimburse expenses or losses that other sources are obligated to reimburse.

HHS allocated $50 billion of the CARES Act provider relief funding for general distribution to Medicare providers impacted by COVID-19,

to be distributed proportional to providers’ share of 2018 net patient revenue.

HHS distributed $18 billion to eligible Medicaid and CHIP providers that did not receive a payment from the general distribution allocation and $14.4 billion to safety net hospitals.

In addition, HHS has made targeted distributions for providers in areas particularly impacted by COVID-19,

We are unable to predict the ultimate impact of the CARES Act and other existing or future stimulus and relief legislation, if any, or the effect that such legislation and other governmental responses intended to assist providers in responding to COVID-19

may have on our business, financial condition, results of operations or cash flows.

There can be no assurance as to the total amount of financial assistance or types of assistance we will receive, that we will be able to comply with the applicable terms and conditions to retain such assistance, or that we will be able to benefit from provisions intended to increase access to resources and ease regulatory burdens for health care providers.

In response to the COVID-19

pandemic, federal and state governments have passed legislation, promulgated regulations and taken other administrative actions intended to assist health care providers in providing care to COVID-19

and other patients and to provide financial relief to health care providers.

Together, the CARES Act, the Paycheck Protection Program and Health Care Enhancement (“PPPHCE”) Act, the CAA, and the ARPA authorize over $186 billion in funding to be distributed to hospitals and other health care providers through the Public Health and Social Services Emergency Fund (“PHSSEF”), also known as the Provider Relief Fund.

These funds are intended to reimburse eligible providers and suppliers for health care-related expenses or lost revenues attributable to the COVID-19

HHS made some general distributions of provider relief funding to Medicare providers impacted by COVID-19,

and also made targeted distributions to specific provider types and industry segments, including providers in areas particularly impacted by COVID-19,

rural providers, providers of services with lower shares of Medicare reimbursement or who predominantly serve the Medicaid population and providers requesting reimbursement for treatment of uninsured Americans, among others.

A portion of the available funding is being distributed to reimburse health care providers that submit claims requests for COVID-19-related treatment,

of uninsured patients at Medicare rates.

HHS has not yet announced the precise method by which all future payments from the PHSSEF will be determined or allocated, so the potential impact to us is not currently known.

The CARES Act also makes other forms of financial assistance available to health care providers, including Medicare and Medicaid payment adjustments and an expansion of the Medicare Accelerated and Advance Payment Program, which makes available advance payments of Medicare funds in order to increase cash flow to providers.

CMS is no longer accepting applications from hospitals and other Medicare Part A providers for accelerated payments and has suspended the advance payment program for physicians and other Medicare Part B providers.

Recoupment of accelerated payments was due to begin in August 2020, but CMS has delayed the recoupment process for these payments, based on amended repayment terms imposed by the Continuing Appropriations Act, 2021 and Other Extensions Act, enacted October 1, 2020, until one year after payment was issued.

However, repayments can be made at any time.

During 2020, we received approximately $4.4 billion of accelerated Medicare payments and approximately $1.8 billion in general and targeted distributions from the Provider Relief Fund, both as provided for and established under the CARES Act.

testing, and vaccine administration for uninsured patients at Medicare rates.

Recipients of these claims reimbursements must attest to and comply with certain terms and conditions, including confirming that patients are uninsured, limitations on balance billings and not using funds to reimburse expenses or losses that other sources are obligated to reimburse.

The CARES Act and related legislation also make other forms of financial assistance available to health care providers.

For example, CMS has increased payment under the hospital inpatient PPS by 20% for discharges of individuals diagnosed with COVID-19 and provides an add-on payment for eligible inpatient cases that use certain new products to treat COVID-19.

The CARES Act also expanded the Medicare Accelerated and Advance Payment Program, which makes available advance payments of Medicare funds in order to increase cash flow to providers.

During 2020, we received approximately $4.4 billion of accelerated Medicare payments and approximately $1.8 billion in general and targeted distributions from the Provider Relief Fund.

During October 2020,

we announced our decision to return, or repay early, all of our share of the Provider Relief Fund distributions and all of the Medicare accelerated payments.

we announced our decision to return, or repay early, all of our share of the Provider Relief Fund general and targeted distributions and all of the Medicare accelerated payments.

During the fourth quarter of 2020, we returned, or repaid early, approximately $6.1 billion of these funds.

In addition to financial assistance, the CARES Act and related legislation include provisions intended to increase access to medical supplies and equipment and ease financial, legal and regulatory burdens on health care providers.

For example, the CARES Act, the CAA and related legislation suspend the Medicare sequestration payment adjustment from May 1, 2020 through March 31, 2021 (but extend sequestration through 2030), provide for a 20% add-on

payment under the hospital inpatient PPS for care provided to patients with COVID-19,

expand access to and payment for telehealth services under Medicare, prioritize review of drug applications to help with shortages of emergency drugs, delay Medicaid DSH reductions, and provide funding to reimburse providers for conducting COVID-19

testing for the uninsured.

The CARES Act and related legislation suspended the Medicare sequestration payment adjustment from May 1, 2020, through December 31, 2021, which would have otherwise reduced payments to Medicare providers by 2% as required by the BCA, but extended sequestration through 2030.

Congress further delayed these sequestration cuts through March 31, 2022, and reduced the sequestration adjustment to 1% from April 1 through

June 30, 2022, but increased the reductions set for 2030.

The APRA, in addition to providing funding for health care providers, increases the federal budget deficit in a manner that triggers an additional statutorily mandated sequestration under the PAYGO Act.

As a result, an additional Medicare payment reduction of up to 4% was required to take effect in January 2022.

However, Congress has delayed implementation of this payment reduction until 2023.

Beyond financial assistance, federal and state governments have enacted legislation, established regulations and issued waivers intended to expand access to and payment for telehealth services, increase access to medical supplies and equipment, prioritize review of drug applications to help with shortages of emergency drugs, and ease various legal and regulatory burdens on health care providers.

HHS and CMS have announced other flexibilities for health care providers in response to COVID-19,

such as extensions for and relief from data submission requirements for providers participating in certain quality reporting programs.

such as relief from data submission requirements and measure suppression policies for providers participating in certain quality reporting programs.

It is unclear how changes to these and other value-based programs will affect our financial condition.

Due to the recent enactment of the CARES Act, the PPPHCE Act, the CAA and other enacted legislation, there is still a high degree of uncertainty surrounding their implementation, and the COVID-19

pandemic continues to evolve.

Some of the measures allowing for flexibility in delivery of care and various financial supports for health care providers are available only for the duration of the PHE, and it is unclear whether or for how long the PHE declaration will be extended.

There is still a high degree of uncertainty surrounding the ongoing impact of the CARES Act and related legislation passed and other efforts taken in response to the COVID-19

pandemic, and the pandemic continues to evolve.

Some of the measures allowing for flexibility in delivery of care and various financial supports for health care providers are available only until funds expire or for the duration of the PHE, and it is unclear whether or for how long the PHE declaration will be extended.

The current PHE determination expires April 16, 2022.

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periods for as long as the emergency continues to exist and may terminate the declaration whenever he determines that the PHE no longer exists.

The federal government may consider additional stimulus and relief efforts, but we are unable to predict whether additional stimulus measures will be enacted or their impact.

There can be no assurance as to the total amount of financial and other types of assistance we will receive under the CARES Act, PPPHCE Act, the CAA or future

Index to Financial Statements

legislation, if any, or whether we shall retain, return or repay any future assistance, and it is difficult to predict the impact of such legislation on our operations.

Further, there can be no assurance that the terms and conditions of provider relief funding or other relief programs will not change or be interpreted in ways that affect our ability to comply with such terms and conditions in the future (which could affect our ability or willingness to retain assistance), the amount of total stimulus funding we will receive or our eligibility to participate in such stimulus funding.

For time periods prior to returning Provider Relief Funds, with respect to future assistance, if any, we do not return, and in those cases where our partners retain such assistance, we will continue to monitor our compliance with the terms and conditions of the Provider Relief Fund, including demonstrating that the distributions received have been used for healthcare-related expenses or lost revenue attributable to COVID-19.

The federal government may consider additional stimulus and relief efforts, but we are unable to predict whether additional measures will be enacted or their impact.

There can be no assurance as to the total amount of financial and other types of assistance we will receive under the CARES Act, PPPHCE Act, the CAA or future legislation, if any, or whether we shall retain, return or repay any future assistance, and it is difficult to predict the impact of such legislation on our operations.

Further, there can be no assurance that the terms and conditions of provider relief funding or other relief programs will not change or be interpreted in ways that affect our ability to comply with such terms and conditions in the future (which could affect our ability or willingness to retain assistance), the amount of total stimulus funding we may receive or our eligibility to participate in such stimulus funding.

For time periods prior to returning Provider Relief Funds, with respect to future assistance, if any, we do not return, and in those cases where our partners retain such assistance, we will continue to monitor our compliance with the terms and conditions of the Provider Relief Fund, including demonstrating that the distributions received have been used for health care-related expenses or lost revenue attributable to COVID-19.

If we are unable to attest to or comply with current or future terms and conditions with respect to any assistance not voluntarily returned for our less-than-wholly owned partnerships, our ability to retain some or all of the distributions received may be impacted.

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As of December 31, 2021, our total indebtedness was $34.579 billion.

As of December 31, 2020, we had availability of $1.962 billion under our senior secured revolving credit facility, $3.750 billion under our senior secured asset-based revolving credit facility, after giving effect to letters of credit and borrowing base limitations and $2.000 billion under our senior secured 364-day

term loan facility (which was terminated during January 2021).

As of December 31, 2021, we had availability of $1.920 billion under our senior secured cash flow credit facility and $1.720 billion under our senior secured asset-based revolving credit facility, after giving effect to letters of credit and borrowing base limitations.

Our high degree of leverage could have important consequences, some of which may be exacerbated by the impact of the COVID-19

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limiting our ability to make strategic acquisitions or causing us to make nonstrategic divestitures;

Index to Financial Statements

limiting our ability to obtain additional financing for working capital, capital expenditures, share repurchases, dividends, product or service line development, debt service requirements, acquisitions and general corporate or other purposes;

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We may find it necessary or prudent to refinance our outstanding indebtedness, the terms of which may not be favorable to us.

Our ability to refinance our indebtedness on favorable terms, or at all, is directly affected by the then current global economic and financial conditions which affect the availability of debt financing and the rates at which such financing is available.

rates at which such financing is available.

In addition, our ability to incur secured indebtedness (which would generally enable us to achieve better pricing than the incurrence of unsecured indebtedness) depends in part on the value of our assets, which depends, in turn, on the strength of our cash flows and results of operations, and on economic and market conditions and other factors.

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incur additional indebtedness or issue certain preferred shares;

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pay dividends on, repurchase or make distributions in respect of our capital stock or make other restricted payments;

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Under our asset-based revolving credit facility, borrowing availability is subject to a borrowing base of 85% of eligible accounts receivable less customary reserves, with any reduction in the borrowing base commensurately reducing our ability to access this facility as a source of liquidity.

In addition, under the asset-based revolving credit facility, when (and for as long as) the combined availability under our asset-based revolving credit facility and our senior secured revolving credit facility is less than a specified amount for a certain period of time or, if a payment or bankruptcy event of default has occurred and is continuing, funds deposited into any of our depository accounts will be transferred on a daily basis into a blocked account with the administrative agent and applied to prepay loans under the asset-based revolving credit facility and to collateralize letters of credit issued thereunder.

In addition, under the asset-based revolving credit facility, when (and for as long as) the combined availability under our asset-based revolving credit facility and the revolving facility under our senior secured cash flow credit facility is less than a specified amount for a certain period of time or, if a payment or bankruptcy event of default has occurred and is continuing, funds deposited into any of our depository accounts will be transferred on a daily basis into a blocked account with the administrative agent and applied to prepay loans under the asset-based revolving credit facility and to collateralize letters of credit issued thereunder.

Under our senior secured credit facilities, we are required to satisfy and maintain specified financial ratios.

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If we were unable to repay those amounts, the lenders under the senior secured credit facilities could proceed against the collateral granted to them to secure such indebtedness.

We have pledged a significant portion of our assets under our senior secured credit facilities and that collateral is also pledged as collateral under our first lien notes.

We have pledged a significant portion of our assets under our senior secured credit facilities and that collateral is

also pledged as collateral under our first lien notes.

If any of the lenders under the senior secured credit facilities accelerate the repayment of borrowings, there can be no assurance there will be sufficient assets to repay the senior secured credit facilities, the first lien notes and our other indebtedness.

Discontinuation, reform or replacement of LIBOR may adversely affect our business.

Discontinuation, reform or replacement of LIBOR may adversely affect our borrowing costs.

As of December 31, 2021, we had $4.740 billion of borrowings under our senior secured credit facilities that bore interest at a floating rate based on LIBOR and $3.640 billion of unfunded commitments under those facilities.

Financial Conduct Authority announced in 2017 that it intends to phase out LIBOR by the end of 2021.

However, the ICE Benchmark Administration, in its capacity as administrator of LIBOR, has published a consultation regarding its intention to continue publication of certain LIBOR tenors by 18 months to June 2023.

Notwithstanding this possible extension, a joint statement by key regulatory authorities called on banks to cease entering into new contracts that use LIBOR as a reference rate by no later than December 31, 2021, and it is impossible to predict whether LIBOR rates will continue to be published or supported after the end of 2021.

If LIBOR becomes unavailable, the interest rate applicable to our floating rate debt will be calculated based on an alternative, comparable or successor rate, which may have a material adverse impact on the cost of the floating rate portion of our indebtedness.

The timing and result of the phase out of LIBOR are unclear, and efforts of industry groups to develop a suitable successor are not guaranteed to result in a viable or widely adopted replacement for LIBOR.

If LIBOR becomes unavailable before a suitable replacement is widely adopted, it could have a material adverse impact on the availability of floating rate financing.

As of December 31, 2020, we also had $2.500 billion of interest rate swap agreements based on LIBOR.

If LIBOR becomes unavailable, it is unclear how payments under those agreements would be calculated.

Index to Financial Statements

International Swaps and Derivatives Association has published a standard protocol addressing the expected discontinuation of LIBOR, but there can be no assurance that such a protocol will be implemented with respect to our swap agreements.

Financial Conduct Authority announced in 2017 that it intends to phase out LIBOR by the end of 2021 and will not compel panel banks to continue to contribute to LIBOR after the end of 2021.

However, the Federal Reserve Board, the Office of the Comptroller of the Currency, and the Federal Deposit Insurance Corporation have encouraged banks to cease entering into new contracts that use U.S.

dollar LIBOR as a reference rate no later than December 31, 2021.

The Federal Reserve Board, together with the Alternative Reference Rates Committee, has chosen the Secured Overnight Financing Rate (“SOFR”) as the recommended risk-free reference rate.

At this time, it is not possible to predict the effect any discontinuance, modification or other reforms to LIBOR, or the establishment of alternative reference rates such as SOFR, or any other reference rate, will have on us or our borrowing costs.

As of December 31, 2021, we also had a $500 million interest rate swap agreement based on LIBOR that is scheduled to expire on December 30, 2022.

If LIBOR becomes unavailable, it is unclear how payments under this agreement would be calculated.

The International Swaps and Derivatives Association has published a standard protocol addressing the expected discontinuation of LIBOR, but there can be no assurance that such a protocol will be implemented with respect to our swap agreements.

Risks related to human capital:

Our operations may be adversely affected by competition for staffing, the shortage of experienced nurses and other health care professionals, vaccine mandates and labor union activity.

Our operations are dependent on the efforts, abilities and experience of our management and medical support personnel, such as nurses, pharmacists and lab technicians, as well as our physicians.

We compete with other health care providers in recruiting and retaining qualified management and personnel responsible for the daily operations of each of our hospitals, including nurses and other nonphysician health care professionals.

In some markets, the availability of nurses and other medical support personnel has been a significant operating issue to health care providers, including at certain of our facilities.

pandemic has exacerbated workforce competition and shortages, and may continue to exacerbate workforce competition and shortages beyond the duration of the pandemic.

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.

As a result, our labor costs could continue to increase and/or our capacity could be negatively impacted.

We also depend on the available labor pool of semi-skilled and unskilled employees in each of the markets in which we operate.

If there is continued competition for these employees or additional union organizing activity or a significant portion of our employee base unionizes, it is possible our labor costs could increase.

When negotiating collective bargaining agreements with unions, whether such agreements are renewals or first contracts, there is the possibility that strikes could occur during the negotiation process, and our continued operation during any strikes could increase our labor costs.

In addition, federal and state laws and regulations may increase our costs of maintaining qualified nurses and other medical support personnel.

We operate in several states that have adopted mandatory nurse-staffing ratios.

If these states reduce mandatory nurse-staffing ratios or additional states in which we operate adopt mandatory nurse-staffing ratios, such changes could significantly affect labor costs and have an adverse impact

on revenues if we are required to limit admissions in order to meet the required ratios.

If our labor costs continue to increase, we may not be able to offset these increased costs as a significant percentage of our revenues consists of fixed, prospective payments.

Additionally, on November 5, 2021, CMS and the U.S.

Occupational Safety and Health Administration (“OSHA”) published regulations and standards setting forth vaccination requirements for certain U.S.

CMS issued a health and safety regulation (“CMS Mandate”) requiring certain covered facilities (including hospitals, ambulatory surgery centers, home health agencies, hospices, providers of outpatient physical therapy and long-term care facilities, in each case, that are Medicare and Medicaid-certified providers) to ensure all staff who work in the covered facility and who provide care, treatment or other services for the facility and/or its patients are fully vaccinated against COVID-19.

The CMS Mandate does not provide a testing option for covered staff.

OSHA issued an Emergency Temporary Standard (“ETS”) mandating that employers with 100 or more employees design, implement, and enforce a mandatory COVID-19 vaccination policy or adopt a policy requiring employees to either receive a COVID-19 vaccination or undergo regular COVID-19 testing and wear a face covering at work.

Both the OSHA ETS and the CMS Mandate were the subject of multiple legal challenges and injunction proceedings regarding whether the agencies exceeded their authority in implementing these regulations and standards, with the U.S.

Supreme Court ultimately determining whether the ETS and/or CMS Mandate should be stayed pending resolution.

On January 13, 2022, the U.S.

Supreme Court lifted two injunctions previously staying the CMS Mandate in 24 states.

The impact of the Supreme Court’s decision renders the CMS Mandate applicable on a nationwide basis pending further litigation on CMS’s authority.

While CMS has extended the compliance deadlines for some states to mid-March 2022, the application of the CMS Mandate could adversely impact the availability of staff to provide services at covered facilities the Company owns, manages or operates.

On January 13, 2022, the Supreme Court issued a nationwide injunction staying the implementation of the ETS pending further decision by the U.S.

Court of Appeals for the Sixth Circuit regarding whether OSHA’s ETS exceeds Congressional authority.

In response, on January 25, 2022, OSHA announced its withdrawal of the ETS.

Additional vaccine and testing mandates may also be announced by state-run OSHA programs or state and local officials in jurisdictions in which we operate our business and which could adversely impact the availability of staff to provide services at covered facilities the Company owns, manages or operates.

The unavailability of such staff, or the inability of the Company to control labor costs, could have a material, adverse effect on our capacity, growth prospects and results of operations.

We may be unable to attract, hire, and retain a highly qualified and diverse workforce, including key management.

The talents and efforts of our employees, particularly our key management, are vital to our success.

Our management team has significant industry experience and would be difficult to replace.

In addition, institutional knowledge may be lost in any potential managerial transition.

We may be unable to retain them or to attract other highly qualified employees, particularly if we do not offer employment terms that are competitive with the rest of the labor market.

Our management is focused on mitigating the impact of the COVID-19

pandemic, which has required and will continue to require a substantial investment of time and resources across our enterprise.

Failure to attract, hire, develop, motivate, and retain highly qualified and diverse employee talent, or failure to develop and implement an adequate succession plan for the management team, could disrupt our operations and adversely affect our business and our future success.

Our performance depends on our ability to recruit and retain quality physicians.

The success of our hospitals depends in part on the number and quality of the physicians on the medical staffs of our hospitals, the admitting and utilization practices of those physicians, maintaining good relations with those physicians and controlling costs related to the employment of physicians.

Although we employ some physicians, physicians are often not employees of the hospitals at which they practice, and, in many of the markets we serve, most physicians have admitting privileges at other hospitals in addition to our hospitals.

We continue to face increasing competition to recruit and retain quality physicians.

Such physicians may terminate

their affiliation with our hospitals at any time.

We anticipate facing increased challenges in this area as the physician population reaches retirement age, especially if there is a shortage of physicians willing and able to provide comparable services.

If we are unable to recruit and retain quality physicians to affiliate with our hospitals, our admissions may decrease, our operating performance may decline, and our capacity and growth prospects may be materially adversely affected.

If we are unable to provide adequate support personnel or technologically advanced equipment and hospital facilities that meet the needs of those physicians and their patients, they may be discouraged from referring patients to our facilities, admissions may decrease and our operating performance may decline.

Risks related to technology, data privacy and cybersecurity:

A cybersecurity incident could result in the compromise of our facilities, confidential data or critical data systems.

A cybersecurity incident could also give rise to potential harm to patients;

remediation and other expenses;

and exposure to liability under HIPAA, consumer protection laws, common law theories or other laws.

Such incidents could subject us to litigation and foreign, federal and state governmental inquiries, damage our reputation, and otherwise be disruptive to our business.

We, directly and through our vendors and other third parties, collect and store on our networks and devices and third-party technology platforms sensitive information, including intellectual property, proprietary business information and personally identifiable information of our patients and employees.

We have made significant investments in technology to adopt and meaningfully use EHR and in the use of medical devices that store sensitive data and are integral to the provision of patient care and to protect our systems, software, equipment, devices, and data from cybersecurity risks.

In addition, medical devices manufactured by third parties that are used within our facilities are increasingly connected to the internet, hospital networks and other medical devices.

The secure maintenance of this information and technology is critical to our business operations.

We have implemented multiple layers of security measures to protect the confidentiality, integrity and availability of this data and the systems and devices that store and transmit such data.

We embed security measures into software and system development processes, utilize current security technologies, and our defenses are monitored and routinely tested internally and by external parties.

We vet the security and integrity of third-party technology platforms hosting infrastructure, applications, and data supporting our operations, and set contractual terms holding them to our security standards.

Despite these efforts, threats from malicious persons and groups, new vulnerabilities and advanced new attacks against information systems and devices against us or our vendors and other third parties create risk of cybersecurity incidents, including ransomware, malware and phishing incidents.

We have seen, and believe we will continue to see, widely spread vulnerabilities, such as the Apache Log4j 2 vulnerability reported in December 2021, which could affect our or other parties’ systems.

Mitigation and remediation recommendations continue to evolve, and addressing this and other critical vulnerabilities is a priority for us.

The volume and intensity of cyberattacks on hospitals and health systems continues to increase.

We are regularly the target of attempted cybersecurity and other threats that could have a security impact, including those by third parties to access, misappropriate or manipulate our information or disrupt our operations, and we expect to continue to experience an increase in cybersecurity threats in the future.

Moreover, hardware, software or applications we use may have inherent vulnerabilities or defects of design, manufacture or operations or could be inadvertently or intentionally implemented or used in a manner that could compromise information security.

There can be no assurance that we or our vendors and other third parties will not be subject to cybersecurity threats and incidents that bypass our or their security measures, impact the integrity, availability or privacy of personal health information or other data subject to privacy laws or disrupt our or their information systems, devices or business, including our ability to provide various health care services.

Further, consumer confidence in the integrity and security of personal information and critical operations data in the health care industry generally could be shaken to the extent there are successful cyberattacks at other health care services companies, which could have a material, adverse effect on our business, financial position or results of operations.

As a result, cybersecurity, privacy, physical security and the continued development and enhancement of our controls, processes and practices designed to protect our facilities, information systems and data from attack,

damage or unauthorized access remain a priority for us.

Our Audit and Compliance Committee includes the topic of cybersecurity risk and information security as one of its standing agenda items, and is frequently updated on management’s ongoing actions to monitor, identify, assess and mitigate significant cybersecurity matters.

Committee meetings regularly include a report from our Chief Security Officer to provide an update on (i) activities within our internal cybersecurity defense center to monitor and respond to both internal and third-party cyber events, (ii) ongoing threats that are being monitored and (iii) the current threat level assessment for the Company.

As cyber threats continue to evolve, along with their increased volume and sophistication, we may be required to expend significant additional resources to continue to modify or enhance our protective measures or to investigate and remediate any cybersecurity vulnerabilities or incidents.

Although to date no cyberattack or other information or security breach, whether experienced by us or a third party, has resulted in material losses or other material consequences to us, there can be no assurance that our controls and procedures in place to monitor and mitigate the risks of cyber threats, including the remediation of critical information security and software vulnerabilities, will be sufficient and/or timely and that we will not suffer material losses or consequences in the future.

Additionally, while we have in place insurance coverage designed to address certain aspects of cyber risks, such insurance coverage may be insufficient to cover all losses or all types of claims that may arise.

The occurrence of any of these events could result in (i) harm to patients;

(ii) business interruptions and delays;

(iii) the loss, misappropriation, corruption or unauthorized access of data;

(iv) litigation and potential liability under privacy, security, breach notification and consumer protection laws, common law theories or other applicable laws;

(v) reputational damage;

and (vi) foreign, federal and state governmental inquiries, any of which could have a material, adverse effect on our financial position and results of operations and harm our business reputation.

Our operations could be impaired by a failure of our information systems.

The performance of our information systems is critical to our business operations.

In addition to our shared services initiatives, our information systems are essential to a number of critical areas of our operations, including:

accounting and financial reporting;

billing and collecting accounts;

coding and compliance;

clinical systems and medical devices;

medical records and document storage;

inventory management;

negotiating, pricing and administering managed care contracts and supply contracts;

monitoring quality of care and collecting data on quality measures necessary for full Medicare payment updates.

Information systems may be vulnerable to damage from a variety of sources, including telecommunications or network failures, human acts such as inadvertent misuse by employees and cyberattacks, including ransomware and data theft, and natural disasters.

Moreover, we rely on various third-party technology platforms, which are increasingly important to our business and continue to grow in complexity and scope.

Failure to adequately manage implementations of new technology, updates or enhancements of such platforms or interfaces between platforms could place us at a competitive disadvantage, disrupt our operations, and have a material, adverse impact on our business and results of operations.

We have taken precautionary measures to prevent unanticipated problems that could affect our information systems.

Nevertheless, we or our vendors and other third parties that we rely upon may experience system

failures and disruptions.

The occurrence of any system failure could result in interruptions, delays, the loss or corruption of data and cessations or interruptions in the availability of systems, all of which could have a material, adverse effect on our financial position and results of operations and harm our business reputation.

Health care technology initiatives, particularly those related to patient data and interoperability, may adversely affect our operations.

The federal government is working to promote the adoption of health information technology and the promotion of nationwide health information exchange to improve health care.

For example, HHS incentivizes the adoption and meaningful use of certified EHR technology through its Promoting Interoperability Programs.

Eligible hospitals and eligible professionals, including our hospitals and employed professionals, are subject to reduced payments from Medicare if they fail to demonstrate meaningful use of certified EHR technology.

As these technologies have become widespread, the focus has shifted to increasing patient access to health care data and interoperability.

Century Cures Act prohibits information blocking by health care providers and certain other entities, which is defined as engaging in activities likely to interfere with the access, exchange or use of electronic health information, except as required by law or specified by HHS as a reasonable and necessary activity.

Current and future initiatives related to health care technology and interoperability may require changes to our operations, impose new and complex compliance obligations and require investments in infrastructure.

We may be subject to financial penalties or other disincentives or experience reputational damage for failure to comply.

It is difficult to predict how these initiatives will affect our relationships with providers and vendors, participation in health care information exchanges or networks, the exchange of patient data, and patient engagement.

We may not be reimbursed for the cost of expensive, new technology.

As health care technology continues to advance, the price of purchasing such new technology has significantly increased for providers.

Some payers have not adapted their payment systems to adequately cover the cost of these technologies for providers and patients.

If payers do not adequately reimburse us for these new technologies, we may be unable to acquire such technologies or we may nevertheless determine to acquire or utilize these technologies in order to treat our patients.

In either case, our results of operations and financial position could be adversely affected.

Risks related to governmental regulation and other legal matters:

Our results of operations may be adversely affected by health care reform efforts, including court challenges to, and efforts to repeal, replace or otherwise significantly change the Affordable Care Act.

We are unable to predict what, if any, and when such changes will be made in the future.

In recent years, the U.S.

Congress and certain state legislatures have passed a large number of laws and regulations intended to effect major change within the U.S.

Our results of operations may be adversely affected by health care reform efforts, including efforts to significantly change the Affordable Care Act.

We are unable to predict what, if any, and when additional health reform measures will be adopted or implemented, and the effects and ultimate impact of any such measures are uncertain.

In recent years, Congress and certain state legislatures have passed a large number of laws and regulations intended to effect major change within the U.S.

health care system, including the Affordable Care Act.

The Affordable Care Act affects how health care services are covered, delivered and reimbursed through expanded health insurance coverage, reduced growth in Medicare program spending, reductions in Medicare and Medicaid DSH payments, and the establishment of programs that tie reimbursement to quality and integration.

However, there is uncertainty regarding the future of the Affordable Care Act.

The law has been subject to legislative and regulatory changes and court challenges.

For example, final rules issued in 2018 expand the availability of association health plans and allow the sale of short-term, limited-duration health plans, neither of which are required to cover all of the essential health benefits mandated by the Affordable Care Act.

A number of members of Congress have stated their desire to repeal or make additional significant changes to the Affordable Care Act, its implementation or interpretation.

Effective January 1, 2019, the penalty associated with the individual mandate to maintain health insurance was eliminated.

As a result of this change, in December 2018, the United States District Court for the North District of Texas found the individual mandate to be unconstitutional and determined that the rest of the Affordable Care Act was, therefore, invalid.

In December 2019, the Fifth Circuit Court of Appeals upheld this decision with respect to the individual mandate, but remanded for further consideration of how this affects the rest of the law.

On November 10, 2020, the U.S.

Supreme Court heard oral arguments regarding this case, and the law remains in place pending the appeals process.

The elimination of the individual mandate penalty and other changes may impact the number of individuals that elect to obtain public or private health insurance or the scope of such coverage, if purchased, either of which may have an adverse effect on our business.

There is uncertainty regarding whether, when, and how the Affordable Care Act may be further changed, the ultimate outcome of court challenges and how the law will be interpreted and implemented.

Changes by Congress or government agencies could eliminate or alter provisions beneficial to us, while leaving in place provisions reducing our reimbursement or otherwise negatively impacting our business.

However, the Affordable Care Act has been subject to legislative and regulatory changes and court challenges.

For example, effective January 1, 2019, the penalty associated with the individual mandate to maintain health insurance was eliminated.

This change resulted in legal challenges to the constitutionality of the individual mandate and the validity of the Affordable Care Act as a whole.

However, in June 2021, the U.S.

Supreme Court determined that the plaintiffs lacked standing, allowing the law to remain in place.

There is uncertainty regarding whether, when and how the Affordable Care Act may be further changed, and how the law will be interpreted and implemented.

Changes by Congress or government agencies could eliminate

or alter provisions beneficial to us, while leaving in place provisions reducing our reimbursement or otherwise negatively impacting our business.

However, President Biden has indicated that his administration generally intends to protect and strengthen the Affordable Care Act and Medicaid programs.

There is also uncertainty regarding whether, when, and what other health reform initiatives will be adopted and the impact of such efforts on providers and other health care industry participants.

Further, the potential impact of the 2020 federal election on health reform efforts is unknown.

Some members of Congress have proposed measures that would expand government-sponsored coverage, including proposals to expand coverage of federally-funded insurance programs as an alternative to private insurance or establish a single-payer system (such reforms often referred to as “Medicare for All”), and some states are considering similar measures.

CMS has indicated that it intends to increase flexibility in state Medicaid programs, including by expanding the scope of waivers under which states may implement Medicaid expansion provisions, impose different eligibility or enrollment restrictions, or otherwise implement programs that vary from federal standards.

CMS administrators have also signaled interest in changing Medicaid payment models.

Other health reform initiatives and proposals, such as the limitations and prohibitions on surprise billing imposed by the No Surprises Act, enacted as part of the CAA, may impact prices, our relationships with patients, payers or ancillary providers (such as anesthesiologists, radiologists, and pathologists), and our competitive position.

CMS administrators may grant states additional flexibility in the administration of state Medicaid programs and make changes to Medicaid payment models.

Other health reform initiatives and proposals, such as price transparency requirements and the requirements of the No Surprises Act, may impact prices, our relationships with patients, payers or ancillary providers (such as anesthesiologists, radiologists, and pathologists), and our competitive position.

Other industry participants, such as private payers and large employer groups and their affiliates, may also introduce financial or delivery system reforms.

We are unable to predict the nature and success of such initiatives.

Health care reform initiatives, including changes to or repeal or invalidation of the Affordable Care Act, may have an adverse effect on our business, results of operations, cash flow, capital resources, and liquidity.

Index to Financial Statements

Health care reform initiatives, including changes to the Affordable Care Act, may have an adverse effect on our business, results of operations, cash flow, capital resources, and liquidity.

Changes in government health care programs may adversely affect our revenues.

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Changes in government health care programs, including Medicaid waiver programs, may reduce the reimbursement we receive and could adversely affect our business and results of operations.

The Affordable Care Act has made significant changes to Medicare and Medicaid, and future health reform efforts or further efforts to repeal or significantly change the Affordable Care Act may impact these programs.

The Affordable Care Act made significant changes to Medicare and Medicaid, and future health reform efforts or further efforts to significantly change the Affordable Care Act may impact these programs.

In recent years, legislative and regulatory changes have resulted in limitations on and, in some cases, reductions in levels of payments to health care providers for certain services under the Medicare program.

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However, the percentage reduction for Medicare may not be more than 2% for a fiscal year, with a uniform percentage reduction across all Medicare programs.

While this reduction has been suspended by the CARES Act and related legislation, it is scheduled to be reinstated April 1, 2021.

While this reduction has been suspended by the CARES Act and related legislation, it is scheduled to be reinstated April 1, 2022, when it will resume as a 1% reduction.

The full 2% reduction will begin July 1, 2022, and the reductions set for 2030 were increased to up to 3%.

As a result of the ARPA, an additional Medicare payment reduction of up to 4% was required to take effect in January 2022;

however, Congress has delayed implementation of this reduction until 2023.

We are unable to predict what other deficit reduction initiatives may be proposed by Congress.

These reductions are in addition to reductions mandated by the Affordable Care Act and other laws.

Further, from time to time, CMS revises the reimbursement systems used to reimburse health care providers, including changes to the MS-DRG

Further, from time to time, CMS revises the reimbursement systems used to reimburse health care providers, including changes to the inpatient hospital MS-DRG

system and other payment systems, which may result in reduced Medicare payments.

For example, CMS plans to use data that hospitals are required to report to CMS for cost reports ending on or after January 1, 2021 regarding their median negotiated charges by MS-DRG

for Medicare Advantage payers to determine MS-DRG

relative weights beginning in 2024.

We cannot predict how this change might impact Medicare payment in the future, but the scope and magnitude have the potential to be material to our business.

Further, under a site neutrality policy, clinic visit services provided by off-campus

provider-based departments that were formerly paid under the outpatient PPS are now paid under the Physician Fee Schedule, subject to certain exceptions that were phased out through calendar years 2019 and 2020.

CMS has also issued final rules reducing Medicare payment rates under the outpatient PPS for drugs obtained under the 340B Drug Pricing Program.

CMS is also considering proposals to reduce drug costs such as the most-favored nation drug pricing model that would align payment for the 50 Medicare Part B drugs with the highest expenditures to the payment amounts for those drugs in international markets.

provider-based departments that were formerly paid under the outpatient PPS are now paid under the Physician Fee Schedule.

The IMPACT Act requires HHS, in conjunction with the Medicare Payment Advisory Commission, to propose a unified post-acute care payment model by 2023.

A unified post-acute care payment system would pay post-acute care providers, including home health agencies, under a single framework according to a patient’s characteristics, rather than based on the post-acute care setting where the patient receives treatment.

CMS has issued final rules reducing Medicare payment rates under the outpatient PPS for drugs obtained under the 340B Drug Pricing Program, although this payment policy has been heavily litigated and is currently before the U.S.

Supreme Court.

In September 2021, HHS released a Comprehensive Plan for Addressing High Drug Prices, a report outlining principles for drug pricing reform.

The report set forth a variety of potential legislative policies that Congress could pursue and summarized actions underway or under consideration by HHS to advance these principles.

CMS may implement further changes to how items or services are reimbursed that result in payment reductions for other services.

Because most states must operate with balanced budgets and the Medicaid program is often a state’s largest program, some states have enacted or may consider enacting legislation designed to reduce their Medicaid expenditures.

Further, many states have also adopted, or are considering, legislation designed to reduce coverage, enroll Medicaid recipients in managed care programs, dis-enroll

Medicaid recipients who fail to meet work requirements and/or impose additional taxes on hospitals to help finance or expand the states’ Medicaid systems.

Further, 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.

Periods of economic weakness may increase the budgetary pressures on many states, and these budgetary pressures may result in decreased spending, or decreased spending growth, for Medicaid programs and the Children’s Health Insurance Program in many states.

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For example, from time to time, Congress considers proposals to restructure the Medicaid program to involve block grants that would be administered by the states.

CMS has announced its intent to introduce additional flexibilities for Medicaid program operation, including block grants and increased use of value-based care models.

The prior presidential administration increased state flexibility in the administration of Medicaid programs, including by allowing states to condition enrollment on work or other community engagement or to use a block grant funding structure.

However, the current presidential administration issued an executive order directing agencies to re-examine

measures that reduce health insurance coverage or undermine Medicaid programs, and the administration has rescinded approvals of waivers involving certain eligibility and enrollment restrictions, including those allowing for work and community engagement requirements.

In some cases, private third-party payers rely on all or portions of Medicare payment systems to determine payment rates.

Changes to government health care programs that reduce payments under these programs may negatively impact payments from private third-party payers.

Index to Financial Statements

Current or future health care reform and deficit reduction efforts, changes in laws or regulations regarding government health care programs, other changes in the administration of government health care programs and changes by private third-party payers in response to health care reform and other changes to government health care programs could have a material, adverse effect on our financial position and results of operations.

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qualifications of medical and support personnel;

issues associated with the confidentiality, maintenance, interoperability, exchange, data breach, identity theft and security of health-related and personal information and medical records;

the confidentiality, maintenance, interoperability, exchange, data breach, identity theft and security of health-related and personal information and medical records;

screening, stabilization and transfer of individuals who have emergency medical conditions;

licensure, certification and enrollment with government programs;

hospital rate or budget review;

the distribution, maintenance and dispensing of pharmaceuticals and controlled substances;

debt collection, limits or prohibitions on balance billing and billing for out of network services;

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environmental protection.

Among these laws are the federal Anti-kickback Statute, the federal Stark Law, the FCA and similar state laws.

We have a variety of financial relationships with physicians and others who either refer or influence the referral of patients to our hospitals, other health care facilities and employed physicians or who are the recipients of referrals, and these laws govern those relationships.

Among these laws are the federal Anti-kickback Statute, EKRA, the federal Stark Law, the FCA and similar state laws.

We have a variety of financial relationships with physicians and others who either refer or influence the referral of patients to our hospitals, other health care facilities, laboratories and employed physicians or who are the recipients of referrals, and these laws govern those relationships.

The OIG has enacted safe harbor regulations that outline practices deemed protected from prosecution under the Anti-kickback Statute.

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Allegations of violations of the Anti-kickback Statute may be brought under the federal Civil Monetary Penalty Law, which requires a lower burden of proof than other fraud and abuse laws, including the Anti-kickback Statute.

Index to Financial Statements

Our financial relationships with referring physicians and their immediate family members must comply with the Stark Law by meeting an exception.

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We also operate health care facilities in the United Kingdom and have operations and commercial relationships with companies in other foreign jurisdictions and, as a result, are subject to certain U.S.

and foreign laws applicable to businesses generally, including anti-corruption laws.

and foreign laws applicable to businesses generally, including anti-corruption and anti-bribery laws.

The Foreign Corrupt Practices Act regulates U.S.

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A variety of state, national, foreign and international laws and regulations apply to the collection, use, retention, protection, security, disclosure, transfer and other processing of personal data.

For example, the CCPA, which affords consumers expanded privacy protections such as the right to know what personal information is collected and how it is used, went into effect on January 1, 2020 and was recently significantly amended by the CPRA, which will go into effect on January 1, 2022.

For example, the CCPA, which affords consumers expanded privacy protections such as the right to know what personal information is collected and how it is used, went into effect on January 1, 2020, and was recently significantly amended by the CPRA.

California residents also have the right to request that a business delete their personal information unless it is necessary for the business to maintain for certain purposes, to direct a business to correct errors in their personal information, and to restrict the use and disclosure of sensitive information.

They have the right to know if their personal information is being sold or shared and the right to opt-out

of the sale or disclosure.

Failure to comply with the CCPA and CPRA may result in regulator enforcement action and damage to our reputation.

They have the right to know if their personal information is being sold or shared and the right to opt out of the sale or disclosure.

Beginning in 2023, under the CPRA’s amendments, as well as comprehensive privacy legislation passed in Virginia and

Colorado, residents of those states will have additional rights with respect to their personal information, such as a right to opt out of certain processing activities for sensitive data and a right to a portable copy of their personal information.

The CPRA creates a new regulator responsible for enforcement of the CPRA, and enforcement priorities of this new regulatory body have yet to be determined.

The CCPA and CPRA also provide for civil penalties for violations, as well as a private right of action for data breaches that may increase data breach litigation.

The potential effects of this legislation are far-reaching

Failure to comply with these and any other comprehensive privacy laws passed at the state or federal level may result in regulatory enforcement action and damage to our reputation.

The potential effects of such legislation are far-reaching

and may require us to modify our data processing practices and policies and to incur substantial costs and expenses to comply.

The GDPR contains stricter privacy restrictions than laws and regulations in the United States and provides for significant fines in the event of violations.

With Brexit, our United Kingdom operations are no longer subject to the European Union’s General Data Protection Regulation (“GDPR”) but are subject to the UK Data Protection Legislation, which has been amended in connection with Brexit to be functionally similar to the GDPR and which contains stricter privacy restrictions than laws and regulations in the United States and provides for significant fines in the event of violations.

These administrative fines are based on a multi-factored approach.

Moreover, rules for data transfers outside of the United Kingdom and European Economic Area have changed significantly with Brexit and a recent Court of European Justice decision, and are subject to further revision and updated regulator guidance, making necessary compliance measures challenging to ascertain and implement with respect to our United Kingdom operations.

We expect that there will continue to be new laws, regulations and industry standards concerning privacy, data protection and information security proposed and enacted in various jurisdictions, which could impact our operations and cause us to incur substantial costs.

We expect that there will continue to be new laws, regulations, regulatory guidance, and industry standards concerning privacy, data protection and information security proposed and enacted in various jurisdictions, which could impact our operations and cause us to incur substantial costs.

We send short message service, or SMS, text messages to patients.

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While we strive to adhere to strict policies and procedures that comply with the TCPA, the Federal Communications Commission, as the agency that implements and enforces the TCPA, may disagree with our interpretation of the TCPA and subject us to penalties and other consequences for noncompliance.

Determination by a court or regulatory agency that our SMS texting practices violate the TCPA could subject us to civil penalties and could require us to change some portions of our

Index to Financial Statements

Determination by a court or regulatory agency that our SMS texting practices violate the TCPA could subject us to civil penalties and could require us to change some portions of our business.

Even an unsuccessful challenge by patients or regulatory authorities of our activities could result in adverse publicity and could require a costly response from and defense by us.

We engage in consumer debt collection for HCA-affiliated hospitals and certain non-affiliated hospitals.

We also engage in credit reporting for certain non-affiliated hospitals.

Moreover, if wireless carriers or their trade associations, which issue guidelines for texting programs, determine that we have violated their guidelines, our ability to engage in texting programs may be curtailed or revoked, which could impact our operations and cause us to incur costs related to implementing a workaround solution.

We engage in consumer debt collection for HCA-affiliated

hospitals and certain non-affiliated

We also engage in credit reporting for certain non-affiliated

The federal Fair Debt Collection Practices Act, the Fair Credit Reporting Act and the TCPA restrict the methods that companies may use to contact and seek payment from consumer debtors regarding past due accounts and to report to consumer reporting agencies on the status of those accounts.

Many states impose additional requirements on debt collection and credit reporting practices, and some of those requirements may be more stringent than the federal requirements.

If we fail to comply with these or other applicable laws and regulations, which are subject to change, we could be subject to liabilities, including civil penalties, money damages, the loss of our licenses to operate one or more facilities, exclusion of one or more facilities from participation in the Medicare, Medicaid and other federal and state health care programs, civil lawsuits and criminal penalties.

Finally, we are subject to various federal, state and local statutes and ordinances regulating the discharge of materials into the environment.

For example, our health care operations generate medical waste, such as pharmaceuticals, biological materials and disposable medical instruments, that must be handled, stored, transported, treated and disposed of in compliance with federal, state and local environmental laws and regulations.

Environmental regulations also may apply when we build new facilities or renovate existing facilities.

If we are found not to be in compliance with such laws and regulations, we may be liable for significant investigation and clean-up

costs or be subject to enforcement actions by governmental authorities or lawsuits by

private plaintiffs.

Moreover, any changes in the environmental regulatory framework (including legislative or regulatory efforts designed to address climate change) could have a material, adverse effect on our business.

If we fail to comply with these or other applicable laws and regulations, which are subject to change, we could be subject to liabilities, including civil penalties, money damages, lapses in reimbursement, the loss of our licenses to operate one or more facilities, exclusion of one or more facilities from participation in the Medicare, Medicaid and other federal and state health care programs, civil lawsuits and criminal penalties.

In addition, different interpretations or enforcement of, or amendments to, these and other laws and regulations in the future could subject our current or past practices to allegations of impropriety or illegality or could require us to make changes in our facilities, equipment, personnel, services, capital expenditure programs and operating expenses.

The costs of compliance with, and the other burdens imposed by, these and other laws or regulatory actions may increase our operational costs, result in interruptions or delays in the availability of systems and/or result in a patient volume decline.

We may also face audits or investigations by one or more domestic or foreign government agencies relating to our compliance with these regulations.

An adverse outcome under any such investigation or audit could result in liability, result in adverse publicity, and adversely affect our business.

We do not always have the benefit of significant regulatory or judicial interpretation of these laws and regulations.

In the future, different interpretations or enforcement of, or amendments to, these or other laws and regulations could subject our current or past practices to allegations of impropriety or illegality or could require us to make changes in our facilities, equipment, personnel, services, capital expenditure programs and operating expenses.

A determination that we have violated these or other laws, or the public announcement that we are being investigated for possible violations of these or other laws, could have a material, adverse effect on our business, financial condition, results of operations or prospects, and our business reputation could suffer significantly.

In addition, other legislation or regulations at the federal or state level may be adopted that adversely affect our business.

An adverse outcome under any such investigation or audit, a determination that we have violated these or other laws or a public announcement that we are being investigated for possible violations could result in liability, result in adverse publicity, and adversely affect our business, financial condition, results of operations or prospects.

State efforts to regulate the construction or expansion of health care facilities could impair our ability to operate and expand our operations.

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We are also subject to examination by federal, state and foreign taxing authorities.

Management believes HCA Healthcare, Inc., its predecessors, subsidiaries and affiliates properly reported taxable income and paid

Index to Financial Statements

taxes in accordance with applicable laws and agreements established with the Internal Revenue Service (“IRS”), state and foreign taxing authorities and final resolution of any disputes will not have a material, adverse effect on our results of operations or financial position.

Management believes HCA Healthcare, Inc., its predecessors, subsidiaries and affiliates properly reported taxable income and paid taxes in accordance with applicable laws and agreements established with the Internal Revenue Service (“IRS”), state and foreign taxing authorities and final resolution of any disputes will not have a material, adverse effect on our results of operations or financial position.

However, if payments due upon final resolution of any issues exceed our recorded estimates, such resolutions could have a material, adverse effect on our results of operations or financial position.

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Some states have adopted similar state whistleblower and false claims provisions.

Certain of our individual facilities and/or affiliates have received, and other facilities and/or affiliates may receive, government inquiries from, and may be subject to investigation by, federal and state agencies.

Certain of our individual facilities and/or

affiliates have received, and other facilities and/or affiliates may receive, government inquiries from, and may be subject to investigation by, federal and state agencies.

Depending on whether the underlying conduct in these or future inquiries or investigations could be considered systemic, their resolution could have a material, adverse effect on our financial position, results of operations and liquidity.

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Should we be found out of compliance with applicable laws, regulations or programs, depending on the nature of the findings, our business, our financial position and our results of operations could be negatively impacted.

We may be subject to liabilities from claims brought against our facilities.

We may be subject to liabilities from claims brought against our facilities, which are costly to defend and may require us to pay significant damages if not covered by insurance.

We are subject to litigation relating to our business practices, including claims and legal actions by patients and others in the ordinary course of business alleging malpractice, product liability or other legal theories.

Many of these actions seek large sums of money as damages and involve significant defense costs.

We insure a portion of our professional liability risks through a 100% owned insurance subsidiary.

Management believes our reserves for self-insured retentions and insurance coverage are sufficient to cover insured claims arising out of the operation of our facilities.

Our 100% owned insurance subsidiary has entered into certain reinsurance contracts;

We insure a portion of our professional liability risks through our insurance subsidiary.

Management believes our reserves for self-insured retentions and insurance coverage are sufficient to cover insured claims arising out of the operation of our facilities, although some claims may exceed the scope or amount of the coverage limits of our insurance policies.

Our insurance subsidiary has entered into certain reinsurance contracts;

however, the subsidiary remains liable to the extent that the reinsurers do not meet their obligations under the reinsurance contracts.

If payments for claims exceed actuarially determined estimates, are not covered by insurance, or reinsurers, if any, fail to meet their obligations, our results of operations and financial position could be adversely affected.

Risks related to human capital:

Our labor costs may be adversely affected by competition for staffing, the shortage of experienced nurses and labor union activity.

Our operations are dependent on the efforts, abilities and experience of our management and medical support personnel, such as nurses, pharmacists and lab technicians, as well as our physicians.

We compete with

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other health care providers in recruiting and retaining qualified management and support personnel responsible for the daily operations of each of our hospitals, including nurses and other nonphysician health care professionals.

In some markets, the availability of nurses and other medical support personnel has been a significant operating issue to health care providers.

pandemic has exacerbated workforce competition and shortages.

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.

As a result, our labor costs could increase.

We also depend on the available labor pool of semi-skilled and unskilled employees in each of the markets in which we operate.

If there is additional union organizing activity or a significant portion of our employee base unionizes, it is possible our labor costs could increase.

In addition, the states in which we operate could adopt mandatory nurse-staffing ratios or could reduce mandatory nurse staffing ratios already in place.

State-mandated nurse-staffing ratios could significantly affect labor costs and have an adverse impact on revenues if we are required to limit admissions in order to meet the required ratios.

If our labor costs increase, we may not be able to offset these increased costs as a significant percentage of our revenues consists of fixed, prospective payments.

Our failure to recruit and retain qualified management, nurses and other medical support personnel, or to control labor costs, could have a material, adverse effect on our results of operations.

We may be unable to attract, hire, and retain a highly qualified and diverse workforce, including key management.

The talents and efforts of our employees, particularly our key management, are vital to our success.

Our management team has significant industry experience and would be difficult to replace.

In addition, institutional knowledge may be lost in any potential managerial transition.

We may be unable to retain them or to attract other highly qualified employees, particularly if we do not offer employment terms that are competitive with the rest of the labor market.

Our performance depends on our ability to recruit and retain quality physicians.

We continue to face increasing competition to recruit physicians.

Such physicians may terminate their affiliation with our hospitals at any time.

We may face increased challenges in this area as the physician population reaches retirement age, especially if there is a shortage of physicians willing and able to provide comparable services.

Risks related to technology, data privacy and cybersecurity:

We may not be reimbursed for the cost of expensive, new technology.

As health care technology continues to advance, the price of purchasing such new technology has significantly increased for providers.

Some payers have not adapted their payment systems to adequately cover the cost of these technologies for providers and patients.

In either case, our results of operations and financial position could be adversely affected.

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A cybersecurity incident could result in the compromise of our facilities, confidential data or critical data systems.

A cybersecurity incident could also give rise to potential harm to patients;

remediation and other expenses;

and exposure to liability under HIPAA, consumer protection laws, common law theories or other laws.

Such incidents could subject us to litigation and foreign, federal and state governmental inquiries, damage our reputation, and otherwise be disruptive to our business.

We, directly and through third-party vendors, collect and store on our networks and devices sensitive information, including intellectual property, proprietary business information and personally identifiable information of our patients and employees.

We have made significant investments in technology to adopt and meaningfully use EHR and in the use of medical devices that store sensitive data and are integral to the provision of patient care.

In addition, medical devices manufactured by third parties that are used within our facilities are increasingly connected to the internet, hospital networks and other medical devices.

The secure maintenance of this information and technology is critical to our business operations.

We have implemented multiple layers of security measures to protect the confidentiality, integrity and availability of this data and the systems and devices that store and transmit such data.

We utilize current security technologies, and our defenses are monitored and routinely tested internally and by external parties.

Despite these efforts, threats from malicious persons and groups, new vulnerabilities and advanced new attacks against information systems and devices against us or our third-party vendors create risk of cybersecurity incidents, including ransomware, malware and phishing incidents.

The volume and intensity of cyberattacks on hospitals and health systems continues to increase.

We are regularly the target of attempted cybersecurity and other threats that could have a security impact, and we expect to continue to experience an increase in cybersecurity threats in the future.

There can be no assurance that we or our third-party vendors will not be subject to cybersecurity incidents that bypass our security measures, impact the integrity, availability or privacy of personal health information or other data subject to privacy laws or disrupt our information systems, devices or business, including our ability to provide various health care services.

As a result, cybersecurity, physical security and the continued development and enhancement of our controls, processes and practices designed to protect our facilities, information systems and data from attack, damage or unauthorized access remain a priority for us.

The occurrence of any of these events could result in (i) harm to patients;

(ii) business interruptions and delays;

(iii) the loss, misappropriation, corruption or unauthorized access of data;

(iv) litigation and potential liability under privacy, security, breach notification and consumer protection laws, common law theories or other applicable laws;

(v) reputational damage;

and (vi) foreign, federal and state governmental inquiries, any of which could have a material, adverse effect on our financial position and results of operations and harm our business reputation.

Our operations could be impaired by a failure of our information systems.

The performance of our information systems is critical to our business operations.

In addition to our shared services initiatives, our information systems are essential to a number of critical areas of our operations, including:

accounting and financial reporting;

billing and collecting accounts;

coding and compliance;

clinical systems and medical devices;

medical records and document storage;

inventory management;

negotiating, pricing and administering managed care contracts and supply contracts;

monitoring quality of care and collecting data on quality measures necessary for full Medicare payment updates.

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Information systems may be vulnerable to damage from a variety of sources, including telecommunications or network failures, human acts and natural disasters.

We have taken precautionary measures to prevent unanticipated problems that could affect our information systems.

Nevertheless, we or our third-party vendors that we rely upon may experience system failures.

Health care technology initiatives, particularly those related to patient data and interoperability, may adversely affect our operations.

The federal government is working to promote the adoption of health information technology and the promotion of nationwide health information exchange to improve health care.

For example, HHS incentivizes the adoption and meaningful use of certified EHR technology through its Promoting Interoperability Programs.

As these technologies have become widespread, the focus has shifted to increasing patient access to health care data and interoperability.

We may be subject to financial penalties or other disincentives or experience reputational damage for failure to comply.

Risks related to operations, strategy, demand and competition:

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Generally, other hospitals in the communities we serve provide services similar to those offered by our hospitals.

CMS publicizes on its Hospital Compare website performance data related to quality measures and data on patient satisfaction surveys that hospitals submit in connection with their Medicare reimbursement.

The Hospital Compare website provides an overall rating that synthesizes various quality measures into a single star rating for each hospital.

CMS publicizes on its Care Compare website performance data related to quality measures and data on patient satisfaction surveys that hospitals submit in connection with their Medicare reimbursement.

The Care Compare website provides an overall rating that synthesizes various quality measures into a single star rating for each hospital.

Federal law provides for the future expansion of the number of quality measures that must be reported.

Further, hospitals are currently required by law to publish online a list of their standard charges for items and services.

A CMS final rule implements expanded transparency requirements beginning in 2021.

The rule was recently upheld by the D.C.

Circuit Court of Appeals.

It is unclear whether the final rule will be subject to further court challenges or other changes under the Biden administration.

If any of our hospitals achieve poor results (or results that are lower than our competitors) on quality measures or on patient satisfaction surveys, or if our standard charges are higher or are perceived to be higher than our competitors, our competitive position could be negatively affected.

If any of our hospitals achieve poor results (or results that are lower than our competitors) on quality measures or on patient satisfaction surveys, our competitive position could be negatively affected.

Further, hospitals are currently required by law to publish online a list of their standard charges for all items and services, including discounted cash prices and payer-specific and de-identified

negotiated charges.

The No Surprises Act imposes additional price transparency requirements beginning January 1, 2022, including requiring providers to send health plans of insured patients and uninsured patients a good faith estimate of the expected charges and diagnostic codes prior to the scheduled date of the service or item.

HHS is deferring enforcement of certain requirements of the No Surprises Act

applicable to providing estimates for insured individuals.

It is not entirely clear how price transparency requirements will affect consumer behavior, our relationships with payers, or our ability to set and negotiate prices, but our competitive position could be negatively affected if our standard charges are higher or are perceived to be higher than the charges of our competitors.

The number of freestanding specialty hospitals, surgery centers, emergency departments, urgent care centers and diagnostic and imaging centers in the geographic areas in which we operate has increased.

Many individuals are seeking a broader range of services at outpatient facilities as a result of the growing availability of stand-alone outpatient health care facilities, the increase in payer reimbursement policies that restrict inpatient coverage and the increase in the services that can be provided on an outpatient basis, including high margin services.

Consequently, most of our hospitals operate in a highly competitive environment, which may put pressure on our pricing, ability to contract with third-party payers and the Company’s strategy for volume growth.

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facilities that compete with our hospitals are physician-owned or are owned by governmental agencies or not-for-profit

Consequently, most of our hospitals operate in a highly competitive environment, which may put pressure on our pricing, ability to contract with third-party payers and strategy for volume growth.

Some of the facilities that compete with our hospitals are physician-owned or are owned by governmental agencies or not-for-profit

corporations supported by endowments, charitable contributions and/or tax revenues and can finance capital expenditures and operations on a tax-exempt

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Some states that have historically imposed CON or similar prior approval requirements have removed or are considering removing these requirements, which may reduce barriers to entry and increase competition in our service areas.

Changes in licensure or other regulations and recognition of new provider types or payment models could also impact our competitive position.

If our competitors are better able to attract patients, make capital expenditures and maintain modern and technologically upgraded facilities and equipment, recruit physicians, expand services or obtain favorable third-party payer contracts at their facilities than our hospitals and other providers, we may experience an overall decline in patient volume.

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The estimates for implicit price concessions are based upon management’s assessment of historical write-offs and expected net collections, business and economic conditions, trends in federal and state governmental and private employer health care coverage, the rate of growth in uninsured patient admissions and other collection indicators.

At December 31, 2020, estimated implicit price concessions of $6.108 billion had been recorded to adjust our revenues and accounts receivable to the estimated amounts we expect to collect.

At December 31, 2021, estimated implicit price concessions of $6.784 billion had been recorded to

adjust our revenues and accounts receivable to the estimated amounts we expect to collect.

The estimated cost of total uncompensated care was $3.350 billion for 2021, $3.483 billion for 2020 and $3.733 billion for 2019.

Any increase in the amount or deterioration in the collectability of uninsured accounts receivable will adversely affect our cash flows and results of operations.

Our facilities may experience growth in total uncompensated care as a result of a number of factors, including conditions impacting the overall economy and high unemployment, both of which have been, and may continue to be, negatively impacted by the COVID-19

Our facilities may experience growth in total uncompensated care as a result of a number of factors, including conditions impacting the overall economy and unemployment levels, both of which have been, and may in the future be, negatively impacted by the COVID-19

Effective January 2019, Congress eliminated the financial penalty associated with the Affordable Care Act’s individual mandate.

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We are unable to predict what, if any, and when such changes will be made in the future.

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We provide uninsured discounts and charity care for individuals, including for those residing in states that choose not to implement the Medicaid expansion or that modify the terms of the program, for undocumented aliens who are not permitted to enroll in an Exchange or government health care programs and for certain others who may not have insurance.

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Broad economic factors resulting from the COVID-19

pandemic, including increased unemployment rates and reduced consumer spending, the continued shift to an outpatient setting and the aging population may impact our revenue mix.

pandemic, including inflationary pressures, supply chain disruptions, labor shortages, increased unemployment and underemployment rates and reduced consumer spending and confidence, the continued shift to an outpatient setting and the aging population may impact our revenue mix.

Private third-party payers, including HMOs, PPOs and other managed care plans, typically reimburse health care providers at a higher rate than Medicare, Medicaid or other government health care programs.

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Private third-party payers, including managed care plans, continue to demand discounted fee structures, and the ongoing trend toward consolidation among payers tends to increase their bargaining power over fee structures.

Payers may utilize plan structures such as narrow networks and tiered networks that limit beneficiary provider choices or impose significantly higher cost sharing obligations when care is obtained from providers in a disfavored tier.

Payers may utilize plan structures such as narrow networks and tiered networks that limit beneficiary provider choices, impose significantly higher cost sharing obligations when care is obtained from providers in a disfavored tier or otherwise shift greater financial responsibility for care to individuals.

Other health care providers may impact our ability to enter into managed care contracts or negotiate increases in our reimbursement and other favorable terms and conditions.

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Our future success will depend, in part, on our ability to retain and renew our third-party payer contracts and enter into new contracts on terms favorable to us, which may be impacted by price transparency initiatives.

Cost-reduction strategies by large employer groups and their affiliates, such as directly contracting with a limited number of providers, may also limit our ability to negotiate favorable terms in our contracts and otherwise intensify competitive pressure.

It is not clear what impact, if any, future health reform efforts or the repeal of, or further changes to, the Affordable Care Act will have on our ability to negotiate reimbursement increases and participate in third-party payer networks on favorable terms.

Cost-reduction strategies by large employer groups and their affiliates,

such as directly contracting with a limited number of providers, may also limit our ability to negotiate favorable terms in our contracts and otherwise intensify competitive pressure.

It is not clear what impact, if any, future health reform efforts or further changes to the Affordable Care Act will have on our ability to negotiate reimbursement increases and participate in third-party payer networks on favorable terms.

If we are unable to retain and negotiate favorable contracts with third-party payers or experience reductions in payment increases or amounts received from third-party payers, our revenues may be reduced.

In addition, our revenues may be reduced if we experience growth in self-pay

In recent years, federal and state legislatures have considered or passed various proposals potentially impacting the size of the uninsured population.

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.

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

Changes to physician utilization practices and treatment methodologies, third-party payer controls designed to reduce inpatient services or surgical procedures and other factors outside our control that impact demand for medical services may reduce our revenues.

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The Medicare program also issues national or local coverage determinations that restrict the circumstances under which Medicare pays for certain services.

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utilization, average lengths of stay and occupancy rates continue to be negatively affected by third-party payers’ preadmission authorization requirements, coverage restrictions, utilization review and by pressure to maximize outpatient and alternative health care delivery services for less acutely ill patients.

Inpatient utilization, average lengths of stay and occupancy rates continue to be negatively affected by third-party payers’ preadmission authorization requirements, coverage restrictions, utilization review and by pressure to maximize outpatient and alternative health care delivery services for less acutely ill patients.

Efforts to impose more stringent cost controls are expected to continue.

Additionally, trends in physician treatment protocols and health plan design, such as health plans that shift increased costs and accountability for care to patients, could reduce our surgical volumes and admissions in favor of lower intensity and lower cost treatment methodologies.

Volume, admission and case-mix

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and medical conditions, seasonal and severe weather conditions, changes in treatment regimens and medical technology and other advances.

Further, the Medicare program’s three-year phase out and eventual elimination of the Inpatient Only List, a list of surgeries and procedures that are only covered by Medicare when provided in an inpatient setting, may reduce inpatient volumes.

Further, our inpatient volumes may decline if various inpatient hospital procedures become eligible for reimbursement by Medicare when performed in outpatient settings.

These factors may reduce the demand for services we offer and decrease the reimbursement that we receive.

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We may encounter difficulty acquiring new facilities or other businesses as a result of competition from other purchasers that may be willing to pay purchase prices that are higher than we believe are reasonable.

Some states require CONs in order to acquire a hospital or other facility, or to expand facilities or services.

Antitrust enforcement in the health care industry is currently a priority of the Federal Trade Commission and the DOJ, including with respect to hospital and physician practice acquisitions.

Some states require CONs in order to acquire a hospital or

other facility, or to expand facilities or services.

In addition, the acquisition of health care facilities often involves licensure approvals or reviews and complex change of ownership processes for Medicare and other payers.

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Such liabilities and related legal or other costs could harm our business and results of operations.

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Our facilities are heavily concentrated in Florida and Texas, which makes us sensitive to regulatory, economic, public health, environmental and competitive conditions and changes in those states.

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Our Florida and Texas facilities’ combined revenues represented 49% of our consolidated revenues for the year ended December 31, 2021.

This concentration makes us particularly sensitive to regulatory, economic, public health, environmental and competitive conditions and changes in those states.

This geographic concentration makes us particularly sensitive to regulatory, economic, public health, environmental and competitive conditions in those states.

Any material change in the current payment programs or regulatory, economic, public health, environmental or competitive conditions in those states could have a disproportionate effect on our overall business results.

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In the past, hurricanes have had a disruptive effect on the operations of our hospitals in Florida, Texas and other coastal states and the patient populations in those states.

Our business activities could be harmed by a particularly active hurricane season or even a single storm, either of which may be intensified by climate change, and the property insurance we obtain may not be adequate to cover losses from future hurricanes or other natural disasters.

Global climate change could also increase the intensity or frequency of hurricanes in those regions.

Our business activities could be harmed by a particularly active hurricane season or even a single storm, and the property insurance we obtain may not be adequate to cover losses from future hurricanes or other natural disasters.

Our business and operations are subject to risks related to climate change.

Global climate change presents both immediate and long-term physical risks (such as extreme weather conditions) and risks associated with the transition to a low-carbon economy (such as regulatory or technology changes).

These changes could result in, for example, temporary declines in the number of patients seeking our services, closures of our hospitals and related facilities, and supply chain disruptions, as well as increased costs of products, commodities and energy (including utilities), and disruptions in our information systems, which in turn could negatively impact our business and results of operations.

In addition, certain of our operations and facilities are located in regions that may be disproportionately impacted by the physical risks of climate change (including hurricanes and flooding), and we face the risk of losses incurred as a result of physical damage to our

hospitals and related facilities and business interruptions caused by such events.

We maintain property insurance coverage to address the impact of physical damage to our facilities and for business interruption losses.

However, such insurance coverage may be insufficient to cover all losses and we may experience a material, adverse effect on our results of operations that is not recoverable through our insurance policies.

Additionally, if we experience a significant increase in climate-related events that result in material losses we may be unable to obtain similar levels of property insurance coverage in the future.

In addition, changes in consumer preferences and additional legislation and regulatory requirements, including those associated with the transition to a low-carbon

economy, may increase costs associated with compliance, the operation of our facilities and supplies.

Regulations limiting greenhouse gas emissions and energy inputs may also increase in coming years, which may adversely impact us through increased compliance costs for us and our suppliers and vendors.

The industry trend toward value-based purchasing may negatively impact our revenues.

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Governmental programs including Medicare currently require hospitals to report certain quality data to receive full reimbursement updates.

In addition, Medicare does not reimburse for care related to certain preventable adverse events (also called “never events”).

The Affordable Care Act also prohibits the use of federal funds under the Medicaid program to reimburse providers for medical assistance provided to treat HACs.

The 25% of hospitals with the worst risk-adjusted HAC scores in the designated performance period receive a 1% reduction in their inpatient PPS Medicare payments.

Hospitals with excess readmission rates for conditions designated by HHS receive a reduction in their inpatient PPS operating Medicare payments for all Medicare inpatient discharges, not just discharges relating to the conditions subject to the excess readmission standard.

In addition, Medicare does not reimburse for care related to certain preventable adverse events (also called “never events”), and federal law prohibits the use of federal funds under the Medicaid program to reimburse providers for medical assistance provided to treat HACs.

The 25% of hospitals with the worst risk-adjusted HAC scores in the designated performance period receive a 1% reduction in their inpatient PPS Medicare payments the following year.

Hospitals with excess readmission rates for conditions designated by CMS receive a reduction in their inpatient PPS operating Medicare payments for all Medicare inpatient discharges, not just discharges relating to the conditions subject to the excess readmission standard.

The reduction in payments to hospitals with excess readmissions can be up to 3% of a hospital’s base payments.

HHS has implemented a value-based purchasing program for inpatient hospital services that reduces inpatient hospital payments for all discharges by 2% in each federal fiscal year.

HHS pools the amount collected from these reductions to fund payments to reward hospitals that meet or exceed certain quality performance standards established by HHS.

HHS estimates that $1.9 billion in value-based incentive payments will be available to hospitals in federal fiscal year 2021 based on achievement (relative to other hospitals) and improvement (relative to the hospital’s own past performance).

CMS has implemented a value-based purchasing program for inpatient hospital services that reduces inpatient hospital payments for all discharges by 2% in each federal fiscal year.

CMS pools the amount collected from these reductions to fund payments to reward hospitals that meet or exceed certain quality performance standards established by CMS.

CMS scores each hospital based on achievement (relative to other hospitals) and improvement (relative to the hospital’s own past performance).

Hospitals that meet or exceed the quality performance standards will receive greater reimbursement under the value-based purchasing program than they would have otherwise.

In response to the COVID-19

pandemic, CMS is applying a measure suppression policy to certain hospital quality measurement and value-based purchasing programs.

The policy is intended to ensure that these programs neither reward nor penalize hospitals based on circumstances caused by the PHE that the measures were not designed to accommodate.

CMS has developed several alternative payment models that are intended to reduce costs and improve quality of care for Medicare beneficiaries and has signaled its intent to have states apply similar strategies in the Medicaid context.

Examples of alternative payment models include bundled payment models in which, depending on whether overall CMS spending per episode exceeds or falls below a target specified by CMS and whether quality standards are met, hospitals may receive supplemental Medicare payments or owe repayments to CMS.

Generally, participation in bundled payment programs is voluntary, but CMS has required hospitals in selected markets to participate in a bundled payment initiative for specified orthopedic procedures, which is scheduled to run through September 30, 2021.

CMS will require hospitals in selected markets to participate in bundled payment initiatives for end-stage renal disease treatment, which began January 1, 2021, and radiation oncology, beginning as early as January 1, 2022.

Generally, participation in bundled payment programs is voluntary, but CMS currently requires hospitals in selected markets to participate in a bundled payment initiative for specified orthopedic procedures and in a model for end-stage

renal disease treatment.

In addition, CMS will require certain hospitals to participate in a radiation oncology model beginning as early as January 1, 2023.

CMS has indicated that it is developing more voluntary and mandatory bundled payment models.

Participation in mandatory or voluntary demonstration projects, particularly demonstrations with the potential to affect payment, may negatively impact our results of operations.

Index to Financial Statements

In October 2021, the CMS Innovation Center released an outline of its strategy for the next decade, noting the need to accelerate the movement to value-based care and drive broader system transformation.

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.

The CMS Innovation Center signaled its intent to streamline its payment models and to increase provider participation through implementation of more mandatory models.

There are also several state-driven value-based care initiatives.

For example, some states have aligned quality metrics across payers through legislation or regulation.

Some private third-party payers are also transitioning toward alternative payment models or implementing other value-based care strategies.

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Our overall business results may suffer during periods of general economic weakness.

pandemic has adversely impacted, and may in the future adversely impact, economic conditions in the United States.

Budget deficits at federal, state and local government entities have had a negative impact on spending, and may continue to negatively impact spending for health and human service programs, including Medicare, Medicaid and similar programs, which represent significant third-party payer sources for our hospitals.

pandemic has led, and may continue to lead, to a general worsening of economic conditions.

In addition, we anticipate that the federal deficit, the growing magnitude of Medicare and Medicaid expenditures and the aging of the United States population will continue to place pressure on government health care programs.

We anticipate that the federal deficit, the growing magnitude of Medicare and Medicaid expenditures and the aging of the U.S.

population will continue to place pressure on government health care programs.

Other risks we face during periods of economic weakness and high unemployment include potential declines in the population covered under managed care agreements, increased patient decisions to postpone or cancel elective and nonemergency health care 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 further difficulties in collecting patient receivables for copayment and deductible receivables.

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We are exposed to market risk related to changes in market values of securities.

pandemic has increased volatility of the capital and credit markets and has led to a general worsening of economic conditions.

The investments of our 100% owned insurance subsidiaries were $504 million at December 31, 2020.

pandemic has increased volatility of the capital and credit markets and has adversely impacted economic conditions.

The investment securities held by our insurance subsidiaries were $541 million at December 31, 2021.

These investments are carried at fair value, with changes in unrealized gains and losses being recorded as adjustments to other comprehensive income.

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Investment securities of our insurance subsidiaries could be impaired by the inability to access the capital markets.

Should the insurance subsidiaries require significant amounts of cash in excess of normal cash requirements to pay claims and other expenses on short notice, we may have difficulty selling these investments in a timely manner or be forced to sell them at a price less than what we might otherwise have been able to in a normal market environment.

Should the insurance subsidiaries

require significant amounts of cash in excess of normal cash requirements to pay claims and other expenses on short notice, we may have difficulty selling these investments in a timely manner or be forced to sell them at a price less than what we might otherwise have been able to in a normal market environment.

We may be required to recognize credit-related impairments on long-term investments in future periods should issuers default on interest payments or should the fair market valuations of the securities deteriorate due to ratings downgrades or other issue specific factors.

We are also exposed to market risk related to changes in interest rates that impact the amount of the interest expense we incur with respect to our floating rate obligations as well as the value of certain investments.

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periodically enter into interest rate swap agreements to manage our exposure to these fluctuations.

We periodically enter into interest rate swap agreements to manage our exposure to these fluctuations.

Our interest rate swap agreements involve the exchange of fixed and variable rate interest payments between two parties, based on common notional principal amounts and maturity dates.

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In February 2021, the Board of Directors approved the resumption of the Company’s quarterly cash dividend program following evaluation of the Company’s financial position.

During 2021, the Board of Directors declared four quarterly dividends of $0.48 per share, or $1.92 per share in the aggregate, on our common stock.

On January 26, 2022, our Board of Directors declared a quarterly dividend of $0.56 per share on our common stock payable on March 31, 2022 to stockholders of record at the close of business on March 17, 2022.

The declaration, amount and timing of such dividends are subject to capital availability and determinations by our Board of Directors that cash dividends are in the best interest of our stockholders and are in compliance with all respective laws and our agreements applicable to the declaration and payment of cash dividends.

Our ability to pay dividends will depend upon, among other factors, our cash flows from operations, our available capital and potential future capital requirements for strategic transactions, including acquisitions, debt service requirements, share repurchases and investing in our existing markets as well as our results of operations, financial condition and other factors beyond our control that our Board of Directors may deem relevant.

A reduction in or elimination of our dividend payments could have a negative effect on our stock price.

A reduction in or suspension or elimination of our dividend payments could have a negative effect on our stock price.

Certain of our investors may continue to have influence over us.

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In addition, pursuant to a shareholders agreement we entered into with Hercules Holding II and the Frist-affiliated investors, certain representatives of these investors have the continued right to nominate certain of the members of our Board of Directors.

As a result, certain of these investors potentially have the ability to influence our decisions to enter into corporate transactions (and the terms thereof) and prevent changes in the composition of our Board of Directors and any transaction that requires stockholder approval.

As a result, certain of these investors potentially have the ability to influence our decisions to enter into corporate transactions (and the terms thereof) and prevent changes in the composition of our Board of Directors or any transaction that requires stockholder approval.

Unresolved Staff Comments

Index to Financial Statements

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.

What changed 10-K

Item 1A. Risk Factors