7 unchanged sentences
The following is a summary of risks factors that could materially and adversely affect our business, financial conditions and results of operations.
−Removed: • we conduct business in a heavily regulated industry, and if we fail to comply with applicable healthcare laws and government regulations, we could incur financial penalties, become excluded from participating in government health care programs, be required to make significant operational changes or experience adverse publicity, which could harm our business.
+Added: • we conduct business in a heavily regulated industry, and if we fail to comply with applicable healthcare laws and government regulations, which may change from time to time, we could incur financial penalties, become excluded from participating in government health care programs, and be required to make significant operational changes or experience adverse publicity, which could harm our business;
• our business model could be challenged and, if any challenges are successful, we could incur financial penalties, become excluded from participating in government health care programs, be required to make significant operational changes or experience adverse publicity, which could harm our business;
1 unchanged sentence
• our history of net losses, and our ability to achieve or maintain profitability in an environment of increasing expenses;
−Removed: • the impact of healthcare reform legislation and other changes in the healthcare industry and in healthcare spending is currently unknown, and may harm our business;
• evolving government regulations may increase costs or negatively impact our results of operations;
11 unchanged sentences
• our ability to maintain and enhance our reputation and brand recognition;
−Removed: • our ability to properly structure and perform under our VBC programs;
+Added: • our ability to properly structure and perform under our value-based care programs;
+Added: • our ability to retain senior management team and other key employees given the current labor market, escalating inflation and salary demands;
• overall business results may suffer from an economic downturn.
−Removed: Ta b le of Contents
Risks Related to Government Regulation, Our Business and Our Industry
18 unchanged sentences
• the criminal healthcare fraud provisions of the federal Health Insurance Portability and Accountability Act of 1996, as amended by the Health Information Technology for Economic and Clinical Health Act, or HITECH, and their implementing regulations, or collectively, HIPAA, and related rules that prohibit knowingly and willfully executing, or attempting to execute, a scheme or artifice to defraud any healthcare benefit program or obtain, by means of false or fraudulent pretenses, representations, or promises, any of the money or property owned by, or under the custody or control of, any healthcare benefit program, regardless of the payer (e.g., public or private), and knowingly and willfully falsifying, concealing or
−Removed: Ta b le of Contents
covering up by any trick or device a material fact or making any material false, fictitious or fraudulent statement in connection with the delivery of or payment for health care benefits, items or services.
15 unchanged sentences
• federal and state laws pertaining to the collection, use, retention, protection, security, disclosure, transfer and processing of personal data;
−Removed: Ta b le of Contents
• state insurance laws governing what healthcare entities may bear financial risk and the allowable types of financial risks, including direct primary care programs, provider-sponsored organizations, ACOs, independent practice associations, and provider capitation.
26 unchanged sentences
Failure to comply with these laws could result in denials of reimbursement for our
−Removed: Ta b le of Contents
Privia Providers’ services (to the extent such services are billed), recoupments of prior payments, professional discipline for our Privia Providers and/or civil or criminal penalties against our Medical Groups.
1 unchanged sentence
The CMS, the federal agency responsible for administering the Medicare program, also made several changes in the manner in which Medicare pays for telehealth visits, many of which relaxed previous requirements, including originating site requirements for both the providers and patients, telehealth modality requirements and others.
−Removed: Many of these measures are effective only for the duration of the COVID-19 public health emergency.
−Removed: Effective January 16, 2022, HHS extended the public health emergency for another ninety days, which is April 16, 2022.
−Removed: The HHS Secretary may choose to renew the declaration for successive 90-day periods for as long as the emergency continues to exist and may terminate the declaration whenever he determines that the public health emergency no longer exists.
−Removed: It is unclear for how long the public health emergency declaration will be extended.
−Removed: It is also unclear which, if any, of these changes related to remote healthcare will remain in place permanently and which will be rolled-back following the COVID-19 pandemic or the expiration of the public health emergency.
−Removed: With the various government shutdowns, stay at home orders, and restrictions on elective health care services brought about by the COVID-19 pandemic, our Owned and Non-Owned Medical Groups have increasingly relied upon the availability of, and reimbursement for, telemedicine and other emerging technologies (such as digital health services) to generate revenue.
−Removed: If regulations change to restrict our Medical Groups’ ability to deliver care, or prohibit Privia Providers from delivering care, through telehealth modalities, our financial condition and results of operations may be adversely affected .
+Added: Many of these measures are effective only for the duration of the COVID-19 public health emergency, which is scheduled to end on May 11, 2023.
+Added: The Consolidated Appropriations Act of 2023 extended many of the COVID-19 public health emergency provisions related to telehealth until December 31, 2024.
+Added: It is unclear which, if any, of these changes related to telehealth will remain in place permanently and which will be rolled-back after December 31, 2024.
+Added: Similarly, any state law and enforcement changes that arose as part of the public health emergency declaration may cease or be rolled back after May 11, 2023.
+Added: Although we are still gauging the overall impact of such changes to our business, the expiration of the public health emergency will result in certain costs that have been borne by the government being passed on to patients and will reduce funding to state Medicaid agencies, which will result in less patients covered by Medicaid thereby increasing both the cost of collections and potential bad debt to health care providers.
+Added: All of these changes could adversely affect our financial conditions and results of operations.
Our revenues and profits could be diminished if we fail to retain our Privia Physicians or fail to recruit new Privia Physicians to affiliate with our Medical Groups.
14 unchanged sentences
Our operating model includes Owned Medical Groups, Non-Owned Medical Groups, MSOs that furnish management services on behalf of our Medical Groups and ACOs, a technology-enabled platform that overlays our Privia Providers’ EMR, and, in most markets, a separate legal entity that serves as an ACO under the MSSP as established by the Patient Protection and Affordable Care Act and a provider network vehicle for VBC on behalf of our Medical Groups as well as, in certain markets, independent, non-Privia Providers.
−Removed: Our ability to conduct business in each state is dependent upon that specific state’s treatment of each component of the Privia operating model under such state’s laws, regulations and policies governing the practice of medicine, physician fee splitting prohibitions, state restrictions on the use and disclosure of patient health information and other confidential information among the
−Removed: Ta b le of Contents
−Removed: various components of our operating model, restrictions on the types of provider entities that can take financial risk or the types of financial risks that can be assumed by providers before triggering the state’s insurance laws requiring licensure from the state’s insurance department or agency.
+Added: Our ability to conduct business in each state is dependent upon that specific state’s treatment of each component of the Privia operating model under such state’s laws, regulations and policies governing the practice of medicine, physician fee splitting prohibitions, state restrictions on the use and disclosure of patient health information and other confidential information among the various components of our operating model, restrictions on the types of provider entities that can take financial risk or the types of
+Added: financial risks that can be assumed by providers before triggering the state’s insurance laws requiring licensure from the state’s insurance department or agency.
The laws of many states, including states in which we currently operate, prohibit us from exercising control over the medical judgments or decisions of our Privia Physicians and from engaging in certain financial arrangements, such as splitting professional fees with Privia Providers or incentivizing certain types of utilization.
15 unchanged sentences
If such a claim were successful, we could be subject to civil and criminal penalties and could be required to restructure or terminate the applicable contractual arrangements.
−Removed: A determination that these arrangements violate state statutes, or our inability to successfully restructure our relationships with our Medical Groups to comply with these statutes, could jeopardize our performance in federal health care programs and commercial payer arrangements, could result in a decrease in management fees under our MSAs, could slow our growth by making it harder to recruit Privia Physicians to join our Medical Groups, and could result in a renegotiation of our existing agreements with Privia Physicians, all of which could have a materially adverse effect on our business, financial condition and the results of operations.
+Added: A determination that these arrangements violate state statutes, or our inability to successfully restructure our relationships with our Medical Groups to comply with these statutes, could jeopardize our performance in federal health care programs and commercial payer arrangements, could result in a decrease in management fees under our MSAs, could slow our growth by making it harder to recruit Privia Physicians to join our Medical Groups, and could result in a renegotiation of our existing agreements with Privia Physicians, all of which could have a material adverse effect on our business, financial condition and the results of operations.
The transition from fee-for-service to value-based reimbursement models may have a material adverse effect on our operations.
7 unchanged sentences
Some states require downstream entities and risk-bearing entities, or RBEs, to obtain an insurance license, a certificate of authority, or an equivalent authorization, in order to participate in downstream risk-sharing arrangements with payers.
−Removed: In some states, statutes, regulations and/or formal guidance explicitly address whether and in what manner the state regulates the transfer of risk by a payor to a downstream entity.
−Removed: However, the majority of states do not explicitly address the
−Removed: Ta b le of Contents
−Removed: issue, and in such states, regulators may nonetheless interpret statutes and regulations to regulate such activity.
−Removed: If downstream risk-sharing arrangements are not regulated directly in a particular state, the state regulatory agency may nonetheless require oversight by the licensed payor as the party to such a downstream risk-sharing arrangement.
+Added: In some states, statutes, regulations and/or formal guidance explicitly address whether and in what manner the state regulates the transfer of risk by a payer to a downstream entity.
+Added: However, the majority of states do not explicitly address the issue, and in such states, regulators may nonetheless interpret statutes and regulations to regulate such activity.
+Added: If downstream risk-
+Added: sharing arrangements are not regulated directly in a particular state, the state regulatory agency may nonetheless require oversight by the licensed payer as the party to such a downstream risk-sharing arrangement.
Such oversight is accomplished via contract and may include the imposition of reserve requirements, as well as reporting obligations.
6 unchanged sentences
ACOs that achieve quality performance standards established by CMS are eligible to share in a portion of the Medicare program’s cost savings.
−Removed: Our ACOs include physicians and advanced practitioners in Georgia, Maryland, Texas, Virginia and Washington, DC in 2021.
+Added: Our ACOs include physicians and advanced practitioners in Florida, Georgia, Maryland, Tennessee, Texas, Virginia and Washington, DC in 2022.
These ACOs participate in the MSSP, and are subject to ACO program methodologies and participation requirements that are updated by CMS for each performance year.
1 unchanged sentence
Failure to comply with such program requirements could subject us and our Medical Groups to significant penalties and, in some cases, termination from participating in MSSP.
−Removed: Additionally, the Center for Medicare and Medicaid Innovation continues to test an array of value-based alternative payment models, including the recent replacement of the Global and Professional Direct Contracting, or GPDC, Model with the ACO Reach program as of January 2, 2023, though which providers can negotiate directly with the government to manage traditional Medicare beneficiaries and share in the savings and risks generated from managing such beneficiaries.
+Added: Additionally, the Center for Medicare and Medicaid Innovation continues to test an array of value-based alternative payment models, including the recent replacement of the Global and Professional Direct Contracting, or GPDC, Model with the ACO Reach program as of January 1, 2023, through which providers can negotiate directly with the government to manage traditional Medicare beneficiaries and share in the savings and risks generated from managing such beneficiaries.
Although we currently do not participate in all of these payment models, we may choose to do so in the future.
1 unchanged sentence
It is possible that the federal or state governments will implement additional reductions, increases, or changes in reimbursement in the future under government programs that may adversely affect us or increase the cost of providing our services.
−Removed: The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue or attain growth, any of which could have a material impact on its business.
+Added: The implementation of cost containment measures or other healthcare reforms may prevent us from being able to generate revenue or attain growth, any of which could have a material adverse effect on our business.
Our operating model also seeks to structure each Medical Group with sufficient integration to allow such Medical Group to negotiate on behalf of its Privia Providers with both federal health care programs and commercial payers.
10 unchanged sentences
Agency action to implement the Executive Order could limit, or increase the cost associated with, our growth plans, including limiting our ability to acquire competitors and grow at rates similar to our historic growth rates.
−Removed: Ta b le of Contents
+Added: Further, on February 3, 2023, the Department of Justice announced that it was withdrawing from its joint statements with the FTC, including the Policy Statement, and will determine the
+Added: anticompetitive nature of such relationships on a case by case basis.
+Added: It is anticipated that the FTC will take a similar position in the coming weeks.
+Added: Although the effect of such withdrawal on enforcement priorities and standards is unclear at this time, we do expect more antitrust scrutiny of health care industry generally and targeted scrutiny of companies such as ours that aggregate providers.
A successful challenge of any of these components of our operating model could result in our restructuring our relationships with our Medical Groups and ACOs, and where such relationships cannot be successfully restructured could result in our inability to furnish services in certain markets.
Further, depending on the enforcement agency an antitrust violation can result in enforcement actions against us, our Medical Groups and/or ACOs ranging from a cease and desist demand, to criminal enforcement with the potential for treble damages.
−Removed: Any such outcome could damage our reputation, jeopardize our existing business arrangements, and could have a materially adverse effect on our business, financial condition and the results of operations.
+Added: Any such outcome could damage our reputation, jeopardize our existing business arrangements, and could have a material adverse effect on our business, financial condition and the results of operations.
Even a successful defense of an antitrust claim can be very expensive, may distract key management, and can damage our reputation and impair our ability to recruit new physicians.
−Removed: We are dependent on our EMR vendor, athenahealth, Inc., which the Privia Technology Solution is integrated and built upon, and which we require all of our Owned Medical Groups to utilize and which is utilized by all but one of the Non-Owned Medical Groups, and our business could be adversely affected if that relationship were disrupted.
+Added: We are dependent on our EMR vendor, athenahealth, Inc., which the Privia Technology Solution is integrated and built upon, and which we require all of our Owned Medical Groups to utilize and which is utilized by most of the Non-Owned Medical Groups, and our business could be adversely affected if that relationship were disrupted.
Although we own all aspects of our athenaNet services, the Privia Technology Solution is not currently usable with other EMRs, and to move our Privia Providers to another EMR provider we would have to duplicate our services on that platform, which could require considerable effort, time and expense.
4 unchanged sentences
We have a history of net losses, we anticipate increasing expenses in the future, and we may not be able to maintain profitability.
−Removed: We reported net (loss) income of $(188.2) millions, $31.2 million and $8.2 million for the years ended December 31, 2021, 2020 and 2019, respectively.
−Removed: Our accumulated deficit is $(208.1) millions and $19.9 million as of December 31, 2021 and 2020, respectively.
+Added: We reported net (loss) income of $(8.6) million, $(188.2) million, and $31.2 million for the years ended December 31, 2022, 2021 and 2020, respectively.
+Added: Our accumulated deficit is $(216.7) million and $(208.1) million as of December 31, 2022 and 2021, respectively.
We expect our aggregate costs will increase substantially in the foreseeable future and we may experience losses as we expect to invest heavily in increasing and expanding our operations, hiring additional employees and operating as a public company.
15 unchanged sentences
We are highly dependent on information technology networks and systems, including the internet, to securely process, transmit and store this sensitive data and information.
−Removed: Security breaches of this infrastructure, including physical or electronic break-ins, computer viruses, attacks by hackers and similar breaches, and employee or contractor error, negligence or malfeasance, can create system disruptions, shutdowns or unauthorized disclosure or modifications of such sensitive data or information, causing PHI or other
−Removed: Ta b le of Contents
−Removed: personal information to be accessed or acquired without authorization or to become publicly available.
+Added: Our information technology systems and those of our third-party service providers, strategic partners and other contractors or consultants are vulnerable to attack and damage or interruption from physical or electronic break-ins, computer viruses, and malware (e.g., ransomware), malicious code, natural disasters, terrorism, war, telecommunication, attacks by hackers, and employee or contractor error, negligence or malfeasance, denial or degradation of service attacks, sophisticated nation-state and nation-state-supported actors or unauthorized access or use by persons inside our organization, or persons with access to systems inside our organization.
We utilize third-party service providers for important aspects of the collection, storage, processing and transmission of employee and patient information, and other confidential and sensitive information, and therefore rely on third parties to manage functions that have material cybersecurity risks.
14 unchanged sentences
We or our third-party service providers may be unable to anticipate these techniques or to implement adequate protective measures, especially as more workforce members and our vendors’ workforce continue to work remotely because of the COVID-19 pandemic.
+Added: We may also experience security breaches that may remain undetected for an extended period.
+Added: Even if identified, we may be unable to adequately investigate or remediate incidents or breaches due to attackers increasingly using tools and techniques that are designed to circumvent controls, to avoid detection, and to remove or obfuscate forensic evidence.
A security breach or privacy violation that leads to disclosure or unauthorized use or modification of, or that prevents access to or otherwise impacts the confidentiality, security, or integrity of, any personal information, patient information, including PHI subject to HIPAA or any other sensitive information we or our contractors or third-party service providers maintain or otherwise process, could harm our reputation, compel us to comply with breach notification laws, cause us to incur significant costs for remediation, fines, penalties, notification to individuals and for measures intended to repair or replace systems or technology and to prevent future occurrences, potential increases in insurance premiums, and require us to verify the accuracy of database contents, resulting in increased costs or loss of revenue.
1 unchanged sentence
In addition, security breaches and other inappropriate access to, or acquisition or processing of, information can be difficult to detect, and any delay in identifying such incidents or in providing any notification of such incidents may lead to increased organizational harm.
−Removed: Any such breach or interruption of our systems or those of any of our third-party service providers could compromise our networks or data security processes and sensitive information could be made inaccessible or could be accessed by unauthorized parties, publicly disclosed, lost or stolen.
+Added: Our service providers from time to time are subject to cyberattacks and security incidents.
+Added: While we do not believe that we have experienced any significant system failure, accident or security breach to date, if such an event were to occur, it could compromise our
+Added: networks or data security processes and sensitive information could be made inaccessible or could be accessed by unauthorized parties, publicly disclosed, lost or stolen.
Any such interruption in access, improper access, disclosure or other loss of information could result in legal claims or proceedings, liability under laws and regulations that protect the privacy of patient information or other personal information, such as HIPAA, and regulatory penalties.
1 unchanged sentence
Any such breach could also result in the compromise of our trade secrets and other proprietary information, which could adversely affect our business and competitive position.
−Removed: While we maintain insurance covering certain security and privacy damages and claim expenses, we may not carry insurance or maintain coverage sufficient to compensate
−Removed: Ta b le of Contents
−Removed: for all liability and in any event, insurance coverage would not address the reputational damage that could result from a security incident.
+Added: While we maintain insurance covering certain security and privacy damages and claim expenses, we may not carry insurance or maintain coverage sufficient to compensate for all liability and in any event, insurance coverage would not address the reputational damage that could result from a security incident.
Further, we maintain copies of our critical operational information, including our EMR data, in different geographic settings and the cloud, and we may not be able to access such copies in the event of a national emergency or widespread natural disaster.
−Removed: Any such breach or interruption of our systems or those of any of our third-party service providers could have a material adverse impact on our business, results of operations, financial condition and cash flows.
+Added: Any such breach or interruption of our systems or those of any of our third-party service providers could have a material adverse effect on our business, results of operations, financial condition and cash flows.
The healthcare industry is highly competitive.
19 unchanged sentences
Although we recognize FFS revenue for our Owned Medical Groups when their associated Privia Providers approve the claims for providing services to patients, we may from time to time experience delays in receiving the associated reimbursement and, with respect to VBC arrangements, ultimate payment of any shared savings, bonuses, withholds and similar payments is received only after the close of the relevant measure period, which may be a calendar year, and then only after the payer has reconciled cost of care, FFS reimbursement paid, if any, reported quality data, and patient attribution resulting in significant delays between the provision of services and ultimate payment.
−Removed: In addition, third-party payers may disallow, in whole or in part, requests for reimbursement based on determinations that the patient is not eligible for coverage, certain amounts are not reimbursable under plan coverage or were for services provided that were not medically necessary, not adequately documented or after submitting additional supporting documentation requested by the payer.
+Added: In addition, third-party payers may disallow, in whole or in part, requests for reimbursement based on determinations that the patient is not eligible for coverage, certain amounts are not reimbursable under plan coverage or were for services provided that were not medically necessary,
+Added: not adequately documented or after submitting additional supporting documentation requested by the payer.
Retroactive adjustments may change amounts realized and recognized as revenue from third-party payers.
3 unchanged sentences
In addition, certain of our patients are covered under health plans that require the patient to cover a portion of their own healthcare expenses through the payment of copayments or deductibles.
−Removed: We may not be able to collect the full amounts due with respect to these
−Removed: Ta b le of Contents
−Removed: payments that are the patient’s financial responsibility, or in those instances where our Privia Physicians provide services to uninsured individuals or individuals for which the physician is out of network.
+Added: We may not be able to collect the full amounts due with respect to these payments that are the patient’s financial responsibility, or in those instances where our Privia Physicians provide services to uninsured individuals or individuals for which the physician is out of network.
To the extent permitted by law, amounts not covered by third-party payers are the obligations of individual patients for which we may not receive whole or partial payment.
15 unchanged sentences
The executive order also instructed certain governmental agencies to review and reconsider their existing policies and rules that limit access to healthcare.
−Removed: It is unclear how other healthcare reform measures enacted by Congress or implemented by the Biden administration or other challenges to the ACA, if any, will impact the ACA or our business.
−Removed: A number of legislative changes have been proposed and adopted since the ACA was enacted, including aggregate reductions to Medicare payments to providers of 2% per fiscal year, which will remain in effect through 2030, with the exception of a temporary suspension from May 1, 2020 through March 31, 2022 due to the COVID-19 pandemic and a reduction of the sequestration cut to 1% from April 1 to June 30, 2022.
−Removed: In addition, the American Rescue Plan Act of 2021, signed into law March 11, 2021, included a number of provisions intended to shore up the ACA, including lower premiums for insurance purchased through the exchange marketplace, premium tax credits for insurance purchased by individuals on the exchange marketplace and providing significant subsidies for states that have not yet expanded their Medicaid programs under the ACA.
−Removed: These changes as well as other administrative changes such as extending enrollment periods for 2021 and increasing navigator funding may ultimately decrease our Medical Groups’ uninsured patient populations but at the same time, such changes may move patient populations from higher reimbursed commercial insurance to lower reimbursed exchange marketplace coverage.
+Added: A number of legislative changes have been proposed and adopted since the ACA was enacted, including automatic, aggregate reductions to Medicare payments to providers.
+Added: Although advocacy groups were successful in limiting the impact of these reductions in 2021 from 8.5% physician reimbursement reduction to a 2.5% physician reimbursement reduction, Congress continues to cut reimbursement annually and has thus far been unwilling to make any long-term legislative changes to how it reimburses for physician services.
+Added: Congress, however, has passed legislation to increase the number of enrollees in exchange market plans.
+Added: For example, the American Rescue Plan Act of 2021, signed into law March 11, 2021, included a number of provisions intended to shore up the ACA, including lower premiums for insurance purchased through the exchange marketplace, premium tax credits for insurance purchased by individuals on the exchange marketplace and providing significant subsidies for states that have not yet expanded their Medicaid programs under the ACA.
+Added: This trend continued into 2022 with CMS adopting a final rule that went into effect January 1, 2023, which among other things, accelerates Medicare coverage for new enrollees and allows for special enrollment period in certain circumstances to reduce any gaps in Medicare coverage/ These changes as well as other administrative changes such as extending enrollment periods and increasing navigator funding may ultimately decrease our Medical Groups’ uninsured patient populations but at the same time, such changes may move patient populations from higher reimbursed commercial insurance to lower reimbursed exchange marketplace coverage.
Although it is too early to determine the likely cumulative effect of these changes, such changes could negatively impact both our revenue and the revenue of our Medical Groups.
Our operating model, the Privia Technology Solution and our revenue are dependent on the healthcare industry’s continued movement towards providers assuming more risk from payers for the cost of patient care.
−Removed: Any legislative, regulatory or industry changes that slows or limits that movement or otherwise reduces the non-facility-based healthcare spending could most likely be detrimental to our business, revenue, financial projections and growth.
+Added: Any legislative, regulatory or industry changes that
+Added: slows or limits that movement or otherwise reduces the non-facility-based healthcare spending could most likely be detrimental to our business, revenue, financial projections and growth.
VBC arrangements typically require providers to achieve certain quality indicators either as a gating prerequisite to realizing value-based revenue enhancements or as a positive or negative multiplier related to such payments, including, for example, the MSSP.
Periodic changes to the quality metrics that our Privia Providers are required to report, either as to the included metric, how the metric is measured or the necessary thresholds for satisfying the metric, could adversely impact our revenue relative to such VBC arrangements.
−Removed: We are also impacted by the Medicare Access and CHIP Reauthorization Act, under which physicians must choose to participate in one of two Quality Payment Program (“QPP”) payment methodology designed to reward physicians for delivering high-quality patient care, the Merit-Based Incentive Payment System, or MIPS, or Alternative Payment Models, or APMs.
+Added: We are also impacted by the Medicare Access and CHIP Reauthorization Act, under which physicians must choose to participate in one of two Quality Payment Program (“QPP”) payment methodologies or “tracks” designed to reward physicians for delivering high-quality patient care:
+Added: the Merit-Based Incentive Payment System, or MIPS;
+Added: or participation in an Advanced Alternative Payment Model, or Advanced APM.
CMS expects to transition increasing financial risk to providers as the QPP evolves.
−Removed: The Advanced Alternative Payment Model (“Advanced APM”) track makes incentive payments available for participation in specific innovative payment models approved by CMS.
−Removed: Providers may earn a 5% Medicare incentive payment through 2024 and will be exempt from the reporting requirements and payment adjustments imposed
−Removed: Ta b le of Contents
−Removed: under the Merit-Based Incentive Payment System (“MIPS”) if the provider has sufficient participation (based on percentage of payments or patients) in an Advanced APM.
+Added: The Advanced APM track makes incentive payments available for participation in specific innovative payment models approved by CMS.
+Added: Providers may earn a 5% Medicare incentive payment through 2024 and will be exempt from the reporting requirements and payment adjustments imposed under MIPS if the provider has sufficient participation (based on percentage of payments or patients) in an Advanced APM.
Alternatively, providers may participate in the MIPS track.
−Removed: Currently, providers electing this option may receive payment incentives or be subject to payment reductions based on their performance with respect to clinical quality, resource use, clinical improvement activities, and meeting Promoting Interoperability standards related to the meaningful use of EHRs.
−Removed: Performance data collected in 2022 will result in payment adjustments of up to 9% in 2024.
+Added: Currently, providers electing this option may receive payment incentives or be subject to payment reductions based on their performance with respect to clinical quality, resource use, clinical improvement activities specified by CMS, and meeting the “Promoting Interoperability” standards related to the meaningful use of EHRs.
+Added: Performance data collected in 2022 may result in upward or downward payment adjustments of up to 9% in 2024.
CMS makes available an exception that permits clinicians to request reweighing of any or all performance categories if they encounter an extreme and uncontrollable circumstance or public health emergency, such as COVID-19, that is outside of their control.
−Removed: Certain automatic exceptions were granted in 2020 and 2021 due to COVID 19 but for performance year 2022, providers will generally be required to submit an application in order to request an exception.
+Added: As in 2020 and 2021, CMS continues to allow certain flexibility in its QPP for 2022 reporting under its extreme and uncontrollable circumstances policies, including, among other things, applying for a reweighting of MIPS performance categories due to the COVID-19 public health emergency and to allow individuals and groups that meet the activity criteria to receive credit for the COVID-19 clinical data reporting with or without clinical trial improvement activity through the MIPS 2022 performance period.
Payments from such federal health care programs are subject to periodic statutory changes, annual regulatory changes, administrative rulings, interpretations and determinations, requirements for utilization review and federal and state funding restrictions, each of which could increase or decrease program payments, as well as affect the cost of providing service to patients and the timing of payments to our Medical Groups, and our ACOs.
17 unchanged sentences
Commercial payers often use plan structures, such as narrow networks or tiered networks, to encourage or require members to use in-network providers.
−Removed: In-network providers typically provide services through commercial payers for a negotiated lower rate or other less favorable terms and achieve their margins by increased volume of services.
+Added: In-network providers typically provide services through commercial payers for a negotiated lower rate or other less
+Added: favorable terms and achieve their margins by increased volume of services.
Commercial payers generally attempt to limit the use of out-of-network providers by requiring members to pay higher copayment and/or deductible amounts for out-of-network care.
2 unchanged sentences
Further, many states have laws and regulations that prevent providers from waiving patient out of pocket amounts, including out of network charges, when such providers submit their full charges to commercial payers.
−Removed: On July 1, 2021, the Departments of Health and Human Services, Labor and Treasury issued an interim final rule intended to reduce surprise billing in health care.
+Added: In December 2020, in connection with the enactment of the Consolidated Appropriations Act of 2021, the No Surprises Act introduced national limitations on billing for certain services furnished by providers who are not in-network with the patient’s self-insured health plan, individual or group health plan.
+Added: On July 1, 2021, the Departments of Health and Human Services, Labor and Treasury issued an interim final rule implementing certain provisions of the No Surprises Act.
On September 30, 2021, a second interim final rule was issued, subject to a public comment period, which closed on October 18, 2021.
On November 17, 2021 a third interim final rule was issued, subject to a public comment period, which closed on January 24, 2022.
−Removed: The provisions of these rules, most of which go into effect on January 1, 2022, seek to limit
−Removed: Ta b le of Contents
−Removed: excessive patient out-of-pocket amounts by limiting cost sharing for out-of-network services to in-network levels, requiring cost sharing for out-of-network payments to offset in-network deductibles, setting out-of-pocket maximums, disclosing patient protections against balance billing, and prohibiting balance billing under certain circumstances.
+Added: The provisions of these rules, most of which went into effect on January 1, 2022, seek to limit excessive patient out-of-pocket amounts by limiting cost sharing for out-of-network services to in-network levels, requiring cost sharing for out-of-network payments to offset in-network deductibles, setting out-of-pocket maximums, requiring disclosure of patient protections against balance billing, and prohibiting balance billing under certain circumstances.
These rules also establish the independent dispute resolution process that providers, facilities or providers of air ambulance services, and health plans or issuers will use to determine final payment beyond allowable patient cost-sharing for certain out-of-network healthcare services and require that certain providers and facilities provide a good faith estimate of the charges to uninsured (or self-pay) individuals so they can know what costs to expect when seeking healthcare.
−Removed: It is currently unclear how such changes will impact our revenue, bad debt, and the competitive advantages of our Medical Groups being in network status across markets.
+Added: The agencies have continued to issue guidance regarding the implementation of the No Surprises Act, and the agencies’ interpretations of law’s requirements have continued to evolve.
+Added: It is currently unclear how the No Surprise Act will impact our revenue, bad debt, and the competitive advantages of our Medical Groups being in network status across markets.
Compliance will require additional training and the build-out of new safeguards to comport our Medical Groups’ billing and collection practices with the new requirements of these interim final rules.
7 unchanged sentences
There are significant risks associated with estimating the amount of revenues that we recognize under our VBC arrangements with payers in a reporting period.
−Removed: The billing and collection process is complex due to ongoing insurance coverage changes, geographic coverage differences, differing interpretations of contract coverage and other payor issues, such as ensuring appropriate documentation.
+Added: The billing and collection process is complex due to ongoing insurance coverage changes, geographic coverage differences, differing interpretations of contract coverage and other payer issues, such as ensuring appropriate documentation.
Determining applicable primary and secondary coverage for our patients, together with the changes in patient coverage that occur each month, requires complex, resource-intensive processes.
Errors in determining the correct coordination of benefits may result in refunds to payers.
−Removed: Revenues associated with Medicare and Medicaid programs are also subject to estimating risk related to the amounts not paid by the primary government payor that will ultimately be collectible from other government programs paying secondary coverage, the patient’s commercial health plan secondary coverage or the patient.
+Added: Revenues associated with Medicare and Medicaid programs are also subject to estimating risk related to the amounts not paid by the primary government payer that will ultimately be collectible from other government programs paying secondary coverage, the patient’s commercial health plan secondary coverage or the patient.
Collections, refunds and payor retractions typically continue to occur for up to three years and longer after our Medical Groups’ services are provided.
−Removed: If our estimates of revenues are materially inaccurate, it could impact the timing and the amount of our revenues recognition and have a material adverse impact on our business, results of operations, financial condition and cash flows.
+Added: If our estimates of revenues are materially inaccurate, it could impact the timing and the amount of our revenues recognition and have a material adverse effect on our business, results of operations, financial condition and cash flows.
Changes in the payer mix of patients and potential decreases in our reimbursement rates as a result of consolidation among commercial payers could adversely affect our revenues and results of operation.
The amounts our Medical Groups receive for patient care services furnished to patients are determined by a number of factors, including the payer mix of our Privia Physicians’ patients and the reimbursement methodologies and rates utilized by our patients’ health insurance company.
−Removed: Reimbursement rates are generally higher for VBC than they are under traditional FFS arrangements, and VBC provides us with an opportunity to capture any additional surplus we create by investing in population health services to better manage a particular patient’s care, which, in turn, should reduce the total cost of care.
+Added: Reimbursement rates are generally higher for VBC than they are under traditional FFS arrangements, and
+Added: VBC provides us with an opportunity to capture any additional surplus we create by investing in population health services to better manage a particular patient’s care, which, in turn, should reduce the total cost of care.
Under certain VBC arrangements, either our management service organizations or our ACOs may receive specific care management fees, administrative fees or other fees to cover such population health and care management services, which may be structured as a fixed fee per member per month, or PMPM, for such services.
−Removed: Under FFS arrangements, our Medical Groups collect fees directly from commercial payers as services are furnished to patients.
−Removed: FFS arrangements accounted for 91.2%, 89.7% and 93.1% of our practice collections for the years ended December 31, 2021, 2020 and 2019, respectively, while VBC accounted for 8.5%, 8.6% and 6.6% of practice collections for the years ended December 31, 2021, 2020 and 2019, respectively.
Any change in payer mix, which could result from payer restrictions on such narrow network products or economic downturn resulting in more uninsured patients or patients insured by state Medicaid programs, could adversely affect the overall reimbursement our Medical Groups receive from commercial payers.
4 unchanged sentences
As a result, payers increasingly are demanding discounted fee structures or the assumption by healthcare providers of all or a portion of the financial risk related to the total cost of care of their enrollees.
−Removed: Ta b le of Contents
Reductions in the quality of services furnished by our Medical Groups or our ACO participants could have a material adverse effect on our business, results of operations, financial condition and cash flows.
27 unchanged sentences
Any increased or unexpected costs or unanticipated delays in taking a Privia Physician live on our technology-enabled platform, including delays caused by factors outside our control, could cause a Privia Physician to terminate his or her relationship prior to going live on our technology-enabled platform causing our operating results and growth targets to suffer.
−Removed: Further, if a Privia Physician terminates prior to the end of
−Removed: Ta b le of Contents
−Removed: the initial term, we are unlikely to recover our spent acquisition costs associated with such Privia Physician, which could negatively affect our revenue and profits.
+Added: Further, if a Privia Physician terminates prior to the end of the initial term, we are unlikely to recover our spent acquisition costs associated with such Privia Physician, which could negatively affect our revenue and profits.
If we cannot timely implement the Privia Technology Solution for Privia Physicians and new Medical Groups, or resolve Privia Provider and patients concerns, including any technical and billing issues, in a timely manner, we may lose Medical Groups, Privia Providers and their patients, and our reputation may be harmed.
22 unchanged sentences
This may force us to compete on additional service attributes and to expend significant resources in order to remain competitive.
−Removed: Ta b le of Contents
If our existing Medical Groups, Privia Providers, health system or hospital partners, ACO participants or payer customers do not continue to renew their contracts with us, renew at lower fee levels or decline to purchase additional applications and services from us, it could have a material adverse effect on our business, financial condition and results of operations.
11 unchanged sentences
We typically enter into multiyear contracts with our Medical Groups, Privia Physicians, health system or hospital partners, ACO participants and payer customers, which often have a stated initial term of three years and automatically renew for successive one-year terms.
−Removed: If our Medical Groups, Privia Physicians, health system or hospital partners, ACO participants and payer customers fail to renew their contracts, renew their contracts upon less favorable terms or at lower fee levels or fail to utilize additional products and services obtained from us, our revenue may decline or our future revenue growth may be constrained.
+Added: From time to time, we may renegotiate or attempt to renegotiate contracts in the ordinary course of business prior to their applicable termination or expiration with certain of our counterparties, including as part of rate negotiations with payer customers.
+Added: If our Medical Groups, Privia Physicians, health system or hospital partners, ACO participants and payer customers fail to renew their contracts, renew their contracts upon less favorable terms or at lower fee levels or fail to utilize additional products and services obtained from us, or if we fail to renegotiate contracts with our counterparties on favorable terms or at all, our revenue may decline or our future revenue growth may be constrained.
Should any of our physician practices terminate their relationship with us after implementation has begun, we would not only lose our time, effort and resources invested in that implementation, but we would also have lost the opportunity to leverage those resources to build a relationship with other Privia Physicians over that same period of time.
12 unchanged sentences
While we determined these prices based on prior experience, the costs inputs associated with the services, and feedback from our Medical Groups, Privia Physicians, health system or hospital partners, ACO participants and payer customers, our assessments may not be accurate and we could be underpricing or overpricing the Privia Technology Solution and our operating model, which may require us to continue to adjust our pricing model.
−Removed: It is essential, however, that our prices remain
−Removed: Ta b le of Contents
−Removed: competitive in the marketplace while providing a reasonable return on investment to allow us to economically provide such services.
+Added: It is essential, however, that our prices remain competitive in the marketplace while providing a reasonable return on investment to allow us to economically provide such services.
Additionally, such fees must generally be fair market value under federal and state fraud and abuse laws such as the Anti-Kickback Statute and the Stark Law.
28 unchanged sentences
If our Medical Groups are not able to continue to provide high quality cost effective healthcare services with high levels of patient satisfaction, our reputation, as well as our business, results of operations and financial condition could be adversely affected, including a failure to realize the benefits of any VBC arrangements.
−Removed: Ta b le of Contents
New Medical Groups and Privia Providers must be properly credentialed and enrolled in commercial payer plans and federal health care programs before our Medical Groups can receive reimbursement for their services, and there may be significant delays in the enrollment process.
13 unchanged sentences
The requirements for enrollment, licensure, certification, and accreditation may include notification or approval in the event of a transfer or change of ownership or certain other changes.
−Removed: Other agencies or commercial payers with which we have contracts may have similar requirements, and some of these processes may be complex.
+Added: Other agencies or commercial payers with which we have contracts may
+Added: have similar requirements, and some of these processes may be complex.
Failure to provide required notifications or obtain necessary approvals may result in the delay or inability to complete an acquisition or transfer, loss of licensure, lapses in reimbursement, or other penalties.
10 unchanged sentences
In the event of a catastrophic event with respect to one or more of these systems or facilities, we may experience an extended period of system unavailability, which could result in substantial costs to remedy those problems or harm our relationship with our Privia Physicians and our business.
−Removed: Ta b le of Contents
Additionally, any disruption in the network access, telecommunications or co-location services provided by third-party providers or any failure of or by third-party providers’ systems or our own systems to handle current or higher volume of use could significantly harm our business.
14 unchanged sentences
Because of the large amount of data that we collect and manage, it is possible that, despite precautions taken at our vendors’ facilities, the occurrence of a natural disaster, cyber incident, decision to close the facilities without adequate notice or other unanticipated problems could result in our non-compliance with privacy laws and regulations, loss of proprietary or personal information and in lengthy interruptions in our service.
−Removed: These service interruptions could also cause our platform to be unavailable to our Medical Groups, Privia Providers, patients and network members, and impair our ability to deliver solutions and services and to manage our relationships with new and existing Medical Groups, Privia Providers, patients and network members.
+Added: These service interruptions could also cause our platform to be unavailable to our Medical Groups, Privia Providers, patients and network members, and impair our ability to deliver solutions and services and to manage our relationships with new and existing
+Added: Medical Groups, Privia Providers, patients and network members.
We do, however, maintain redundancy with respect to the critical components of our platform.
13 unchanged sentences
Our information technology systems facilitate our ability to conduct our business.
−Removed: While we have disaster recovery systems and business continuity plans in place, any disruptions in our disaster recovery systems or the failure of these systems to operate as
−Removed: Ta b le of Contents
−Removed: expected could, depending on the magnitude of the problem, adversely affect our operating results by limiting our capacity to effectively monitor and control our operations.
+Added: While we have disaster recovery systems and business continuity plans in place, any disruptions in our disaster recovery systems or the failure of these systems to operate as expected could, depending on the magnitude of the problem, adversely affect our operating results by limiting our capacity to effectively monitor and control our operations.
Despite our implementation of a variety of security measures, our information technology systems could be subject to physical or electronic break-ins, and similar disruptions from unauthorized tampering or any weather-related disruptions where our headquarters is located.
15 unchanged sentences
These lawsuits, which may be initiated by government authorities as well as private party relators, which are often disgruntled employees or physicians, can involve significant monetary damages, fines, attorney fees and the award of bounties to private plaintiffs who successfully bring these suits, as well as to the federal health care programs.
−Removed: In recent years, government oversight and law enforcement have become increasingly active and aggressive in investigating and taking legal action against potential fraud and abuse especially in the health care industry.
+Added: In recent years, government
+Added: oversight and law enforcement have become increasingly active and aggressive in investigating and taking legal action against potential fraud and abuse especially in the health care industry.
Furthermore, our business exposes our Medical Groups and Privia Providers to potential medical malpractice, professional negligence or other related actions or claims that are inherent in the provision of healthcare services.
9 unchanged sentences
Our business is highly dependent on maintaining effective information systems as well as the integrity and timeliness of the data we use to serve our Privia Providers’ patients, support our Privia Providers and care teams, monitor and manage our ACOs, monitor and manage, including reporting on behalf of, our management services organizations, and to otherwise operate our business.
−Removed: Because of the large amount of data that we collect and manage, it is possible that hardware failures or errors in our systems could result in data loss or corruption or cause the information that we collect to be incomplete or contain inaccuracies that our customers regard as
−Removed: Ta b le of Contents
+Added: Because of the large amount of data that we collect and manage, it is possible that hardware failures or errors in our systems could result in data loss or corruption or cause the information that we collect to be incomplete or contain inaccuracies that our customers regard as significant.
If our data were found to be inaccurate or unreliable due to fraud, corruption or other error, or if we, or any of the third-party service providers we engage, were to fail to maintain information systems and data integrity effectively, we could experience operational disruptions that may impact our Privia Physicians, Medical Groups, health system or hospital partners, patients and our commercial plan customers, as well as our compliance with reporting obligations under the Medicare program, Medicare Advantage plans and the MSSP, and commercial VBC arrangements, and hinder our ability to provide services, establish appropriate pricing for our services, retain and attract Medical Groups and Privia Physicians, manage VBC obligations, determine total cost of care and spend, establish appropriate reserves, report financial results timely and accurately, and maintain regulatory compliance, among other things.
12 unchanged sentences
We rely on a combination of trademark, trade-secret, and copyright laws and confidentiality procedures and contractual provisions to protect our intellectual property rights in our internally developed technology and content and our brand.
−Removed: We may, over time, increase our investment in protecting our intellectual property through additional trademark, patent and other intellectual property filings that could be expensive and time-consuming to develop and maintain, both in terms of initial preparation and ongoing registration requirements and the costs of defending our rights.
+Added: We may, over time, increase our investment in protecting our intellectual property through additional trademark, patent and other intellectual property filings that could be expensive and time-consuming to develop and
+Added: maintain, both in terms of initial preparation and ongoing registration requirements and the costs of defending our rights.
These measures, however, may not be sufficient to offer us meaningful protection.
11 unchanged sentences
Our failure to obtain, maintain and enforce our intellectual property rights could therefore have a material adverse effect on our business, financial condition and results of operations.
−Removed: Ta b le of Contents
Third parties may allege that we are infringing, misappropriating or otherwise violating their intellectual property rights and in some instances initiate formal legal proceedings, the outcome of which would be uncertain and could have a material adverse effect on our business, financial condition and results of operations.
18 unchanged sentences
Even if resolved in our favor, litigation or other legal proceedings relating to intellectual property claims may cause us to incur significant expenses, and could distract our technical and management personnel from their normal responsibilities.
−Removed: In addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments, and if securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our common stock.
+Added: addition, there could be public announcements of the results of hearings, motions or other interim proceedings or developments, and if securities analysts or investors perceive these results to be negative, it could have a material adverse effect on the price of our common stock.
Moreover, any uncertainties resulting from the initiation and continuation of any legal proceedings could have a material adverse effect on our ability to raise the funds necessary to continue our operations.
8 unchanged sentences
Moreover, third parties may independently develop similar or equivalent proprietary information or otherwise gain access to our trade secrets, know-how and other internally developed information.
−Removed: Ta b le of Contents
Any restrictions on our use of, or ability to license, data, or our failure to license data and integrate third-party technologies, could have a material adverse effect on our business, financial condition and results of operations.
29 unchanged sentences
Some open source projects have known vulnerabilities and architectural instabilities and are provided on an “as-is” basis, which, if not properly addressed, could negatively affect the performance of our platform.
−Removed: If we inappropriately use or incorporate open source
−Removed: Ta b le of Contents
−Removed: software subject to certain types of open source licenses that challenge the proprietary nature of our technology-enabled platform and service, we may be required to re-engineer our platform, discontinue the commercialization of our platform or take other remedial actions, any of which could adversely impact our business, financial condition and results of operations.
+Added: If we inappropriately use or incorporate open source software subject to certain types of open source licenses that challenge the proprietary nature of our technology-enabled platform and service, we may be required to re-engineer our platform, discontinue the commercialization of our platform or take other remedial actions, any of which could adversely impact our business, financial condition and results of operations.
We depend on our senior management team and other key employees, and the loss of one or more of these employees or an inability to attract and retain other highly skilled employees could harm our business.
6 unchanged sentences
Our Medical Groups are concentrated in Virginia, Maryland, the District of Columbia, Texas, Tennessee, Florida, California and Georgia, and we may not be able to successfully establish a presence in new geographic markets.
−Removed: A substantial portion of our revenue is driven by our medical practices in Virginia, Maryland, the District of Columbia, Texas, Tennessee, Florida, and Georgia.
+Added: A substantial portion of our revenue is driven by our medical practices in Virginia, Maryland, the District of Columbia, Texas, Tennessee, Florida, Georgia, and California.
As a result, our exposure to many of the risks described herein are not mitigated by a diversification of geographic focus.
7 unchanged sentences
Our overall business results may suffer from an economic downturn.
−Removed: During periods of high unemployment, such as we are experiencing related to the COVID-19 pandemic, governmental entities often experience budget deficits as a result of increased costs and lower than expected tax collections.
−Removed: These budget deficits at federal, state and local government entities have decreased, and may continue to decrease, spending for federal health care programs, including Medicare, Medicaid and similar programs, which represent significant payer sources for our Medical Groups.
+Added: During periods of high unemployment and inflation, such as we are experiencing related to the COVID-19 pandemic, governmental entities often experience budget deficits as a result of increased costs and lower than expected tax collections.
+Added: These budget deficits at federal, state and local government entities have decreased, and may continue to decrease, spending for federal health care programs,
+Added: including Medicare, Medicaid and similar programs, which represent significant payer sources for our Medical Groups.
Other risks we face during periods of high unemployment include potential declines in the patient base, potential increases in the uninsured and underinsured populations, which could negatively impact our payer mixes, a contracting of discretionary spending by our patient base, which could negatively affect demand for the services of our Privia Physicians, and further difficulties in our collecting patient co-payment and deductible receivables.
10 unchanged sentences
Our management team may not successfully or efficiently manage us as a public company that is subject to significant regulatory oversight and reporting obligations under the federal securities laws and the continuous scrutiny of securities analysts and investors.
−Removed: These new obligations and
−Removed: Ta b le of Contents
−Removed: constituents require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could adversely affect our business, results of operations and financial condition.
+Added: These new obligations and constituents require significant attention from our senior management and could divert their attention away from the day-to-day management of our business, which could adversely affect our business, results of operations and financial condition.
Our corporate culture has contributed to our success, and if we cannot maintain this culture as we grow, we could lose the innovation, creativity and teamwork fostered by our culture and our business may be harmed.
6 unchanged sentences
We have vendors that may be the sole or primary source of certain services, products or technology critical to the services either we or our Privia Providers furnish, or to which we have committed obligations to make purchases, sometimes at particular prices.
−Removed: If any of these vendors do not meet our needs for the services or products they supply, including in the event of a product recall, shortage or dispute, and we are not able to find adequate alternative sources, if we experience material price increases from these vendors that we are unable to mitigate, or if the costs of some of the products or services that we purchase are borne by our Medical Groups and such Medical Groups are not reimbursed or not adequately reimbursed for such products or services, it could have a material adverse impact on our business, results of operations, financial condition and cash flows.
+Added: If any of these vendors do not meet our needs for the services or products they supply, including in the event of a product recall, shortage or dispute, and we are not able to find adequate alternative sources, if we experience material price increases from these vendors that we are unable to mitigate, or if the costs of some of the products or services that we purchase are borne by our Medical Groups and such Medical Groups are not reimbursed or not adequately reimbursed for such products or services, it could have a material adverse effect on our business, results of operations, financial condition and cash flows.
In addition, the technology related to the services or products critical to the services we provide is subject to new developments that may result in superior products.
13 unchanged sentences
There is a possibility that a Medicare Advantage plan may seek repayment from us, our ACOs, or our Medical Groups should CMS make any payment adjustments to the Medicare Advantage plan as a result of its audits.
−Removed: In addition, we may face civil and criminal liability under healthcare fraud and abuse laws, including, without limitation, the False Claims Act.
+Added: CMS has indicated that payment adjustments will not be limited to RAF scores for the specific MA enrollees for which errors are found but may also be extrapolated to the entire MA plan subject to a particular CMS contract.
+Added: Based on a recent final rule issued by CMS in January 2023, although 2011 to 2017 plan years are still subject to audit, overpayments to MA plans that are identified as a result of a Risk Adjustment Data Validation, or RADV, audit will only be subject to extrapolation for plan year 2018 and any subsequent plan year.
+Added: In addition, CMS will not apply an adjustment factor, known as Fee-For-Service, or FFS, Adjuster in RADV audits to account for potential differences in diagnostic coding between the Medicare Advantage program and Medicare FFS program.
+Added: Although we are continuing to assess the potential impact this final rule may have on our business and operations, such adjustments could adversely affect our revenue, financial conditions and results of operations.
+Added: Moreover, we may face civil and criminal liability under healthcare fraud and abuse laws, including, without limitation, the False Claims Act.
By way of example, in 2018, the Department of Justice, or the DOJ, reached a $270 million settlement agreement with HealthCare Partners Holdings, LLC based upon the organization’s internal coding policies and provider education that resulted in the submission of inappropriate diagnosis codes, and the inappropriate capture of historical diagnoses both of which inflated the organization’s RAF scores and resulted in inflated payment rates.
The DOJ alleged that such submissions constituted a civil False Claims Act violation.
−Removed: More recently, in August 2021, Sutter Health agreed to pay $90 million to resolve allegations that it violated the False Claims Act by knowingly submitting inaccurate
−Removed: Ta b le of Contents
−Removed: information about health status of beneficiaries enrolled in Medicare Advantage plans and entered into a five-year Corporate Integrity Agreement with the OIG.
+Added: More recently, in August 2021, Sutter Health agreed to pay $90 million to resolve allegations that it violated the False Claims Act by knowingly submitting inaccurate information about health status of beneficiaries enrolled in Medicare Advantage plans and entered into a five-year Corporate Integrity Agreement with the OIG.
There can be no assurance that a Medicare Advantage plan in which our Medical Groups participate will not be randomly selected or targeted for review by CMS or that the outcome of such a review will not result in a material adjustment in our revenue and profitability, even if the information we submitted to the plan is accurate and supportable.
7 unchanged sentences
This calculation may not take into account physicians who are not currently available because of an exclusive arrangement with an intermediary entity or because the physician is locked out of moving while awaiting payment pursuant to a VBC arrangement.
−Removed: In addition to a sufficiently large TAM to allow us to affiliate with a sufficiently large number of physicians to make the market economically viable, each market is evaluated to determine if there is sufficient reimbursement variation in fee schedules paid by commercial payers to physicians to create sufficient economic opportunity to allow such physicians to embrace our Privia operating model.
+Added: In addition to a sufficiently large TAM to allow us to affiliate with a sufficiently large number of physicians to make the market economically viable, each market is evaluated to determine if there is sufficient reimbursement variation in fee schedules paid
+Added: by commercial payers to physicians to create sufficient economic opportunity to allow such physicians to embrace our Privia operating model.
Our targeted TAM is also based on the assumption that the strategic approach that our solution enables for potential Privia Physicians will be more attractive to our available physicians than many competing opportunities.
12 unchanged sentences
Two of our Owned Medical Groups are subject to heightened reporting requirements for providers receiving more than $500,000 from the Provider Relief Fund.
−Removed: Although none of the Owned Medical Groups have yet reported, given changes arising from The Consolidated Appropriations Act, 2021 and additional guidance issued by HHS, we believe the Owned Medical Groups have more than sufficient lost revenue when comparing 2020 actual patient care revenue to 2020 budgeted patient care revenue as well as COVID-related expenditures to offset such amounts.
−Removed: These two Owned Medical Groups will also be subject to Single Audit requirements, as set forth in the regulations at 45 C.F.R.
−Removed: §75.501, which will require the recipients to maintain appropriate records and cost documentation, and they may be subject to additional audits by HHS, the OIG or the Pandemic Response Accountability Committee.
+Added: Independent audits were conducted to provide assurance that the Owned Medical Groups’ receipt of funds from HHS Provider Relief Fund and the American Rescue Plan followed the requirements of the statutes, regulations and the terms and conditions of the awards.
+Added: It was filed in accordance with the requirements of the Consolidated Appropriations Act of 2021 and additional guidance issued by HHS.
+Added: Although continued reporting obligations exist for these Owned Medical Groups, the amount of funds distributed for such periods will no longer be subject to the single audit requirements.
+Added: The Owned Medical Groups will continue to have obligations regarding maintenance of documentation of such records and costs, and remain potentially subject to additional audits by HHS, the OIG, and the Pandemic Response Accountability Committee.
Any recipient identified as providing inaccurate information will be subject to recoupment and deliberate omission, misrepresentation or falsification of any information associated with such reporting may be punishable by criminal, civil or administrative penalties, including but not limited to revocation of Medicare billing privileges, exclusion from federal health care programs, and/or the imposition of fines, civil damages and/or imprisonment.
−Removed: The law relative to the Provider Relief Fund as well as guidance from HHS
−Removed: Ta b le of Contents
−Removed: continues to evolve and we cannot say definitively whether HHS will agree with our assessment that funds were appropriately utilized by the Owned Medical Groups.
+Added: The law relative to the Provider Relief Fund as well as guidance from HHS continues to evolve and we cannot say definitively whether HHS will agree with our assessment that funds were appropriately utilized by the Owned Medical Groups.
In the event that such funds were used inappropriately or revenue losses were insufficient, it would be necessary to reimburse HHS for Provider Relief Funds received by our Owned Medical Groups, which would have a material adverse effect on our business, financial condition, and operations.
1 unchanged sentence
As the public health emergency for the COVID-19 pandemic continues, access to, and demand for, our services may be limited, which could adversely affect our business.
−Removed: Adverse market conditions resulting from the spread of COVID-19, including new variants, could materially adversely affect our business and the value of our common stock.
−Removed: We cannot predict how long the public health emergency for the COVID-19 pandemic will continue and the impact it may have on certain of our markets.
−Removed: Given recent and potential future increases in both positive test results and COVID-19 hospitalizations, it is possible that some state and local jurisdictions in our current markets may again impose shutdowns, “shelter-in-place” orders, quarantines, executive orders and similar government orders and restrictions for their residents to control the spread of COVID-19 or variants thereof.
−Removed: Such orders or restrictions have resulted in largely remote operations at our headquarters and reduced staffing and services at some of our Medical Groups and Privia Physicians’ Affiliated Practices, work stoppages and slowdowns among some of our vendors and suppliers, slowdowns and delays, travel restrictions and cancellation of elective procedures and reduction in our in-person sales activity, thereby significantly and potentially negatively impacting our operations.
−Removed: Other disruptions or potential disruptions include restrictions on the ability of our personnel to travel;
+Added: Adverse market conditions resulting from the COVID-19 pandemic, including new variants, could materially adversely affect our business and the value of our common stock.
+Added: If there is an increase in COVID-19 hospitalizations, it is possible that some state and local jurisdictions in our current markets may again impose shutdowns, “shelter-in-place” orders, quarantines, executive orders and similar government orders and restrictions for their residents to control the spread of COVID-19 or variants thereof.
+Added: Such orders or restrictions could result in reduced staffing and services at some of our Medical Groups and Privia Physicians’ Affiliated Practices, work stoppages and slowdowns among some of our vendors and suppliers, slowdowns and delays, travel restrictions and cancellation of elective procedures and reduction in our in-person sales activity, thereby significantly and potentially negatively impacting our operations.
+Added: Other potential disruptions include restrictions on the ability of our personnel to travel;
inability of our suppliers to manufacture goods and to deliver these to us on a timely basis, or at all;
4 unchanged sentences
and additional government requirements or other incremental mitigation efforts.
−Removed: The extent to which the current wave, or subsequent waves, of the COVID-19 pandemic or the spread of variants impact our business will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity and spread of COVID-19 or variants, vaccination rates and the actions to contain the COVID-19 pandemic or treat its impact, among others.
+Added: The extent to which future waves, of the COVID-19 pandemic or the spread of variants impact our business will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge
+Added: concerning the severity and spread of COVID-19 or variants, vaccination rates and the actions to contain the COVID-19 pandemic or treat its impact, among others.
In addition, the COVID-19 virus disproportionately impacts older adults, especially those with chronic illnesses, which includes many of our patients, which could strain the resources of our physician practices.
−Removed: Even without government restrictions on travel and our operations, patients may again become reluctant to seek necessary care given the risks of the COVID-19 pandemic.
+Added: Even without government restrictions on travel and our operations, patients may again become reluctant to seek necessary care if the COVID-19 pandemic worsens as a result of new variants.
This could have the effect of reducing the revenue of our Medical Groups and our resulting management fees.
2 unchanged sentences
We also may experience increased internal and third-party medical costs as we provide care for patients suffering from COVID-19.
−Removed: In addition, we may face increased competition due to changes to our competitors’ products and services, including modifications to their terms, conditions, and pricing that could materially adversely impact our business, results of operations, and overall financial condition in future periods.
−Removed: If the COVID-19 pandemic worsens, especially in regions where we have offices or Medical Groups, our business activities originating from affected areas could be adversely affected.
−Removed: Disruptive activities could include business closures in impacted areas, further restrictions on our employees’ and service providers’ ability to travel, impacts to productivity if our employees or their family members experience health issues, and potential delays in hiring and onboarding of new employees.
−Removed: We may take further actions that alter our business operations as may be required by local, state, or federal authorities or that we determine are in the best interests of our employees.
−Removed: Such measures could negatively affect our sales and marketing efforts, sales cycles, employee productivity, or patient retention, any of which could harm our financial condition and business operations.
+Added: In addition, we may face increased competition due to changes to our competitors’ products and services, including modifications to their terms, conditions, and pricing that could materially adversely affect our business, results of operations, and overall financial condition in future periods.
Further government restrictions in response to the COVID-19 pandemic and other national and international incidents could also cause our third-party data center hosting facilities and cloud computing platform providers, which are critical to our infrastructure, to shut down their business, experience security incidents that impact our business, delay or disrupt performance or delivery of services, or experience interference with the supply chain of hardware required by their systems and services, any of which could materially adversely affect our business.
1 unchanged sentence
Limitations on access or disruptions to services or goods provided by or to some of our suppliers and vendors upon which our technology-enabled platform and business operations relies, could interrupt our ability to provide our technology-enabled platform, decrease the productivity of our workforce, and significantly harm our business operations, financial condition, and results of operations.
−Removed: Our technology-enabled platform and the other systems or networks used in our business may experience an increase in attempted cyber-attacks, targeted intrusion, ransomware, and phishing campaigns seeking to take advantage of shifts to employees working
−Removed: Ta b le of Contents
−Removed: remotely using their household or personal internet networks and to leverage fears promulgated by the COVID-19 pandemic.
+Added: Our technology-enabled platform and the other systems or networks used in our business may experience an increase in attempted cyber-attacks, targeted intrusion, ransomware, and phishing campaigns seeking to take advantage of shifts to employees working remotely using their household or personal internet networks and to leverage fears promulgated by the COVID-19 pandemic.
The success of any of these unauthorized attempts could substantially impact our technology-enabled platform, the proprietary and other confidential data contained therein or otherwise stored or processed in our operations, and ultimately our business.
Any actual or perceived security incident also may cause us to incur increased expenses to improve our security controls and to remediate security vulnerabilities.
+Added: On January 12, 2023, HHS again extended the public health emergency for an additional ninety days.
+Added: On January 30, 2023, the Office of Management and Budget issued a statement of policy that the Biden Administration’s intent is to extend the public health emergency to May 11, 2023, and to end the public health emergency on that date.
+Added: The Consolidated Appropriations Act of 2023 extended many of the telehealth flexibilities authorized by the COVID-19 public health emergency through December 31, 2024.
+Added: Nonetheless, once the COVID-19 public health emergency and the extended telehealth flexibility cease, it may be necessary to change certain of our operations to satisfy the then existing requirements, which may revert back to pre-public health emergency standards, and may result in a loss of revenue as coverage for our telehealth capabilities may cease or be significantly reduced.
The extent and continued impact of the COVID-19 pandemic on our business will depend on certain developments, including:
5 unchanged sentences
To the extent the COVID-19 pandemic adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described in this “Risk Factors” section, including but not limited to those relating to cyber-attacks and security vulnerabilities, interruptions or delays due to third parties, or our ability to raise additional capital or generate sufficient cash flows necessary to fulfill our obligations under our existing indebtedness or to expand our operations.
−Removed: Our use, disclosure, and other processing of personal information, including health information, is subject to HIPAA, other federal and state privacy and security regulations, and contractual obligations, and our failure to comply with those regulations or contractual obligations or to adequately secure the information we hold could result in significant liability or reputational harm and, in turn, a material adverse effect on our patient base and revenue.
+Added: Our use, disclosure, and other processing of personal information, including health-related information, is subject to HIPAA, other federal and state privacy and security regulations, and contractual obligations, and our actual or perceived failure to comply with those regulations or contractual obligations could result in significant liability or reputational harm and, in turn, a material adverse effect on our patient base and revenue.
Numerous state and federal laws and regulations govern the collection, dissemination, use, privacy, confidentiality, security, availability, integrity, and other processing of PHI and personal information.
2 unchanged sentences
HIPAA requires covered entities, like us, our Owned or Non-Owned Medical Groups, and their business associates to develop and maintain policies and procedures with respect to PHI that is used or disclosed, including the adoption of administrative, physical and technical safeguards to protect such information.
−Removed: Our Medical Groups are all participants in an Affiliated Covered Entity under HIPAA, which allows us to share certain HIPAA compliance efforts but also provides for joint and several liability for HIPAA violations among all the participants in the Affiliated Covered Entity, which could result in the Office for Civil Rights, or OCR, imposing liability on one of our Owned Medical Groups and we would have to pursue contribution among the other members, which may be difficult to actually collect.
−Removed: HIPAA also implemented the use of standard transaction code sets and standard identifiers that covered entities must use when submitting or receiving certain electronic healthcare transactions, including activities associated with the billing and collection of healthcare claims.
+Added: Our Medical Groups are all participants in an “Affiliated Covered Entity” under HIPAA, which is a group of legally separate covered entities that considers themselves a single covered entity due to affiliation or some common control or ownership.
+Added: Participation in an affiliated covered entity allows us to share certain HIPAA compliance efforts but also provides for joint and several liability for HIPAA violations among all the participants in the Affiliated Covered Entity.
In addition to our status as a covered entity, our management services organizations and ACOs are “business associates” to our Medical Groups and ACO participants.
−Removed: Penalties for violations of HIPAA and its implementing regulations can be costly, and a single breach incident can result in violations of multiple standards.
+Added: Entities that are found to be in violation of HIPAA as the result of a breach of unsecured PHI, a complaint about privacy practices or an audit by the U.S.
+Added: Department of Health and Human Services, or HHS, may be subject to significant civil, criminal and administrative fines and penalties and/or additional reporting and oversight obligations if required to enter into a resolution agreement and corrective action plan with HHS to settle allegations of HIPAA non-compliance.
HIPAA also authorizes state attorneys general to file suit on behalf of their residents.
7 unchanged sentences
If a breach involves fewer than 500 people, the covered entity must record it in a log and notify HHS at least annually.
+Added: A non-permitted use or disclosure of PHI is presumed to be a breach under HIPAA unless the covered entity or business associate establishes that there is a low probability the information has been compromised consistent with requirements enumerated in HIPAA.
We are also subject to a provision of the federal 21st Century Cures Act that is intended to facilitate the appropriate exchange of health information.
−Removed: In May 2020, the United States Department of Health and Human Services Office of the National Coordinator for Health Information Technology and CMS issued complementary new rules that are intended to clarify provisions of the 21st Century Cures Act regarding interoperability and information blocking and create significant new requirements for healthcare industry participants.
−Removed: It is unclear at this time what the costs of compliance with the new rules will be, and what additional risks there may be to our business.
+Added: In May 2020, the United States Department of Health and Human Services Office of the National Coordinator for Health Information Technology and CMS issued complementary new rules that are intended to clarify provisions of the 21st Century Cures Act regarding interoperability and information blocking and include, among other things, requirements surrounding information blocking, changes to ONC’s health IT certification program and requirements that CMS regulated payors make relevant claims/care data and provider directory information available through standardized patient access and provider directory application programming interfaces, or APIs, that connect to provider electronic health record systems, or EHRs.
+Added: The companion rules will transform the way in which healthcare providers, health IT developers, health information exchanges/health information networks, or HIEs/HINs, and health plans share patient information, and create significant new requirements for healthcare industry participants.
+Added: For example, the ONC rule, which went into effect on April 5, 2021, prohibits healthcare providers, health IT developers of certified health IT, and HIEs/HINs from engaging in practices that are likely to interfere with, prevent, materially discourage, or otherwise inhibit the access, exchange or use of electronic health information, or EHI, also known as “information blocking.” To further support access and exchange of EHI, the ONC rule identifies eight “reasonable and necessary activities” as exceptions to information blocking activities, as long as specific conditions are met.
+Added: Any failure to comply with these rules could have a material adverse effect on our business, results of operations and financial condition.
Numerous other federal and state laws and regulations protect the confidentiality, privacy, availability, integrity and security of PHI and other types of personal information.
−Removed: State statutes and regulations vary from state to state, and these laws and regulations in many
−Removed: Ta b le of Contents
−Removed: cases are more restrictive than HIPAA and its implementing rules.
+Added: State statutes and regulations vary from state to state, and these laws and regulations in many cases are more restrictive than HIPAA and its implementing rules.
These laws and regulations are often uncertain, contradictory, and subject to changed or differing interpretations, and we expect new laws, rules and regulations regarding privacy, data protection, and information security to be proposed and enacted in the future.
For example, the California Consumer Privacy Act of 2018 (the “CCPA”), which was significantly amended by the California Privacy Rights Act (“CPRA”) effective January 1, 2022, affords consumers expanded privacy protections.
−Removed: Additionally, Virginia and Colorado passed comprehensive privacy legislation in 2021, and several privacy bills have been proposed both at the federal and state level that may result in additional legal requirements that impact our business.
+Added: Additionally, Virginia, Connecticut, Utah and Colorado have passed comprehensive privacy legislation in 2021, and several additional privacy bills have been proposed both at the federal and state level that may result in additional legal requirements that impact our business.
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.
−Removed: Beginning in 2023, under the CPRA’s amendments, as well as comprehensive privacy legislation passed in Virginia, 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.
+Added: Beginning in 2023, under the CPRA’s amendments, as well as comprehensive privacy legislation passed in Virginia, residents of those states will have additional rights with
+Added: 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.
6 unchanged sentences
This complex, dynamic legal landscape regarding privacy, data protection, and information security creates significant compliance issues for us and potentially restricts our ability to collect, use and disclose data and exposes us to additional expense, adverse publicity and liability.
+Added: In the event that we are subject to or affected by the CCPA, the CPRA or other domestic privacy and data protection laws, any liability from failure to comply with the requirements of these laws could adversely affect our financial condition.
+Added: Furthermore, the Federal Trade Commission, or FTC, and many state Attorneys General continue to enforce federal and state consumer protection laws against companies for online collection, use, dissemination and security practices that appear to be unfair or deceptive.
+Added: For example, according to the FTC, failing to take appropriate steps to keep consumers’ personal information secure can constitute unfair acts or practices in or affecting commerce in violation of Section 5(a) of the Federal Trade Commission Act.
+Added: The FTC expects a company’s data security measures to be reasonable and appropriate in light of the sensitivity and volume of consumer information it holds, the size and complexity of its business, and the cost of available tools to improve security and reduce vulnerabilities.
While we have implemented data privacy and security measures in an effort to comply with applicable laws, regulations, and contractual obligations relating to privacy and data protection, some PHI and other personal information or confidential information is transmitted to us by third parties, who may not implement adequate security and privacy measures.
17 unchanged sentences
The federal NOL carryforwards for years before 2018 begin to expire in 2034 and the state NOL carryforwards begin to expire in 2034.
−Removed: Changes in the ownership of our stock in the future, including as a result of future offerings, and some of which are outside of our control, could result in an ownership
−Removed: Ta b le of Contents
−Removed: change under Section 382 of the Code (or applicable state law) after such date, which could significantly limit our ability to utilize our existing and future NOL carryforwards arising at any time prior to such ownership change.
+Added: Changes in the ownership of our stock in the future, including as a result of future offerings, and some of which are outside of our control, could result in an ownership change under Section 382 of the Code (or applicable state law) after such date, which could significantly limit our ability to utilize our existing and future NOL carryforwards arising at any time prior to such ownership change.
General Risks
−Removed: As a result of being a public company, we are obligated to maintain proper and effective internal control over financial reporting in order to comply with Section 404 of the Sarbanes-Oxley Act.
−Removed: We may not complete our analysis of our internal control over financial reporting in a timely manner, or these internal controls may not be determined to be effective, which may adversely affect investor confidence in us and, as a result, the value of our common stock.
−Removed: In addition, because of our status as an emerging growth company, you will not be able to depend on any attestation from our independent registered public accountants as to our internal control over financial reporting for the foreseeable future.
−Removed: We are required by Section 404 of the Sarbanes-Oxley Act to furnish a report by management on, among other things, the effectiveness of our internal control over financial reporting in our second Annual Report following the completion of our initial public offering.
−Removed: The process of designing and implementing internal control over financial reporting required to comply with this requirement will be time-consuming, costly and complicated.
−Removed: If during the evaluation and testing process we identify one or more other material weaknesses in our internal control over financial reporting or determine that existing material weaknesses have not been remediated, our management will be unable to assert that our internal control over financial reporting is effective.
−Removed: In addition, if we fail to achieve and maintain the adequacy of our internal controls, as such standards are modified, supplemented or amended from time to time, we may not be able to ensure that we can conclude on an ongoing basis that we have effective internal controls over financial reporting in accordance with Section 404 of the Sarbanes-Oxley Act.
−Removed: Even if our management concludes that our internal control over financial reporting is effective, our independent registered public accounting firm may issue a report that is qualified if it is not satisfied with our controls or the level at which our controls are documented, designed, operated or reviewed.
−Removed: However, our independent registered public accounting firm will not be required to attest formally to the effectiveness of our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act until the later of the filing of our second Annual Report following the completion of our initial public offering or the date we are no longer an “emerging growth company,” as defined in the JOBS Act.
−Removed: Accordingly, you will not be able to depend on any attestation concerning our internal control over financial reporting from our independent registered public accountants for the foreseeable future.
−Removed: We cannot be certain as to the timing of completion of our evaluation, testing and any remediation actions or the impact of the same on our operations.
−Removed: If we are not able to implement the requirements of Section 404 of the Sarbanes-Oxley Act in a timely manner or with adequate compliance, our independent registered public accounting firm may issue an adverse opinion due to ineffective internal controls over financial reporting, and we may be subject to sanctions or investigation by regulatory authorities, such as the SEC.
−Removed: As a result, there could be a negative reaction in the financial markets due to a loss of confidence in the reliability of our financial statements.
−Removed: In addition, we may be required to incur costs in improving our internal control system and the hiring of additional personnel.
−Removed: Any such action could negatively affect our results of operations and cash flows.
+Added: As a public reporting company, we are obligated to maintain proper and effective internal control over financial reporting in order to comply with Section 404 of the Sarbanes-Oxley Act.
+Added: If we fail to maintain effective internal control over financial reporting, we may not be able to accurately report our financial results or report them in a timely manner, which may adversely affect investor confidence in us .
+Added: Reporting obligations as a public company place a considerable strain on our financial and management systems, processes and controls, as well as on our personnel.
+Added: As a public company, we are required to document and test our internal control over financial reporting pursuant to Section 404 of the Sarbanes-Oxley Act so that our management can certify as to the effectiveness of our internal control over financial reporting.
+Added: Section 404(a) of the Sarbanes-Oxley Act (“Section 404(a)”) requires that beginning with this annual report for the year ended December 31, 2022, management assess and report annually on the effectiveness of our internal control over financial reporting and identify any material weaknesses in our internal control over financial reporting.
+Added: Section 404(b) requires our independent registered public accounting firm to issue an annual report that addresses the effectiveness of our internal control over financial reporting.
+Added: Our compliance with Section 404(a) has required to incur substantial expenses and expend significant management efforts.
+Added: If we identify material weaknesses in our internal control over financial reporting in the future, our management will be unable to assert that our disclosure controls and procedures and our internal control over financial reporting is effective.
+Added: If we are unable to assert that our internal control over financial reporting is effective, or if our independent registered public accounting firm is unable to express an unqualified opinion as to the effectiveness of our internal control over financial reporting, investors may lose confidence in the accuracy and completeness of our financial reports, the market price of our common stock could be adversely affected and we could become subject to litigation or investigations by Nasdaq, the SEC, or other regulatory authorities, which could require additional financial and management resources.
+Added: Increased attention to, and evolving expectations for, environmental, social, and governance (“ESG”) initiatives could increase our costs, harm our reputation, or otherwise adversely impact our business .
+Added: Companies across industries are facing increasing scrutiny from a variety of stakeholders related to their ESG and sustainability practices.
+Added: Expectations regarding voluntary ESG initiatives and disclosures may result in increased costs (including but not limited to increased costs related to compliance, stakeholder engagement, contracting and insurance), enhanced compliance or disclosure obligations, or other adverse impacts to our business, financial condition, or results of operations.
+Added: While we may at times engage in voluntary initiatives (such as voluntary disclosures, certifications, or goals, among others) to improve the ESG profile of the Company, such initiatives may be costly and may not have the desired effect.
+Added: Moreover, we may not be able to successfully complete such initiatives due to factors that are within or outside of our control.
+Added: Even if this is not the case, our actions may subsequently be determined to be insufficient by various stakeholders, and we may be subject to investor or regulator engagement on our ESG efforts, even if such initiatives are currently voluntary.
+Added: Certain market participants, including major institutional investors and capital providers, use third-party benchmarks and scores to assess companies’ ESG profiles in making investment or voting decisions.
+Added: Unfavorable ESG ratings could lead to increased negative investor sentiment towards us, which could negatively impact our share price as well as our access to and cost of capital.
+Added: To the extent ESG matters negatively impact our reputation, it may also impede our ability to compete as effectively to attract and retain employees, which may adversely impact our operations.
+Added: In addition, we expect there will likely be increasing levels of regulation, disclosure-related and otherwise, with respect to ESG matters.
+Added: For example, the SEC has published propose rules that would require companies to provide significantly expanded climate-related disclosures in their periodic reporting, which may require us to incur significant additional costs to comply, including the implementation of significant additional internal controls processes and procedures regarding matters that have not been subject to such controls in the past, and impose increased oversight obligations on our management and board of directors.
+Added: These and other changes in stakeholder expectations will likely lead to increased costs as well as scrutiny that could heighten all of the risks identified in this risk factor.
+Added: Additionally, our business partners may be subject to similar expectations, which may augment or create additional risks, including risks that may not be known to us.
Risks Related to Our Indebtedness
Our existing indebtedness could adversely affect our business and growth prospects.
−Removed: As of December 31, 2021, the Company had $33.3 million in principal amount outstanding under our Term Loan Facility.
+Added: As of December 31, 2022, there was no amount outstanding under our Term Loan Facility and $65.0 million of borrowing availability under our Revolving Credit Facility.
Our indebtedness, or any additional indebtedness we may incur, could require us to divert funds identified for other purposes for debt service and impair our liquidity position.
10 unchanged sentences
We expect to use cash flow from operations to meet current and future financial obligations, including funding our operations, debt service requirements and capital expenditures.
−Removed: The ability to make these payments depends on our financial and operating
−Removed: Ta b le of Contents
−Removed: performance, which is subject to prevailing economic, industry and competitive conditions and to certain financial, business, economic and other factors beyond our control.
+Added: The ability to make these payments depends on our financial and operating performance, which is subject to prevailing economic, industry and competitive conditions and to certain financial, business, economic and other factors beyond our control.
We may not be able to generate sufficient cash flow to service all of our indebtedness, and may be forced to take other actions to satisfy our obligations under such indebtedness, which may not be successful.
33 unchanged sentences
These restrictions, along with restrictions that may be contained in agreements evidencing or governing other future indebtedness, may affect our ability to grow in accordance with our growth strategy.
−Removed: Ta b le of Contents
Our failure to raise additional capital or generate cash flows necessary to expand our operations and invest in new technologies in the future could reduce our ability to compete successfully and harm our results of operations.
12 unchanged sentences
The Lead Sponsors have significant influence on us, and their interests may conflict with ours or yours in the future.
−Removed: As of March 7, 2022, investment entities affiliated with Goldman Sachs (collectively, “Goldman Sachs”) and Pamplona Capital Management LLP (“Pamplona” and, together with Goldman Sachs, the “Lead Sponsors”) beneficially own or control approximately 25.9% and 18.5%, respectively, of our common stock.
+Added: As of February 23, 2023, investment entities affiliated with Goldman Sachs (collectively, “Goldman Sachs”) and Pamplona Capital Management LLP (“Pamplona” and, together with Goldman Sachs, the “Lead Sponsors”) beneficially own or control approximately 21.6% and 15.4%, respectively, of our common stock.
Based on their combined percentage voting power, the Lead Sponsors have significant influence over the vote of all matters submitted to a vote of our shareholders.
9 unchanged sentences
The Shareholder Rights Agreement also prohibits us from increasing or decreasing the size of our Board without the prior written consent of the Lead Sponsors.
−Removed: In addition, for so long as either Lead Sponsor owns at least 15% of the common stock, its consent will be required for certain corporate actions, including a change of control;
+Added: In addition, for so long as either Lead Sponsor owns at least 15% of the common stock, its consent will be required for certain corporate actions, including a change of
acquisitions or dispositions of assets in an amount exceeding 15% of our total assets;
10 unchanged sentences
The Lead Sponsors also may pursue acquisition opportunities that may be complementary to our business, and, as a result, those acquisition opportunities may not be available to us.
−Removed: In addition, the Lead Sponsors may have an interest in pursuing
−Removed: Ta b le of Contents
−Removed: acquisitions, divestitures and other transactions that, in its judgment, could enhance its investment, even though such transactions might involve risks to you.
−Removed: We are an “emerging growth company” and we expect to elect to comply with reduced public company reporting requirements, which could make our common stock less attractive to investors.
−Removed: We are an “emerging growth company,” as defined in the JOBS Act.
−Removed: For as long as we continue to be an emerging growth company, we are eligible for certain exemptions from various public company reporting requirements.
−Removed: These exemptions include, but are not limited to, (i) not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, (ii) reduced disclosure obligations regarding executive compensation in our periodic reports, proxy statements and registration statements, (iii) exemptions from the requirements of holding a non-binding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved, and (iv) an extended transition period to comply with new or revised accounting standards applicable to public companies.
−Removed: We could be an emerging growth company for up to five years after the first sale of our common stock pursuant to an effective registration statement under the Securities Act, which fifth anniversary will occur in 2026.
−Removed: If, however, certain events occur prior to the end of such five-year period, including if we become a “large accelerated filer,” our annual gross revenue exceeds $1.07 billion or we issue more than $1.0 billion of non- convertible debt in any three-year period, we would cease to be an emerging growth company prior to the end of such five-year period.
−Removed: We intend to provide reduced disclosure regarding executive compensation in our annual meeting proxy statement and may elect to take advantage of other reduced disclosure obligations in future filings.
−Removed: In addition, we will choose to take advantage of the extended transition period to comply with new or revised accounting standards applicable to public companies.
−Removed: As a result, the information that we provide to holders of our common stock may be different than you might receive from other public reporting companies in which you hold equity interests.
−Removed: We cannot predict if investors will find our common stock less attractive as a result of reliance on these exemptions.
−Removed: If some investors find our common stock less attractive as a result of any choice we make to reduce disclosure, there may be a less active trading market for our common stock and the market price for our common stock may be more volatile.
+Added: In addition, the Lead Sponsors may have an interest in pursuing acquisitions, divestitures and other transactions that, in its judgment, could enhance its investment, even though such transactions might involve risks to you.
+Added: Risks related to the Pamplona Entities, a Lead Sponsor.
+Added: Pamplona Capital Management LLC and related entities (the “Pamplona Entities”) beneficially owned approximately 15.4% of our outstanding common stock as of December 31, 2022.
+Added: Certain shareholders of LetterOne, which is a significant investor in the Pamplona Entities, are on the UK and EU Russian sanctions list, although neither the Pamplona Entities nor LetterOne have been designated and, to the best of our knowledge, are not sanctioned.
+Added: While we believes that we are in full compliance with all applicable sanctions regulations and intend to remain so, there can be no assurance that the perception of Pamplona’s relationship with Privia will not adversely affect our business or stock price.
The requirements of being a public company may strain our resources and distract our management, which could make it difficult to manage our business, particularly after we are no longer an “emerging growth company.”
2 unchanged sentences
Compliance with these rules and regulations have increased our legal and financial compliance costs, made some activities more difficult, time-consuming or costly and increased demand on our systems and resources.
−Removed: We will continue to experience such increased costs and challenges particularly after we are no longer an “emerging growth company.” The Exchange Act requires that we file annual, quarterly and current reports with respect to our business, financial condition and results of operations.
+Added: We will continue to experience such increased costs and challenges particularly because we are no longer an “emerging growth company.” The Exchange Act requires that we file annual, quarterly and current reports with respect to our business, financial condition and results of operations.
The Sarbanes-Oxley Act requires, among other things, that we establish and maintain effective internal controls and procedures for financial reporting.
8 unchanged sentences
If our efforts to comply with new laws, regulations and standards differ from the activities intended by regulatory or governing bodies due to ambiguities related to their application and practice, regulatory authorities may initiate legal proceedings against us and there could be a material adverse effect on our business, financial condition and results of operations.
−Removed: Ta b le of Contents
Provisions of our corporate governance documents could make an acquisition of us more difficult and may prevent attempts by our shareholders to replace or remove our current management, even if beneficial to our shareholders.
16 unchanged sentences
Our amended and restated certificate of incorporation further provides that any person or entity purchasing or otherwise acquiring any interest in shares of our capital stock is deemed to have notice of and consented to the provisions of our amended and restated certificate of incorporation described above.
−Removed: The forum selection clause in our amended and
−Removed: Ta b le of Contents
−Removed: restated certificate of incorporation may have the effect of discouraging lawsuits against us or our directors and officers and may limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us.
+Added: The forum selection clause in our amended and restated certificate of incorporation may have the effect of discouraging lawsuits against us or our directors and officers and may limit our shareholders’ ability to obtain a favorable judicial forum for disputes with us.
Our operating results and stock price may be volatile, and the market price of our common stock may drop below the price you pay.
1 unchanged sentence
In addition, securities markets worldwide have experienced, and are likely to continue to experience, significant price and volume fluctuations.
−Removed: This market volatility, as well as general economic, market or political conditions, could subject the market price of our shares to wide price fluctuations regardless of our operating performance.
+Added: This market volatility, as well as general economic, market
+Added: or political conditions, could subject the market price of our shares to wide price fluctuations regardless of our operating performance.
Our operating results and the trading price of our shares may fluctuate in response to various factors, including:
30 unchanged sentences
See “Dividend Policy” for more detail.
−Removed: Ta b le of Contents
If securities or industry analysts do not continue to publish research or reports about our business, if they adversely change their recommendations regarding our shares or if our results of operations do not meet their expectations, our stock price and trading volume could decline.
8 unchanged sentences
The potential issuance of preferred stock may delay or prevent a change in control of us, discouraging bids for our common stock at a premium to the market price, and materially adversely affect the market price and the voting and other rights of the holders of our common stock.
−Removed: Ta b le of Contents
UNRESOLVED STAFF COMMENTS
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.