What changed in this filing

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Item 1. Business

2021-03-16 compared with 2020-03-16 · 115 added, 73 removed, 431 unchanged (30% of the section changed)

Business Overview

We are a leading national provider of freestanding, fixed-site outpatient diagnostic imaging services in the United States based on number of locations and annual imaging revenue.

We have been in business since 1985 and incorporated in Delaware in 2008.

At December 31, 2019 , we operated directly or indirectly through joint ventures with hospitals, 335 centers located in California, Delaware, Florida, Maryland, New Jersey, and New York.

We are a leading national provider of freestanding, fixed-site outpatient diagnostic imaging services in the United States based on number of locations and annual imaging revenue and have been in business since 1985.

At December 31, 2020, we operated directly or indirectly through joint ventures with hospitals, 331 centers located in Arizona, California, Delaware, Florida, Maryland, New Jersey, and New York.

Our centers provide physicians with imaging capabilities to facilitate the diagnosis and treatment of diseases and disorders and may reduce unnecessary invasive procedures, often reducing the cost and amount of care for patients.

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We provide training programs, standardized policies and procedures, and sharing of best practices among the physicians in our regional networks.

In addition to our imaging services, we own and operate a number of technology businesses that are complementary to our imaging business.

Our subsidiary eRAD, Inc., develops and sells computerized systems for the diagnostic imaging industry, which provide the technology to distribute, display, store and retrieve digital images.

Our subsidiary Imaging On Call LLC, currently provides teleradiology services for remote interpretation of images on behalf of hospitals and hospital-based radiology groups.

In 2019, we increased our efforts in Artificial Intelligence (AI) by acquiring the remaining 75% that we did not already own in Nulogix, Inc.

and made an investment in Whiterabbit.ai to use AI and other technologies to create new solutions for breast cancer imaging.

In addition, we have a software division which complements our imaging business.

Through our subsidiary eRAD, Inc., we sell computerized systems that distribute, display, store and retrieve digital images.

We have a focus on Artificial Intelligence (AI), with the contributions from our acquisitions of Nulogix and DeepHealth plus our investment in Whiterabbit.ai, to develop and deploy AI suites to enhance radiologist interpretation of images.

Available Information

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All of our wholly owned facilities are in this category.

Many hospitals provide both inpatient and outpatient diagnostic imaging services, typically on site.

These inpatient and outpatient centers are owned and operated by the hospital or clinic, or jointly by both, and are primarily used by patients of the hospital or clinic.

The hospital or clinic bills third-party payors, such as managed care organizations, insurance companies, Medicare or Medicaid.

We have entered into joint ventures with certain hospitals to provide diagnostic imaging services at those hospitals.

Many hospitals provide both inpatient and outpatient diagnostic imaging services, typically on site or at a dedicated center located on or nearby the hospital campus.

These can be owned and operated by the hospital and provide imaging services to inpatients as ordered or outpatients through physician referrals.

The hospital normally bills third-party payors such as managed care organizations, insurance companies, Medicare or Medicaid.

We have entered into joint ventures with certain hospitals both provide and manage their diagnostic imaging services, allowing them to leverage our industry expertise.

Mobile Imaging

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PET technology has been found highly effective and appropriate in certain clinical circumstances for the detection and assessment of tumors throughout the body, the evaluation of some cardiac conditions and the assessment of epilepsy seizure sites.

The information provided by PET technology often obviates the need to perform further

highly invasive or diagnostic surgical procedures.

The information provided by PET technology often obviates the need to perform further highly invasive or diagnostic surgical procedures.

In addition, we employ combined PET/CT systems that blend the PET and CT imaging modalities into one scanner.

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Our Scale and Position as the Largest Provider of Freestanding, Fixed-site Outpatient Diagnostic Imaging Services in the United States, Based on Number of Centers and Revenue

As of December 31, 2019 , we operated 335 centers in California, Delaware, Florida, Maryland, New Jersey, and New York.

As of December 31, 2020, we operated 331 centers in Arizona, California, Delaware, Florida, Maryland, New Jersey, and New York.

Our size and scale allow us to achieve operating, sourcing and administrative efficiencies, including equipment and medical supply sourcing savings and favorable maintenance contracts from equipment manufacturers and other suppliers.

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Our Facility Density in Many Highly Populated Areas of the United States

The strategic organization of our diagnostic imaging facilities into regional networks concentrated in major population centers in six states offers unique benefits to our patients, our referring physicians, our payors and us.

The strategic organization of our diagnostic imaging facilities into regional networks concentrated in major population centers in seven states offers unique benefits to our patients, our referring physicians, our payors and us.

We are able to increase the convenience of our services to patients by implementing scheduling systems within geographic regions, where practical.

For example, many of our diagnostic imaging facilities within a particular region can access the patient appointment calendars of other

facilities within the same regional network to efficiently allocate time available and to meet a patient's appointment, date, time, or location preferences.

For example, many of our diagnostic imaging facilities within a particular region can access the patient appointment calendars of

other facilities within the same regional network to efficiently allocate time available and to meet a patient's appointment, date, time, or location preferences.

The grouping of our facilities within regional networks enables us to easily move technologists and other personnel, as well as equipment, from over-utilized to under-utilized facilities on an as-needed basis, and drive referrals.

Our organization of referral networks results in increased patient throughput, greater operating efficiencies, better equipment utilization rates and improved response time for our patients.

We believe our networks of facilities and tailored service offerings for geographic areas drives local physician referrals, makes us an attractive candidate for selection as a preferred provider by third-party payors and creates economies of scale.

We believe our networks of facilities and tailored service offerings for geographic areas drive local physician referrals, make us an attractive candidate for selection as a preferred provider by third-party payors and create economies of scale.

Our Strong Relationships with Payors and Diversified Payor Mix

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Our close relationship with Howard G.

Berger, M.D., our President and Chief Executive Officer, and Beverly Radiology Medical Group (“BRMG”) in California and our long-term arrangements with radiologists outside of California enable us to better ensure that medical service provided at our facilities is consistent with the needs and expectations of our referring physicians, patients and payors.

Berger, M.D., our President and Chief Executive Officer, and Beverly Radiology Medical Group (“BRMG”) in California and our long-term arrangements with radiologists outside of California enable us to better ensure that the medical service provided at our facilities is consistent with the needs and expectations of our referring physicians, patients and payors.

Our Experienced and Committed Management Team

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Our Technologically Advanced Operations

Our eRad subsidiary develops and sells computerized imaging systems for the industry and our Imaging On Call subsidiary provides teleradiology services for interpretation of images for radiology groups, hospitals and other medical groups.

We have assembled an industry leading team of software developers to create radiology workflow solutions and have increased our efforts in AI by acquiring Nulogix, Inc.

and making an investment in Whiterabbit.ai as noted above.

In 2019, we created an Artificial Intelligence (AI) division that now hosts the combined efforts of our acquisitions of DeepHealth, Nulogix, and an equity investment in WhiteRabbit.ai.

The division is currently focused on developing both improved medical interpretation of scans and patient management within the field of mammography.

Combined with our established eRad subsidiary, which develops and sells computerized imaging systems for the industry, we have assembled an industry leading team of software developers to create radiology workflow solutions that improve patient care.

Business Strategy

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We intend to enhance our operations and increase scan volume and revenue at our existing facilities by expanding physician relationships and increasing the procedure offerings.

Expansion Into Related Businesses

With our acquisition of eRad we entered the business of the development and sale of software systems essential to the imaging industry.

Similarly, with our acquisition of Imaging On Call, we entered the teleradiology business.

Our investment in WhiteRabbit.ai Inc.

is expanding our use of AI in diagnostic imaging services.

We intend to regularly evaluate potential acquisitions of other businesses to the extent they complement our imaging business.

Focus on Profitable Contracting

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• payors are receptive to our entry into the market.

This was exemplified by our recent expansion into the Phoenix, Arizona marketplace which not only met our qualifications, but also strengthened our relationship with Dignity Health, forming our third outpatient radiology venture to manage the acquired imaging centers.

Expand Our Joint Ventures

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The Consolidated Medical Group

The consolidated medical group ("the Group") consist of professional corporations owned or controlled by individuals within our senior management, namely Howard G.

The consolidated medical group ("the Group") consists of professional corporations owned or controlled by individuals within our senior management, namely Howard G.

Berger, M.D., our President and Chief Executive Officer, and John V.

Crues, III, M.D., RadNet's Medical Director, both of whom are members of our Board of Directors.

The Group provides professional medical services in California, Delaware, Maryland, New Jersey and New York, and includes the Beverly Radiology Medical Group (BRMG).

The Group provides professional medical services in California, Delaware, Maryland, New Jersey and New York, and includes Beverly Radiology Medical Group (BRMG).

BRMG is responsible for the professional medical services at nearly all of our facilities located in California.

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For the year ended December 31, 2020, this percentage was 79%.

The percentage may be adjusted, if necessary, to ensure that the parties receive the fair value for the services they render.

The percentage may be adjusted, if necessary, to ensure that the parties receive fair value for the services they render.

The following are the other principal terms of our management agreement with BRMG:

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We may terminate the agreement if Dr.

Berger no longer owns at least 60% of the equity of BRMG;

Berger no longer owns

at least 60% of the equity of BRMG;

as of December 31, 2020, he owned indirectly 99% of the equity interests of BRMG.

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% of Net Service Fee Revenue

2020 Year Ended

2019 Year Ended

Commercial Insurance (1)

54 % 56 % 56 %

Managed Care Capitated Payors 13 % 11 % 11 %

Medicare 20 % 21 % 20 %

Medicaid 2 % 2 % 3 %

(1) Includes co-payments, direct patient payments and payments through contracts with physician groups and other non-insurance company payors.

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Commercial Insurance

Generally, insurance companies reimburse us, directly or indirectly, including through the consolidated medical group or through the contracted radiology groups elsewhere, on the basis of agreed upon rates.

Generally, insurance companies reimburse us, directly or indirectly, including through the group or through the contracted radiology groups elsewhere, on the basis of agreed upon rates.

These rates are negotiated and may differ materially with rates set forth in the Medicare Physician Fee Schedule for the particular service.

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The following table sets forth the number of our facilities operated directly or managed through joint ventures for each year during the five-year period ended December 31, 2020:

2016 2017 2018 2019 2020

Total facilities owned or managed (at beginning of the year) 300 305 297 344 335

Facilities added by:

Acquisition 10 8 55 9 13

Internal development 8 4 5 4 4

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The following table indicates, as of December 31, 2020, the quantity of principal diagnostic equipment available at our facilities operated directly or through joint venture investments:

Equipment Count

Years Ended December 31,

Equipment Count Years Ended December 31,

2020 2019 2018

MRI 293 288 273

CT 175 168 162

PET/CT 67 62 59

Mammography 315 303 289

Ultrasound 689 662 632

X-ray 376 343 308

Nuclear Medicine 57 50 53

Fluoroscopy 117 120 117

Total equipment 2,089 1,996 1,893

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We have developed our own Radiology Information System through our team of software development engineers, which is used as our front desk patient tracing system, and began running this internally developed system in the first quarter of 2015.

At December 31, 2019 , we had a total of 6,165 full-time, 616 part-time and 1,717 per diem employees, including those employed by the consolidated medical group.

These numbers include 144 full-time and 40 part-time physicians and 2,033 full-time, 412 part-time and 1,129 per-diem technologists.

In addition to our company personnel, we contract 96 full-time physicians through a relationship with Envision Healthcare.

We employ site managers who are responsible for overseeing day-to-day and routine operations at each of our facilities, including staffing, modality and schedule coordination, referring physician and patient relations and purchasing of materials.

These site managers report to regional managers and directors, who are responsible for oversight of the operations of all facilities within their region, including sales, marketing and contracting.

The regional managers and directors, along with our directors of contracting, marketing, facilities, management/purchasing and human resources all report to our chief operating officers.

Human Capital

We believe the strength of our workforce is critical to the success of our mission to provide comprehensive radiology solutions and change the future of healthcare.

We are focused on attracting, retaining, and developing the talent we need to deliver on our commitment to our patients and partners.

We invest in our employees to ensure their confidence and competence in their roles, as well as to provide a path for professional career development.

We are keenly aware of the value of a diverse workforce and are proud of our track record.

We further our objectives of inclusion by providing training and growth opportunities, market-competitive compensation and a responsive benefits plan to support the needs of our human capital.

We employ imaging center managers who are responsible for overseeing day-to-day and routine operations at each of our facilities, including staffing, modality and schedule coordination, referring physician and patient relations and purchasing of materials to effectively manage their location(s).

These imaging center managers report to regional managers and/or directors, who are responsible for oversight of the operations of all facilities within their region, including sales, marketing and contracting.

The regional managers and directors, along with our directors of contracting, marketing, facilities, management/purchasing and senior human resources leadership all report to our chief operating officers.

These officers, our chief financial officer, our director of information services and our medical director report to our chief executive officer.

None of our employees is subject to a collective bargaining agreement nor have we experienced any work stoppages.

We believe our relationship with our employees is good.

At December 31, 2020, we had a total of 6,157 full-time, 525 part-time and 1,645 per diem employees, including those employed by the Group.

These numbers include 130 full-time and 51 part-time physicians and 2,033 full-time, 358 part-time and 1,089 per-diem technologists.

Diversity and Inclusion.

Our culture of diversity and inclusion continues to enable us to exceed the expectations of our patients and meet our growth strategy.

Our success in inclusion and diversity objectives are the result of strong leadership, transparency and accountability.

While our workforce demographics clearly indicate our success in achieving a highly diverse team, in order to foster even stronger understanding of diversity, equity and inclusion, we have developed an internal education program to ensure all of our team are aware of our closely held values.

Our initiatives include:

• Building a Harmonious Workforce – a three part training series aimed at education, awareness and sensitivity training for senior management, center level management and our team at large

• RadRecruit – training on best in class recruiting practices to ensure equity in the interview/hiring process and education regarding unconscious bias for our management team

• Corporate support and sponsorship of community outreach/enrichment programs for underserved population such as our ongoing and flourishing relationship with JVS SoCal.

• High School, Vocational School and Collegiate outreach

• The 2020 second quarter launch of RadNet Voices, an internal DE & I committee, sponsored by senior leadership, and comprised of a core members and rotating group of team members to capture and respond to team member experience.

Approximately 80% of the Company’s workforce at December 31, 2020 was female and 49% were from under-represented groups.

During the year ended December 31, 2020, our total attrition rate was less than 2%.

Employee Development.

We continue to emphasize employee development and education.

We provide a range of internal education and development programs and opportunities to support the advancement of our employees.

RadNet offers Leadership Development and Operations Rotation Program, Management Training, Technical Scholarship, and various modality education and training support programs We offer both formal and informal programs to identify, foster and retain top talent.

Aside from our Tuition Reimbursement program which encourages professional development for our incumbent team, we also sponsor undergraduate and graduate education and advanced technical training (RPA) for various incumbent team members.

Our primary compensation strategy is to promote a pay-for-performance culture.

Our guiding principles are anchored on the goals of being able to attract, incentivize, and retain talented employees.

We provide compensation that is competitive and consistent with employee positions, skill levels, and experience.

We align our executives’ and eligible non-executive employees long-term equity compensation with our stockholders’ interests.

Our employees are eligible for benefits that are industry-leading, including PPO and HDHP medical plans with a company sponsored HSA, wellness plans that include financial incentives, free radiology procedures for team and family, paid life insurance and AD&D, dental, vision.

Employee Assistance Plan (EAP) with enhanced mental health benefits, group paid long and short term disability plans, 401(k), tuition reimbursement, access to instant earned wages through DailyPay, paid and unpaid leave, flexible working schedule,and a variety of voluntary benefits including Colonial, Supplemental Life, Dependent Life and Commuter benefits and free flu vaccinations.

Health and Wellness.

Beyond the fundamental needs of health, welfare and retirement programs, we are focused on the specific needs of our individual employees.

In 2020, our employees adapted to an unprecedented amount of change and uncertainty driven by the COVID-19 pandemic, including rescheduled work priorities, and closure of schools and daycare facilities for families.

We have continued to provide resources and ongoing support to employees facing these challenges throughout the year, such as a wellness incentives, , home office setup allowance, expanded health coverage, and flexible work schedules.

Additionally and as a result of many of our hospital and managed care partners we were able to provide access to COVID vaccinations for our patient facing healthcare workers first, then our lower risk but essential infrastructure team.

Sales and Marketing

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Sports Marketing Program

Our west coast operations provide diagnostic digital X-ray services for the Los Angeles Lakers, Clippers, Kings and Sparks at the Staples Center and at the Coliseum for the University of Southern California Trojans football team.

Our west coast operations provide diagnostic digital X-ray services for the following organizations at their respective stadiums:

Los Angeles Clippers, Dodgers, Lakers, Kings and Sparks and the USC Trojans football team.

In exchange for these services the teams provide us with season tickets and parking.

Contract lengths vary from yearly up to five years.

We also provide radiology services at many of our imaging centers for the Los Angeles Angels, Anaheim Ducks, and the Oakland Athletics organizations.

We also provide radiology services at select imaging centers for the Anaheim Ducks, Los Angeles Angels, Los Angeles Rams, Oakland Athletics and San Francisco 49ers organizations.

Through our east coast operations, we have entered into sponsorship agreements with the Baltimore Ravens of the National Football League and the Baltimore Orioles of Major League Baseball which permits us to state we are the imaging partner to each organization.

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If we open or acquire additional imaging facilities, we may incur material lease obligations.

See Note 9, Leases, to our consolidated financial statements included in this annual report from on Form 10-K for further information.

See Note 9, Leases, to our consolidated financial statements included in this annual report on Form 10-K for further information.

Timely and effective maintenance is essential for achieving high utilization rates of our imaging equipment.

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For this reason, it is not possible to predict whether or to what extent a court will enforce the contracted radiology practices’ covenants.

The inability of the contracted radiology practices or us to enforce radiologist’s non-compete covenants could result in increased competition from individuals who are knowledgeable about our business strategies and operations.

The inability of the contracted radiology practices or us to enforce a radiologist’s non-compete covenants could result in increased competition from individuals who are knowledgeable about our business strategies and operations.

Liability Insurance

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In addition, insurers from which we purchase such insurance may experience financial hardship which would impact their ability to pay covered policyholder claims.

Pursuant to our agreements with physician groups with whom we contract, including the consolidated medical group, each must maintain medical malpractice insurance for each physician in the group, having coverage limits of not less than $1.0 million per incident and $3.0 million in the aggregate per year.

Pursuant to our agreements with physician groups with whom we contract, including the Group, each must maintain medical malpractice insurance for each physician in the group, having coverage limits of not less than $1.0 million per incident and $3.0 million in the aggregate per year.

California’s medical malpractice cap further reduces our exposure.

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Ownership, construction, operation, expansion and acquisition of diagnostic imaging facilities are subject to various federal and state laws, regulations and approvals concerning licensing of facilities and personnel.

In addition, free-standing diagnostic imaging facilities that provide services not performed as part of a physician office must meet Medicare requirements to be certified as an independent diagnostic testing facility before it can be authorized to bill the Medicare program.

In addition, free-standing diagnostic imaging facilities that provide services not performed as part of a physician's office must meet Medicare requirements to be certified as an independent diagnostic testing facility before it can be authorized to bill the Medicare program.

Corporate Practice of Medicine

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During the year ended December 31, 2020, approximately 20% of our net service revenue generated at our diagnostic imaging centers was derived from federal government sponsored healthcare programs (Medicare) and 2% from state sponsored programs (Medicaid).

Federal law known as the Anti-kickback Statute prohibits the knowing and willful offer, payment, solicitation or receipt of any form of remuneration in return for, or to induce, (i) the referral of a person, (ii) the furnishing or arranging for the furnishing of items or services reimbursable under the Medicare, Medicaid or other governmental programs or (iii) the purchase, lease or order or arranging or recommending purchasing, leasing or ordering of any item or service reimbursable under the Medicare, Medicaid or other governmental programs.

purchase, lease or order or arranging or recommending purchasing, leasing or ordering of any item or service reimbursable under the Medicare, Medicaid or other governmental programs.

Noncompliance with the federal Anti-kickback Statute can result in exclusion from the Medicare, Medicaid or other governmental programs and civil and criminal penalties.

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To create better clarity, the Office of the Inspector General of the U.S.

Department of Health and Human Services has issued regulations as "safe harbor" guidelines which if met in form and substance, will assure healthcare providers that they will not be prosecuted for violation of the Anti–kickback Statute.

Department of Health and Human Services (OIG) has issued regulations as "safe harbor" guidelines which if met in form and substance, will assure healthcare providers that they will not be prosecuted for violation of the Anti–kickback Statute.

The OIG issued a final rule on November 20, 2020, as part of the Regulatory Sprint to Coordinated Care initiative by the U.S.

Department of Health and Human Services that, among other things, established new "safe harbors" under the Anti-kickback Statute for certain value-based compensation arrangements.

Although full compliance with these provisions ensures against prosecution under the federal Anti-kickback Statute, the failure of a transaction or arrangement to fit within a specific safe harbor does not necessarily mean that the transaction or arrangement is illegal or that prosecution under the federal Anti-kickback Statute will be pursued.

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The penalties for violating the Stark Law include a prohibition on payment by these governmental programs and civil penalties of as much as $15,000 for each violation referral and $100,000 for participation in a circumvention scheme.

The regulations governing the Stark Law were also recently amended as part of the Regulatory Sprint to Coordinated Care initiative.

These new regulations, which among other things establish new exceptions for value-based arrangements, were published by the Centers for Medicare & Medicaid Services (CMS) on November 20, 2020.

We believe that, although we receive fees under our service agreements for management and administrative services, we are not in a position to make or influence referrals of patients.

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Therefore, we believe that the Stark Law is not implicated by the financial relationships between our operations and the contracted radiology practices.

In addition, we believe that we have structured our acquisitions of the assets of existing practices, and we intend to structure any future acquisitions, so as not to violate the Anti-kickback Statute and Stark Law and regulations.

Specifically, we believe the consideration paid by us to physicians to acquire the tangible and intangible assets associated with their practices is consistent with fair value in arms’ length transactions and is not intended to induce the referral of patients or other business generated by such physicians.

Specifically, we believe the consideration paid by us to physicians to acquire the tangible and intangible assets associated with

their practices is consistent with fair value in arms’ length transactions and is not intended to induce the referral of patients or other business generated by such physicians.

Should any such practice be deemed to constitute an arrangement designed to induce the referral of Medicare or Medicaid patients, then our acquisitions could be viewed as possibly violating anti-kickback and anti-referral laws and regulations.

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An unsatisfactory audit of any of our diagnostic imaging facilities or contracted radiology practices could result in any or all of the following:

significant repayment obligations, exclusion from the Medicare, Medicaid or other governmental programs, and civil and criminal penalties.

Federal regulatory and law enforcement authorities have increased enforcement activities with respect to Medicare, Medicaid fraud and abuse regulations and other reimbursement laws and rules, including laws and regulations that govern our activities and the activities of the radiology practices.

The federal government also has increased funding to fight healthcare fraud

and is coordinating its enforcement efforts among various agencies, such as the U.S.

significant repayment obligations, exclusion from Medicare, Medicaid or other governmental programs, and civil and criminal penalties.

Federal regulatory and law enforcement authorities have increased enforcement activities with respect to Medicare and Medicaid fraud and abuse regulations and other reimbursement laws and rules, including laws and regulations that govern our activities and the activities of the radiology practices.

The federal government also has increased funding to fight healthcare fraud and is coordinating its enforcement efforts among various agencies, such as the U.S.

Department of Justice, the U.S.

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State Anti-kickback and Physician Self-referral Laws

Many states have adopted laws similar to the federal Anti-kickback Statute.

Some of these state prohibitions apply to referral of patients for healthcare services reimbursed by any source, not only the Medicare and Medicaid programs.

Although we believe that we comply with both federal and state Anti-kickback laws, any finding of a violation of these laws could subject us to criminal and civil penalties or possible exclusion from federal or state healthcare programs.

Many states have adopted laws similar to the federal Anti-kickback Statute and the Stark Law.

Some of these state prohibitions apply to services and the referral of patients for healthcare services reimbursed by any source, not only the Medicare and Medicaid programs.

Although we believe that we comply with both federal and state anti-kickback laws and self-referral laws, any finding of a violation of these laws could subject us to criminal and civil penalties or possible exclusion from federal or state healthcare programs.

Such penalties would adversely affect our financial performance and our ability to operate our business.

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The federal False Claims Act further provides that a lawsuit thereunder may be initiated in the name of the United States by an individual, a “whistleblower,” who is an original source of the allegations.

The government has taken the position that claims presented in violation of the federal anti-kickback law or Stark Law may be considered a violation of the federal False Claims Act.

The government has taken the position that claims presented in violation of the federal Anti-kickback Statute or Stark Law may be considered a violation of the federal False Claims Act.

Penalties include civil penalties of not less than $5,500 and not more than $11,000 for each false claim, plus three times the amount of damages that the federal government sustained because of the act of that person.

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Excluded from the adjustment is low-technology imaging modalities such as ultrasound, X-ray and fluoroscopy.

The Health Care and Education Reconciliation Act of 2010 (H.R.

The Health Care and

Education Reconciliation Act of 2010 (H.R.

4872), or Reconciliation Act, which was passed by the Senate and approved by the President on March 30, 2010, amends the provision for higher presumed utilization of advanced diagnostic imaging services to a presumed rate of 75%.

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The aim of increased utilization of diagnostic imaging services is to spread the cost of the equipment and services over a greater number of scans, resulting in a lower cost per scan.

These changes have precipitated reductions in federal reimbursement for medical imaging and result in decreased revenue for the scans we perform for Medicare beneficiaries.

These changes have precipitated reductions in federal reimbursement for medical imaging and have resulted in decreased revenue for the scans we perform for Medicare beneficiaries.

Other changes in reimbursement for services rendered by Medicare Advantage plans may also reduce the revenues we receive for services rendered to Medicare Advantage enrollees.

On November 8, 2016, Donald Trump was elected President of the United States.

President Trump has repeatedly signaled his intent to repeal and replace the PPACA and members of the Republican Party in Congress have also advocated the repeal or modification of the PPACA.

On January 20, 2017, President Trump signed an “Executive Order Minimizing the Economic Burden of the Patient Protection and Affordable Care Act Pending Repeal.” (the “PPACA Executive Order”).

Under the PPACA Executive Order it is the policy of the Trump Administration to seek prompt repeal of the PPACA.

On December 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act (the “TCJA”)).

Among numerous changes to the tax code, the TCJA repealed the individual mandate tax penalty (the “Individual Mandate”), a PPACA provision that required individuals to pay additional taxes if he or she was uninsured during the year.

On December 22, 2017, President Trump signed into law the Tax Cuts and Jobs Act (the “Tax Act”)).

Among numerous changes to the tax code, the Tax Act repealed the individual mandate tax penalty (the “Individual Mandate”), a PPACA provision that required individuals to pay additional taxes if he or she was uninsured during the year.

Repeal of the Individual Mandate may lead to more people being uninsured, and could raise premium rates for insured persons.

Such a development, as well as other changes to (or the full repeal of) the PPACA (whether through legislation or judicial action), could affect reimbursement, coverage, and utilization of diagnostic imaging services in ways that are currently unpredictable.

Such a development could affect reimbursement, coverage, and utilization of diagnostic imaging services in ways that are currently unpredictable.

Other changes to the PPACA (whether through legislation or judicial action), including further rollbacks or full repeal of the PPACA being sought by congressional and state members of the Republican Party, or expansion of the PPACA (including, but not limited to, the development of a "public option" that would compete with private insurers to offer coverage to both individuals and those with employer sponsored insurance) being sought by the Biden Administration, could have similarly unpredictable effects.

Health Insurance Portability and Accountability Act of 1996

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Moreover, we cannot guarantee that enforcement agencies or courts will not make interpretations of the HIPAA standards that are inconsistent with ours, or the interpretations of our contracted radiology practices or their affiliated physicians.

A finding of liability under the HIPAA standards may result in significant criminal and civil penalties.

A finding of liability under the

HIPAA standards may result in significant criminal and civil penalties.

Noncompliance also may result in exclusion from participation in government programs, including Medicare and Medicaid.

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Insurance Laws and Regulation

States in which we operate have adopted certain laws and regulations affecting risk assumption in the healthcare industry, including those that subject any physician or physician network engaged in risk-based managed care to applicable insurance laws and regulations.

These laws and regulations may require physicians and physician networks to meet minimum capital requirements and other safety and soundness requirements.

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Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-K

Item 1. Business