What changed in this filing

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Item 1. Business

2023-03-01 compared with 2022-03-01 · 72 added, 96 removed, 427 unchanged (28% 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 and have been in business since 1985.

We are a leading national provider of diagnostic imaging services in the United States based on number of locations and annual imaging revenue.

We have been in business since 1985.

At December 31, 2022, we operated directly or indirectly through joint ventures with hospitals, 357 centers located in Arizona, California, Delaware, Florida, Maryland, New Jersey, and New York.

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Our multi-modality strategy diversifies revenue streams, reduces exposure to reimbursement changes and provides patients and referring physicians one location to serve the needs of multiple procedures.

Integral to the imaging center business is our software arm headed by eRAD, Inc., which sells computerized systems that distribute, display, store and retrieve digital images.

Internationally, our subsidiary Heart and Lung Imaging LLC, provides teleradiology services for remote interpretation of images on behalf of providers within the framework of the United Kingdom's National Health Service.

We seek to develop leading positions in regional markets in order to leverage operational efficiencies.

We develop our medical imaging business through a combination of organic growth and acquisitions.

We develop our imaging business through a combination of organic growth and acquisitions.

Our scale and density within selected geographies provide close, long-term relationships with key payors, radiology groups and referring physicians.

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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, 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 also established an Artificial Intelligence (AI) division, with the contributions from our acquisitions of Nulogix and DeepHealth plus our investment in Whiterabbit.ai, which develop and deploy AI suites to enhance radiologist interpretation of images initially in the field of mammography.

Early in 2022, after the period covered by this annual report, we expanded the division by the acquisition of two companies in the Netherlands, Aidence Holding B.V.

and Quantib B.V.

that are developing AI solutions initially targeted for lung and prostate cancer.

We have also established an Artificial Intelligence (AI) division, that develops and deploys AI suites to enhance radiologist interpretations of breast, lung and prostate images.

The division is led by DeepHealth, and includes our acquisitions of Aidence Holding B.V.

and Quantib B.V., both based in The Netherlands.

Available Information

All reports we file with the Securities and Exchange Commission are available free of charge via EDGAR through the SEC website at www.sec.gov .

We also maintain a website at www.radnet.com where we make available, free of charge, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports as soon as is reasonably practicable after the material is electronically filed with the Securities and Exchange Commission.

We also maintain a website at www.radnet.com where we make available, free of charge, our annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports as soon as reasonably practicable after the material is electronically filed with, or furnished to, the Securities and Exchange Commission.

References to our website in this report are provided as a convenience and the information contained on, or otherwise accessible through, the website is not incorporated by reference into, nor does it form a part of this annual report on Form 10-K or any other document that we file with the Securities and Exchange Commission.

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The number of MRI and CT scans performed annually in the United States continues to grow due to their wider acceptance by physicians and payors, an increasing number of applications for their use and a general increase in demand due to the aging population.

Although currently small in scope, Artificial Intelligence (AI) methods are now being employed to aid radiologists in scan interpretation by quickly allowing comparison to large imaging databases to enable pinpoint diagnosis in shorter time frames.

Although currently small in scope, AI methods are now being employed to aid radiologists in scan interpretation by quickly allowing comparison to large imaging databases to enable pinpoint diagnosis in shorter time frames.

In addition, AI methods can keep track of individuals needing procedures on a regular basis (i.e.

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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, 2021, we operated 347 centers in Arizona, California, Delaware, Florida, Maryland, New Jersey, and New York.

As of December 31, 2022, we operated, directly or indirectly through joint ventures with hospitals, 357 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 Experienced and Committed Management Team

Our senior management group has more than 100 years of combined healthcare management experience.

Our executive management team has created our differentiated approach based on their comprehensive understanding of the diagnostic imaging industry and the dynamics of our regional markets.

Our senior and executive management teams have created our differentiated approach based on their comprehensive understanding of the diagnostic imaging industry and the dynamics of our regional markets.

We have a track record of successful acquisitions and integration of acquired businesses into RadNet, and have managed the business through a variety of economic and reimbursement cycles.

Our Technologically Advanced Operations

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.

Early in 2022, after the period covered by this annual report, we expanded the division by the acquisition of two companies in the Netherlands, Aidence Holding B.V.

In 2019, we created an AI division that now hosts the combined efforts of our acquisitions of DeepHealth, Aidence Holding B.V.

and Quantib B.V..

that are developing AI solutions initially targeted for lung and prostate cancer, respectively.

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.

The division is currently focused on developing improved medical interpretation of scans within the fields of mammography, lung and prostate imaging.

Combined with our established eRad subsidiary, which develops and sells computerized imaging data storage and retrieval systems, 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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Because many of our contracts with third party payors are short-term in nature, we can regularly renegotiate these contracts, if necessary.

We believe our position as a leading provider of diagnostic imaging services and our long-term relationships with physician groups in our markets enable us to obtain more favorable contract terms than would be available to smaller or less experienced imaging services providers.

We believe our position as a leading provider of diagnostic imaging services and our long-term

relationships with physician groups in our markets enable us to obtain more favorable contract terms than would be available to smaller or less experienced imaging services providers.

Optimize Operating Efficiencies

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Expand Our Networks

We intend to continue to expand the number of our center both organically and through targeted acquisitions, using a disciplined approach for evaluating and entering new areas, including consideration of whether we have adequate financial resources to expand.

We intend to continue to expand the number of our centers both organically and through targeted acquisitions, using a disciplined approach for evaluating and entering new areas, including consideration of whether we have adequate financial resources to expand.

Our current plans are to strengthen our market presence in geographic areas where we currently have existing operations and to expand into neighboring and other areas where we believe we can compete effectively.

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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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We intend to continue to expand in established markets through additional joint ventures, particularly with hospital systems.

We believe that such joint ventures strengthen and expand our strength in markets where we are already established.

We believe that these joint ventures strengthen and expand our strength in markets where we are already established.

We offer a comprehensive set of imaging services including MRI, CT, PET, nuclear medicine, X-ray, ultrasound, mammography, fluoroscopy and other related procedures.

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In order to comply with this prohibition, we contract with medical groups to provide professional medical services in our centers, including the supervision and interpretation of diagnostic imaging procedures.

The medical group maintains full control over the physicians it employs.

Through our management agreements, we make available the imaging facility and all of the furniture and medical equipment at the facility for use by the radiology practice, and the practice is responsible for staffing the facility with qualified professional medical personnel.

The medical groups are compensated for their services from the professional component of the global net service fee revenue.

Many states have also enacted laws prohibiting a licensed professional from splitting fees derived from the practice of medicine with an unlicensed person or business entity.

We do not believe that the management, administrative, technical and other non-medical services we provide to each of our contracted radiology groups violate the corporate practice of medicine prohibition or that the fees we charge for such services violate the fee splitting prohibition.

However, the enforcement and interpretation of these laws by regulatory authorities and state courts vary from state to state.

If our arrangements with our independent contractor radiology groups are found to violate state laws prohibiting the practice of medicine by general business corporations or fee splitting, our business, financial condition and ability to operate in those states could be adversely affected.

The Consolidated Medical Group

The consolidated medical group ("the Group") consists of professional corporations owned or controlled by individuals within our senior management that provide professional medical services in Arizona, California, Delaware, Maryland, New Jersey and New York.

Under management agreements, we are paid compensation for our technical services and for the use of our centers and equipment.

Other Professional Radiology Groups

We contract with a consolidated medical group (the "Group") which consists of professional corporations owned or controlled by individuals within our senior management that provide professional medical services in Arizona, California, Delaware, Maryland, New Jersey and New York.

At locations where the Group does not provide professional medical services, we have entered into long-term contracts with third-party radiology groups in the area to provide physician services at those centers.

These third-party radiology practice groups provide professional services, including supervision and interpretation of diagnostic imaging procedures, in our diagnostic imaging centers.

The radiology practices maintain full control over the provision of professional services.

The contracted radiology practices have outstanding physician and practice credentials and reputations;

strong competitive market positions;

a broad sub-specialty mix of physicians;

a history of growth and potential for continued growth.

The medical groups retain the professional reimbursements associated with imaging procedures after deducting management service fees paid to us.

Management Services

We provide the use of our diagnostic imaging equipment, technical and management services, and administration of the non-medical functions of the professional medical practices at our centers, including the provision of non-medical staff, accounting services, billing and collection, medical and office supplies, transcription services, maintenance of medical records, and marketing.

These third-party radiology practice groups maintain full control over the provision of professional services, including supervision and interpretation of diagnostic imaging procedures, in our diagnostic imaging centers.

Each medical group maintains control over the physicians it employs, and is responsible for staffing the facility with qualified professional medical personnel.

Under management agreements with the Group or other third-party radiology practices, we provide the use of our diagnostic imaging equipment, technical and management services, and administration of the non-medical functions of the professional medical practices at our centers, including the provision of non-medical staff, accounting services, billing and collection, medical and office supplies, transcription services, maintenance of medical records, and marketing.

As compensation for the services furnished under management contracts with our medical groups, we receive technical fees for the use of our diagnostic imaging equipment and technical services and an agreed percentage of the medical practice billings for, or collections from, services provided at our centers.

The medical groups retain the professional reimbursements associated with imaging procedures after deducting management service fees paid to us.

Additionally, we perform certain management services for a portion of the professional groups with whom we contract who provide professional radiology services at local hospitals.

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

We have described below the types of reimbursement arrangements we have with third-party payors.

Commercial Insurance

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.

Generally, insurance companies reimburse us, directly or indirectly, including through the Group or through the contracted radiology groups, 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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Under these agreements that are generally between the medical groups and the payor (which in most cases are large medical groups or Independent Practice Associations), the payor pays a pre-determined amount per-member per-month in exchange for the radiology group providing all necessary covered services to the managed care members included in the agreement.

These contracts pass much of the financial risk of providing outpatient diagnostic imaging services, including the risk of over-use, from the payor to the radiology group and, as a result of our management agreement with the radiology group, to us.

These contracts pass much of the financial risk of providing outpatient diagnostic imaging services, including the risk of over-use, from the payor to the radiology practice group and, as a result of our management agreement with the radiology practice group, to us.

We believe that through our comprehensive utilization management, or UM, program we have become highly skilled at assessing and moderating the risks associated with the capitation agreements, so that these agreements are profitable for us.

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• perform sophisticated financial analysis, such as analyzing cost and profitability, volume, charges, current activity and patient case mix, with respect to each of our managed care contracts.

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.

Human Capital

We have developed our own Radiology Information System through our team of software development engineers, which is used as our front desk patient tracking system.

Human Capital Management Strategy

The primary goal of our talent management strategy is to attract and retain engaged, talented, and diverse team members to establish RadNet as the employer of choice.

We seek to drive performance by enabling effective leadership that results in a positive patient experience delivered by talented and engaged team members.

To achieve this, leaders across the enterprise partner to develop and deliver talent and culture programs, create total rewards strategies, and provide efficient and effective people operations.

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 centers, 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 centers 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.

We value an ethical culture where diversity is embraced, good health and safety are promoted, and employees are empowered to share their ideas and opinions.

We strive to care for our team members and are concerned about their total well-being.

Headcount and Labor Representation.

At December 31, 2022, we had a total of 6,946 full-time, 509 part-time and 1,612 per diem employees, including those employed by the Group.

These numbers include 221 full-time and 78 part-time physicians and 2,251 full-time, 353 part-time and 1,083 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:

• 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.

Approximately 77% of the Company’s workforce at December 31, 2021 was female and 48% were from under-represented groups.

During the year ended December 31, 2021, our total attrition rate was less than 2%.

Employee Development.

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.

Since March 2020, our employees have 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.

Diversity, Equity, Inclusion, & Belonging.

We are committed to creating an inclusive work environment where team members can be their best and authentic selves.

With diversity comes a plethora of different perspectives and these different perspectives breed innovative ideas that enable us to lead radiology forward.

Our relationship with Jobs.Vision.Success SoCal, a nonprofit, non-sectarian social service agency, is one example of our support and sponsorship of community outreach and enrichment programs for underserved populations.

As a foundational practice, all employees are required to complete cultural competence training annually.

Employee Listening.

We believe in ensuring every team member feels valued, seen, and heard;

therefore, we have various avenues for all to share ideas and provide feedback.

Piloting initiatives such as the Connections Roadshow and new employee listening platforms enabled senior leaders to hear from team members at all levels of the organization to gain insights on various topics including quality, engagement, innovation, customer service, patient focus, diversity, equity, inclusion, and belonging.

Total Well-being.

We subscribe to the belief that if we take care of our people, they will in turn, take care of our patients.

Prioritizing and promoting wellness allows our team members to be their best selves at work and at home.

Concerning ourselves with the physical, mental, emotional, and social well-being of each team member enables us to attract and retain top talent.

Beyond fair and equitable pay, we offer a wide range of benefit plan options that include, but are not limited to, medical insurance, health savings accounts, family support services, nutrition and exercise programs, and financial education.

We evaluate our total well-being packages regularly to remain competitive, align with legislative changes, and respond to the needs of our team members.

Based on survey feedback, we recently replaced our wellness platform and introduced Navigate Wellness to better address what our team members care about most.

Talent Development.

Equipping our people to perform excellently is one of our top priorities.

With companies across the country facing unprecedented, post-pandemic labor shortages, attrition, and turnover, we are doubling down on our People and Culture initiatives.

We have established a Talent & Culture Center of Expertise to focus on the employee experience from beginning to end.

With a heightened focus on upskilling our existing workforce, our investment in new training and development platforms and piloting a coaching capabilities builder program for our leaders, we are promoting timely and effective feedback that fosters trust, respect, teamwork, growth, and excellence.

Furthermore, our tuition reimbursement program encourages team members at all levels of the enterprise to seek additional skills.

Sales and Marketing

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Sports Marketing Program

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

Our west coast operations renders in stadium digital X-ray for the following organizations:

Los Angeles Clippers, Dodgers, Kings and Lakers.

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

In exchange, we receive season tickets and parking.

Contract lengths vary from yearly up to five years.

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.

We also provide radiology services at select imaging centers for the Anaheim Ducks, Los Angeles Angels, Los Angeles Rams, Oakland Athletics, San Francisco 49ers and student athletes of the University of Southern California.

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 permit us to state we are the imaging partner to each organization.

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We acquire our major diagnostic imaging equipment directly from original equipment manufacturers or through third party financing companies and purchase medical supplies from various national vendors.

We have excellent working relationships with our providers who are of comparable stature in the event one becomes unavailable.

Our diagnostic imaging equipment represents a cornerstone investment of the company as it provides our customers the latest in imaging technology.

We employ direct purchase or finance arrangements to accomplish our needs with such firms as GE, Hologic, Key Equipment, Philips, Siemens and Spectrum.

We have excellent working relationships with our providers who are of comparable stature in the event one becomes unavailable.

At December 31, 2022, our liabilities for operating arrangements of radiology equipment amounted to approximately $13.7 million.

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

In order to ensure operational efficiency, we have maintenance arrangements with the various service arms of the original equipment manufacturers.

In order to ensure operational efficiency, we have maintenance arrangements with the various service arms of the original equipment manufacturers that supply our imaging equipment.

Our competitors include independent imaging operators and smaller regional operators, as well as hospitals and hospital groups that operate their own imaging services.

In addition, some physician practices have established their own diagnostic imaging centers within their group practices.

We experience additional competition as a result of those activities.

We compete principally on the basis of our reputation, our ability to provide multiple modalities at many of our centers, the location of our centers, the quality of our diagnostic imaging services and technologists and our ability to establish and maintain relationships with healthcare providers and referring physicians.

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Some of our competitors may now or in the future have access to greater financial resources than we do, which could allow them to establish more centers and provide access to newer, more advanced equipment.

Each of the third party contracted radiology practices has entered into agreements with its physician shareholders and full-time employed radiologists that generally prohibit those shareholders and radiologists from competing for a period of two to five years within defined geographic regions after they cease to be owners or employees, as applicable.

Each of the Group and our third party contracted radiology practices has entered into agreements with its physician shareholders and full-time employed radiologists that generally prohibit those shareholders and radiologists from competing for

a period of two to five years within defined geographic regions after they cease to be owners or employees, as applicable.

In certain states, like California, a covenant not to compete is enforced in limited circumstances involving the sale of a business.

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Therefore, we monitor developments in healthcare law and modify our operations from time to time as the business and regulatory environment changes.

Licensing and Certification Laws

Facilities Licensing and Certification Laws

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

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In the states in which we operate, other than Florida and Arizona, a lay person or any entity other than a professional corporation or other similar professional organization is not allowed to practice medicine, including by employing professional persons or by having any ownership interest or profit participation in or control over any medical professional practice.

The laws of such states also prohibit a lay person or a non-professional entity from exercising control over the medical judgments or decisions of physicians and from engaging in certain financial arrangements, such as splitting professional fees with physicians.

laws of such states also prohibit a lay person or a non-professional entity from exercising control over the medical judgments or decisions of physicians and from engaging in certain financial arrangements, such as splitting professional fees with physicians.

We structure our relationships with the radiology practices, including the purchase of diagnostic imaging centers, in a manner that we believe keeps us from engaging in the practice of medicine, exercising control over the medical judgments or decisions of the radiology practices or their physicians, or violating the prohibitions against fee-splitting.

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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.

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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(i) X-ray, fluoroscopy or ultrasound procedures that require the insertion of a needle, catheter, tube or probe through the skin or into a body orifice;

(ii) radiology procedures that are integral to the performance of, and performed during, non-radiological medical procedures;

(ii) radiology procedures that are integral to the performance of, and performed

during, non-radiological medical procedures;

and (iii) invasive or interventional radiology, because the radiology services in these procedures are merely incidental or secondary to another procedure that the physician has ordered.

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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.

Other changes to the PPACA (whether through legislation or judicial action), including further rollbacks 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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Under HIPAA, a healthcare benefit program includes any private plan or contract affecting interstate commerce under which any medical benefit, item or service is provided.

A person or entity that knowingly and willfully obtains the money or property of any healthcare benefit program by

means of false or fraudulent representations in connection with the delivery of healthcare services is subject to a fine or imprisonment, or potentially both.

A person or entity that knowingly and willfully obtains the money or property of any healthcare benefit program by means of false or fraudulent representations in connection with the delivery of healthcare services is subject to a fine or imprisonment, or potentially both.

In addition, HIPAA authorizes the imposition of civil money penalties against entities that employ or enter into contracts with excluded Medicare or Medicaid program participants if such entities provide services to federal health program beneficiaries.

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HIPAA imposes federal standards for electronic transactions, for the security of electronic health information and for protecting the privacy of PHI.

The Health Information Technology for Economic and Clinical Health Act of 2009 (“HITECH”), signed into law on February 17, 2009, dramatically expanded, among other things, (1) the scope of HIPAA to now apply directly to “business associates,” or independent contractors who receive or obtain PHI in connection with providing a service to a covered entity, (2) substantive security and privacy obligations, including new federal security breach notification requirements to affected individuals, DHHS and prominent media outlets, of certain breaches of unsecured PHI, (3) restrictions on marketing communications and a prohibition on covered entities or business associates from receiving remuneration in exchange for PHI, and (4) the civil and criminal penalties that may be imposed for HIPAA violations, increasing the annual cap in penalties from $25,000 to $1.5 million per year.

including new federal security breach notification requirements to affected individuals, DHHS and prominent media outlets, of certain breaches of unsecured PHI, (3) restrictions on marketing communications and a prohibition on covered entities or business associates from receiving remuneration in exchange for PHI, and (4) the civil and criminal penalties that may be imposed for HIPAA violations, increasing the annual cap in penalties from $25,000 to $1.5 million per year.

In addition, many states have enacted comparable privacy and security statutes or regulations that, in some cases, are more stringent than HIPAA 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