3 unchanged sentences
A discussion of the risks we face can be found below under the heading "Risk Factors" and should be carefully considered, together with other information in this Annual Report and our other filings with the SEC, before making an investment decision regarding our common stock.
−Removed: COVID-19 and Other Potential Pandemic Risks
−Removed: • The COVID-19 pandemic continues to significantly affect our operations, business and financial condition.
Business and Operational Risks
13 unchanged sentences
• If we are unable to integrate and operate our information systems effectively or implement new systems and processes, our operations could be disrupted.
+Added: • A pandemic, epidemic or outbreak of a contagious disease in the markets in which we operate or that otherwise impacts our facilities could adversely impact our business.
Financial and Accounting Risks
6 unchanged sentences
• We may be limited in our ability to utilize, or may not be able to utilize, net operating loss carryforwards to reduce our future tax liability.
−Removed: • We entered into a tax receivable agreement that will require us to make payments to the pre-IPO owners of Surgery Center Holdings, LLC (the "Pre-IPO Owners"), which amounts are expected to be material.
Cybersecurity and Data Risks
13 unchanged sentences
Governance Risks
−Removed: • We are a "controlled company" within the meaning of Nasdaq rules and, therefore, we qualify for, and currently rely on, exemptions from certain corporate governance requirements.
−Removed: • Our controlling stockholder has significant influence over us, including control over decisions that require the approval of stockholders, which could limit our stockholders’ ability to influence the outcome of key transactions, including a change of control.
+Added: • Our largest stockholder has significant influence over us, including influence over decisions that require the approval of stockholders, which could limit our stockholders’ ability to influence the outcome of key transactions, including a change of control.
• Provisions in the certificate of designation governing our preferred stock and in our charter documents and Delaware law may deter takeover efforts that could be beneficial to stockholder value.
3 unchanged sentences
If any of the following risks, or other risks and uncertainties, actually occurred, our business, financial condition and operating results could suffer.
−Removed: COVID-19 and Other Potential Pandemic Risks
−Removed: The COVID-19 pandemic continues to significantly affect our operations, business and financial condition.
−Removed: The COVID-19 pandemic has significantly affected our facilities, employees, patients, communities, business operations and financial performance, as well as the U.S.
−Removed: economy and financial markets.
−Removed: The COVID-19 pandemic materially impacted our financial performance
−Removed: for the years ended December 31, 2021 and 2020 and potentially could negatively impact our financial performance in 2022.
−Removed: We cannot provide any certainty regarding the continuing effects of the impact of the COVID-19 pandemic, which is difficult to predict and is dependent on factors beyond our control.
−Removed: The impact of the COVID-19 pandemic on our surgical facilities varies based on the market in which the facility operates, the type of surgical facility and the procedures that are typically performed.
−Removed: Our facilities experienced significantly lower surgical case volume in 2020 and parts of 2021.
−Removed: It is difficult to predict the duration of this lower surgical case volume and, while governmental restrictions are continuing to ease in certain areas of the U.S., other areas are experiencing a surge in COVID-19 cases and variants of the virus and have imposed or may impose restrictions in response.
−Removed: Our case volume, financial condition and results of operations may be adversely affected by existing or future federal or state laws, regulations, orders, or other governmental or regulatory actions addressing the current COVID-19 pandemic or the U.S.
−Removed: health care system, including federal and state vaccine mandates or other requirements or restrictions.
−Removed: We experienced, and in the future could experience, supply chain disruptions, including shortages and delays, and could experience significant price increases, in equipment, pharmaceuticals and medical supplies.
−Removed: Staffing, equipment, and pharmaceutical and medical supplies shortages, including vaccine mandates, may also impact our ability to serve patients at our facilities.
−Removed: Broad economic factors resulting from the current COVID-19 pandemic, including increased unemployment rates and reduced consumer spending, could also negatively affect our payor mix, increase the relative proportion of lower margin services we provide and reduce patient volumes, as well as diminish our ability to collect outstanding receivables.
−Removed: Business closings and layoffs in the areas in which we operate may lead to increases in the uninsured and underinsured populations and adversely affect demand for our services, as well as the ability of patients and other payors to pay for services as rendered.
−Removed: Any increase in the amount or deterioration in the collectability of patient accounts receivable may adversely affect our cash flows and results of operations, requiring an increased level of working capital.
−Removed: If general economic conditions continue to deteriorate or remain uncertain or diminished for an extended period of time, our liquidity and ability to repay our outstanding debt may be harmed.
−Removed: The foregoing and other continued disruptions to our business as a result of the COVID-19 pandemic (including the potential for additional resurgences of COVID-19 or its variants) have had and may to continue to have a material adverse effect on our business and may have a material adverse effect on our results of operations, financial condition, cash flows and our ability to service our indebtedness.
−Removed: Although we have received grants and accelerated payments under the CARES Act, we are reviewing and may seek any additional available benefits in the future under the CARES Act, the COVID-19 Economic Relief Bill (together, the "Relief Bills") or other existing or any future legislation passed that could benefit us.
−Removed: We cannot predict the manner in which such future benefits will be allocated or administered, and we cannot assure you that we will be able to access such benefits in a timely manner or at all.
−Removed: Certain of the programs we seek to access under the Relief Bills have not previously been administered on the present scale or at all.
−Removed: Government or third party program administrators may be unable to cope with the volume of applications in the near term.
−Removed: There can be no assurance that the implementation or interpretation of the provisions of the Relief Bills or other legislation will not change in ways that affect our funding or eligibility to participate, or that changes to the guidance on the recognition and certification of payments received will not result in government recoupment of funds that were initially released to us as grants.
−Removed: Additionally, accessing these programs and our response to the COVID-19 pandemic have required our management team to devote extensive resources and is likely to continue to do so in the near future, which may negatively affect our ability to implement our business plan and respond to opportunities.
−Removed: A pandemic, epidemic or outbreak of a contagious disease in the markets in which we operate or that otherwise impacts our facilities could adversely impact our business.
−Removed: If a pandemic, epidemic or outbreak of an infectious disease, including the recent outbreak of respiratory illness caused by a novel coronavirus known as COVID-19, or other public health crisis were to affect the areas in which we operate, our business, including our revenue, profitability and cash flows, could be adversely affected.
−Removed: If any of our facilities were involved, or perceived to be involved, in treating patients with a highly contagious disease, or there was an outbreak of a highly contagious disease in areas in which our surgical centers are located, our patients might cancel or defer elective procedures or otherwise avoid medical treatment.
−Removed: This could result in reduced patient volumes and operating revenues, potentially over an extended period.
−Removed: Further, a pandemic, epidemic or outbreak of an infectious disease might adversely impact our business by causing temporary shutdowns of our facilities or diversion of patients or by causing staffing shortages in our facilities.
−Removed: We may be unable to locate replacement supplies, and ongoing delays could require us to reduce procedure volume or cause temporary shutdowns of our facilities.
−Removed: Although we have disaster plans in place and operate pursuant to infectious disease protocols, the extent to which COVID-19 or other public health crisis will impact our business is difficult to predict and will depend on many factors beyond our control, including the speed of contagion, the development and implementation of effective preventative measures and possible treatments, the scope of governmental and other restrictions on travel and other activity, and public reactions to these factors.
Business and Operational Risks
2 unchanged sentences
We depend upon private and governmental third-party sources of payment for the services provided by physicians in our physician network and to patients in our surgical facilities, including surgical hospitals.
−Removed: We derived approximately 43% in 2021 and 39% in both
−Removed: 2020 and 2019, of our revenue from government payors, including Medicare and Medicaid programs.
−Removed: The amounts that we receive from the Medicare and Medicaid programs for our services are subject to statutory and regulatory changes, administrative rulings, interpretations and determinations concerning patient eligibility requirements, funding levels and the method of calculating payments or reimbursements, among other things;
+Added: We derived approximately 42%, 43% and 39% in 2022, 2021 and 2020, respectively, of our revenue from government payors, including Medicare and Medicaid programs.
+Added: The amounts that we receive from the Medicare and Medicaid programs for our services are subject to statutory and regulatory changes, administrative rulings, interpretations and determinations concerning patient eligibility requirements, funding levels and the method of calculating payments or
+Added: reimbursements, among other things;
refinements to the Medicare Ambulatory Surgery Center payment system and refinements made by CMS to Medicare’s reimbursement policies;
8 unchanged sentences
If we are unable to negotiate and enter into favorable contracts or maintain satisfactory relationships and renew existing contracts on favorable terms with private insurance payors, our revenue and profitability may decrease.
−Removed: Payments from private insurance payors, including state workers’ compensation programs and managed care organizations, represented approximately 51% in 2021 and 54% in both 2020 and 2019, of our patient service revenue.
+Added: Payments from private insurance payors, including state workers’ compensation programs and managed care organizations, represented approximately 52%, 51% and 54% of our patient service revenue in 2022, 2021 and 2020, respectively.
Most of these payments came from private insurance payors with which our facilities have contracts.
11 unchanged sentences
If the proportion of our services subject to out-of-network fee schedules increases, we may experience a decrease in volume at our ASCs or other facilities due to fewer referrals of out-of-network patients.
−Removed: Additionally, payments from workers’ compensation payors represented approximately 5% of our patient service revenue in 2021, and approximately 6% of our patient service revenues in both 2020 and 2019.
+Added: Additionally, payments from workers’ compensation payors represented approximately 4%, 5% and 6% of our patient service revenue in 2022, 2021 and 2020, respectively.
A majority of states have implemented workers’ compensation provider fee schedules.
7 unchanged sentences
Generally speaking, certain types of our cases, such as orthopedic cases, generate relatively higher revenue than other types of cases, such as pain management and GI cases.
−Removed: Therefore, a significant shift in our case mix toward a higher percentage of lower
−Removed: revenue cases, which could occur for reasons beyond our control, could result in a material adverse effect on our business, prospects, results of operations and financial condition.
+Added: Therefore, a significant shift in our case mix toward a higher percentage of lower revenue cases, which could occur for reasons beyond our control, could result in a material adverse effect on our business, prospects, results of operations and financial condition.
Our case volume and surgical case mix may be adversely affected by patients’ unwillingness to pay for procedures in our facilities.
31 unchanged sentences
If we are unable to successfully execute on this strategy in the future, our future growth could be limited.
−Removed: unable to identify suitable acquisition and development opportunities, or to complete acquisitions and new projects in a timely manner and on favorable terms.
+Added: We may be unable to identify suitable acquisition and development opportunities, or to complete acquisitions and new projects in a timely manner and
+Added: on favorable terms.
Further, the businesses or assets we acquire in the future may not ultimately produce returns that justify our related investment.
35 unchanged sentences
These hospitals have established relationships with physicians and payors.
−Removed: In addition, other companies either currently are in the same or similar business of developing, acquiring and operating surgical facilities or may decide to enter our business.
+Added: In addition, other companies either currently are in the same or similar business of developing, acquiring and
+Added: operating surgical facilities or may decide to enter our business.
Many of these companies have greater resources than we do, including financial, marketing, staff and capital resources.
23 unchanged sentences
Other states are reluctant to strictly enforce non-compete agreements and restrictive covenants against physicians and other health care professionals.
−Removed: Therefore, there can be no assurance that our non-compete agreements related to employed or otherwise contracted physicians and other health professionals will be enforceable if challenged in certain states.
+Added: Furthermore, the Federal Trade Commission ("FTC") recently published a proposed rule that would prohibit employers from entering into non-compete agreements and nullifying existing non-competes.
+Added: Therefore, there can be no assurance that our non-compete agreements related to employed or otherwise contracted physicians and other health professionals will be enforceable if challenged in certain states or if the proposed FTC rule is adopted in its current form.
In such event, we would be unable to prevent former employed or otherwise contracted physicians and other health professionals from competing with us, potentially resulting in the loss of some of our hospital contracts and other business.
1 unchanged sentence
Our surgical facilities are sensitive to regulatory, economic and other conditions in the states where they are located.
−Removed: Our revenue is particularly sensitive to regulatory, economic and other conditions in the state of Texas.
−Removed: As of December 31, 2021, we owned and operated nine consolidated surgical facilities in Texas.
+Added: Our revenue is particularly sensitive to regulatory, economic and other conditions in the states of Texas and Idaho.
+Added: As of December 31, 2022, we owned and operated eleven consolidated surgical facilities in Texas.
The Texas facilities represented approximately 12% of our revenue in fiscal 2022.
48 unchanged sentences
If we are unable to properly integrate other information systems or expand our current information systems it may have an adverse effect on our ability to obtain new business, retain existing business and maintain or increase our profit margins and we could suffer, among other things, operational disruptions, disruptions in cash flows and increases in administrative expenses.
+Added: A pandemic, epidemic or outbreak of a contagious disease in the markets in which we operate or that otherwise impacts our facilities could adversely impact our business.
+Added: If a pandemic, epidemic or outbreak of an infectious disease, including the recent outbreak of respiratory illness caused by a novel coronavirus known as COVID-19, or other public health crisis were to affect the areas in which we operate, our business, including our revenue, profitability and cash flows, could be adversely affected.
+Added: If any of our facilities were involved, or perceived to be involved, in treating patients with a highly contagious disease, or there was an outbreak of a highly contagious disease in areas in which our surgical centers are located, our patients might cancel or defer elective procedures or otherwise avoid medical treatment.
+Added: This could result in reduced patient volumes and operating revenues, potentially over an extended period.
+Added: Further, a pandemic, epidemic or outbreak of an infectious disease might adversely impact our business by causing temporary shutdowns of our facilities or diversion of patients or by causing staffing shortages in our facilities.
+Added: We may be unable to locate replacement supplies, and ongoing delays could require us to reduce procedure volume or cause temporary shutdowns of our facilities.
+Added: Although we have disaster plans in place and operate pursuant to infectious disease protocols, the extent to which COVID-19 or other public health crisis will impact our business is difficult to predict and will depend on many factors beyond our control, including the speed of contagion, the development and implementation of effective preventative measures and possible treatments, the scope of governmental and other restrictions on travel and other activity, and public reactions to these factors.
Financial and Accounting Risks
13 unchanged sentences
Our level of indebtedness increases the risk that we may be unable to generate cash sufficient to pay amounts due in respect of our indebtedness.
−Removed: In addition, subject to applicable restrictions under our Senior Indebtedness, we may incur significant additional indebtedness, which may be secured, from time to time, which could have important consequences, including:
+Added: addition, subject to applicable restrictions under our Senior Indebtedness, we may incur significant additional indebtedness, which may be secured, from time to time, which could have important consequences, including:
• making it more difficult for us to satisfy our obligations with respect to our indebtedness;
30 unchanged sentences
We cannot assure you that we will be able to maintain compliance with these covenants in the future and, if we fail to do so, that we will be able to obtain waivers from the lenders and/or amend the covenants.
−Removed: Our failure to comply with the restrictive covenants described above as well as others contained in our future debt instruments from time to time could result in an event of default, which, if not cured or waived, could result in our being required to repay these borrowings before their maturity.
+Added: Our failure to comply with the restrictive covenants described above as well as others contained in our future debt instruments from time to time could result in an event of default, which, if not cured or waived, could result in our being required to repay
+Added: these borrowings before their maturity.
If we are forced to refinance these borrowings on less favorable terms, our results of operations and financial condition could be adversely affected.
32 unchanged sentences
Any refinancing of our debt could be at higher interest rates and may require us to comply with more onerous covenants, which could further restrict our business operations.
−Removed: The Senior Secured Credit Facilities bear interest at a rate per annum equal to (x) the London Interbank Offered Rate ("LIBOR") plus a margin ranging from 3.00% to 3.25% per annum, depending on the Company’s first lien net leverage ratio or (y) an alternate base rate (which will be the highest of (i) the prime rate, (ii) 0.50% per annum above the federal funds effective rate and (iii) one-month LIBOR plus 1.00% per annum (solely with respect to the Term Loan, the alternate base rate shall not be less than 2.00% per annum)) plus a margin ranging from 2.00% to 2.25% per annum.
−Removed: In addition, the Company is required to pay a commitment fee of 0.50% per annum in respect of unused commitments under the Revolver.
−Removed: The 2020 incremental term loans bear interest at a rate per annum equal to (x) LIBOR plus a margin of 8.00% per annum or (y) an alternate base rate (which will be the highest of (i) the prime rate, (ii) 0.5% per annum above the federal funds effective rate, (iii) one-month LIBOR plus 1.00% per annum and (iv) 2.00% per annum) plus a margin of 7.00% per annum.
+Added: The Term Loan bears interest at a rate per annum equal to (x) the London Interbank Offered Rate ("LIBOR") plus a margin 3.75% per annum (LIBOR shall be subject to a floor of 0.75%) or (y) an alternate base rate (which will be the highest of (i) the prime rate, (ii) 0.50% per annum above the federal funds effective rate and (iii) one-month LIBOR plus 1.00% per annum (the alternative base rate shall be subject to a floor of 1.75%)) plus a margin of 2.75% per annum.
+Added: The Revolver bears interest at a non-default rate per annum equal to (x) the Secured Overnight Financing Rate ("SOFR") (plus a customary SOFR adjustment) plus a margin of up to 3.25% per annum or (y) an alternate base rate (which will be the highest of (i) the prime rate, (ii) 0.5% per annum above the federal funds effective rate and (iii) one-month SOFR (plus a customary SOFR adjustment) plus 1.00% per annum) plus a margin of up to 2.25% per annum.
Discontinuation, reform or replacement of LIBOR may adversely affect our business.
−Removed: The credit agreement governing the Senior Secured Credit Facilities permits interest on borrowings to be calculated based on LIBOR.
+Added: The credit agreement governing the Senior Secured Credit Facilities permits interest on our Term Loan borrowings to be calculated based on LIBOR.
LIBOR and certain other interest "benchmarks" may be subject to regulatory guidance and/or reform that could cause interest rates under our current or future debt agreements to perform differently than in the past or cause other unanticipated consequences.
The United Kingdom’s Financial Conduct Authority, which regulates LIBOR, has announced that it intends to phase out LIBOR by June 2023.
−Removed: If the phase out occurs as planned, the interest rate applicable to our variable rate debt may be calculated based on an alternative, comparable or
−Removed: successor rate which may have a material adverse impact on the cost of the variable rate portion of our indebtedness.
+Added: If the phase out occurs as planned, the interest rate applicable to our Term Loan may be calculated based on an alternative, comparable or successor rate which may have a material adverse impact on the cost of the variable rate portion of our indebtedness.
The timing and result of the phase out of LIBOR are unclear, and efforts of industry groups to develop a suitable successor are not guaranteed to result in a viable or widely adopted replacement for LIBOR.
17 unchanged sentences
Future ownership changes may subject our NOL carryforwards to further annual limitations, which could restrict our ability to use them to offset our taxable income in periods following the ownership changes.
−Removed: We entered into a tax receivable agreement that will require us to make payments to the pre-IPO owners of Surgery Center Holdings, LLC (the "Pre-IPO Owners"), which amounts are expected to be material.
−Removed: On September 30, 2015, Surgery Partners, Inc.
−Removed: became the direct parent and sole member of Surgery Center Holdings, LLC (the "Reorganization").
−Removed: We indirectly acquired favorable tax attributes in connection with the Reorganization.
−Removed: These tax attributes would not be available to us in the absence of the consummation of the Reorganization.
−Removed: As part of the Reorganization, we entered into a tax receivable agreement with the Pre-IPO Owners.
−Removed: In connection with the Transactions completed in in August 2017, we entered into an agreement to amend the tax receivable agreement (as amended, the "TRA"), which became effective on August 31, 2017.
−Removed: Pursuant the TRA, we agreed to make annual payments to H.I.G.
−Removed: in its capacity as the stockholders representative on behalf of the other pre-Reorganization stockholders pursuant to a fixed payment schedule.
−Removed: The final payment is scheduled to be made in 2024.
−Removed: The amounts payable under the TRA are calculated to equal the product of (i) an annual base amount and (ii) the sum of (x) the maximum corporate federal income tax rate for the applicable year and (y) three percent.
−Removed: The amounts payable under the TRA are related to our projected realized tax savings over the next five years and are not dependent on our actual tax savings over the next five years.
−Removed: The calculations of amounts payable pursuant to the TRA is thus dependent on the maximum corporate federal income tax rate.
−Removed: To the extent that we are unable to make payments under the TRA, such payments will be deferred and will accrue interest at a rate of LIBOR plus 500 basis points until paid.
−Removed: If the terms of credit agreements and other debt documents cause us to be unable to make payments under the TRA and such terms are not materially more restrictive than those existing as of September 30, 2015, such payments will be deferred and will accrue interest at a rate of LIBOR plus 300 basis points until paid.
−Removed: We estimate that the total remaining amounts payable under the TRA as of December 31, 2021 may be as high as $22.0 million, but the ultimate amounts payable are likely to vary if there are further changes in law as to the income tax rates applicable to domestic corporations.
Our stock price could be volatile, and, as a result, our stockholders may not be able to resell their shares at or above the price paid for them.
Since our initial public offering, the price of our common stock as reported on The Nasdaq Global Select Market has ranged from a low of $4.00 on March 18, 2020 to a high of $69.58 on June 25, 2021.
−Removed: The price of our common stock could be subject to fluctuations in response to a number of factors, including those described elsewhere in this report and others such as:
+Added: The price of our common stock could be subject to fluctuations in response to a number of factors, including those described elsewhere in this Annual Report and others such as:
• variations in our operating performance and the performance of our competitors;
12 unchanged sentences
This type of litigation could result in substantial costs and divert our management’s attention and resources, and could also require us to make substantial payments to satisfy judgments or to settle litigation.
−Removed: For example, see Note 14.
−Removed: "Commitments and Contingencies - Stockholder Litigation" to our consolidated financial statements included elsewhere in this report.
Cybersecurity and Data Risks
5 unchanged sentences
We and our third-party vendors have been and likely will continue to be subject to attempted cybersecurity attacks.
−Removed: While there has been no material impact on our business or operations from these attempted attacks.
−Removed: There can be no assurance that we or our third-party vendors will not be subject to cybersecurity incidents that bypass our security measures, impact the integrity, availability or privacy of personal health information or other data subject to privacy laws or disrupt our information systems, devices or business, including our ability to provide various health care services.
+Added: Although there has been no material impact on our business or operations from these attempted attacks, there can be no assurance that we or our third-party vendors will not be subject to cybersecurity incidents that bypass our security measures, impact the integrity, availability or privacy of personal health information or other data subject to privacy laws or disrupt our information systems, devices or business, including our ability to provide various health care services.
The market for cybersecurity insurance is relatively new and coverage available for cybersecurity events may evolve as the industry matures.
9 unchanged sentences
Notification must also be made to HHS and, in certain situations involving large breaches, to the media.
−Removed: The HIPAA rules created a presumption that all non-
−Removed: permitted uses or disclosures of unsecured protected health information are breaches.
+Added: The HIPAA rules created a presumption that all non-permitted uses or disclosures of unsecured protected health information are breaches.
HIPAA imposes mandatory civil and criminal penalties for violations of its requirements ranging up to $50,000 per violation, with a maximum civil penalty of $1.5 million in a calendar year for violations of the same requirement.
37 unchanged sentences
Different interpretations or enforcement of existing or new laws and regulations could subject our current practices to allegations of impropriety or illegality, or require us to make changes in our operations, facilities, equipment, personnel, services, capital expenditure programs or operating expenses to comply with the evolving rules.
−Removed: Any enforcement action against us, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business.
+Added: Any enforcement
+Added: action against us, even if we successfully defend against it, could cause us to incur significant legal expenses and divert our management’s attention from the operation of our business.
A number of initiatives have been proposed during the past several years to reform various aspects of the health care system in the U.S.
68 unchanged sentences
The Stark Law prohibits certain self-referrals for health care services unless an exception applies.
−Removed: Under the current Stark Law and related regulations, services provided at an ASC are not covered by the statute, even if those services include imaging, laboratory services or other Stark designated health services, provided that (i) the ASC does not bill for these services separately, or (ii) if the center is permitted to bill separately for these services, they are specifically exempted from Stark Law prohibitions.
+Added: Under the current Stark Law and related regulations, services provided at an ASC are not covered by the statute, even if those services include imaging, laboratory services
+Added: or other Stark designated health services, provided that (i) the ASC does not bill for these services separately, or (ii) if the center is permitted to bill separately for these services, they are specifically exempted from Stark Law prohibitions.
These are generally radiology and other imaging services integral to performance of surgical procedures that meet certain requirements and certain outpatient prescription drugs.
31 unchanged sentences
Moreover, another trend impacting health care providers is the increased use of the FCA, particularly by individuals who bring actions under that law.
−Removed: Under the "qui tam," or whistleblower, provisions of the FCA, private parties may bring actions on behalf of the federal
+Added: Under the "qui tam," or whistleblower, provisions of the FCA, private parties may bring actions on behalf of the federal government.
If the government intervenes and prevails in the action, the defendant may be required to pay three times the actual damages sustained by the government, plus mandatory civil monetary penalties of between $12,526 and $25,076 for each false claim submitted to the government.
These private parties, often referred to as relators, are entitled to share in any amounts recovered by the government through trial or settlement.
−Removed: Both direct enforcement activity by the government and whistleblower lawsuits under the FCA have increased significantly in recent years;
+Added: Both direct enforcement activity by the government and whistleblower lawsuits under the FCA have increased
+Added: significantly in recent years;
thus, the risk that we will have to defend a false claims action, pay significant fines or be excluded from the Medicare and Medicaid programs has increased.
63 unchanged sentences
In many of the states in which we currently operate, certificates of need must be obtained for capital expenditures exceeding a prescribed amount, changes in capacity or services offered and various other matters.
−Removed: The remaining states in which we now or may in the future operate may adopt
−Removed: similar legislation.
+Added: The remaining states in which we now or may in the future operate may adopt similar legislation.
Our costs of obtaining a certificate of need could be significant, and we cannot assure you that we will be able to obtain the certificates of need or other required approvals for additional or expanded surgical facilities or services in the future.
In addition, at the time we acquire a surgical facility, we may agree to replace or expand the acquired facility.
−Removed: If we are unable to obtain required approvals, we may not be able to acquire additional surgical facilities, expand health care services we provide at these facilities or replace or expand acquired facilities.
+Added: If we are unable to obtain required approvals,
+Added: we may not be able to acquire additional surgical facilities, expand health care services we provide at these facilities or replace or expand acquired facilities.
If antitrust enforcement authorities conclude that our market share in any particular market is too concentrated, that our or our health system partners’ commercial payor contract negotiating practices are illegal, or that we other violate antitrust laws, we could be subject to enforcement actions that could have a material adverse effect on our business, prospects, results of operations and financial condition.
5 unchanged sentences
Governance Risks
−Removed: We are a "controlled company" within the meaning of Nasdaq rules and, therefore, we qualify for, and currently rely on, exemptions from certain corporate governance requirements.
−Removed: Our stockholders do not have the same protections afforded to stockholders of companies that are subject to such requirements.
−Removed: As of December 31, 2021, Bain Capital controlled a majority of the voting power of our outstanding common stock.
−Removed: As a result, we are a "controlled company" within the meaning of the corporate governance standards of Nasdaq.
−Removed: Under these rules, a company of which more than a majority of the voting power is held by an individual, group or another company is a "controlled company" and may elect not to comply with certain corporate governance requirements including:
−Removed: the requirement that a majority of the board of directors consist of independent directors;
−Removed: the requirement that we have a nominating/corporate governance committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities;
−Removed: the requirement that we have a compensation committee that is composed entirely of independent directors with a written charter addressing the committee’s purpose and responsibilities.
−Removed: As of December 31, 2021, we have availed ourselves of certain of these exemptions.
−Removed: For example, we did not have a majority of independent directors for the entire period covered by this report (and may, in the future, have less than a majority of independent directors) and we do not have a nominating and corporate governance committee.
−Removed: Accordingly, our stockholders will not have the same protections afforded to stockholders of companies that are subject to all of the corporate governance requirements of Nasdaq.
−Removed: There can be no assurance as to the period of time during which we will remain a "controlled company".
−Removed: Our controlling stockholder has significant influence over us, including control over decisions that require the approval of stockholders, which could limit our stockholders’ ability to influence the outcome of key transactions, including a change of control.
−Removed: As of the date of this filing we were controlled by Bain Capital, which beneficially owned approximately 54.9% of our outstanding common stock.
−Removed: For as long as Bain Capital continues to control a majority of the voting power of our common stock, it will be able to direct the election of all of the members of our board of directors and could exercise a controlling influence over our business and affairs, including any determinations with respect to mergers or other business combinations, the acquisition or disposition of assets, the incurrence of indebtedness, the issuance of any additional common stock or other equity securities, the repurchase or redemption of common stock and the payment of dividends.
−Removed: Similarly, Bain Capital will have the power to determine matters submitted to a vote of our stockholders without the consent of our other stockholders, will have the power to prevent a change in our control and could take other actions that might be favorable to it.
−Removed: Even if Bain Capital ceases to beneficially own a majority of the voting power of our common stock, it will continue to be able to strongly influence or effectively control our decisions.
+Added: Our largest stockholder has significant influence over us, including influence over decisions that require the approval of stockholders, which could limit our stockholders’ ability to influence the outcome of key transactions, including a change of control.
+Added: As of December 31, 2022, affiliates of Bain Capital owned approximately 46.2% of our outstanding common stock.
+Added: Although we are no longer a “controlled company” within the meaning of the corporate governance standards of Nasdaq, affiliates of Bain Capital continue to be able to strongly influence or effectively control our decisions.
Provisions in our charter documents and Delaware law may deter takeover efforts that could be beneficial to stockholder value.
2 unchanged sentences
In addition, our board of directors has the right to issue preferred stock without stockholder approval that could be used to dilute a potential hostile acquiror.
−Removed: Our certificate of incorporation also imposes some restrictions on mergers and other business combinations between us and any holder of 15.0% or more of our outstanding common stock other than
−Removed: affiliates of Bain Capital.
+Added: Our certificate of incorporation also imposes some restrictions on mergers and other business combinations between us and any holder of 15.0% or more of our outstanding common stock other than affiliates of Bain Capital.
As a result of these features, our stockholders may lose their ability to sell their stock for a price in excess of the prevailing market price, and efforts by stockholders to change the direction or management of the Company may be unsuccessful.
9 unchanged sentences
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.