What changed in this filing

/stocks — the workspaceLOADING

Item 1. Business

2026-03-02 compared with 2025-03-07 · 55 added, 38 removed, 314 unchanged (23% of the section changed)

37 unchanged sentences

We have diversified the mix of procedures performed at our facilities by strategically introducing select specialties that will complement existing services.

In many cases, we keep certain facilities as single-specialty where it suits an individual facility or market demand.

However, in many cases, we keep certain facilities as single-specialty where it suits an individual facility or market demand.

We provide each of our surgical facilities with a full range of financial, marketing and operating services.

40 unchanged sentences

Under the FFY 2026 final rule, rates for inpatient stays in hospitals paid under the IPPS that successfully report certain quality data under the Hospital Inpatient Quality Reporting ("IQR") Program and demonstrate meaningful use of certified electronic health record ("EHR") technology will be increased by 2.6%.

Those hospitals that do not successfully report quality data under the IQR Program (but are meaningful EHR users) would be subject to a one-fourth reduction in their annual payment update.

Those hospitals that do not successfully report quality data under the IQR Program (but are meaningful EHR users) would be subject to an approximate one-third reduction in their annual payment update.

In addition to the IQR Program, hospitals will be subject to payment adjustments under the Value Based Purchasing Program, Readmissions Reduction Program and Hospital Acquired Conditions Reduction Programs that have been implemented by the Department of Health and Human Services ("HHS").

5 unchanged sentences

Hospitals that do not meet the reporting requirements of the Medicare Hospital Outpatient Quality Reporting Program will be subject to a 2.0% payment rate decrease.

As a result of legislative changes related to off-campus HOPDs, certain off-campus HOPDs that began billing under the OPPS (or underwent certain changes) on or after November 2, 2015 are no longer paid for most services under the OPPS.

Instead, these facilities are paid under the Medicare Physician Fee Schedule ("MPFS"), which typically results in lower reimbursements.

Certain off-campus HOPDs are paid under the Medicare Physician Fee Schedule ("MPFS"), which typically results in lower reimbursements.

Services provided in a dedicated emergency department are still paid under the OPPS.

This change has not significantly affected reimbursement to any of our HOPDs, but we cannot assure you that our HOPDs will not be impacted in the future.

Medicare Reimbursement - ASCs

10 unchanged sentences

Annual cost reports required under the Medicare and Medicaid programs are subject to routine governmental audits.

These audits may result in adjustments to the amounts ultimately determined to be payable to us under these

reimbursement programs.

These audits may result in adjustments to the amounts ultimately determined to be payable to us under these reimbursement programs.

Finalization of these audits often takes several years.

4 unchanged sentences

In addition to our operational strategy, we continuously evaluate opportunities to expand our presence in the surgical facility market by making strategic acquisitions of existing surgical facilities and by developing new surgical facilities in cooperation with local physician partners and, when appropriate, health care systems and other strategic partners.

We generally structure our partnerships where either we are a majority owner partnered with physicians or we are a minority owner with buy-up rights.

These buy-up rights give us the option to own a controlling interest at some point in the future.

We generally structure our partnerships where either we are a majority owner partnered with physicians or we are a minority owner with potential buy-up opportunities.

These buy-up opportunities in certain circumstances can give us the option to own a controlling interest at some point in the future.

Alternatively, we may choose to pursue a strategic relationship with physicians and a health care system.

16 unchanged sentences

We also market our surgical facilities directly to private insurance payors via our contracting and credentialing programs.

Payor marketing activities conducted by our corporate office management and facility administrators emphasize the high quality of care, cost advantages and convenience of our surgical facilities, and are focused on making each surgical facility an approved provider under local managed care plans.

Payor marketing activities are conducted by our corporate managed care department team.

We emphasize the high quality of surgical care, cost advantages over local competitors, and high patient satisfaction with our surgical facilities.

We seek to include each surgical facility as a participating provider in national and local managed care plans.

In each market in which we operate a surgical facility, we compete with hospitals and operators of other surgical facilities to attract physicians and patients.

6 unchanged sentences

Our revenue fluctuates based on the number of business days in each calendar quarter, because the majority of services provided by physicians in our surgical facilities consist of scheduled procedures and office visits that occur during weekday business hours.

revenue in the fourth quarter could also be impacted by an increased utilization of services due to annual deductibles which are not usually met until later in the year and also as patients utilize their health care benefits before they expire at year-end.

In addition, revenue in the fourth quarter could also be impacted by an increased utilization of services due to annual deductibles which are not usually met until later in the year and also as patients utilize their health care benefits before they expire at year-end.

Human Capital Resources

37 unchanged sentences

Private Insurance Payors

Most private third-party payors reimburse us for services pursuant to written contracts.

Most group health third-party payors reimburse us for services pursuant to written contracts.

These contracts generally require that we offer discounts from our established charges.

1 unchanged sentence

In those situations, commonly known as "out-of-network" services, we generally charge the patients the same co-payment or other patient responsibility amounts that we would have charged had we had a contract with the private insurance payor.

We also submit a

claim for the services to the private insurance payor along with full disclosure that we have charged the patient an in-network patient responsibility amount.

We also submit a claim for the services to the private insurance payor along with full disclosure that we have charged the patient an in-network patient responsibility amount.

Governmental Regulation

We are subject to federal, state and local laws dealing with issues such as occupational safety, employment, medical leave, insurance regulations, civil rights, discrimination, building codes and medical waste and other environmental issues.

Federal, state and local governments are expanding the regulatory requirements on businesses like ours.

1 unchanged sentence

Certificates of Need, Licensure and Accreditation

Capital expenditures for the construction of new health care facilities, the addition of beds or new health care services or the acquisition of existing health care facilities may be reviewable by state regulators under statutory programs that are sometimes referred to as certificate of need laws.

Capital expenditures for the construction of new health care facilities, the addition of beds, new health care services or the acquisition of existing health care facilities may be reviewable by state regulators under statutory programs that are sometimes referred to as certificate of need laws.

States with certificate of need laws restrict or otherwise require prior authorization for the construction and acquisition of health care facilities and the expansion of existing facilities and services.

4 unchanged sentences

Although our surgical hospitals primarily or exclusively provide surgical services, they must meet all applicable requirements for general hospital licensure.

In addition, based on the specific operations of our surgical facilities, some of these facilities maintain a pharmacy license, a controlled substance registration, a clinical laboratory certification waiver, and environmental protection permits for biohazards and/or radioactive materials, as required by applicable law.

In addition, based on the specific operations of our surgical facilities, these facilities maintain a pharmacy license, a controlled substance registration, a clinical laboratory certification waiver or laboratory certification, and environmental protection permits for biohazards and/or radioactive materials, as required by applicable law.

The failure to comply with these regulations and applicable licensing requirements could result in the suspension or revocation of a facility’s license.

As of December 31, 2025, the majority of our facilities were accredited by either The Joint Commission or the Accreditation Association for Ambulatory Health Care, two of the major national organizations that establish standards relating to the physical plant, administration, quality of patient care and operation of medical staffs of various types of health care facilities.

The effect of accreditation by these organizations is to exempt the facilities from routine surveys by state agencies to determine compliance with CMS requirements.

These accredited facilities are subject to periodic surveys by the accrediting organization to ensure that they are in compliance with the applicable standards.

Many private insurance health plans require our facilities to be accredited by one or both of these organizations in order to be participating providers.

Many private insurance health plans require our facilities to be accredited by one of these organizations in order to be participating providers.

Failure to maintain accreditation would cause a facility to become subject to state survey agency oversight and potentially subject to increased scrutiny by CMS and could result in a loss of payment from private insurance health plans.

Affordable Care Act Repeal Efforts

Initiatives to repeal or modify the Patient Protection and Affordable Care Act (the "Affordable Care Act") have persisted over the past several years.

Recent Developments and Potential Changes in Health Care Policy

The Patient Protection and Affordable Care Act, as amended by the Health Care and Education Reconciliation Act of 2010 (the "Affordable Care Act"), extended health coverage to millions of uninsured legal U.S.

residents through a combination of private sector health insurance reforms and public program expansion.

The expansion of health insurance coverage under the Affordable Care Act resulted in an increase in the number of patients using our facilities with either private or public program coverage and a decrease in uninsured and charity case admissions, along with reductions in Medicare and Medicaid reimbursement to healthcare providers.

Efforts to repeal the Affordable Care Act have persisted since its enactment.

As an example, the Tax and Jobs Act of 2017 effectively eliminated the tax penalty associated with the so-called "individual mandate," which required most individuals to obtain qualifying health insurance coverage or pay a tax penalty.

As of December 31, 2024, however, further legislative efforts to repeal and replace the Affordable Care Act in full have not been successful.

However, further legislative efforts to repeal and replace the Affordable Care Act in full have not been successful.

Nevertheless, we are unable to guarantee that future efforts, such as the adoption of any future federal or state health care reform legislation, or any ruling by a court with respect to the Affordable Care Act, will not have a negative financial impact on the Company.

Various laws and regulations that have been implemented since the Affordable Care Act’s enactment have successfully lengthened the enrollment period, expanded income eligibility, and reduced premium caps for subsidies for individuals purchasing Affordable Care Act coverage through state and federal marketplaces;

however, the Affordable Care Act subsidies expired on December 31, 2025 following Congress’ failure to renew and extend them.

It is widely anticipated that their expiration will result in significant increases in premiums, likely leading to decreased enrollment and a corresponding rise in the number of uninsured individuals or, at minimum, a shift of individuals from commercial coverage to government program coverage.

An increase in the uninsured population in addition to or combined with a wide-scale transition of patients from commercial to government program coverage may have a negative impact on the Company’s financial performance by reducing demand for services and decreasing reimbursement for such services when rendered.

We cannot predict whether or how Congress may further extend or modify provisions of or relating to the Affordable Care Act or other laws affecting the healthcare industry generally, nor can we predict how the current administration will influence, promulgate or implement rules, regulations or executive orders that affect the healthcare industry directly or indirectly.

We may also experience potential impacts on our business, in ways we cannot anticipate, from healthcare-related policy changes at the state level.

Some federal and state changes, initiatives and requirements could, among other things, negatively impact our patient volumes, case mix and revenue mix, increase our operating costs, adversely affect the reimbursement we receive for our services, impact our competitive position or require us to expand resources to modify certain aspects of our operations.

More specifically, we are unable to predict the effect of future government healthcare funding policy changes on our business.

The Medicare and Medicaid programs are subject to:

• Statutory and regulatory changes, administrative and judicial rulings, executive orders, interpretations and determinations concerning eligibility requirements, funding levels and the method of calculating reimbursements, among other things;

• Requirements for utilization review;

• Federal and state funding restrictions.

Any of these factors could materially increase or decrease payments from government programs in the future, as well as affect the cost of providing services to our patients and the timing of payments to our facilities.

If the rates paid by governmental payers are reduced, if the scope of services covered by governmental payers is limited, if eligibility or enrollment is further restricted, if there are changes to align payment rates for certain procedures across various care settings, or if we or one or more of our facilities are excluded from participation in the Medicare or Medicaid program or any other government healthcare program, there could be a material adverse effect on our business, financial condition, results of operations or cash flows.

Furthermore, we cannot predict the impact healthcare policy risks and uncertainties may have on the trading price of our common stock.

One Big Beautiful Bill Act

On July 4, 2025, Congress passed the One Big Beautiful Bill Act (the “OBBBA”), its budget reconciliation act for federal fiscal year 2025.

The OBBBA includes provisions that may impact the financial performance of the Company through substantial modifications to the state and federal statutes and regulations to which the Company’s operations are subject.

OBBBA provisions that may impact the Company have varying effective dates, and analysis of their impact and timing is ongoing.

The Company is unable to predict whether or how future legislation, rulemaking, or judicial action will impact implementation of the OBBBA.

Of particular relevance to the Company’s operations, the OBBBA has reduced the federal government’s overall Medicaid expenditures and tightened Medicaid eligibility requirements, each of which are likely to drive an increase in the uninsured population.

Because the Company’s facilities rely in part of reimbursement from federal health care programs, including Medicaid, for the reimbursement of services rendered, these changes may have a negative impact on the Company’s financial performance.

Ongoing budgetary uncertainties and continued efforts to reduce the federal deficit may result in further payment reductions from both the Medicaid and Medicare programs.

Medicare and Medicaid Participation

18 unchanged sentences

The failure of a particular business arrangement to comply with a safe harbor does not determine whether the arrangement violates the Anti-Kickback Statute.

Instead, when a transaction or relationship does not fit within a safe harbor, the facts and circumstances as well as the intent of the parties related to a specific transaction or relationship must be examined to determine whether or not any illegal conduct has occurred.

Instead, when a transaction or relationship does not fit within a safe harbor, the facts and circumstances as well as the

intent of the parties related to a specific transaction or relationship must be examined to determine whether or not any illegal conduct has occurred.

Physician-owners of our surgical facilities are in a position to generate referrals to the facilities, potentially subjecting the distribution of available cash to those investors to scrutiny under the Anti-Kickback Statute.

19 unchanged sentences

However, we cannot assure you that the OIG would find our compliance programs to be adequate or that our management agreements would be found to comply with the Anti-Kickback Statute.

Certain of our ASCs have entered into arrangements for professional services, including arrangements for anesthesia services.

In a Special Advisory Bulletin issued in April 2003, the OIG focused on "questionable" contractual arrangements where a health care provider in one line of business (the "Owner") expands into a related health care business by contracting with an existing provider of a related item or service (the "Manager/Supplier") to provide the new item or service to the Owner’s existing patient population, including federal health

care program patients (so called "suspect Contractual Joint Ventures").

The Manager/Supplier not only manages the new line of business, but may also supply it with inventory, employees, space, billing, and other services.

In other words, the Owner contracts out substantially the entire operation of the related line of business to the Manager/Supplier-otherwise a potential competitor-receiving in return the profits of the business as remuneration for its referrals.

Through an Advisory Opinion, the OIG extended this suspect contractual joint venture analysis to arrangements between anesthesiologists and physician owners of ASCs.

In Advisory Opinion No.

12-06 (May 25, 2012), the OIG concluded that certain proposed arrangements between anesthesia groups and physician-owned ASCs could result in prohibited remuneration under the federal Anti-Kickback Statute.

We believe our arrangements for anesthesia services are distinguishable from those described in Advisory Opinion 12-06 (May 25, 2012) and are in compliance with the requirements of the federal Anti-Kickback Statute.

However, we cannot assure you that regulatory authorities would agree with that position.

We also may guarantee a surgical facility’s third-party debt financing and certain lease obligations as part of our obligations under a management agreement.

12 unchanged sentences

If an entity is paid for services provided through a prohibited referral, it may be required to refund the payments.

Violations of the Stark Law may also result in the imposition of damages equal to three times the amount improperly claimed and civil monetary penalties of up to $15,000 per prohibited claim and $100,000 per prohibited circumvention scheme and exclusion from participation in the Medicare and Medicaid programs.

Violations of the Stark Law may also result in the imposition of damages equal to three times the amount improperly claimed

and civil monetary penalties of up to $15,000 per prohibited claim and $100,000 per prohibited circumvention scheme and exclusion from participation in the Medicare and Medicaid programs.

Notably, "designated health services" does not include surgical services that are provided in an ASC.

16 unchanged sentences

However, these laws, rules and regulations have typically been the subject of limited judicial and regulatory interpretation.

a result, we cannot assure you that our surgical facilities will not be investigated or scrutinized by the governmental authorities empowered to do so or, if challenged, that their activities would be found to be lawful.

As a result, we cannot assure you that our surgical facilities will not be investigated or scrutinized by the governmental authorities empowered to do so or, if challenged, that their activities would be found to be lawful.

A determination of non-compliance with the applicable state health care laws, rules, and regulations could subject our surgical facilities to civil and criminal penalties and could have a material adverse effect on our operations.

15 unchanged sentences

Our facilities also remain subject to any state laws that relate to privacy or the reporting of data breaches that are more restrictive than the regulations issued under HIPAA and the requirements of the HITECH Act.

For example, various state laws and regulations may require us to notify affected individuals in the event of a data breach involving certain personal information, such as social security numbers, dates of birth and credit card information.

For example, various state laws and regulations may require

us to notify affected individuals in the event of a data breach involving certain personal information, such as social security numbers, dates of birth and credit card information.

In response to the increasing number of cyberattacks targeting the healthcare sector, HHS issued a Notice of Proposed Rulemaking on January 6.

1 unchanged sentence

If these proposed regulatory changes are enacted, our surgical facilities will need to comply with the new security standards, potentially incurring significant costs to implement necessary changes.

As of December 31, 2025, however, HHS had yet to publish a final rule formalizing these proposals.

Emergency Medical Treatment and Active Labor Act

8 unchanged sentences

We believe that our surgical hospitals comply with EMTALA.

With respect to our hospitals that do not have an emergency room, those hospitals maintain a protocol for the transfer of patients requiring emergency treatment.

With respect to our surgical hospitals that do not have an emergency room, those hospitals maintain a protocol for the transfer of patients requiring emergency treatment.

While we believe such protocols satisfy CMS requirements, we are unable to guarantee that CMS would not interpret such protocols to be inconsistent with EMTALA requirements, potentially jeopardizing each facility's participation in the Medicare program.

1 unchanged sentence

Our clinical laboratories are subject to federal oversight under the Clinical Laboratory Improvement Amendments of 1988 ("CLIA") which extends federal oversight to virtually all clinical laboratories by requiring that they be certified by the federal government or by a federally-approved accreditation agency.

CLIA requires that all clinical laboratories meet quality assurance, quality control and personnel

CLIA requires that all clinical laboratories meet quality assurance, quality control and personnel standards.

Laboratories also must undergo proficiency testing and are subject to inspections.

17 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.

What changed 10-K

Item 1. Business