Encompass Health (EHC) risk factors, FY2025 10-K

Other

1. 01Reductions or changes in reimbursement from government or third-party payors could adversely affect our Net operating revenues and other operating results49% rewritten
2. 02Reimbursement claims are subject to various audits from time to time and such audits may negatively affect our operations and our cash flows from operations
3. 03Substantive and procedural deficiencies in the administrative appeals process associated with denied Medicare reimbursement claims could delay and reduce our reimbursement for services previously provided40% rewritten
4. 04Changes in our payor mix or the acuity of our patients could adversely affect our Net operating revenues or our profitability
5. 05Delays in collection or non-collection of our accounts receivable could adversely affect our business, financial position, results of operations, cash flows, and liquidity
6. 06Efforts to reduce payments to healthcare providers undertaken by third-party payors, conveners, and referral sources could adversely affect our revenues and profitability
7. 07Quality reporting requirements could adversely affect the Medicare reimbursement we receive

Other Regulatory Risks

1. 08The ongoing evolution of the healthcare delivery system, including alternative payment models and value-based purchasing initiatives, in the United States may significantly affect our business and results of operations20% rewritten
2. 09Other legislative and regulatory initiatives and changes affecting the industry could adversely affect our business and results of operations30% rewritten
3. 10Compliance with the extensive laws and government regulations applicable to healthcare providers requires substantial time, effort and expense, and if we fail to comply with them, we could suffer penalties or be required to make significant changes to our operations
4. 11Efforts to comply with regulatory mandates to increase the use of electronic health data and health system interoperability may lead to enforcement and negative publicity which could adversely affect our business
5. 12If any of our hospitals fail to comply with the Medicare enrollment requirements or conditions of participation, that hospital could be terminated from the Medicare program
6. 13Any termination of one or more of our hospitals from the Medicare program for failure to satisfy the enrollment requirements or conditions of participation could materially adversely affect our business, financial position, results of operations, and cash flows72% rewritten
7. 14security worldwide is continuously evolving and developing and, as a result, interpretation and implementation standards and enforcement practices are likely to remain uncertain for the foreseeable futureNew
8. 15In addition to government regulation, privacy advocates and industry groups have and may in the future propose self-regulatory standards from time to time. These and other industry standards may legally or contractually apply to us, or we may elect to comply with such standards
9. 16The pricing transparency and similar consumer protection rules could adversely affect our business and results of operations30% rewritten
10. 17in the estimate, the patient may initiate a patient-provider dispute resolution process established by regulation. Additionally, HHS may impose penalties of up to $10,000 per violation of the No Surprises ActNew

Other Operational Risks

1. 18our systems, particularly in light of the number of well-funded and organized threat actors working to attack healthcare providers and the possibility of zero-day vulnerabilities and exploits yet to be identifiedNew
2. 19The failure of our business partners and vendors to maintain the proper function, availability, or security of their information systems or to protect against unauthorized access could have a material adverse effect on our business, financial position, results of operations, and cash flows
3. 20We face intense competition for patients from other healthcare providers
4. 21If we are unable to provide a consistently high quality of care, our business will be adversely impacted22% rewritten
5. 22If we are unable to maintain or develop relationships with patient referral sources, our growth and profitability could be adversely affected
6. 23We may selectively pursue strategic acquisitions of, and we frequently pursue joint ventures with, other healthcare providers. We may face limitations on our ability to identify sufficient joint venture, acquisition or other development targets and to complete those transactions to meet goals77% rewritten
7. 24it is not unusual for third-party providers to challenge the initial awards of CONs, the increase in the number of approved beds in an existing CON, or the expansion of the area served, and the adjudication of those challenges and related appeals may take many yearsNew
8. 25Acute-care hospitals that participate in joint ventures with us may experience operational or financial challenges that, in turn, affect our joint venture inpatient rehabilitation hospitals
9. 26We may make investments or complete transactions that could expose us to unforeseen risks and liabilities
10. 27We may not be able to successfully integrate acquisitions or realize the anticipated benefits of any acquisitions
11. 28Competition for staffing, shortages of qualified personnel, union activity or other factors may increase our staffing costs and reduce profitability
12. 29We are a defendant in various lawsuits, and may be subject to liability under qui tam cases, the outcome of which could have a material adverse effect on us89% rewritten
13. 30We may be more vulnerable to the effects of a public health emergency than other businesses due to the nature of our patients, and a regional or global socio-political, weather or other catastrophic event could severely disrupt our business
14. 31Regulatory and other efforts to promote a transition to a lower-carbon economy may result in significant operational and financial challenges for us

Financial Risks

1. 32We may incur additional indebtedness in the future, and that debt or the associated increased leverage may have negative consequences for our business. The restrictive covenants included in the terms of our indebtedness could affect our ability to execute aspects of our business plan successfully
2. 33Uncertainty in the credit markets could adversely affect our financial condition or our growth opportunities