1064863--2/22/2008--AMERIGROUP

related topics

{regulation, government, change}

{cost, contract, operation}

{acquisition, growth, future}

{debt, indebtedness, cash}

{financial, litigation, operation}

{product, market, service}

{operation, natural, condition}

{regulation, change, law}

{control, financial, internal}

{product, liability, claim}

{loan, real, estate}

{cost, operation, labor}

Failure to comply with the terms of our contracts with our government partners could negatively impact our profitability and subject us to fines, penalties and liquidated damages. Failure to comply with government regulations could subject us to civil and criminal penalties and limitations on our profitability. Changes in healthcare laws could reduce our profitability. Changes in Medicaid funding by the federal government or the states could substantially reduce our profitability. If state governments do not renew our contracts on favorable terms or we fail to retain our contracts as a result of a re-bidding process, our business will suffer. Delays in program expansions or contract changes could negatively impact our business. If a state fails to renew its federal waiver application for mandated Medicaid enrollment into managed care or such application is denied, our membership in that state will likely decrease. We rely on the accuracy of eligibility lists provided by the state government, and in the case of our Medicare Advantage members, by the federal government. Inaccuracies in those lists would negatively affect our results of operations. If state regulatory agencies require a statutory capital level higher than the state regulations we may be required to make additional capital contributions. Risks related to our business Results of our Qui Tam litigation could negatively impact our revenues, profitability and liquidity. As participants in state and federal health care programs, we are subject to extensive fraud and abuse laws which may give rise to frequent lawsuits and claims against us, and the outcome of these lawsuits and claims may have a material adverse effect on our financial position, results of operations and liquidity. Receipt of inadequate or significantly delayed premiums would negatively impact our revenues, profitability and cash flow. Our inability to manage medical costs effectively would reduce our profitability. Our limited ability to predict our incurred medical expenses accurately has in the past and could in the future materially impact our reported results. Our inability to operate new business opportunities at underwritten levels could have a material adverse effect on our business. Difficulties in executing our acquisition strategy or integrating acquired business could adversely affect our business. Failure of a new business would negatively impact our results of operations. Ineffective management of rapid growth or our inability to grow could negatively affect our results of operations, financial condition and business. We are subject to competition that impacts our ability to increase our penetration of the markets that we serve. Restrictions and covenants in our credit facility could limit our ability to take actions. Our debt service obligations may adversely affect our cash flow and our increased leverage as a result of our convertible notes offering and Credit Agreement may harm our financial condition and results of operations. Changes in accounting may affect our results of operations. Our investments in auction rate securities are subject to risks that may cause losses and have a material adverse effect on our liquidity. Our inability to maintain good relations with providers could harm our profitability or subject us to material fines, penalties or sanctions. Negative publicity regarding the managed care industry may harm our business and operating results. We may be subject to claims relating to medical malpractice, which could cause us to incur significant expenses. We are currently involved in litigation, and may become involved in future litigation, which may result in substantial expense and may divert our attention from our business. Changes in the number of Medicaid eligibles, or benefits provided to Medicaid eligibles or a change in mix of Medicaid eligibles could cause our operating results to suffer. Our inability to integrate, manage and grow our information systems effectively could disrupt our operations.

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1064863--2/22/2008--AMERIGROUP_CORP