1064863--3/1/2006--AMERIGROUP

related topics

{regulation, government, change}

{acquisition, growth, future}

{cost, contract, operation}

{operation, natural, condition}

{customer, product, revenue}

{product, market, service}

{financial, litigation, operation}

{control, financial, internal}

{tax, income, asset}

{debt, indebtedness, cash}

{product, liability, claim}

{regulation, change, law}

{cost, operation, labor}

Our failure to comply with government regulations could subject us to civil and criminal penalties and limitations on our profitability. Compliance with new federal and state rules and regulations may require us to make unanticipated expenditures. Changes in healthcare laws could reduce our profitability. Changes in federal funding mechanisms could reduce our profitability. Reductions in Medicaid funding by the states could substantially reduce our profitability. If state governments do not renew our contracts with them on favorable terms, our business will suffer. 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. Delays in program expansions, renewals or contract changes could negatively impact our business. We rely on the accuracy of eligibility lists provided by the state government, and in the case of our Special Needs Plan members in Houston, 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 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. We have a significant relationship with Cook Children s Physician Network in Fort Worth, Texas. Termination of this relationship could negatively affect our results of operations. Our limited ability to predict our incurred medical expenses accurately has in the past and could in the future materially impact our reported results. 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 inability to maintain satisfactory relationships with providers would harm our profitability. 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. 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. Changes in SCHIP rules restricting eligibility could cause our operating results to suffer. Our inability to integrate, manage and grow our information systems effectively could disrupt our operations. Acts of terrorism, natural disasters and medical epidemics could cause our business to suffer. 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.

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1064863--3/1/2006--AMERIGROUP_CORP