1129623--3/14/2008--ODYSSEY_HEALTHCARE

related topics

{regulation, government, change}

{acquisition, growth, future}

{tax, income, asset}

{system, service, information}

{product, market, service}

{cost, contract, operation}

{product, liability, claim}

{debt, indebtedness, cash}

{personnel, key, retain}

{provision, law, control}

{loan, real, estate}

{financial, litigation, operation}

We are subject to a Medicare cap amount which is calculated by Medicare. Our net patient service revenue and profitability could be adversely affected by limitations on Medicare payments. We operate in an industry that is subject to extensive federal, state and local regulation, and changes in law and regulatory interpretations could reduce our net patient service revenue and profitability. Almost half of our hospice patients reside in nursing homes. Changes in the laws and regulations regarding payments for hospice services and room and board provided to our hospice patients residing in nursing homes could reduce our net patient service revenue and profitability. If we are unable to maintain relationships with existing patient referral sources or to establish new referral sources, our growth and profitability could be adversely affected. Our growth strategy to develop new hospice programs in new and existing markets may not be successful, which could adversely impact our growth and profitability. Our growth strategy to acquire other hospices may not be successful and the integration of future acquisitions may be difficult and disruptive to our ongoing business. Our loss of key senior management personnel or our inability to hire and retain skilled employees at a reasonable cost could adversely affect our business and our ability to increase patient referrals. A nationwide shortage of qualified nurses could adversely affect our profitability and our ability to grow and continue to provide quality, responsive hospice services to our patients as nursing wages and benefits increase. Medical reviews and audits by governmental and private payors could result in material payment recoupments and payment denials, which could negatively impact our business. If any of our hospice programs fails to comply with the Medicare conditions of participation, that program could be terminated from the Medicare program, thereby adversely affecting our net patient service revenue and profitability. Many states have certificate of need laws or other regulatory provisions that may adversely impact our ability to expand into new markets and thereby limit our ability to grow and to increase our net patient service revenue. We may not be able to compete successfully against other hospice providers, and competitive pressures may limit our ability to maintain or increase our market position and adversely affect our profitability. If our costs were to increase more rapidly than the fixed payment adjustments we receive for our hospice services from Medicare and Medicaid, our profitability could be negatively impacted. Federal and state legislative and regulatory initiatives relating to patient privacy could require us to expend substantial sums on acquiring and implementing new information systems. Our net patient service revenue and profitability may be constrained by cost containment initiatives undertaken by insurers and managed care companies. A significant reduction in the carrying value of our goodwill could have a material adverse effect on our profitability. Professional and general liability claims and hired and non-owned auto liability claims may have an adverse effect on us either because our insurance coverage may be inadequate to cover the losses or because claims against us, regardless of merit or eventual outcome, may adversely affect our reputation, our ability to obtain patient referrals or our ability to expand our business. Because of conditions in the credit markets we may not be able to access our funds that are currently invested in auction rate securities without incurring a substantial loss on the disposition of such securities. We may need additional capital to fund our operations and finance our growth, and we may not be able to obtain it on terms acceptable to us, or at all. The Credit Agreement contains, and future debt agreements may contain, various covenants that limit our discretion in the operation of our business. We are dependent on the proper functioning of our information systems to efficiently manage our business. Our inability to effectively integrate, manage and keep secure our information systems could disrupt our operations. Provisions in our charter documents, under Delaware law, and in our stockholder rights plan could discourage a takeover that stockholders may consider favorable.

Full 10-K form ▸

1129623--3/14/2008--ODYSSEY_HEALTHCARE_INC