1361579--2/19/2010--Virtual_Radiologic

related topics

{regulation, government, change}

{financial, litigation, operation}

{personnel, key, retain}

{product, liability, claim}

{system, service, information}

{property, intellectual, protect}

{acquisition, growth, future}

{customer, product, revenue}

{stock, price, operating}

{cost, contract, operation}

Our inability to effectively manage our growth could adversely affect our business and our operating results. We may in the future become involved in intellectual property rights claims, which could harm our business and operating results. If we are unable to recruit and retain a sufficient number of qualified independent contractor physicians, our future growth would be limited and our business and operating results would be negatively impacted. If we are unable to obtain proper physician licenses or hospital privileges on behalf of our independent contractor physicians, or if our independent contractor physicians lose those licenses or privileges, our business, financial condition and results of operations may be negatively impacted. The forthcoming potential loss of our ability to leverage our Joint Commission accreditation for privileging purposes, or any future loss of Joint Commission accreditation could negatively impact our business and operating results. We are dependent upon our engagement with a physician who is properly licensed to oversee our medical practice. We are also dependent on our management team, and the loss of any key member of this team may prevent us from implementing our business plan in a timely manner. As a result of our corporate structure, we are highly dependent upon our Affiliated Medical Practices, which we do not own. Interruptions or delays in our or our customers information systems or in network or related services provided by third party suppliers could impair the delivery of our services and harm our business. If our security measures are breached and unauthorized access is obtained to patient or customer data, we may face liabilities and our system may be perceived as not being secure, causing customers to curtail or stop using our services, which could lead to a decline in revenues. Any failure to protect our intellectual property rights could impair its value and our competitive advantage. If our arrangements with our independent contractor physicians or our customers are found to violate state laws prohibiting the practice of medicine by general business corporations or fee splitting, our business, financial condition and ability to operate in those states could be adversely affected. Non-compliance with federal and state anti-kickback laws could affect our business, operations or financial condition. Federal or state self-referral regulations could impact our arrangements with our independent contractor physicians. Any lawsuit against us or our customers under the Federal False Claims Act, and the outcome of any such lawsuit could have a material adverse effect on our business, financial condition and results of operations. Medicare and Medicaid rules governing reassignment of payments could affect our customers ability to collect fees for final interpretation services provided by our independent contractor physicians and our ability to market these services to our customers. We are subject to medical device regulations applicable to vRad PACS and our failure to maintain regulatory clearance for this software or to maintain regulatory compliance as a medical device establishment could adversely impact our business. Future changes in healthcare regulation are difficult to predict and may constrain or require us to restructure our operations, which could negatively impact our business and operating results. Non-compliance with state and federal regulations concerning the privacy and security of patient information may adversely affect our business, financial condition or operations. Changes in the rules and regulations governing Medicare and Medicaid s payment for medical services could affect our revenues, particularly with respect to final reads. Our business could be materially affected if a HHS-OIG study results in adverse modifications to Medicare payments for emergency room imaging. Although we maintain medical liability insurance covering all of our independent contractor physicians, our Affiliated Medical Practices and our company, we are subject to medical malpractice claims and other lawsuits that may require us to pay significant damages if not covered by insurance. If we are unable to retain our customers because they terminate their contracts with us or allow those contracts to lapse, our operating results and financial condition may be adversely affected. Because our contracts with our customers contain fixed prices, we are unable to pass along any increase in our expenses to our customers during their contract term. We may be subject to less favorable levels of payment based upon third party payer fee schedules. If we acquire any companies or technologies in the future, they could prove difficult to integrate, disrupt our business, dilute stockholder value and adversely affect our operating results. Our operating results are subject to seasonal fluctuations, which make our results difficult to predict and could cause our performance to fall short of quarterly expectations.

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1361579--2/19/2010--Virtual_Radiologic_CORP