19411--2/28/2007--MAGELLAN_HEALTH_SERVICES

related topics

{regulation, government, change}

{financial, litigation, operation}

{tax, income, asset}

{customer, product, revenue}

{debt, indebtedness, cash}

{product, market, service}

{stock, price, operating}

{product, liability, claim}

{capital, credit, financial}

Reliance on Customer Contracts The Company s inability to renew, extend or replace expiring or terminated contracts could adversely affect the Company s liquidity, profitability and financial condition. Integration of Companies Acquired by Magellan The Company s profitability could be adversely affected if the integration of companies acquired by Magellan, including NIA and ICORE, is not completed in a timely and effective manner. Changes in the Medical Managed Care Industry Certain changes in the business practices of this industry could negatively impact the Company s resources, profitability and results of operations. Changes in the Contracting Model for Medicaid Contracts Certain changes in the contracting model used by states for managed healthcare services contracts relating to Medicaid lives could negatively impact the Company s resources, profitability and results of operations. Risk-Based Products Because the Company provides services at a fixed fee, if the Company is unable to accurately predict and control healthcare costs, the Company s profitability could decline. Fluctuation in Operating Results The Company experiences fluctuations in quarterly operating results and, as a consequence, the Company may fail to meet or exceed market expectations, which could cause the Company s stock price to decline. Dependence on Government Spending The Company can be adversely affected by changes in federal, state and local healthcare policies. Restrictive Covenants in the Company s Debt Instruments Restrictions imposed by the Company s debt agreements limit the Company s operating and financial flexibility. These restrictions may adversely affect the Company s ability to finance the Company s future operations or capital needs or engage in other business activities that may be in the Company s interest. Required Assurances of Financial Resources The Company s liquidity, financial condition, prospects and profitability can be adversely affected by present or future state regulations and contractual requirements that the Company provide financial assurance of the Company s ability to meet the Company s obligations. Competition The competitive environment in the specialty managed healthcare industry may limit the Company s ability to maintain or increase the Company s rates, which would limit or adversely affect the Company s profitability, and any failure in the Company s ability to respond adequately may adversely affect the Company s ability to maintain contracts or obtain new contracts. Possible Impact of Healthcare Reform Healthcare reform can significantly reduce the Company s revenues or profitability. Government Regulation The Company is subject to substantial government regulation and scrutiny, which increase the Company s costs of doing business and could adversely affect the Company s profitability. The Company faces additional regulatory risks associated with its Specialty Pharmaceutical Management segment which could subject it to additional regulatory scrutiny and liability and which could adversely affect the profitability of the Specialty Pharmaceutical Management segment in the future. Risks Related To Realization of Goodwill and Intangible Assets The Company s profitability could be adversely affected if the value of intangible assets is not fully realized. Risk of Potential Limitation of the Company s Net Operating Loss Carryforwards ( NOLs ) Certain future changes in the composition of the Company s stockholder population could, in certain circumstances, limit the Company s ability to use the Company s NOLs. Claims for Professional Liability Pending or future actions or claims for professional liability (including any associated judgments, settlements, legal fees and other costs) could require the Company to make significant cash expenditures and consume significant management time and resources, which could have a material adverse effect on the Company s profitability and financial condition. Professional Liability and Other Insurance Claims brought against the Company that exceed the scope of the Company s liability coverage or denial of coverage could materially and adversely affect the Company s profitability and financial condition. Class Action Suits and Other Legal Proceedings The Company could be targeted by class action and other lawsuits that could result in material liabilities to the Company or cause the Company to incur material costs, to change the Company s operating procedures in ways that increase costs or to comply with additional regulatory requirements. Government Investigations The Company may be subjected to additional regulatory requirements and to investigations or regulatory action by governmental agencies, each of which may have a material adverse effect on the Company s business, financial condition and results of operations.

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19411--2/28/2007--MAGELLAN_HEALTH_SERVICES_INC