896262--2/27/2008--AMEDISYS

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{loss, insurance, financial}

{competitive, industry, competition}

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Risks Related to Our Industry Because our revenue is substantially derived from Medicare, reductions in Medicare rates, rate increases that do not cover cost increases and/or significant changes to the Medicare reimbursement methodology may adversely affect our business. If any of our agencies fail to comply with the conditions of participation in the Medicare program, that agency could be terminated from the Medicare program, which would adversely affect our results of operations. Our operations are subject to federal and state laws prohibiting fraud by healthcare providers, including laws containing criminal provisions. We are subject to extensive government regulation. Any changes to the laws and regulations governing our business, or the interpretation and enforcement of those laws or regulations, could cause us to modify our operations and could negatively impact our results of operations. We are subject to federal and state laws that govern our financial relationships with physicians and other health care providers, including potential or current referral sources. 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. We may be subject to substantial malpractice or other similar claims. An economic downturn, continued deficit spending by the Federal government and state budget pressures in states in which we operate could result in a reduction in reimbursement and covered services. Our industry is highly competitive, with relatively few barriers to entry in some markets. State efforts to regulate the establishment or expansion of health care providers could impair our ability to expand our operations. A shortage of qualified registered nursing staff and other caregivers could adversely affect our ability to attract, train and retain qualified personnel and could increase operating costs. Risks Related to Our Business Our revenue is substantially derived from Medicare. Reductions in Medicare rates, rate increases that do not cover cost increases and/or significant changes to the Medicare reimbursement methodology may adversely affect our business. Future cost containment initiatives undertaken by private third-party payors may limit our future revenue and profitability. Migration of our Medicare beneficiary patients to Medicare managed care providers could negatively impact our operating results. Possible changes in the case mix of patients, as well as payor mix and payment methodologies, may have a material adverse effect on our results of operations. Our allowance for contractual adjustments and doubtful accounts may not be sufficient to cover uncollectible amounts. Delays in reimbursement may cause liquidity problems. Our growth strategy depends on our ability to manage growing and changing operations. Our growth strategy depends on our ability to open agencies, acquire additional agencies on favorable terms and integrate and operate these agencies effectively. If our growth strategy is unsuccessful or we are not able to successfully integrate newly acquired or opened agencies into our existing operations, our future results of operations could be adversely impacted. Our acquisitions may impose strains on our existing resources. Our inability to effectively integrate, manage and keep secure our information systems could disrupt our operations. Failure of, or problems with, our clinical software system could harm our business and operating results. We depend on outside software providers. Our insurance liability coverage may not be sufficient for our business needs. If we must write off a significant amount of intangible assets or long-lived assets, our earnings will be negatively impacted. The agreement governing our revolving credit facility contains, and future debt agreements may contain, various covenants that limit our discretion in the operation of our business. We depend on the services of our executive officers and other key employees. Our operations could be affected by natural disasters or terrorist acts. Risks Related to Ownership of Our Common Stock The price of our common stock may be volatile and this may adversely affect our stockholders. Sales of substantial amounts of our common stock or preferred stock, or the availability of those shares for future sale, could adversely affect our stock price and limit our ability to raise capital. In the past we have had to defend class action lawsuits, and there is no assurance that we will not face similar suits in the future that could require us to pay substantial damage awards. Our board of directors may use anti-takeover provisions or issue stock to discourage control contests.

Full 10-K form ▸

896262--2/27/2008--AMEDISYS_INC