Risk Factors Update Summary

• A majority of net revenue in 2023 was generated by operations in five states, with Texas contributing approximately 32% of net revenue in 2023. This concentration poses a significant risk.
• Various processes may experience significant delays, impacting operations and cash flows.
• The flat birth rate in 2021, following a 1% increase in births from 2020, suggests a transient rebound. Future declines in births could impact business operations.
• The reduction in the Medicare Physician Fee Schedule conversion factor by 3.5% in 2024 from the previous year may lead to decreased Medicare payments to physicians.
• The potential impact of federal legislation imposing transparency requirements on providers regarding pricing information for prescription drugs could affect business operations.
• Failure to comply with privacy laws could harm business and operations, leading to liability.
• New rules create penalties for information blocking after September 1, 2023, impacting healthcare industry participants.
• The termination of the Services Agreement with R1RCM due to performance issues may disrupt revenue cycle management, impacting financial results.
• The expiration of waivers for certain services post-COVID-19 may increase exposure to legal, regulatory, and compliance risks, affecting operations.
• New laws and regulations could increase compliance costs and affect business activities.
• Compliance with changing regulations may result in unexpected costs upwards of millions of dollars.
• The potential loss of Medicaid coverage for up to 15 million people due to changes in Medicaid eligibility requirements could impact patient volumes and financial performance.
• Increased cyberattacks may lead to an increase in data privacy and security risks.
• Compliance with regulations may lead to reputational harm and negative market perception.