LabCorp 2015 Annual Report Download - page 26

Index
 
Investors should carefully consider all of the information set forth in this report, including the following risk factors, before deciding to invest in any of
the Company’s securities. The risks below are not the only ones that the Company faces. Additional risks not presently known to the Company, or that the
Company presently deems immaterial, may also negatively impact the Company. The Company’s business, consolidated financial condition, revenues,
results of operations, profitability, reputation or cash flows could be materially impacted by any of these factors.
This report also includes forward-looking statements that involve risks or uncertainties. The Company’s results could differ materially from those anticipated
in these forward-looking statements as a result of certain factors, including the risks described below and elsewhere. See “Forward Looking Statements” in
Item 7.



Government payers, such as Medicare and Medicaid, as well as insurers, including MCOs, have increased their efforts to control the cost, utilization and
delivery of healthcare services. From time to time, Congress has considered and implemented changes in Medicare fee schedules in conjunction with
budgetary legislation. Further reductions of reimbursement for Medicare and Medicaid services or changes in policy regarding coverage of tests or other
requirements for payment, such as prior authorization or a physician or qualified practitioner’s signature on test requisitions, may be implemented from time
to time. Reimbursement for pathology services performed by LCD is also subject to statutory and regulatory reduction. Reductions in the reimbursement rates
and changes in payment policies of other third-party payers may occur as well. Such changes in the past have resulted in reduced payments as well as added
costs and have decreased test utilization for the clinical laboratory industry by adding more complex new regulatory and administrative requirements. Further
changes in third-party payer regulations or policies may have a material adverse impact on LCD's business. Actions by agencies regulating insurance or
changes in other laws, regulations, or policies may also have a material adverse effect upon LCD's business.
                   

The Company is subject to extensive government regulation at the national, state and local levels. The Company’s failure to meet governmental
requirements under these regulations, including those relating to billing practices and financial relationships with physicians and hospitals, could lead to
civil and criminal penalties, exclusion from participation in Medicare and Medicaid and possible prohibitions or restrictions on the use of its laboratories.
While the Company believes that it is in material compliance with all statutory and regulatory requirements, there is a risk that government authorities might
take a contrary position. Such occurrences, regardless of their outcome, could damage the Company’s reputation and adversely affect important business
relationships it has with third parties.



The clinical laboratory testing industry is subject to extensive regulation, and many of these statutes and regulations have not been interpreted by the
courts. CLIA extends federal oversight to virtually all clinical laboratories operating in the U.S. by requiring that they be certified by the federal government
or by a federally-approved accreditation agency. The sanction for failure to comply with CLIA requirements may be suspension, revocation or limitation of a
laboratory’s CLIA certificate, which is necessary to conduct business, as well as significant fines and/or criminal penalties. In addition, the Company is
subject to regulation under state law. State laws may require that laboratories and/or laboratory personnel meet certain qualifications, specify certain quality
controls or require maintenance of certain records.
Applicable statutes and regulations could be interpreted or applied by a prosecutorial, regulatory or judicial authority in a manner that would adversely
affect the Company's business. Potential sanctions for violation of these statutes and regulations include significant fines and the suspension or loss of
various licenses, certificates and authorizations, which could have a material adverse effect on the Company’s business. In addition, compliance with future
legislation could impose additional requirements on the Company which may be costly.
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