Henry Schein 2014 Annual Report Download - page 29

Download and view the complete annual report

Please find page 29 of the 2014 Henry Schein annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 131

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96
  • 97
  • 98
  • 99
  • 100
  • 101
  • 102
  • 103
  • 104
  • 105
  • 106
  • 107
  • 108
  • 109
  • 110
  • 111
  • 112
  • 113
  • 114
  • 115
  • 116
  • 117
  • 118
  • 119
  • 120
  • 121
  • 122
  • 123
  • 124
  • 125
  • 126
  • 127
  • 128
  • 129
  • 130
  • 131

15
Also, HIPAA requires certain health care providers, such as physicians, to use certain transaction and code set
rules for specified electronic transactions, such as transactions involving claims submissions. Commencing July 1,
2012, CMS required that electronic claim submissions and related electronic transactions be conducted under a new
HIPAA transaction standard called Version 5010. CMS has required this upgrade in connection with another new
requirement applicable to the industry, the implementation of new diagnostic code sets to be used in claims
submission. The new diagnostic code sets are called the ICD-10-CM. They were originally to be implemented on
October 1, 2013 (and CMS delayed the implementation date until October 1, 2014), but as part of the Protecting
Access to Medicare Act of 2014, enacted on April 1, 2014, Congress prohibited the Secretary of Health and Human
Services from implementing ICD-10-CM any earlier than October 1, 2015. CMS published a final rule on
August 4, 2014 adopting the October 1, 2015 compliance date and requiring the use of ICD-9-CM code sets
through September 30, 2015, and there is no suggestion that implementation will be further delayed. Certain of our
businesses provide electronic practice management products that must meet those requirements, and while we
believe that we are prepared to timely adopt the new standards, it is possible that the transition to these new
standards, particularly the transition to ICD-10-CM, may result in a degree of disruption and confusion, thus
potentially increasing the costs associated with supporting this product.
International Transactions
In addition, United States and foreign import and export laws and regulations require us to abide by certain
standards relating to the importation and exportation of products. We also are subject to certain laws and
regulations concerning the conduct of our foreign operations, including the U.S. Foreign Corrupt Practices Act, the
U.K. Bribery Act and other anti-bribery laws and laws pertaining to the accuracy of our internal books and records,
as well as other types of foreign requirements similar to those imposed in the United States.
While we believe that we are substantially compliant with the foregoing laws and regulations promulgated
thereunder and possess all material permits and licenses required for the conduct of our business, there can be no
assurance that regulations that impact our business or customers’ practices will not have a material adverse effect
on our business. As a result of political, economic and regulatory influences, the health care distribution industry in
the United States is under intense scrutiny and subject to fundamental changes. We cannot predict what further
reform proposals, if any, will be adopted, when they may be adopted, or what impact they may have on us.
See “ITEM 1A. Risk Factors” for a discussion of additional burdens, risks and regulatory developments that
may affect our results of operations and financial condition.
Proprietary Rights
We hold trademarks relating to the “Henry Schein®” name and logo, as well as certain other trademarks. We
intend to protect our trademarks to the fullest extent practicable.