Quest Diagnostics 2000 Annual Report Download - page 38

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18
committee of the board of directors requires periodic reporting of compliance operations from management. Government
officials have publicly cited this program as a model for the industry.
In October 1996, we signed a five-year corporate integrity agreement with the OIG. Under the agreement, we
agreed to take steps to demonstrate our integrity as a provider of services to federally sponsored healthcare programs.
These include steps to:
• maintain our corporate compliance program;
• adopt pricing guidelines;
• audit laboratory operations; and
• investigate and report instances of noncompliance, including any corrective actions and disciplinary steps.
This agreement also gives us the opportunity to seek clearer guidance on matters of compliance and to resolve
compliance issues directly with the OIG. SBCL also entered into a five-year corporate integrity agreement with the OIG
that became effective in 1997. As a result of our acquisition of SBCL, SBCL is now covered under our corporate
integrity agreement.
None of the undertakings included in our corporate integrity agreement are expected to have any material
adverse effect on our business, financial condition, results of operations, cash flow, and prospects. We believe we comply
in all material respects with all applicable statutes and regulations. However, we cannot assure you that no statutes or
regulations will be interpreted or applied by a prosecutorial, regulatory or judicial authority in a manner that would
adversely affect us. Potential sanctions for violation of these statutes include significant damages, penalties, and fines,
exclusion from participation in governmental healthcare programs and the loss of various licenses, certificates and
authorization necessary to operate some or all of our business.
Insurance
We maintain various liability and property insurance programs (subject to maximum limits and self-insured
retentions) for claims that could result from providing or failing to provide clinical laboratory testing services, including
inaccurate testing results and other exposures. Management believes that present insurance coverage and reserves are
sufficient to cover currently estimated exposures, but we cannot assure you that we will not incur liabilities in excess of
the policy limits. Similarly, although we believe that we will be able to obtain adequate insurance coverage in the future
at acceptable costs, we cannot assure you that we will be able to do so.
Employees
At both December 31, 2000 and 1999, we employed approximately 27,000 people. Approximately 25,000 of
our employees were full-time at December 31, 2000. These totals exclude employees of the joint ventures in which we do
not have a majority interest. We have no collective bargaining agreements with any unions, and we believe that our
overall relations with our employees are good.