Quest Diagnostics 2003 Annual Report Download - page 39

(h) Inability to obtain professional liability or other insurance coverage or a material increase in premiums
for such coverage or reserves for self-insurance. See “Business—Insurance’’.
(i) Denial of CLIA certification or other licenses for any of our clinical laboratories under the CLIA
standards, revocation or suspension of the right to bill the Medicare and Medicaid programs or other
adverse regulatory actions by federal, state and local agencies. See “Business—Regulation of Clinical
Laboratory Operations’’.
(j) Changes in federal, state or local laws or regulations, including changes that result in new or increased
federal or state regulation of commercial clinical laboratories, including regulation by the FDA.
(k) Inability to achieve expected synergies from our acquisitions of other business, including Unilab. See
“Business—Recent Acquisitions’’.
(l) Inability to achieve additional benefits from our Six Sigma and standardization initiatives.
(m) Adverse publicity and news coverage about the clinical laboratory industry or us.
(n) Computer or other system failures that affect our ability to perform tests, report test results or properly
bill customers, including potential failures resulting from the standardization of our IT systems and
other system conversions, telecommunications failures, malicious human acts (such as electronic
break-ins or computer viruses) or natural disasters. See “Business—Information Systems’’ and
“Business—Billing’’.
(o) Development of technologies that substantially alter the practice of laboratory medicine, including
technology changes that lead to the development of more cost-effective tests such as (1) point-of-care
tests that can be performed by physicians in their offices and (2) home testing that can be carried out
without requiring the services of clinical laboratories. See “Business—Competition’’ and “Business—
Regulation of Clinical Laboratory Operations’’.
(p) Issuance of patents or other property rights to our competitors or others that could prevent, limit or
interfere with our ability to develop, perform or sell our tests or operate our business.
(q) Development of tests by our competitors or others which we may not be able to license, or usage of
our technology or similar technologies or our trade secrets by competitors, any of which could
negatively affect our competitive position.
(r) Inability to commercialize newly licensed tests or technologies or to obtain appropriate reimbursements
for such tests.
(s) Inability to obtain or maintain adequate patent and other proprietary rights protections of our products
and services or to successfully enforce our proprietary rights.
(t) Development of an Internet-based electronic commerce business model that does not require an
extensive logistics and laboratory network.
(u) The impact of the privacy regulations, security regulations and standards for electronic transactions
regulations issued under HIPAA on our operations as well as the cost to comply with the regulations,
including the failure of third party payers to complete testing with us, failure to agree on data content
for claims, failure to accept default diagnosis codes in the absence of physician-supplied codes, or
inability of payers to accept or remit transactions in HIPAA-required standard transaction and code set
format. See “Business—Privacy and Security of Health Information; Standard Transactions’’.
(v) Inability to promptly or properly bill for our services or to obtain appropriate payments for services
that we do bill. See “Business—Billing’’.
(w) Changes in interest rates and changes in our credit ratings from Standard & Poor’s and Moody’s
Investor Services causing an unfavorable impact on our cost of and access to capital.
(x) Inability to hire and retain qualified personnel or the loss of the services of one or more of our key
senior management personnel.
(y) Terrorist and other criminal activities, which could affect our customers, transportation or power
systems, or our facilities, and for which insurance may not adequately reimburse us for.
22