Quest Diagnostics 2011 Annual Report Download - page 30

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including the diversion of management’s attention to the assimilation of the operations of businesses we have
acquired, difficulties in the integration of operations and systems and the realization of potential operating
synergies, the assimilation and retention of the personnel of the acquired companies, challenges in retaining the
customers of the combined businesses, and potential adverse effects on operating results. The process of
combining companies may be disruptive to our businesses and may cause an interruption of, or a loss of
momentum in, such businesses as a result of the following difficulties, among others:
•loss of key customers or employees;
•difficulty in standardizing information and other systems;
•difficulty in consolidating facilities and infrastructure;
•failure to maintain the quality or timeliness of services that our Company has historically provided;
•diversion of management’s attention from the day-to-day business of our Company as a result of the need
to deal with the foregoing disruptions and difficulties; and
•the added costs of dealing with such disruptions.
If we are unable successfully to integrate strategic acquisitions in a timely manner, our business and our
growth strategies could be negatively affected. Even if we are able to successfully complete the integration of the
operations of other companies or businesses we may acquire in the future, we may not be able to realize all or
any of the benefits that we expect to result from such integration, either in monetary terms or in a timely
manner.
We are subject to numerous legal and regulatory requirements governing our activities, and we may face
substantial fines and penalties, and our business activities may be impacted, if we fail to comply.
Our business is subject to or impacted by extensive and frequently changing laws and regulations in the
United States (including at both the federal and state levels) and the other jurisdictions in which we engage in
business. While we seek to conduct our business in compliance with all applicable laws, many of the laws and
regulations applicable to us are vague or indefinite and have not been interpreted by the courts, including many
of those relating to:
•billing and reimbursement of clinical tests;
•certification or licensure of clinical laboratories;
•the anti-self-referral and anti-kickback laws and regulations;
•the laws and regulations administered by the U.S. Food and Drug Administration;
•the corporate practice of medicine;
•operational, personnel and quality requirements intended to ensure that clinical testing services are
accurate, reliable and timely;
•physician fee splitting;
•relationships with physicians and hospitals;
•safety and health of laboratory employees; and
•handling, transportation and disposal of medical specimens, infectious and hazardous waste and radioactive
materials.
These laws and regulations may be interpreted or applied by a prosecutorial, regulatory or judicial authority
in a manner that could require us to make changes in our operations, including our pricing and/or billing
practices. We may not be able to maintain, renew or secure required permits, licenses or any other regulatory
approvals needed to operate our business or commercialize our products. If we fail to comply with applicable
laws and regulations, or if we fail to maintain, renew or obtain necessary permits, licenses and approvals, we
could suffer civil and criminal penalties, fines, exclusion from participation in governmental healthcare programs
and the loss of various licenses, certificates and authorizations necessary to operate our business, as well as incur
additional liabilities from third party claims. If any of the foregoing were to occur, our reputation could be
damaged, important business relationships with third parties could be adversely affected and it could have a
material adverse effect on our business.
We regularly receive requests for information, and occasionally subpoenas, from governmental authorities.
We also are subject from time to time to qui tam claims brought by former employees or other “whistleblowers.”
The federal and state governments continue to strengthen their position and scrutiny over healthcare fraud. In
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