Quest Diagnostics 2015 Annual Report Download - page 42

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(d) Impact of changes in payer mix, including any shift from fee-for-service to discounted or capitated fee
arrangements.
(e) Adverse actions by government or other third-party payers, including healthcare reform that focuses on reducing
healthcare costs but does not recognize the value and importance to healthcare of clinical testing, unilateral
reduction of fee schedules payable to us, competitive bidding, and an increase in the practice of negotiating for
exclusive arrangements that involve aggressively priced capitated or fee-for-service payments by health insurers
or other payers.
(f) The impact upon our testing volume and collected revenue or general or administrative expenses resulting from
our compliance with Medicare and Medicaid administrative policies and requirements of third-party payers. These
include:
(1) the requirements of Medicare carriers to provide diagnosis codes for many commonly ordered tests and the
possibility that third-party payers will increasingly adopt similar requirements;
(2) inability to obtain from patients a valid advance beneficiary notice form for tests that cannot be billed without
prior receipt of the form;
(3) increased challenges in operating as a non-contracted provider with respect to health plans;
(4) the impact of additional or expanded limited coverage policies and limits on the allowable number of test
units; and
(5) the impact of increased prior authorization programs for clinical testing.
(g) Adverse results from pending or future government investigations, lawsuits or private actions. These include, in
particular, monetary damages, loss or suspension of licenses, and/or suspension or exclusion from the Medicare
and Medicaid programs and/or criminal penalties.
(h) Failure to efficiently integrate acquired businesses and to manage the costs related to any such integration, or to
retain key technical, professional or management personnel.
(i) Denial, suspension or revocation 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.
(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, tests developed by commercial clinical laboratories or other
products or services that we offer or activities in which we are engaged, including regulation by the FDA.
(k) Inability to achieve expected benefits from our acquisitions of other businesses.
(l) Inability to achieve additional benefits from our business performance tools and efficiency initiatives.
(m) Adverse publicity and news coverage about the clinical testing industry or us.
(n) Computer or other IT system failures that affect our ability to perform testing, report test results or properly bill
customers, or result in the disclosure of confidential information, including potential failures resulting from
implementing common IT systems and other system conversions, telecommunications failures, malicious human
acts (such as electronic break-ins or computer viruses) or natural disasters.
(o) Development of technologies that substantially alter the practice of clinical testing, including technology changes
that lead to the development of more convenient or cost-effective testing, or testing to be performed outside of a
commercial clinical laboratory, such as (1) point-of-care testing that can be performed by physicians in their
offices, (2) esoteric testing that can be performed by hospitals in their own laboratories or (3) home testing that
can be carried out without requiring the services of clinical laboratories.
(p) Negative developments regarding intellectual property and other property rights that could prevent, limit or
interfere with our ability to develop, perform or sell our tests or operate our business. These include:
(1) Issuance of patents or other property rights to our competitors or others; and
(2) Inability to obtain or maintain adequate patent or other proprietary rights for our products and services or to
successfully enforce our proprietary rights.
(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 or other intellectual property by competitors, any of which
could negatively affect our competitive position.
(r) Regulatory delay or inability to commercialize newly developed or licensed tests or technologies or to obtain
appropriate reimbursements for such tests.
(s) Inability to properly bill for our services or to obtain appropriate payments for services that we do bill.
(t) Changes in interest rates and changes in our credit ratings from Standard & Poor's, Moody's Investor Services or
Fitch Ratings causing an unfavorable impact on our cost of and access to capital.
(u) Inability to hire and retain qualified personnel or the loss of the services of one or more of our key senior
management personnel.
(v) Terrorist and other criminal activities, hurricanes, earthquakes or other natural disasters, and health pandemics,
which could affect our customers, transportation or systems, or our facilities, and for which insurance may not
adequately reimburse us.
QUEST DIAGNOSTICS 2015 ANNUAL REPORT ON FORM 10-K