Labcorp

New or substantially reworded (8)

• Natural disasters (e.g., severe weather, fires, and earthquakes), geopolitical events (e.g., terrorism, war, and political instability), public health crises, criminal activity, supply chain disruptions, and other events beyond the Company’s control could negatively affect the Company’s operations. These disruptions may temporarily reduce testing volumes, delay study progress, hinder specimen transport, limit access to laboratories and IT systems, and interrupt supply deliveries. They may also affect customer operations, further decreasing demand. Prolonged disruptions caused by such events, especially in key operational locations, could harm the Company’s results of operations.

• The Company’s diagnostic testing services are primarily billed to third parties, including MCOs, employer plans, and other health insurance providers. Read more

  A shift toward a higher mix of government and MCO payers may adversely effect revenues due to lower reimbursement rates. Ongoing efforts by payers to reduce reimbursement, tighten payment policies, and control utilization are expected to continue. If the Company cannot offset these reductions through cost efficiencies, increased volume or new services, its revenues, profitability, and cash flows may be materially impacted. PAMA has already reduced Medicare reimbursement rates for many tests, and further reductions are expected, although rate reductions are frozen for 2026 and capped at 15% per year for 2027-2029. Delays and changes in coding, billing, and payer policies have historically impacted

• revenue and margins, and similar disruptions may continue. Increasing patient cost-sharing and evolving value-based care models also pose collection challenges and may affect the Company’s ability to attract and retain MCOs.

• BLS supports pharmaceutical, biotechnology, and medical device companies in navigating the regulatory approval and post-approval compliance requirements process. Read more

  Changes in government regulations, whether easing or tightening requirements and changes in government operations, including staff reductions and reorganization efforts, could reduce the demand for BLS’s services or make them less competitive. Additionally, efforts to control drug and device costs, or changes in insurer reimbursement practices, may lead customers to reduce R&D spending, which could adversely affect BLS’s business.

• BLS’s revenues are closely tied to R&D spending by pharmaceutical, biotechnology, and medical device companies, which may depend on access to capital and reimbursement from payers. Read more

  Economic conditions, industry trends, or funding constraints could lead to reduced or delayed R&D activity or outsourcing, materially impacting BLS’s business and financial performance.

• The Company’s quarterly results of operations may vary significantly from quarter to quarter making it harder to predict future results.

• The Company’s operations rely on the continued performance and security of its information technology systems. Read more

  System failures, cybersecurity incidents, disruptions, or other issues affecting information technology systems could impair data processing, service delivery, billing, and customer communications. The Company also relies on third parties for critical services, including transportation, supplies, and data processing and expects them to comply with applicable laws and regulations, including environmental, health and safety, and privacy and data security laws. Failures by these providers, whether operational, legal, or cybersecurity-related, and issues affecting their information technology systems, could disrupt services, compromise personal or other confidential information, expose the Company to liability and could materially impact its business, even if the Company is not…

• The Company continues to face cybersecurity threats, including ransomware attempts, data breaches, and phishing and social engineering attempts targeting its systems and its employees, and those of third-party vendors. Read more

  Increasingly sophisticated methods, including the use of AI by threat actors, heighten these risks. The Company has implemented a formal cybersecurity program; however, threat actors’ techniques continue to evolve and may not be identifiable until deployed, which could limit the Company’s ability to prevent unauthorized access, data compromise, service disruption, or fraudulent activity. The Company may be unable to anticipate and/or implement appropriate controls needed to protect against these evolving threats or be required to expend additional resources to prepare for and respond to any cybersecurity vulnerabilities. Evolving threats may outpace defenses, requiring…

No longer in the text (4)

• Natural disasters, such as adverse weather, fires, earthquakes, power shortages and outages, geopolitical events, such as terrorism, war, political instability, or other conflict, public health crises and disease epidemics and pandemics, criminal activities, disruptions to supply chains, inaccessibility of natural resources, and other disruptions or events beyond the Company’s control could negatively affect the Company’s operations. Any of these events may result in a temporary decline of testing volumes and other work in both segments. In addition, such events may temporarily interrupt the Company’s ability to transport specimens, efficiently commence, continue, or complete its work on studies, utilize information technology systems, utilize certain laboratories, and/or to receive material from its suppliers. Such events can also affect customer operations and thereby impact testing…

• Dx testing services are billed to MCOs, Medicare, Medicaid, physicians and physician groups, hospitals, patients, and employer groups. Read more

  Most testing services are billed to a party other than the physician or other authorized person who ordered the test. Increases in the percentage of services billed to government and MCOs could have an adverse effect on the Company’s revenues.

• The Company expects the efforts to impose reduced reimbursement, more stringent payment policies, and utilization and cost controls by government and other payers to continue. Read more

  If Dx cannot offset additional reductions in the payments it receives for its services by reducing costs, increasing test volume, and/or introducing new services and procedures, it could have a material adverse effect on the Company’s revenues, profitability, and cash flows. In 2014, Congress passed PAMA, requiring Medicare to change the way payment rates are calculated for tests paid under the CLFS, and to base the payment on the weighted median of rates paid by private payers. Pursuant to PAMA, reimbursement rates for many clinical laboratory tests provided under Medicare were reduced from 2018 through 2020. Enforcement of PAMA was suspended each year from 2021 through 2025, but a long-term resolution through…

• The Company’s ability to attract and retain MCOs is critical given the impact of healthcare reform, changes in coverage and evolving value-based care and risk-based reimbursement delivery models (e.g., accountable care organizations (ACOs) and Independent Physician Associations (IPAs)).