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What changed in Pediatrix Medical Group, Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Pediatrix Medical Group, Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+316 added−310 removedSource: 10-K (2026-02-19) vs 10-K (2025-02-20)

Top changes in Pediatrix Medical Group, Inc.'s 2025 10-K

316 paragraphs added · 310 removed · 263 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

71 edited+11 added−10 removed236 unchanged
Biggest changeComplex initiatives are derived and based on our long-standing CQI efforts, our value-based care initiatives, and various clinical quality collaboratives. Our quality metrics include standard clinical outcome reporting, trend analysis and threshold performance, which are provided to our affiliated clinicians. • Patient Safety Organization (“PSO”).
Biggest changeOur quality metrics include standard clinical outcome reporting, trend analysis and threshold performance, which are provided to our affiliated clinicians. • Patient Safety Organization (“PSO”). We have a federally-listed PSO, the mission of which is to improve the quality and safety of care rendered by our clinical providers through the collection and analysis of quality data.
We typically are responsible for billing patients and third-party payors for services rendered by our affiliated physicians separately 12 from other related charges billed by the hospital or other physicians to the same payors. Some of our hospital contracts require hospitals to pay us administrative fees.
We typically are 12 responsible for billing patients and third-party payors for services rendered by our affiliated physicians separately from other related charges billed by the hospital or other physicians to the same payors. Some of our hospital contracts require hospitals to pay us administrative fees.
We believe our Compliance Program provides a solid framework to meet this commitment and our obligations as a provider of healthcare services, including: • a Chief Compliance Officer who reports to our Board of Directors on a regular basis; • a Compliance Committee consisting of our senior executives; • a formal internal audit function, including an Associate Vice President of Internal Audit who reports to the Audit Committee on a regular basis; 21 • our Code of Conduct , which is applicable to our employees, independent contractors, officers and directors; • our Code of Professional Conduct – Finance , which is applicable to our finance personnel, including our Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer; • a disclosure program that includes a mechanism to enable individuals to disclose on a confidential or anonymous basis to the Chief Compliance Officer or any person who is not in the disclosing individual’s chain of command, issues or questions believed by the individual to be a potential violation of criminal, civil, or administrative laws or of company policies or procedures; • an organizational structure designed to integrate our compliance objectives into our corporate offices, regions and practices; and • education, monitoring and corrective action programs designed to establish methods to promote the understanding of our Compliance Program and adherence to its requirements.
We believe our Compliance Program provides a solid framework to meet this commitment and our obligations as a provider of healthcare services, including: • a Chief Compliance Officer who reports to our Board of Directors on a regular basis; • a Compliance Committee consisting of our senior executives; • a formal internal audit function, including an Associate Vice President of Internal Audit who reports to the Audit Committee on a regular basis; • our Code of Conduct , which is applicable to our employees, independent contractors, officers and directors; • our Code of Professional Conduct – Finance , which is applicable to our finance personnel, including our Chief Executive Officer, Chief Financial Officer and Chief Accounting Officer; 21 • a disclosure program that includes a mechanism to enable individuals to disclose on a confidential or anonymous basis to the Chief Compliance Officer or any person who is not in the disclosing individual’s chain of command, issues or questions believed by the individual to be a potential violation of criminal, civil, or administrative laws or of company policies or procedures; • an organizational structure designed to integrate our compliance objectives into our corporate offices, regions and practices; and • education, monitoring and corrective action programs designed to establish methods to promote the understanding of our Compliance Program and adherence to its requirements.
Adverse changes or conditions affecting states in which our operations are concentrated, such as healthcare reforms, changes in laws, rules and regulations, reduced Medicaid reimbursements, an increase in the income level required to qualify for government healthcare programs or government investigations, may have a material adverse effect on our business, financial condition, results of operations, cash flows and the trading price of our securities.
Adverse 24 changes or conditions affecting states in which our operations are concentrated, such as healthcare reforms, changes in laws, rules and regulations, reduced Medicaid reimbursements, an increase in the income level required to qualify for government healthcare programs or government investigations, may have a material adverse effect on our business, financial condition, results of operations, cash flows and the trading price of our securities.
Because obstetrics is a significant source of hospital admissions, hospital administrators have responded to these demands by establishing NICUs and contracting with independent neonatology group practices, such as our affiliated professional contractors, to staff and manage these units. As a result, NICUs within the United States tend to be concentrated in hospitals with higher volumes of births.
Because obstetrics is a significant source of hospital admissions, hospital administrators have responded to these demands by establishing NICUs and contracting with independent neonatology group practices, such as our affiliated professional contractors, to staff and manage these units. As a result, NICUs within the United States tend to be concentrated in 6 hospitals with higher volumes of births.
These include a more streamlined charge capture system, a cloud-based image access and storage solution, continued development of our cloud-based neonatology-specific notes system and upgrades to our office-based practices electronic health record system that are designed to be better for our physicians and improve the patient-facing portal for our patients and their families.
These include a more streamlined charge capture system, a cloud-based image access and storage solution, continued development of our cloud-based neonatology-specific notes system and upgrades to our office-based 7 practices electronic health record system that are designed to be better for our physicians and improve the patient-facing portal for our patients and their families.
We continually seek improvements to our systems to expedite the overall process, streamline information gathering from our clinical systems and improve efficiencies in the reimbursement process. We maintain additional information systems designed to improve operating efficiencies of our affiliated practice groups, reduce physicians’ paperwork requirements and facilitate interaction among our affiliated physicians and their colleagues regarding patient care issues.
We continually seek improvements to our systems to expedite the overall process, streamline information gathering from our clinical systems and improve efficiency in the reimbursement process. We maintain additional information systems designed to improve operating efficiencies of our affiliated practice groups, reduce physicians’ paperwork requirements and facilitate interaction among our affiliated physicians and their colleagues regarding patient care issues.
We plan to continue to find ways to supply real 7 time data to our affiliated physician practices so that they can have visibility to, and more importantly, manage patient volumes. • Promote Same-Unit and Organic Growth . We seek opportunities for increasing revenue from our hospital-based and office-based operations.
We plan to continue to find ways to supply real time data to our affiliated physician practices so that they can have visibility to, and more importantly, manage patient volumes. • Promote Same-Unit and Organic Growth . We seek opportunities for increasing revenue from our hospital-based and office-based operations.
See “Professional and General Liability Coverage.” PROFESSIONAL AND GENERAL LIABILITY COVERAGE We maintain professional and general liability insurance policies with third-party insurers generally on a claims-made basis, subject to deductibles, self-insured retention limits, policy aggregates, exclusions, and other restrictions, in accordance with standard industry practice.
See “Professional and General Liability Coverage.” PROFESSIONAL AND GENERAL LIABILITY COVERAGE We maintain professional and general liability insurance policies with third-party insurers generally on a claims-made basis, subject to deductibles, self-insured retention limits, policy aggregates, exclusions, and other 22 restrictions, in accordance with standard industry practice.
In addition to our database of physicians, we recruit nationally through trade advertising, referrals from our affiliated physicians and attendance at conferences. • Billing, Collection and Reimbursement . We assume responsibility for assisting our affiliated physicians with contracting with third-party payors. We are responsible for billing, collection and reimbursement for services rendered by our affiliated physicians.
In addition to our database of physicians, we recruit nationally through trade advertising, referrals from our affiliated physicians and attendance at conferences. • Billing, Collection and Reimbursement . We assume responsibility for assisting our affiliated physicians with contracting with third-party payors. We are responsible for billing, collection and reimbursement for services 11 rendered by our affiliated physicians.
We focus our efforts in this area using a market-based approach and in each geographic area where we operate, we consider how we can solidify and/or expand our existing hospital, health system and clinical practice relationships and form new ones.
We focus our efforts in this area using a market-based approach and in each geographic area where we operate, we consider how we can solidify and/or expand our existing hospital, health system and clinical practice relationships and form new 8 ones.
In all instances, however, we do not assume responsibility for 11 charges relating to services provided by hospitals or other physicians with whom we collaborate. Such charges are separately billed and collected by the hospitals or other physicians.
In all instances, however, we do not assume responsibility for charges relating to services provided by hospitals or other physicians with whom we collaborate. Such charges are separately billed and collected by the hospitals or other physicians.
We expect to incur additional costs to ensure that our data privacy and security policies, procedures, and activities comply with applicable and evolving legal requirements. These requirements are also subject to change.
We expect to incur additional costs to ensure that our data privacy and security policies, procedures, and activities comply with applicable and evolving legal requirements. 20 These requirements are also subject to change.
Some contracts provide for fees if the hospital does not generate sufficient patient volume in order to guarantee that we receive a specified minimum revenue level. We also receive fees from hospitals for administrative services performed by our affiliated physicians providing medical director services at the hospital. Administrative fees accounted for approximately 14% of our net revenue for 2024.
Some contracts provide for fees if the hospital does not generate sufficient patient volume in order to guarantee that we receive a specified minimum revenue level. We also receive fees from hospitals for administrative services performed by our affiliated physicians providing medical director services at the hospital. Administrative fees accounted for approximately 14% of our net revenue for 2025.
On December 10, 2020, OCR issued proposed revisions to the Privacy Rule aimed at reducing regulatory burdens that may exist in discouraging coordination of care, including creating an exception to the minimum necessary standard for healthcare coordination, and other proposals to increase patient access to their health information, among other changes.
On December 10, 2020, HHS issued proposed revisions to the Privacy Rule aimed at reducing regulatory burdens that may exist in discouraging coordination of care, including creating an exception to the minimum necessary standard for healthcare coordination, and other proposals to increase patient access to their health information, among other changes.
Data on neonatal outcomes demonstrates that, in general, the likelihood of mortality or an adverse condition or outcome (referred to as “morbidity”) is reduced the longer a baby remains in the womb. There are approximately 3,000 board-certified maternal-fetal medicine subspecialists in the United States. Other Pediatric Subspecialty Medicine .
Data on neonatal outcomes demonstrates that, in general, the likelihood of mortality or an adverse condition or outcome (referred to as “morbidity”) is reduced the longer a baby remains in the womb. There are approximately 3,100 board-certified maternal-fetal medicine subspecialists in the United States. Other Pediatric Subspecialty Medicine .
Pediatric intensivists are hospital-based pediatricians with additional education and training in caring for critically ill or injured children and adolescents. Our affiliated physicians who provide this clinical care staff and manage pediatric intensive care units (“PICUs”) at over 60 hospitals. Pediatric Hospitalists . Pediatric hospitalists are hospital-based pediatricians specializing in inpatient care and management of acutely ill children.
Pediatric intensivists are hospital-based pediatricians with additional education and training in caring for critically ill or injured children and adolescents. Our affiliated physicians who provide this clinical care staff and manage pediatric intensive care units (“PICUs”) at approximately 60 hospitals. Pediatric Hospitalists . Pediatric hospitalists are hospital-based pediatricians specializing in inpatient care and management of acutely ill children.
The RAC’s multi-disciplinary approach involves the collaboration of both clinical and business professionals, including finance, legal and compliance. With participating clinicians located throughout the country, the RAC supports a comprehensive scope of research efforts. This nationwide perspective allows us to better anticipate future needs and opportunities. • Quality and Safety.
The RAC’s multi-disciplinary approach involves the collaboration of both clinical and business professionals, including finance, legal and compliance. With participating clinicians located throughout the country, the RAC supports a comprehensive scope of research efforts. This broad perspective allows us to better anticipate future needs and opportunities. • Quality and Safety.
As of December 31, 2024, 40 states and the District of Columbia have expanded Medicaid eligibility to cover this additional low-income patient population (including states that have adopted but not yet implemented expansion and those that are using an alternative approach to eligibility expansion) and other states are considering such expansion.
As of December 31, 2025, 40 states and the District of Columbia have expanded Medicaid eligibility to cover this additional low-income patient population (including states that have adopted but not yet implemented expansion and those that are using an alternative approach to eligibility expansion) and other states are considering such expansion.
Other areas of pediatric subspecialty medicine are closely associated with maternal-fetal-newborn medical care. For example, pediatric intensivists are subspecialists who care for critically ill or injured children and adolescents in PICUs. There are approximately 3,100 board-certified pediatric intensivists in the United States.
Other areas of pediatric subspecialty medicine are closely associated with maternal-fetal-newborn medical care. For example, pediatric intensivists are subspecialists who care for critically ill or injured children and adolescents in PICUs. There are approximately 3,400 board-certified pediatric intensivists in the United States.
Hospitals and Other Customers Our relationships with our hospital partners and other customers are critical to our operations. Hospitals control access to their units through the awarding of contracts and hospital privileges. We have been retained by approximately 395 hospitals to staff and manage clinical activities within specific hospital-based units and other departments.
Hospitals and Other Customers Our relationships with our hospital partners and other customers are critical to our operations. Hospitals control access to their units through the awarding of contracts and hospital privileges. We have been retained by approximately 400 hospitals to staff and manage clinical activities within specific hospital-based units and other departments.
Among other changes to the laws governing PHI, HITECH required OCR to strengthen and expand HIPAA requirements, increase penalties for violations, give patients new rights to restrict uses and disclosures of their PHI, and impose a number of privacy and security requirements directly on Business Associates.
Among other changes to the laws governing PHI, HITECH required HHS to strengthen and expand HIPAA requirements, increase penalties for violations, give patients new rights to restrict uses and disclosures of their PHI, and impose a number of privacy and security requirements directly on Business Associates.
In addition to base salaries, these offerings may include a combination of annual bonuses, stock-based compensation awards, an Employee Stock Purchase Plan, a 401(k) Plan, 24 healthcare and insurance benefits, health savings and flexible spending accounts, paid time off, family leave, fertility benefits, and employee assistance programs, among many others. GEOGRAPHIC COVERAGE We provide physician services across 36 states.
In addition to base salaries, these offerings may include a combination of annual bonuses, stock-based compensation awards, an Employee Stock Purchase Plan, a 401(k) Plan, healthcare and insurance benefits, health savings and flexible spending accounts, paid time off, family leave, fertility benefits, and employee assistance programs, among many others. GEOGRAPHIC COVERAGE We provide physician services across 37 states.
ITEM 1. BUSINESS OVERVIEW Pediatrix is a leading provider of physician services including newborn, maternal-fetal, and other pediatric subspecialty care. Our national network is comprised of affiliated physicians who provide clinical care in 36 states.
ITEM 1. BUSINESS OVERVIEW Pediatrix is a leading provider of physician services including newborn, maternal-fetal, and other pediatric subspecialty care. Our national network is comprised of affiliated physicians who provide clinical care in 37 states.
Our affiliated physicians and clinicians provide critical medical care through several women’s and children’s healthcare services across 36 states, providing care to the most vulnerable patient population in the country: expecting mothers and their newborns and children.
Our affiliated physicians and clinicians provide critical medical care through several women’s and children’s healthcare services across 37 states, providing care to the most vulnerable patient population in the country: expecting mothers and their newborns and children.
The Federal government has also responded by instructing federal agencies, such as the OCR and FTC, to use their existing authority to provide greater protections for consumers with respect to the use of their data, and more specifically, their health data.
The Federal government has also responded by instructing federal agencies, such as the HHS and FTC, to use their existing authority to provide greater protections for consumers with respect to the use of their data, and more specifically, their health data.
We make available a catalog of over 11,000 courses to all audiences across subjects including business skills, leadership and management, office productivity, health and wellness and personal development, among others. The courses are designed to develop great people who become great leaders that will ultimately shape a great company.
We make available a catalog of over 16,000 courses to all audiences across subjects including business skills, leadership and management, office productivity, health and wellness and personal development, among others. The courses are designed to develop great people who become great leaders that will 23 ultimately shape a great company.
Our goal is to discover, understand and teach healthcare practices that enhance the abilities of clinicians to deliver quality care, thereby contributing to better patient outcomes and reduced long-term health care costs. These initiatives benefit our patients, clinicians, referring and collaborating physicians, hospital partners and third-party payors.
Our goal is to discover, understand and teach healthcare practices that enhance the abilities of our clinicians to deliver the highest quality care, thereby contributing to better patient outcomes, a better patient experience and reduced long-term health care costs. These initiatives benefit our patients, clinicians, referring and collaborating physicians, hospital partners and third-party payors.
OUR PHYSICIAN SPECIALTIES AND SERVICES The following discussion describes our physician specialties and the care that we provide, either directly or through our affiliated professional contractors: Neonatal Care 4 We provide clinical care to babies born prematurely or with complications within specific units at hospitals, primarily NICUs, through our network of affiliated neonatal physician subspecialists (“neonatologists”), neonatal nurse practitioners and other pediatric clinicians, who staff and manage clinical activities at over 350 NICUs in 30 states.
OUR PHYSICIAN SPECIALTIES AND SERVICES The following discussion describes our physician specialties and the care that we provide, either directly or through our affiliated professional contractors: Neonatal Care 4 We provide clinical care to babies born prematurely or with complications within specific units at hospitals, primarily NICUs, through our network of affiliated neonatal physician subspecialists (“neonatologists”), neonatal nurse practitioners and other pediatric clinicians, who staff and manage clinical activities at over 360 NICUs in 32 states.
BabySteps is a clinical electronic documentation system used by our affiliated neonatal physicians and other clinicians to record clinical progress notes and certain laboratory reports and to provide them with a decision tree to assist them in certain situations with the selection of appropriate billing codes.
BabySteps is a clinical electronic documentation system used by our affiliated neonatal physicians and other clinicians to record clinical progress notes and findings and to provide them with a decision tree to assist them in certain situations with the selection of appropriate billing codes.
We have licensed the Nextgen Electronic Health Record (“EHR”) and Practice Management (“PM”), an integrated product line for our affiliated office-based physicians and other clinicians to record patient clinical documentation and manage the full revenue cycle.
We have licensed the Nextgen Electronic Health Record (“EHR”) and Practice Management (“PM”), an integrated product line for our affiliated ambulatory physicians and other clinicians to record patient clinical documentation and manage the full revenue cycle.
We have over 490 affiliated physicians who provide maternal-fetal and obstetrical medical care to expectant mothers experiencing complicated pregnancies primarily in areas where our affiliated neonatal physicians practice. Our network also includes other pediatric subspecialists, including 240 physicians providing hospital-based pediatric care, over 230 physicians providing pediatric intensive care, and 20 physicians providing pediatric surgical care.
We have over 475 affiliated physicians who provide maternal-fetal and obstetrical medical care to expectant mothers experiencing complicated pregnancies primarily in areas where our affiliated neonatal physicians practice. Our network also includes other pediatric subspecialists, including over 230 physicians providing pediatric intensive care, 220 physicians providing hospital-based pediatric care, and 20 physicians providing pediatric surgical care.
There are approximately 7,300 board-certified neonatologists in the United States. 6 Maternal-Fetal Medicine . Expectant mothers with pregnancy complications often seek or are referred by their obstetricians to maternal-fetal medicine subspecialists.
There are approximately 7,200 board-certified neonatologists in the United States. Maternal-Fetal Medicine . Expectant mothers with pregnancy complications often seek or are referred by their obstetricians to maternal-fetal medicine subspecialists.
We continue to evolve the NextGen EHR and PM to respond to regulatory updates and our evolving office-based services landscape. Our management information systems are also an integral element of the billing and reimbursement process.
We continue to evolve the NextGen EHR and PM to respond to regulatory updates and our evolving ambulatory services landscape. Our management information systems are also an integral element of the billing and reimbursement process.
Additionally, the FTC has been active with respect to enforcement of its Health Breach Notification Rule and in scrutinizing the use and disclosure of sensitive personal information. The FTC also finalized changes to the Health Breach Notification Rule in April 2024.
For instance, the FTC has been active with respect to enforcement of its Health Breach Notification Rule and in scrutinizing the use and disclosure of sensitive personal information. The FTC also finalized changes to the Health Breach Notification Rule in April 2024.
Since we launched this program in 1994, we believe that we have become the largest provider of newborn hearing screening services in the United States. In 2024, we screened over 805,000 babies for potential hearing loss at 340 hospitals across the nation.
Since we launched this program in 1994, we believe that we have become the largest provider of newborn hearing screening services in the United States. In 2025, we screened over 793,000 babies for potential hearing loss at 340 hospitals across the nation.
This product line provides additional benefits to our office-based practices, including clinical decision trees to assist physicians with the selection of compliant billing codes, medication management (including electronic prescription of controlled substance and prescription drug monitoring programs), promotion of consistent documentation, patient engagement tools, virtual visits and telemedicine tools, Artificial intelligence tools for streamlined clinician documentation, and data for research and education.
This product line provides additional benefits to our ambulatory practices, including clinical decision trees to assist physicians with the selection of compliant billing codes, medication management (including electronic prescription of controlled substance and prescription drug monitoring programs), promotion of consistent documentation, patient engagement tools, virtual visits and telemedicine tools, Artificial intelligence tools for streamlined clinician documentation, a new referral management template, and data for research and education.
At December 31, 2024, our national network comprised approximately 2,335 affiliated physicians, including 1,335 physicians who provide neonatal clinical care, primarily within hospital-based neonatal intensive care units (“NICUs”), to babies born prematurely or with medical complications.
At December 31, 2025, our national network comprised approximately 2,295 affiliated physicians, including 1,350 physicians who provide neonatal clinical care, primarily within hospital-based neonatal intensive care units (“NICUs”), to babies born prematurely or with medical complications.
Our physician-centric approach to clinical research and continuous quality improvement has demonstrated improvements in clinical outcomes, while reducing the costs of care associated with complications as well as variability in protocols.
Our physician-led approach to clinical research and continuous quality improvement has consistently demonstrated improvements in clinical outcomes, while reducing the costs of care associated with complications as well as variability in care processes.
During 2024, we focused on advancing the efficiency of clinical documentation, integration and interoperability, introducing new billing capabilities, and advancing the security posture of the BabySteps platform.
During the past few years, we focused on advancing the efficiency of clinical documentation, integration and interoperability, introducing new billing capabilities, and advancing the security posture of the BabySteps platform.
During 2024, approximately 67% of our net revenue was generated by operations in our five largest states. Our operations in Texas accounted for approximately 32% of our net revenue for the same period.
During 2025, approximately 64% of our net revenue was generated by operations in our five largest states. Our operations in Texas accounted for approximately 32% of our net revenue for the same period.
Clinical Research, Education, Quality and Safety As part of our ongoing commitment to improving patient care through evidence-based medicine, we also conduct clinical research, monitor clinical outcomes and implement clinical quality initiatives with a view to improving patient outcomes, shortening the length of hospital stays and reducing long-term health system costs.
Clinical Research, Education, Quality and Safety As part of our ongoing commitment to improving patient care through evidence-based medicine, we also conduct clinical research, monitor clinical outcomes and implement clinical quality initiatives with a view to improving patient outcomes, shortening the length of hospital stays and reducing long-term health system costs with a focus on women's and children's services that we believe is unrivaled.
As an accredited provider of continuing medical 9 and nursing education, we offer a variety of live and online educational credit opportunities that can be accessed on demand by our providers and are in synergy with latest research publications and healthcare industry standards. We are continually expanding our learning materials to new subspecialties.
As an accredited provider of continuing medical and nursing education, we offer a variety of live and online high quality educational credit opportunities that can be accessed on demand by our providers and are in 9 synergy with latest research publications and healthcare industry standards.
To help facilitate and support research efforts, Pediatrix has a Research Advisory Committee (“RAC”). The goal of the RAC is to design, implement and maintain a program for clinical research oversight and support that enables our practices to conduct research that is safe, effective, financially viable and legally compliant.
To help facilitate and support research efforts, we have a Research Advisory Committee (“RAC”) with a goal to design, implement and maintain a program for clinical research oversight and support that enables our practices to conduct research that is safe, effective, financially viable and legally compliant.
We continue to seek to expand our operations by acquiring established physician practices in our core physician specialties. During 2024, we added one maternal-fetal medicine practice. • Strengthen and Broaden Relationships With Our Partners .
We continue to seek to expand our operations by acquiring established physician practices in our core physician specialties. During 2025, we added one maternal-fetal medicine practice and acquired several neonatology, maternal-fetal medicine and OB hospitalist practices in one transaction. • Strengthen and Broaden Relationships With Our Partners .
As of December 31, 2024, we had approximately 2,335 practicing physicians affiliated with us, and we employed or contracted with approximately 1,970 other clinical professionals and approximately 2,150 other full-time and part-time employees.
As of December 31, 2025, we had approximately 2,295 practicing physicians affiliated with us, and we employed or contracted with approximately 2,020 other clinical professionals and approximately 2,260 other full-time and part-time employees.
We believe collaborative innovation is a pathway towards excellence in research, education, quality and safety. Because of the critical role innovation plays, our team strives to integrate the latest technological advances, artificial or augmented intelligence, genomics and mobile applications into everyday care.
We believe collaborative innovation is a pathway towards excellence in research, education, quality and safety. Because of the critical role innovation plays, our team strives to integrate the latest technological advances, artificial or augmented intelligence and mobile applications into everyday care. Telehealth and mobile health, virtual reality, point-of-care diagnostics and advanced data analytics are currently shaping the future of medicine.
Our Training and Development team is committed to providing an environment that fosters both individual and organizational development. Through its various training and educational programs, the training and development team supports the organization’s commitment to excellence and its mission to “Take great care of the patient, every day and in every way TM ”.
Through its various training and educational programs, the training and development team supports the organization’s commitment to excellence and its mission to “Take great care of the patient, every day and in every way TM ”.
Department of Health and Human Services (“HHS”) Office for Civil Rights (“OCR”), which is responsible for enforcing HIPAA, also may enter into resolution agreements requiring the payment of a civil money penalty and/or the establishment of a corrective action plan to address violations of HIPAA.
Violations of HIPAA are punishable by civil money penalties and, in some cases, criminal penalties and imprisonment. The U.S. Department of Health and Human Services (“HHS”), which is responsible for enforcing HIPAA, also may enter into resolution agreements requiring the payment of a civil money penalty and/or the establishment of a corrective action plan to address violations of HIPAA.
To the extent these laws apply to our operations, they may ultimately have conflicting requirements that would further complicate compliance. Further, new health information standards, whether implemented pursuant to HIPAA, congressional action or otherwise, could have a significant effect on the manner in which we handle health-related information, and the cost of complying with these standards could be significant.
Further, new health information standards, whether implemented pursuant to HIPAA, congressional action or otherwise, could have a significant effect on the manner in which we handle health-related information, and the cost of complying with these standards could be significant.
Liabilities in excess of our insurance coverage, including coverage for professional liability and certain 22 other claims, could have a material adverse effect on our business, financial condition, results of operations, cash flows and the trading price of our securities.
With respect to professional liability risk, we self-insure a significant portion of this risk through our wholly owned captive insurance subsidiary. Liabilities in excess of our insurance coverage, including coverage for professional liability and certain other claims, could have a material adverse effect on our business, financial condition, results of operations, cash flows and the trading price of our securities.
Hospitals traditionally staff these units or settings through affiliations with local physician groups or independent practitioners. However, management of these units and settings presents significant operational challenges, including variable admissions rates, increased operating costs, complex reimbursement systems and other administrative burdens.
However, management of these units and settings presents significant operational challenges, including variable admissions rates, increased operating costs, complex reimbursement systems and other administrative burdens.
Although there are limited exemptions for PHI and the CCPA's implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, the CCPA may increase our compliance costs and potential liability. Laws similar to the CCPA have passed or have been proposed in several other states and also have been proposed at the federal level.
Although there are limited exemptions for PHI and the CCPA's implementation standards and enforcement practices are likely to remain uncertain for the foreseeable future, the CCPA and other state privacy laws may increase our compliance costs and potential liability.
Telehealth and mobile health, virtual reality, point-of-care diagnostics and advanced data analytics are currently shaping the future of medicine. Our team is actively engaged in integrating the latest innovations that can optimize clinical care delivery and augment our clinical research initiatives with the goal of further optimizing patient outcomes.
Our team is actively engaged in integrating the latest innovations that can optimize clinical care delivery and augment our clinical research initiatives with the goal of further optimizing patient outcomes.
Our goal is to enhance the value of our services, attract new and retain high-quality clinicians, improve clinical operations and enhance practice communication. • Clinical Research. We conduct clinical research to discover ways to improve clinical care for our patients. We share our discoveries throughout the medical community by publishing our observations in peer-reviewed medical journals.
Our goal is to enhance the value of our services, attract new and retain high-quality clinicians, improve clinical operations and enhance practice communication. • Clinical Research. We conduct clinical research to discern ways to improve clinical care for our patients and for the specialty of neonatology.
Using a variety of clinical performance markers, our de-identified data warehouse also helps us track medication and procedure interactions, link treatments to outcomes and identify opportunities to enhance patient outcomes. • pMD Charge Capture.
With comprehensive reporting tools, our physicians can use this information to benchmark outcomes, enhance clinical decision-making and advance best practices at the bedside. Using a variety of clinical performance markers, our de-identified data warehouse also helps us track medication and procedure interactions, link treatments to outcomes and identify opportunities to enhance patient outcomes. • pMD Charge Capture.
This requires us to work every day to put tools into the hands of our affiliated physicians and other clinical professionals so they can deliver high quality care to our patients. 23 Training and Leadership Development We are committed to the continued development of our people and believe in fostering great leaders.
But healthcare is also our business, so we must also take great care of the business. This requires us to work every day to put tools into the hands of our affiliated physicians and other clinical professionals so they can deliver high quality care to our patients.
While a final rule has not yet been issued, if adopted, these proposed changes may require us to update our HIPAA policies and procedures to comply with the new requirements.
Moreover, on December 27, 2024, HHS issued proposed revisions to the HIPAA Security Rule aimed at strengthening required cybersecurity protections for protected health information. While a final rule has not yet been issued for either proposed rule, if adopted, these proposed changes may require us to update our HIPAA policies and procedures to comply with the new requirements.
We have a federally-listed PSO, the mission of which is to improve the quality and safety of care rendered by our clinical providers through the collection and analysis of quality data. As a federally-listed PSO, our mission to improve the safety of care rendered is supported by the dissemination of best practices information and implementation of patient safety programs.
As a federally-listed PSO, our mission to improve the safety of care rendered is supported by the dissemination of best practices information and implementation of patient safety programs. We endorse High Reliability Organization (“HRO”) concepts to provide “Just Culture” training to our clinicians.
We provide continuing medical and nursing education to our affiliated clinicians to ensure that they have access to current treatment methodologies, national best practices, and evidence-based guidelines. The Pediatrix Center for Research, Education, Quality and Safety is accredited by the Accreditation Council for Continuing Medical Education and accredited by the American Nurses Credentialing Center’s Commission on Accreditation.
We provide continuing medical and nursing education to our affiliated clinicians to ensure that they have access to current treatment methodologies, national best practices, and evidence-based guidelines and also provide continuing medical education to external clinicians.
We provide extensive continuing medical and nursing education to our affiliated clinicians in an effort to ensure that they have access to current treatment methodologies, national best practices and evidence-based guidelines. We believe that referring and collaborating physicians, hospitals, third-party payors and patients all benefit from our clinical research, education, quality and safety initiatives. DEMAND FOR OUR SERVICES Hospital-Based Care.
We provide extensive continuing medical and nursing education to our affiliated clinicians in an effort to ensure that they have access to current treatment methodologies, national best practices and evidence-based guidelines and also provide continuing medical education to external clinicians.
While these new laws generally include exemptions for HIPAA-covered data, they add layers of complexity to compliance in the U.S. market, and could increase our compliance costs and adversely affect our business. In addition, industry groups such as the payment card industry have developed self-regulatory guidelines for privacy and data security.
While these laws generally include exemptions for HIPAA-covered entities or data, they add layers of complexity to compliance in the U.S. market, and could increase our compliance costs and adversely affect our business. In addition, we are subject to a variety of legal and industry standards with respect to information security and the handling of other special categories of data.
Compliance with new privacy, security, and breach notification laws, regulations, requirements and self-regulatory guidelines may result in increased operating costs and may constrain or require us to alter our business model or operations. For example, changes to HIPAA promulgated pursuant to HITECH further restricted our ability to collect, disclose and use PHI and imposed additional compliance requirements on us.
Compliance with new privacy, security, and breach notification laws, regulations, requirements and self-regulatory guidelines, as well as laws relating to Artificial Intelligence or automated decision making technologies, may result in increased operating costs for our privacy and data practices, and may constrain or require us to alter our business model or operations.
We believe this is critical as hospitals and health systems seek to expand their service offerings and as the broader healthcare market seeks new solutions to operate more efficiently. 8 We also believe one of the greatest predictors of success in our partnerships at the hospital and health system level is a high degree of strategic alignment between our clinical leaders and our partners.
We believe this is critical as hospitals and health systems seek to expand their service offerings and as the broader healthcare market seeks new solutions to operate more efficiently.
Through the leadership of our affiliated clinicians, we have cultivated a culture of continuous quality improvement and safety, which is the cornerstone of our success and helps us to fulfill our mission. Our team of clinical experts leads and provides oversight of national quality and safety programs across various specialties and subspecialties. • Continuous Quality Improvement (“CQI”) .
Through the leadership of our affiliated clinicians, we have cultivated a culture of continuous quality improvement and safety, which is the cornerstone of our success and helps us to fulfill our mission to “Take great care of the patient, every day and in every way TM ”.
We de-identify and transfer data from the clinical documentation that resides in BabySteps to our “clinical data warehouse” that since inception has accumulated clinical information on more than 2.0 million patients and approximately 35 million patient days. With comprehensive reporting tools, our physicians can use this information to benchmark outcomes, enhance clinical decision-making and advance best practices at the bedside.
BabySteps Cloud enables our affiliated physician practices to capture a consistent set of clinical information about the patients to whom we provide care. We de-identify and transfer data from the clinical documentation that resides in BabySteps to our “clinical data warehouse” that since inception has accumulated clinical information on more than 2.1 million patients and approximately 37 million patient days.
CQI initiatives are important for our clinicians. We provide our clinicians with the opportunity to collaborate and share best practices and facilitate access to valuable information, resources, and professional development tools. Our affiliated clinicians can identify areas for improvement, and then systematically monitor, study, learn, and implement change.
Our team of clinical experts leads and provides oversight of national quality and safety programs across various specialties and subspecialties. • Continuous Quality Improvement (“CQI”) . CQI initiatives are important for our clinicians. We provide our clinicians with the opportunity to collaborate, share best practices and facilitate access to valuable information, resources, and professional development tools.
Hospitals generally must provide cost-effective, quality care in order to enhance their reputations within their communities and desirability to patients, referring and collaborating physicians and third-party payors. In an effort to improve outcomes and manage costs, hospitals typically employ or contract with physician specialists to provide specialized care in many hospital-based units or settings.
In an effort to improve outcomes and manage costs, hospitals typically employ or contract with physician specialists to provide specialized care in many hospital-based units or settings. Hospitals traditionally staff these units or settings through affiliations with local physician groups or independent practitioners.
We believe HITRUST certification not only enhances our credibility in the industry, but also strengthens our commitment to protecting our patients’ data. • Clinical Data Warehouse. BabySteps Cloud enables our affiliated physician practices to capture a consistent set of clinical information about the patients to whom we provide care.
We believe HITRUST certification not only enhances our credibility in the industry, but also strengthens our commitment to protecting our patients’ data. In 2025, we continued the interim assessment and gap analysis for the next HITRUST phase. • Clinical Data Warehouse.
In the wake of the Dobbs decision, there has been significant attention on the collection, use and disclosure of health information.
Jackson Women’s Health Organization , which overturned Roe v. Wade and eliminated the constitutional right to abortion in the United States, there has been significant attention and state legislative activity on the collection, use and disclosure of health information.
The CCPA regulations also impose proscriptive requirements on businesses regarding how to properly demonstrate compliance with the law's requirements. The CPRA provides even greater rights to consumers with respect to their data, such as the right to correction, data portability, access to information about processing and profiling activities, and opt-out rights.
The CPRA amendments, among other things, created a new agency, the California Privacy Protection Agency (“CPPA”), which is authorized to issue substantive regulations and has resulted in increased privacy and information security enforcement and provided even greater rights to consumers with respect to their data, such as the right to correction, data portability, access to information about processing and profiling activities, and opt-out rights.
Removed
This requires our clinicians to hone a skill set beyond just the practice of medicine. To this end, we maintain a Clinical Leadership Development Program where our affiliated clinicians from across the organization participate virtually and in person in a variety of leadership workshops to provide them with the best tools to foster positive productive relationships with our valued partners.
Added
We believe that referring and collaborating physicians, hospitals, third-party payors and patients all benefit from our clinical research, education, quality and safety initiatives. DEMAND FOR OUR SERVICES Hospital-Based Care. Hospitals generally must provide cost-effective, quality care in order to enhance their reputations within their communities and desirability to patients, referring and collaborating physicians and third-party payors.
Removed
We endorse High Reliability Organization (“HRO”) concepts to provide “Just Culture” training to our clinicians.
Added
We share our discoveries throughout the medical community by presenting at local, regional, national and international conferences as well as publishing our observations in peer-reviewed medical journals.
Removed
Violations of HIPAA are punishable by civil money penalties and, in some cases, criminal penalties and imprisonment. The U.S.
Added
Our affiliated clinicians can identify areas for improvement, and then systematically monitor, study, learn, and implement change. Complex initiatives are derived and based on our long-standing CQI efforts, our value-based care initiatives, and various clinical quality collaboratives.
Removed
California recently amended and expanded CCPA through another ballot initiative, the California Privacy Rights Act (“CPRA”), passed on November 3, 2020 and made effective as of January 1, 2023. The CPRA also created a new agency, the California Privacy Protection Agency (“CPPA”), which is authorized to issue substantive regulations and has resulted in increased privacy and information security enforcement.
Added
The Pediatrix Center for Research, Education, Quality and Safety is accredited by the Accreditation Council for Continuing Medical Education and the American Nurses Credentialing Center’s Commission on Accreditation.
Removed
Additional states have passed privacy legislation or have indicated an intent to propose such legislation, particularly in light of the United States Supreme Court’s decision in Dobbs v. Jackson Women’s Health Organization , which overturned Roe v. Wade and eliminated the constitutional right to abortion in the United States.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeAny changes, if enacted, could reduce or eliminate eligibility for certain individuals or reduce payments to providers of services. As a result, we could experience an increase in the number of uninsured patients and delayed or reduced Medicaid payment for services furnished to program enrollees.
Biggest changeFurther, the One Big Beautiful Bill Act reformed the Medicaid program by imposing work requirements on certain adult beneficiaries, and requiring states to increase patient cost-sharing amounts for certain services, among other reforms. Any additional changes, if enacted, could reduce or eliminate eligibility for certain individuals or reduce payments to providers of services.
Further, any fiscal tightening impacting GHC Programs or changes to the structure of any GHC Programs could have an adverse effect on our financial condition, results of operations, cash flows and the trading price of our securities.
Further, any fiscal tightening impacting GHC Programs or changes to the structure of any GHC Programs could have an adverse effect on our financial condition, results of operations, cash flows and the trading price of our securities.
The following is a summary of the principal risk factors described in this section: • Economic conditions could have an adverse effect on our business. • The birth rate in the United States has declined in past years and may decline further. • Unfavorable changes or conditions could occur in the states where our operations are concentrated. • Potential healthcare reform efforts may have a significant effect on our business. • COVID-19 necessitated the delivery of certain healthcare services remotely via telehealth, which is subject to extensive federal and state regulation, as well as temporary waivers tied to the COVID-19 public health emergency, and certain flexibilities afforded to the provision and reimbursement of telehealth may be rolled back. • The Medicare Access and CHIP Reauthorization Act of 2015 (“MACRA”) and potential changes to it may have an adverse effect on our business. • The Transparency in Coverage Final Rule, which requires certain health plans and issuers to publish pricing information on in-network and out-of-network providers and make price comparison and cost-sharing information available to insureds, could have a material impact on our business. • State budgetary constraints and the uncertainty over the future of Medicaid could have an adverse effect on our reimbursement from Medicaid programs. • Congress or states have, and may continue to, enact surprise billing or other laws restricting the amount out-of-network providers of services can charge and recover for such services. • Expanding eligibility of GHC Programs could adversely affect our reimbursement. • Government-funded programs, private insurers, or state laws and regulations may limit, reduce, or make retroactive adjustments to reimbursement amounts or rates. • We may become subject to billing investigations by federal and state government authorities and private insurers. • The healthcare industry is highly regulated and government authorities may determine that we have failed to comply with applicable laws, rules or regulations. • We undertook a transformation of our revenue cycle management function from an outsourced provider to a hybrid function that utilizes both our corporate personnel as well as one or more third-party service providers.
The following is a summary of the principal risk factors described in this section: • Economic conditions could have an adverse effect on our business. • The birth rate in the United States has declined in past years and may decline further. • Unfavorable changes or conditions could occur in the states where our operations are concentrated. • Potential healthcare reform efforts may have a significant effect on our business. • COVID-19 necessitated the delivery of certain healthcare services remotely via telehealth, which is subject to extensive federal and state regulation, as well as temporary waivers tied to the COVID-19 public health emergency, and certain flexibilities afforded to the provision and reimbursement of telehealth have been and may continue to be rolled back. • The Medicare Access and CHIP Reauthorization Act of 2015 (“MACRA”) and potential changes to it may have an adverse effect on our business. • The Transparency in Coverage Final Rule, which requires certain health plans and issuers to publish pricing information on in-network and out-of-network providers and make price comparison and cost-sharing information available to insureds, could have a material impact on our business. • State budgetary constraints and the uncertainty over the future of Medicaid could have an adverse effect on our reimbursement from Medicaid programs. • Congress or states have, and may continue to, enact surprise billing or other laws restricting the amount out-of-network providers of services can charge and recover for such services. • Expanding eligibility of GHC Programs could adversely affect our reimbursement. • Government-funded programs, private insurers, or state laws and regulations may limit, reduce, or make retroactive adjustments to reimbursement amounts or rates. • We may become subject to billing investigations by federal and state government authorities and private insurers. • The healthcare industry is highly regulated and government authorities may determine that we have failed to comply with applicable laws, rules or regulations. • We undertook a transformation of our revenue cycle management function from an outsourced provider to a hybrid function that utilizes both our corporate personnel as well as one or more third-party service providers.
Penalties for violating these laws can range from physician licensure sanctions, fines and criminal sanctions; • statutes created by HIPAA, which impose criminal liability for, among other things, knowingly and willfully executing or attempting to execute a scheme to defraud any healthcare benefit program, including private insurance plans, or, in any matter involving a healthcare benefit program, for knowingly and willfully making materially false, fictitious or fraudulent statements in connection with the delivery of or payment for health care benefits; • federal and state regulations that broadly define provider and supplier affiliation and require providers to disclose to GHC Programs certain disclosable events including, without limitation, current or previous direct or indirect affiliations with providers or suppliers having uncollected debt to GHC Programs, being subject to payment suspension, being excluded from participation in GHC Programs or had such billing privileges denied or revoked, and that permit GHC Programs to deny or revoke provider or supplier 36 enrollment based upon such affiliations upon determining that the affiliations pose an undue risk of fraud, waste, or abuse; • state laws that prohibit or limit general business corporations from practicing medicine, exercising control over physicians’ medical decisions or engaging in certain practices or financial arrangements, such as splitting fees with physicians.
Penalties for violating these laws can range from physician licensure sanctions, fines and criminal sanctions; • statutes created by HIPAA, which impose criminal liability for, among other things, knowingly and willfully executing or attempting to execute a scheme to defraud any healthcare benefit program, including private insurance plans, or, in any matter involving a healthcare benefit program, for knowingly and willfully making materially false, fictitious or fraudulent statements in connection with the delivery of or payment for health care benefits; • federal and state regulations that broadly define provider and supplier affiliation and require providers to disclose to GHC Programs certain disclosable events including, without limitation, current or previous direct or indirect affiliations with providers or suppliers having uncollected debt to GHC Programs, being subject to payment suspension, being excluded from participation in GHC Programs or had such billing privileges denied or revoked, and that permit GHC Programs to deny or revoke provider or supplier enrollment based upon such affiliations upon determining that the affiliations pose an undue risk of fraud, waste, or abuse; • state laws that prohibit or limit general business corporations from practicing medicine, exercising control over physicians’ medical decisions or engaging in certain practices or financial arrangements, such as splitting fees with physicians.
Our current indebtedness and any future increases in leverage could have adverse consequences on us, including: • a substantial portion of our cash flow from operations will be required to service interest and principal payments on our debt and will not be available for operations, working capital, capital expenditures, expansion, acquisitions, dividends or general corporate or other purposes; • our ability to obtain additional financing in the future may be impaired; • we may be more highly leveraged than our competitors, which may place us at a competitive disadvantage; • our flexibility in planning for, or reacting to, changes in our business and industry may be limited; and • we may be more vulnerable in the event of a downturn in our business, our industry or the economy in general.
Our current indebtedness and any future increases in leverage could have adverse consequences on us, including: • a substantial portion of our cash flow from operations will be required to service interest and principal payments on our debt and will not be available for operations, working capital, capital expenditures, expansion, acquisitions, dividends or general corporate or other purposes; • our ability to obtain additional financing in the future may be impaired; • we may be more highly leveraged than our competitors, which may place us at a competitive disadvantage; • our flexibility in planning for, or reacting to, changes in our business and industry may be limited; and 44 • we may be more vulnerable in the event of a downturn in our business, our industry or the economy in general.
Violations of the federal Anti-Kickback Statute can result in significant civil monetary penalties and criminal fines, as well as imprisonment and exclusion from participation in GHC Programs; • the federal civil False Claims Act, which may be enforced through civil whistleblower or qui tam actions and imposes significant civil penalties, treble damages and potential exclusion from GHC Programs 35 against individuals or entities for, among other things, knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or for making a false record or statement material to an obligation to pay the federal government or for knowingly and improperly avoiding, decreasing or concealing an obligation to pay money to the federal government.
Violations of the federal Anti-Kickback Statute can result in significant civil monetary penalties and criminal fines, as well as imprisonment and exclusion from participation in GHC Programs; • the federal civil False Claims Act, which may be enforced through civil whistleblower or qui tam actions and imposes significant civil penalties, treble damages and potential exclusion from GHC Programs against individuals or entities for, among other things, knowingly presenting, or causing to be presented, to the federal government, claims for payment that are false or fraudulent or for making a false record or statement material to an obligation to pay the federal government or for knowingly and improperly avoiding, decreasing or concealing an obligation to pay money to the federal government.
If a provider (or facility, in the emergency care context) receives a payment denial or is unsatisfied with the out-of-network rate paid by the plan and the parties are unable to resolve the dispute, either party can initiate an Independent Dispute Resolution (“IDR”) process, which is essentially an arbitration process whereby a certified IDR entity evaluates proposed offers from both 32 the provider/facility and the plan and makes a determination based on several factors, including, but not limited to, the QPA.
If a provider (or facility, in the emergency care context) receives a payment denial or is unsatisfied with the out-of-network rate paid by the plan and the parties are unable to resolve the dispute, either party can initiate an Independent Dispute Resolution (“IDR”) process, which is essentially an arbitration process whereby a certified IDR entity evaluates proposed offers from both the provider/facility and the plan and makes a determination based on several factors, including, but not limited to, the QPA.
Business—“Government Regulation—Fee Splitting; Corporate Practice of Medicine.” 37 Further, regulatory authorities or other parties also could assert that our relationships, including fee arrangements, among our affiliated professional contractors, hospital clients or referring physicians violate the anti-kickback, fee splitting, EKRA, or self-referral laws and regulations or that we have submitted false claims or otherwise failed to comply with government program reimbursement requirements.
Business—“Government Regulation—Fee Splitting; Corporate Practice of Medicine.” Further, regulatory authorities or other parties also could assert that our relationships, including fee arrangements, among our affiliated professional contractors, hospital clients or referring physicians violate the anti-kickback, fee splitting, EKRA, or self-referral laws and regulations or that we have submitted false claims or otherwise failed to comply with government program reimbursement requirements.
For example, in some states, we are dependent on our relationship with affiliated physician practices, which we do not own, to provide physician and other clinical services, and our business would be adversely affected if those relationships were disrupted or if our arrangements with our providers are found to violate state laws prohibiting the corporate practice of medicine or fee splitting, or if our contractual relationships with such entities cease to continue.
For example, in some states, we are dependent on our relationship with affiliated physician practices, which we do not own, to provide physician and other clinical services, and our business would be adversely affected if those 37 relationships were disrupted or if our arrangements with our providers are found to violate state laws prohibiting the corporate practice of medicine or fee splitting, or if our contractual relationships with such entities cease to continue.
Insurers are required to calculate the patient’s total cost-sharing amount pursuant to rules set forth in the NSA and its implementing regulations which, in some cases, can be calculated by reference to the applicable “qualifying payment amount” (or the “QPA,” which is generally defined as the median contracted rate in a specific area) for the items or services furnished.
Insurers are required to calculate the patient’s total cost-sharing amount pursuant to rules set forth in the NSA and its implementing regulations which, in some cases, can be calculated by reference to the applicable “qualifying payment amount” (or the “QPA,” which is generally defined as the median contracted rate in a specific area) for the 32 items or services furnished.
GHC Programs may also suspend our payments pending an audit or investigation, which 43 could last for an extended period of time. If we are not reimbursed fully or in a timely manner for such services or there is a finding that we were incorrectly reimbursed, our revenue, cash flows and financial condition could be materially, adversely affected.
GHC Programs may also suspend our payments pending an audit or investigation, which could last for an extended period of time. If we are not reimbursed fully or in a timely manner for such services or there is a finding that we were incorrectly reimbursed, our revenue, cash flows and financial condition could be materially, adversely affected.
A significant portion of our net revenue is derived from reimbursements from various third-party payors, including GHC Programs, private insurance plans and managed care plans, for services provided by our affiliated professional contractors. We are responsible for submitting reimbursement requests to these payors and collecting the reimbursements, and we assume the financial risks relating to uncollectible and delayed reimbursements.
A significant portion of our net revenue is derived from reimbursements from various third-party payors, including GHC Programs, private insurance plans and managed care plans, for services provided by our affiliated 43 professional contractors. We are responsible for submitting reimbursement requests to these payors and collecting the reimbursements, and we assume the financial risks relating to uncollectible and delayed reimbursements.
It is possible that we may seek to enforce indemnification provisions in the future against sellers who may no longer have the financial wherewithal to satisfy their obligations to us. Accordingly, we may incur material liabilities for past activities of acquired businesses. • We could incur or assume indebtedness and issue equity in connection with acquisitions.
It is possible that we may seek to enforce indemnification provisions in the future against sellers who may no longer have the financial wherewithal to satisfy their obligations to us. Accordingly, we may incur material liabilities for past activities of acquired businesses. 40 • We could incur or assume indebtedness and issue equity in connection with acquisitions.
If an agreement with a third-party payor is terminated, we are generally required to seek reimbursement as an out-of-network provider. In the event we attempt to balance-bill patients, we may be limited in our ability to do so by certain state and federal laws and regulations, as discussed above.
If an agreement with a third-party payor is terminated, we are generally required to seek reimbursement as an out-of-network provider. 34 In the event we attempt to balance-bill patients, we may be limited in our ability to do so by certain state and federal laws and regulations, as discussed above.
We cannot assure you that we will be able to refinance any of our debt, including our revolving line of credit and senior notes, on commercially reasonable terms or at all. 44 Provisions of our articles and bylaws could deter takeover attempts, but our business could be negatively affected as a result of shareholder activism.
We cannot assure you that we will be able to refinance any of our debt, including our revolving line of credit and senior notes, on commercially reasonable terms or at all. Provisions of our articles and bylaws could deter takeover attempts, but our business could be negatively affected as a result of shareholder activism.
Government-funded programs, private insurers or state laws and regulations may limit, reduce or make retroactive adjustments to reimbursement amounts or rates. 33 A significant portion of our net revenue is derived from payments made by GHC Programs, principally Medicaid, including the managed care plans under the Medicaid program.
Government-funded programs, private insurers or state laws and regulations may limit, reduce or make retroactive adjustments to reimbursement amounts or rates. A significant portion of our net revenue is derived from payments made by GHC Programs, principally Medicaid, including the managed care plans under the Medicaid program.
It could also expose us or such persons to a risk of loss or misuse of this information, result in litigation, or potential liability, cause damage to our brand and reputation or otherwise harm 46 our business. Under certain circumstances, we could also be excluded temporarily or permanently from certain commercial or GHC Programs.
It could also expose us or such persons to a risk of loss or misuse of this information, result in litigation, or potential liability, cause damage to our brand and reputation or otherwise harm our business. Under certain circumstances, we could also be excluded temporarily or permanently from certain commercial or GHC Programs.
See Item 1. Business—“Other Legal Proceedings” and— “Professional and General Liability Coverage.” 42 The reserves that we have established related to our professional liability losses are subject to inherent uncertainties and if actual costs exceed our estimates this may lead to a reduction in our net earnings.
See Item 1. Business—“Other Legal Proceedings” and— “Professional and General Liability Coverage.” The reserves that we have established related to our professional liability losses are subject to inherent uncertainties and if actual costs exceed our estimates this may lead to a reduction in our net earnings.
Additionally, if Congress does not act to extend CHIP beyond 2027, or if Congress extends CHIP but substantially alters the current program, we could be adversely affected if children in states where we do business lose Medicaid coverage or payments for services furnished to these children are delayed or reduced.
If Congress does not act to extend CHIP beyond 2027, or if Congress extends CHIP but substantially alters the current program, we could be adversely affected if children in states where we do business lose Medicaid coverage or payments for services furnished to these children are delayed or reduced.
Our future results of operations could be adversely affected if we are unable to manage our growth effectively. Hospitals or other customers may terminate their agreements with us, our physicians may lose the ability to provide services in hospitals or administrative fees paid to us by hospitals may be reduced.
Our future results of operations could be adversely affected if we are unable to manage our growth effectively. 41 Hospitals or other customers may terminate their agreements with us, our physicians may lose the ability to provide services in hospitals or administrative fees paid to us by hospitals may be reduced.
We could also be materially impacted if we are dropped from the provider network in one or more of the Managed Medicaid Plans with which we currently participate. In Florida, more than 75% of the Medicaid population participates in a Managed Medicaid Plan, with even higher participation rates for children.
We could also be materially impacted 29 if we are dropped from the provider network in one or more of the Managed Medicaid Plans with which we currently participate. In Florida, more than 75% of the Medicaid population participates in a Managed Medicaid Plan, with even higher participation rates for children.
We compete with many types of healthcare providers, including teaching, research and government institutions, hospitals and health systems and other practice and services groups, for the services of qualified clinicians. The U.S. is currently experiencing and is expected to continue to experience a nationwide healthcare professional shortage.
We compete with many types of healthcare providers, including teaching, research and government 45 institutions, hospitals and health systems and other practice and services groups, for the services of qualified clinicians. The U.S. is currently experiencing and is expected to continue to experience a nationwide healthcare professional shortage.
HIPAA has ranges of increasing minimum penalty amounts tiered according to the entity’s degree of culpability. Breaches of unsecured PHI may also result in unexpected costs to us, upwards of millions of dollars, through third party litigation, contractual breach resolution, breach notification and remediation.
HIPAA has ranges of increasing minimum penalty amounts tiered according to the entity’s degree of culpability. Breaches of unsecured PHI may also result in unexpected costs to us, upwards of millions of dollars, through third party litigation, contractual breach 49 resolution, breach notification and remediation.
A shift in the mix of our payors from private healthcare insurance programs to government payors may result in an increase in our estimated provision for contractual adjustments and uncollectibles and a corresponding decrease in our net revenue, as well as a significant reduction in our average reimbursement rates.
A shift in the mix of our payors from private healthcare insurance programs to government payors may result in an increase in our estimated provision for 33 contractual adjustments and uncollectibles and a corresponding decrease in our net revenue, as well as a significant reduction in our average reimbursement rates.
If we are not successful in integrating an acquisition, we may decide to dispose of such acquisition and may do so at a loss or record impairments in connection with such a disposition. 40 We may not be able to successfully execute our same-unit and organic growth strategies.
If we are not successful in integrating an acquisition, we may decide to dispose of such acquisition and may do so at a loss or record impairments in connection with such a disposition. We may not be able to successfully execute our same-unit and organic growth strategies.
While these laws generally include exemptions for PHI and similar 47 information maintained by a covered entity or business associate in compliance with HIPAA, personal information that is generated in connection with certain clinical trials, and personal information that has been de-identified, they add layers of complexity to compliance in the U.S. market, and could increase our compliance costs and adversely affect our business; • Federal and state consumer protection laws, including the FTC’s authority under Section 5 of the Federal Trade Commission Act, prohibit unfair and deceptive acts and practices related to privacy and data security.
While these laws generally include exemptions for PHI and similar information maintained by a covered entity or business associate in compliance with HIPAA, personal information that is generated in connection with certain clinical trials, and personal information that has been de-identified, they add layers of complexity to compliance in the U.S. market, and could increase our compliance costs and adversely affect our business; 48 • Federal and state consumer protection laws, including the FTC’s authority under Section 5 of the Federal Trade Commission Act, prohibit unfair and deceptive acts and practices related to privacy and data security.
Each year, CMS releases the annual Medicaid Managed Care Rate Development Guide which provides federal baseline rules for setting reimbursement rates in managed care plans. We could be affected by lower reimbursement 29 rates in some or all of the Managed Medicaid Plans with which we participate.
Each year, CMS releases the annual Medicaid Managed Care Rate Development Guide which provides federal baseline rules for setting reimbursement rates in managed care plans. We could be affected by lower reimbursement rates in some or all of the Managed Medicaid Plans with which we participate.
The healthcare industry and physicians’ medical practices, including the healthcare and other services that we and our affiliated physicians provide, are subject to extensive and complex federal, state and local laws, rules and regulations, compliance with which imposes substantial costs on us.
The healthcare industry and physicians’ medical practices, including the healthcare and other services that we and our affiliated physicians provide, are subject to extensive and complex federal, state and local laws, rules and 35 regulations, compliance with which imposes substantial costs on us.
Reliance on third-party providers could have significant negative consequences, including significant disruptions in our operations and significantly increased costs to undertake such operations, either of which could damage our relationships with our patients and customers.
Reliance on third-party providers could have 39 significant negative consequences, including significant disruptions in our operations and significantly increased costs to undertake such operations, either of which could damage our relationships with our patients and customers.
Further, if a federal government shutdown 34 were to occur for a prolonged period of time, federal government payment obligations, including its obligations under Medicare and Medicaid, may be delayed. Similarly, if state government shutdowns were to occur, state payment obligations may be delayed.
Further, if a federal government shutdown were to occur for a prolonged period of time, federal government payment obligations, including its obligations under Medicare and Medicaid, may be delayed. Similarly, if state government shutdowns were to occur, state payment obligations may be delayed.
In some cases, these laws prohibit or regulate additional conduct beyond what federal law affects, including applicability to items and services paid by commercial insurers and private pay patients.
In some cases, these laws prohibit or regulate additional conduct beyond what federal law 36 affects, including applicability to items and services paid by commercial insurers and private pay patients.
Risks Related to Operating our Business 41 We are dependent upon our key management personnel for our future success and loss of our key management and other personnel or an inability to attract new management and other personnel could impact our business.
Risks Related to Operating our Business We are dependent upon our key management personnel for our future success and loss of our key management and other personnel or an inability to attract new management and other personnel could impact our business.
Department of Health and Human Services’ ("HHS") Office of the National Coordinator for Health Information Technology (“ONC”) promulgated final rules to support access, exchange, and use of EHI. Specifically, the information blocking regulations were implemented as part of the 21st Century Cures Act, and are primarily designed to facilitate technology interoperability and enable the free flow of EHI.
Department of Health and Human Services’ (“HHS”) Office of the National Coordinator for Health Information Technology (“ONC”) promulgated final rules to support access, exchange, and use of EHI. Specifically, the information blocking regulations were implemented as part of the 21st Century Cures Act, and are primarily designed to facilitate technology interoperability and enable the free flow of EHI.
In addition, we utilize third-party contractors to perform certain revenue cycle management functions for healthcare providers, including medical coding.
In addition, we utilize 38 third-party contractors to perform certain revenue cycle management functions for healthcare providers, including medical coding.
For example, Congress established automatic spending reductions under the Budget Control Act of 2011 (the “BCA”), resulting in a 2% reduction in Medicare payments that began in 2013 and extend through the first six months of the FY 2032 sequestration order.
For example, Congress established automatic spending reductions under the Budget Control Act of 2011 (the “BCA”), resulting in a 2% reduction in Medicare payments that began in 2013 and extend through the first eleven months of the FY 2032 sequestration order.
In late 2020, Congress enacted legislation intended to protect patients from “surprise” medical bills when services are furnished by providers who are not in network with the patient’s insurer (the “No Surprises Act” or the "NSA").
In late 2020, Congress enacted legislation intended to protect patients from “surprise” medical bills when services are furnished by providers who are not in network with the patient’s insurer (the “No Surprises Act” or the “NSA”).
Further, we are also subject to a provision of the federal 21st Century Cures Act and related regulations that are intended to facilitate the appropriate exchange of electronic health information ("EHI"). Beginning in 2020, the U.S.
Further, we are also subject to a provision of the federal 21st Century Cures Act and related regulations that are intended to facilitate the appropriate exchange of electronic health information (“EHI”). Beginning in 2020, the U.S.
As these laws and regulations continue to develop, it could incentivize certain third-party payors to terminate agreements as a business strategy which could lower overall reimbursement to providers. Any reductions in reimbursement amounts could have an adverse effect on our business, financial condition, results of operations, cash flows and the trading price of our securities.
As these laws and regulations continue to develop, it could incentivize certain third-party payors to cut rates and/or terminate agreements as a business strategy which could lower overall reimbursement to providers. Any reductions in reimbursement amounts could have an adverse effect on our business, financial condition, results of operations, cash flows and the trading price of our securities.
We currently anticipate that our affiliated physicians will continue to be eligible to receive bonus payments in 2025 through participation in the MIPS, although the amounts of such bonus payments are not expected to be material.
We currently anticipate that our affiliated physicians will continue to be eligible to receive bonus payments in 2026 through participation in the MIPS, although the amounts of such bonus payments are not expected to be material.
COVID-19 necessitated the delivery of certain healthcare services remotely via telehealth, which is subject to extensive federal and state regulation, as well as temporary waivers tied to the COVID-19 public health emergency, and certain flexibilities afforded to the provision and reimbursement of telehealth may be rolled back.
COVID-19 necessitated the delivery of certain healthcare services remotely via telehealth, which is subject to extensive federal and state regulation, as well as temporary waivers tied to the COVID-19 public health emergency, and certain flexibilities afforded to the provision and reimbursement of telehealth have been and may continue to be rolled back.
While this cyberattack did not have a material impact on us or our operations, future cyber attacks on us or our third-party providers could have a material impact on our business.
This cyberattack did not have a material impact on us or our operations, but future cyber attacks on us or our third-party providers could have a material impact on our business.
In addition, we have and may incur significant legal fees to pursue enforcement of such agreements and restrictive covenants. Further, the Federal Trade Commission issued a final rule that would prohibit employers from using non-compete clauses with workers. The rule would have been effective September 4, 2024, but is currently enjoined pending legal challenges.
In addition, we have and may incur significant legal fees to pursue enforcement of such agreements and restrictive covenants. Further, the Federal Trade Commission issued a final rule that would prohibit employers from using non-compete clauses with workers. The rule would have been effective September 4, 2024, but was enjoined.
During the year ended December 31, 2024, the percentage of our patient service revenue being reimbursed under GHC Programs decreased as compared to the year ended December 31, 2023. If, however, economic conditions in the United States deteriorate, we could experience shifts toward GHC Programs, and patient volumes and reimbursement for services we provide could decline.
During the year ended December 31, 2025, the percentage of our patient service revenue being reimbursed under GHC Programs remained stable as compared to the year ended December 31, 2024. If, however, economic conditions in the United States deteriorate, we could experience shifts toward GHC Programs, and patient volumes and reimbursement for services we provide could decline.
In addition, as a result of ARPA, an additional Medicare payment reduction of up to 4% was to take effect in January 2022; however, Congress delayed implementation of this reduction until 2025.
In addition, as a result of ARPA, an additional Medicare payment reduction of up to 4% was to take effect in January 2022; however, Congress has repeatedly delayed implementation of this reduction until 2026.
In addition, provisions in our Amended and Restated Articles of Incorporation, as amended, and Bylaws, including those relating to calling shareholder meetings, taking action by written consent and other matters, could render it more difficult or discourage an attempt to obtain control of Pediatrix through a proxy contest or consent solicitation, however, there is no assurance that these provisions would have such an effect.
In addition, provisions in our Amended and Restated Articles of Incorporation, as amended, and Bylaws, including those relating to calling shareholder meetings, taking action by written consent and other matters, could render it more difficult or discourage an attempt to obtain control of Pediatrix through a proxy contest or consent solicitation, however, these provisions might not have such an effect.
In addition, the staff of the Department of Government Efficiency (the "DOGE"), an executive administrative agency created by the second Trump Administration, have been provided access to key payment and contracting systems at CMS to look for opportunities for improving efficiency and to identify fraud and ineffective use of resources.
In addition, the staff of an executive administrative agency created by the second 28 Trump Administration was provided access to key payment and contracting systems at CMS to look for opportunities for improving efficiency and to identify fraud and ineffective use of resources.
In addition, a certain portion of our interest expense may not be deductible. • We may not be able to successfully recruit, onboard and retain qualified physicians and other clinicians and other personnel, and our compensation expense for existing clinicians and other personnel may increase. 26 • We may not be able to maintain effective and efficient information systems or properly safeguard our information systems. • Federal and state laws concerning the privacy and security of personal information may increase our costs and limit our ability to collect and use that information.
In addition, a certain portion of our interest expense may not be deductible. • We may not be able to successfully recruit, onboard and retain qualified physicians and other clinicians and other personnel, and our compensation expense for existing clinicians and other personnel may increase. 26 • We may not be able to maintain effective and efficient information systems or properly safeguard our information systems. • Our use of artificial intelligence technologies may expose us to additional legal, regulatory, operational, and competitive risks. • Federal and state laws concerning the privacy and security of personal information may increase our costs and limit our ability to collect and use that information.
Quarterly results may also be impacted by the timing of acquisitions and any fluctuation in patient volume. As a result, our results of operations for any quarter are not indicative of results of operations for any future period or full fiscal year. We may write-off intangible assets, such as goodwill.
Quarterly results may also be impacted by the timing of acquisitions and any fluctuation in patient volume. As a result, our results of operations for any quarter are not indicative of results of operations for any future period or full fiscal year.
The birth rate in the United States has declined and may decline further. 27 Birth data for 2023 indicate that total births in the United States decreased compared to 2022. Provisional data for 2024 is not yet available.
The birth rate in the United States has declined and may decline further. 27 Birth data for 2024 indicate that total births in the United States increased by 1% compared to 2023. Provisional data for 2025 is not yet available.
For example, these laws generally apply to “healthcare entities” regardless of licensure, and therefore apply to organizations that often do not require separate licensure. Furthermore, the reviews are more substantive in nature, often focusing on the impact of the proposed transaction on factors such as cost, quality, access, equity and 38 competition.
For example, these laws generally apply to “healthcare entities” regardless of licensure, and therefore apply to organizations that often do not require separate licensure. Furthermore, the reviews are more substantive in nature, often focusing on the impact of the proposed transaction on factors such as cost, quality, access, equity and competition. Healthcare transaction review law requirements vary significantly between states.
A payor mix shift from private healthcare insurance programs to GHC Programs or to healthcare insurance exchanges has resulted and may continue to result in an increase in our estimated provision for contractual adjustments and uncollectibles and a corresponding decrease in our net revenue, as well as a significant reduction in our average reimbursement rates.
A payor mix shift from private healthcare insurance programs to GHC Programs or to healthcare insurance exchanges has in the past resulted and, if it were to occur again in the future may result in an increase in our estimated provision for contractual adjustments and uncollectibles and a corresponding decrease in our net revenue, as well as a significant reduction in our average reimbursement rates.
While we have invested significant resources in planning and project management, unforeseen implementation or enhancement issues may arise. In addition, our efforts to centralize various business processes and functions within our organization in connection with our system implementations may disrupt our operations.
Unforeseen implementation or enhancement issues may arise with respect to our investments in planning and project management resources. In addition, our efforts to centralize various business processes and functions within our organization in connection with our system implementations may disrupt our operations.
As of December 31, 2024 , our total indebtedness was $615.6 million, of which $400.0 million was at fixed interest rates and $215.6 million was at variable rates. We also had $450.0 million of additional borrowing capacity under our revolving line of credit which was subject to a variable interest rate.
As of December 31, 2025 , our total indebtedness was $596.9 million, of which $400.0 million was at fixed interest rates and $196.9 million was at variable rates. We also had $450.0 million of additional borrowing capacity under our revolving line of credit which was subject to a variable interest rate.
Our reserves have been, and could further be, significantly affected should current and future occurrences differ from historical claim trends and expectations. While claims are monitored closely when estimating reserves, the complexity of the claims and wide range of potential outcomes often hamper timely adjustments to the assumptions used in these estimates.
Our reserves have been, and could further be, significantly affected should current and future occurrences differ from historical claim trends and expectations. Moreover, the complexity of the claims and wide range of potential outcomes often hamper timely adjustments to the assumptions used in our reserve estimates.
We may not find suitable acquisition candidates or successfully integrate our acquisitions. Our acquisitions may expose us to greater business risks and could affect our payor mix. We have expanded and continue to seek to expand our presence in new and existing metropolitan areas by acquiring established physician group practices.
Our acquisitions may expose us to greater business risks and could affect our payor mix. We have expanded and continue to seek to expand our presence in new and existing metropolitan areas by acquiring established physician group practices.
The carrying value of our intangible assets, which consists primarily of goodwill related to our acquisitions, is subject to testing at least annually, and more frequently if impairment indicators exist.
We may write-off intangible assets, such as goodwill. 42 The carrying value of our intangible assets, which consists primarily of goodwill related to our acquisitions, is subject to testing at least annually, and more frequently if impairment indicators exist.
Failure to maintain reliable information systems, disruptions in our existing information systems or the implementation of new systems could disrupt business operations or cause errors and delays in billings and collections, difficulty satisfying requirements under hospital contracts, disputes with patients and payors, violations of patient privacy, confidentiality, and other regulatory requirements, increased administrative expenses and other adverse consequences.
Failure to maintain reliable information systems, disruptions in our existing information systems or the implementation of new systems could disrupt business operations or cause errors and delays in billings and collections, difficulty satisfying requirements under hospital contracts, disputes with patients and payors, violations of patient privacy, confidentiality, and other regulatory requirements, increased administrative expenses and other adverse consequences. 46 Information security risks have generally increased in recent years because of new technologies and tactics of cyber criminals.
Business— “Government Regulation—Fraud and Abuse Provisions.” Further, identified overpayments from Medicare or Medicaid must be refunded to the government within 60 days of identification or the entity could be held liable under the federal False Claims Act (“FCA”), including for treble damages and substantial civil penalties, currently set at $13,946 up to $27,894 per false claim or statement for penalties assessed after January 15, 2024.
Business— “Government Regulation—Fraud and Abuse Provisions.” Further, identified overpayments from Medicare or Medicaid must be refunded to the government within 60 days of identification or the entity could be held liable under the federal False Claims Act (“FCA”), including for treble damages and substantial civil penalties, currently set at $14,308 up to $28,619 per false claim or statement for penalties assessed after July 3, 2025.
The outcome of each IDR dispute is generally binding on both the provider/facility and plan with respect to the particular claims at issue in that dispute but may not affect an insurer’s future offers of payment.
The outcome of each IDR dispute is generally binding on both the provider/facility and plan with respect to the particular claims at issue in that dispute but may not affect an insurer’s future offers of payment, though providers have had difficulty enforcing IDR awards against insurers.
While we have developed a number of strategic initiatives across our organization, in both our shared services functions and our operational infrastructure, to address some of the effects of changes in economic conditions, there is no assurance that these initiatives will be successful in generating improvements in our general and administrative expenses and our operational infrastructure.
We have developed a number of strategic initiatives across our organization, in both our shared services functions and our operational infrastructure, to address some of the effects of changes in economic conditions; however, these initiatives might not be successful in generating improvements in our general and administrative expenses and our operational infrastructure.
Diminished service quality from outsourcing, our inability to utilize offshore service providers or the failure to comply with restrictions on the use of third-party service providers could 39 have an adverse effect on our business, financial condition, results of operations, cash flows and the trading price of our securities.
Diminished service quality from outsourcing, our inability to utilize offshore service providers or the failure to comply with restrictions on the use of third-party service providers could have an adverse effect on our business, financial condition, results of operations, cash flows and the trading price of our securities. We may not find suitable acquisition candidates or successfully integrate our acquisitions.
Healthcare transaction review laws may affect the structure and timing of proposed transactions we may enter into or our ability to enter into transactions at all, which may have an adverse effect on our business, financial condition and results of operations.
Some states require notice, while others may require a cost and market impact review. Healthcare transaction review laws may affect the structure and timing of proposed transactions we may enter into or our ability to enter into transactions at all, which may have an adverse effect on our business, financial condition and results of operations.
Many state waivers in relation to COVID-19 have already expired. On a federal level, CMS created flexibilities for the provision and reimbursement of telehealth for Medicare beneficiaries during the COVID-19 PHE. While some of these flexibilities have been permanently extended, others are still permitted subject to temporally limited authorizations.
Many state waivers in relation to COVID-19 have already expired. On a federal level, CMS created flexibilities for the provision and reimbursement of telehealth for Medicare beneficiaries during the COVID-19 PHE. While some of these flexibilities have been permanently extended, others have been temporarily extended through December 31, 2027.
Although we currently maintain liability insurance coverage intended to cover professional liability and other claims, there can be no assurance that our insurance coverage will be adequate to cover liabilities arising out of claims asserted against us where the outcomes of such claims are unfavorable to us.
We currently maintain liability insurance coverage intended to cover professional liability and other claims, but our insurance coverage might not be adequate to cover liabilities arising out of claims asserted against us where the outcomes of such claims are unfavorable to us.
Certain of our employment agreements can be terminated without cause by any party upon prior written notice. In addition, substantially all of our affiliated physicians have agreed not to compete within a specified 45 geographic area for a certain period after termination of employment. The law governing non-compete agreements and other forms of restrictive covenants varies from state to state.
Certain of our employment agreements can be terminated without cause by any party upon prior written notice. In addition, substantially all of our affiliated physicians have agreed not to compete within a specified geographic area for a certain period after termination of employment.
The results of the 2024 federal election, including the election of President Trump and Republican control of both houses of Congress, may result in significant changes in, and have resulted in uncertainty with respect to, legislation, regulation, implementation or repeal of laws and rules related to government health programs, including Medicare and Medicaid.
The current administration and Republican-controlled Congress may result in significant changes in, and have resulted in uncertainty with respect to, legislation, regulation, implementation or repeal of laws and rules related to government health programs, including Medicare and Medicaid.
Although we believe that we have reasonable and appropriate information security procedures and other safeguards in place, as cybersecurity threats continue to evolve, we have been and may be required to expend additional resources to continue to enhance our information security measures or to investigate and remediate information security vulnerabilities.
As cybersecurity threats continue to evolve, we have been and may be required to expend additional resources to continue to enhance our information security measures or to investigate and remediate information security vulnerabilities.
In addition to the ACA, there could be changes to other GHC Programs, such as a change to the Medicaid program design or Medicaid coverage and reimbursement rates set forth under federal or state law. Historically, Congress and the Administration sought to convert Medicaid into a block grant or to institute per capita spending caps, among other things.
In addition to the ACA, there could be changes to other GHC Programs, such as a change to the Medicaid program design or Medicaid coverage and reimbursement rates set forth under federal or state law.
Future declines in births are possible, particularly if there is an economic recession, and could have an adverse effect on our patient volumes, net revenue, results of operations, cash flows, financial condition and the trading price of our securities. Unfavorable changes or conditions could occur in the states where our operations are concentrated.
Despite the slight increase in the number of total births in 2024, the birth rate has generally declined and future declines in births are possible, particularly if there is an economic recession, and could have an adverse effect on our patient volumes, net revenue, results of operations, cash flows, financial condition and the trading price of our securities.
A majority of our net revenue in 2024 was generated by our operations in five states. In particular, Texas accounted for approximately 32% of our net revenue in 2024. See Item 1.
Unfavorable changes or conditions could occur in the states where our operations are concentrated. A majority of our net revenue in 2025 was generated by our operations in five states. In particular, Texas accounted for approximately 32% of our net revenue in 2025. See Item 1.
Notably, however, there are certain services for which a balance billing is always prohibited and consent to do so may never be obtained, including emergency, anesthesia, pathology, radiology, laboratory, and neonatology services.
Notably, however, there are certain services for which a balance billing is always prohibited and consent to do so may never be obtained, including emergency medicine, anesthesia, pathology, radiology, laboratory, and neonatology services. Providers that violate these surprise billing prohibitions may be subject to enforcement action by the Centers for Medicare and Medicaid Services (“CMS”), the U.S.
Some states may seek to maintain expanded eligibility and could offset the cost by further reducing payments to providers of services. In some states, we could experience delayed or reduced Medicaid payment for services furnished to program enrollees. Moreover, Democrats in Congress have sought to expand Medicaid or Medicaid-like coverage in states that have not yet expanded Medicaid.
If states that expanded Medicaid reduce or eliminate eligibility for certain individuals, the number of patients who are uninsured could increase. Some states may seek to maintain expanded eligibility and could offset the cost by further reducing payments to providers of services. In some states, we could experience delayed or reduced Medicaid payment for services furnished to program enrollees.
To that end, many states have similar legislation on this topic that continue to evolve. As noted above, under the NSA, patients may not be balance billed in excess of their in-network cost-sharing amount.
As noted above, under the NSA, patients may not be balance billed in excess of their in-network cost-sharing amount.
Developers of certified information technology and health information networks/health information exchanges, however, may be subject to civil monetary penalties of up to $1 million per violation (adjusted for inflation).
On July 1, 2024, the HHS published in the Federal Register a final rule to establish such disincentives, effective July 31, 2024. Developers of certified information technology and health information networks/health information exchanges, however, may be subject to civil monetary penalties of up to $1 million per violation (adjusted for inflation).
All of the states in which we operate, however, already cover children in the first year of life and pregnant women if their household incomes are at or below 133% of the federal poverty level. If states that expanded Medicaid reduce or eliminate eligibility for certain individuals, the number of patients who are uninsured could increase.
As of December 31, 2025, 40 states, and the District of Columbia, adopted the expansion of Medicaid eligibility. All of the states in which we operate, however, already cover children in the first year of life and pregnant women if their household incomes are at or below 133% of the federal poverty level.
They also have sought to reduce payments to certain hospitals in some of these states. Should any of these changes take effect, we cannot predict with any assurance the ultimate effect to reimbursements for our services. Congress and the second Trump Administration may also seek substantial reforms to Medicaid law and the ability of states to design Medicaid programs.
Moreover, Democrats in Congress have sought to expand Medicaid or Medicaid-like coverage in states that have not yet expanded Medicaid. They also have sought to reduce payments to certain hospitals in some of these states. Should any of these changes take effect, we cannot predict with any assurance the ultimate effect to reimbursements for our services.
Any implementation or enhancement issues or business operation disruptions could have a material effect on our business, financial condition, results of operations, cash flows, internal control over financial reporting and the trading price of our securities. Hospitals could limit our ability to use our information management systems in our units by requiring us to use their own information management systems.
Any implementation or enhancement issues or business operation disruptions could have a material effect on our business, financial condition, results of operations, cash flows, internal control over financial reporting and the trading price of our securities. Our use of artificial intelligence (“AI”) technologies may expose us to additional legal, regulatory, operational, and competitive risks.
The ACA allowed states to expand their Medicaid programs through federal payments that fund most of the cost of increasing the Medicaid eligibility income limit from a state’s historic eligibility levels to 133% of the federal 31 poverty level. As of December 31, 2024, 40 states, and the District of Columbia, adopted the expansion of Medicaid eligibility.
State budgetary constraints and the uncertainty over the future of Medicaid could have an adverse effect on our reimbursement from Medicaid programs . 31 The ACA allowed states to expand their Medicaid programs through federal payments that fund most of the cost of increasing the Medicaid eligibility income limit from a state’s historic eligibility levels to 133% of the federal poverty level.
Department of Health and Human Services (“HHS”) subsequently issued a final rule called the HTI-1 Rule that, among other things, revised the information blocking regulations, effective March 11, 2024.On August 5, 2024, ONC published in the Federal Register a proposed rule called the HTI-2 Proposed Rule that, among other things, will further revise the information blocking regulations, if finalized.
The original information blocking regulations compliance date was April 5, 2021 and the U.S. Department of Health and Human Services (“HHS”) subsequently issued a final rule called the HTI-1 Rule that, among other things, revised the information blocking regulations, effective March 11, 2024.
Under the 21st Century Cures Act, health care providers that violate the information blocking prohibition will be subject to appropriate disincentives. On July 1, 2024, the HHS published in the Federal Register a final rule to establish such disincentives, effective July 31, 2024.
On August 5, 2024, ONC published in the Federal Register a proposed rule called the HTI-2 Proposed Rule that, among other things, will further revise the information blocking regulations, if finalized. Under the 21st Century Cures Act, health care providers that violate the information blocking prohibition will be subject to appropriate disincentives.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur CISO is informed about and monitors prevention, detection, mitigation, and remediation efforts through regular communication and reporting from professionals in the information security organization, many of whom hold cybersecurity certifications such as a Certified Information Systems Security Professional ("CISSP"), Certified Data Privacy Solutions Engineer ("CDPSE"), or Security+ and through the use of technological tools and software and results from third-party audits.
Biggest changeHe has specific experience in the following information security areas: security governance and policy, information security strategy and planning, penetration testing, vulnerability management, cybersecurity threat intelligence, incident response, third party risk management, cloud security, application security, identity and access management, data loss prevention, and security awareness. 51 Our CISO is informed about and monitors prevention, detection, mitigation, and remediation efforts through regular communication and reporting from professionals in the information security organization, many of whom hold cybersecurity certifications such as a Certified Information Systems Security Professional (“CISSP”), Certified Data Privacy Solutions Engineer (“CDPSE”), or Security+ and through the use of technological tools and software and results from third-party audits.
Our Board of Directors receives reports at least twice per year from members of senior management, including our Chief Information Security Officer (“CISO”) and Chief Compliance Officer , regarding the Company’s information systems 50 and technology and associated policies, processes, and practices for managing and mitigating cybersecurity and technology-related risks.
Our Board of Directors receives reports at least twice per year from members of senior management, including our Chief Information Security Officer (“CISO”) and Chief Compliance Officer , regarding the Company’s information systems and technology and associated policies, processes, and practices for managing and mitigating cybersecurity and technology-related risks.
ITEM 1C. CYBERSECURITY 49 Cybersecurity Risk Management and Strategy We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity and availability of our critical systems and information.
ITEM 1C. CYBERSECURITY Cybersecurity Risk Management and Strategy We have developed and implemented a cybersecurity risk management program intended to protect the confidentiality, integrity and availability of our critical systems and information.
Recently we have obtained HITRUST certification for one of our core clinical applications, however this does not mean that overall we meet any particular technical standards, specifications, or requirements, but only that we use these standards as a guide to help us design and assess our program.
We have maintained HITRUST certification for one of our core clinical applications, however this does not mean that overall we meet any 50 particular technical standards, specifications, or requirements, but only that we use these standards as a guide to help us design and assess our program.
The Council includes our Chief Executive Officer, Executive Vice President, Chief Financial Officer and Treasurer, Executive Vice President, General Counsel, Chief Administrative Officer and Secretary, Senior Vice President, Operations, Senior Vice President and Chief Information Officer, Senior Vice President, People Services, Vice President and Chief Information Security Officer, Vice President, Chief Compliance Officer, and Associate Vice President, Internal Audit.
The Council includes our Chief Executive Officer, Executive Vice President, Chief Financial Officer and Treasurer, Executive Vice President, General Counsel, Chief Administrative Officer and Secretary, Executive Vice President, National Operations, Executive Vice President, Chief Investment Officer and Strategy, Senior Vice President and Chief Information Officer, Senior Vice President, People Services, Vice President and Chief Information Security Officer, Vice President, Chief Compliance Officer, and Associate Vice President, Internal Audit.
Removed
He has specific experience in the following information security areas: security governance and policy, information security strategy and planning, penetration testing, vulnerability management, cybersecurity threat intelligence, incident response, third party risk management, cloud security, application security, identity and access management, data loss prevention, and security awareness.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

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Biggest changeITEM 3. LEGAL PROCEEDINGS The information required by this Item is included in and incorporated herein by reference to Item 1. Business of this Form 10-K under “Government Investigations” and “Other Legal Proceedings.” ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 51 PART II
Biggest changeITEM 3. LEGAL PROCEEDINGS The information required by this Item is included in and incorporated herein by reference to Item 1. Business of this Form 10-K under “Government Investigations” and “Other Legal Proceedings.” ITEM 4. MINE SAFETY DISCLOSURES Not applicable. 52 PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

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Biggest changeBase Period Years Ended December 31, Company/Index 2019 2020 2021 2022 2023 2024 Pediatrix Medical Group, Inc. $ 100.00 $ 88.31 $ 97.91 $ 53.47 $ 33.47 $ 47.21 S&P 500 Index $ 100.00 $ 116.26 $ 147.29 $ 118.84 $ 147.64 $ 182.05 S&P 600 Health Care $ 100.00 $ 131.41 $ 138.98 $ 102.25 $ 99.53 $ 102.90 NYSE Composite Index $ 100.00 $ 104.40 $ 123.37 $ 109.14 $ 121.13 $ 137.26 Issuer Purchases of Equity Securities During the three months ended December 31, 2024, we withheld 57,056 shares of our common stock to satisfy minimum statutory withholding obligations in connection with the vesting of restricted stock.
Biggest changeBase Period Years Ended December 31, Company/Index 2020 2021 2022 2023 2024 2025 Pediatrix Medical Group, Inc. $ 100.00 $ 110.88 $ 60.55 $ 37.90 $ 53.46 $ 87.16 S&P 500 Index $ 100.00 $ 126.69 $ 102.22 $ 126.99 $ 156.59 $ 182.25 S&P 600 Health Care $ 100.00 $ 105.76 $ 77.81 $ 75.74 $ 78.31 $ 77.88 NYSE Composite Index $ 100.00 $ 118.17 $ 104.54 $ 116.03 $ 131.48 $ 151.49 Issuer Purchases of Equity Securities During the three months ended December 31, 2025, we repurchased 2.9 million shares of our common stock under the share repurchase programs that were approved by our Board of Directors.
We believe that the number of beneficial owners of our common stock is greater than the number of record holders because a significant number of shares of our common stock is held through brokerage firms in “street name.” Dividend Policy We did not declare or pay any cash dividends on our common stock in 2024, 2023, or 2022.
We believe that the number of beneficial owners of our common stock is greater than the number of record holders because a significant number of shares of our common stock is held through brokerage firms in “street name.” Dividend Policy We did not declare or pay any cash dividends on our common stock in 2025, 2024, or 2023.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—“Liquidity and Capital Resources.” 52 Performance Graph The following graph compares the cumulative total shareholder return on $100 invested on December 31, 2019 in our common stock against the cumulative total return of the S&P 500 Index, S&P 600 Health Care Index, and the NYSE Composite Index.
Management’s Discussion and Analysis of Financial Condition and Results of Operations—“Liquidity and Capital Resources.” 53 Performance Graph The following graph compares the cumulative total shareholder return on $100 invested on December 31, 2020 in our common stock against the cumulative total return of the S&P 500 Index, S&P 600 Health Care Index, and the NYSE Composite Index.
Recent Sales of Unregistered Equity Securities During the three months ended December 31, 2024, we did not sell any unregistered shares of our equity securities. Equity Compensation Plans Information regarding equity compensation plans is set forth in Item 12 of this Form 10-K and is incorporated herein by reference. 54
Recent Sales of Unregistered Equity Securities During the three months ended December 31, 2025, we did not sell any unregistered shares of our equity securities. Equity Compensation Plans Information regarding equity compensation plans is set forth in Item 12 of this Form 10-K and is incorporated herein by reference. 55
The returns are calculated assuming reinvestment of dividends. The graph covers the period from December 31, 2019 through December 31, 2024. The stock price performance included in the graph is not necessarily indicative of future stock price performance.
The returns are calculated assuming reinvestment of dividends. The graph covers the period from December 31, 2020 through December 31, 2025. The stock price performance included in the graph is not necessarily indicative of future stock price performance.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Common Stock Our common stock is traded on the New York Stock Exchange (the “NYSE”) under the symbol “MD.” As of February 14, 2025, we had 163 holders of record of our common stock, and the closing sales price on that date for our common stock was $14.05 per share.
MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED STOCKHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES Common Stock Our common stock is traded on the New York Stock Exchange (the “NYSE”) under the symbol “MD.” As of February 13, 2026, we had 144 holders of record of our common stock, and the closing sales price on that date for our common stock was $21.52 per share.
Our July 2013 program allows us to repurchase shares of our common stock up to an amount sufficient to offset the dilutive impact from the issuance of shares under our equity compensation programs.
Our July 30, 2013 program allows us to repurchase shares of our common stock up to an amount sufficient to offset the dilutive impact from the issuance of shares under our equity compensation programs. Our August 2, 2018 repurchase program allowed us to repurchase up to an additional $500.0 million of shares of our common stock.
Period Total Number of Shares Repurchased (a) Average Price Paid per Share Total Number of Shares Purchased as part of the Repurchase Program Approximate Dollar Value of Shares that May Yet Be Purchased Under the Repurchase Programs (a) October 1 – October 31, 2024 57,056 (b) $ 11.26 — (a) November 1 – November 30, 2024 — — — (a) December 1 – December 31, 2024 — — — (a) Total 57,056 $ 11.26 — (a) 53 a) We have two active repurchase programs.
Period Total Number of Shares Repurchased (a) Average Price Paid per Share (b) Total Number of Shares Purchased as part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs (a) October 1 – October 31, 2025 545,000 $ 17.01 545,000 (a) November 1 – November 30, 2025 2,053,817 23.20 2,053,817 (a) December 1 – December 31, 2025 297,208 23.70 297,208 (a) Total 2,896,025 $ 22.09 2,896,025 (a) 54 a) During 2025, we had three active repurchase programs.
Our August 2018 repurchase program allows us to repurchase up to an additional $500.0 million of shares of our common stock, of which we repurchased $497.1 million as of December 31, 2024. b) Shares withheld to satisfy nominal minimum statutory withholding obligations in connection with the vesting of restricted stock.
Our August 18, 2025 repurchase program has a three-year term and allows us to repurchase up to an additional $250.0 million of shares of our common stock, of which we repurchased $83.8 million as of December 31, 2025. b) Average price paid per share excludes costs associated with repurchases, including the 1% excise tax on share repurchases as a result of the Inflation Reduction Act of 2022.
Added
This repurchase program concluded during 2025 after the full authorized amount had been repurchased.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

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Biggest changeFor a reconciliation of each of Adjusted EBITDA from continuing operations and Adjusted EPS from continuing operations to the most directly comparable GAAP measures for the years ended December 31, 2024, 2023 and 2022, refer to the tables below (in thousands, except per share data). 62 Years Ended December 31, 2024 2023 2022 (Loss) income from continuing operations attributable to Pediatrix Medical Group, Inc. $ (99,069 ) $ (60,408 ) $ 62,568 Interest expense 40,743 42,075 39,695 Income tax (benefit) provision (2,272 ) 12,049 18,806 Depreciation and amortization expense 32,226 36,171 35,636 Transformational and restructuring related expenses 64,260 2,219 27,312 Impairment losses 178,435 168,312 — Loss on disposal of businesses 9,699 — — Loss on early extinguishment of debt — — 57,016 Adjusted EBITDA from continuing operations attributable to Pediatrix Medical Group, Inc. $ 224,022 $ 200,418 $ 241,033 Years Ended December 31, 2024 2023 2022 Weighted average diluted shares outstanding 83,330 82,201 84,121 (Loss) income from continuing operations and diluted (loss) income from continuing operations per share attributable to Pediatrix Medical Group, Inc. $ (99,069 ) $ (1.19 ) $ (60,408 ) $ (0.73 ) $ 62,568 $ 0.74 Adjustments (1) : Amortization (net of tax of $2,373, $2,010 and $2,242) 7,120 0.09 6,032 0.07 6,727 0.08 Stock-based compensation (net of tax of $2,473, $3,081 and $3,596) 7,420 0.09 9,242 0.11 10,788 0.13 Transformational and restructuring related expenses (net of tax of $16,065, $555 and $6,828) 48,195 0.58 1,664 0.02 20,484 0.24 Impairment losses (net of tax of $31,633 and $42,078) 146,802 1.76 126,234 1.54 — — Loss on disposal of businesses (net of tax of $2,425) 7,274 0.09 — — — — Loss on early extinguishment of debt (net of tax of $14,254 ) — — — — 42,762 0.51 Net impact from discrete tax events 7,912 0.09 20,825 0.25 (3,370 ) (0.04 ) Adjusted income and diluted EPS from continuing operations attributable to Pediatrix Medical Group, Inc. $ 125,654 $ 1.51 $ 103,589 $ 1.26 $ 139,959 $ 1.66 (1) A blended tax rate of 25% was used to calculate the tax effects of the adjustments for the years ended December 31, 2024, 2023 and 2022, respectively, other than for impairment losses for the year ended December 31, 2024, due to a portion of the expenses being non-deductible. 63 RESULTS OF OPERATIONS The following table sets forth, for the periods indicated, certain information related to our continuing operations expressed as a percentage of our net revenue: Years Ended December 31, 2024 2023 Net revenue 100.0 % 100.0 % Operating expenses: Practice salaries and benefits 71.6 72.6 Practice supplies and other operating expenses 5.9 6.3 General and administrative expenses 11.8 11.4 Depreciation and amortization 1.6 1.8 Transformational and restructuring related expenses 3.2 0.1 Goodwill impairment 7.4 7.4 Long-lived asset impairments 1.4 — Loss on disposal of businesses 0.5 — Total operating expenses 103.4 99.6 (Loss) income from operations (3.4 ) 0.4 Non-operating expense, net (1.6 ) (2.8 ) Loss from continuing operations before income taxes (5.0 ) (2.4 ) Income tax benefit (provision) 0.1 (0.6 ) Loss from continuing operations (4.9 )% (3.0 )% Year Ended December 31, 2024 as Compared to Year Ended December 31, 2023 Our net revenue was $2.01 billion for the year ended December 31, 2024, as compared to $1.99 billion for 2023.
Biggest changeYears Ended December 31, 2025 2024 2023 Net income (loss) $ 165,388 $ (99,069 ) $ (60,408 ) Interest expense 35,965 40,743 42,075 Income tax provision (benefit) 51,044 (2,272 ) 12,049 Depreciation and amortization expense 21,827 32,226 36,171 Transformational and restructuring related expenses 22,272 64,260 2,219 Net gain on investments in divested businesses (20,906 ) — — Impairment losses — 178,435 168,312 Loss on disposal of businesses — 9,699 — Adjusted EBITDA $ 275,590 $ 224,022 $ 200,418 63 Years Ended December 31, 2025 2024 2023 Weighted average diluted shares outstanding 85,268 83,330 82,201 Net income (loss) and diluted net income (loss) per share $ 165,388 $ 1.94 $ (99,069 ) $ (1.19 ) $ (60,408 ) $ (0.73 ) Adjustments (1) : Amortization (net of tax of $1,879, $2,373 and $2,010) 5,638 0.06 7,120 0.09 6,032 0.07 Stock-based compensation (net of tax of $2,919, $2,473 and $3,081) 8,756 0.10 7,420 0.09 9,242 0.11 Transformational and restructuring related expenses (net of tax of $5,568, $16,065 and $555) 16,704 0.20 48,195 0.58 1,664 0.02 Net gain on investments in divested businesses (net of tax $5,226) (15,680 ) (0.18 ) — — — — Impairment losses (net of tax of $31,633 and $42,078) — — 146,802 1.76 126,234 1.54 Loss on disposal of businesses (net of tax of $2,425) — — 7,274 0.09 — — Net impact from discrete tax events (6,634 ) (0.08 ) 7,912 0.09 20,825 0.25 Adjusted income and diluted EPS $ 174,172 $ 2.04 $ 125,654 $ 1.51 $ 103,589 $ 1.26 (1) A blended tax rate of 25% was used to calculate the tax effects of the adjustments for the years ended December 31, 2025, 2024 and 2023, respectively, other than for impairment losses for the year ended December 31, 2024, due to a portion of the expenses being non-deductible.
Collection of patient service revenue we expect to receive is normally a function of providing complete and correct billing information to the GHC Programs and third-party insurance payors 60 within the various filing deadlines and typically occurs within 30 to 60 days of billing.
Collection of patient service revenue we expect to receive is normally a function of providing complete and correct billing information to the GHC Programs and third-party insurance payors within the various filing deadlines and typically occurs within 30 to 60 days of billing.
We anticipate that funds generated from operations, together with our current cash on hand and funds available under our Amended Credit Agreement, will be sufficient to finance our working capital requirements, fund anticipated acquisitions and capital expenditures, fund expenses related to our transformational and restructuring activities, fund our share repurchase programs and meet our contractual obligations as described above for at least the next 12 months from the date of issuance of this Form 10-K.
We anticipate that funds generated from operations, together with our current cash on hand and funds available under our Amended Credit Agreement, will be sufficient to finance our working capital requirements, fund 68 anticipated acquisitions and capital expenditures, fund expenses related to our transformational and restructuring activities, fund our share repurchase programs and meet our contractual obligations as described above for at least the next 12 months from the date of issuance of this Form 10-K.
Changes resulting from various legal proceedings, 57 and any legislative or administrative change to the current healthcare financing system, could have a material adverse effect on our business, financial condition, results of operations, cash flows and the trading price of our securities. See Item 1A.
Changes resulting from various legal proceedings, and any legislative or administrative change to the current healthcare financing system, could have a material adverse effect on our business, financial condition, results of operations, cash flows and the trading price of our securities. See Item 1A.
As a result, volumes at those practices fluctuate based on the number of business days in each calendar quarter. • A significant number of our employees and our associated professional contractors, primarily physicians, exceed the level of taxable wages for social security during the first and second quarters of the year.
As a result, volumes at those practices fluctuate based on the number of business days in each calendar quarter. 60 • A significant number of our employees and our associated professional contractors, primarily physicians, exceed the level of taxable wages for social security during the first and second quarters of the year.
The impact of this change does not include adjustments that may be required as a result of audits, inquiries and investigations from government authorities and agencies and other third-party payors that may occur in the ordinary course of business. See Note 19 to our Consolidated Financial Statements in this Form 10-K.
The impact of this change does not include adjustments that may be required as a result of audits, inquiries and investigations from government authorities and agencies and other third-party payors that may occur in the ordinary course of business. See Note 18 to our Consolidated Financial Statements in this Form 10-K.
For claims subject to the NSA, including many emergency care services, out-of-network providers will be paid an initial amount determined by the plan; if a provider is not satisfied with the initial amount paid for the services, the provider can pursue recourse through an independent dispute resolution ("IDR") process.
For claims subject to the NSA, including many emergency care services, out-of-network providers will be paid an initial amount determined by the plan; if a provider is not satisfied with the initial amount paid for the services, the provider can pursue recourse through an independent dispute resolution (“IDR”) process.
At that date, we elected to perform a quantitative assessment and determined no impairment existed. 58 During the second quarter of 2024, we experienced a triggering event, due to a sustained decline in our stock price and a market capitalization below our book equity value.
At that date, we elected to perform a quantitative assessment and determined no impairment 62 existed. During the second quarter of 2024, we experienced a triggering event, due to a sustained decline in our stock price and a market capitalization below our book equity value.
ITEM 6. R ESERVED 55 ITE M 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion highlights the principal factors that have affected our financial condition and results of operations as well as our liquidity and capital resources for the periods described.
ITEM 6. R ESERVED 56 ITE M 7. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS The following discussion highlights the principal factors that have affected our financial condition and results of operations as well as our liquidity and capital resources for the periods described.
We have not recorded any material adjustments to prior period contractual adjustments and uncollectibles in the years ended December 31, 2024, 2023, or 2022. Some of our agreements require hospitals to pay us administrative fees.
We have not recorded any material adjustments to prior period contractual adjustments and uncollectibles in the years ended December 31, 2025, 2024, or 2023. Some of our agreements require hospitals to pay us administrative fees.
OVERVIEW Pediatrix is a leading provider of physician services including newborn, maternal-fetal and other pediatric subspecialty care. Our national network is comprised of affiliated physicians who provide clinical care in 36 states.
OVERVIEW Pediatrix is a leading provider of physician services including newborn, maternal-fetal and other pediatric subspecialty care. Our national network is comprised of affiliated physicians who provide clinical care in 37 states.
At December 31, 2024, we believe we were in compliance, in all material respects, with the financial covenants and other restrictions applicable to us under the Amended Credit Agreement and the 2030 Notes.
At December 31, 2025, we believe we were in compliance, in all material respects, with the financial covenants and other restrictions applicable to us under the Amended Credit Agreement and the 2030 Notes.
Discussions of 2022 items and year-to-year comparisons between 2023 and 2022 are not included in this Form 10-K and can be found in “Management's Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2023 filed with the SEC on February 20, 2024 (the “2023 Annual Report”) and are incorporated herein by reference.
Discussions of 2023 items and year-to-year comparisons between 2024 and 2023 are not included in this Form 10-K and can be found in “Management's Discussion and Analysis of Financial Condition and Results of Operations” in Part II, Item 7 of the Company's Annual Report on Form 10-K for the fiscal year ended December 31, 2024 filed with the SEC on February 20, 2025 (the “2024 Annual Report”) and are incorporated herein by reference.
Adjusted earnings per share (“Adjusted EPS”) from continuing operations has also been further adjusted for these items and consists of diluted income (loss) from continuing operations per common and common equivalent share adjusted for amortization expense, stock-based compensation expense, transformational and restructuring related expenses and any impacts from discrete tax events.
Adjusted earnings per share (“Adjusted EPS”) has also been further adjusted for these items and consists of diluted net income (loss) per common and common equivalent share adjusted for amortization expense, stock-based compensation expense, transformational and restructuring related expenses and any impacts from discrete tax events.
We believe these measures, in addition to income (loss) from continuing operations, net income (loss) and diluted net income (loss) from continuing operations per common and common equivalent share, provide investors with useful supplemental information to compare and understand our underlying business trends and performance across reporting periods on a consistent basis.
We believe these measures, in addition to net income (loss), net income (loss) and diluted net income (loss) per common and common equivalent share, provide investors with useful supplemental information to compare and understand our underlying business trends and performance across reporting periods on a consistent basis.
In addition, during the first quarter of each year, we use cash to make any discretionary matching contributions for participants in our qualified contributory savings plans.
In addition, during the first quarter of each year, we use cash to make any discretionary matching contributions for participants in our qualified contributory savings plan.
As a result, we could be affected by potential changes to various aspects of the ACA, including changes to subsidies, healthcare insurance marketplaces and Medicaid expansion. We cannot say for certain whether there will be additional future challenges to the ACA or what impact, if any, such challenges may have on our business.
As a result, we could be affected by potential changes to various aspects of the ACA, including changes to subsidies, tax credits, monthly premiums, healthcare insurance marketplaces and Medicaid expansion. We cannot say for certain whether there will be additional future challenges to the ACA or what impact, if any, such challenges may have on our business.
We have 490 affiliated physicians who provide maternal-fetal and obstetrical medical care to expectant mothers experiencing complicated pregnancies primarily in areas where our affiliated neonatal physicians practice. Our network also includes other pediatric subspecialists, including 240 physicians providing hospital-based pediatric care, over 230 physicians providing pediatric intensive care, and 20 physicians providing pediatric surgical care.
We have 475 affiliated physicians who provide maternal-fetal and obstetrical medical care to expectant mothers experiencing complicated pregnancies primarily in areas where our affiliated neonatal physicians practice. Our network also includes other pediatric subspecialists, including over 230 physicians providing pediatric intensive care, 220 physicians providing hospital-based pediatric care and 20 physicians providing pediatric surgical care.
At December 31, 2024, we had no outstanding indebtedness under the Revolving Credit Line, which had an available borrowing capacity of $450.0 million. For additional information on our total indebtedness, see Note 13 to our Consolidated Financial Statements in this Form 10-K.
At December 31, 2025, we had no outstanding indebtedness under the Revolving Credit Line, which had an available borrowing capacity of $450.0 million. For additional information on our total indebtedness, see Note 12 to our Consolidated Financial Statements in this Form 10-K.
We evaluate the need for professional liability insurance reserves in excess of amounts estimated in our actuarial valuations on a routine basis, and as of December 31, 2024, based on our historical experience for continuing operations, a reasonably likely change of 4.0% to 10.0% in our estimates would result in an increase or decrease to net income of $3.5 million to $8.7 million.
We evaluate the need for professional liability insurance reserves in excess of amounts estimated in our actuarial valuations on a routine basis, and as of December 31, 2025, based on our historical experience, a reasonably likely change of 4.0% to 10.0% in our estimates would result in an increase or decrease to net income of $3.4 million to $8.5 million.
The purchase of common stock by participants in our 1996 Non-Qualified Employee Stock Purchase Plan, as amended (the “ESPP”), generated cash proceeds of $3.6 million, $4.9 million and $5.4 million for the years ended December 31, 2024, 2023 and 2022, respectively.
The purchase of common stock by participants in our 1996 Non-Qualified Employee Stock Purchase Plan, as amended (the “ESPP”), generated cash proceeds of $3.2 million, $3.6 million and $4.9 million for the years ended December 31, 2025, 2024 and 2023, respectively.
General Economic Conditions and Other Factors Our operations and performance depend significantly on economic conditions. During the year ended December 31, 2024, the percentage of our patient service revenue being reimbursed under government-sponsored or funded healthcare programs (“GHC Programs”) decreased as compared to the year ended December 31, 2023.
General Economic Conditions and Other Factors Our operations and performance depend significantly on economic conditions. During the year ended December 31, 2025, the percentage of our patient service revenue being reimbursed under government-sponsored or government-funded healthcare programs (“GHC Programs”) remained stable as compared to the year ended December 31, 2024.
We believe excluding the impacts from the impairment activity, transformational and restructuring related activity and loss on disposal of businesses provides a more comparable view of our operating income and operating margin. Total non-operating expenses were $32.6 million for the year ended December 31, 2024, as compared to $55.7 million for 2023.
We believe excluding the impacts from the impairment activity, transformational and restructuring related expenses and loss on disposal of businesses provides a more comparable view of our operating income and operating margin. 65 Total non-operating income was $7.6 million for the year ended December 31, 2025, as compared to total non-operating expenses of $32.6 million for 2024.
We have included the expenses, which in certain cases represent estimates, related to such activity on a separate line item in our consolidated statements. During 2024, our transformation and restructuring related expenses relate specifically to our practice portfolio management activities, revenue cycle management transition activities and position eliminations across various shared services and operations departments.
We have included the expenses, which in certain cases represent 59 estimates, related to such activity on a separate line item in our consolidated statements. During 2025, our transformation and restructuring related expenses relate specifically to position eliminations across various shared services departments and revenue cycle management transition activities.
At December 31, 2024, our national network comprised approximately 2,335 affiliated physicians, including 1,335 physicians who provide neonatal clinical care, primarily within hospital-based neonatal intensive care units (“NICUs”), to babies born prematurely or with medical complications.
At December 31, 2025, our national network comprised approximately 2,295 affiliated physicians, including 1,350 physicians who provide neonatal clinical care, primarily within hospital-based neonatal intensive care units (“NICUs”), to babies born prematurely or with medical complications.
Excluding the impairment activity, transformational and restructuring related expenses and loss on disposal of businesses, our income from operations was $183.7 million and $157.9 million, and our operating margin was 9.1% and 7.9% for the years ended December 31, 2024 and 2023, respectively.
Excluding the impairment activity, transformational and restructuring related expenses and loss on disposal of businesses, our income from operations was $231.1 million and $183.7 million, and our operating margin was 12.1% and 9.1% for the years ended December 31, 2025 and 2024, respectively.
In addition, there is a corresponding insurance receivable of $28.5 million recorded as a component of other assets for certain professional liability claims that are covered by insurance policies.
In addition, there is a corresponding insurance receivable of $20.8 million recorded as a component of other assets for certain professional liability claims that are covered by insurance policies.
Loss on disposal of businesses was $9.7 million for the year ended December 31, 2024, primarily resulting from the disposals of the primary and urgent care practices. Loss from operations was $68.7 million for the year ended December 31, 2024, as compared to income from operations of $7.3 million for 2023.
Loss on disposal of businesses was $9.7 million for the year ended December 31, 2024, primarily resulting from the disposals of the primary and urgent care practices. Income from operations was $208.8 million for the year ended December 31, 2025, as compared to loss from operations of $68.7 million for 2024.
Our net revenue, net income and operating cash flows may be materially and adversely affected if actual adjustments and uncollectibles exceed management’s estimated provisions as a result of changes in these factors. As of December 31, 2024, our DSO was 47.6 days.
Our net revenue, net income and operating cash flows may be materially and adversely affected if actual adjustments and uncollectibles exceed management’s estimated provisions as a result of changes in these factors. As of December 31, 2025, our DSO was 42.8 days.
During the year ended December 31, 2024, cash flow from accounts receivable for continuing operations was $10.3 million, as compared to $26.3 million for the same period in 2023. DSO is one of the key factors that we use to evaluate the condition of our accounts receivable and the related allowances for contractual adjustments and uncollectibles.
During the year ended December 31, 2025, cash flow from accounts receivable was $30.6 million, as compared to $10.3 million for the same period in 2024. 66 DSO is one of the key factors that we use to evaluate the condition of our accounts receivable and the related allowances for contractual adjustments and uncollectibles.
The following is a summary of our payor mix, expressed as a percentage of net revenue from continuing operations, exclusive of administrative fees and miscellaneous revenue, for the periods indicated: Years Ended December 31, 2024 2023 Contracted managed care 70% 67% Government 24% 26% Other third-parties 4% 5% Private-pay patients 2% 2% 100% 100% The payor mix shown in the table above is not necessarily representative of the amount of services provided to patients covered under these plans.
The following is a summary of our payor mix, expressed as a percentage of net revenue, exclusive of hospital contract administrative fees and other revenue, for the periods indicated: Years Ended December 31, 2025 2024 Contracted managed care 70% 70% Government 24% 24% Other third-parties 4% 4% Private-pay patients 2% 2% 100% 100% The payor mix shown in the table above is not necessarily representative of the amount of services provided to patients covered under these plans.
Geographic Coverage During 2024 and 2023, approximately 67% of our net revenue from continuing operations was generated by operations in our five largest states. During 2024 and 2023, our five largest states consisted of Texas, Florida, Georgia, California, and Washington. During both 2024 and 2023, our operations in Texas accounted for approximately 32% of our net revenue.
Geographic Coverage During 2025 and 2024, approximately 64% and 67%, respectively, of our net revenue was generated by operations in our five largest states. During 2025 and 2024, our five largest states consisted of Texas, Florida, Georgia, California, and Washington. During both 2025 and 2024, our operations in Texas accounted for approximately 32% of our net revenue.
General and administrative expenses primarily include all billing and collection functions and all other salaries, benefits, supplies and operating expenses not specifically identifiable to the day-to-day operations of our physician practices and services. General and administrative expenses increased by $10.9 million, or 4.8%, to $238.4 million for the year ended December 31, 2024, as compared to $227.5 million for 2023.
General and administrative expenses primarily include all billing and collection functions and all other salaries, benefits, supplies and operating expenses not specifically identifiable to the day-to-day operations of our physician practices and services. General and administrative expenses increased by $2.4 million, or 1.0%, to $240.8 million for the year ended December 31, 2025, as compared to $238.4 million for 2024.
These changes, if implemented, could eliminate the guarantee that everyone who is eligible and applies for Medicaid benefits would receive them and could potentially give states new authority to restrict eligibility, cut benefits and/or make it more difficult for people to enroll. See Item 1. Business – “Relationship With Our Partners – Government Regulatory Requirements” and see also Item 1A.
These changes, if implemented, could eliminate the guarantee that everyone who is eligible and applies for Medicaid benefits would receive them and could potentially give states new authority to restrict eligibility, cut benefits and/or make it more difficult for people to enroll. See Item 1.
Any significant change in our DSO results in additional analyses of outstanding accounts receivable and the associated reserves. We calculate our DSO using a three-month rolling average of net revenue.
DSO reflects the timeliness of cash collections on billed revenue and the level of reserves on outstanding accounts receivable. Any significant change in our DSO results in additional analyses of outstanding accounts receivable and the associated reserves. We calculate our DSO using a three-month rolling average of net revenue.
Also in connection with the Redemption, we amended and restated the Credit Agreement (the “Credit Agreement”, and such amendment and restatement, the “Credit Agreement Amendment”), concurrently with the issuance of the 2030 Notes.
Concurrently with the issuance of the 2030 Notes, we amended and restated our credit agreement (the “Credit Agreement”, and such amendment and restatement, the “Credit Agreement Amendment”).
We had approximately $1.34 billion in gross accounts receivable for continuing operations outstanding at December 31, 2024, and considering this outstanding balance, based on our historical experience, a reasonably likely change of 0.5% to 1.50% in our estimated collection rate would result in an impact to net revenue of $6.4 million to $19.1 million.
We had approximately $1.15 billion in gross accounts receivable outstanding at December 31, 2025, and considering this outstanding balance, based on our historical experience, a reasonably likely change of 0.5% to 1.50% in our estimated collection rate would result in an impact to net revenue of $5.5 million to $16.5 million.
After excluding discrete tax impacts and goodwill impairment-related effects for the years ended December 31, 2024 and 2023, our tax rates were 29.4% and 27.9%, respectively. We believe excluding discrete tax impacts and goodwill impairment-related impacts on our tax rate provides a more comparable view of our effective income tax rate.
After excluding discrete tax impacts and goodwill impairment-related effects, as relevant, for the years ended December 31, 2025 and 2024, our tax rates were 26.6% and 29.4%, respectively. We believe excluding discrete tax impacts and goodwill impairment-related impacts from our tax rate provides a more comparable view of our effective income tax rate.
Practice Portfolio Management Plan and Impairment of Long-Lived Assets During the second quarter of 2024, we formalized our physician practice optimization plans, resulting in a decision to exit almost all of our affiliated office-based practices, other than maternal-fetal medicine.
Office-Based Practice Exits During the second quarter of 2024, we formalized our physician practice optimization plans, resulting in a decision to exit almost all of our affiliated office-based practices, other than maternal-fetal medicine.
Investing Activities During the year ended December 31, 2024, our net cash used in investing activities of $35.4 million consisted primarily of capital expenditures of $22.0 million, net purchases from maturities or sale of investments of $12.1 million and acquisition payments of $8.2 million.
These activities were partially offset by proceeds from an investment in a divested business of $30.0 million. During the year ended December 31, 2024, our net cash used in investing activities of $35.4 million consisted primarily of capital expenditures of $22.0 million, net purchases from maturities or sale of investments of $12.1 million and acquisition payments of $8.2 million.
The Credit Agreement, as amended by the Credit Agreement Amendment (the “Amended Credit Agreement”), among other things, (i) refinanced the prior unsecured revolving credit facility with a $450.0 million unsecured revolving credit facility, including a $37.5 million sub-facility for the issuance of letters of credit (the “Revolving Credit Line”), and a new $250.0 million term A loan facility (“Term A Loan”) and (ii) removed JPMorgan Chase Bank, N.A., as the administrative agent under the Credit Agreement and appointed Bank of America, N.A. as the administrative agent for the lenders under the Amended Credit Agreement.
The Credit Agreement, as amended by the Credit Agreement Amendment (the “Amended Credit Agreement”), among other things, (i) refinanced the prior unsecured revolving credit facility with a $450.0 million unsecured revolving credit facility, including a $37.5 million sub-facility for the issuance of letters of credit (the “Revolving Credit Line”), and a new $250.0 million term A loan facility (“Term A Loan”) and (ii) removed JPMorgan Chase Bank, N.A., as the administrative agent under the Credit Agreement and appointed Bank of America, N.A. as the administrative agent for the lenders under the Amended Credit Agreement. 67 The Amended Credit Agreement matures on February 11, 2027 and is guaranteed on an unsecured basis by substantially all of our subsidiaries and affiliated professional contractors.
The $7.4 million decrease was primarily related to non-same unit activity, primarily resulting from practice dispositions, partially offset by an increase in clinical compensation expense, including incentive compensation based on practice results and benefits, all at our existing units. The net increase in benefits primarily reflects increases in payroll taxes and group insurance costs.
The $100.0 million decrease was primarily related to non-same unit activity, primarily resulting from practice dispositions, partially offset by an increase in clinical compensation expense, including incentive compensation based on practice results and benefits, all at our existing units.
Practice supplies and other operating expenses decreased by $7.1 million, or 5.7%, to $117.7 million for the year ended December 31, 2024, as compared to $124.8 million for 2023. The decrease was primarily attributable to non-same unit activity, primarily resulting from practice dispositions.
Practice supplies and other operating expenses decreased by $38.4 million, or 32.7%, to $79.3 million for the year ended December 31, 2025, as compared to $117.7 million for 2024. The decrease was primarily attributable to non-same unit activity, primarily resulting from practice dispositions.
Our total liability related to professional liability risks at December 31, 2024 was $287.9 million, of which $30.4 million is classified as a current liability within accounts payable and accrued expenses in the Consolidated Balance Sheet.
Our total liability related to professional liability risks at December 31, 2025 was $273.5 million, of which $35.2 million is classified as a current liability within accounts payable and accrued expenses in the Consolidated Balance Sheet.
DSO reflects the timeliness of cash collections on billed revenue and the level of reserves on outstanding accounts receivable. Our DSO for continuing operations was 47.6 days at December 31, 2024 as compared to 50.5 days at December 31, 2023. The 2.9 days decrease in DSO was primarily due to improved cash collections at existing units.
DSO reflects the timeliness of cash collections on billed revenue and the level of reserves on outstanding accounts receivable. Our DSO was 42.8 days at December 31, 2025 as compared to 47.6 days at December 31, 2024. The 4.8 days decrease in DSO was primarily due to improved cash collections at existing units.
The total loss on disposal of these businesses was $11.0 million. “Surprise” Billing Legislation In late 2020, Congress enacted the No Surprises Act (“NSA”) legislation intended to protect patients from “surprise” medical bills when certain services are furnished by providers who are not in-network with the patient’s insurer.
“Surprise” Billing Legislation 57 In late 2020, Congress enacted the No Surprises Act (“NSA”) legislation intended to protect patients from “surprise” medical bills when certain services are furnished by providers who are not in-network with the patient’s insurer.
However, because many factors can affect historical and future loss patterns, the determination of an appropriate professional liability reserve involves complex, subjective judgment, and actual results may vary significantly from estimates.
However, because many factors can affect historical and future loss patterns, the determination of an appropriate professional liability reserve involves complex, subjective judgment, and actual results may vary significantly from estimates. Goodwill Goodwill represents the excess of purchase price over the fair value of the net assets acquired.
Adjusted EPS was $1.51 for the year ended December 31, 2024, as compared to $1.26 for 2023. LIQUIDITY AND CAPITAL RESOURCES As of December 31, 2024, we had $229.9 million of cash and cash equivalents attributable to continuing operations as compared to $73.3 million at December 31, 2023.
Adjusted EPS was $2.04 for the year ended December 31, 2025, as compared to $1.51 for 2024. LIQUIDITY AND CAPITAL RESOURCES As of December 31, 2025, we had $375.2 million of cash and cash equivalents as compared to $229.9 million at December 31, 2024.
At December 31, 2024, the Company had long term capital requirements comprised primarily of $400.0 million in senior notes, $49.9 million of operating lease liabilities and $5.7 million of finance lease liabilities. At December 31, 2024, our total liability for uncertain tax positions was $2.9 million.
At December 31, 2025, the Company had long term capital requirements comprised primarily of $400.0 million in senior notes, $196.9 million of Term A Loan, $41.0 million of operating lease obligations and $3.5 million of finance lease obligations. At December 31, 2025, our total liability for uncertain tax positions was $1.3 million.
Additionally, we had working capital attributable to continuing operations of $205.5 million at December 31, 2024, an increase of $111.0 million from our working capital from continuing operations of $94.5 million at December 31, 2023. The increase in working capital is primarily due to net favorable impacts in our same-unit results, primarily from an increase in revenue.
Additionally, we had working capital of $304.6 million at December 31, 2025, an increase of $99.1 million from our working capital of $205.5 million at December 31, 2024. The increase in working capital is primarily due to net favorable impacts in our same-unit results, primarily from an increase in revenue.
The increase in revenue of $18.3 million, or 0.9%, was primarily attributable to an increase in same-unit revenue, partially offset by a decrease in revenue from non-same unit activity, primarily resulting from practice dispositions. Same units are those units at which we provided services for the entire current period and the entire comparable period.
The decrease in revenue of $99.1 million, or 4.9%, was primarily attributable to non-same unit revenue, primarily from practice dispositions, partially offset by an increase in same-unit revenue. Same units are those units at which we provided services for the entire current period and the entire comparable period. Same-unit net revenue increased by $106.8 million, or 6.2%.
Cash Flows Cash provided by (used in) operating, investing and financing activities from continuing operations is summarized as follows (in thousands): Years Ended December 31, 2024 2023 Operating activities $ 217,250 $ 146,081 Investing activities (35,406 ) (48,176 ) Financing activities (14,485 ) (25,715 ) Operating Activities We generated cash flow from operating activities for continuing operations of $217.3 million and $146.1 million for the years ended December 31, 2024 and 2023, respectively.
Cash Flows Cash provided by (used in) operating, investing and financing activities from continuing operations is summarized as follows (in thousands): Years Ended December 31, 2025 2024 Operating activities $ 274,739 $ 217,250 Investing activities (18,296 ) (35,406 ) Financing activities (107,494 ) (14,485 ) Operating Activities We generated cash flow from operating activities for continuing operations of $274.7 million and $217.3 million for the years ended December 31, 2025 and 2024, respectively.
An out-of-network provider is only permitted to bill a patient more than the cost-sharing amount allowed under the NSA for certain types of services if the provider satisfies all aspects of an informed consent process set forth in the NSA’s implementing regulations.
An out-of-network provider is only permitted to bill a patient more than the cost-sharing amount allowed under the NSA for certain types of services if the provider satisfies all aspects of an informed consent process set forth in the NSA’s implementing regulations. Providers that violate these surprise billing prohibitions may be subject to enforcement actions by CMS, the U.S.
Risk Factors for a discussion of the uncertainties, risks and assumptions associated with these forward-looking statements. The operating results for the periods presented were not significantly affected by inflation. This section generally discusses 2024 and 2023 items and year-to-year comparisons between 2024 and 2023.
Risk Factors for a discussion of the uncertainties, risks and assumptions associated with these forward-looking statements. This section generally discusses 2025 and 2024 items and year-to-year comparisons between 2025 and 2024.
For the years ended December 31, 2024, 2023 and 2022, both Adjusted EBITDA and Adjusted EPS are being further adjusted to exclude loss on disposal of businesses, impairment losses and the impacts from loss on the early extinguishment of debt, as relevant.
For the years ended December 31, 2025, 2024 and 2023, both Adjusted EBITDA and Adjusted EPS are being further adjusted to exclude net gain on investments in divested businesses, impairment losses and loss on disposal of businesses, as relevant.
Medicaid Expansion The ACA also allows states to expand their Medicaid programs through federal payments that fund most of the cost of increasing the Medicaid eligibility income limit from a state’s historic eligibility levels to 133% of the federal poverty level. See Item 1.
Risk Factors ─ “Potential healthcare reform efforts may have a significant effect on our business.” Medicaid Reform The ACA also allows states to expand their Medicaid programs through federal payments that fund most of the cost of increasing the Medicaid eligibility income limit from a state’s historic eligibility levels to 133% of the federal poverty level. See Item 1.
The expenses during 2024 reflect lease impairment and severance expenses resulting from our practice portfolio management activities, revenue cycle management transition activities, and position eliminations across various shared services and operations departments. The expenses during 2023 are directly related to the termination of our prior contract for revenue cycle management services.
The expenses during 2024 primarily related to the impairment of various right-of-use lease assets resulting from our practice portfolio management activities, position eliminations across various shared services and operations departments and revenue cycle management transition activities.
Providers that violate these surprise billing prohibitions may be subject to enforcement actions by CMS or by states, one or both of which may be tasked with investigating potential non-compliance as a result of patient complaints, as well as any state-specific penalties enforcement action and federal civil monetary penalties.
Department of Labor, or by states, one or multiple of which may be tasked with investigating potential non-compliance as a result of patient complaints, as well as any state-specific penalties enforcement action and federal civil monetary penalties.
These fluctuations are primarily due to the following factors: • There are fewer calendar days in the first and second quarters of the year, as compared to the third and fourth quarters of the year.
Quarterly Results We have historically experienced and expect to continue to experience quarterly fluctuations in net revenue and net income. These fluctuations are primarily due to the following factors: • There are fewer calendar days in the first and second quarters of the year, as compared to the third and fourth quarters of the year.
The Amended Credit Agreement also provides for other customary fees and charges, including an unused commitment fee with respect to the Revolving Credit Line ranging from 0.150% to 0.200% of the unused lending commitments under the Revolving Credit Line, based on our consolidated net leverage ratio. 67 The Amended Credit Agreement contains customary covenants and restrictions, including covenants that require us to maintain a minimum interest coverage ratio, a maximum consolidated net leverage ratio and to comply with laws, and restrictions on the ability to pay dividends, incur indebtedness or liens and make certain other distributions subject to baskets and exceptions, in each case, as specified therein.
The Amended Credit Agreement contains customary covenants and restrictions, including covenants that require us to maintain a minimum interest coverage ratio, a maximum consolidated net leverage ratio and to comply with laws, and restrictions on the ability to pay dividends, incur indebtedness or liens and make certain other distributions subject to baskets and exceptions, in each case, as specified therein.
As of December 31, 2024, the planned exits of our pediatric office-based practices were completed. Exit of Primary and Urgent Care Service Line During 2024, we made the decision to exit our primary and urgent care service line based on a review of the cost and time that would be required to build the platform to scale.
Additionally, we exited our primary and urgent care service line during 2024 based on a review of the cost and time that would be required to build the platform to scale.
We also consider the economic outlook for the healthcare services industry and various other factors during the testing process, including hospital and physician contract changes, local market developments, changes in third-party payor payments and other publicly available information. Non-GAAP Measures In our analysis of our results of operations, we use various GAAP and certain non-GAAP financial measures.
We also consider the economic outlook for the healthcare services industry and various other factors during the testing process, including hospital and physician contract changes, local market developments, changes in third-party payor payments and other publicly available information. Consistent with prior years, we performed our annual impairment analysis in the third quarter, specifically as of July 31, 2025.
Recognizing this and our need to adapt to the current healthcare climate, during the second quarter, we made the decision to return to a hospital-based and maternal-fetal medicine-focused organization.
Recognizing this and our need to adapt to the current healthcare climate, we made the decision to return to a hospital-based and maternal-fetal medicine-focused organization. As of December 31, 2024, the exits of our pediatric office-based practices were completed.
Some agreements provide for fees if the hospital does not generate sufficient patient volume in order to guarantee that we receive a specified minimum revenue level. We also receive fees from hospitals for administrative services performed by our affiliated physicians providing medical director or other services at the hospital.
Some agreements provide for fees if the hospital does not generate sufficient patient volume in order to guarantee that we receive a specified minimum revenue level.
Same-unit net revenue increased by $81.4 million, or 4.8%. The increase in same-unit net revenue was comprised of an increase of $47.8 million, or 2.8%, from net reimbursement-related factors, and $33.6 million, or 2.0%, related to patient service volumes.
The increase in same-unit net revenue was comprised of an increase of $97.5 64 million, or 5.7%, from net reimbursement-related factors, and $9.3 million, or 0.5%, related to patient service volumes.
For example, the gross amount billed to patients covered under GHC Programs for the years ended December 31, 2024 and 2023 represented approximately 53% and 55%, respectively, of our total gross patient service revenue.
For example, the gross amount billed to patients covered under GHC Programs for the years ended December 31, 2025 and 2024 represented approximately 53% of our total gross patient service revenue. These percentages of gross revenue and the percentages of net revenue provided in the table above include the payor mix impact of acquisitions completed through December 31, 2025.
The net increase in revenue related to net reimbursement-related factors was primarily due to an increase in revenue resulting from a favorable shift in payor mix and an increase in administrative fees from our hospital partners. The increase in revenue from patient service volumes was related to increases across all of our service lines.
The net increase in revenue related to net reimbursement-related factors was primarily due to an increase in revenue resulting from improved collection activity, increased patient acuity, primarily in neonatology, a favorable shift in payor mix, an increase in administrative fees from our hospital partners and modest improvements in managed care contracting.
Goodwill impairment was $150.6 million and $148.3 million for the years ended December 31, 2024 and 2023, respectively. Long-lived asset impairments were $27.8 million for the year ended December 31, 2024, resulting from practice portfolio management activities.
Goodwill impairment was $150.6 million for the year ended December 31, 2024, resulting from the triggering event during the second quarter based on a sustained stock price decline. Long-lived asset impairments were $27.8 million for the year ended December 31, 2024, resulting from practice portfolio management activities.
Financing Activities During the year ended December 31, 2024, our net cash used in financing activities of $14.5 million primarily consisted of payments of $12.5 million on our Term A Loan (as defined below).
Financing Activities During the year ended December 31, 2025, our net cash used in financing activities of $107.5 million primarily consisted of common stock repurchases of $86.7 million, payments of $18.8 million on our Term A Loan (as defined below) and a contingent consideration payment of $3.2 million.
Loss from continuing operations was $99.1 million for the year ended December 31, 2024, as compared to $60.4 million for 2023. Adjusted EBITDA from continuing operations was $224.0 million for the year ended December 31, 2024, as compared to $200.4 million for 2023.
Net income was $165.4 million for the year ended December 31, 2025, as compared to a net loss of $99.1 million for 2024. Adjusted EBITDA was $275.6 million for the year ended December 31, 2025, as compared to $224.0 million for 2024.
We have incurred certain expenses that we do not consider representative of our underlying operations, including transformational and restructuring related expenses. Accordingly, we report adjusted earnings before interest, taxes and depreciation and amortization (“Adjusted EBITDA”) from continuing operations, defined as income (loss) from continuing operations before interest, taxes, depreciation and amortization, and transformational and restructuring related expenses.
Accordingly, we report adjusted earnings before interest, taxes and depreciation and amortization (“Adjusted EBITDA”), defined as net income (loss) before interest, taxes, depreciation and amortization, and transformational and restructuring related expenses.
The net decrease in non-operating expenses was primarily related to an impairment loss of $20.0 million in the prior year related to a cost-method investment, an increase in investment income on higher cash balances and lower interest expense due to lower debt balances.
The net increase in total non-operating income was primarily related to a net gain on investments in divested businesses of $20.9 million, an increase in interest income due to higher cash balances and interest rates and a decrease in interest expense from modestly lower interest rates and borrowings.
During the year ended December 31, 2023, our net cash used in 66 investing activities for continuing operations of $48.2 million consisted primarily of capital expenditures of $33.3 million, net purchases from maturities or sale of investments of $9.0 million and acquisition payments of $6.7 million.
Investing Activities During the year ended December 31, 2025, our net cash used in investing activities of $18.3 million consisted primarily of acquisition payments of $23.2 million, capital expenditures of $18.5 million, net purchases of investments of $3.2 million and other activity of $3.5 million.
General and administrative expenses as a percentage of net revenue was 11.8% for the year ended December 31, 2024, as compared to 11.4% for the same period in 2023. Depreciation and amortization expense was $32.2 million for the year ended December 31, 2024, as compared to $36.2 million for 2023.
The net increase of $2.4 million is primarily related to increases in collection fees and higher incentive-based compensation based on financial results. General and administrative expenses as a percentage of net revenue was 12.6% for the year ended December 31, 2025, as compared to 11.8% for the same period in 2024.
The increase in our Adjusted EBITDA was primarily due to net favorable impacts in our same-unit results, primarily from higher revenue. 65 Diluted net loss per common and common equivalent share was $1.19 on weighted average shares outstanding of 83.3 million for the year ended December 31, 2024, as compared to $0.73 on weighted average shares outstanding of 82.2 million for 2023.
Diluted net income per common and common equivalent share was $1.94 on weighted average shares outstanding of 85.3 million for the year ended December 31, 2025, as compared to diluted net loss per common and common equivalent share of $1.19 on weighted average shares outstanding of 83.3 million for 2024.
The net increase in cash flow of $71.2 million for the year ended December 31, 2024, as compared to the year ended December 31, 2023, was primarily due to increases in cash flow from accounts payable and accrued expenses, other long-term assets, income taxes and long-term professional liabilities.
The net increase in cash flow of $57.4 million for the year ended December 31, 2025, as compared to the year ended December 31, 2024, was primarily due to higher earnings and increases in cash flow from accounts receivable.
The outcome of each IDR dispute is generally binding on both the provider and payor with respect to the particular claims at issue in that dispute but may not affect an insurer’s future offers of payment. Accordingly, we cannot predict how these IDR results will compare to the rates that our affiliated physicians customarily receive for their services.
The outcome of each IDR dispute is generally binding on both the provider and payor with respect to the particular claims at issue in that dispute but may not affect an insurer’s future offers of payment, though providers have had difficulty enforcing IDR awards against insurers.
Our operating margin was (3.4)% for the year ended December 31, 2024, as compared to 0.4% for the same period in 2023. The decrease in our operating margin was primarily due to impairment activity, transformational and restructuring expenses and loss on disposal of businesses, partially offset by net favorable impacts from same-unit results due to higher revenue.
Our operating margin was 10.9% for the year ended December 31, 2025, as compared to (3.4)% for the same period in 2024. The increase in our operating margin was primarily due to the impact from practice disposition activity and favorable same-unit results, primarily related to same-unit revenue growth.
Liquidity On February 11, 2022, we issued $400.0 million of 5.375% unsecured senior notes due 2030 (the “2030 Notes”).
During the year ended December 31, 2024, our net cash used in financing activities of $14.5 million primarily consisted of payments of $12.5 million on our Term A Loan. Liquidity On February 11, 2022, we issued $400.0 million of 5.375% unsecured senior notes due 2030 (the “2030 Notes”).
The tax rates for the years ended December 31, 2024 and 2023 are not meaningful as calculated due to the pre-tax loss and related tax effects of the non-cash goodwill impairment charges in each period. Excluding the effect of these items, our effective tax rate was 45.5% and 35.8% for the years ended December 31, 2024 and 2023, respectively.
Our effective income tax rate (“tax rate”) was 23.6% for the year ended December 31, 2025, compared to 2.2% for the year ended December 31, 2024. The tax rate for the year ended December 31, 2024 is not meaningful as calculated due to the pre-tax loss and related tax effects of the non-cash goodwill impairment charge.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeConsidering the total outstanding balance, a 1% change in interest rates would result in an impact to income before income taxes of $2.2 million per year. 68
Biggest changeConsidering the total outstanding balance, a 1% change in interest rates would result in an impact to income before income taxes of $2.0 million per year. 69
We borrow under our Amended Credit Agreement at various interest rate options based on the Alternate Base Rate or Term SOFR rate depending on certain financial ratios. At December 31, 2024, we had an outstanding principal balance of $215.6 million on our Amended Credit Agreement under our Term A Loan.
We borrow under our Amended Credit Agreement at various interest rate options based on the Alternate Base Rate or Term SOFR rate depending on certain financial ratios. At December 31, 2025, we had an outstanding principal balance of $196.9 million on our Amended Credit Agreement under our Term A Loan.

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