CHE · 10-Q · 2026Q1 · Full report

Regulatory Risk and Investigations

CHEMED CORP · 2026-04-28 · Importance 40 · Surprise 42

The Company states it is subject to various lawsuits and claims in the normal course of business and periodically receives communications from governmental and regulatory agencies regarding Medicare and Medicaid billing compliance at its VITAS hospice subsidiary. Chemed establishes reserves for specific uninsured liabilities in connection with regulatory and legal actions when those liabilities are deemed probable and estimable, but notes that in most instances it is unable to reasonably estimate potential liabilities due to uncertainty of outcomes and litigation stage. Legal fees related to such regulatory and legal actions are expensed as incurred and the Company refers investors to Note 10 for descriptions of current material legal matters. These regulatory interactions relate specifically to VITAS billing and compliance and thus could affect reimbursement and contingent liability exposure.

Key facts

• The Company is subject to various lawsuits and claims and periodically receives communications from governmental and regulatory agencies concerning compliance with Medicare and Medicaid billing requirements at VITAS
• The Company establishes reserves for specific, uninsured liabilities in connection with regulatory and legal action that it deems probable and estimable and discloses regulatory/legal actions when it believes a loss could be reasonably possible