AdaptHealth Corp.

AdaptHealth Corp. and subsidiaries ("AdaptHealth" or "the Company") is a national leader in providing patient-centered, healthcare-at-home solutions including home medical equipment (“HME”), medical supplies, and related services. The Company operates under four reportable segments that align with its product categories: (i) Sleep Health, (ii) Respiratory Health, (iii) Diabetes Health, and (iv) Wellness at Home. A description of the products and services provided within each of the Company’s four reportable segments is provided below.

The Sleep Health segment provides sleep therapy equipment, supplies and related services (including continuous positive airway pressure and BiLevel services) to individuals for the treatment of obstructive sleep apnea.

The Respiratory Health segment provides oxygen and home mechanical ventilation equipment and supplies and related chronic therapy services to individuals for the treatment of respiratory diseases, such as chronic obstructive pulmonary disease and chronic respiratory failure.

The Wellness at Home segment provides home medical equipment and services to patients in their homes including those who have been discharged from acute care and other facilities. The segment tailors a service model to patients who are adjusting to new lifestyles or navigating complex disease states by providing essential medical supplies and durable medical equipment.

The Company services beneficiaries of Medicare, Medicaid and commercial insurance payors. As of December 31, 2025, AdaptHealth serviced approximately 4.3 million patients annually in all 50 states through our network of approximately 640 locations in 48 states. The Company's principal executive offices are located at 555 East North Lane, Suite 5075, Conshohocken, Pennsylvania 19428.

Company Operations

Product Offering. AdaptHealth delivers patient-centered, healthcare-at-home solutions including home medical equipment, medical supplies, and related services directly to a patient’s home upon discharge from a hospital and/or receipt of a physician/medical referral. The breadth of AdaptHealth’s products is particularly valuable to acute care hospitals, sleep laboratories and long-term care facilities that discharge patients with complex conditions and multiple product needs.

For resupply sale and one-time sale products, which include those deemed to be consumables, AdaptHealth receives a single payment upon sale of the product. These products, which include positive airway pressure ("PAP") masks and related supplies, continuous glucose monitors ("CGM"), diabetes management supplies, orthopedic bracing, wound care supplies, home medical equipment and related accessories, incontinence supplies, medications, enteral supplies, and other products, accounted for approximately 63% of AdaptHealth’s net revenue for the year ended December 31, 2025.

AdaptHealth is paid a fixed monthly amount for certain HME products as designated by the Centers for Medicare & Medicaid Services (“CMS”) or commercial insurance payors, such as oxygen and home mechanical ventilation equipment, PAP equipment, hospital beds, and other products. These sales accounted for approximately 33% of AdaptHealth’s net revenue for the year ended December 31, 2025.

AdaptHealth receives a per member per month (“PMPM”) fee under certain at-risk capitation arrangements, which refers to a model in which the Company receives a PMPM fee from the third-party payor, and is responsible for managing a range of healthcare services and associated costs of its members. In at-risk capitation arrangements, AdaptHealth is responsible for the cost of contracted healthcare services required by those members in accordance with the terms of each agreement. Capitated revenue contracts with payors are generally multi-year arrangements and have a single monthly stand ready performance obligation to provide all aspects of necessary medical care to members for the contracted period in accordance with the scope of the agreements. These at-risk capitation arrangements accounted for approximately 4.0% of AdaptHealth’s net revenue for the year ended December 31, 2025.

Supply Chain. AdaptHealth plays an important role in delivering HME products to patients in their homes. Manufacturers of home medical equipment and diabetes medical devices sell and ship their products to AdaptHealth directly. AdaptHealth also contracts with national healthcare distribution companies to ship certain HME products and diabetes medical devices directly to patients’ homes. These distributors invoice AdaptHealth for the cost of shipped products at the time of sale. AdaptHealth receives referrals from a variety of sources, such as acute care hospitals, sleep laboratories, pulmonologist and endocrinologist offices, skilled nursing facilities, hospice operators, and primary care providers, among others. AdaptHealth’s products are either shipped to patients’ homes by AdaptHealth-operated or contracted delivery trucks or shipped using proprietary or third-party distribution services. AdaptHealth invoices payors and patients directly for the products that are delivered and for the services that are provided.

Operating Structure

Management. AdaptHealth is led by a proven management team with experience across a variety of organizations in the healthcare industry. AdaptHealth's management structure is strategically aligned through its four reportable segments, which each have a general manager who are responsible for the operations of each segment. These general managers report to AdaptHealth's Chief Operating Officer. AdaptHealth has a centralized approach for key business processes, including revenue cycle management, purchasing, payor contracting, mergers and acquisitions (“M&A”) activity, finance, compliance, legal, human resources, IT, resupply and sales management. However, AdaptHealth believes that the personalized nature of patient care and referral relationships, characteristic of the home healthcare industry, also requires a focus on operating locally as well. AdaptHealth responds promptly and effectively to local market demands and opportunities through local managers, who are responsible and accountable for maintaining and developing relationships with referral sources and serving patients.

IT. AdaptHealth has established an integrated, technology-enabled, centralized platform, distinguishing itself from many of its competitors that traditionally use less automated processes that are typically complex, can be prone to mistakes and are less efficient. AdaptHealth’s technology enables automated, compliant, and integrated workflow into patients’ delivery of care. AdaptHealth believes that this advanced technology platform provides it with a competitive advantage through its unique components that cater to patients and physicians. AdaptHealth believes that its technology platform has several characteristics that appeal to physicians, including its ease of use, the improved compliance it enables through its integrated systems, and the automated, integrated workflow it provides for patients’ delivery of care. AdaptHealth has formed close relationships with its third-party software providers to optimize its workflow. Additionally, AdaptHealth’s e-prescribing capabilities enhance transparency and reduce transcription and other errors. AdaptHealth believes that patients are also better served due to the efficiency from time of order to delivery and the seamless integration across points of care enabled by AdaptHealth’s platform. The integrated system also provides AdaptHealth management with critical information in a timely manner, allowing them to track performance levels company wide. AdaptHealth utilizes a proprietary mobile delivery technology called OTL, which has many features, including delivery notification, patient satisfaction applications and referral source notifications.

We are deploying innovative programs, which use artificial intelligence, including generative artificial intelligence and similar tools and technologies (collectively, “AI”), to improve or enhance patient and operational workflows. AI deployment involves internal resources as well as strategic partnerships focused on patient experience and operational efficiencies. Any creation, use, or deployment of AI may subject us to additional risks under HIPAA and other laws and regulations governing privacy or AI. To the extent we use personal information to train AI, we are required to comply with laws, regulations, and contractual requirements governing uses and disclosures of personal information, which may require us to obtain patient authorizations or to de-identify personal information or protected health information. In addition, the Federal Trade Commission (“FTC”) has announced that they are taking a closer look at how AI is developed and used, including evaluating claims by companies regarding AI that could be false or misleading, to take appropriate steps to reduce biases. For further discussion on AdaptHealth’s use of AI, see Item 1A, Risk Factors – “The use or anticipated use of artificial intelligence (“AI”) technologies, including generative AI, by us or third parties, could result in reputational harm, competitive harm, and legal liability, and may increase or create new operational risks.”

See Item 1C, "Cybersecurity", of this Annual Report on Form 10-K, for discussion of AdaptHealth's risk management and strategy and governance relating to cybersecurity.

Revenue Cycle Management. AdaptHealth’s revenue cycle management and billing processes have both automated and manual elements that are designed to maintain the integrity of revenue and accounts receivable. A majority of AdaptHealth's third-party payors can accommodate electronic claims submission, such as Medicare, certain state Medicaid payors and many commercial insurance payors, and are billed electronically on a daily basis. For payors that are unable to accept electronic submissions, AdaptHealth generates paper claims and invoices.

Outsourced Providers

AdaptHealth contracts with business process outsourcing providers to provide certain billing, accounts payable and administrative functions. These providers are primarily based in India and the Philippines, and provide AdaptHealth with the ability to scale its workforce in a cost-effective manner. As of December 31, 2025, approximately 4,400 full-time equivalent personnel were provided to AdaptHealth under such arrangements.

Sales and Marketing

Sales activities are generally carried out by AdaptHealth’s full-time sales representatives with assistance from on-site liaisons in certain markets who interact directly with hospital discharge coordinators and patients. AdaptHealth’s sales team works in close alignment with AdaptHealth’s trained clinical team as part of their sales activities. AdaptHealth primarily acquires new patients through referrals, and also acquires new patients through capitated arrangements with various managed care providers. Sources of referrals include acute care hospitals, sleep laboratories, pulmonologist and endocrinologist offices, skilled nursing facilities, hospice operators, and primary care providers, among others. AdaptHealth’s sales representatives maintain continual contact with medical professionals across these facilities. AdaptHealth believes that its relationships with its referral sources are strong and that these entities will continue to be a source of organic revenue through new patients. While AdaptHealth views its referral sources as fundamental to its business, no single referral source accounted for a material amount of its annual net revenue as of December 31, 2025.

Acquisitions

Continuing to grow through accretive acquisitions remains an element of AdaptHealth’s growth strategy, and AdaptHealth continuously reviews its pipeline of potential acquisition candidates. AdaptHealth also leverages the acquisition of equipment from previous providers to facilitate the transition of patients related to newly awarded at-risk capitated contracts. The revenue related to these newly awarded contracts is considered organic revenue. AdaptHealth leverages its scalable front-end and back-office technology platform to facilitate acquisition integration to help realize short-term cost saving synergies and longer-term revenue growth synergies.

Suppliers

AdaptHealth purchases home healthcare equipment, medical devices and supplies from a variety of suppliers. AdaptHealth purchases these items primarily from two to three suppliers for each of its product categories, including its sleep therapy equipment and supplies, its mobility and home services products (such as hospital beds, wheelchairs, walkers and commodes) and its diabetes services products/CGM products.

Facilities

AdaptHealth does not own any properties and leases its operating locations. As of December 31, 2025, AdaptHealth serviced approximately 4.3 million patients annually in all 50 states through its network of approximately 640 locations in 48 states. During the year ended December 31, 2025, AdaptHealth completed an average of approximately 38,500 equipment and supply deliveries a day. Full-service locations average approximately 5,800 square feet and are usually a combination of office and warehouse space. Many of these facilities are accredited to provide patients with medical products, equipment and related services, and their adjacent warehouse space is used for storage of adequate supplies of equipment and accessories for such patient services. AdaptHealth believes that these facilities are adequate to meet its current needs. AdaptHealth reviews its facility footprint on a regular basis and adds locations as needed to support patient growth.

Human Capital Resources

As of December 31, 2025, AdaptHealth had approximately 10,900 employees. AdaptHealth’s human capital resources objectives and compensation program include attracting and retaining highly motivated, well-qualified employees and executives. AdaptHealth uses a mix of competitive salaries and other benefits to attract and retain employees and executives. AdaptHealth believes that relations between its management and employees are good, and it is committed to inclusion and policies and procedures to maintain a safe work environment. AdaptHealth is committed to its DIRECT Value Statements: Diversity and Inclusion, Integrity, Respect, Excellence, Compassion and Teamwork.

Talent Development and Retention

Building and strengthening AdaptHealth’s talent pipeline is imperative to its success. AdaptHealth's management team has a dedicated annual performance management review process which provides a platform for feedback conversations around performance and goal setting. Leadership development trainings have been delivered quarterly including topics on change management, conducting critical performance discussions, and talent acquisition practices. This encourages learning among our leaders and continues AdaptHealth’s building of a foundation of excellence. AdaptHealth has also launched AdaptUniversity, a national learning system designed to teach valuable job skills that focus on operational efficiencies and offer pathways for career development.

Competition

The HME market is fragmented and highly competitive. AdaptHealth competes with other large national providers, including Accendra Health, Lincare Holdings Inc., Rotech Healthcare, Inc., Cardinal Health, Inc. and Quipt Home Medical Corp; regional providers, including DASCO Home Medical Equipment, Binson’s Medical Equipment, Inc., Norco, Inc., Protech Home Medical Corp., and Viemed Healthcare, Inc.; and product-specific providers, including Breg, Inc., Inogen, Inc., Acelity L.P., and CCS Medical, as well as numerous other smaller local providers. In addition, AdaptHealth competes with non-HME providers, including CVS and Amazon.

Consolidation of the HME market is a continuing trend, as required technology investments and reduced reimbursements put financial pressure on smaller providers. Larger HME providers with integrated technology and automated processes are generally better positioned to gain market share and more attractive vendor pricing. The Medicare Durable Medical Equipment, Prosthetics, Orthotics, & Supplies (“DMEPOS”) Competitive Bidding Program also emphasizes the importance of relationships with both the payors and referral sources. Because payors typically select a limited number of exclusive suppliers, and physicians typically refer based on timely delivery and consistency, relationships with both are critical to success in the market.

AdaptHealth believes that the most important competitive factors in the regional and local markets are:

•Quality of patient care, including clinical expertise;

•Service quality and an efficient, responsive referral process;

•Differentiated technology platform that provides a superior physician and patient experience;

•Reputation with referral sources, including local physicians and hospital-based professionals;

•Comprehensive offering across the home medical equipment space;

•Broad network of payor contracts and regional insurers; and

•Overall ease of doing business.

AdaptHealth believes that it competes favorably with competitors on the basis of these and other factors.

See Item 7."Management's Discussion and Analysis of Financial Condition and Results of Operations - Commitments and Contingencies."

Government Regulation

The federal government and all states in which AdaptHealth currently operates regulate various aspects of AdaptHealth’s business. In particular, AdaptHealth’s operations are subject to federal laws that regulate the reimbursement of its products and services under various government programs and that are designed to prevent fraud and abuse. AdaptHealth’s operations are also subject to state laws governing, among other things, pharmacies, nursing services, medical equipment suppliers and certain types of home health activities. State regulators may also determine that telephone marketing of AdaptHealth products and services to patients fall within state regulation of telemarketing. Certain of AdaptHealth’s employees are subject to state laws and regulations governing the licensure and professional practice of respiratory therapy, pharmacy and nursing.

AdaptHealth maintains a Compliance Program that is designed to meet the regulations and guidelines set forth by the U.S. Department of Health and Human Services ("HHS"), provides ongoing compliance training designed to keep AdaptHealth’s officers, directors and employees well-educated and up-to-date regarding developments on relevant topics and emphasizes AdaptHealth’s policy of strict compliance. Federal and state laws require that AdaptHealth obtain facility and other regulatory licenses and accreditation and that AdaptHealth enroll as a supplier with federal and state health programs.

As a healthcare provider, AdaptHealth is subject to extensive regulation to prevent fraud and abuse and laws regulating reimbursement under various government programs. The marketing, billing, documenting and other practices of healthcare companies are all subject to government scrutiny. To ensure compliance with Medicare, Medicaid and other regulations, regional health insurance carriers and state agencies often conduct audits and request customer records and other documents to support AdaptHealth’s claims submitted for payment of services rendered to customers. Similarly, government agencies and their contractors periodically open investigations and obtain information from healthcare providers pursuant to the legal process. Violations of federal and state regulations can result in severe criminal, civil and administrative penalties and sanctions, including disqualification from Medicare and other reimbursement programs, which could have a material adverse effect on AdaptHealth’s financial condition, results of operations, and reputation.

Numerous federal and state laws and regulations, including HIPAA and the Health Information Technology for Economic and Clinical Health Act ("HITECH Act"), govern the collection, dissemination, security, use and confidentiality of protected health information and other personal information. As part of AdaptHealth’s provision of, and billing for, healthcare equipment and services, AdaptHealth is required to collect and maintain protected health information. In addition, various federal and state legislative and regulatory bodies or self-regulatory organizations may expand current laws or regulations, enact new laws or regulations, or issue revised rules or guidance regarding privacy, data protection and consumer protection. For instance, the California Consumer Privacy Act, as amended by the California Privacy Rights Act, and its implementing regulations (“CCPA”), provides California residents expanded rights regarding their personal information, including the right to access, delete, and correct their personal information, and opt out of sharing or selling their personal information. The CCPA provides for civil penalties for violations, as well as a private right of action for data breaches that is expected to increase data breach litigation. Although there are limited exemptions for protected health information, the CCPA may increase AdaptHealth’s compliance costs and potential liability. Many similar comprehensive privacy laws have been enacted in several states, including Washington (My Health My Data Act), Nevada (Consumer Health Data Privacy Law), and New York (New York Health Information Privacy Act), each of which has its own specific rules, requirements, and penalties. New health information standards, whether implemented pursuant to HIPAA, the HITECH Act, congressional action or otherwise, could have a significant effect on the manner in which AdaptHealth handles healthcare-related data and communicate with payers, and the cost of complying with these standards could be significant. If AdaptHealth does not comply with existing or new laws and regulations related to patient or consumer health information, it could be subject to criminal or civil sanctions.

Additionally, the Federal Trade Commission ("FTC") and many state attorneys general are interpreting existing federal and state consumer protection laws to impose evolving standards for the online collection, use, dissemination and security of health-related and other personal information. Courts may also adopt the standards for fair information practices promulgated by the FTC which concern consumer notice, choice, security and access. Consumer protection laws require AdaptHealth to publish notices that describe how it handles personal information and rights provided to individuals to control their personal information. If any such notice that AdaptHealth publishes is considered untrue, it may be subject to government claims of unfair or deceptive trade practices, which could lead to significant liabilities and consequences. Furthermore, according to the FTC, violating consumers’ privacy rights or failing to take appropriate steps to keep consumers’ personal information secure may constitute unfair acts or practices in or affecting commerce in violation of Section 5 of the FTC Act. Sending communications with AdaptHealth’s patients are also subject to laws and regulations, including the Telephone Consumer Protection Act of 1991 ("TCPA"), the Controlling the Assault of Non-Solicited Pornography And Marketing ("CAN-SPAM") Act, additional fax regulations under the Junk Fax Act and the Telemarketing Sales Rule and Medicare regulations.

Healthcare is an area of rapid regulatory change. Changes in laws and regulations and new interpretations of existing laws and regulations may affect permissible activities, the relative costs associated with doing business, and reimbursement amounts paid by federal, state and other third-party payers. Changes enacted by a new presidential administration or Congress may impact Medicare and Medicaid programs, as well as insurance plans offered on the Affordable Care Act exchanges. As discussed further below, Public Law 119-21, also known as the One Big Beautiful Bill Act (“OBBBA”), enacted on July 4, 2025, includes provisions affecting Medicaid eligibility and enrollment, many of which do not take effect until 2027. These changes can result in reduction of reimbursements to AdaptHealth, increased regulatory complexity, and a reduction in the number of beneficiaries covered by these programs or other changes that affect AdaptHealth. AdaptHealth cannot predict the future of federal, state and local regulation or legislation, including Medicare and Medicaid statutes and regulations, or possible changes in national healthcare policies. Adapting to future legislative and regulatory changes could have a material adverse effect on AdaptHealth’s financial condition and results of operations.

The long-term effects of climate change are difficult to predict and may be widespread. The impacts may include physical risks (such as rising sea levels or frequency and severity of extreme weather conditions), social and human effects (such as population displacement or harm to health and well-being), compliance costs and transition risks (such as regulatory or technological changes) and other adverse effects. The effects could impair, among other things, the availability and cost of certain products and commodities and energy (including utilities), which may in turn impact AdaptHealth's ability to procure goods or services required for the operation of its business at the quantities and levels it requires. AdaptHealth may bear losses incurred as a result of, among other things, physical damage to or destruction of its facilities (such as patient service offices and warehouses), loss or spoilage of inventory, and business interruption due to weather events that may be attributable to climate change. Governments in the U.S. and abroad are considering new or expanded laws to address climate change. Such laws may include limitations on greenhouse gas (“GHG”) emissions, mandates that companies implement processes to monitor and disclose climate-related matters, additional taxes or offset charges on specified energy sources, and other requirements. In October 2023, the state of California enacted the Climate Corporate Data Accountability Act ("SB-253"), which mandates the disclosure of GHG emissions, including Scope 1, Scope 2 and Scope 3 emissions; and the Climate-Related Financial Risk Act ("SB-261"), which mandates the disclosure of climate-related financial risks, and measures adopted to reduce and adapt to such risks. The effective date of the final rules is currently delayed until the first quarter of 2026. Compliance with climate-related laws may be further complicated by disparate regulatory approaches in various jurisdictions. New or expanded climate-related laws could impose substantial costs on AdaptHealth. At the present time, we cannot predict their potential effect on AdaptHealth's capital expenditures or results of operations.

Compliance with such laws and regulations is costly and may materially affect AdaptHealth's business and results of operations. Among other effects, healthcare regulations substantially increase the time, difficulty and costs incurred in obtaining and maintaining approval to market newly developed and existing products. AdaptHealth believes it is in material compliance with all statutes and regulations applicable to its operations.

Implemented Regulation

As a provider of home oxygen, respiratory and other chronic therapy equipment to the home healthcare market, AdaptHealth participates in Medicare Part B, the Supplementary Medical Insurance Program, which was established by the Social Security Act of 1965. Providers of home oxygen and other respiratory therapy services and equipment have historically been heavily dependent on Medicare reimbursement due to the high proportion of elderly persons suffering from respiratory diseases utilizing Medicare benefits. Durable medical equipment, including oxygen equipment, is traditionally reimbursed by Medicare based on fixed fee schedules.

Impact of the MMA

In December 2003, the Medicare Prescription Drug, Improvement, and Modernization Act of 2003 ("MMA") was signed into law. The MMA established a Recovery Audit Contractors ("RAC") program, which implemented a new method for recovery of Medicare overpayments by utilizing private companies operating on a contingent fee basis to identify and recoup Medicare overpayments, and implemented quality standards and accreditation requirements for Durable Medical Equipment ("DME") suppliers. The RACs are empowered to audit claims submitted by healthcare providers and overpayments identified by the RACs can be recouped from future payments, including in cases where the reimbursement rules are unclear or subject to differing interpretations. This activity, as well as the activity of intermediaries and others involved in government reimbursement, may include changes in long-standing interpretations of reimbursement rules, which could adversely impact AdaptHealth’s future financial condition and results of operations. In October 2008, CMS established Zone Program Integrity Contractors (“ZPICs”) and Unified Program Integrity Contractors (“UPICs”), who are responsible for ensuring the integrity of all Medicare-related claims. CMS continues to utilize program integrity contractors and has expanded its audit activity and enforcement efforts, including the increased use of medical review, payment audits, and data-driven oversight initiatives. On November 25, 2025, the CMS administrator announced a nationwide initiative to coordinate with state authorities to identify and pursue potential Medicare-related tax fraud and improper provider arrangements, which could impact providers such as AdaptHealth. These legislative and regulatory provisions, as currently in effect, have and will continue to adversely impact AdaptHealth’s financial condition and results of operations.

Impact of Competitive Bidding

The MMA legislation directly impacted reimbursement for the primary respiratory and other DME products that AdaptHealth provides. Among other things, the MMA established a competitive acquisition program for DME. The MMA instructed CMS to establish and implement programs under which competitive acquisition areas would be established throughout the U.S. for the purposes of awarding contracts for the furnishing of competitively priced items of DME, including oxygen equipment. For each competitive acquisition area, CMS is required to conduct an auction under which providers submit bids to supply certain covered items of DME. Successful bidders are expected to meet certain program quality standards, volume commitments and surety bond requirements in order to be awarded a contract, and only successful bidders can supply the covered items to Medicare beneficiaries in the respective acquisition area. There are, however, regulations in place that allow non-contracted suppliers to continue to provide equipment and services to their existing customers at the new prices determined through the bidding process. Competitive bidding contracts are expected to be re-bid at least every three years. CMS is required to award contracts to multiple entities submitting bids in each area for an item or service but has the authority to limit the number of contractors in a competitive acquisition area to the number it determines to be necessary to meet projected demand.

In March 2019, CMS announced that it would consolidate all rounds and areas of the DMEPOS Competitive Bidding Program (“CBP”) into a single round of competition effective January 1, 2021 named “Round 2021.” Round 2021 contracts became effective on January 1, 2021 and extended through December 31, 2023. CMS included 16 product categories in Round 2021. On April 10, 2020, CMS announced that due to the COVID-19 pandemic, it removed the non-invasive ventilators product category from the Round 2021 DMEPOS Competitive Bidding Program.

On October 27, 2020, CMS announced that it would not award competitive bid contracts in 13 of the 15 remaining product categories due to a failure to achieve expected savings and that contract awards would only be made for off-the-shelf (“OTS”) knee and back braces. All other product categories were removed from Round 2021. For the years ended December 31, 2025, 2024, and 2023, net revenue generated with respect to providing OTS knee and back braces (excluding amounts generated in non-rural and rural non-bid areas) were not material. AdaptHealth has obtained contracts for OTS knee and back braces and does not expect the single payment amounts imposed by CMS under such contracts to have a material impact on AdaptHealth.

On May 25, 2023, CMS announced a temporary gap period for the CBP starting January 1, 2024, following the expiration of all Round 2021 contracts for OTS knee and back braces on December 31, 2023. The gap period commenced as anticipated. On November 28, 2025, CMS issued the Calendar Year (CY) 2026 Home Health Prospective Payment System Final Rule (CMS-1828-F) (“2026 Final Rule”), and announced that CBP will resume in 2026, following applicable rulemaking and implementation activities. The current CBP timeline published by CMS contains, in relevant part, the following target dates: (1) late summer/early fall 2026 - bid window opens; (2) late summer/early fall 2027 - contracts awarded and single payment amounts announced; and (3) no later than January 1, 2028 - contracts and single payment amounts in effect, and the six-month transition period begins for beneficiaries to switch to contract suppliers. Product categories for the CBP include Class II continuous glucose monitors and insulin pumps, urological supplies, ostomy supplies, hydrophilic urinary catheters, OTS back braces, OTS knee braces and OTS upper extremity braces. CMS also finalized updates to the DMEPOS Competitive Bidding Program in the 2026 Final Rule, including revised bidding processes, changes to single payment amounts and bid limits, new product categories, a Remote Item Delivery competitive model, and changes to provider enrollment and accreditation requirements. The resumption of the CBP beginning in 2026 could further alter reimbursement rates and payment methodologies for certain DME items beyond the current fee schedule framework.

The competitive bidding process has historically put pressure on the amount AdaptHealth is reimbursed in the markets in which it exists, as well as in areas that are not subject to the DMEPOS Competitive Bidding Program. The rates required to win future competitive bids could continue to depress reimbursement rates. AdaptHealth will continue to monitor developments regarding the DMEPOS Competitive Bidding Program. While AdaptHealth cannot predict the outcome of the DMEPOS Competitive Bidding Program on its business in the future nor the Medicare payment rates that will be in effect in future years for the items subjected to competitive bidding, the program may materially adversely affect its financial condition and results of operations.

CMS’s decision to cancel the 2021 competitive bidding program was a significant development for AdaptHealth. On December 28, 2021, CMS permanently finalized the higher blended rates in rural and noncontiguous non-competitive bidding areas. Congress further extended a blended higher Medicare reimbursement rate in non-competitive bidding/non-rural areas through December 31, 2023. After December 31, 2023, the reimbursement rate has reverted to 100% of the Medicare fee schedule, adjusted to inflation.

Impact of the OBBBA

On July 4, 2025, the One Big Beautiful Bill Act (“OBBBA”) was signed into law. The OBBBA introduces significant changes to U.S. health care policy and the federal tax code. Although the most substantial health care provisions are not set to take effect until 2027 or later, the law imposes new limitations and eligibility requirements expected to affect Medicaid funding and enrollment, as well as the Affordable Care Act ("ACA") health insurance marketplace.

The OBBBA is expected to reduce the federal government’s overall Medicaid expenditures and tighten Medicaid eligibility requirements. The law limits eligibility for Medicaid by imposing work or community engagement requirements for adults under 65 years old in states that expanded their Medicaid programs under the ACA (“Expansion States”). This includes states with waiver-based expansions, subject to limited exceptions, and requires Medicaid eligibility redetermination at least every six months. In addition to changes made to federal healthcare programs, the OBBBA contains policy changes that are expected to decrease the number of individuals who obtain health insurance from the marketplace platforms established by the ACA. The OBBBA effectively ends automatic renewals of coverage by requiring pre-enrollment verification of eligibility and restricts subsidized marketplace coverage based on immigration status. The expiration of these enhanced subsidies may reduce the affordability of marketplace coverage, potentially resulting in lower enrollment or migration to plans with higher cost-sharing and more limited benefits. In addition, the OBBBA authorizes states to impose Medicaid work requirements and related eligibility conditions, which may further reduce Medicaid enrollment or increase administrative disenrollment. Any reduction in covered lives, or changes to Medicaid eligibility and benefit structures, could adversely affect utilization, reimbursement levels, and AdaptHealth's revenues.

The OBBBA also introduces significant changes to Medicaid financing mechanisms, including restrictions on provider tax arrangements that are intended to reduce the federal matching funds received by state Medicaid programs. The law prohibits states from establishing new provider taxes or increasing rates of existing provider taxes while also limiting the structure of such taxes. Additionally, the OBBBA directs the U.S. Department of Health and Human Services to revise regulations governing state-directed payment arrangements (“SDPs”) to cap total payment rates paid by Medicaid managed care organizations for specified services, including hospital services, by tying caps to Medicare payment rates instead of average commercial rates and imposing lower caps in Expansion States. The revised regulations will apply to SDPs established on or after July 4, 2025, unless the SDP meets certain grandfathering criteria that provide a time-limited exemption from the new payment limits. As states adjust SDP structures in response to enrollment declines, budgetary pressures, or evolving CMS oversight, reimbursement levels and payment predictability for items reimbursed under Medicaid programs may be adversely affected.

To support the delivery of health care in rural communities, the OBBBA established a temporary rural health grant initiative, the Rural Health Transformation Program, which allocates $50 billion in rural health funding for fiscal years 2026 through 2030. The program’s implementation, including how funds will be distributed, which providers will qualify, and the criteria CMS will apply to state applications, has not been finalized and the impact on AdaptHealth is uncertain.

In addition, the OBBBA contains modifications to sections of the Internal Revenue Code related to the deductibility of depreciation and business interest expense, which became effective in 2025.

We are unable to predict at this time how states will implement various requirements of the OBBBA, nor can we predict whether or how future legislation, rulemaking, or judicial action will impact implementation of the OBBBA. Given these uncertainties, we cannot estimate the OBBBA’s impact, nor can we predict the timing of that impact, on our future business, financial condition or results of operations.

Durable Medical Equipment Medicare Administrative Contractors

In order to ensure that Medicare beneficiaries only receive medically necessary and appropriate items and services, the Medicare program has adopted a number of documentation requirements. For example, certain provisions under CMS guidance manuals, local coverage determinations, and the DME Medicare Administrative Contractors (“MAC”) Supplier Manuals provide that clinical information from the “patient’s medical record” is required to justify the initial and ongoing medical necessity for the provision of DME. Some DME MACs, CMS staff and other government contractors have recently taken the position, among other things, that the “patient’s medical record” refers not to documentation maintained by the DME supplier but instead to documentation maintained by the patient’s physician, healthcare facility or other clinician, and that clinical information created by the DME supplier’s personnel and confirmed by the patient’s physician is not sufficient to establish medical necessity. If treating physicians do not adequately document, among other things, their diagnoses and plans of care, the risk that AdaptHealth will be subject to audits and payment denials may increase. Moreover, auditors’ interpretations of these policies are inconsistent and subject to individual interpretation, leading to significant increases in individual supplier and industry-wide perceived error rates. High error rates could lead to further audit activity and regulatory burdens and could result in AdaptHealth making significant refunds and other payments to Medicare and other government programs. Accordingly, AdaptHealth’s future revenues and cash flows from government healthcare programs may be delayed and/or reduced. Private payors also may conduct audits and may take legal action to recover alleged overpayments. AdaptHealth could be adversely affected in some of the markets in which it operates if the auditing payor alleges substantial overpayments were made to AdaptHealth due to coding errors or lack of documentation to support medical necessity determinations. AdaptHealth cannot currently predict the adverse impact these measures might have on its financial condition and results of operations, but such impact could be material.

Federal and state budgetary and other cost-containment pressures will continue to impact the home respiratory care industry. AdaptHealth cannot predict whether new federal and state budgetary proposals will be adopted or the effect, if any, such proposals would have on its financial condition and results of operations.

Medicare Provider Enrollment Changes and Enhanced Oversight

Effective January 1, 2026, the 36-month rule pertaining to changes in majority ownership will apply to all DMEPOS suppliers. This rule, which currently applies to home health agencies and hospices, was included in the 2026 Final Rule. CMS created the 36-month rule for home health agencies in 2010 and subsequently expanded it to include hospices in 2024. Under the 2026 Final Rule, CMS mirrors the approach taken with respect to home health agencies and hospices. If a DMEPOS supplier has a change in majority ownership within 36 months after the effective date of its initial enrollment in Medicare or within 36 months after its most recent change in majority ownership, then Medicare billing privileges will not be conveyed to the new owner unless an exception applies. Instead, a prospective owner-buyer would have to enroll in Medicare as a new supplier, and undergo a survey and obtain accreditation from an approved accrediting organization. The application of the rule to DMEPOS suppliers is likely to create significant additional work and cost for suppliers and may create a reimbursement gap until initial enrollment is completed, and could impact AdaptHealth as to any transactions to acquire or sell any DMEPOS supplier entities.

The 2026 Final Rule also changes the frequency of surveys for DMEPOS suppliers. Previously, suppliers were re-surveyed every three years; effective January 1, 2026, suppliers will be re-surveyed and re-accredited at least once every 12 months; CMS has indicated that suppliers may be re-surveyed multiple times in a 12-month period. This could result in increased compliance expenses and have unknown impacts on reimbursement.

Availability of Information

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We also make available free of charge through our website, https://adapthealth.com/investorrelations, electronic copies of certain documents that we file with the SEC, including our Annual Reports on Form 10-K, Quarterly Reports on

Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act as soon as reasonably practicable after we electronically file such material with, or furnish it to, the SEC. Information on our website or any other website is not incorporated by reference into, and does not constitute a part of, this Annual Report.