Company: BIAF
Filing Date: 2025-03-31
Form Type: 10-K
Source: 0001641172-25-001840
Chunk: 71

Company: bioAffinity Technologies, Inc.
Filing Date: 2025-03-31
Form: 10-K
Item: Item 1
Chunk 71
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uses standard industry billing codes, known as Current Procedural Terminology (“CPT”) codes, to bill for its diagnostic assays.
These codes can change over time. When codes change, there is a risk of an error being made in the claim adjudication process. These
errors can occur with claims submission, third-party transmission, or in the processing of the claim by the payor. Claim adjudication
errors may result in a delay in payment processing or a reduction in the amount of the payment received. Coding changes, therefore, may
have an adverse effect on PPLS’ revenues. There can be no assurance that payors will recognize these codes in a timely manner or
that the process of transitioning to such a code and updating their billing systems will not result in errors, delays in payments, and
a related increase in accounts receivable balances.

As
PPLS introduces new assays, PPLS will need to add new codes to its billing process as well as its financial reporting systems. Failure
or delays in effecting these changes in external billing and internal systems and processes could negatively affect its collection rates,
revenue, and cost of collecting.

Additionally,
PPLS’ billing activities require its third-party billing provider to implement compliance procedures and oversight, train and monitor
its employees, challenge coverage and payment denials, assist patients in appealing claims, and require PPLS to undertake audits to evaluate
compliance with applicable laws and regulations as well as internal compliance policies and procedures. Payors also conduct external
audits to evaluate payments, which add further complexity to the billing process. If the payor makes an overpayment determination, there
is a risk that PPLS may be required to return some portion of prior payments it has received. These billing complexities and the related
uncertainty in obtaining payment for its assays could negatively affect its revenue and cash flow, its ability to achieve profitability,
and the consistency and comparability of its, and therefore our, results of operations.

PPLS
relies on a third-party billing provider and an in-house billing function to transmit claims to payors, and any delay in transmitting
claims could have an adverse effect on its revenue.

While
PPLS manages the overall processing of claims, it relies on a third-party billing provider to transmit the actual claims to payors based
on the specific payor billing format. Claims processing could be delayed if its third-party provider makes changes to its invoicing system.
Additionally, coding for diagnostic assays may change,