NEW YORK--(BUSINESS WIRE)-- Link to Fitch Ratings' Report: Impact of Potential Medicare Cuts on Nonprofit Hospitals
Potential reductions in Medicare reimbursement associated with ongoing U.S. deficit reduction negotiations are likely to have a material impact on nonprofit hospitals operating margins over the medium to long term, according to Fitch Ratings in a new report.
Lower-rated hospitals are likely to be more adversely affected than higher-rated hospitals due to typically larger exposure to Medicare, smaller scales of operations and lower operating margins.
Fitch's analysis concludes that each percentage point cut in Medicare reimbursement rates could reduce operating margins, which average 2.6% across all Fitch-rated hospitals, by approximately 40 basis points. The analysis assumes that hospital management does not undertake any offsetting actions.
Fitch notes that industry-wide reimbursements from Medicare and Medicaid programs account for over 50% of hospitals' gross patient revenues, exposing hospitals to state and federal budget cuts.
Fitch will continue to monitor the ongoing deficit reduction dialogue and assess any effects on credit quality.
Fitch will host a teleconference on Thursday, Nov. 17 to discuss this report, the details of which are as follows:
Date & Time:
Thursday, Nov. 17 at 1:00 p.m. EDT
+1-706-902-0405 (outside U.S)
Conference ID: #28566262
There will be a Q&A session following the analysts' remarks.
The full report 'Impact of Potential Medicare Cuts on Nonprofit Hospitals' is available at 'www.fitchratings.com' or by clicking on the above link.
Additional information is available at 'www.fitchratings.com'
Adam Kates, +1-312-368-3180
70 West Madison Street
Chicago, IL 60602
Jim LeBuhn, +1-312-368-2059
Sandro Scenga, +1-212-908-0278
KEYWORDS: United States North America New York
INDUSTRY KEYWORDS: Health Hospitals Professional Services Finance