SEC probes accounting problems at West Penn Allegheny hospital

West Penn Allegheny Health System is facing some fallout from its $73 million writedown.The SEC decided to look into the hospital's finances after the system announced that it had overstated its revenue by $73 million, including $67 million in patient receivables. This came after the system refinanced $758 million in bonds last year. SEC executives describe it as an "informal" inquiry.

The announcement that West Penn would take the $73 million writedown led to downgraded ratings on the Fitch and Moody's Investors Service. Fitch downgraded the bonds to B minus from B and placed the issue on a negative rating watch.

As we reported previously, the system is already in financial trouble, reporting an operating loss of $15.6 million on revenue of $1.1 billion for the nine months ending in March. Small wonder that the SEC is suspicious of a $73 million credit that may have come just in time for West Penn to float its bond issue successfully.

To learn more about the SEC inquiry:
- read this Pittsburgh Business Times piece

Related Articles:
West Penn Allegheny forced to adjust balance sheet
West Penn Allegheny Health profit up
Case study: West Penn begins loss-reversal plan

Suggested Articles

The profit margins and management of Community Health Group raise questions about oversight of managed care insurers.

Financial experts are warning practices about the pitfalls of promoting medical credit cards to their patients.

A proposed rule issued by HHS on Tuesday would expand short-term coverage, a move Seema Verma said will have "virtually no impact" on ACA premiums.