8 Hospitals Receive Credit Downgrades in Past Month

Eight acute-care hospitals and health systems received a credit downgrade between Sept. 15 and Oct. 14, according to a report by HFA Partners.

The hospitals and health systems receiving credit downgrades included:

•    Baptist Health (Louisville, Ky.) — from A1 to A2 (Moody's)
•    Brazosport Regional Health System (Jackson, Texas) — from BBB- to BB+ (S&P)
•    Catholic Health Initiatives (Englewood, Colo.) — from AA- to A+ (S&P)
•    Crittenton Hospital Medical Center (Rochester, Mich.) — from Baa2 to Baa3 (Moody's)
•    MaineGeneral Health (Augusta) — from Baa3 to Ba1 (Moody's)
•    Robinson Memorial Hospital (Ravenna, Ohio) — from Baa3 to Ba2 (Moody's)
•    Trinity Health (Livonia, Mich.) — from AA to AA- (S&P)
•    Tuomey Healthcare System (Sumter, S.C.) — from BB to CCC (S&P)

Notable among organizations receiving downgrades was Trinity Health and Tuomey. S&P downgraded Trinity Health as it grapples with its merger of Catholic Health East, a lower-rated credit. Often, when two large health systems merge or one acquires the other, the larger, higher-rated credit receives a temporary tick down as it absorbs the lower-rated credit.

S&P downgraded Tuomey as the embattled health system faces major false claims damages. Earlier this month, a federal judge ordered Tuomey to pay at least $237.4 million in penalties after a jury said the health system and its physicians participated in a kickback scheme. S&P said the two-notch downgrade reflects the huge fines, which could possible lead to large financial losses or even bankruptcy.

Four acute-care hospitals and health systems garnered a credit upgrade in the past month:

•    Catholic Health East (Newtown Square, Pa.) — from A+ to AA- (S&P) and from A2 to Aa2 (Moody's)
•    Norman (Okla.) Regional Health System — from BB+ to BBB- (Fitch)
•    St. Peter's Health Partners/St. Peter's Hospital (Albany, N.Y.) — from BBB+ to A- (Fitch) and from A- to A (S&P)
•    Upper Valley Medical Center (Troy, Ohio) — from A- to A (S&P)

Four hospitals and health systems also had positive outlook changes, while five hospitals and health systems had negative outlook changes.

Related Articles on Hospital Credit Ratings:
Moody's: Health Insurance Exchange Uncertainties Hurt Nonprofit Hospitals
Massive Stark Law Penalties Lead to Credit Downgrade for Tuomey
5 Hospitals Receive Credit Downgrades in Past Month

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