Although outpatient activity does not bring in as much revenue as inpatient cases, outpatient volume is usually more profitable. As such, EBITDA is also growing.
Operating income and revenue also grew at Fitch-rated for-profit hospitals during the first quarter of 2012 thanks to the large, industry-wide underpayment settlement with CMS and HHS. In April, those two agencies agreed to settle a dispute with roughly 2,200 hospitals over low reimbursements from the Medicare inpatient prospective payment system from 1999 to 2011.
Fitch analysts also expect for-profit hospitals to keep their solid liquidity profile and cash flow in the second half of 2012 due to the federal electronic health record incentive payments and continued payments from the Medicare settlement.
More Articles on Fitch Hospital Reports:
Fitch: Recent Illinois Charity Care Legislation Benefits Non-Profit Hospitals
Fitch: Standalone Children’s Hospitals Have Strong Liquidity, Operating Profitability
Fitch: Patient Admissions, Pricing Trends Mixed at For-Profit Hospitals
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