The downgrade is attributable to KDMC’s operating losses in the fourth quarter of 2013, negative operating cash flow in the first quarter of 2014 and a significant decline in liquidity by the end of the year due to the medical center paying a large settlement to the government.
In May, KDMC agreed to pay the government $40.9 million to resolve allegations it made millions by performing medically unnecessary heart procedures on patients.
Moody’s gave KDMC a negative outlook due to the medical center’s negative publicity related to the Department of Justice investigation, which resulted in a decrease in patient volumes and a loss in market share to its local and regional competitors.
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