Children’s Hospital Los Angeles’ credit rating was downgraded to “Ba2” from “Ba1” by Moody’s.
The system’s rating was previously under review for a downgrade and reflects a further decline in days cash on hand despite several successful initiatives to supplement liquidity, Moody’s said in a March 4 report. Children’s Hospital Los Angeles has about 17 days cash on hand as of Dec. 31.
Moody’s said Ba2 rating reflects the system’s challenged operations and weak liquidity, but also its unique clinical and institutional importance. The system’s weak performance has been driven by its heavy reliance on state funding due to its significant Medicaid exposure.
Children’s Hospital Los Angeles — with help from outside consultants — has identified opportunities for improvement in 2026, including labor-related savings and revenue cycle enhancements.
A major contributing factor to the system’s decreasing days cash on hand is the delay in CMS approval of round nine of California’s provider fee program. A possible $200 million in new money financing could close before the end of March, improving cash on hand to more than 60 days.
Children’s Hospital Los Angeles has a negative outlook at its new rating.
At the Becker's 11th Annual IT + Revenue Cycle Conference: The Future of AI & Digital Health, taking place September 14–17 in Chicago, healthcare executives and digital leaders from across the country will come together to explore how AI, interoperability, cybersecurity, and revenue cycle innovation are transforming care delivery, strengthening financial performance, and driving the next era of digital health. Apply for complimentary registration now.
