Moody's: Lower-Rated Hospitals Depend More on Medicare

President Barack Obama's fiscal year 2013 budget calls for massive cuts to Medicare and Medicaid, and since lower-rated non-profit hospitals depend more on these governmental programs, especially Medicare, for reimbursement, they are more at risk for payment pressures, according to a Feb. 21 credit outlook report from Moody's Investors Service.

Moody's found that Aa-rated hospitals have a payor mix that is 39 percent Medicare patients. Hospitals with an A credit rating have a Medicare payor mix of 43 percent, and hospitals with Baa ratings or lower have a payor mix of 44 percent.

Hospitals that depend more on Medicare are unlikely to see pressures ease on their credit ratings in the near future, according to the report. In addition to the FY 2013 budget, hospitals will see reductions to Medicare payments due to value-based purchasing as well as sequestration cuts from last summer's national deficit talks.

More Articles on Hospital Ratings:

10 Hospitals and Health Systems Receive Credit Downgrades in Past Month

Lower-Rated Hospitals Face Bond Challenges in 2012

Moody's: Non-Profit Hospital Downgrades Outpace Upgrades for 6th Straight Year

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