New Medicare cuts threaten non-profit hospitals - Moody’s is one of the top 3 credit rating agencies along with Fitch and S&P. Moody’s Raymond McDaniel is Moody’s CEO.

1. New Medicare cuts threaten
non-profit hospitals - Moody’s
Moody’s is one of the top 3 credit rating
agencies along with Fitch and S&P. Moody’s
Raymond McDaniel is Moody’s CEO.

2. WASHINGTON (Reuters) - Not-for-profit U.S. hospitals began confronting another threat to
their shaky finances last week with the start of reductions to Medicare that are included in the
universal federal spending cuts known as sequestration, Moody's Investors Service said on
Monday.
Sequestration called for slicing 2 percent from reimbursements paid by the Medicare health
insurance program for the elderly, beginning on April 1. That will likely lower the revenues of
hospitals, physicians and other healthcare providers by $11 billion in 2013, the rating agency said
in a special report.
"The cuts exacerbate an already challenging operating environment for not-for-profit hospitals as
many already face low revenue growth from both governmental and private insurance payers,"
Moody's added.
Not-for-profit hospitals could be hit again during negotiations by members of Congress over a
"grand bargain" to reduce the U.S. debt and deficit.
"Moreover, there is a perennial risk that the so-called ‘doc fix' will not be renewed, which would
force reductions to physician reimbursements," Moody's said.
This is the fifth year that Moody's has had a negative outlook for not-for-profit hospitals, which
tend to serve large low-income populations.

3. The federal government has often posed the biggest risk to their balance sheets. Moody's in January
noted that the health insurance law known as Obamacare calls for more than $300 billion in reductions
to Medicare through 2019.
Still, there are other threats to the sector that do not have to do with federal legislation. Mostly, the
2007-09 recession drove up the numbers of people seeking treatment at not-for-profit hospitals, and
those high volumes have yet to subside.
(Reporting by Lisa Lambert; Editing by Leslie Adler)
Original Moody’s Article.