The surprise-billing ban set to take effect next year is a credit negative for some physician-staffing companies, as it will likely constrain cash flow, according to a new report from Moody's Investors Services.
The No Surprises Act bans providers from billing patients out-of-network rates when they receive care from out-of-network physicians unexpectedly. It also holds patients harmless in these situations.
Moody's said that any provider that bills patients directly for services will have some level of exposure to the ban.
Among the most exposed will be physician-staffing companies that operate emergency rooms and those that provide anesthesiology services. Moody's said the ban will also affect physician-staffing firms that provide physicians for radiology services and will have some financial repercussions for the hospitals that depend on these staffing firms.
"Many rated staffing companies carry leverage, cash flow and liquidity metrics that place them well into speculative-grade territory," said Jonathan Kanarek, a Moody's vice president and senior credit officer. "As such, even a modest reduction in collections could negatively impact cash flow and liquidity, placing further pressures on their credit profiles."