Moody's Investor Service has maintained its negative outlook for the non-profit hospital industry, citing the recent 0.4 percent net decrease for inpatient reimbursements by CMS, according to a report by the Healthcare Financial Management Association.
The reimbursement cuts, which will go into effect Oct. 1, are estimated to total a $440 million cut to the hospitals.
Moody's said the net reduction is "extremely rare" given CMS rates typically increase from year to year. The ratings agency also stated that while non-profit hospitals have successfully reduced costs in recent years through supply chain and labor productivity improvements, additional reductions in these areas will be very challenging, according to the report.
Read the HFMA report on non-profit hospitals.
Read more about non-profit hospitals:
- Report: Weak Margins Threaten Survival of Smaller Not-for-Profit Hospitals
- Study: Non-profit Healthcare Organizations Averaged Investment Returns of 18.8% in 2009
The reimbursement cuts, which will go into effect Oct. 1, are estimated to total a $440 million cut to the hospitals.
Moody's said the net reduction is "extremely rare" given CMS rates typically increase from year to year. The ratings agency also stated that while non-profit hospitals have successfully reduced costs in recent years through supply chain and labor productivity improvements, additional reductions in these areas will be very challenging, according to the report.
Read the HFMA report on non-profit hospitals.
Read more about non-profit hospitals:
- Report: Weak Margins Threaten Survival of Smaller Not-for-Profit Hospitals
- Study: Non-profit Healthcare Organizations Averaged Investment Returns of 18.8% in 2009