Oaklawn Hospital's Ba1 rating has been placed under review for downgrade, due to the hospital's decline in operating performance over the last several months. Losses in recent months will contribute to lower than historical liquidity balances over the near term and may result in Oaklawn violating its debt service coverage covenant for fiscal 2023 (March 31).
I filed Senate Bill 293 this year, which will allow qualifying rural hospitals to convert to a new designation, as a Rural Emergency Hospital (REH) in order to avert potential closure. Hospitals granted this designation will receive federal payments of approximately $3.2 million per REH in 2023, with gradual increases in subsequent years.
Recent research indicates that nonprofit hospitals devote a similar or smaller share of their operating expenses to charity care in comparison to for-profit hospitals. In light of these concerns, several policy ideas have been floated to better align the level of community benefits provided by nonprofit hospitals with the value of their tax exemption.
The affirmation of the 'A' rating reflects Fitch's expectation that MWHC's operating EBITDA margin will gradually return to about 9% as it executes on its growth strategy and financial improvement plan and continues to benefit from its care coordination redesign.
Health officials in the administration of Gov. Ned Lamont faced sharp questioning Monday over the governor’s proposal to control prescription drug and hospital costs, a measure that would cost hospitals hundreds of millions in lost revenue.
The last time there was a significant push by taxing authorities to challenge the tax-exempt status of hospitals in Pennsylvania was three decades ago. Pittsburgh is now conducting a review of tax-exempt property.