Bulletin: Community Health Systems Inc. $262 Million Settlement Ends U.S. Justice Department Probe; Ratings Are Unaffected

NEW YORK (S&P Global Ratings) Sept. 27, 2018--S&P Global Ratings today said that Community Health Systems Inc. (CCC+/negative/--) has settled a probe by the U.S. Department of Justice concerning Health Management Associates, Inc. (HMA) and related entities, which Community Health acquired in 2014. The settlement totaled $262 million. Although we had anticipated this settlement, and the amount is broadly in line with our estimates, we had expected that it would come in 2019, and therefore had incorporated it into our 2019 cash flow estimates. However, we believe that the Tennessee-based hospital operator has adequate liquidity under its revolvers to fund the settlement. Our ratings on Community Health are unchanged. Community Health continues to face industry headwinds along with other small

...NEW YORK (S&P Global Ratings) Sept. 27, 2018--S&P Global Ratings today said that Community Health Systems Inc. (###+/negative/--) has settled a probe by the U.S. Department of Justice concerning Health Management Associates, Inc. (HMA) and related entities, which Community Health acquired in 2014. The settlement totaled $262 million. Although we had anticipated this settlement, and the amount is broadly in line with our estimates, we had expected that it would come in 2019, and therefore had incorporated it into our 2019 cash flow estimates. However, we believe that the Tennessee-based hospital operator has adequate liquidity under its revolvers to fund the settlement. Our ratings on Community Health are unchanged. Community Health continues to face industry headwinds along with other small market hospitals, including weak admission trends, pressures on government reimbursement funding, more aggressive actions by private insurers to control health care costs, and increasing competition...

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