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February 9, 2009

EMHS' credit rating takes a hit

By The Mainebiz News Staff

Standard & Poor's has downgraded Eastern Maine Healthcare Service's credit rating from A+ to A-.

The downgrade was attributed primarily to the fact that EMHS's seven member hospitals are owed a total of $115 million in backlogged Medicaid payments from the state, according to the Bangor Daily News. The credit rating agency also said it downgraded EMHS' rating because it has had "weakening profitability with thin margins" for the last three years, and is operating at a loss in the current fiscal year, according to the newspaper. Dan Coffey, vice president and CFO at the healthcare system, told the paper the rating change will mean it will cost EMHS and its affiliates more to borrow money for big-ticket purchases and construction projects.

Trish Riley, director of the Governor's Office of Health Policy and Finance, told the Daily News that paying off old MaineCare debts to hospitals is a priority and that the state plans to use a portion of the anticipated federal stimulus money to pay off some of that debt.

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