TeamHealth downgraded to ‘CCC+’ due to UnitedHealth contract dispute, low ED volumes

Furthermore, the downgrade reflects TeamHealths constantly high monetary utilize due to the pandemics impacts..
Check out the complete press release here.

UnitedHealth last year moved to end high-reimbursement in-network contracts with TeamHealth. The changes took impact between Oct. 15, 2019, and July 1, and affected contracts throughout 18 states. © Copyright ASC COMMUNICATIONS 2020. Interested in LINKING to or REPRINTING this material?

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Fitch Ratings devalued the issuer default ranking on health center staffing company TeamHealth to “CCC+,” due in part to a contract dispute with UnitedHealth and low emergency department patient volumes across the country. TeamHealths prior score was “B-.”.

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The downgrade also reflects that an agreement dispute with insurance company UnitedHealth “will weigh on TeamHealths financial cushion throughout 2020-2021,” Fitch said.
UnitedHealth in 2015 moved to end high-reimbursement in-network contracts with TeamHealth. The changes worked between Oct. 15, 2019, and July 1, and affected agreements across 18 states. Earlier that year, UnitedHealth minimized TeamHealths compensations for specific out-of-network claims by about 50 percent, triggering TeamHealth to sue UnitedHealth in eight states..

Fitch stated the downgrade was made for a number of reasons, consisting of that pandemic-related business interruption has actually weighed on TeamHealths earnings and capital this year.
In particular, TeamHealth produces about 60 percent of its income from EDs, which saw a significant drop in client volumes this spring due to stay-at-home orders. In addition, TeamHealths margins were pressured since it needed to maintain ED staffing levels regardless of these lower volumes.
Fitch stated it expects these pandemic-related disruptions to affect TeamHeaths financial resources and operations through the remainder of 2020..

The credit ranking firms actions impact about $4 billion in financial obligation as of June 30..

Alia Paavola –
Monday, September 14th, 2020
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” This will leave the company with less flexibility to take in other unfavorable industry advancements,” Fitch said.