Moody’s: HCA’s plan to return $6B in federal aid is credit negative

Nashville, Tenn.-based HCA Healthcare’s plan to return about $6 billion in federal grants and loans is credit negative, according to Moody’s Investors Service. 

HCA announced Oct. 8 that it is returning $6 billion in federal aid meant to offset financial strain tied to the COVID-19 pandemic. The move is credit negative because it will reduce the for-profit hospital operator’s earnings and liquidity, Moody’s said. 

“These credit negative effects will be partially mitigated by lower social risk associated with return of CARES Act grants and early repayment of accelerated Medicare payments,” the credit rating agency said. 

HCA CEO Sam Hazen said returning the federal aid “is appropriate and the socially responsible thing to do.” 

The company said it expects to report revenues of $13.3 billion for the third quarter of this year, up from $12.7 billion a year earlier. Income before taxes is expected to be about $950 million, compared to $979 million in the same quarter of 2019. 

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