Rural hospital operator Health Management Associates said Tuesday its first-quarter profit dropped 26% as bad debt costs increased and the company discounted more than $100 million in services to uninsured patients.
Net income for the quarter ended March 31 slipped to $65 million, or 27 cents per share, from $87.2 million, or 36 cents per share, a year ago.
Revenue grew 13% to $1.14 billion from $1.01 billion a year earlier, as total admissions grew 2.6%.
Beginning in February of this year, HMA began discounting charges for non-elective services by 60% for uninsured patients. Uninsured discounts for the latest quarter totaled about $117.7 million. In addition, the company revised its care policy so that only those uninsured accounts for which the patient meets poverty guidelines are being written off as charity/indigent.
Charity/indigent care writeoffs for the latest quarter fell to $26.2 million from $142.4 million a year ago, while bad debt expense grew to $121.5 million from $82.7 million last year.
As reported, HMA recapitalized its balance sheet by issuing $3.25 billion of new senior secured credit facilities, and returned about $2.4 billion to shareholders through a $10-per-share special cash dividend paid on March 1. The company said it has now suspended its regular quarterly dividend indefinitely.
HMA owns and operates general acute care hospitals in rural communities in the U.S. HMA currently operates 61 hospitals in 16 states with about 8,700 licensed beds.