LOS ANGELES (MarketWatch) � The negative impact of a �60 Minutes� story was seen Monday in shares of Health Management Associates, with the hospital chain�s stock down nearly 6% in trading.
Health Management HMA �was at $7.50 at the close, a day after the CBS News magazine show aired a story criticizing HMA�s admission practices. It featured a number of former HMA employees who said on the record that there was pressure to admit patients from emergency rooms into the company�s hospitals to maximize profits.
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Two doctors, an administrator at one hospital, an executive vice president of the chain and the company�s compliance director � all former employees � were interviewed for the segment, which contended that HMA�s profit-oriented admission practices were systemic.
The former compliance director, ex-FBI agent Paul Meyer, said the chain�s practices pertaining to Medicare and Medicaid patients amounted to fraud against the government and were worthy of a criminal investigation.
The piece concluded by saying HMA was under investigation by the Justice Department, but added that hospital officials are cooperating with the probe of its practices.
On Friday, HMA tried to stave off effects of the story with a pre-emptive strike, criticizing �60 Minutes.� The company issued an additional statement Monday as well as several video testimonials from Chief Executive Gary Newsome and several other HMA officials and medical personnel.
�You can�t really, in my opinion, have a successful organization by putting inappropriate pressure anywhere,� Newsome said in his videotaped statement. �I don�t care whether it�s with our physicians or our nurses or anywhere.�
HMA went on to say that those interviewed were �disgruntled former employees of the company and former contracted physicians, several of whom are seeking financial gain through active litigation with Health Management.�
/quotes/zigman/229077/quotes/nls/hma HMA 7.50, -0.45, -5.66%
Before Sunday�s airing, Naples, Fla,-based Health Management had offered a number of charts showing the rate of admissions from its emergency rooms were in line with the rest of the industry. On Monday, HMA noted that �60 Minutes� did not dispute its admissions data.
The company added that no patients were identified as being inappropriately admitted in the newscast, nor were there individual instances cited in which a doctor�s judgment was overridden by HMA.
Elsewhere in health care, HCA Holdings Inc. HCA �was up nearly 2% after the company received a �B-/RR6� rating from Fitch for $1 billion in senior unsecured notes, expected to be used for a special fourth-quarter dividend to shareholders.
The hospital industry�s revenue outlook is weak, Fitch said, but HCA patient-volume trends are stronger than most other for-profit chains.
�However, a shift to patients with less-profitable government health-insurance coverage has recently been a headwind to the company�s top-line growth and profitability,� according to the agency.
As a result, the company will see little growth in operating earnings next year, Fitch said.
HCA shares were up 46 cents to $32.21 at the close.
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