OREANDA-NEWS. Revenues are likely to come under pressure for U.S. critical access hospitals, though Fitch Ratings expects the ratings of these hospitals to remain stable, as discussed in a new report.

'Critical access hospitals (CAHs) often enjoy strong bipartisan legislative support that will prevent significant reimbursement changes for the foreseeable future,' said Director Emily Wadhwani. 'Additionally, though they are prolific across the country, their enhanced Medicare payments comprise a very small piece of the overall Medicare budget, making them a less likely target for cuts.'

The Affordable Care Act (ACA) could negatively affect select hospitals that are vulnerable to significant reimbursement changes brought on health reform. That said, most CAHs in Fitch's rated portfolio have healthy financial cushions that serve to largely mitigate this risk.

Another key credit risk is the shrinking rural population that CAHs were designed to serve. This is particularly evident in the Southern and Midwestern United States, which have seen more hospital closures in recent years. As such, 'a robust ambulatory service base is necessary for critical access hospitals to remain viable in these markets,' said Wadhwani.

Another interesting trend that could play out is increasing consolidation. CAHs may find it necessary to seek out partners in order to structure themselves as high-value providers. Partnership can help address a majority of inherent challenges for rural providers. However, hospitals with weaker financial profiles are less likely to find partners, which could in turn prompt more rural hospital closures.

'Rural Health Care: Credit Considerations for Critical Access Hospitals' is available at 'www.fitchratings.com' or by clicking on the above link.