Moody's Investors Service, New York, said it has lowered its ratings on Tenet Healthcare Corp., Santa Barbara, Calif., citing the health system's deteriorating operating cash flow and potential claims on its cash from tax and legal settlements. Moody's dropped three of its ratings on Tenet debt to B1 from Ba3 and dropped a fourth rating to B3 from B2. Moody's said Tenet's cash flow has been weakened by higher bad-debt expense, California's nurse-staffing ratios law and tougher negotiating by health plans. The ratings agency also cited a $253 million appeals court judgment won against the company by John Bedrosian, one of the founders of Tenet's predecessor company National Medical Enterprises, and an Internal Revenue Service deficiency report. Moody's said its outlook on Tenet is negative, in light of the potential liabilities from numerous investigations. Tenet owns or operates 106 hospitals, including five hospitals it has agreed to sell. -- by Vince Galloro
Tenet sees debt ratings lowered; cash flow cited
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