Healthcare providers that operate in Massachusetts could be at a disadvantage following the implementation of a new cost-containment law, Standard & Poor's Ratings Services said.
The ratings agency noted that the law could put pressure on operating margins, which would in turn affect credit ratings. It added that the impact might not be felt for at least 18 months, but ultimately the extent of ratings hit will depend on how quickly and successfully healthcare providers can cut costs.
The legislation, signed by Gov. Deval Patrick on Aug. 6, requires healthcare providers across Massachusetts to limit spending increases to a rate no higher than the rate of change in the gross state product through 2017 and to a half a percentage point below the rate of change in the gross state product thereafter. Penalties for not complying amount to $500,000.