July 27 (Reuters) – Hospital operator Universal Health Services lowered its full-year profit forecast on Monday, citing changes in reimbursements related to certain Medicaid supplemental payment programs, sending its shares down nearly 8% in extended trading.
Medicaid supplemental payment programs provide hospitals with reimbursements above standard Medicaid payment rates and help fund care for low-income patients.
Here are some details:
• This comes against the backdrop of uncertainty surrounding the enhanced Affordable Care Act subsidies, as their expiration has left more patients uninsured and raised concerns about higher uncompensated-care costs for U.S. hospitals.
• The King of Prussia, Pennsylvania-based company expects full-year adjusted earnings of $22.28 to $23.65 per share, down from its previous forecast of $22.64 to $24.52.
• Larger peer HCA Healthcare also cut its annual profit forecast earlier this month, citing a rise in uninsured patients, largely due to a number of those who dropped coverage under ACA or “Obamacare” plans.
• Universal Health’s quarterly same-facility adjusted admissions rose 2.9% in its acute care hospitals during the second quarter, while admissions in behavioral health facilities rose 0.5%.
• The company reported an adjusted profit of $5.98 per share for the second quarter, just ahead of analysts’ average estimate of $5.96, according to data compiled by LSEG.
• Quarterly net revenue rose 8.3% to $4.64 billion, while analysts estimated $4.58 billion.
(Reporting by Padmanabhan Ananthan in Bengaluru; Editing by Shilpi Majumdar)
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