Gentiva Covenant at Risk From Medicare Cuts: Corporate Finance
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Cuts in Medicare payments may force Gentiva Health Services Inc. to breach a loan covenant this year, Credit Suisse AG said, as trading prices drop for debt of the largest U.S. home-health and hospice company by sales.
The federal Centers for Medicare & Medicaid Services last month proposed a 3.4 percent reduction to home health payments for 2012 to promote greater payment accuracy. New Medicare cuts issued in November forced the company to trim its projected 2011 sales by as much as $150 million to a range of $1.8 billion to $1.85 billion, Atlanta-based Gentiva said in its second-quarter earnings announcement on Aug. 4.