UnitedHealth split causes Moody's to change U.S. Anesthesia Partners outlook to negative

Moody's Investors Service changed its outlook of U.S. Anesthesia Partners, a group of nearly 5,000 anesthesia providers, from stable to negative due to a contract termination from UnitedHealth Group.

In a Feb. 28 rating action, Moody's said U.S. Anesthesia Partners' earnings could face erosion because UnitedHealth Group canceled its in-network contracts with the provider group in Texas. The contract represents about 10 percent of U.S. Anesthesia Partners' annual revenues, and is expected to be terminated in April 2020. 

"Moody's believes that the two companies will eventually agree on modified contract terms," the ratings action said. "However, the modified contracts could come with lower reimbursement rates for USAP, which will reduce profitability. Further, a drawn-out negotiation process may lead to disruption to hospital customers and contract losses."

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