More troubling financial news has been released for the not-for-profit hospital industry sector. A recent report conducted by Moody's Investor Service shows fiscal year 2008 medians weakening across key measures:

Moody's reports that, while measures of operating performance have been declining since FY 2005, balance sheet measures had strengthened through FY 2007. The FY 2008 medians, however, show weakening of both operating performance and balance sheet measures, with the median for every major ratio declining from the prior year.

"Medians for days cash on hand, cash-to-debt, and Moody's-adjusted debt to cash flow have weakened, as have the medians for operating margin, operating cash flow margin, and Moody's-adjusted maximum annual debt service coverage," said Spielman. "This combination of weakening balance sheets and the continuing decline of operating performance challenges the general credit profile of the sector."

To make matters worse, it is not expected that healthcare reform measures will do anything to strengthen the sector:

Moody’s currently views healthcare reform as mixed to largely negative for the sector. It is unlikely that the sector outlook will be changed to stable before potential reform-related changes are understood, the rating agency says.

For assistance in developing strategies to deal with these and other challenges facing the healthcare industry, please contact REDW's healthcare experts, and .

A recent press release by the U.S. Department of Health & Human Services announces more that $25.7 million in grants to increase and improve health and support services at the nation's health centers.

“These grants could not be coming at a better time,” Secretary Sebelius said. “With more than 14.5 million Americans out of work, and 47 million without health insurance, the health centers are seeing more patients now than ever before.”

Overseen by the Health Resources and Services Administration (HRSA) at HHS, the Health Center system served more than 17 million medically underserved people in 2008, up from 10 million patients served in 2001. Since the economic downturn began, the health center patient population has grown by another one million people – a third of them children. By law, patients are accepted regardless of their ability to pay.

Nine grants totaling $863,332 have been awarded to New Mexico health centers. Of course, as with all federal grants, there are many regulations required for compliance. If you'd like to learn more about compliance or other federal grant opportunities for health centers, please contact REDW's healthcare experts, and .

In case you missed it, the Healthcare Financial Management Association (HFMA)sums up some of the key findings of research conducted by the Medical Group Management Association (MGMA):

... the top three challenges of running a physician group practice are dealing with operating costs that are rising more rapidly than revenues, maintaining physician compensation levels in an environment of declining reimbursement, and selecting and implementing a new electronic health record (EHR).

Respondents cited collecting from self-pay patients and those with high-deductible health plans and health savings accounts as the fourth-highest challenge. Managing finances in the face of uncertain Medicare reimbursement rates rounded out the top five.

You can download the 2009 Medical Practice Today Research Summary here. If you find your physician group facing some of these same challenges, REDW's healthcare experts, , and are ready to help you find the best solutions.

Last week a decision on tax lightning was made by Second Judicial District Judge Theresa Baca [subscription] that could have far-reaching impact for everyone who pays, as well as the entities who collect, property tax in New Mexico.

In a decision that could force an overhaul of tax policy statewide, a district judge has struck down part of a law that often results in home buyers paying significantly higher property taxes than people already living in similar homes in the same neighborhood.

Second Judicial District Judge Theresa Baca ruled that a 2001 state law unfairly created a class of people who are taxed more because of when they bought their homes — a phenomenon known as "tax lightning."

Baca ruled that violated the state constitution.

To understand how this judicial decisions may impact your past, present and future property tax liability, please contact REDW's state and local tax (SALT) expert, .



The information contained in this blog is not intended to be tax advice, is of a general nature, and is based on authorities that are subject to change. Application to your specific situation should be determined in consultation with your tax advisor. IRS Circular 230 Disclosure: Any tax advice in this communication is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing or recommending to another party any matters addressed herein.

When it comes to tax audits and protest procedures, you may be wondering what rights you have as a taxpayer. One good source of information, at least when it comes to the New Mexico Taxation and Revenue Department, is the publication FYI-400 which can be downloaded here. This 12-page document has lots of useful information about your rights and notes that:

The department regularly offers free business tax workshops (CRS program only) in each of the local tax offices. In addition there are free publications that can help to prevent certain problems. They are available on the web site or through your local tax office.

Of course if you're like most business owners, you don't have the time, or the desire, to attend business tax workshops, even if they are free. That's why REDW has a state and local tax (SALT) expert ready to help. For more information on state and local tax issues, please contact .


The information contained in this blog is not intended to be tax advice, is of a general nature, and is based on authorities that are subject to change. Application to your specific situation should be determined in consultation with your tax advisor. IRS Circular 230 Disclosure: Any tax advice in this communication is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties that may be imposed on any taxpayer or (ii) promoting, marketing or recommending to another party any matters addressed herein.