TD says CMS hospital rules positive for Surgery Partners, negative for HCA

TD Cowen analysts say the rate updates of the Centers for Medicare and Medicaid Services’ proposed rule for hospital outpatient and ambulatory surgery center procedures will be overshadowed by a proposal to eliminate the inpatient only list, which is positive for Surgery Partners (SGRY) and United Surgical Partners (USPI), and the 340B remedy reduction higher from 0.5% to 2.0% per year, which is likely negative for HCA Healthcare (HCA), Tenet Healthcare (THC) and Universal Health (UHS). However, the firm expects this to be lobbied by the American Hospital Association and awaits additional commentary from the industry. The rule projects an overall 2.4% rate update for outpatient hospital and ambulatory surgery center procedures, the analysts tell investors in a research note. Shares of HCA are down 3% to $359.09 in morning trading while Surgery Partners is up 2% to $22.38.