Latest assault on ACA rocks hospital sector, Community Health falls, regains footing

By Paul A. Harris

Portland, Ore., Oct. 13 – Hospital paper sold off Friday on news that the U.S. Department of Health and Human Services, acting on a legal opinion from Attorney General Jeff Sessions, plans to end billions of dollars in payments to insurers under the Affordable Care Act program.

The pretext for the move is an assertion that the payments lack a Congressional appropriation, and are therefore unconstitutional.

Hospital names initially traded down 1 to 2 points at Friday's open, as the market reacted to the news, traders said.

However later in the day some retraced portions of the ground they had earlier relinquished.

In the distressed context, Community Health Systems, Inc. sold off in such a manner early Friday, then regained its footing.

The FWCT-2 Escrow Corp. (Community Health Systems) 6 7/8% senior notes due Feb. 1, 2022 were 73¼ bid, down half a point on the day, early Friday afternoon, a trader said.

The paper got as low as 71½ bid, early in the session, the source added.

It was 72¾ bid 73¾ offered on Thursday.

Parsing the moves, the trader suggested that some investors sold into the Friday news that the administration of President Donald J. Trump had once again taken up the assault on his predecessor's landmark Affordable Care Act.

Short covering was also likely involved in Friday's moves seen in the paper, the trader added.

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