Moody's cuts InSight Health

Moody's Investors Service said it downgraded InSight Health Services Corp.'s credit ratings, including the $300 million senior secured floating-rate notes due 2011 to B3 from B2, the $250 million 9.875% senior subordinated notes due 2011 to Caa2 from Caa1 and the corporate family rating to B3 from B2.

The outlook is negative.

The downgrades primarily reflect Moody's expectation that the company will experience material reductions in revenues and cash flows as a result of forthcoming changes in Medicare reimbursements for its diagnostic imaging services.

While only 11% of the company's revenues are derived from Medicare, the impact of the Medicare changes will be substantial because about 80% of the company's revenues are derived from MRI and CT, the two hardest hit modalities under the reimbursement changes, the agency said.

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