Ashleigh Rogers
Long/short equity, growth at reasonable price, value, banks

Delay Of Two-Midnight Rule Helps Tenet But Stock Still Has To Prove Itself After Miss

The Centers for Medicare and Medicaid Services (or CMS as it is commonly known) recently announced on January 31st a six-month delay on what has come to be known as the Two-Midnight Rule. The Two-Midnight rule is somewhat complex; it basically governs when a patient can be processed as an inpatient admission. The details are rather arcane, but the net effect of the six-month delay is that it will alleviate some of the near-term pressures facing hospitals as a result of low utilization levels. For major hospital company Tenet Healthcare (NYSE:THC), the rule is a modest positive.

Tenet like most hospital chains has been suffering a double-headwind recently, and the rule delay is not enough to fix that....

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