Medicare cuts and reductions in reimbursement rates battered Insight Health Services' bonds last week. Its 9 7/8% '11 notes tumbled 10 points to 32 after the provider of diagnostic imaging services reported poor financials, blaming the Medicare cuts as well as other negative trends in the sector for its troubles. The bonds regained four points to trade at 36.
Insight's revenue dropped 3.3% to $306.3 million for the year ended June 30, from $316.9 million for the same period last year. It registered a $210.2 million net loss for the year ended June 30, compared with a $27.2 million net loss for the comparable period in 2005. The company said its operations have been and will likely continue to be adversely affected by overcapacity in the diagnostic imaging industry and planned reductions in reimbursement. Mitch Hill, Insight cfo, did not return a call.