How to Prepare for a Rating Agency Review with Fractional CFO Support

For healthcare organizations, a rating agency review is more than a financial checkpoint. It’s a defining moment that influences access to capital, borrowing costs, and long-term strategic flexibility. Whether you’re a $500M community hospital or a $3B integrated health system, preparation is critical. This is where fractional CFO support becomes a strategic advantage.

Why Rating Agency Reviews Matter

• Capital Access: Strong ratings, lower borrowing costs, and expanded financing options for growth and modernization.

• Stakeholder Confidence: Boards, investors, and community partners view ratings as a proxy for organizational stability.

• Strategic Flexibility: A favorable rating provides leverage in mergers, acquisitions, and partnerships.

  
  

Key Preparation Steps

1. Financial Narrative Development

Fractional CFOs help craft a compelling story that goes beyond numbers:

• Position financial performance in the context of market dynamics.

• Highlight proactive strategies for margin improvement and risk mitigation.

• Translate complex data into clear, board-ready messaging.

2. Data Integrity & Transparency

Rating agencies scrutinize accuracy and consistency:

• Review audited financials, interim statements, and reconciliations.

• Ensure alignment between operating metrics, capital plans, and liquidity reports.

• Identify and address anomalies before they raise questions.

3. Capital Planning & Liquidity Analysis

Fractional CFOs provide independent, disciplined oversight:

• Model debt capacity and stress-test repayment scenarios.

• Evaluate liquidity reserves against agency benchmarks.

• Align capital projects with ROI and strategic priorities.

4. Operational Performance Review

Agencies look for sustainable performance, not one-time gains:

• Assess revenue cycle efficiency, payer mix, and reimbursement trends.

• Benchmark labor productivity and supply chain costs.

• Demonstrate resilience through scenario planning.

5. Governance & Leadership Readiness

Fractional CFOs prepare executives and boards for direct engagement:

• Conduct mock Q&A sessions to anticipate agency inquiries.

• Coach leaders on articulating strategy, risk management, and community impact.

• Ensure governance documents reflect strong oversight and accountability.

The Fractional CFO Advantage

Unlike internal teams stretched thin by daily operations, fractional CFOs bring:

• Independent perspective: Objective analysis that strengthens credibility.

• Specialized expertise: Deep knowledge of rating agency criteria and healthcare finance.

• Scalable support: Tailored engagement from tactical prep to strategic advisory.

  
  

Final Thought

A rating agency review is not just about surviving scrutiny; it’s about showcasing your organization’s financial strength and strategic vision. With fractional CFO support, healthcare leaders can approach the process with confidence, clarity, and a compelling narrative that positions them for long-term success.