Triad Left in Lurch as CFO Walks

Thus, Feinstein believes that Whitman is simply pursuing attractive opportunities with a new employer rather than running away from problems at an old one. But Skolnick, for one, is not so sure.

"We ... are concerned that something more than just the weather in Naples, Fla., and the shift in responsibility to COO from CFO is behind this move," Skolnick wrote. "In our view, it is never, ever a good thing when a CFO leaves."

Still, Skolnick worries about the company that has snagged Triad's former CFO as well.

"We remain very concerned about what (Whitman) will find once he gets to HMA and begins to explore the company's operations and financial reporting practices," she wrote. "Investors/owners of HMA shares must understand that guidance could change materially after Burke settles in at HMA."

Skolnick believes that HMA has established "very aggressive" targets that, in the end, will still result in poor earnings quality going forward. She specifically questions how HMA expects to increase same-hospital admissions by 2% to 4% when the industry -- at its best -- has been posting growth rates that are merely half that size.

In the Dark

Ultimately, Skolnick wonders if HMA really understands certain aspects of its business at all. For example, she says that HMA "didn't know" until recently how much revenue it receives from stop-loss payments -- checks from insurance companies that resemble Medicare outliers -- even though Tenet (THC - Cramer's Take - Stockpickr), with its infamous billing strategy, had brought the topic to the forefront.

Moreover, Skolnick points out, HMA has wound up in the dark when it comes to the crucial issue of bad debts from the uninsured as well.

"A couple of years ago, HMA management said something to the effect that 'Our bad debt ratio can be 6% when the rest of the industry is at 9% or higher because we're in these local markets and see our patients in the supermarket. We know these people, and they'd be too embarrassed not to pay their bills,'" Skolnick recalls. "Guess the uninsured don't buy groceries anymore because they sure aren't paying their hospital bills."