After years of disappointments, Health Management Associates ( HMA) is finally rewarding its loyal -- and incredibly patient -- shareholder base.

The rural hospital chain has borrowed billions of dollars so that it can pay a one-time dividend of $10 a share to its equity owners. The company, which has always boasted a strong balance sheet in the past, announced its recapitalization plans along with a major accounting change that some view as long overdue.

Specifically, HMA is altering the way it treats accounts for patients who often do not pay their bills. For starters, the company will record a $200 million fourth-quarter charge to increase its reserves for receivables that are not covered by health insurance. Then, going forward, the company will start reserving for "a significant portion" of self-pay accounts at the time they are created.

Before, HMA -- unlike most in the industry -- waited 120 days to fully reserve for those self-pay accounts.

"We had long been concerned that receivables were overstated ... and that the company did not match the timing of bad-debt expense on the income statement with the admission of a self-pay patient," notes Sheryl Skolnick, senior vice president of CRT Capital Group. "Nice to be right, but the company's recap makes being right on that issue moot."

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