Moody's Investors Service last week completed a review of the state's 15 rated hospitals, resulting in two upgrades and one downgrade.

Good Samaritan Hospital in Baltimore and The Memorial Hospital and Medical Center of Cumberland won higher ratings, with both moving to A from Baal.

But the agency dropped its assessment of Anne Arundel Medical Center in Annapolis to Baal from A.

Twelve other ratings were confirmed, including the lowest rated hospital in the state, Doctors' Community Hospital in Lanham, at Baa.

Of the 21 states Moody's has reviewed over the past two years, only Maryland and New Jersey had no ratings below the investment-grade level.

But the rating agency said there are distinctions to be made between the two states.

"Although hospitals in both Maryland and New Jersey are subject to restrictive reimbursement methodologies, Moody's has concluded that the Maryland system is the more stable and more desirable of the two," the agency said in a summary of its findings.

"Furthermore, Maryland's system contains financial incentives which can result in stronger performance," Moody's added.

Maryland's strong hospitals are also the result of economic resiliency and the state's relative affluence, as well as a reimbursement method that, unlike many systems, covers costs adequately, Moody's said.

Maryland is also distinctive for having Moody's only Aaa long-term health-care rating, for the Howard Hughes Medical Institute in Bethesda.

Anne Arundel's problems reflect timing constraints characteristic of regulated environments, which are slow to adapt to service or volume changes.

"As a result of tremendous pressure to provide more capacity, the hospital depleted its cash levels such that bondholder security was affected," Moody's said in explaining the downgrade. "It is expected that this situation, through the rate-setting process, may eventually be ameliorated.

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