The US Government’s proposal to implement large cuts in Medicare funding may result in the downgrading of hospital credit positions of high-cost urban facilities, according to a report.

The report by Moody’s Investors Service said that the cost control measures will be negative for the credit position of many high-cost urban hospitals even if the number of insured patients expands.

Most of the 17 highest-cost hospitals are in urban areas with high unemployment and higher levels of poverty.

The report said stand-alone hospitals which depend on high-cost referral practices and do not gain many paying patients will be most affected.