The $100M Question in Healthcare M&A
In healthcare private equity, there's a striking disconnect between the rigor applied to financial diligence and the approach to reimbursement analysis. Firms routinely make eight to nine-figure decisions based on reimbursement intelligence that wouldn't pass muster in any other aspect of their diligence process.
Traditional reimbursement studies provide only the most general insights: "The target's overall reimbursement is approximately 12% below market, suggesting potential upside." This high-level analysis masks critical variations that can significantly impact both valuation and post-close value creation.
The Real Cost of Imprecise Reimbursement Diligence
When traditional black box studies miss critical reimbursement insights, the consequences ripple through the entire investment:
Valuation Impact
Without precise reimbursement intelligence, firms either overpay for assets or walk away from opportunities others will capture
Value Creation Delays
Portfolio companies spend the critical first 6-12 months post-close trying to understand their reimbursement landscape
Operating Team Frustration
Healthcare executives face board pressure to deliver reimbursement improvements without the specific intelligence needed to succeed
Exit Multiple Compression
Companies that can't demonstrate data-driven reimbursement optimization often face skepticism from buyers
The PayorScope Due Diligence Advantage
PayorScope transforms healthcare reimbursement due diligence with:
- CPT-Level Analysis: Precise examination of key revenue-driving procedure codes against market benchmarks
- Provider Verification: Complete verification of all providers across target locations with credential status
- Competitive Mapping: Identification of all relevant competitors in target markets with rate comparisons
- Implementation Roadmap: Specific, actionable post-close initiatives to capture identified opportunities
- Value Creation Quantification: Precise modeling of EBITDA impact from reimbursement improvements
PE-Focused Due Diligence Timeline
Pre-LOI (2-3 Weeks)
- Deploy precision reimbursement intelligence for initial market benchmarking
- Map competitive landscape in target geographies
- Identify preliminary red flags and opportunities
Diligence Phase (4-6 Weeks)
- Conduct comprehensive rate analysis by payor, plan, and geography
- Identify specific CPT codes with highest improvement potential
- Quantify exact revenue impact of bringing underpaid codes to market benchmarks
First 30 Days Post-Close
- Implement credentialing correction for immediate wins
- Prepare data-backed negotiation packages for priority payors
- Initialize payor outreach for highest-impact contract discussions
From Data to Value Creation
PayorScope's due diligence isn't just about analyzing the target—it's about creating a specific roadmap for post-close value creation. Our process ensures a seamless transition from diligence findings to implementation initiatives:
Immediate Actions
- Specific, actionable insights ready for day-one implementation
- Prioritized list of highest-ROI reimbursement opportunities
Long-term Strategy
- Data-backed negotiation packages for immediate payor outreach
- Tracking mechanisms to measure realized gains against projections
