Managed Care Diligence

Traditional diligence validates historical revenue. Fulcrum quantifies future reimbursement value.

Q: How is this different from the quality-of-earnings work our accountants already do?

A quality-of-earnings study validates that reported revenue was real and collected. It does not test whether it was collected at the right rate, or whether the contracts permit collecting more. Black Box Diligence reads each payer agreement as an economic instrument — benchmarking rates code-by-code against a defined market set and quantifying the gap to median and top quartile. It complements a QofE; it does not duplicate it.

Q: What data do we need from the target, and what happens when they won't produce it?

Ideally: executed payer contracts and amendments, fee schedules, and a claims/remittance extract. When documents are not produced, we benchmark against payer price-transparency machine-readable files and the target's billing data, and we track every missing item as a named open diligence item rather than papering over it. Visible open items are part of the deliverable.

Q: Can this run inside a two-week exclusivity window?

Yes. The workflow is built to produce a board-ready read inside a compressed exclusivity window, with an initial rate-position and contract-mechanics view early and a full benchmarked model as data arrives. Scope scales to the time and documents available.

Q: How do you benchmark without disclosing another client's contracted rates?

Benchmarks are built from payer price-transparency and machine-readable-file data — a public data source — cleaned code-by-code, plus the target's own billing and remittance data. Percentiles are computed against a defined set of practices or facilities within a defined radius. No individual client's confidential contracted rates are ever disclosed to another.

Q: Do you support the negotiation post-close, or only diagnose pre-close?

Both. The diligence deliverable includes a payer-by-payer negotiation calendar tied to termination and renewal windows. Fulcrum can carry that plan into the post-close renegotiation, or hand it to the operator's team as an executable roadmap.

Q: Our FDD or QofE provider already modeled reimbursement upside — why do we need this?

Rate upside is only real if the contracts and the payers permit it. Financial diligence confirms what was collected; it rarely tests whether a modeled post-close rate synergy is achievable given contract language, assignment and change-of-control terms, how each payer treats the transaction, or the mechanics of collapsing multiple TINs. Those are the exact places an assumed synergy quietly disappears after close — and where a team that has negotiated these agreements can tell you, before signing, what the market will actually bear.

Q: What does the deliverable actually look like?

A board-ready executive report — rate position by payer and service family, percentile benchmarking against a defined market set, named-competitor rate comparison, contract-mechanics findings, a quantified opportunity, and a negotiation roadmap — plus a supporting contract inventory workbook. Illustrative samples of both are viewable on this page.

The managed care diligence discipline that quantifies what reimbursement will do after close — not just what it did before.

See a sample deliverable → How the method works

From capital to underwritten value

Step 01

Capital Deployed

Step 02

Traditional DiligenceFinancials · legal · quality

The gap

The Black BoxReimbursement layer

Step 03

Fulcrum Managed Care IntelligenceRate · contract · leakage

Result

Underwritten Enterprise Value

The reimbursement layer is where value hides — and where it's made.

See a sample deliverable →

The gap in conventional diligence

What conventional diligence closes — and what it leaves open.

Financial, legal, and operational diligence review the business as it was run. The reimbursement layer — the contracts that set every future dollar of rate — is rarely read as an economic instrument. That layer is the Black Box.

Reviewed by conventional diligence

Financials
Legal
Compliance
Operations
Quality
Revenue cycle

Complete. Checked. Closed. These workstreams confirm the business as operated.

Reviewed by Fulcrum — the reimbursement layer

Rate position

Where the target sits versus the market — and Medicare.

Fee schedules by payer
% of CMS by service family
Payment methodology
Percentile position vs. defined market set
Geographic rate variation

Contract mechanics

What each agreement permits — and forbids.

Term & renewal structure
Termination rights
Escalators
Amendment rights
MFN & rate-parity
All-products clauses
Timely filing
Assignment & change of control

Payment integrity

Where dollars leak between contracted and collected.

Medical policy
Bundling & modifier logic
Downcoding exposure
Stop-loss & outlier provisions
Drug reimbursement
Underpayment leakage
Silent-PPO & network-rental exposure

Market leverage

What negotiating position the platform actually holds.

Covered lives
Network adequacy
Payer & provider concentration
Employer mix & steerage
Referral economics
Site-of-care differential

Forward value

What the reimbursement layer will do after close.

Negotiation calendar
Benchmark gap to median & top quartile
Code-level carveout opportunity
Capitation & value-based adequacy
Post-close sequencing

Conventional diligence confirms the revenue was collected. It rarely asks whether it was collected at the right rate — or whether the contract permits collecting more.

How reimbursement moves valuation

Why a financial buyer cares about rate, not just volume.

Rate improvement converts to EBITDA at near-full margin — no added volume, staff, or capital — and is therefore multiplied at exit. A volume gain of equal revenue is not. Move the rate index and watch where it lands.

Illustrative mechanics — not a Fulcrum benchmark

Rate-position sensitivity

Indexed values only. No dollar figures, no percentages. The point is mechanical: where a marginal dollar goes.

Rate position (index) 100

CurrentMedianTop quartile

The revenue readout rises with rate. Because rate improvement carries almost no incremental cost, nearly all of it flows to contribution margin and then to EBITDA — so enterprise value, at a held multiple, moves far more than the revenue line alone suggests.

Implied enterprise value (indexed)

100

At the current rate position, everything is indexed to 100.

Enterprise value moves 1.0× the revenue change.

Illustrative mechanical model at a held exit multiple. Bars indexed to a common scale. Not a Fulcrum benchmark, forecast, or representation of any engagement outcome.

Beyond the headline rate

The rate on the page is not the dollar in the account.

Two gaps sit between a contracted rate and collected revenue: the discount the contract itself imposes, and the revenue that leaks before it's ever collected. A rate read alone catches neither.

Charges → expected → actual

Where the contracted dollar goes before it lands — indexed, illustrative.

Gross charges100

↳ contractual discountthe rate the contract actually pays

Expected collections64

↳ operational leakagedenials · coding errors · late filing

Actual collections57

Illustrative mechanics — not a Fulcrum benchmark. The gap between expected and actual is recoverable without renegotiating a single rate.

Payment integrity

The expected-vs-actual gap

Expected collections are what the contract entitles you to; actual collections are what arrives. The difference is denials, coding errors, timely-filing losses, and weak follow-up — leakage that a rate benchmark never surfaces, and that closes without a payer conversation.

Site of care

Where the service is billed changes the rate

The same procedure pays differently across facility and non-facility settings, and across ASC versus hospital-outpatient. In the ophthalmology sample, that differential is the entire ASC repricing thesis — the surgery center collects a fraction of what peer facilities collect for the identical code.

Emerging risk

Automated, AI-driven down-coding

Payers increasingly use algorithms to down-code office and E/M claims — reclassifying a 99214 to a 99213 even when documentation supports the original level. It erodes realized rate quietly. The contract inventory sample scores every agreement's down-coding payment policy for exactly this exposure.

The method

Eight phases from contract to board-ready finding.

Each phase produces evidence, not opinion. Open items are tracked from day one — visible intellectual honesty is more persuasive than a clean story.

Contract collection

Every executed agreement and amendment — including what the target hasn't produced, tracked as open items from day one.

Open itemslogged, not hidden

Data normalization

Claims, remittance, and fee-schedule data reconciled to a common code-level basis.

Code-levelcommon basis

Contract interpretation

Methodology, language, and payment rules read as an economic instrument — not for legal risk alone.

MFN · all-productsescalators · amendment rights

Financial modeling

Rate position mapped to volume by payer and by code.

Payer × coderevenue mapping

Market benchmarking

Percentile position against a defined competitor set inside a defined radius.

225 practices · 91 ASCs50-mile radius illustrative engagement

Risk identification

Rate erosion, leakage, concentration, termination and change-of-control exposure.

Silent-PPOleakage & steerage

Opportunity quantification

Gap to median and top quartile, priced by payer and code family.

Median → top quartilepriced by code

Executive reporting

Board-ready findings with a payer-by-payer negotiation calendar attached.

Board-ready+ negotiation calendar

Why it's a black box

Confidential by construction.

The name is literal. Reimbursement rates are protected by contract, and competing parties can't lawfully share them with each other. As an independent third party, Fulcrum holds each side's confidential rate data inside the box — benchmarking, repricing, and comparing contract strength without ever disclosing one party's negotiated rates to another. Buyers and sellers, or joint-venture partners, get the analysis they need to underwrite the deal; no one sees the other's contracts. That is what makes benchmarking against a defined market set both rigorous and antitrust-safe.

Evidence

The specimen gallery.

Everything above is argument. This is proof — two Fulcrum sample deliverables, inspectable inline.

Sample & confidentiality notice. Both specimens are illustrative of actual Fulcrum Health Partners deliverables; client identity is withheld. Tax IDs are masked, competitor names withheld, and any benchmark labeled a placeholder is not Fulcrum's proprietary rate data. Every figure shown traces to one of these two samples.

Specimen A — Buy-side diligence report

A 17-slide board-ready executive report. Multi-site ophthalmology group and affiliated ASC, Midwest metro. Four slides annotated below with what an investor should notice. Scroll or use the arrows.

Section 1 · Executive Summary

The platform is sound. The value is on the facility side.

90th+

percentile — BCBS professional rates, largest payer

<55th

percentile — all four ASC facility contracts

~$5.3M

annual facility payments at below-market rates

2028

favorable Aetna professional contract secured through Jan

Sample report — illustrative; client identity withheldFulcrum Health Partners · fulcrumhp.com

What to notice

Strong professional contracts sitting beside weak facility contracts. The value creation lever is the ASC side — and it is quantified, not asserted.

Section 5 · Facility Contracts

Every facility contract below the 55th percentile.

UnitedHealthcare31st

BCBS43rd

Cigna53rd

Aetna*N/A

Facility surgical percentile vs. 91 ASCs. *Status unconfirmed — open diligence item.

Sample report — illustrative; client identity withheldFulcrum Health Partners · fulcrumhp.com

The disconnect

The same organization that negotiated 90th-percentile clinic rates holds 43rd-percentile ASC rates with the same payer. Facility contracts were simply never re-negotiated.

Section 5 · The Money Code

Same procedure. Same payer. Same market.

The Surgery Ctr$1,377

Competitor 4$900

Competitor 1$1,902

Competitor 3$2,074

Competitor 2$3,383

UHC facility rate, cataract surgery (CPT 66984) — 49% of facility revenue.

Sample report — illustrative; client identity withheldFulcrum Health Partners · fulcrumhp.com

Code-level concentration

The Surgery Center collects $1,377 per case while a competing ASC collects $3,383 for the identical code. At 49% of facility revenue, this single code is the highest-leverage carveout.

Section 5 · The Core Finding

Strong clinic contracts. Weak facility contracts. Same payers.

BCBSProf 91st · Fac 43rd

CignaProf 77th · Fac 53rd

UnitedHealthcareProf 32nd · Fac 31st

■ Professional percentile ■ Facility percentile

Sample report — illustrative; client identity withheldFulcrum Health Partners · fulcrumhp.com

Valuation implication

The gap isn't priced into seller expectations. Closing it converts directly to EBITDA at nearly 100% margin — no added volume, staff, or capex. ~$5.3M of facility payments sit below market.

Specimen B — Managed care contract inventory

A live, sortable and filterable reproduction of the master contract abstract. Multi-state urgent care platform, 46 agreements across two contracting entities. Client identity, tax IDs, and specific markets are withheld. Portfolio dashboard is computed live from the rows below.

Line of business

Methodology

Renegotiation priority

Search payer

S9083 = HCPCS global per-visit case rate for urgent care. "Below / At / Above market" compares case-rate S9083 to an illustrative regional benchmark (placeholder values, not Fulcrum proprietary data), using a ±5% band. FFS agreements are shown at their % of Medicare basis. Every value is fabricated for demonstration.

Request the full sample report and a walkthrough of the method.

Engagement record

How a Fulcrum engagement reads on one page.

A repeatable summary structure. The records below are illustrative placeholders, styled to final quality; real engagements drop in without redesign.

Specialty physician platform + ASC

Multi-site ophthalmology group, Midwest metro

Buy-side · platform acquisition

Diligence question

Is the revenue base durable, and where is post-close rate upside?

Scope & data basis

All major commercial contracts, professional + facility; price-transparency data tied to billing & remittance; benchmarked vs. 225 practices and 91 ASCs in a 50-mile radius.

Principal findings

90th-percentile professional book beside sub-55th-percentile facility contracts with the same payers; 49% of facility revenue in a single code.

Value implication

~$5.3M facility repricing pool (illustrative)

Recommended actions

Facility-first renegotiation; code-level carveouts on 66984/66991; resolve open contract items pre-close.

Outcome

Board received a payer-by-payer negotiation calendar and a quantified upside case.

Example engagements — not for legal use.

Multi-state urgent care platform

46-agreement portfolio, two contracting entities

Portfolio review · contract inventory & rate assessment

Diligence question

Where across a two-entity, multi-state book is rate erosion and renegotiation leverage?

Scope & data basis

46 managed care agreements abstracted across 20 fields; case-rate S9083 benchmarked to an illustrative regional set by line of business.

Principal findings

15 of 19 case-rate agreements below market; 21 agreements with no annual escalator; a silent-PPO / network-rental leakage exposure flagged for audit.

Value implication

9 high-priority renegotiation targets (illustrative)

Recommended actions

Strike unilateral-amendment and MFN clauses; insert escalators; audit network-rental steerage; sequence Medicaid renewals to regulatory windows.

Outcome

A ranked action list tied to each contract's renewal and termination window.

Example engagements — not for legal use.

Why Fulcrum

A payer contract read for what it earns — not just what it risks.

Generalist diligence firms staff reimbursement review with accountants and attorneys who read contracts for legal risk. Reading a payer contract for what it permits you to earn is a different discipline.

It is practiced by people who have sat on both sides of the negotiating table — who know which clauses cap rate, which concede it, and where a benchmark-anchored request actually moves. That is the bench Fulcrum brings to a deal.

The people who negotiated and managed these agreements should be the ones reading them in diligence.

The generalist read

Financial diligence confirms the past

Quality-of-earnings and financial due diligence verify that revenue was booked and collected. The teams that run them — the Big Four accounting firms, tax-focused diligence practices, and generalist management consultancies — rarely include anyone who has negotiated a payer contract or consolidated tax IDs after a close.

Post-close rate "synergies" modeled in the FDD that the contract language never permitted
How each payer treats a merger, acquisition, or change of control — and whether the contract even assigns
Stock-purchase versus asset-purchase treatment, and the re-credentialing it can trigger
The reality of collapsing multiple TINs onto the surviving agreements

The operator's read

Fulcrum reads what it will earn

Fulcrum staffs this work with people who have sat on both sides of the table — payer negotiators, former health-plan leaders, and provider-side contracting teams. They read a contract for what it will actually earn, and for what the integration will actually allow.

Rate upside that is demonstrable with benchmark evidence — not assumed in a model
A payer-by-payer view of how assignment, change-of-control, and M&A clauses behave
Which TINs can be collapsed onto which contracts — and where that protects or erodes rate
A synergy case a buyer can underwrite, because it survives contact with the contracts

It is a pattern we see repeatedly: a reimbursement synergy promised in diligence that the market, the contract structure, and the payer's rules for mergers and acquisitions were never going to deliver. A team that has actually managed these agreements can tell you — before the model is built — what the market will bear.

Client engagements

Who we serve

One asset. Two reasons to underwrite it.

Deal side

Underwriting the asset

You are pricing a reimbursement base and the upside a new owner can unlock — before you commit capital.

Private equityInvestment banksFamily offices Strategic acquirersCorporate developmentLenders

Provider side

Running the asset

You are operating the platform and defending — then growing — every rate the contracts already permit.

Health systemsPhysician platformsASC platforms Infusion & specialty pharmacyOncologyOphthalmology OrthopedicsDermatologyCardiology Behavioral healthUrgent careMulti-state groups

Questions

What deal teams ask first.

How is this different from the quality-of-earnings work our accountants already do?

A quality-of-earnings study validates that reported revenue was real and collected. It does not test whether it was collected at the right rate, or whether the contracts permit collecting more. Black Box Diligence reads each payer agreement as an economic instrument — benchmarking rates code-by-code against a defined market set and quantifying the gap to median and top quartile. It complements a QofE; it does not duplicate it.

What data do we need from the target, and what happens when they won't produce it?

Ideally: executed payer contracts and amendments, fee schedules, and a claims/remittance extract. When documents are not produced, we benchmark against payer price-transparency machine-readable files and the target's own billing data, and we track every missing item as a named open diligence item rather than papering over it. In the ophthalmology sample, unproduced fee schedules and an unconfirmed facility contract are shown openly as open items — that visibility is part of the deliverable.

Can this run inside a two-week exclusivity window?

Yes. The workflow produces a board-ready read inside a compressed exclusivity window: an initial rate-position and contract-mechanics view early, and a full benchmarked model as data arrives. Scope scales to the time and documents available.

How do you benchmark without disclosing another client's contracted rates?

Benchmarks are built from payer price-transparency and machine-readable-file data — a public data source — cleaned code-by-code, plus the target's own billing and remittance data. Percentiles are computed against a defined set of practices or facilities within a defined radius. No individual client's confidential contracted rates are ever disclosed to another.

Do you support the negotiation post-close, or only diagnose pre-close?

Both. The deliverable includes a payer-by-payer negotiation calendar tied to termination and renewal windows. Fulcrum can carry that plan into the post-close renegotiation, or hand it to the operator's team as an executable roadmap.

How do you handle contract-mechanics risk, not just rate?

Rate is only half the read. We flag MFN and rate-parity clauses, all-products clauses, unilateral-amendment rights, tight timely-filing windows, evergreen terms with no escalator, and change-of-control provisions — each of which can erode value or complicate a close. The contract inventory sample scores every agreement on these terms.

Our FDD or QofE provider already modeled reimbursement upside — why do we need this?

Because rate upside is only real if the contracts and the payers permit it. Financial diligence confirms what was collected; it rarely tests whether a modeled post-close rate synergy is achievable given contract language, assignment and change-of-control terms, how each payer treats the transaction, or the mechanics of collapsing multiple TINs. Those are the exact places an assumed synergy quietly disappears after close — and where a team that has negotiated these agreements can tell you, before signing, what the market will actually bear.

What does the deliverable actually look like?

A board-ready executive report — rate position by payer and service family, percentile benchmarking, named-competitor rate comparison, contract-mechanics findings, a quantified opportunity, and a negotiation roadmap — plus a supporting contract inventory workbook. Illustrative samples of both are viewable in the specimen gallery above.

Today's Challenges. Tomorrow's Solutions.

Open the Black Box before you sign the model.

Bring Fulcrum in on a live deal and quantify what reimbursement will do after close — under NDA, inside your timeline.

Discuss a live deal under NDA → Review the sample deliverables