BH Practice Acquisition Due Diligence — 2026 Guide

Why RCM Matters More Than Financials Alone

Buyers often audit financials + patient volume + provider count and miss the biggest hidden risk: broken RCM. A practice with $10M revenue and 10% denial rate is worth $2M less than a practice with the same revenue and 5% denial rate.

The 8-Point RCM Due Diligence Audit

1. Denial rate by payer + trend (last 12 months)
2. Days in AR by payer (average + range)
3. Net collection rate by payer
4. Aging AR (60+, 90+, 120+ buckets)
5. Bad debt write-offs (last 12 months)
6. Prior auth denial rate (missing units)
7. MHPAEA parity issue rate (90837 downcodes)
8. Contract expiration dates + upcoming rate cuts

Credentialing State Audit

1. All providers CAQH profiles current?
2. Provider panel status per payer?
3. Expiring credentials in next 12 months?
4. New provider enrollment turnaround (weeks)?
5. Malpractice coverage adequate?

Technology Debt Audit

1. EHR vendor + contract terms (transferability?)
2. Practice management system integration
3. Data extraction feasibility
4. Backup + disaster recovery status
5. HIPAA compliance state (last audit date)

Compliance Audit

1. OIG exclusion check for all providers
2. State licensing verified
3. DEA license current (prescribers)
4. ADA + accessibility compliance
5. 42 CFR Part 2 compliance (if SUD)

Valuation Impact of Findings

• Every 1% denial rate above industry benchmark: subtract 5-10% from valuation
• Days in AR over 45: subtract 5-15% from valuation
• Panel closures or non-renewals: material discount (10-30%)
• Technology migration required: subtract $50K-$500K
• Credentialing gaps: subtract $25K-$100K per gap

Revenant Care runs pre-acquisition RCM audits · Pricing

– KD, Revenant Care