Reimbursement quality of earnings for healthcare private equity.
This page describes how Crescent engages: the scope of the work, the workflow from kickoff to delivery, the artifacts produced, the data and security posture, and the continuous monitoring relationship that follows.
what we engage on
Scope.
Crescent runs engagements for private equity acquirers of physician practices. Our main focus is on healthcare PE doing add-on acquisitions into existing platforms — the deal type where Crescent’s analytical product is most directly translatable into deal terms.
Engagement types.
Acquisition diligence: Full claims-file adjudication of an acquisition target. LOI through close. The primary engagement type.
Platform diligence: Same analytical scope applied to a platform-level transaction or refinancing. Larger scope, longer timeline.
Portfolio audit: Retroactive variance analysis on a held portfolio company, or the entire portfolio, typically when the platform's performance is diverging from the underwriting case. Surfaces what was missed at the original close.
Continuous monitoring: Post-close engine deployment on an acquired or held portfolio company. The engagement that follows acquisition diligence in most cases. More information below.
Specialty fit.
Crescent’s engine has been validated against the full reimbursement substrate for orthopedics and spine. The same substrate covers most professional-services-heavy specialties in the rollup landscape: derm, GI, ophthalmology, urology, cardiology, ENT, OB/GYN. Engine performance is strongest where Medicare Part B and ASC reimbursement constitute a material portion of revenue.
Engagements outside this fit — primary care capitated arrangements, behavioral health, oncology infusion centers — are evaluated case-by-case. Some are in fit; some require additional substrate work before the engine produces defensible output.
Deal-size fit.
The engagement structure is calibrated for transactions in the $25M to $300M enterprise value range. Smaller deals are doable but the engagement fee is a less efficient use of the diligence cap. Larger deals expand the scope of the platform analysis and the engagement timeline accordingly.
how an engagement runs
Six phases, two weeks.
The engagement is structured as six phases with a defined gate between phase 3 and phase 4. The gate is the buyer’s decision point — by the end of phase 3, the buyer has the preliminary findings memo and can decide whether to proceed or walk before phase 4 begins.
phase 01
intake
days 1–2
Engagement scoping, data access setup, contract registry build.
Initial call confirms deal context, target practice, payer mix, claims volume, and timeline. BAA executed. Data transfer mechanism established — typically SFTP into a schema-per-engagement Postgres environment. Initial payer contract documents requested from target via the buyer's diligence channel. The contract registry build begins.
phase 02
ingest & adjudicate
days 3–5
Full claims-file run through the engine.
837 claims and 835 remittances ingested, normalized, and joined. Companion-guide overrides applied per payer. The engine runs against every claim. By end of phase 2, every line of every claim in the file has a CAPE-computed allowed amount, a payer-actual remittance, and a variance with mechanism attribution.
The variance engine runs across the adjudication output, identifying systematic patterns and producing the named findings. The preliminary findings memo lists the top variance patterns, the aggregate variance number, the early read on synergy posture, and the early read on clawback exposure. Delivered with a 45-minute call with the deal team.
decision gate
The buyer evaluates the preliminary findings against the deal thesis. Proceed to phase 4. Walk. Or restructure the deal terms before proceeding. Phase 4 begins only on explicit go-ahead.
Synergy modeling executes against the platform's contract registry. Forward run-rate model runs with provider-level trajectories and retention scenarios. Clawback exposure is bounded by statutory recoupment windows by claim type. Audit exposure mapped across active RAC topics and OIG Work Plan items.
phase 05
synthesis
days 13–14
Negotiation brief, full report assembly, portal population.
Findings synthesized into the deliverable. Negotiation brief drafted with specific recommendations on purchase price, holdback, earn-out, walk-away thresholds. Full report assembled with citation chain for every dollar finding. Portal populated with engagement data, drill-down access provisioned for the deal team.
phase 06
delivery
day 14+
Walkthrough, Q&A, transition to close support or monitoring.
90-minute delivery presentation walking the deal team through the negotiation brief, top findings in each pillar, and recommendations. Followed by Q&A and live stress-testing of synergy assumptions through the portal. Engagement transitions to either close support (the period between delivery and signing) or to continuous monitoring (post-close).
Expedited timelines.
Engagements can be compressed when the deal calendar demands it. Phase 1 and 2 can run in parallel under expedited terms. Phase 3 can deliver in 4 days. Full delivery in 10 days is achievable with sufficient resourcing. Communicate timeline pressure at engagement scoping.
Phase-gated pricing.
The engagement fee is structured to match the workflow’s decision gate. The buyer commits a phase-1 fee at engagement start (30% of total) covering phases 1 through 3 — through the preliminary findings memo. If the deal walks at the decision gate, the engagement closes at the phase-1 fee with no further obligation. If the buyer proceeds to phase 4, the remaining 70% is invoiced on full delivery.
Pricing structure protects the buyer against broken-deal cost on the largest portion of the engagement. Specific fee scales discussed during engagement scoping.
what we deliver
Three artifacts.
The engagement produces three distinct artifacts, each serving a different audience and a different point in the deal lifecycle.
01
The negotiation brief.
Designed to be taken into the next conversation with the seller. The brief carries four specific dollar recommendations:
Recommended purchase price adjustment, with justification linking to specific findings.
Recommended escrow and holdback, with statutory window references and release schedule.
Recommended earn-out structure tied to specific synergy realization milestones.
Walk-away threshold below which the deal becomes uneconomic under the base case.
Read by the deal partner. Used in seller negotiation.
02
The full analytical report.
Section structure:
Executive summary. Five headline findings for IC consumption.
Truth. Historical variance analysis. Top systematic patterns with mechanism attribution. Provider scorecards. Payer behavior breakdowns. Contract compliance.
Forward run-rate. Deterministic 12 and 24-month projection. CPT-level reimbursement trajectory. Provider-level forward modeling. Retention scenarios. Named base, conservative, and stress cases.
Upside. Synergy modeling across four levers. Contract migration. Site-of-service migration with anesthesia capture. Provider coding normalization. Volume capacity expansion.
Downside. Clawback exposure quantification with claim-level identification. Audit exposure mapping. Escrow recommendation with release schedule.
Read by the deal team during deal work and by the IC during approval. Used as the substrate for the LBO model and the IC memo.
03
The live portal.
Every dollar figure in the report drills down to its supporting claims. Every systematic pattern shows the underlying claim cluster. Synergy assumptions are adjustable; the portal recomputes against the engagement data in real time. Findings are exportable to specific IC packet formats.
Read by the deal team during diligence; by the operating team for 100-day planning; by the platform CFO for ongoing reference.
the four pillars
What the analysis produces.
Each pillar of the engagement maps to a specific deal mechanic. The homepage’s what we deliver section describes them in full; what follows is a procurement-side reference summary.
Pillar
Headline
Typical magnitude
Deal mechanic
01 — truth
Ground-truth EBITDA
2 to 11% recoverable variance, % of net professional revenue
Full 837 claims files and 835 remittance files across the diligence window (typically 24 months). Payer contracts and amendments where available. Practice management system extract for provider rosters and billing-side context.
Data transfer
Encrypted SFTP into a schema-per-engagement Postgres environment. Schemas are isolated; engagement data does not cross schema boundaries.
HIPAA
Crescent operates as a Business Associate under HIPAA. BAA executed at engagement intake, before any data transfer.
PHI handling
Engagement data persists for the duration of the engagement plus the agreed retention window. Engagement-specific data is destroyed at retention window end on written confirmation. De-identified pattern data may be retained per the engagement letter's data-use terms.
Security posture
Engagement environments hosted in SOC 2 Type 1 infrastructure. Type 2 in progress. Penetration testing on annual cadence. Full security documentation package available on signed NDA.
Access control
Per-engagement access provisioned through SSO. Audit trail on every data access. Portal access expires on engagement close unless converted to continuous monitoring.
Subprocessors
Cloud infrastructure (AWS) and authentication (Auth0). Full subprocessor list available on request. No third-party access to engagement data outside the infrastructure layer.
Regulatory posture
The engine consults regulatory sources but does not file claims, submit appeals, or represent providers in payer interactions. Findings are advisory; recovery actions are taken by the buyer's existing RCM or counsel.
Security documentation, BAA template, and data processing addendum available on engagement-track request. Send a note to the engagement desk for the package.
after close
From engagement to monitoring.
Most acquisition diligence engagements convert to continuous monitoring engagements after close. The same engine, the same portal, the same data substrate — extended into the post-acquisition operating relationship.
What continuous monitoring covers.
Continuous variance detection: The engine runs on the platform's claims feed at monthly cadence. New systematic patterns flagged as they emerge. The diligence variance number becomes a live operating metric.
Synergy realization tracking: The synergy projections modeled during diligence are tracked against actual cash flow. The operating partner sees, monthly, whether the modeled $X million of contract migration synergy is materializing in remittances.
Provider scorecards: Each provider's trajectory tracked against the forward run-rate projection. Used for compensation conversations, retention planning, and operating reviews.
Payer scorecards: Payer behavior tracked over time. Denial rates, days to cash, contract compliance percentages. Used as the data foundation for payer renegotiation.
Forward run-rate refresh: The diligence forward projection updated quarterly with actual results substituted for forecast. The platform CFO sees how the asset is tracking against the LBO model.
Add-on diligence at discount: Subsequent acquisitions into the platform are diligenced at a reduced engagement fee, because the platform's contracts, payer behavior priors, and operational benchmarks are already in the system.
Structure.
Continuous monitoring is priced per provider per month, with a 36-month default term. Engagement letter terms include a credit mechanism: a portion of the diligence fee credits against the first 12 months of monitoring fees on commitment at diligence-letter signing.
Full continuous monitoring detail provided during engagement scoping.
begin an engagement
Open a conversation with the engagement desk.
Engagements typically begin in the diligence window following LOI, with full delivery sized to the buyer’s close timeline.
To open a conversation, send the following to the engagement desk: