Financial models for home health and hospice agencies
Cash forecasting around period billing and notice-of-admission timing, visit cost by discipline against the period payment, LUPA exposure, and census-driven revenue. Built to order, checked before it ships.
How the money moves
Payment arrives per period rather than per visit, which severs the link between the work done in a week and the cash received for it. Visits are a cost as they happen; the period is billed at its end and paid later still, and the timing of the notice of admission can move a whole period's cash by weeks. Underneath sits a threshold effect that has no equivalent in most industries: a period with too few visits is paid per visit instead of as a period, so the difference between a profitable admission and a loss can be a single visit. Hospice trades the periods for a per-diem by level of care, and adds an aggregate cap that is only knowable across the year.
A finished sample for home health and hospice agencies
Home health cash forecast
Cash tied to the visit or an invoice date. Under period payment the invoice date is neither when the work happened nor when the cash arrives.
- $42,331
- Promised by the old forecast by the end of August, not yet arrived
- $7,690
- Left on the table by LUPA periods
- $87,230
- Lowest closing cash in view
Brightwater Home Health is illustrative. The data is invented; the mechanics are not.
What we build for home health and hospice agencies
The workbooks this business runs on
- 01
Cash flow forecast
Built on period billing and notice-of-admission timing rather than on invoices, because in this business the invoice date is not when the work happened or when the cash arrives.
- 02
Visit cost by discipline
Cost per visit by discipline, including travel and non-visit time, against what the period actually pays — the comparison that says which referral sources are worth taking.
- 03
LUPA exposure reporting
Periods sitting near the visit threshold, early enough in the period to still do something about them.
- 04
Census and admissions forecast
Admissions, length of stay and discharges driving census, and census driving revenue — one model instead of three assumptions.
- 05
Board and lender reporting pack
Census, payer mix, cost per visit, days cash on hand and covenant headroom, on one set of numbers that agree with each other.
Every one of these is a request on your board, not a project with a scope document. All of them are on the one subscription — there is no build type you have to move up a plan to reach.
Where these models usually go wrong, and what we do instead
Four mistakes a model makes when the builder has never seen this business
- 01
Revenue recognized per visit, which reports a good month for a period that will be paid as a LUPA
What we do instead. We recognize on the period and flag the ones tracking under the visit threshold while there is still time to change the outcome.
- 02
Cash tied to invoice date, when notice-of-admission timing is what actually moves it
What we do instead. We drive the cash forecast off admission and notice-of-admission dates, which is what the bank balance actually follows.
- 03
Visit cost excluding travel and documentation time, which makes every rural referral look profitable
What we do instead. We load travel and non-visit time into cost per visit by discipline, so a referral source is judged on what serving it really costs.
- 04
Hospice modeled at a blended per-diem, ignoring level-of-care mix and the aggregate cap
What we do instead. We model the per-diem by level of care and track the aggregate cap across the year, so a cap problem arrives as a forecast and not as a repayment.
When people call us
Usually one of these has just happened
- An acquisition, on either side of it
- A census swing that has moved cash before anyone forecast it
- A rate rule or payment model change
- A bank covenant or a borrowing base
- Cost report preparation
Want this built for your numbers?
Every workbook is recalculated with a formula engine, its checks are proved able to fail, and a second pass re-derives the headline numbers before it ships.
Not ready? Get a free teardown of a sheet you already rely on.