TRANSFORMING HOME HEALTH THROUGH VALUE-BASED CARE

ABOUT THIS COMPARISON

This deck presents a detailed financial and operational comparison between the Traditional Fee-for-Service (FFS) Model and a Provider-Led Value-Based Enterprise (VBE) structure.

In the VBE Model: Your home health agency becomes the contracting entity that holds the direct payer agreement and assumes population risk. ACUITYhealth serves as a VBE participant, providing the CHI scoring technology, FHIR interoperability, predictive analytics, and RAF optimization that enable your transformation.

The Result: You maintain clinical control and receive 70% of PMPM revenue while Acuity's 30% share covers the intelligence layer that makes value-based care achievable without building complex infrastructure.

UNDERSTANDING PER-MEMBER-PER-MONTH (PMPM)

PMPM is your new revenue model. Instead of billing per visit or episode, you receive a fixed monthly payment for each patient under your care, regardless of visit frequency. This predictable $300+ monthly payment replaces the uncertainty of episodic billing.

What this means for your agency: You transition from a vendor billing for services to a risk-bearing partner with the payer. Your focus shifts from maximizing visits to optimizing outcomes. You keep the savings when you prevent hospitalizations and manage care efficiently.

The transformation: This model converts your existing Medicare census into guaranteed monthly revenue starting Day 1. No waiting for episode completion. No denied claims. Just predictable cash flow that rewards quality over quantity, backed by real-time health data that proves your value.

70%

Higher Profit Margins

Day 1

PMPM Activation

$300

Base PMPM/Patient

25%

Cost Reduction

A COMPREHENSIVE GUIDE TO TRANSITIONING FROM FEE-FOR-SERVICE TO PROVIDER-LED VBE

THIS MODEL TRANSFORMS YOUR HOME HEALTH AGENCY FROM A TRANSACTIONAL VENDOR INTO A RISK-BEARING PARTNER WITH PREDICTABLE REVENUE AND MEASURABLE OUTCOMES

PAYMENT MODEL TRANSFORMATION

TRADITIONAL FFS VS VALUE-BASED CARE

METRIC	TRADITIONAL FFS	PROVIDER-LED VBC
Payment Type	Episode-based, per visit	Monthly PMPM, continuous
Average Revenue	$2,800-$4,200 per 30-day	$300 PMPM × 12 months
Duration	6-8 weeks only	Continuous monthly
Gross Margin	10-15%	25-30%
Readmission Rate	20-25%	<10% with CHI
RAF Benefit	None	+0.3-0.5 score lift
Time to Revenue	60-90 days	Immediate (Day 1)
Documentation	Manual OASIS-E1	Auto FHIR write-back

KEY METRIC EXPLANATIONS

Payment Type Transform

Shifts from episodic billing to continuous PMPM
Creates predictable monthly cash flow
No 60-90 day payment delays or claim denials
Revenue starts Day 1 and continues monthly
Payment regardless of visit volume

Gross Margin Improvement

VBC doubles margins from 15% to 30%
Reduces unnecessary visits through predictive care
Cuts documentation burden by 85%
Profit increases by preventing readmissions vs treating them
Creates sustainable growth model

Readmission Rate Impact

Reduces readmissions from 25% to under 10%
Saves $10,000 per prevented hospitalization
CHI predictive alerts enable pre-crisis intervention
Earn quality bonuses while reducing system costs
Improves patient outcomes and satisfaction scores

RAF Score Advantage

Captures complete diagnoses increasing RAF from 1.1 to 1.6
Adds $50-$75 PMPM per patient through proper coding
Your OASIS data already contains this value
VBC monetizes immediately vs leaving money unclaimed
SDOH factors provide additional risk adjustment

Documentation Automation

FHIR auto-population reduces charting from 45 to 7 minutes
Saves 85% of documentation time per patient
Nurses spend time with patients, not paperwork
Improves compliance through standardized capture
Reduces burnout and increases job satisfaction

Immediate Revenue Recognition

Day 1 PMPM activation upon contract signing
No 60-day episode delays or billing lag
No collection issues - predictable monthly deposits
Direct payment improves cash flow immediately
Eliminates bad debt and collection costs

100 CHF PATIENT ANNUAL COMPARISON

Traditional FFS

$700K

Gross Revenue

$105K Net Margin

Provider-Led VBC

$510K

Total Revenue

$180K Net Margin

KEY METRIC EXPLANATIONS

PAYMENT TYPE TRANSFORMATION

Shifts from episodic billing to continuous monthly payments
Eliminates gaps between episodes and denied claims
Creates predictable cash flow regardless of visit volume

GROSS MARGIN IMPROVEMENT (10-15% → 25-30%)

Reduces unnecessary visits through predictive care
Automates documentation saving 85% of charting time
Shifts focus from volume to value-based outcomes

READMISSION REDUCTION (20-25% → <10%)

CHI scoring predicts decompensation before crisis
Real-time alerts enable preventive interventions
Each prevented readmission saves $10,000+ in costs

RAF SCORE BENEFIT (+0.3-0.5 UPLIFT)

Captures complete diagnosis coding from OASIS data
Each 0.1 RAF increase = $30 higher monthly PMPM
SDOH factors add additional risk adjustment value

IMMEDIATE REVENUE (DAY 1 VS 60-90 DAYS)

PMPM payments start immediately upon enrollment
No waiting for episode completion or billing cycles
Improves working capital by 60+ days

DOCUMENTATION AUTOMATION

FHIR integration auto-populates OASIS fields
Reduces documentation time from 45 to 7 minutes
Ensures 100% compliance and quality reporting

VBC DELIVERS 71% HIGHER NET MARGINS DESPITE LOWER GROSS REVENUE THROUGH PREDICTABLE PMPM PAYMENTS AND REDUCED OPERATIONAL COSTS

PMPM DERIVATION METHODOLOGY

TRANSPARENCY IN COVERAGE + RISK ADJUSTMENT

BASE PMPM = TiC BASELINE × RAF MULTIPLIER × QUALITY FACTOR

$300 = $200 × 1.2 × 1.25

1

TiC BASELINE

Transparency in Coverage - CMS-mandated price transparency data showing actual negotiated rates between payers and providers. Reveals true cost of care episodes, enabling identification of preventable spending.

2

RAF MULTIPLIER

Risk Adjustment Factor - CMS hierarchical condition category (HCC) scoring system. Captures patient complexity from diagnoses, demographics, and social determinants. Higher RAF = higher reimbursement.

3

QUALITY FACTOR

Rewards outcome improvements
Aligns payment with value
Creates sustainable margins
Drives continuous improvement

1

TiC BASELINE CALCULATION
Total CHF episode costs: $1,200/month average
Preventable costs identified: $400 (33%)
Negotiated capture rate: 50% of savings
Base: $200 PMPM

↓

2

RAF SCORE ENHANCEMENT
Current RAF: 1.1 (incomplete coding)
Enhanced RAF: 1.4 (OASIS + SDOH capture)
Multiplier effect: 1.27x
Adjusted: $254 PMPM

↓

3

QUALITY & OUTCOME TIERS
Readmission reduction: +10%
Medication adherence: +8%
OASIS improvement: +7%
Final: $300-$350 PMPM

RISK-ADJUSTED PMPM BY CONDITION

CONDITION	BASE TiC	RAF	PMPM
CHF + Diabetes	$250	1.6	$400
COPD + Depression	$220	1.4	$325
Post-Surgery	$180	1.2	$275
Chronic Wounds	$200	1.3	$300

ACCURATE RAF SCORING ALONE INCREASES PMPM BY 27%, WHILE QUALITY BONUSES ADD ANOTHER 15-25% UPSIDE

POPULATION STRATIFICATION

ACUITY CHI 5-TIER SYSTEM

TIER 5: HIGH COMPLEXITY CHI 0-20

PMPM Rate

$440

Population %

15%

RAF Score

1.8-2.2

Monthly Cost

$1,500-$2,000

Interventions: Daily monitoring, CCCM, hospital-at-home, palliative care

TIER 4: RISING RISK CHI 21-40

PMPM Rate

$350

Population %

20%

RAF Score

1.4-1.7

Monthly Cost

$900-$1,200

Interventions: Weekly RN visits, RPM, medication management, care coordination

TIER 3: MODERATE CHI 41-60

PMPM Rate

$285

Population %

30%

RAF Score

1.1-1.3

Monthly Cost

$600-$800

Interventions: Bi-weekly visits, CCM, telehealth, SDOH support

TIER 2: STABLE CHI 61-80

PMPM Rate

$225

Population %

25%

RAF Score

0.9-1.0

Monthly Cost

$400-$500

Interventions: Monthly check-ins, PCM, digital engagement, education

TIER 1: WELLNESS CHI 81-100

PMPM Rate

$175

Population %

10%

RAF Score

0.7-0.8

Monthly Cost

$200-$300

Interventions: Quarterly wellness visits, prevention, health coaching

CHI-BASED STRATIFICATION ENABLES PRECISE RESOURCE ALLOCATION, REDUCING UNNECESSARY VISITS BY 40% WHILE IMPROVING OUTCOMES

FINANCIAL PROJECTION MODEL

50 CHF PATIENT COST ANALYSIS

6-WEEK EPISODE OF CARE BREAKDOWN (PER PATIENT)

DISCIPLINE	FFS VISITS	FFS COST	VBE VISITS	VBE COST
Skilled Nursing (RN)	10 visits	$1,800	4 visits + RPM	$720
Physical Therapy	6 visits	$900	3 visits + virtual	$450
Occupational Therapy	4 visits	$560	2 visits	$280
Home Health Aide	8 visits	$480	4 visits	$240
Medical Social Worker	2 visits	$300	1 visit + virtual	$150
Wound Care/Supplies	As needed	$400	As needed	$250
Documentation/Admin	45 min/visit	$560	7 min/visit (auto)	$110
TOTAL PER EPISODE	30+ visits	$5,000	14 visits + tech	$2,200

50 PATIENT COHORT COMPARISON (6 WEEKS)

Traditional FFS Model

$250,000

Total Episode Cost

Revenue: $280,000
Margin: $30,000 (11%)

VBE Model (PMPM)

$110,000

Total Care Cost

Revenue: $45,000 (monthly)
Margin: $15,750 (35%)

EFFECTIVE COMPENSATION INCREASE

FFS MODEL (50 PATIENTS)

Gross Revenue: $280,000
Operating Costs: $250,000
Net Margin: $30,000 (11%)
Per Patient Profit: $600

VBE MODEL (50 PATIENTS)

PMPM Revenue: $45,000/mo
Operating Costs: $110,000
Net Margin: $15,750 (35%)
Per Patient Profit: $1,350

125% INCREASE IN PER-PATIENT PROFIT

Despite 56% lower costs through efficiency and automation

SCALING TO 600 PATIENT POPULATION

TIER	PATIENTS	PMPM	MONTHLY	ANNUAL
Tier 5: High Complex	90 (15%)	$440	$39,600	$475,200
Tier 4: Rising Risk	120 (20%)	$350	$42,000	$504,000
Tier 3: Moderate	180 (30%)	$285	$51,300	$615,600
Tier 2: Stable	150 (25%)	$225	$33,750	$405,000
Tier 1: Wellness	60 (10%)	$175	$10,500	$126,000
TOTAL	600	$295 avg	$177,150	$2,125,800

REVENUE DISTRIBUTION (70/30 SPLIT)

Home Health (70%)

$1.49M

Annual Revenue

From 50: $378K
To 600: $1.49M
Growth: 294%

ACUITY (30%)

$638K

Annual Revenue

From 50: $162K
To 600: $638K
Growth: 294%

QUALITY BONUS POTENTIAL (600 PATIENTS)

METRIC	THRESHOLD	BONUS	ANNUAL VALUE
Readmission Reduction	<15%	+10%	$212,580
RAF Completeness	>95%	+8%	$170,064
CHI Improvement	>5 points	+7%	$148,806
OASIS Timeliness	100%	+5%	$106,290
TOTAL BONUS POTENTIAL			$637,740

HOW QUALITY METRICS ARE DERIVED

Readmission Reduction

Baseline: 22% rate (132 patients)
Target: <15% (90 patients max)
CHI predicts 85% of readmissions
42 prevented × $10K = $420K saved
10% bonus = $212,580 earned

RAF Score Completeness

Current RAF: 1.1 (incomplete)
Target: 1.4+ via OASIS capture
0.3 increase = $90 PMPM/patient
600 × $90 × 12 = $648K value
8% bonus = $170,064 earned

CHI Score Improvement

Baseline CHI: 52 (moderate)
Target: 57+ (5-point gain)
Measured via OASIS functions
Each point = 2% less utilization
7% bonus = $148,806 earned

OASIS Timeliness

Start: Submit within 5 days
Recert: Every 60 days on time
Discharge: Within 30 days
100% via FHIR auto-population
5% bonus = $106,290 earned

STARTING WITH 50 PATIENTS PROVES THE MODEL WITH 125% PROFIT INCREASE, THEN SCALING TO 600 PATIENTS GENERATES $2.76M TOTAL OPPORTUNITY INCLUDING BONUSES

OPERATIONAL COST TRANSFORMATION

PER-PATIENT MONTHLY COST BREAKDOWN

Traditional FFS

$520

Cost Per Patient

RN Visits: $320
PT/OT: $120
Admin: $80

VBC Model

$195

Cost Per Patient

Risk-Based Care: $130
Tech Platform: $35
Admin: $30

COST REDUCTION DRIVERS

CATEGORY	FFS COST	VBC COST	SAVINGS
Clinical Labor	$320/patient	$130/patient	59% reduction
Documentation	$45/patient	$8/patient	82% reduction
Care Coordination	$35/patient	$12/patient	66% reduction
Readmission Cost	$75/patient	$20/patient	73% reduction
Admin Overhead	$45/patient	$25/patient	44% reduction
TOTAL	$520	$195	62.5% reduction

NET MARGIN ANALYSIS (600 PATIENTS)

FFS

TRADITIONAL MODEL
Gross Revenue: $312,000/month
Total Costs: $312,000/month
Operating Margin: $46,800 (15%)
Annual Net: $561,600

VBC

VALUE-BASED MODEL
PMPM Revenue: $177,150/month
Total Costs: $117,000/month
Operating Margin: $60,150 (34%)
Quality Bonuses: $53,145/month
Annual Net: $1,360,000

VBC DELIVERS 142% HIGHER NET INCOME WITH 62% LOWER OPERATIONAL COSTS THROUGH PREDICTIVE CARE MANAGEMENT AND AUTOMATION

STRATEGIC IMPLEMENTATION

12-MONTH TRANSITION ROADMAP

PHASE	TIMELINE	ACTIONS	REVENUE IMPACT
Phase 1: Foundation	Months 0-3	TiC analysis, RAF baseline, CHI implementation	$300 base PMPM secured
Phase 2: Pilot	Months 4-6	100-patient cohort, data integration, reporting	+10% RAF uplift ($30/patient)
Phase 3: Scale	Months 7-9	600-patient expansion, quality metrics tracking	+15% quality bonus ($45/patient)
Phase 4: Optimize	Months 10-12	Full automation, shared savings activation	+20% performance tier ($60/patient)

YEAR 1 FINANCIAL EVOLUTION

Q1 (Baseline)

$531K

$300 PMPM × 600

Q2 (RAF Lift)

$584K

$330 PMPM × 600

Q3 (Quality)

$631K

$345 PMPM × 600

Q4 (Performance)

$684K

$380 PMPM × 600

KEY PERFORMANCE INDICATORS

METRIC	BASELINE	TARGET	ACHIEVED
30-Day Readmissions	22%	<15%	12%
CHI Score Improvement	45	55+	58
RAF Score Accuracy	1.1	1.4+	1.45
Documentation Time	45 min	<10 min	7 min
Cost Per Patient	$520	<$250	$195

3-YEAR GROWTH PROJECTION

Y1

600 patients × $345 avg PMPM = $2.48M revenue
Net margin: $844K (34%)

Y2

1,200 patients × $365 avg PMPM = $5.26M revenue
Net margin: $2.1M (40%)

Y3

2,000 patients × $385 avg PMPM = $9.24M revenue
Net margin: $4.16M (45%)

THIS TRANSFORMATION CREATES A SCALABLE, TECHNOLOGY-ENABLED CARE DELIVERY MODEL THAT GENERATES 3X HIGHER MARGINS WHILE IMPROVING PATIENT OUTCOMES AND REDUCING TOTAL COST OF CARE BY 25%

THANK YOU

ACUITY.health

Predict Health. Empower Life.

LEADERSHIP TEAM

Srinivas Nimmagadda, M.D.
Founder & CEO

Jake Saunders, M.D.
Chief Medical Officer

Ricky Shinall, M.D. Ph.D.
Chief Scientific Officer

Grant Saunders
Chief Technology Officer

Brian Williams
Chief Operating Officer

CONTACT US

Ready to transform your home health agency into a value-based care leader?
Let's discuss how ACUITYhealth can enable your journey to predictable PMPM revenue.