Revenue clarity.
Operational control.
A 36-month RCM partnership for St. Raphael Health Dallas, built around transparent economics, surgical growth and the move beyond Cerner.
Eligible facility collections → PhyTech fee
4.70% effective fee • Even monthly collections
Retained hospital costs are additional. Actual spending unknown.
Make the assumptions visible.
Test retained costs, replacement technology and enterprise scope. All outputs are illustrative.
Scenario assumptions
How the monthly fee is built
Rates are marginal and reset monthly. No repricing of lower bands. Display below uses average monthly cash for explanation; the annual fee uses the actual selected monthly pattern.
Annual recurring operating costs
Current Cerner allocation held at $90K per site. Future replacement allocation follows the slider. Internal staffing is held constant for sensitivity and must be re-estimated at different workloads.
36 month view
Monthly fee audit trail
Retained costs include the liaison and all residual hospital costs within the comparison boundary. Do not add the liaison again. Year 1 transition costs are added once. No inflation or uplift; no annual true-up. A positive difference is not validated cash savings.
Lean allocation. Clear hospital ownership.
12.0 illustrative hospital FTEs versus 8.5 allocated PhyTech equivalents, plus a retained hospital manager.
RCM leadership and liaison
Hospital: 1 FTE · PhyTech: 0.75 equivalents
Internal salary pool: $100,000, before benefits.
Shared PhyTech leadership; hospital retains separate manager liaison
Patient access and authorization coordination
Hospital: 2 FTE · PhyTech: 1 equivalents
Internal salary pool: $110,000, before benefits.
Hospital retains onsite registration and clinical approvals
Coding and revenue integrity
Hospital: 2 FTE · PhyTech: 1.5 equivalents
Internal salary pool: $150,000, before benefits.
Allocated specialists with human review
Claims and rejection management
Hospital: 2 FTE · PhyTech: 1.5 equivalents
Internal salary pool: $120,000, before benefits.
Allocated execution team
Payment posting and reconciliation
Hospital: 1 FTE · PhyTech: 0.75 equivalents
Internal salary pool: $55,000, before benefits.
Allocated team; hospital controls bank accounts
Denials appeals and payer A/R
Hospital: 3 FTE · PhyTech: 2.5 equivalents
Internal salary pool: $195,000, before benefits.
Allocated specialists and escalation
Patient financial services
Hospital: 1 FTE · PhyTech: 0.5 equivalents
Internal salary pool: $65,000, before benefits.
Shared bilingual coverage subject to agreed hours
Retained manager-level liaison: $125K fully burdened illustrative allowance within the base $175K retained-cost total. Allocations are workload equivalents across shared resources, not dedicated headcount or guaranteed coverage.
A second hospital. A separate decision.
Model different collection levels for Dallas and a potential North Dallas site.
Independent site assumptions
This fee-only comparison does not scale the 12 FTE baseline. A second site needs its own workload, retained-cost, enrollment and implementation assessment.
Keep facility, provider, site and legal-entity reporting distinct. Agree the allocation of any aggregate fee in writing.
From financial visibility to focused action.
Explore three concepts for the planned PhySight intelligence experience.
Sample definitions and production readiness
Collections and sample plan are summed across the selected window. Denial rate is denied initial claims divided by adjudicated initial claims in that window. Case counts reflect fictional completed surgical cases. A/R and worklists are point-in-time snapshots at sample month 6, regardless of window. Worklist values are flagged balances, not forecasts of recovery. Expected payment is a fictional contract-based illustration.
Production reporting would require approved scope, validated entity and provider attribution, reconciled data feeds, security and access controls, agreed KPI definitions, human review and functionality confirmation. No account identifiers or physician labels refer to real patients or providers. North Dallas is in due diligence, not acquired.
PhySight examples are separate from the commercial simulator. Changing these demonstration filters does not change the proposal’s fee or cost assumptions.
See the operation behind the cash.
A sample management scorecard showing the reporting design.
What the board would see
Cash reconciled to bank-supported records, collection attribution, payer variance, aging, operational exceptions and accountable next actions.
Baseline and denominator agreement precede target setting. A trend alone does not establish causal improvement.
Technology with a readiness gate
Power BI reporting and PhySight AI are planned, subject to access, data quality, security, interface testing and agreed scope. Qualified people retain coding and decision oversight.
Review the proposed KPI definitions →Readiness before acceleration.
Select a phase to explore deliverables, dependencies and decision rights.
Day 1 is the agreed mobilization date. EHR conversion timing is independent. No production go-live until the hospital approves readiness and continuity arrangements.
View the responsibility matrix →Executive RCM partnership proposal
An accountable operating model for a 36 month engagement
PhyTech proposes a revenue cycle partnership that connects financial clearance, revenue integrity, billing, payment accuracy, patient service, and executive oversight as St. Raphael moves from Cerner to a replacement EHR. We recommend approving the scope and commercial structure in principle, followed by a joint validation and readiness assessment before production go-live.
The investment thesis is disciplined execution with transparent economics: a 12.0 FTE illustrative internal model compared with 8.5 allocated PhyTech FTE equivalents, supported by a retained manager-level hospital RCM liaison. Allocated equivalents describe workload capacity across dedicated and shared resources; they are not a promise of 8.5 dedicated employees or coverage hours.
At $20 million of annual eligible collections distributed evenly across months, the proposed annual fee is $940,000, or 4.70%. Against the preliminary $1,281,600 internal model, the gross difference is $341,600 before retained hospital costs. With $175,000 retained, the modeled difference is $166,600. These are planning comparisons, not validated savings.
Actual hospital spending is unknown. The decision should compare future internal operations on the replacement EHR with the PhyTech future state, identifying costs that can actually cease, costs that remain, and shared allocations that do not release cash.
Base assumption: the $20 million target is facility-only, with no professional collections included. This is an unresolved planning assumption, not a verified hospital fact. Professional billing may be included at the same combined marginal fee only with written hospital and provider approval. Enterprise aggregation also requires explicit agreement.
| Decision item | Proposed framework |
|---|---|
| Term | 36 months from mutually agreed production go-live |
| Staffing | 12.0 hospital model versus 8.5 PhyTech equivalents plus retained hospital liaison |
| Technology | Cerner current state; replacement EHR costs to be validated |
| Growth | North Dallas hospital remains in due diligence; acquisition not completed |
Investment thesis and PhyTech qualifications
Evidence of preparation and a defined delivery model
PhyTech’s project work includes an executive revenue cycle review, a managed-care matrix consolidating seven agreement files into five contract categories, and surgeon activity analysis covering 2,312 encounters and 79 surgeons. These completed analytical work products demonstrate familiarity with the supplied records and establish a useful starting point for implementation.
We propose senior RCM coordination, coding and revenue integrity review, claims and denial execution, bilingual English and Spanish patient financial service, managed-care coordination, and reconciled executive reporting. Final service hours, named leaders, backup coverage, credentials, and comparable hospital references should be confirmed in the contracting package.
The proposed value is reliable process ownership and clearer financial control. No audited recovery result, staffing productivity guarantee, or hospital reference outcome is asserted. Validate experience and delivery capacity against the final facility and professional scope.
| Investment priority | Operating response | Evidence for leadership |
|---|---|---|
| Protect cash | Reconcile charges through remittances | Exception queues and cash reconciliation |
| Improve payment accuracy | Load validated payer terms and review variances | Expected versus actual payment register |
| Support surgical growth | Coordinate surgeon offices and payer readiness | Case clearance and enrollment tracking |
| Create accountability | Assign owners deadlines and escalation | Weekly operations and monthly executive review |
Staffing and hospital liaison
Illustrative roles and annual salary assumptions
The internal salary model totals $795,000 before benefits. The allocation below is a planning design developed for this proposal, not a verified current hospital roster. Scope and volumes must be tested on a like-for-like basis; onsite registration, clinical work, and hospital decision authority remain hospital responsibilities.
The hospital retains a manager-level RCM liaison responsible for internal coordination, clinical and physician-office escalation, data access, approval routing, and readiness sign-off. The liaison is additional to the 8.5 PhyTech equivalents, not included in them. A $125,000 fully burdened liaison allowance is included within the base $175,000 retained-cost scenario; the remaining $50,000 is a placeholder for retained technology and overhead, not an approved budget.
| Role | Hospital FTE | PhyTech equiv. | Hospital salary pool |
|---|---|---|---|
| RCM leadership and liaison | 1 | 0.75 | $100,000 |
| Patient access and authorization coordination | 2 | 1 | $110,000 |
| Coding and revenue integrity | 2 | 1.5 | $150,000 |
| Claims and rejection management | 2 | 1.5 | $120,000 |
| Payment posting and reconciliation | 1 | 0.75 | $55,000 |
| Denials appeals and payer A/R | 3 | 2.5 | $195,000 |
| Patient financial services | 1 | 0.5 | $65,000 |
| Total | 12 | 8.5 | $795,000 |
Fully burdened internal cost model
Current Cerner planning baseline with no double counting
The $1,281,600 annual model equals $106,800 per modeled FTE. Benefits are applied to base salaries once. Technology, facilities, FF&E, G&A and transaction costs appear separately; they must not be added again through a blanket overhead multiplier.
The $90,000 Cerner allocation is unverified and is not a vendor quote. It cannot automatically be removed or transferred to the replacement EHR. Confirm software scope, allocation methodology, remaining contract obligations, interface fees, and termination costs.
| Expense | Annual estimate | Per FTE |
|---|---|---|
| Base salaries | $795,000 | $66,250 |
| Benefits payroll taxes and workers compensation at 28% | $222,600 | $18,550 |
| Cerner RCM software support and allocated technology | $90,000 | $7,500 |
| Rent occupancy and utilities | $42,000 | $3,500 |
| FF&E and depreciation | $18,000 | $1,500 |
| Allocated G&A HR finance and IT | $60,000 | $5,000 |
| Clearinghouse statements and communications | $36,000 | $3,000 |
| Training compliance and miscellaneous | $18,000 | $1,500 |
| Total | $1,281,600 | $106,800 |
Current and future operating economics
Compare future states and classify actual cash effects
Avoidable costs cease only when a position, vendor agreement, space commitment, or other expense is actually eliminated. Retained costs include the hospital liaison, onsite access, clinical duties, financial approvals, and required technology. Allocated but nonavoidable costs can include rent, shared IT, G&A and depreciation; allocating them to RCM does not mean outsourcing releases cash.
Future internal recurring cost = $1,191,600 plus replacement RCM technology allocation. The $1,191,600 removes only the modeled $90,000 Cerner allocation from the current model. This holds all other categories constant for sensitivity; actual workflow and staffing redesign may change them.
PhyTech future recurring cost = progressive fee plus retained hospital costs. Include nonavoidable costs in retained costs whenever they remain in the comparison boundary. Add implementation, migration, dual operations, severance and other transition costs separately to each relevant scenario. Whole-hospital EHR costs common to both future states should be identified consistently without double counting.
| Component | Current internal | Future internal | PhyTech future |
|---|---|---|---|
| RCM staffing | 12.0 modeled | 12.0 sensitivity baseline | 8.5 equivalents plus liaison |
| Recurring operating cost | $1,281,600 | $1,191,600 + new tech | $940,000 + retained at $20M |
| Technology | Cerner $90K assumed | Replacement allocation unknown | Contract allocation unknown |
| Transition costs | Excluded | Add actual migration costs | Add actual transition costs |
| Avoidability | Unverified | Validate line by line | Validate retained residuals |
Progressive compensation and benchmarks
Monthly marginal tiers with no annual threshold substitution
Monthly fee on eligible collections C ≥ 0 = 5.25% × min(C, $500,000) + 4.75% × min(max(C − $500,000, 0), $500,000) + 4.25% × max(C − $1,000,000, 0). Each rate applies only to its band. Thresholds reset monthly; uneven monthly cash can change the annual fee.
Approved facility and professional collections may share one combined fee calculation at these same tiers; no separate professional percentage is added. Written hospital/provider approval must specify entities, providers, services, collections attribution and reporting. Maintain distinct facility, professional, provider and location reporting and an agreed allocation of the aggregate fee.
Enterprise aggregation across additional hospitals and approved professional entities is available only through explicit written agreement. Separate entities do not automatically share thresholds. No acquisition, professional approval or combined $20M scope is assumed in the base case.
| Annual evenly distributed collections | Annual fee | Effective rate |
|---|---|---|
| $20,000,000 | $940,000 | 4.70% |
| $30,000,000 | $1,365,000 | 4.55% |
| $40,000,000 | $1,790,000 | 4.475% |
Three year financial model
Flat collections and costs with no assumed uplift or inflation
Base case: $20M annual facility-only eligible collections, evenly distributed monthly; replacement RCM technology placeholder $90,000 annually; retained cost $175,000 annually, including liaison; transition costs $0 for illustration only. The replacement placeholder is not a quote and is not evidence that Cerner pricing continues.
The model excludes financing, taxes, inflation, collection uplift and incremental hospital growth costs. Net differences are arithmetic scenario outputs. At higher volume the internal staffing baseline must be re-estimated; a fixed 12 FTE model is not a validated scalable comparator.
| Annual or cumulative measure | Year 1 | Year 2 | Year 3 | 36 months |
|---|---|---|---|---|
| Collections | $20M | $20M | $20M | $60M |
| Future internal | $1,281,600 | $1,281,600 | $1,281,600 | $3,844,800 |
| PhyTech fee | $940,000 | $940,000 | $940,000 | $2,820,000 |
| Retained hospital | $175,000 | $175,000 | $175,000 | $525,000 |
| Partnership total | $1,115,000 | $1,115,000 | $1,115,000 | $3,345,000 |
| Modeled difference | $166,600 | $166,600 | $166,600 | $499,800 |
Revenue integrity and executive scorecard
Proposed controls and targets to finalize after baseline validation
Reconcile surgical schedules to completed encounters, documentation, charge capture and billable claims every business day. Validate implants, supplies, modifiers and payer-specific edits; apply qualified human coding review and clinical query controls. The hospital retains clinical documentation and medical necessity decisions.
Track claim acknowledgments through payer acceptance, post remittances against bank-supported cash, review contract variances and credits, and prioritize denials by deadline and financial exposure. Patient support and statements follow hospital assistance, refund, collection and payer-billing policies.
| Measure | Definition and proposed standard | Owner |
|---|---|---|
| Charge reconciliation | Completed cases matched to charges daily; report missing items | PhyTech and liaison |
| Submission lag | Target ≤3 business days after complete billable documentation | PhyTech |
| Rejection response | Review within 1 business day of notice | PhyTech |
| Payment posting | Target ≤2 business days after complete remittance availability | PhyTech |
| Clean claim acceptance | Accepted first submissions / initial submissions; baseline first | PhyTech |
| Denials and A/R | Define denial denominator; aging by payer and responsibility; baseline first | PhyTech and finance |
| Cash and credits | Cash to bank and remittance reconciliation; aged credits and next action | Finance and PhyTech |
Managed care and surgical growth
Payer readiness and physician alignment before expansion
PhyTech will quarterback the managed-care and credentialing work program: consolidate contracts and amendments, map payer products to current entities, validate participation and effective dates, maintain the rate matrix, track renewals, and coordinate enrollment and recredentialing. The hospital retains negotiating authority, contract execution, privileging and credentialing approval.
Routine senior coordination is proposed within scope. Extraordinary projects, external legal work and consulting require separate written approval. Validate product-specific reimbursement, filing limits, implant terms, bundling and patient billing before configuration.
Use surgeon-office coordination to align scheduling, authorization, enrollment, documentation and case readiness. The 2,500 annual surgical case objective is a planning target, not a forecast. Evaluate case contribution using validated payer mix, reimbursement, implants, staffing and capacity; historical gross charges do not establish contribution margin.
North Dallas acquisition remains in due diligence and is not completed. Before adding a hospital, validate closing, entity authority, enrollment, contracts, systems, staffing, bank and ledger separation, and written scope. Preserve site-level reporting even when fee tiers are expressly aggregated.
| Illustrative enterprise case | Separate monthly tiers annualized | Approved aggregate tiers annualized |
|---|---|---|
| Two sites at $20M each | $1,880,000 | $1,790,000 |
| Difference from aggregation | — | $90,000 lower modeled fee |
First 100 days and technology readiness
Day 1 starts at the agreed mobilization date
Timing is readiness-dependent and does not promise that the hospital EHR conversion will finish in 100 days. Maintain Cerner cash and A/R continuity until replacement workflows are tested and authorized.
Power BI views and PhySight AI are planned capabilities subject to data readiness, security, interface validation, human oversight and agreed scope. They are not represented as live hospital production capabilities. PhyTech supports financial workflow design and testing; the hospital and EHR vendor own the broader conversion.
| Window | Actions | Exit evidence |
|---|---|---|
| Days 1 to 15 | Validate entity payer authority scope costs A/R ownership and access | Approved baseline and dependency register |
| Days 16 to 30 | Map workflows; assign liaison; test claims remittances charges and data | Signed responsibility schedule and test plan |
| Days 31 to 60 | Controlled go-live only after readiness approval; reconcile dual systems | Accepted claim and cash reconciliation; continuity plan |
| Days 61 to 100 | Optimize denials and variances; validate scorecard; review growth readiness | Executive review and next-quarter action plan |
Responsibility and governance matrix
One accountable owner per decision and a retained hospital liaison
R means responsible for execution; A means accountable for approval; C means consulted; I means informed. Finance denotes the hospital CFO or delegated executive. Clinical denotes hospital clinical leadership. Hospital IT includes EHR/vendor coordination.
Weekly operating meetings resolve claim and cash exceptions. Monthly executive reviews address reconciled performance, fees and dependencies. Quarterly managed-care and growth reviews examine payer readiness and physician expansion. Maintain issue owner, deadline, exposure and closure evidence; agree urgent escalation windows before go-live.
| Workstream | PhyTech | Liaison | Finance | Clinical | IT |
|---|---|---|---|---|---|
| Claims posting denial execution | A/R | C | I | C | C |
| Clinical documentation | C | R | I | A | I |
| Refunds writeoffs financial policy | R | C | A | C | I |
| Payer contracts and enrollment | R | R | A | C | I |
| System access and conversion | C | R | C | C | A |
| RCM production readiness | R | R | A | C | R |
| Financial baseline and fee approval | R | C | A | I | C |
Commercial definitions and approval framework
Proposed business terms for definitive agreement
Initial term: 36 months from mutually agreed production go-live. Specify effective date, mobilization period, renewal, notice, termination for cause and cure, transition support, data return, privacy, security, liability, and any business associate agreement in the definitive contract.
Eligible collections: cash actually received and attributed to approved in-scope services and entities, net of applicable refunds, reversals and recoupments. Specify service-date cutover, bank/ledger attribution, patient and payer receipts, agency recoveries, settlements, credits and post-termination receipts. Exclude taxes, loans, capital contributions and unrelated receipts. Agree how negative monthly net collections and subsequent reversals affect invoices before execution.
Invoice monthly with supporting collection reconciliation, marginal tier calculation, provider/facility detail and aggregate fee allocation where approved. Define payment deadline, dispute window and audit rights in the agreement. The proposal does not impose a minimum cash guarantee or an annual fee true-up.
Professional billing is included at the same combined fee structure only after written hospital and provider approval of scope and authority; it is not automatic. Enterprise aggregation requires explicit agreement naming participating entities and effective dates, with separate financial reporting. Incremental volume and coverage requirements must be assessed before activation.
Historical A/R is separately negotiated. Establish ownership, inventory, account boundaries, collectibility, vendor rights, recovery duties, refunds, cash attribution and separate compensation in a distinct statement of work. Exclude that inventory from standard fees unless expressly agreed; prevent duplicate charging.
Identify responsibility for EHR licensing, interfaces, clearinghouse, statements, postage and other external expenses before incurrence. List costs included in the fee and costs retained by the hospital, so third-party expenses are neither omitted nor charged twice. EHR procurement is independent of the RCM agreement.
Historical financial and surgical context
Appendix A Pre ownership transition analysis and source limitations
Treat this analysis as pre-ownership-transition historical context. The supplied January 2, 2025 to October 12, 2026 encounter period also spans the reported transition; it is not a clean post-transition St. Raphael operating baseline. Do not annualize these figures or infer current collections, current profitability or recoverable cash.
Top five surgeons account for 32.5% of historical charges; top ten 49.2%. Twenty-four encounter surgeons were absent from the separate roster. Reconcile the active roster and validate three zero durations and one duration above 24 hours. These exceptions do not alone establish credentialing deficiencies.
The reviewed agreements name First Baptist Medical Center. Assignment or payer consent for the current operator was not supplied. Obtain executed originals, participation confirmations, complete amendments and rate files. MyBlue preadmission rules differ from other reviewed BCBSTX products; New Choice has distinct billing rules. Confirm applicability of the November 1, 2026 rate transition.
| Historical measure | Source value |
|---|---|
| Surgeons and encounters | 79 and 2,312 |
| Gross charges | $269,378,562.07 |
| Payment balance | ($19,528,734.95) |
| Adjustment balance | ($219,800,553.57) |
| Remaining net balance | $30,049,273.55 |
| Surgical duration | 2,446.87 hours |
| Inpatient and outpatient encounters | 337 and 1,975 |
Rank the evidence. Keep the decision independent.
The retained preliminary evaluation order is MEDITECH Expanse, Epic, then Altera Sunrise. No completed vendor scoring or prices are assumed.
Evidence-led evaluation
The original order is advisory. Explore your own evidence-based scores below; blank criteria keep the result incomplete. A calculated score does not override access, safety, governance or funding gates.
01 MEDITECH Expanse ↗02 Epic ↗
03 Altera Sunrise ↗
Official product links verified for the proposal November 5, 2026. No vendor affiliation or endorsement is implied. EHR licensing and implementation remain separate hospital investments.
Proposed evaluation weights
Independent EHR shortlist
Appendix B Informational ranking retained from project decisions
1 MEDITECH Expanse. First evaluation priority for the independent surgical-hospital scenario. Verify end-to-end surgical workflow, implant charge capture, coding interfaces, reconciled analytics and five-year total cost. Official product information: Official vendor information ↗
2 Epic. Evaluate enterprise growth fit and hospital-capable hosting arrangements. Require written evidence of deployment options, governance, data access, interface rights and acquisition onboarding economics. Official product information: Official vendor information ↗
3 Altera Sunrise. Evaluate as a competitive alternative using observed OR and financial workflow demonstrations, integration ownership and current references. Official product information: Official vendor information ↗
This is an advisory evaluation order, not completed vendor scoring, pricing diligence or a procurement commitment. Vendor pages verified November 5, 2026 establish product identity, not St. Raphael suitability. Vendor names are typographic identifiers; no recreated logos or endorsements are used.
Apply proposed weights: surgical workflows 30%, total cost and implementation risk 25%, multi-facility scalability 20%, interoperability and RCM data access 15%, financial reporting 10%. Score only after evidence review. Compare licensing, hosting, interfaces, internal staffing, migration, training, dual operation, cash disruption, expansion and exit costs. No vendor prices are assumed.
Sources and final validation package
Appendix C Distinguish project evidence from illustrative assumptions
Project decision source: RCM Proposal Draft conversation, retrieved November 5, 2026. It confirms the fully burdened categories, current Cerner versus replacement EHR distinction, professional scope and enterprise aggregation questions, and the requested dual deliverables.
Prior proposal: PhyTech St. Raphael RCM Proposal, November 5, 2026. Used for proposed services, operating standards, commercial framework, technology caveats and EHR evaluation order. Current proposal supersedes its facility-only professional pricing language and historical-first organization.
Historical project evidence: PhyTech St. Raphael Executive Summary, October 30, 2026; PhyTech Managed Care Matrix; St. Raphael Surgeon Summary. The summary identifies source workbook SRHD-Surgeon List 2026.xlsx, DATA!A1:AC2313 and Surgeon List!A1:C68. Historical observations here are derived from the project summary, not a new audit of source transactions or executed contracts.
New illustrative allocations: role-level staffing and salary pools, $125,000 liaison allowance, $175,000 retained base case and $90,000 replacement technology placeholder. None is a verified hospital expense, vendor price or approved employment budget.
Before final approval obtain current legal entity and enrollment records; executed payer agreements; latest 12 months of monthly cash charges adjustments refunds and denials; current A/R aging and ownership; payroll and benefits; software and vendor contracts; occupancy and G&A allocation; active provider roster; expected surgical volume; replacement EHR bids and transition costs.
Approve an agreed scope and RACI, staffing coverage, billing authority, cost-avoidability bridge, fee attribution rules and implementation exit gates. The editable Word proposal and interactive HTML use the same base assumptions and monthly progressive fee formula. HTML scenarios are sensitivity tools, not approved hospital forecasts.
Approve the framework. Validate the operating case.
Confirm scope, assign the hospital liaison, reconcile current costs and payer authority, and establish readiness gates before go-live. Professional billing, aggregation and historical A/R require their stated written agreements.
Commercial framework →Validation package →Revisit assumptions ↑