CLEARSKY REHAB HOSPITAL ROSEPINE
1. Target Overview & Investment Thesis
CLEARSKY REHAB HOSPITAL ROSEPINE is a 20-bed rural/critical access in VERNON PARISH, LA with $5.9M in net patient revenue and a 5.9% operating margin. The hospital serves a payer mix of 77.9% Medicare, 0.9% Medicaid, and 21.1% commercial.
Thesis: Turnaround. Our ML models identify $446K in annual EBITDA improvement potential from RCM optimization across 5 levers, lifting margin from 5.9% to 13.4% (+754bps).
| Net Revenue HCRIS | $5.9M |
| Current EBITDA COMPUTED | $348K |
| Operating Margin COMPUTED | 5.9% |
| Occupancy HCRIS | 52.2% |
| Revenue / Bed COMPUTED | $295K |
| Net-to-Gross HCRIS | 65.7% |
| Distress Probability ML | 54.0% |
2. Market Context & Competitive Position
LA has 212 Medicare-certified hospitals with a median operating margin of -3.5%. The target's margin of 5.9% places it above the state median. Among 126 size-comparable peers (10-40 beds), the median margin is -2.9%. The target performs in line with or above peers.
3. RCM Performance Analysis — Comparable Hospitals
Comps selected by bed count (10-40), prioritizing same-state peers. 126 hospitals in the comp set.
| Hospital | State | Beds | Revenue | Margin |
|---|---|---|---|---|
| CLEARSKY REHAB HOSPITAL ROSEPI (Target) | LA | 20 | $5.9M | 5.9% |
| SPECIALISTS HOSPITAL OF SHREVE | LA | 15 | $79.1M | 21.3% |
| OCHSNER BAYOU LLC | LA | 25 | $76.5M | -0.9% |
| OUR LADY OF THE ANGELS HOSPITA | LA | 36 | $76.2M | -4.9% |
| CENTRAL LOUISIANA SURGICAL HOS | LA | 24 | $69.1M | 7.7% |
| ST. CHARLES PARISH HOSPITAL | LA | 27 | $64.0M | -5.1% |
| AVALA | LA | 21 | $64.0M | 7.4% |
| BYRD REGIONAL HOSPITAL | LA | 39 | $61.1M | 2.5% |
| THE SPINE HOSPITAL OF LOUISIAN | LA | 23 | $57.4M | 35.4% |
4. Predicted Improvement Opportunities
Improvement targets set at P75 of comparable peers with 60% gap closure assumption. Coefficients calibrated to published research bands. Total EBITDA uplift: $446K (754bps margin improvement).
| Lever | Current | Target | EBITDA Impact | Margin | Ramp |
|---|---|---|---|---|---|
| Net Collection Rate | 93.5% | 97.0% | $124K | +210bp | 18mo |
| Denial Rate Reduction | 12.0% | 6.5% | $122K | +206bp | 12mo |
| Cost to Collect | 4.5% | 2.5% | $118K | +200bp | 12mo |
| A/R Days Reduction | 5200.0% | 3800.0% | $72K | +122bp | 9mo |
| Clean Claim Rate | 88.0% | 96.0% | $10K | +16bp | 6mo |
5. EBITDA Bridge
| Current EBITDA | $348K |
| + RCM Uplift | +$446K |
| Pro Forma EBITDA | $793K |
| Current Margin | 5.9% |
| Pro Forma Margin | 13.4% |
| WC Released (1x) | $227K |
6. Returns Analysis — Scenario Matrix
5-year hold, 5.5x leverage, 3% organic growth, 10%/yr debt paydown. Base case uses 100% of predicted RCM uplift. Bull case: 130% uplift at lower entry. Bear case: 50% uplift at higher entry.
| Scenario | Entry | Exit | Equity In | Equity Out | MOIC | IRR |
|---|---|---|---|---|---|---|
| Base Case | 10.0x | 10.0x | $535K | $6.7M | 12.62x | 66.0% |
| Base (11x exit) | 10.0x | 11.0x | $535K | $7.6M | 14.21x | 70.0% |
| Bull Case | 9.0x | 11.0x | $481K | $9.2M | 19.20x | 80.6% |
| Bull (12x exit) | 9.0x | 12.0x | $481K | $10.2M | 21.24x | 84.3% |
| Bear Case | 11.0x | 10.0x | $588K | $4.3M | 7.39x | 49.2% |
| Bear (11x exit) | 11.0x | 11.0x | $588K | $5.0M | 8.45x | 53.2% |
7. Key Risks & Mitigants
| Severity | Risk Factor | Mitigant |
|---|---|---|
| Medium | Heavy Medicare dependence | Medicare comprises 77.9% of days; rate updates may lag inflation. Mitigant: CDI/CMI lever directly increases Medicare reimbursement |
| High | Elevated distress probability | Model estimates 54.0% probability of financial distress. Mitigant: distressed entry pricing (7-9x) compensates for risk |
8. Data Sources & Methodology Appendix
Data Sources
- CMS HCRIS Cost Reports (Medicare-certified hospitals)
- CMS Medicare Utilization (DRG-level volumes)
- CMS Chronic Conditions (county-level disease prevalence)
- HCRIS multi-year trend data (financial time series)
Comparable Selection
- 126 hospitals with 10-40 beds
- Same-state prioritization (n=127)
- Comp margins: P25=-15.8% / P50=-2.9% / P75=7.2%
Bridge Methodology
- Targets: P75 of comparable peers (60% gap closure)
- Denial: avoidable share = 35% of delta × NPR
- AR: bad debt coefficient = $0.65 per day per $1K NPR
- NCR: 60% coefficient on collection rate improvement
- CDI: 0.75% of Medicare revenue per 0.01 CMI point
Returns Assumptions
- Leverage: 5.5x entry (84.6% debt / 15.4% equity)
- Organic growth: 3% annual EBITDA growth
- Debt paydown: 10% of principal per year
- Hold period: 5 years
Generated by SeekingChartis on April 26, 2026. All predictions use public data only. Confidence intervals calibrated via split conformal prediction (90% coverage target). This memo is for informational purposes and does not constitute investment advice.