ML Analysis — COMPASS BEHAVIORAL CENTER LLC
CCN 194085 | Clustering + Distress + RCM Opportunity
🛡️ Public data only — no PHI permitted on this instance.
Investability Score
Speculative — only pursue if turnaround thesis is strong and entry multiple reflects risk.
42
/ 100 (D)
Financial Health4/25
RCM Upside18/25
Market Position11/20
Demand Defensibility5/15
Operational Efficiency4/15
Entry Multiple: 8.0x – 10.0x
Est. MOIC: 1.9x
Risk Factors:
- Negative operating margin
- Small facility (<50 beds) — limited scale
Catalysts:
- Limited competition supports pricing power
Margin Prediction (Trained Ridge Model)
-12.4%
R²=0.34 | n=4,907 | Grade B | Actual: -2.3%
Ridge regression trained on 4,907 HCRIS hospitals. 90% CI: [-40.7%, 15.9%]. P32 nationally.
| Driver | Value | Effect | Explanation | |
|---|---|---|---|---|
| Revenue/Bed | 280514.042 | -0.1813 | Lower Revenue/Bed decreases predicted margin | |
| Expense/Bed | 287089.333 | +0.1688 | Higher Expense/Bed increases predicted margin | |
| Medicaid % | 0.677 | -0.0711 | Higher Medicaid % decreases predicted margin | |
| Net-to-Gross | 0.649 | +0.0314 | Higher Net-to-Gross increases predicted margin | |
| Log(Beds) | 3.178 | -0.0278 | Lower Log(Beds) decreases predicted margin |
Turnaround: 29%Low turnaround probability (29%). Structural disadvantages in Revenue/Bed and Expense/Bed.
Safety-Net/Medicaid Heavy
Archetype
67.1%
Distress Risk
$9.0M
RCM Opportunity
A
Opportunity Grade
131.5%
Projected Margin
Cluster: Safety-Net/Medicaid Heavy
Percentile within cluster: P72. High Medicaid dependence creates reimbursement risk. Assess DSH payments and state expansion status.
Nearest Peers
| Hospital | State | Beds |
|---|---|---|
| WESTERN PEAKS SPECIALTY HOSPITAL | UT | 59 |
| HOSPITAL MENONITA AIBONITO | PR | 129 |
| TOPPENISH COMMUNITY HOSPITAL | WA | 47 |
| MINERAL COMMUNITY HOSPITAL | MT | 25 |
| BANNER UNIVERSITY MED CENTER SOUTH | AZ | 132 |
| NORTH COLORADO MEDICAL CENTER | CO | 202 |
Distress Analysis
Risk: High
National distress rate: 49.3%
LA distress rate: 46.3%
Model AUC: 0.629
| Factor | Value | Contribution | Direction |
|---|---|---|---|
| Medicaid Day Pct | 0.677 | +0.587 | ▲ risk |
| Net To Gross Ratio | 0.649 | +0.125 | ▲ risk |
| Revenue Per Bed | 280514.042 | +0.077 | ▲ risk |
| Medicare Day Pct | 0.120 | -0.035 | ▼ risk |
| Beds | 24.000 | -0.017 | ▼ risk |
| Occupancy Rate | 0.521 | +0.004 | ▲ risk |
RCM Improvement Opportunity
Total (risk-adjusted): $9.0M
Current margin: -2.3%
Projected margin: 131.5%
Grade: A
Comps: 129
Gap analysis vs P75 peers with 60% closure assumption. Confidence-weighted by lever implementation difficulty.
| Lever | Current | Benchmark | Gap | Impact | Confidence | Timeline |
|---|---|---|---|---|---|---|
| Payer Mix Optimization | 0.203 | 0.726 | 52.3% | $7.8M | 50% | 24mo |
| Occupancy Improvement | 0.521 | 0.698 | 17.7% | $1.2M | 55% | 24mo |
Predicted RCM Performance (Public Data Only)
A
RCM Grade
Strong RCM profile — likely low-risk from an operations perspective. Focus diligence on growth thesis.
| Metric | Predicted | 90% CI | Percentile | Assessment |
|---|---|---|---|---|
| Denial Rate | 2.0% | [2.0%, 25.0%] | P0 | Strong — predicted denial rate is in the top third nationall |
| Days in AR | 31.2 | [25.0, 75.0] | P65 | Strong — predicted days in ar is in the top third nationally |
| Clean Claim Rate | 98.0% | [80.0%, 98.0%] | P0 | Strong — predicted clean claim rate is in the top third. |
| Net Collection Rate | 99.5% | [90.0%, 99.5%] | P8 | Strong — predicted net collection rate is in the top third. |