Building the Foundation

Business Case Guide

Version 3 – June 2026

Key Activity 2: Use the Business Case Tool to develop financial projections for care team expansion.

Your team is now ready to use the Business Case Tool, informed by your shared understanding of the CHC’s preliminary decision regarding APM 2.0 participation. The Business Case Tool is an Excel workbook composed of the following eight tabs.


Tab
Purpose

Instructions
Orientation to the purpose and use of the tool.

Staffing and Salary Cost
Input of salary and benefit costs by staff position.

Users, Visits, Revenue
Physical and behavioral visits and revenue by payer category in 2022.

Administrative Costs
Site specific administrative costs (fixed and variable) and corporate overhead allocation to the site.

Incentive Information
Pay-for-performance incentive payments by metric and payer, earned and potentially earned.

Historical Financials
Site-specific all-source revenue, expenses and calculation of net margin.

PHMI Expenses and Grants
PHMI project-specific non-care team expenses and grant revenue.

PHMI Optimal Care Team
PHMI recommended core team and expanded care team modeling.

Ideal Care Team Simulation
Financial modeling using recommended or modified expanded care team with or without triggering change in scope and rebasing of PPS rate and with or without adoption of capitated APM.

As you begin to use the tool, we recommend following this sequence of steps:

  1. Review the tool and understand the data that needs to be collected.
  2.  Identify who is responsible for gathering the data inputs required and by what date.
    • Note that the Business Case Tool is completed for a single unique site.
  3. Once it’s complete, perform two data checks:
    • Tab 5: Confirm the net operating income/loss on row 37 aligns with the previous calendar year (CY) financial statement for the site.
    • Tab 8: Confirm the existing care team staffing information in columns C and D aligns with the site’s current care team model.
  4. Compare the site’s existing care team composition to the ideal care team simulation (Tab 8) and test various scenarios that consider:
    • Services for a specific population of focus (pediatric, maternity, behavioral health, and adult prevention and condition management).
    • New tasks that could be performed under the PHMI model of care that apply to the entire Medicaid managed care assigned membership; those that apply to an entire patient population independent of payer class; and those that apply to only the population of focus.
    • Which tasks require new care team members, and which could be performed by redesigning the job responsibilities of existing staff.
    • The projected impact of the revised model of care on demand for services that are billable under fee-for-service reimbursement.
    • The projected impact of the revised model of care on billable visits under APM 2.0, if applicable.
    • The projected impact on PCP efficiency in providing billable visits under fee-for-service reimbursement.
  5. Review the impact to revenue and expenses.
    • Identify recommendations for a financially sustainable approach to population health management that account for the CHC’s decision to stay fee-for-service or move to APM 2.0.
  6. Present the recommendations.
    • Share the recommendations with a multidisciplinary and diverse group of decision-makers for discussion and feedback. Iterate and revise to complete.