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PwC CMAAS or A&M?
how much harder is banking then valuation?
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Are you talking reimbursement rates? If that’s the case I have seen adjustments for this run through as diligence and PF adjustments. If you have the data to reliably calculate a revenue uplift across the LTM I’d go ahead and post it as a diligence adjustment but if you don’t have great data I would lean towards a PF. This is likely to be heavily scrutinized by a buy-side team so you want to make sure your calculation is solid if you are going to include this in EBITDA. But overall, I see rate increase adjustments quite a bit
This seems fairly reasonable if those rates are contractually locked in. But with any pro forma, then that begs the question "what else in your business is contractually locked in that we AREN'T adjusting for?", particularly on the cost side
Medicare/Medicaid rates pretty much change yearly. So this could be seen as normal-course. I’ll let someone more senior chime in too, but I think the argument to propose an adjustment for those payors specifically would be that the increases are at an above normal amount.
So if rates generally increase by ~3% each year due to inflation (as an example) then you probably should only propose for an adjustment for rates that increased above that amount.
But I would say generally rate adjustments are common, but expect some push-back from the buy side.