DNP885 Module 7 assignment: revenue projection with stated assumptions and a low case, a full sample

From 620 Discharges to $127,069: A Revenue Projection for a Heart Failure Transitional Clinic, Every Assumption Shown and a Low Case Included

Student Name

Doctor of Nursing Practice Program, Aspen University

DNP885: Strategic Planning and Financial Management

Instructor Name

Month Day, Year

From 620 Discharges to $127,069: A Revenue Projection for a Heart Failure Transitional Clinic, Every Assumption Shown and a Low Case Included

A revenue projection is a chain of assumptions, and its value depends on whether each link can be checked. This paper projects visit revenue for a nurse practitioner-led heart failure transitional clinic at Harlan Valley, the composite hospital whose nursing division set the strategic objectives earlier in the term, and which the capital committee has agreed to fund for build-out. It starts from the hospital's own discharge count, states each assumption with its source, calculates base, low, and high cases, and identifies which assumptions matter most. The projection covers visit revenue only; the clinic's costs and its effect on readmissions are addressed in the business case.

The Service

The clinic will see adults discharged after a heart failure hospitalization, with a first visit within seven days of discharge and follow-up visits over the next month to adjust medications, check weight and symptoms, and reinforce self-care. A nurse practitioner will lead it, supported by a registered nurse care coordinator who calls each patient within two business days of discharge. The model reflects the evidence: in a systematic review of 47 randomized trials of transitional care for heart failure, multidisciplinary heart failure clinics and home-visiting programs reduced all-cause readmission over three to six months, with high strength of evidence (Feltner et al., 2014).

Assumptions

Table 1 lists each assumption and where it comes from.

The Base Case

Of 620 discharges, 434 patients are eligible, and at a 75 percent capture rate the clinic sees 326 patients a year. Of these, 222 are Medicare beneficiaries whose first visit is billed as transitional care management at $235, producing $52,170, and 104 have other coverage, producing $9,906 at $95.25. Follow-up visits total 587 at a blended $110.72, producing $64,993. Base-case visit revenue is $127,069 a year from 913 visits.

Transitional care management carries requirements: an interactive contact with the patient within two business days of discharge and a face-to-face visit within a set period, seven days for high-complexity patients. The care coordinator's call is designed to meet the first requirement, and the seven-day visit target meets the second. If either is missed, the first visit is billed as an ordinary office visit at a lower rate.

Low and High Cases

The low case assumes a capture rate of 50 percent, since patients may prefer to return to their own physician or may not want another appointment so soon after discharge, and 1.3 follow-up visits per patient because of no-shows. That yields 217 patients, 499 visits, and $72,575 in revenue, 43 percent below the base case. The high case assumes 85 percent capture and 2.2 follow-up visits, yielding 369 patients, 1,181 visits, and $160,129. The range from $72,575 to $160,129 is wide because the two assumptions that drive it, whether patients come and whether they come back, have not yet been tested here.

The First Partial Year

The clinic is scheduled to open on January 3, 2028, midway through the fiscal year. For those six months, volume is assumed to ramp to 60 percent of the base case as referral habits form, producing about $38,100. The first full year of operation, ending June 30, 2029, is the year for which the base, low, and high cases apply.

Which Assumptions Matter Most

Capture rate is the most important assumption. Each 10 percentage points of capture changes revenue by roughly $17,000 in the base case, because it changes both first visits and follow-ups. The transitional care management rate is second: if only half of Medicare first visits met the requirements, revenue would fall by about $13,000, since those visits would be paid at the ordinary Medicare rate of $118 instead of $235. The payer mix is more stable, because it is drawn from the hospital's own discharges. These sensitivities point to the operational priorities: a discharge process that schedules the clinic visit before the patient leaves, and a reliable two-day call.

How the Projection Will Be Checked

A projection earns trust when it is compared with results. After opening, the clinic's monthly report will show, beside each assumption, the actual value: eligible discharges, the share scheduled before leaving the hospital, the share who attended, follow-up visits per patient, the share of Medicare first visits that met the transitional care management requirements, and net collections by payer. Budgets built on explicit volume and rate assumptions allow variances to be traced back to the assumption that failed, rather than explained after the fact (Finkler et al., 2013). If actual capture after six months is closer to the low case, the team will review the discharge scheduling process first, since it is the step most within the hospital's control, before revising the projection downward. The same report will feed the quarterly review of the heart failure readmission objective, so that volume and outcome are read together.

What Revenue Does Not Capture

Visit revenue is only part of the clinic's financial story, and probably the smaller part. The clinic's main purpose is to reduce readmissions, and early follow-up after heart failure discharge is associated with lower readmission risk (Hernandez et al., 2010). Fewer readmissions would reduce the hospital's penalty, but they would also reduce some inpatient revenue from readmissions that are paid. Those effects, and the clinic's operating costs, belong in the business case rather than in this projection, so that revenue is not inflated by benefits that arrive through a different channel.

Conclusion

Built from 620 discharges and eight stated assumptions, the clinic's projected visit revenue is $127,069 in a full base-case year, with a low case of $72,575 and a high case of $160,129. Capture rate and transitional care management billing drive most of the uncertainty. Monthly tracking of both after the clinic opens will show which case is unfolding, and the business case will use the low case as its planning figure.

References

Feltner, C., Jones, C. D., Cené, C. W., Zheng, Z.-J., Sueta, C. A., Coker-Schwimmer, E. J., Arvanitis, M., Lohr, K. N., Middleton, J. C., & Jonas, D. E. (2014). Transitional care interventions to prevent readmissions for persons with heart failure: A systematic review and meta-analysis. Annals of Internal Medicine, 160(11), 774-784. https://doi.org/10.7326/M14-0083

Finkler, S. A., Jones, C. B., & Kovner, C. T. (2013). Financial management for nurse managers and executives (4th ed.). Elsevier Saunders.

Hernandez, A. F., Greiner, M. A., Fonarow, G. C., Hammill, B. G., Heidenreich, P. A., Yancy, C. W., Peterson, E. D., & Curtis, L. H. (2010). Relationship between early physician follow-up and 30-day readmission among Medicare beneficiaries hospitalized for heart failure. JAMA, 303(17), 1716-1722. https://doi.org/10.1001/jama.2010.533