Revenue in motion
The money waiting in a stage is its daily dollar flow times the days it waits there. It isn't lost: cutting days releases it once, and every later order arrives sooner.
Revenue in motion
An HME revenue flow case study. How much revenue is waiting at each step between a referral and a payment, how long it waits, and how much never arrives.
How to read this page. This case study comes from real work with a home medical equipment provider. To protect the client, we changed the details and the figures, and sized the model to a provider with about $100M in net revenue. The method and the pattern of findings are real. The dollar amounts, day counts and rates are illustrative. Labels such as measured and modeled describe how each kind of figure was produced in the original work.
At a glance
About $19M of this provider's revenue is in motion at any moment, and roughly $5.9M of it could reach the bank sooner. Another $1.8M to $4.1M a year is recoverable from orders and claims that fall out of the flow today.
$19.2M
Revenue in motion right now
Modeled; the warehouse shows $20.0M across open orders, bill hold and A/R
$5.9M
One-time cash if each stage hit its target days
Modeled; $3.5M of it sits in A/R, measured directly
$1.8M–$4.1M
Recoverable revenue per year
$1.8M from write-offs; the rest depends mostly on intake data still being validated
~78 days
Referral to cash, ~108 with prior auth
Rough: adds stage averages, and A/R uses DSO, a portfolio measure; targets ~50 and ~60
Most of this money isn't lost. It's waiting in intake queues, auth holds, bill holds and an A/R that pays its first dollar in about 22 days but carries 53 days of sales in A/R. The quickest wins sit at the back of the flow: about $330K of claims have waited more than 60 days to go out, and about $7.1M a year is written off.
The question
The provider is a multi-state home medical equipment business with about $100M in net revenue, mostly respiratory: oxygen, CPAP and non-invasive ventilation. Brightree is the system of record, Coral handles referral intake at most branches, and Steinert Analytics replicates the Brightree data into a Microsoft Fabric warehouse.
The question started with a branch visit. A senior leader learned that roughly 240 referrals had been sitting unconverted at a single branch. At $1,050 to $1,300 per order, that is $250K to $310K waiting in one building, and it came to light in a conversation with branch managers, not in a report.
So we asked what the P&L can't answer. How much revenue is waiting at each step between a referral and a payment? How long does it wait, and how much never arrives? A P&L shows what was collected. It doesn't show what is in transit, or where it's stuck.
240referrals sitting unconverted at one branch
$250K to $310K waiting in one building, found in a conversation, not in a report.
Revenue as a flow
A DME order passes through five stages between referral and cash, and revenue waits in each one.
New orders, about 38% of revenue, travel every stage. Rental months and resupply, about 62%, join at billing. So A/R carries the whole business, while the front of the flow carries its growth.
Revenue that falls out
Referrals that never convert and claims that are written off are lost every year until the process changes.
Where revenue is waiting
A/R holds about four-fifths of the money in motion. Intake, prior auth and billing have the highest share of their dollars waiting past target, about two-thirds each.
$19.2M in motion, $5.9M of it past target days
Waiting within target daysWaiting past target days
Intake
$2.24M
Prior auth
$0.35M
Delivery
$0.34M
Billing
$0.67M
Payment (A/R)
$15.55M
Intake
About 120 Coral cases arrive each working day. The consignment snapshot shows about 9 days to enter an order and 16 to process it. At roughly $1,170 an order, each day of intake holds about $140K.
Prior auth
About $360K sits in "Order Hold for Auth." Orders in that state today have waited about 56 days, while completed auth cycles average about 30.
Delivery
Not the constraint. Drop-ship orders clear pending tracking in about a day, with about $180K in that state at any time.
Billing
About $280K waits in "Ready to Confirm" for about 5 days, and $570K sits in bill hold, more than half of it past 60 days.
Payment
Open A/R is $15.7M at a DSO of 53, with 22% over 90 days and denials at 15% of A/R. These have held flat or worsened over the past 12 months.
Where it's stuck, by branch
Every branch gets stuck somewhere different, so one company-wide target hides where to act. Select a branch.
| Branch | Intaketarget 5d | Prior authtarget 10d | Deliverytarget 2d | Billingtarget 2d | Paymenttarget 41d | Past target |
|---|---|---|---|---|---|---|
| $177K14d | $37K32d | $14K3d | $57K6d | $960K63d | $1.2M | |
| $511K28d | $27K25d | $21K3d | $57K5d | $426K51d | $1.0M | |
| $171K14d | $24K25d | $13K3d | $110K9d | $488K53d | $806K | |
| $169K14d | $34K31d | $15K3d | $67K6d | $409K52d | $694K | |
| $175K15d | $31K31d | $17K3d | $51K5d | $395K51d | $669K | |
| $132K13d | $42K44d | $17K3d | $45K6d | $344K52d | $580K | |
| $147K15d | $28K32d | $12K3d | $43K6d | $316K51d | $546K | |
| $61K10d | $10K20d | $6K3d | $19K4d | $182K48d | $278K |
Cedar Grove, the acquired branch, is stuck at intake. Orders take about 28 days to enter against a 5-day target: about $511K waiting past target, or roughly 440 referrals. This is the 240-referral story, found by a report instead of a branch visit.
The same cut by payer and product points to different owners. Commercial and Medicare Advantage plans hold most of the prior auth wait, since Medicare fee-for-service needs none for oxygen or PAP. Oxygen and PAP resupply carry most of the recurring billing, so their bill holds and compliance visits decide whether rental months get paid.
Branch names are made up, and the branch, payer and product figures are an illustrative split that adds up to the totals on this page. In practice the cut comes straight from the warehouse: branch is on every sales order, payer on every invoice, and product group on every order line.
Where revenue falls out
About $7.1M a year is written off, about 6.6% of allowed revenue. The largest fall-out that can be measured today sits at the back of the flow. Yearly losses and today's at-risk balances overlap, so these rows shouldn't be added together.
Write-offs
~$7.1M a yearMeasured
Denials not worked in time, missed filing limits, uncollected patient balances
Recoupments
~$2.1M a yearMeasured
Post-payment audits that find thin documentation: orders, face-to-face notes, proof of delivery
Denials sitting in A/R
~$2.4M todayMeasured 15% of A/R
Eligibility, missing auth, medical necessity, coding
Bill hold over 60 days
~$330K todayMeasured 58% of bill hold
Missing documents or auth; many commercial and Medicaid managed care plans allow only 90 to 180 days from the date of service
Referrals never converted
~$8.7M of order value a yearAssumed 83% conversion, not yet measured
Incomplete paperwork, slow first contact, patient goes elsewhere
Orders voided before delivery
~$840K a yearModeled at 98%
Patient declines, duplicates, coverage problems
Auth denied or abandoned
~$640K a yearModeled at 85% approval
Missing clinical documentation, requests that expire
Recoupments tie the back of the flow to the front. Documentation skipped at intake to move an order faster can come back as a recoupment a year or more later. Speed at intake only pays when the paperwork travels with the order.
More than 60% of allowed revenue is recurring: rental months and resupply. That makes adherence part of revenue flow too. Medicare keeps paying a CPAP rental past the first three months only if the patient used it at least four hours a night on 70% of nights in a 30-day stretch, and the treating practitioner re-evaluates them between days 31 and 91. A missed visit ends the rental as surely as missed usage (CGS).
What it's worth
Bringing each stage to its target frees about $5.9M of cash once. Working the fall-out adds about $4.1M a year, more than 40% of it from write-offs, which are measured directly. The recovery shares are our judgment.
$5.86M
Cash that arrives sooner, once.
Intake to sales order$1.54M
Modeled: 16 days to 5; 20% of non-converted referrals won backPrior auth$0.23M
Auth hold measured; approval rate assumedDelivery$0.12M
ModeledConfirm and bill$0.45M
Bill hold measured: 6 days to 2A/R to payment$3.52M
DSO measured; 41 is a stretch target; a quarter of write-offs won back, to confirm by write-off reasonThe two measures don't add together. The first is cash that arrives sooner, once. The second is revenue that arrives at all, every year.
What is a day of DSO worth to you?
Each day of DSO here is worth about $274K of cash ($100M of net revenue over 365 days). Try your own numbers.
Cash released once$1.4M$274K per day of DSO
The playbook
Each stage has one or two levers, and each lever has a number that shows whether it moved.
Intake
- Lever
- A daily queue of unconverted referrals by branch, channel and age. A documentation checklist at intake: standard written order (SWO), face-to-face notes, sleep study or qualifying oxygen test, verified benefits.
- Number that proves it
- Median days to sales order; conversion by channel and branch
Prior auth
- Lever
- Separate the provider's time (assembling and submitting) from the payer's time. Submit complete packets. Renew auths before they expire.
- Number that proves it
- Days from order to submission; days from submission to decision
Delivery
- Lever
- Same-day proof of delivery. Drop-ship tracking exceptions worked daily.
- Number that proves it
- Days from delivery to confirmation
Confirm and bill
- Lever
- A 48-hour confirmation target. Bill hold worked by reason and age, escalated at 45 days.
- Number that proves it
- Bill hold over 60 days
A/R
- Lever
- Work the tail after the first payment: secondary claims, patient balances, denial root causes by payer.
- Number that proves it
- DSO; A/R over 90 days; write-off rate
Recurring revenue
- Lever
- Tie PAP and NIV compliance, and resupply cadence, to the rental and resupply revenue they protect.
- Number that proves it
- Rental months billed against expected
Two clocks in prior auth
Medicare fee-for-service doesn't require prior auth for oxygen or PAP, so this provider's auth volume comes from Medicare Advantage, Medicaid and commercial plans. Since January 1, 2026, Medicare Advantage, Medicaid and CHIP plans must decide complete standard requests within seven calendar days and urgent ones within 72 hours (CMS-0057-F). Medicare's DME contractors decide the items they do pre-authorize within five business days (CGS). Commercial plans and pended requests take longer, but an auth cycle averaging 30 days suggests a large share of the wait comes before a complete request reaches the payer, the part the provider controls. Loading the auth table will confirm it.
The tail of A/R
The first payment lands in about 22 days, yet DSO is 53. The drag is likely in the tail: secondary payers, patient balances and denial rework.
Filing deadlines
Medicare allows 12 months from the date of service to file (Noridian), but many commercial and Medicaid managed care plans allow far less. For a payer with a 90-day limit, a claim held 60 days after delivery has about a month left.
What we can't see yet
The front of the flow is the least measured, and it holds about half of the modeled annual upside. Six data steps would close most of the gap.
- Load the prior authorization table, so approval and denial dates are visible by payer
- Load the void reason names, to separate auth denials from patient cancellations
- Capture an intake date at branches that don't use Coral
- Rebuild stage durations from state changes only; the WIP log also records reassignments and need-date changes
- Count every Coral case in conversion, including cases that never become orders
- Link PAP and NIV compliance to rental continuation
How Steinert Analytics delivers this
Diagnose
The Revenue Flow Scorecard defines the stages and handoffs, confirms where each date and dollar lives in Brightree, and sizes the revenue waiting at each stage. This analysis is a first pass at that output.
Build
The Revenue Flow Dashboard gives you one view from referral to payment on your own Brightree data: dollars and days by stage, aging, and fall-out by branch, payer and intake channel.
Improve
We work the stage with the most money in it, using the levers above and automation where a queue is still manual, such as intake, auth packets and bill hold triage.
Run
Managed analytics keeps the numbers trusted and the queues worked, with weekly stage reviews and new measures as processes change.
The next 240 stuck referrals show up on Monday's dashboard, not in a conversation at a branch.
Method and assumptionsThe model, the inputs, the checks and the sources
This case study comes from real work with a home medical equipment provider. To protect the client, we changed the details and the figures, and sized the model to a provider with about $100M in net revenue. The method and the pattern of findings are real. The dollar amounts, day counts and rates are illustrative. Labels such as measured and modeled describe how each kind of figure was produced in the original work.
The model rests on one relationship from operations research, Little's Law: what sits in a stage equals what flows in per day times how long it stays.
Revenue waiting in a stage = allowed dollars entering per day × average days in the stage
One-time cash is the daily flow times the days cut (days now minus target). Recoverable revenue is the annual fall-out times the share realistically won back. Daily flows are worked backward from collected revenue through each stage's pass-through rate, so recurring claims enter at A/R and earlier stages carry only new orders. In practice recurring claims also pass through confirmation and bill hold, which the billing stage doesn't separate yet.
Inputs
| Input | Value | Source |
|---|---|---|
| Net revenue | $100M a year | Measured |
| Recurring share (rentals and resupply) | 62% | Measured at about 63% (38% rental months, ~25% resupply); modeled at 62% |
| Orders through prior auth | 10% of new-order dollars | 6% measured in WIP history; raised to match the ~$360K auth hold |
| Average order value | $1,170 | ~$35M of new-setup dollars over ~30K intake cases a year |
| Days now: intake, auth, delivery, bill, A/R | 16, 30, 3, 6, 53 | Consignment snapshot, WIP history, WIP snapshot, DSO |
| Target days | 5, 10, 2, 2, 41 | Benchmarks and judgment |
| Pass-through | 83%, 85%, 98%, 99.2%, 93.4% | Assumed, except A/R: 1 minus the write-off rate |
| Share of fall-out won back | 20%, 30%, 30%, 50%, 25% | Judgment |
What we measured
The inputs come from the provider's Brightree data in the Fabric warehouse, rounded. Where a stage isn't measured yet, the model fills it in from benchmarks, and the result is checked against the warehouse's own daily totals.
| Measure | Where it comes from | Status |
|---|---|---|
| Net revenue, allowed dollars, recurring share | Net revenue detail; invoice lines by billing period | Measured |
| Open orders, bill hold, A/R, DSO, denials, write-offs | Daily numbers snapshot; payment facts | Measured |
| Dollars waiting by WIP state | Sales order WIP snapshot | Measured |
| Intake speed | Coral case export; consignment snapshot | Measured; conversion pending |
| Prior auth share and days | WIP state history; auth keys on order lines | Measured; being validated |
| Conversion and approval rates, recovery shares | Industry benchmarks and judgment | Assumed |
How the model checks out
Three of these checks hold partly by construction: A/R days come from DSO, the write-off rate sets A/R fall-out, and the auth share was set to match the auth hold. The independent test is open orders, where the model comes in about 20% low, so treat front-of-flow figures as estimates.
| Check | Model | Warehouse |
|---|---|---|
| A/R waiting | $15.5M | $15.7M open A/R |
| Write-offs per year | $7.1M | ~$7.1M |
| Waiting in prior auth | $0.35M | ~$0.36M on auth hold |
| Waiting to bill | $0.67M | $0.85M ($0.57M bill hold + $0.28M Ready to Confirm) |
| Waiting before delivery | $2.9M | $3.7M open orders |
The gap before delivery is likely structural. The open-orders figure is extrapolated and probably includes resupply and rental orders that the intake model doesn't count.
Benchmarks and sources
Benchmarks used: optimal days in A/R of 30 to 40, typical DME denial rates of 15% to 25%, and 60% to 70% of denials traced to preventable workflow gaps (NikoHealth); up to half of faxed referrals never converting into orders (VGM Heartland session).
Common questions
Is this a real client?
It comes from real work with a home medical equipment provider. We changed the details and figures to protect the client, so the method and pattern of findings are real and the numbers are illustrative.
What does revenue in motion mean?
It's the revenue waiting at each step between a referral and a payment.
What do the measured and modeled labels mean?
They describe how each kind of figure was produced in the original work.
Can you run this analysis for our company?
Yes. The work starts with the Revenue Flow Scorecard, which maps your stages and estimates stuck value.