Most behavioral health groups receive financial statements each month and call it reporting. The statements record what happened to the ledger; they do not say whether the group is growing, whether it is profitable by payer or site, why utilization moved, what the cash position will be in eight weeks, or what the owners should decide. The management report answers those questions in a fixed order, by a fixed business day, and is reviewed in a standing meeting where decisions are recorded. This is the report, page by page, with a sample month for a two-site, 18-clinician outpatient group — call it the September pack, delivered October 14.
Page one: the story
Five to eight sentences, written for a reader with ten minutes. What happened, what drove it, what is changing, and what decisions are needed — written by someone who understands both the numbers and the practice, after the rest of the pack is built, not before. The sample:
Completed sessions rose 3 percent to 2,310, driven by the north site reaching 83 percent utilization; the south site fell to 70 percent as two clinicians reduced hours ahead of parental leave. Net revenue was US$259,000, 2 percent above budget, with net per session flat at US$112. Contribution margin was 26 percent, one point below budget, because no-shows rose to 13.6 percent — about US$10,200 this month — concentrated in south's Friday and early-morning slots. Days in receivables improved to 37 from 41 as the managed-Medicaid backlog cleared; denials for missing authorization fell to 2.8 percent after the front-end gate went live. Cash ended at US$218,000; the 13-week forecast holds above the floor through December, with a US$9,000 dip in week eleven flagged and covered by the self-pay statement campaign. Turnover year-to-date is 11 percent against 24 last year; one clinician is flagged on two leading indicators and has a conversation scheduled. Two decisions requested: approve the south schedule-template redesign, and approve the offer to the child-and-adolescent hire with a December start and credentialing submitted on acceptance.
Why it is first. If only one page is read, it is this one, and it is written so the owners could run the meeting from it alone.
Page two: operating metrics
The numbers that move next month's revenue sit ahead of the numbers that record last month's. Each with current month, prior month, prior year, budget, and a twelve-month sparkline.
| Metric | Sep | Aug | Sep LY | Budget |
|---|---|---|---|---|
| Completed sessions — north / south / total | 1,310 / 1,000 / 2,310 | 1,260 / 985 / 2,245 | 1,180 / 920 / 2,100 | 1,300 / 1,010 / 2,310 |
| Utilization vs. break-even (81%) — north / south | 83% / 70% | 80% / 74% | 77% / 72% | 80% / 78% |
| No-show + late-cancel rate; cost | 13.6%; US$10,200 | 12.1%; US$8,900 | 14.8% | 11.5% |
| Intake: inquiries → screened → scheduled → first kept → second kept | 184 → 151 → 128 → 101 → 84 | 176 → 139 → 116 → 88 → 70 | — | 180 → 150 → 130 → 105 → 88 |
| Active caseload; net client change | 1,412; +31 | 1,381; +18 | 1,290 | 1,420 |
| Days to first appointment | 6.5 | 7.8 | 11.2 | ≤7 |
| Clinician headcount; hires; departures; open seats | 18; 0; 0; 1 | 18; 1; 0; 1 | 17 | 19 |
How it is read. Utilization by clinician is on the appendix page; here the owners see that north is above break-even and south is below, that no-shows are the margin story, that intake conversion improved at every stage after the second coordinator started, and that caseload is growing. The south utilization line is the first agenda item.
Page three: revenue and margin by the dimensions that matter
A single revenue line hides everything the owners need to act on.
| Net revenue | Contribution | Margin | Net / session | |
|---|---|---|---|---|
| North site | US$147,500 | US$47,200 | 32% | US$113 |
| South site | US$111,500 | US$20,100 | 18% | US$111 |
| Group | US$259,000 | US$67,300 | 26% | US$112 |
| By payer: Commercial A | US$93,200 | — | — | US$124 |
| Commercial B | US$49,700 | — | — | US$101 |
| Managed Medicaid | US$36,800 | — | — | US$79 |
| Self-pay / out-of-network | US$66,900 | — | — | US$168 |
| School contract | US$12,400 | — | — | US$115 |
Contribution per session by payer appears here against fully loaded cost (US$109): Commercial B and managed Medicaid remain below cost; the Commercial B renewal case goes to the payer in November.
Page four: revenue cycle health
| Metric | Sep | Aug | Target | Trend |
|---|---|---|---|---|
| Verified before first session | 96% | 94% | >95% | ↑ |
| First-pass acceptance | 97.4% | 96.8% | >97% | ↑ |
| Initial denial rate; top reason | 7.1%; eligibility | 8.4%; authorization | <8% | ↑ |
| Appeal overturn rate | 58% | 52% | >50% | ↑ |
| Days in receivables — total / Commercial A / Medicaid | 37 / 26 / 54 | 41 / 27 / 63 | <40 | ↑ |
| Patient balance collected at service | 86% | 83% | >85% | ↑ |
| Net collection rate (trailing 3 mo) | 95.1% | 94.3% | >96% | ↑ |
| Write-offs by cause (US$) | Timely filing 1,100; uncollectible patient 3,400; other 900 | — | — | — |
| Receivables; allowance | US$318,000; US$34,000 | US$339,000; US$37,000 | — | — |
Why it sits here. Revenue cycle health explains the gap between revenue earned and cash collected; it belongs between margin and cash.
Page five: financial statements
Income statement with prior month, prior year, and budget columns; balance sheet; cash flow. Accrual basis, revenue by date of service, allowance recorded; variance commentary only on material lines — not a narration of every row. The sample's commentary is three lines: clinician compensation 1.2 points above budget as a share of revenue because of south's lower utilization; occupancy on plan; professional fees US$4,000 over budget for the payer-negotiation counsel review, one-time.
Page six: cash and the forward view
Current cash, the 13-week forecast's ending balances with floor breaches flagged, and the rolling 12-month outlook against budget. The sample: cash US$218,000 against a floor of US$118,000; thirteen weekly ending balances charted with week eleven dipping to US$109,000 before the statement campaign and US$121,000 after; the 12-month outlook shows the south leave coverage and the December hire's credentialing gap as the two cash events ahead.
Page seven: people and risk
| Item | Status |
|---|---|
| Turnover YTD (voluntary / involuntary) | 11% (2 / 0) vs. 24% LY |
| Leading indicators | 1 clinician flagged (utilization 90% ×2 months; PTO unused); conversation scheduled Oct 17 |
| Open seats; time open | 1 (child & adolescent, south); 38 days; offer pending |
| Credentialing pipeline | 1 clinician: Commercial A live, Commercial B pending (day 44), Medicaid pending (day 44) |
| Parental leaves | 2 at south, Nov–Jan; coverage plan in place |
| Compliance / contract items | Commercial B renewal notice deadline Jan 15; classification review complete, no exposure; credit balances refunded US$2,100 |
| Insurance renewals | Malpractice due Dec 1 (US$22,600, in forecast) |
Page eight: decisions requested
Each with the recommendation and the numbers behind it, so the meeting decides rather than discusses.
- Approve the south schedule-template redesign. Removes 14 chronically empty Friday and early-morning slots, adds two evening blocks; modeled utilization 70 → 77 percent over 90 days; no-show cost reduction ≈ US$3,000/month. Recommendation: approve.
- Approve the child-and-adolescent offer. US$84,000 base, productivity above 26 sessions, December 2 start, credentialing submitted on acceptance; ramp to 75 percent by March; year-one net contribution ≈ US$18,000 after credentialing gap; fills the 38-day-open seat and the south leave gap. Recommendation: approve.
- Note for November: Commercial B written case to be sent by November 10; exit analysis complete (net effect of exit −US$38,000 year one, +US$41,000 year two); floor set at net US$113 per session.
Appendix pages
Utilization by clinician against break-even and target band with the intake funnel beside it; contribution per session by clinician, payer, and site; the payer file summary; the 13-week forecast grid; the vendor scorecards for billing and accounting; and the decisions log — every decision from prior meetings with its date, owner, and status.
Format and discipline
Same structure every month, so trends are visible and nobody hunts for a number. Delivered by business day twelve — the close on day ten, the pack on day twelve — and reviewed in a standing ninety-minute meeting with the owners and the clinical director within three business days, with decisions recorded in the log. Fourteen pages including appendices is typical for a two-site group; the first page is the one that gets read in the car. A report that is produced but not discussed is a cost, and the meeting is the control.
Why this is CFO work
The pack joins practice management, billing, payroll, scheduling, and ledger data that live in five systems; the operating metrics ahead of the statements is a design choice someone has to make and defend; the commentary requires understanding what each number means for this group; the decisions page requires someone willing to put the recommendation in writing; and the meeting requires a counterpart who owns the numbers so the owners can own the decisions. The report is the CFO's monthly product.
Worked example
The sample month above is the worked example. Two readings from it that a set of statements would not have produced: south's utilization at 70 percent against an 81 percent break-even is a US$10,000-a-month contribution gap with a specific cause (schedule template and two leaves), and the decision to fix it is on page eight with a modeled result; and Commercial B at a net US$101 against a US$109 cost on 19 percent of sessions is a US$63,000 annual subsidy to a payer, with the negotiation case and the exit floor already prepared for November. The owners spent ninety minutes, approved two decisions, and knew the cash position through December.
Illustrative figures for a hypothetical organization; not a client's data.