Organizational Design Analysis

I've written the full analysis as a decision draft for you to review before the CEO sees it. I recommend Option 2, a moderate restructure that cuts her direct reports from 10 to 7 without changing how clinics report. All the headcounts in your notes add up (1,020 in clinics + 160 corporate = 1,180). No costs or savings are quoted because I didn't have compensation data, so budget neutrality is judged only by counting roles.

The three options

Why Option 2

• Denials: one person owns the 11.4% denial rate from contract terms through claims.

Growth: one person owns acquisitions, new openings and integration until each clinic is handed to the COO. Tennessee is the first case.

New-clinic approvals: six sign-offs become one decision body (CEO, CFO, COO and the growth lead), with the other functions consulted in parallel.

• Outcomes data: the CCO owns it in time for the 2027 value-based contracts.
• Clinics: no reporting change for the 1,020 people who work there.

Option 3 removes the state VP layer, but at 100 clinics the COO would have about 14 regional directors, so that layer would probably have to come back.

Conflicting direction to clinic managers can't be fixed by moving boxes alone. Moving clinic managers under the CCO would just flip the conflict. All three options rely on:

• a written split of decision rights: the CCO sets clinical minimums, and the COO decides operating trade-offs above them;
• one shared scorecard per clinic;
• all requests to clinics going through the regional directors;
• incentives tied to both visits and protocol compliance, which needs HR and employment counsel review.

The 90-day plan runs from 1 Feb to 1 May 2027. There is a pre-announcement phase from mid-December, an announcement sequence (board, then executives, affected leaders and all staff), risks, governance and metrics. Some useful work can start now, before any announcement: breaking down denials by root cause, a baseline survey of clinic managers, and confirming which outcome measures the two payers need.

Questions to settle first (all 16 are in Section 10):
1.

Do you count as one of the CEO's direct reports? Your list of 10 leaves you out. If you count, every option has 8 directs, and the fallback (CIO reporting to the CFO) is risky during the EMR consolidation.
2. Should the Growth & Integration role be filled by expanding an existing role or by an outside hire? This decides whether Option 2 is budget neutral.
3. What does compensation by role look like? Without it, budget neutrality is a count of roles, not dollars.

Role changes, any eliminations and incentive redesign all need HR and employment counsel review before anything is communicated. I haven't assessed any individuals; roles that need a leadership decision are flagged instead.

File: brightmoor-org-design-analysis.md (in your working folder). Last modified 1 Oct 2026, 22:19. It is the only copy; nothing else has been generated from it.

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The file it wrote: brightmoor-org-design-analysis.md

Brightmoor Rehab Partners: Organizational Design Analysis

Decision draft for Chief of Staff review. Not for distribution. Prepared 1 Oct 2026.
Purpose: give the CEO three structural options, a recommendation, and a 90-day transition plan by mid-December 2026, ahead of an announcement by 1 Feb 2027.

How to read the numbers

• Every headcount, span, and layer figure comes from the notes you supplied. Where data was missing, the document says NOT PROVIDED, and Section 10 turns each of those into a question.
• Targets marked rule of thumb are this method's working thresholds: a manager span of 3–12, where under 3 suggests removing a layer and over 12 suggests splitting the team. They are not industry benchmarks. The limit of 7 CEO direct reports is your constraint.
• The document quotes no costs or savings because no compensation data was provided. Whether an option is budget neutral is judged by counting roles, and the CFO needs to confirm it against compensation data.

Bottom line: recommend

Option 2 (moderate restructure). It reduces the CEO's direct reports from 10 to 7. One leader under the CFO would own the full denial number, combining Revenue Cycle and Payer Contracting. A new Growth & Integration executive would own clinic growth from deal to fully integrated clinic. The CCO would own producing outcomes data. Clinic reporting lines stay exactly as they are. Problem 1 (conflicting direction) is mostly a decision-rights and incentive problem, not a reporting-line problem, so every option relies on non-structural fixes to solve it.

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1. Current State Assessment

1.1 Annotated structure

CEO  (10 direct reports)                                   ← over the ≤7 constraint by 3
├── COO  (3 directs shown; clinic line = 1,020 people)
│   ├── State VP Ohio      (3 Regional Directors)          ← span 3
│   ├── State VP Kentucky  (3 Regional Directors)          ← span 3
│   └── State VP Tennessee (3 Regional Directors)          ← span 3; includes 14 clinics acquired Mar 2026
│        └── 9 Regional Directors → 64 Clinic Managers      (5–10 each, avg 7.1)
│             └── 64 Clinic Managers → 944 clinic staff     (avg 14.75; above the 12 rule of thumb)
├── CFO ........................ Finance 22
├── Chief Clinical Officer ..... Clinical Excellence 9      ← gives clinics direction outside the ops line (P1)
├── VP Revenue Cycle ........... 58                         ┐ denial rate 11.4%; each side blames
├── VP Payer Contracting ....... 6                          ┘ the other; no single owner (P2)
├── VP Marketing & Growth ...... 12                         ┐
├── Director of Strategy ....... 2                          ┘ two of the six new-clinic sign-offs (P4)
├── VP HR ...................... 18
├── CIO ........................ IT 24                      ← 14 TN clinics still on their own scheduling and EMR (P3)
└── General Counsel ............ Legal 4
    (CEO office ................ 5)

Headcount reconciliation

• Clinic line: 944 staff + 64 clinic managers + 9 RDs + 3 state VPs = 1,020, which matches your figure.
• Corporate: 58 + 24 + 22 + 18 + 12 + 9 + 6 + 5 + 4 + 2 =

160, which also matches. Revenue Cycle is 36% of corporate headcount.

• Total: 1,180, which matches. Corporate is 13.6% of headcount.
• The COO does not appear in the clinic-line count, and there is no corporate operations function. Where the COO and CEO are counted is NOT PROVIDED.

1.2 Spans of control

1.3 Layers

Layers are counted as reporting hops between a frontline employee and the CEO.

1.4 Outliers and observations

• CEO span of 10 breaches the limit of 7. At least three directs have to move under someone else.

Clinic managers average 14.75 direct reports, above the 12 rule of thumb. This does

not automatically mean the teams should be split. Adding a layer across 64 clinics would conflict with budget neutrality. Before acting, establish whether clinic managers carry a patient caseload and whether lead-therapist or front-desk-lead roles already exist (both NOT PROVIDED).

COO and state VPs both have a span of exactly 3. That is at the delayering threshold, not below it. The state layer gets wider as clinics are added. At 100 clinics and today's average RD span (7.1), you would need about 14 RDs, or about 4–5 per state VP. Keeping 9 RDs would mean about 11 clinics each, which is within the rule of thumb but close to its limit.

• The RD spread of 5–10 means workloads are uneven. Clinic counts by state and region are NOT PROVIDED.

Growth pace: reaching 100 clinics by the end of 2028 means about 36 more in about 27 months (roughly 1.3 a month). You added 26 since 2023, and 14 of those (54%) came in one deal. Steady growth at that pace needs a repeatable acquire, open, and integrate process. Today no one is accountable for that process (P3, P4).

1.5 Is a reorganization the right tool?

Yes, with a caveat. The strategy is clear: 100 clinics and value-based contracts in 2027. Nothing in the notes points to a problem with one individual. No recent reorg is still settling. The company is not in crisis. The caveat: two of the four problems (P1 and P4) come mainly from decision rights and process. A new structure will not fix them unless the process changes in Section 4.0 happen alongside it.

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2. Pain Point Diagnosis

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3. Design Principles

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4. Structural Options

4.0 Fixes needed under every option

These fixes address the parts of P1, P2 and P4 that a new structure cannot fix. All three options need them:
1.

Decision-rights charter between the CCO and the COO: the CCO sets clinical protocols and minimum compliance floors; the COO decides operating trade-offs above those floors; disputes escalate on a fixed timeline.
2. One clinic scorecard covering visits per day, protocol compliance, intake-caused denials and, later, outcomes.
3. Denial root-cause taxonomy: every denial gets a category, and every category gets an owner.
4. New-clinic approval process: one decision body, functional reviews in parallel, a standard business case.

Option 1: Incremental adjustment (consolidate under the CFO)

Changes

• VP Revenue Cycle and VP Payer Contracting both move to report to the CFO, and both VP roles stay. The CFO becomes accountable for the denial rate.
• The Director of Strategy moves to report to the CFO and also runs the new-clinic pipeline.
• The COO is named accountable for integration. The Tennessee state VP leads the Tennessee integration with a part-time cross-functional working team.
• Outcomes data is handled as a joint CCO–CIO project with no dedicated owner.

CEO (7)
├── COO ................ clinic line 1,020 (unchanged) + integration accountability
├── CFO ................ Finance 22 + Revenue Cycle 58 + Payer Contracting 6 + Strategy 2 = 88
├── CCO ................ Clinical Excellence 9
├── VP Marketing & Growth  12
├── VP HR .............. 18
├── CIO ................ 24
└── General Counsel .... 4
   (CEO office 5)

Problems addressed: P2 (owner is the CFO); P1, P3 and P4 partly (through the process fixes and a named but under-resourced owner); the CEO-span constraint.

• Not addressed: S1 (outcomes data); S2 (growth capability); the RC/PC handoff below the CFO.
• Complexity: low. Timeline (estimate): 30–60 days to stabilize.

Constraint fit: ≤7 directs, yes (7). Budget neutral, yes. CFO and CCO stay, yes (CFO scope grows). Announce by 1 Feb, yes.

Option 2: Moderate restructure (single owners for revenue and growth) — recommended

Changes

Revenue Cycle and Payer Contracting combine into one function under one leader, the VP Revenue Cycle & Payer Contracting, who reports to the CFO and owns the denial rate from start to finish.

New CEO direct: SVP Growth & Integration. Strategy (2) and Marketing (12) move under this role, plus a new

Development & Integration Management Office (IMO) staffed by redeploying people from existing functions. The role owns the pipeline (acquisitions and de novo openings) and integration up to a defined "integration complete" handoff to the COO.

The CCO adds outcomes and value-based readiness: an outcomes lead within Clinical Excellence, with analytics provided by redeployed IT staff.

Clinic operations are unchanged: same reporting lines and the same 5 layers. The state layer is reviewed again at about 80 clinics.

• Directs leaving the CEO line: VP Revenue Cycle, VP Payer Contracting, VP Marketing & Growth, Director of Strategy (−4). Joining: SVP Growth & Integration (+1). Net change: 10 → 7.

CEO (7)
├── COO ................................ clinic line 1,020 (unchanged)
│   └── 3 State VPs → 9 RDs → 64 Clinic Managers → 944 staff
├── CFO ................................ 86
│   ├── Finance ........................ 22
│   └── VP Revenue Cycle & Payer Contracting   64  (Revenue Cycle 58 + Payer Contracting 6)   ← NEW combined
├── CCO ................................ Clinical Excellence 9 + Outcomes & Value-Based Care lead (redeployed)
├── SVP Growth & Integration ........... 14 + IMO (redeployed)                                ← NEW
│   ├── Strategy & Development ......... 2
│   ├── Marketing ...................... 12
│   └── Integration Management Office .. size TBD against the 2027 pipeline (NOT PROVIDED)
├── CIO ................................ 24 (owns systems integration and the outcomes data platform)
├── VP HR .............................. 18
└── General Counsel .................... 4
   (CEO office 5)        Corporate total still 160

Problems addressed: P2 and P3 fully. P4 fully (pipeline owner plus one decision body). P1 partly: one channel into clinics plus the Section 4.0 fixes, but the result depends on incentive alignment. S1, S2, and the CEO-span constraint.

Not addressed: clinic-manager span (14.75); thin COO and state VP layers (deliberately kept for growth); the Tennessee EMR migration itself, which will not finish within 90 days.

Complexity: medium.

Timeline (estimate): about 90 days for the structure. The integration and outcomes capabilities will take longer to mature.

• Constraint fit:
  • ≤7 directs: yes (7). If the Chief of Staff counts as a CEO direct, see Section 10, Q1.
  • Budget neutral: neutral by role count if the growth role is filled by expanding an existing role. An external hire needs an offset; the candidate offset is the VP-level role freed by combining Revenue Cycle and Payer Contracting. The CFO must confirm this with compensation data (NOT PROVIDED).
  • CFO and CCO stay: yes, with expanded scope.
  • Announce by 1 Feb: yes.

Option 3: Significant redesign (value-chain executives, delayered operations)

Changes

New Chief Revenue Officer (a revenue-cycle role, not sales) reporting to the CEO. Covers Payer Contracting, Revenue Cycle, and a new central

Patient Access team for eligibility and authorization verification. Front-desk staff stay in clinics but work to intake standards set by the CRO.

• New Chief Growth Officer, covering Strategy, Marketing, development and the IMO (as in Option 2).
• State VP layer removed: the 9 RDs report directly to the COO (span 9). Clinic layers go from 5 to 4.
• CIO reports to the CFO, to stay within 7 directs.

Clinical Excellence realigned by region, each RD region with a named clinical partner. This depends on whether the team's current roles allow it (NOT PROVIDED).

CEO (7)
├── COO ................... 9 RDs → 64 Clinic Managers → 944 staff (state VP layer removed)
├── CFO ................... Finance 22 + IT 24 = 46
├── CCO ................... Clinical Excellence 9 (regionally aligned) + Outcomes
├── Chief Revenue Officer . Revenue Cycle 58 + Payer Contracting 6 = 64 + Patient Access (redeployed; size NOT PROVIDED)   ← NEW
├── Chief Growth Officer .. Strategy 2 + Marketing 12 = 14 + IMO                                                          ← NEW
├── VP HR ................. 18
└── General Counsel ....... 4
   (CEO office 5)

Problems addressed: P2 (most completely), P3, P4, S1, S2, and the CEO-span constraint. P1 partly (same reliance on Section 4.0).

• Not addressed: P1's incentive root cause; clinic-manager span; layer growth at 100 clinics.
• Complexity: high. Timeline (estimate): 6–9 months to stabilize.
• Constraint fit:
  • ≤7 directs: yes (7, which requires the CIO to move under the CFO).
  • Budget neutral:

not verified. Two new executive roles are offset against 3 state VP roles plus consolidated VP roles; compensation data is NOT PROVIDED.

• CFO and CCO stay: yes.
• Announce by 1 Feb: yes for the announcement; the executive roles are probably not filled by then.

4.4 Comparison

*Any role elimination, compensation change or redundancy requires HR and employment counsel review before it is communicated.

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5. Recommended Design: Option 2

Why

It gives an owner to every unowned number: the denial rate (VP Revenue Cycle & Payer Contracting), integration and the growth pipeline (SVP Growth & Integration), and outcomes data (CCO).
2.

It protects the clinics, where 86% of employees work. Clinic reporting lines don't change. Problem 1 is fixed through decision rights and a single channel, not by redrawing lines.
3.

It builds what the 2028 strategy needs, a repeatable acquire, open and integrate capability, without Option 3's churn among executives and in the clinic line.
4.

It meets every constraint. Budget neutrality holds by role count if the growth role is filled internally; the CFO must confirm it against compensation data.

Trade-offs accepted

• The CFO's organization grows to 86 people. The combined VP runs the denial work day to day; the CFO is executive sponsor.
• The state VP layer and the 5-layer depth stay because the state layer fills in as clinics are added. Revisit at about 80 clinics.
• The clinic-manager span (14.75) is not addressed until caseload data is available.
• Problem 1 is only partly structural. If incentives aren't aligned, the conflict will continue.
• Four leaders lose their direct line to the CEO, which creates a retention risk (see Section 8).

Function detail

Before any communication, HR and employment counsel must review: the combined VP role and what happens to the second VP-level role; the scope and title changes for VP Marketing & Growth and Director of Strategy; incentive redesign for RDs and clinic managers; and any redeployment into the IMO or outcomes roles.

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6. Role Clarity

6.1 CEO directs and changed roles

6.2 RACI for the processes behind the problems

New-clinic approval goes from six sign-offs to one decision body. The Investment Committee is the CEO, CFO, COO and SVP Growth & Integration. Everyone else is consulted.

Escalation: a clinical-versus-operational dispute goes from the RD and Clinical Excellence lead, to the COO and CCO, to the CEO if still unresolved. Turnaround times at each step are for you and the CEO to set.

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7. Coordination Mechanisms

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8. Transition Plan

8.0 Before the announcement (mid-December 2026 to 31 January 2027)

• About 18 Dec: CEO chooses an option.
• Late December to mid-January:
  • HR and employment counsel review all role changes.
  • CEO and VP HR decide how to fill the growth role (internal expansion, external hire, or interim).
  • CFO validates budget neutrality.
• Early work that doesn't depend on the reorg:
  • Run the denial root-cause breakdown, so the new owner starts with data.
  • Run a baseline pulse survey of clinic managers.
  • Confirm which outcome measures the two payers require and when.
  • Draft the CCO–COO decision-rights charter.

8.1 Phases

8.2 Communication sequence (outline only; you write and deliver the messages)

Follow-up: FAQ, Q&A sessions at 2 weeks and 6 weeks, skip-level meetings with clinic managers.

8.3 Risks

Probability and impact ratings are judgments.

8.4 Transition governance

• Transition Steering, chaired by the Chief of Staff, meets weekly with a tracker and risk log.
• The CEO approves any change to the design. The Steering group can adjust sequencing.
• Formal reviews at days 30, 60 and 90.
• Because clinic lines don't change, the design can be partly reversed at the corporate level if needed.

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9. Success Metrics

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10. Gaps and Questions

Does the Chief of Staff count as a CEO direct report? Your list of 10 excludes it. If it counts, every option has 8. The fallback is moving the CIO under the CFO, which is risky during EMR consolidation.
2. Where are the COO and CEO counted? They are not in the 1,020 or, apparently, in the 160.
3. Clinic counts by state and region, and the total number of Tennessee clinics.
4. Clinic manager span range, whether clinic managers carry a caseload, and whether lead roles exist.
5.

Corporate internal structure: manager counts, spans and layers within Revenue Cycle (58), IT (24) and the other functions.
6. Compensation by role, needed to verify budget neutrality for every option.
7. Denial breakdown by reason, payer, state and clinic. Does Tennessee differ?
8. Are the six sign-offs

sequential or parallel? What split of acquisitions and de novos is planned for 2027–28, and what is the current pipeline?
9. Value-based contracts: which payers, contract start dates, required outcome measures and baseline period.
10. Tennessee deal terms: any transition-services or EMR contract constraints on migration timing.
11. Baselines for visits per day, protocol compliance, attrition and engagement.
12. Is the $142M for 2026 actual or forecast?
13. Who does M&A deal work today, given Strategy has 2 people?
14. Board requirements and calendar for approving executive structure changes.
15. Is there an existing data and analytics team anywhere in the 160?
16. Delegation thresholds for the Investment Committee versus the board.