Payor Financial Models

Roll Forward Model (RFM)

The RFM enables payor clients to use their own claims data to make predictions about the future profitability of specific groups and markets. The client-specific claims data is reweighted (using MPACT) to create proxies for target populations; demographic data from Truven is used as needed to “fill in” any missing data cells. The RFM also takes into account all relevant rules and regulations. Proprietary modeling techniques enable the RFM to independently assess the impact of a number of elements, including premium assignments (or actual premiums, where available), cost and premium trends, metal tier assignments, risk adjustment cash flows, and reinsurance calculations. The result is very granular estimates of profitability at the member, group, and segment level. For example, the RFM can predict individual- or group-level value for the years 2014 through 2017 (including claims, risk-adjustment payments, and margins), member-level profitability by metal tier, and segment-level profitability by demographics, geography, and condition.