When the Centers for Medicare and Medicaid Services (CMS) called on health plans to apply for a value-based insurance test project, it stipulated that interested organizations must include financial projections and that those projections must be “actuarially certified.”
While that term wouldn’t stump health plans and traditional payers – for whom the use of actuaries is commonplace – providers and physicians may have little understanding of actuaries and what they do.
As CMS looks to test and expand risk-based payment models and private insurers do the same, providers might need to learn about these business professionals.
The Society of Actuaries defines an actuary as someone who uses mathematics and statistics to analyze the possible financial consequences of future events. Actuaries work in insurance, finance and investments, or retirement and health benefits.
They essentially work with risk – identifying it and creating opportunities to minimize it.
- Making investments in your ability to manage risk is the final step on a three-part journey to value-based care. Where is your organization on that path? Assess your progress here.
The American Medical Association says actuaries can help physicians and providers tackle negotiations under risk-based contracts. They can analyze and compare payment rates, budgets and quality goals. Those skills could become ever more important as shared risk agreements and reimbursement policies become more common.
Healthcare executives do believe value-based care contracts will become more common, according to survey results from HealthLeaders Media. Respondents to the Physician Alignment Survey say they expect increased focus on shared-savings programs, bundled payments and at-risk contracts in coming years.
To learn more about how doctors and provider networks can work with actuaries check out Optum Providers #5in5 podcast: What is an actuary and why do I need one?
You’ll hear about the aspects of care actuaries can analyze and understand the risks of not using an actuary.
About the Author:
Elena White currently serves as vice president of the Risk Quality & Network Solutions division for Optum. She has over 18 years’ experience leading network optimization initiatives, network development and expansion, business planning, provider reimbursement development, transformation to risk-based arrangements and medical cost management strategies for both health plan and provider organizations.
Elena holds a bachelor’s degree from University of California at Riverside and master’s degree in business administration from Loyola Marymount University.