Compass

How to Use This Tool

Build a VBC financial model in 6 steps. Step 1: Choose your line of business and contract type. Step 2: Set population characteristics. Step 3: Define cost and utilization inputs. Step 4: Configure intervention assumptions. Step 5: Set risk corridor and financial terms. Step 6: Review your results dashboard. Toggle between Guide and Expert modes for more or less detail. Save models to the cloud, compare scenarios side-by-side, and export term sheets and PDF reports.

Contract Setup

Define the foundational parameters for your value-based arrangement.

Line of Business+

The insurance product type. MA, Medicaid, commercial, and ACO each have different cost baselines and regulatory rules. This auto-populates all defaults.

Contract Type+

Whether the provider shares only in savings (upside) or also absorbs losses (two-sided). Two-sided unlocks higher sharing rates but creates downside risk.

ACO Program Track+

The specific CMS program structure. MSSP Basic is a glide path into risk; Enhanced is full two-sided; REACH uses capitated models. The track sets your MSR and sharing caps.

Total Member Months+

Members multiplied by months attributed. 10,000 members for 12 months = 120,000 MM. This is the denominator for every PMPM calculation. Under 5,000 lives produces statistically unreliable results.

Geographic Region+

Regional cost adjustment factor. Northeast and West Coast run 15-18% above national average. This adjusts the baseline so the model reflects local care costs.

County Benchmark Lookup+

Optional. Select a county to auto-populate the MA benchmark PMPM, geographic cost index, and average risk score from CMS county rate data. Overrides the geographic region selector above.

Contract Duration+

Performance years. Longer contracts (3-5 years) let care management programs mature. Year 1 rarely shows large returns; real value appears in years 2-3.

Attribution Methodology+

How members get assigned. Prospective locks the panel up front — you know who you're managing. Retrospective assigns after the fact, more accurate but harder to intervene.

Population Characteristics

Define the risk profile and demographics of your attributed population.

Average Risk Score (HCC/DxCG)+ 1.00

How sick your population is relative to average (1.0 = average). Higher scores mean higher benchmarks and more room for savings. Undercoded populations get punished.

Range: 0.30 -- 4.00Benchmark: 1.00

Coding Intensity Adjustment+ 5.9%

CMS reduces MA risk scores by ~5.9% to account for coding intensity differences between MA and Fee-for-Service. This adjustment is applied before the risk-adjusted benchmark is calculated.

Range: 0% -- 10%MA Default: 5.9%

Population Average Age+ 72

Adjustable average age of the attributed population. Affects cost through an age-risk multiplier: younger populations cost less, older populations cost more. Ages below 45 reduce baseline by up to 15%; ages above 75 increase it by up to 20%.

Range: 18 -- 90LOB Default: 72

Female % (Gender Mix)+ 52%

Percentage of attributed population that is female. Affects maternity cost allocation in the model. Higher female percentage in commercial populations increases maternity-related costs.

Range: 30% -- 70%LOB Default: 52%

Dual-Eligible %+ 0%

Percentage of MA/DSNP members who are dually eligible for Medicare and Medicaid. Duals cost approximately 2.5x non-duals due to higher acuity, behavioral health needs, and social determinants. The effective risk multiplier increases proportionally.

Range: 0% -- 50%Duals cost ~2.5x non-duals

New Enrollee %+ 15%

Members without 12 months of claims history. They lack reliable risk scores, making their benchmark less accurate. High churn (>15%) adds volatility to savings calculations.

Range: 0% -- 50%Benchmark: 15%

Costs & Utilization

Set cost benchmarks and utilization rates for the target population.

Import Claims Data (Optional)

Drop a CSV file here or click to browse
Supports claims detail or direct PMPM format

Warnings:

Total Cost of Care PMPM (Known Benchmark)+ $1,100 PMPM

If you know your actual TCOC, enter it here to override the calculated estimate. This is the most important number in the model — use real data when available.

$100 -- $3,000Defaults to LOB benchmark. Adjust to match your known TCOC.

Typical ranges: MA $900--1,200 · Commercial $400--700 · Medicaid $300--500 · DSNP $1,200--1,800

Fee Schedule Basis+

The pricing framework for unit costs. Most commercial contracts express rates as a percentage of Medicare. This determines the dollar value of every utilization unit.

% of Medicare (Facility)+ 100%

Hospital reimbursement as % of Medicare rates. Commercial typically pays 180-250%. Higher percentages mean higher benchmarks — more room for savings but payer is already overpaying.

50% -- 400%MA Benchmark: 100%

% of Medicare (Professional)+ 100%

Physician reimbursement as % of Medicare. Commercial typically pays 130-180%. Combined with visit rates, this builds the professional services cost baseline.

50% -- 300%MA Benchmark: 100%

IP Average Case Rate $12,000

$3,000 -- $50,000Default: $12,000

ER Average Visit Cost $2,500

$500 -- $8,000Default: $2,500

PCP Average Visit Cost $150

$50 -- $400Default: $150

Specialist Average Visit Cost $250

$75 -- $800Default: $250

Base Pharmacy PMPM $130

$50 -- $600Default: $130

IP Admits / 1,000+ 65

Inpatient admissions per 1,000 members annually. Usually the largest cost category. Reducing admits by 10% on a large book can generate millions in savings.

10 -- 200MA Benchmark: 65

Average Length of Stay

National average LOS: 4.5 days

ER Visits / 1,000+ 350

Emergency visits per 1,000 annually. High ER rates signal primary care access gaps and represent redirection savings opportunity.

50 -- 800MA Benchmark: 350

PCP Visits / 1,000+ 4200

Primary care visits per 1,000. Higher PCP utilization correlates with lower ER and IP use. More PCP visits is usually the goal, not something to reduce.

1,000 -- 10,000MA Benchmark: 4,200

Specialist Visits / 1,000+ 2800

Specialty visits per 1,000. Referral management and center-of-excellence routing can reduce specialist spend without cutting access.

500 -- 8,000MA Benchmark: 2,800

Specialty Rx % of Total+ 50%

Portion of pharmacy spend on specialty drugs. Specialty is 2% of scripts but 50%+ of Rx cost. This dramatically affects total cost projections.

10% -- 80%Benchmark: 50%

Medical Cost Trend (%)+ 7.5%

Annual medical cost increase rate. Trend compounds across multi-year contracts. Higher trend in the benchmark favors providers; lower trend favors payers.

0% -- 15%Industry Avg: 7.5%

Pharmacy Cost Trend (%)+ 9.0%

Annual pharmacy cost increase. Often exceeds medical trend due to specialty pricing. If pharmacy is carved in, high Rx trend can erase medical savings.

0% -- 20%Industry Avg: 9.0%

Category Trend Rates

Use uniform trend

▼

IP Trend (%) 7.5%

0% -- 20%Typical: 8-10%

OP Trend (%) 7.5%

0% -- 20%Typical: 7-9%

Professional Trend (%) 7.5%

0% -- 20%Typical: 4-6%

ER Trend (%) 7.5%

0% -- 20%Typical: 10-12%

BH Trend (%) 7.5%

0% -- 20%Typical: 5-7%

Post-Acute Trend (%) 7.5%

0% -- 20%Typical: 6-8%

Pharmacy Inclusion+

Whether pharmacy is included in or excluded from the benchmark. Carving in gives more levers but more exposure. Carving out simplifies the model.

Pharmacy Carved In

Pharmacy Rebate Offset %+ 20%

Percentage of pharmacy spend offset by manufacturer rebates. Reduces the Rx PMPM component. Defaults vary by LOB: ~20% for commercial, ~15% for MA, 0% for Medicaid FFS. Only active when pharmacy is carved in.

0% -- 50%Commercial default: 20%

Contract Terms

Define the financial terms of the shared savings/risk arrangement.

Target Episode Price+ $25,000

The negotiated price per episode. Should be set below historical cost to generate savings.

$5,000 -- $100,000Negotiated episode rate

Historical Episode Cost+ $30,000

Average historical cost per episode under FFS.

$5,000 -- $150,000Prior period average

Expected Annual Episode Volume+ 200

Number of episodes expected per year.

10 -- 2,000Annual episodes

Provider Gainshare %+ 60%

Provider share of per-episode savings when actual cost is below target price.

0% -- 100%Typical: 50-70%

Warranty Period (days)+ 90

Post-discharge window during which readmissions are included in episode cost.

0 -- 180 daysTypical: 30-90 days

Complication Rate %+ 12%

Expected percentage of episodes with complications.

0% -- 40%Typical: 8-15%

Complication Cost Multiplier+ 1.5x

How much more a complicated episode costs vs. a clean one.

1.0x -- 3.0xTypical: 1.3-2.0x

Annual Volume Growth %+ 5%

Year-over-year increase in episode volume.

0% -- 30%Typical: 3-10%

Capitation Type+

Full capitation covers all services. Partial covers physician services only.

Full Capitation

Partial (Prof Only)

Capitation Rate PMPM+ $900

Fixed monthly payment per member.

$50 -- $3,000Monthly per-member rate

Expected Medical Cost PMPM+ $850

Projected actual cost PMPM. Difference from capitation rate is your margin.

$50 -- $3,000Projected cost

Stop-Loss Threshold (per member)+ $75,000

Annual per-member cost above which payer reimburses excess.

$25,000 -- $500,000Per-member annual

Stop-Loss Premium PMPM+ $20

Monthly reinsurance cost. Deducted from margin.

$0 -- $75Default: $20

Risk Corridor -- Lower Band %+ 3%

Percentage below expected cost defining the gain corridor.

0% -- 15%First band threshold

Risk Corridor -- Upper Band %+ 5%

Percentage above expected cost defining the loss corridor.

0% -- 20%Upper band threshold

Corridor Sharing % (Provider)+ 50%

Provider's share of gains or losses within the corridor.

0% -- 100%Typical: 50%

Admin Cost PMPM+ $40

Administrative overhead deducted from capitation margin.

$5 -- $100Default: $40

Utilization Variance %+ 8%

Expected deviation from projected utilization.

0% -- 25%Typical: 5-12%

CMS Benchmark PMPM+$1,100

CMS county benchmark rate. Auto-populated from LOB/county, editable.

$500 -- $2,500CMS county benchmark

Premium Percentage+85%

Percentage of CMS premium the provider receives. Typical MA delegated groups get 80-90%.

70% -- 95%Typical: 80-90%

Stars Bonus Eligible+

If plan achieves 4.0+ Stars, CMS pays 5% quality bonus on benchmark.

Stars bonus not applied

Expected Medical Cost PMPM+$850

Projected actual cost PMPM for the delegated population.

$50 -- $3,000Projected medical cost

Admin Cost PMPM+$40

Administrative overhead deducted from premium margin.

$5 -- $100Default: $40

Stop-Loss Threshold+$75,000

Annual per-member cost above which payer reimburses excess.

$25,000 -- $500,000Per-member annual

Stop-Loss Premium PMPM+$20

Monthly reinsurance cost deducted from margin.

$0 -- $75Default: $20

Quality Withhold %+3%

Percentage of premium revenue withheld pending quality performance.

0% -- 10%Typical: 2-5%

Risk Corridor -- Lower Band %+3%

Percentage below expected cost defining the gain corridor.

0% -- 15%First band threshold

Risk Corridor -- Upper Band %+5%

Percentage above expected cost defining the loss corridor.

0% -- 20%Upper band threshold

Corridor Sharing %+50%

Provider share of gains or losses within the corridor.

0% -- 100%Typical: 50%

Capitation Election+

ACO REACH Global track allows capitation election with monthly advance payments reconciled at year-end.

Capitation not elected

Expected Savings Rate+ 3.0%

Projected % by which actual costs will beat the benchmark. Be conservative year 1. Programs projecting 5%+ savings in year 1 are usually wrong.

0% -- 25%Y1 Typical: 2-4%

Provider Savings Share %+ 50%

% of savings the provider keeps. Higher shares compensate for care management investment. Meaningless without understanding the MSR and quality gate underneath.

0% -- 100%Typical: 50%

Minimum Savings Rate (MSR)+ 2.0%

Minimum savings threshold before sharing begins. A 2% MSR on $100M means the first $2M in savings generates zero payout. Exists to filter statistical noise from real performance.

0% -- 10%CMS MSSP: 2-3.9%

Provider Risk Share % (Two-Sided)+ 40%

In two-sided contracts, the % of losses the provider absorbs when costs exceed benchmark. Should be proportional to savings share — if you keep 50% of wins, 40% of losses is fair.

0% -- 100%Typical: 30-50%

Max Provider Downside+ 10%

Cap on provider losses as % of benchmark. Without a cap, one bad year can bankrupt a practice. Always negotiate a cap.

0% -- 50% of benchmarkTypical: 5-15%

Max Provider Upside+ 25%

Cap on provider earnings as % of gross savings. Limits windfall payouts. Resist caps in negotiation — if you generated the savings, why cap your reward?

0% -- 100% of gross savingsTypical: 20-30%

Truncation Point+ $250K

Claim cost threshold above which individual members are excluded from the savings calculation. Protects against catastrophic outliers. Lower truncation favors providers.

$50K -- $2MTypical: $200-300K

Quality Gate Type+

How quality affects the financial settlement. Binary = all-or-nothing. Sliding = partial credit. ACO = CMS composite. Never accept binary if you can get sliding — the cliff effect is devastating.

Binary

Sliding Scale

Quality Withhold %+ 5%

% of earnings held back pending quality verification. Keep at 3-5%. Above 5%, you're paying a quality tax that makes economics less attractive than they appear.

0% -- 20%Typical: 3-5%

Stop-Loss Premium PMPM+ $15

Per-member reinsurance cost that caps catastrophic loss exposure. In two-sided contracts, this isn't optional — it's survival.

$0 -- $50Default: $15

Claims Completion Factor+ 98%

% of claims received at settlement time. 98% means 2% are still processing. Settling too early (before 6+ months runout) overstates savings.

90% -- 100%Default: 98% (actuarially conservative)

Care Management Investment PMPM+ $8

Your investment in care coordination, population health, and clinical infrastructure. This reduces your net margin from savings. Model it honestly.

$0 -- $30Default: $8

Administrative Cost PMPM+ $35

Program administration costs — analytics, reporting, compliance, legal. Often underestimated. If you don't model it, the P&L surprises you.

$10 -- $75Default: $35

Annual Savings Improvement+ 0.5%

Additional savings rate per year in multi-year contracts. Reflects care management maturation. Justifies longer contract terms.

0% -- 2%Added to savings rate each year in multi-year projections

NPV Discount Rate+ 5%

Discount rate for net present value calculations on multi-year contracts. Reflects the time value of money. Higher rates reduce the present value of future savings. Only applies to contracts longer than 1 year.

3% -- 10%Default: 5%

Annual Benchmark Rebasing+

Whether the benchmark resets based on prior year actual costs. Rebasing punishes success — reduces cumulative savings by ~30% in years 2+. Fight it in negotiation.

When on, reduces cumulative savings by ~30% in years 2+ as benchmark resets to prior actuals

Reconciliation Timing+

When financial settlement occurs. Shared savings reconciliation typically happens 18 months after the performance year starts. Bundled payments reconcile quarterly. Capitation reconciles monthly with annual true-up.

Quality Metrics

Define quality performance expectations and bonus structures.

Quality Score (Baseline)+ 3.5

Your current quality performance before the VBC contract. The gap between baseline and target determines how much improvement is needed to unlock payments.

1.0 -- 5.0 StarsBenchmark: 3.5

Quality Score (Target)+ 4.0

The threshold required for full financial settlement. Set realistically — achievable targets that escalate over the contract term.

1.0 -- 5.0 StarsThreshold: 4.0

Quality Bonus Pool (% of TCOC)+ 2.0%

Additional money for exceptional quality, as % of TCOC. Bonus pools cost the payer nothing unless quality improves — easier to negotiate than higher savings shares.

0% -- 10%Typical: 1-3%

Stars Bonus Applicable (MA Only)+

MA only. 5% premium rebate from CMS for 4.0+ Stars plans. If you're driving Stars improvement, get contractual credit for it.

5% rebate at 4.0+ Stars

Results Dashboard

Projected financial outcomes for Year 1 of the value-based arrangement.

Scenario 1: Empty

Scenario 2: Empty

Scenario 3: Empty

Sensitivity Analysis

Savings Waterfall

Cost by Service Category

Shared Savings Distribution

Risk Corridor Analysis

Quality-Adjusted Financials

MLR Impact

Provider P&L View

Year-over-Year Projection

Probabilistic Sensitivity Analysis Monte Carlo Simulation

▼

Baseline PMPM

Savings Rate

Medical Trend

Enrollment

Quality Score

Scenario Comparison

Want to discuss this model with an advisor?

We'll review your assumptions and help you negotiate terms.

Compass is built by Cadence · Learn about structured continuation governance →

Sign in to Compass

My Models

Scenario Comparison

Contract Setup

Population Characteristics

Costs & Utilization

Contract Terms

Quality Metrics

Results Dashboard

Sensitivity Analysis

Savings Waterfall

Cost by Service Category

Shared Savings Distribution

Risk Corridor Analysis

Quality-Adjusted Financials

MLR Impact

Provider P&L View

Year-over-Year Projection

Cash Flow Timeline

Probabilistic Sensitivity Analysis Monte Carlo Simulation

Net Savings Distribution (1,000 Simulations)

Percentile Outcomes

Tornado Chart: Variable Impact on Net Savings

Scenario Comparison

Model for free. Scale when you need to.