Health Care Cost Trends Request for Proposal – Risk Adjustment

Background and Purpose

Risk adjustment remains an important topic in health insurance. It is intended to reduce the effects of risk selection, particularly in markets where underwriting is not allowed and rating factors are restricted. Risk adjustment adjusts payments or premiums to reflect differences in the expected risk of members within a health plan or market. Because risk adjustment methodologies do not perfectly predict future costs or fully account for differences in expected costs, different markets continue to face distinct implementation and performance challenges.

The Society of Actuaries (SOA) Research Institute has published research on risk adjustment, including a 2023 report Evaluating risk adjustment in Medicare Advantage, as well as prior reports including:

• A Case Study of Risk Adjustment for Texas Medicaid
• Accuracy of Claims-Based Risk Scoring Models
• Risk Scoring in Health Insurance: A Primer

The HCCT Strategic Research Committee is seeking to build on this work with an updated examination and analysis of risk adjustment.

Research Objectives

The HCCT Strategic Research Committee is seeking proposals from researchers to provide cross-disciplinary insight on risk adjustment. Examples of topics that may be addressed include:

• Analysis of the effectiveness of current risk adjustment methodologies
• Address proposed updates to current risk adjustment methodologies
• Potential integration of Artificial Intelligence into risk adjustment methodologies

The research should provide findings that are relevant to practicing health actuaries and should clearly describe the data, methods, assumptions, limitations, and practical implications of the analysis.

Proposal Requirements

Proposals should provide the following information:

1. Resumes of the researcher(s), including any graduate student(s) expected to participate, indicating how their background, education and experience bear on their qualifications to undertake the research. If more than one researcher is involved, a single individual should be designated as the lead researcher and primary contact. The person submitting the proposal must be authorized to speak on behalf of all the researchers as well as for the firm or institution on whose behalf the proposal is submitted.
   
   
2. An outline of the approach to be used (e.g., literature search, model, etc.), emphasizing issues that require special consideration. Details should be given regarding the techniques to be used, collateral material to be consulted, and possible limitations of the analysis.
   
   
3. A description of the expected deliverables and any supporting data, tools or other resources.
   
   
4. Cost estimates for the research, including computer time, salaries, report preparation, material costs, etc. Such estimates can be in the form of hourly rates, but in such cases, time estimates should also be included. Any guarantees as to total cost should be given and will be considered in the evaluation of the proposal. While cost will be a factor in the evaluation of the proposal, it will not necessarily be the decisive factor.
   
   As a guide for developing the project budget, please review the Historical Project Cost Guide (see Appendix)
   
   
5. A schedule for completion of the research, identifying key dates or time frames for research completion and report submissions. The Health Care Cost Trends (HCCT) Strategic Research Committee is interested in completing this project in a timely manner.
   
   
6. Suggestions in the proposal for ensuring timely delivery, such as fee adjustments, are encouraged.
   
   
7. Other related factors that give evidence of a proposer's capabilities to perform in a superior fashion should be detailed.
   
   
8. Proposals should be limited to 5 pages (excluding the resumes of researchers).

Proposals should be submitted to Research-HCCT@soa.org, by the end of the day on October 30, 2026. Expressions of interest should be submitted by October 12th. Proposals that are accompanied by and expression of interest will be given additional consideration. Decisions on whether a proposal is chosen will be communicated by November 30th 2026.

Selection Process

The (HCCT) Strategic Research Committee will appoint a Project Oversight Group (POG) to oversee the project. The [sponsoring entity/POG] is responsible for recommending the proposal to be funded. Input from other knowledgeable individuals also may be sought, but the HCCT will make the final recommendation, subject to Society of Actuaries Research Institute (SOA) leadership approval. An SOA staff research actuary will provide staff actuarial support.

Questions

Any questions regarding this RFP should be directed to Research-HCCT@soa.org.

Conditions

The selection of a proposal is conditioned upon and not considered final until a Letter of Agreement is executed by both the Society of Actuaries Research Institute and the researcher.

The Health Care Cost Trends Program Steering Committee reserves the right to not award a contract for this research. Reasons for not awarding a contract could include, but are not limited to, a lack of acceptable proposals or a finding that insufficient funds are available. The Society of Actuaries Research Institute also reserves the right to redirect the project as is deemed advisable.

The Society of Actuaries Research Institute plans to hold the copyright to the research and to publish the results with appropriate credit given to the researcher(s).

The Society of Actuaries Research Institute may choose to seek public exposure or media attention for the research. By submitting a proposal, you agree to cooperate with the Society of Actuaries in publicizing or promoting the research and responding to media requests.

The Society of Actuaries Research Institute may also choose to market and promote the research to members, candidates and other interested parties. You agree to perform promotional communication requested by the Society of Actuaries Research Institute, which may include, but is not limited to, leading a webcast on the research, presenting the research at an SOA meeting, and/or writing an article on the research for an SOA newsletter.

Conflict of Interest

You agree to disclose any of your material business, financial and organizational interests and affiliations which are or may be construed to be reasonably related to the interest, activities and programs of the Society of Actuaries Research Institute.

Appendix

The cost ranges below are intended as a guide for budgeting project costs for proposals in response to SOA Research Institute Request for Proposals (RFP). Please note these figures span the 33^rd to 66^th percentiles for all projects as well as projects that involve a specific approach (lit review, survey, etc.). They are based on historical costs over several recent years. Expected costs for some RFPs may fall outside these ranges depending on the nature of the work and resources required for completion.

All Contracted Projects

This category includes all contracted projects that the Institute has undertaken within the last several years.

The 33^rd-66^th percentile project costs range is $25,000 - $50,000.

Literature Reviews

This category includes projects that involved only a literature review or the cost for the portion of a larger project that included a literature review.

The 33^rd-66^th percentile project costs range is $15,000 - $20,000.

Surveys

This category includes all projects that had a survey as their primary component.

The 33^rd-66^th percentile project costs range is $28,000 - $55,000.