agilon (AGL) is entering the fictional Wellness City market with our partner Quality Primary Care Physicians (QPCP) in 2025. We need to contract with key payors in the market to take full risk for QPCP’s Medicare Advantage patients. With each payor agreement, agilon contracts to receive a % of the revenue the payor receives from CMS (“CMS Premium”), and agilon will be responsible for 100% of Medical Expense. (For simplicity, assume that CMS Premium is calculated as Risk Score x Plan Bid Rate. Plan Bid Rate is correlated with CMS Benchmark rates). Task: Your task is to build a model to evaluate the economic opportunity for agilon (Medical Margin basis) from a potential contract with fictional payor RegionalCare. You will be asked to present the model after completion.
