Provider liability represents costs payable to physicians, hospitals and other ancillary providers, including both Privia physicians (and their Affiliated Practices), and providers the Company has contracted with through payer partners. Those costs include amounts that have not yet been paid for physician guaranteed payments and other required distributions pursuant to the service agreements as well as medical claims costs for services provided to attributed beneficiaries for which the Company is financially responsible under at-risk capitated revenue arrangements whether paid directly by the Company or indirectly by payers with whom the Company has contracted. Provider expenses are recognized in the period in which services are provided and include estimates of claims that have been incurred but have either not yet been received, processed, or paid and as such, not reported.

The Company’s provider liability balance represents management’s best estimate of its obligation for unpaid provider expenses. Management exercises judgment to determine the assumptions used for developing the required estimates. Provider liability estimates are developed using actuarial methods commonly used by health insurance actuaries that include a number of factors and assumptions including medical service utilization trends, changes in membership, observed medical cost trends, historical claim payment patterns and other factors.

Periodically, the Company re-examines previously established provider liability estimates based on actual claim submissions and other changes in facts and circumstances. The Company adjusts its provider liability estimates as more complete claims information becomes available, recognizing changes in the period in which they are identified. Differences between estimated liabilities and actual claim settlements are recognized in the period the claims are settled.

Liabilities for unpaid medical claims under at-risk capitation arrangements, which are included in provider liability in the accompanying consolidated balance sheets, are as follows:


	March 31,
(Dollars in thousands)	2026		2025
Balance, beginning of period	$	78,989	$	66,355
Incurred health care costs
Current year	81,143		70,565
Prior years	435		(954)
Total claims incurred	$	81,578	$	69,611
Claims paid
Current year	(2,088)		(10,273)
Prior years	(53,239)		(39,332)
Total claims paid	$	(55,327)	$	(49,605)


Balance, end of period	$	105,240	$	86,361