# What is a Pmpm payment?

## What is a Pmpm payment?

The amount of money paid or received on a monthly basis for each individual enrolled in a managed care plan, often referred to as capitation.

### What is Medicare capitation?

Capitation is a fixed amount of money per patient per unit of time paid in advance to the physician for the delivery of health care services. When the primary care provider signs a capitation agreement, a list of specific services that must be provided to patients is included in the contract.

How do you calculate capitation payments?

Divide that by 6,500 patient visits, and the result is \$77 annual revenue per visit. Next, figure a tentative capitation rate for your practice by multiplying your per-visit revenue by the number of visits per 1,000 enrollees. Then divide by 12 months to determine the per member per month (PMPM) capitation rate.

How does Pmpm work?

Applies to a revenue or cost for each enrolled member each month. The number of units of something divided by member months. Often used to describe premiums or capitated payments to providers, but can also refer to the revenue or cost for each enrolled member each month.

## How do you calculate cost per member per month?

Refers to the ratio of some service or cost divided into the number of members in a particular group on a monthly basis. For example, if a 10,000 member HMO in one month’s time spends \$20,000 on cardiovascular surgery, the cost on a PMPM basis would be \$20,000 divided by 10,000 equaling \$2 per member per month.

### What is the difference between capitation and fee for service payment?

Under the capitation payment system, a fixed payment is made to the practice for each enrolled patient, per time period (the practice absorbs cost or surplus); under FFS payments, the practice is paid for each of the specific services delivered to a patient (the insurer absorbs cost or surplus).

What does full risk capitation mean?

Full-risk capitation arrangements involve shared financial risk among all participants and place providers at risk not only for their own financial performance, but also for the performance of other providers in the network.

What is per employee per month?

PEPM means “Per Employee Per Month,” which the Parties recognize as a common term in the health care industry. For purposes of this Exhibit, PEPM is defined as the applicable rate paid by Employer to Teladoc Health for each Employee who is eligible to utilize the Teladoc Services each month.

## Which is better capitation or fee for service?

When California providers share in the risk through a capitation payment model, better value and health outcomes are achieved than with a fee-for-service model, according to a new report from the Integrated Healthcare Association (IHA). The results revealed that capitation is associated with better quality performance.

### What is PMpm payments?

Per Member Per Month (PMPM) Payment Definition and Methodology. •. Definition. : The PMPM payment is a prospective quarterly risk-adjusted payment to CPC practices that supports practices in conducting the activities required by the CPC program.

What is PMpm rate?

PMPM stands for cost per member per month. This calculation is often used by health insurance companies to determine the average cost of health care for each of their members. It is also used by other businesses outside the health care industry whenever these businesses offer health care benefits to employees.

What does capitation mean?

Capitation is a type of a health care payment system in which a doctor or hospital is paid a fixed amount per patient for a prescribed period of time by an insurer or physician association. It pays the doctor, known as the primary care physician…