Question: You represent an integrated delivery system that is in negotiations with a health plan for a capitated rate to cover all hospital and physician services
You represent an integrated delivery system that is in negotiations with a health plan for a capitated rate to cover all hospital and physician services for a defined population. The following utilization data have been given to you, which detail last years usage rates. You have included in this table your expected costs for selected services. Using the data presented in the DATA TABLE below, calculate a required break-even rate for this contract, assuming that you need a 13% retention factor to cover administrative costs. DATA TABLE - PMPM Rate C
DATA TABLE - PMPM Rate Calculations
Category
Annual Frequency per 1,000
Unit Cost
Copay Frequency per 1,000
Copay Amount
HOSPITAL INPATIENT
Medical-surgical
650
$2,500
0
$0.00
Maternity
50
$650
0
$0.00
HOSPITAL OUTPATIENT
Surgery
120
$3,100
0
$0.00
X-ray and lab
900
$475
0
$0.00
Emergency department
250
$425
250
$100.00
PHYSICIAN
Inpatient surgery
250
$4,100
0
$0.00
Outpatient surgery
600
$450
0
$0.00
Office visits
8,500
$80
8,250
$25.00
Inpatient visits
350
$250
0
$0.00
Mental health
200
$190
200
$25.00
alculations Annual Frequency ...per 1,000 Copay Frequency per 1,000 Unit Cost Copay Category. Amount
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts