You have been asked to develop a capitation rate for a primary care group based

Question

You have been asked to develop a capitation rate for a primary care group based on the following projections:

Service                             Annual Frequency/1,000                     Cost per Service
                                          Inpatient Visits                                             1 00                $7,000.00
a.) Office Visits                        3,000                                                     $45.00
b.) Lab/X-ray                              500                                                       $25.00

What per-member per-month (PMPM) rate would be required to break even, ignoring any copayments?

Explanation / Answer

Service No Amount Total Inpatient 100 7000 700000 Office Visit 3000 45 135000 Lab/X-Ray 500 25 12500 Total Cost 847500 Average Cost=Total cost/1000 847.5 PMPM=Average Cost/12 70.63

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