In order to calculate a simple monthly capitation payment, the Argyle Health Plan used the following information: The average number of office visits each member makes in a year is two The FFS rate per office visit is $55 The member copayment is $5 per office visit The reimbursement period is one month Given this information, Argyle would correctly calculate that the per member per month (PMPM) capitation rate should be

Question

Quizplus · Accepted Answer

To calculate the PMPM capitation rate, we need to consider the following steps:

Step 1: Calculate the total cost per member per year.
The member visits the office two times in a year. So, the total cost per member per year can be calculated as:
= (FFS rate per office visit - member copayment) x number of visits
= ($55 - $5) x 2
= $100

Step 2: Calculate the monthly cost per member.
As the reimbursement period is one month, we need to divide the total cost per member per year by 12 months.
= $100 / 12
= $8.33

Therefore, the PMPM capitation rate should be $8.33.

In Order to Calculate a Simple Monthly Capitation Payment, the Argyle