90.2K

Verified Solution

Link Copied!

I need help to understand and show my work in excel sheet. please Managed Care pays its primary care physicians $($PCPs$)$ by capitation, but a percentage of the total

capitated amount is withheld and distributed to individual PCPs based on aggregate PCP performance.

The financial goal of importance to Managed Care is to achieve total actual specialty care and hospital

costs less than budgeted. To this end, Managed Care provides a financial incentive to its PCPs to

encourage careful referral of patients to these services. The financial incentive is based on the referral

gain or loss, defined as the difference between the actual and budgeted specialty care and hospital cost.

More specifically, Managed Care uses the following risk$-$sharing rules:

If there is a total referral gain, then all of the total withhold is returned to the PCPs based on the number of patients per PCP$.$

If there is a total referral loss that is less that the total withhold, then the difference $($withhold $-$ referral loss$)$ is

returned to the PCPs based on the number of patients per PCP$.$

If there is a total referral loss that is greater than the total withhold, then none of the withhold is returned to the PCPs

Last year, Managed Care's capitation payment to the PCPs was $$20$ Per Patient Per Month $($PPPM$),$ but $15$ percent of this

amount was placed into the PCP risk pool. The budgeted amount for specialty and hospital costs was

$$50$ PPPM$.$ At the end of the year, the following data were recorded for the four PCPs at Managed Care:

a$.$ Calculate the withhold returned to each PCP at the end of the year.

b$.$ Calculate the total compensation of each PCP at the end of the year.

c$.$ Was each of the PCPs fairly compensated?

d$.$ What incentives does this single risk pool based on aggregate PCP performance present to the individual PCPs$?$

e$.$ What should be investigated to assess the fairness of the PCP compensation?

Calculations

a$,$ and b$.$

Referral gain $($loss$)$

Withhold returned

Total compensation

Answer & Explanation Solved by verified expert

See Answer