1. Dr. Robbins, a local pediatrician, accepts Red Square Insurance, a commercial insurance company, for payment. Since Dr. Robbins has agreed to accept a 20% discount off of their normal charges, Red Square has made Dr. Robbins a member of their preferred provider list. If Dr. Robbins normally charges $100 per routine office visit (a pretty standard amount in the region), how much will Red Square reimburse Dr. Robbins for their member, little Suzys office visit?

B) Is this a Fee for Service, Capitated, or Bundled Payment kind of reimbursement (payment) model? Why do you think that?

2. Red Square is trying to convert as many of their providers to a capitated payment model. They have approached Dr. Robbins about providing pediatric services for their 7,000 pediatric members.
   1. They have offered Dr. Robbins $4.00 PMPM. What would Dr. Robbins monthly capitated revenue be?
   2. Red Square estimates that 2% of their pediatric patients have an office visit per month. Dr. Robbins has fixed costs of $15,000 per month that need to be covered and the VCu for an office visit is $95. Is this contract profitable for Dr. Robbins?