Mini-case 1:

Need help with Withhold Returned and Total Compensation

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:
				Dr. Adams	Dr. Baker	Dr. Cage	Dr. Dove
	Number of referred patients	600	800	1,000	1,600
	Actual referral costs		$504,000	$470,000	$590,000	$880,000
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.
Calculations
a. and b.
	PCP capitation payment PPPM	$20
	PCP risk pool withhold rate	3%
	Specialty/hospital budget PPPM	$50
	Number of months per year	12
				Dr. Adams	Dr. Baker	Dr. Cage	Dr. Dove	Total
	Number of referred patients	600	800	1,000	1,600	4,000
	Annual capitation payment	$144,000	$192,000	$240,000	$384,000	$960,000
	Withhold			$21,600	$28,800	$36,000	$57,600	$144,000
	Initial allocation		$122,400	$163,200	$204,000	$326,400	$816,000
	Budgeted referral costs	$360,000	$480,000	$600,000	$960,000	$2,400,000
	Actual referral costs		$504,000	$470,000	$590,000	$880,000	$2,444,000
	Referral gain (loss)		-$144,000	$10,000	$10,000	$80,000	$44,000
	Withhold returned
	Total compensation