What reimbursement methodology is associated with a per-member per-month payment structure?

The reimbursement methodology associated with a per-member per-month payment structure is capitation. This model involves a fixed payment to healthcare providers for each enrolled member, regardless of the number of services provided or the frequency of care needed during that month. This financial arrangement incentivizes providers to focus on preventive care and efficient management of patient health, as their income is not directly linked to the volume of services delivered.

In capitation, providers are typically responsible for a comprehensive range of healthcare services for the enrolled members. This can lead to a more coordinated and efficient approach to patient care, as it encourages providers to prioritize health maintenance and preventive services to minimize the need for costly interventions later.

The other reimbursement methodologies—such as cost-plus reimbursement, Diagnosis-Related Groups (DRGs), and fee-for-service—rely on different payment structures. Cost-plus reimbursement involves providers being paid for their costs plus a markup, DRGs are used for inpatient hospital services where reimbursement is based on predetermined rates linked to patient diagnoses, and fee-for-service reimburses providers based on the specific services rendered to patients. These models do not align with the same per-member per-month approach found in capitation.