Project 2: Task 1

Selina

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May 23, 2019, 12:04:15 AM5/23/19

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Discussions for project 2 task 1

June Pericak

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May 23, 2019, 12:32:55 PM5/23/19

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What did everyone get for Bullet 1 & 2?

Bullet one: 10.3 million or 21.48 PMPM

Bullet two: 244.89

Bullet three: still working.

Allison

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May 23, 2019, 11:02:14 PM5/23/19

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That sounds familiar for Bullet one - haven't done 2 or 3 yet.

softball08

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May 24, 2019, 2:55:46 PM5/24/19

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What are people getting for the break even PMPM?

Allison

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May 24, 2019, 10:33:24 PM5/24/19

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I'm not sure I understand the shared savings component of the reimbursement proposal - is it saying that if incurred claims (PMPM) are higher than the 7% trended claims that HUB pays 20% of the difference and that if incurred claims (PMPM) is lower than the 7% trend that HUB gets 50% of the difference paid to them?

And then would the break even PMPM be where the capitation payment + the PMPM equals incurred claims at the target level?

Not sure if that makes sense because I get a very high number for PMPM when I tried that.

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jpie...@gmail.com

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Jul 26, 2019, 11:39:58 AM7/26/19

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For bullet 1 isn't it just the $400 PMPM that is given to you for FFS? Then trended by 7% each year?

cjm...@gmail.com

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Aug 10, 2019, 8:03:22 PM8/10/19

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Don't forget they're asking about contract period, so that's baseline + next 2 years.
Are you sure about the 21.48? Are we supposed to be dividing by 12? Are these member months or average members?

How did you get $244.89 for bullet 2 and get $21.48 for bullet 1? If you don't divide by 12, the FFS PMPM is $257.72

I'm calculating the cap payment as $100*the risk adj for patient type*# of members in patient type. Sum those up to be $9.8M, divide by 40,000 members to get $244.89 PMPM(?)

For breakeven I can't decide if we are supposed to compare to the FFS or the baseline claims $400 PMPM? Here I just compared claim costs vs cap payment. Sum up the difference over the three contract years and divide by the 120,000 members to get the contract period PMPM. Going to collect more in years 1&2 to offset the larger loss in year 3.

I feel like I'm missing something little and I'll have a correct answer.

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Bryce

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Aug 12, 2019, 12:14:20 PM8/12/19

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Bullet 1: Thats what I got.

Bullet 2: $9,795,490 ($20.41 PMPM) I think you just need to divide by 12 to get the PMPM...looks like you are showing PMMY?

Bullet 3: PMPM target to break-even for first year ($424.79) and second year ($454.75). This should generate enough shared savings to allow them to break-even compared to their current FFA arrangement. Hope I am not missing something.

Chris

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Aug 12, 2019, 12:47:33 PM8/12/19

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Update to my post:
Bullet 1: I agree on $10.3M and after reading the assignment closer (block of text after the bullets in task 1), we're not assuming any trend for FFS in the contract period, so its always $10.3M

Bullet 2: I agree the total cap pmt is $9.8M

Bullet 3: We have the gap between FFS and Cap -> 0.5M, with 40k members that's $1.07 PMPM, and we need twice as much savings because of the upside component

For the cap arrangement we are assuming 7% trend for 2 years. Find difference between the trended claims pmpm and the target savings to get the breakeven pmpm.

Sarah

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Aug 31, 2019, 2:14:52 PM8/31/19

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I agree with bullets 1 and 2, but not with bullet 3.

For bullet 3, it seems to me that the question is asking what are the incurred claims in the contract period that would result in a net income of $0 to HUB. I don't think this depends on FFS payments at all since we're only looking at the proposed reimbursement arrangement. In the contract period under the proposed reimbursement arrangement, HUB would receive the capitation amount ($244.89 PMPY) plus any shared savings/losses. It seems to me that we're trying to calculate what the incurred claims should be in the contract period such that the capitation amount + shared savings = incurred claims in the contract period.

Chris

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Sep 4, 2019, 1:03:55 PM9/4/19

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I'm not sure we're in disagreement, maybe I'm just not conveying my thoughts well. I didn't mean to use the FFS payments. I was just looking at the bottom of page 2 of the assignment where it says, "Overall PMPM healthcare cost target is 7% annual trend applied to the total baseline incurred claims"

So I used baseline incurred claims from page 3 of the assignment, right below the membership table, where it says $400 PMPM. Then I multiplied that by (1+0.07)^2 to get trended claims amount. 2 years in the contract period, 7% trend.

Sarah

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Sep 4, 2019, 3:30:45 PM9/4/19

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I agree with your calculation of the contract period healthcare cost target. My thinking is that you would then use the resulting target PMPM, the PMPM capitation amount, and the PMPM shared savings/loss component to find the incurred claims that produces $0 in net income to HUB.

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chocman...@gmail.com

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Oct 22, 2019, 12:10:59 AM10/22/19

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Agree with bullet 3. The target for the contract period is $400*1.07^2. Subtract bullet 2 capitation payment PMPM. This results in the incurred claims such that Claims + Capitation Payments = Target. This would be the break-even point. If claims are under or over, then there are shared savings/losses.

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Anna Mitchell

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Oct 7, 2020, 10:36:04 PM10/7/20

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Is bullet one asking for 2 separate answers?? It says find the FFS reimbursement amount for both the baseline period and contract period

Chris Mckay

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Jan 30, 2021, 10:38:30 PM1/30/21

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I know I'm late to reply, but no, it's asking 1 question. It says right under Task 1 to assume no trend on HUB's cost/util, so the base period experience = contract experience. They're asking for 1 number.

Also for Q3, I'm confused by some of y'alls answers here. We know the costs HUB incurs from their baseline data. They are getting paid the capitated amount. So they are still out the difference. To get this money, they need to make it up through the PMPM agreement. They need $X to breakeven. That's (X/40,000/12) PMPM. They make 50% of savings, so we need double that in savings. The contract period is two years from base, so the base trended is $400 * (1.07)^2 = $457.96. $457.96 - Savings = Breakeven PMPM.

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ashwag alzahrani

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May 13, 2021, 9:39:54 PM5/13/21

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How much the break even point is? I got 38.16 PMPM

Cap payment + 50% of shared saving

في الاثنين، 10 مايو 2021 في تمام الساعة 5:28:09 م UTC+3، كتب ccd...@gmail.com رسالة نصها:

I'm not clear on what question 3 is asking, do they want to know the incurred claims PMPM that would result in breaking even?

Casey Drick

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May 13, 2021, 10:02:40 PM5/13/21

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That is not what I got but I think it depends on how you interpret the question. I took it to mean how much savings does HUB need to realize in order for FFS reimbursement to equal the Risk-adjusted Capitation with shared savings / loss reimbursement

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ashwag alzahrani

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May 14, 2021, 8:07:57 AM5/14/21

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Thanks a lot... You are right,. If the HUB should leave if the proposed arrangement payment is below current arrangement payment.. so the realized saving should be 1.07, then the target PMPM cost is 455 . It makes sense.. Thanks again

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Virtual Assistant

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Oct 7, 2021, 4:11:53 AM10/7/21

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I think there is a general consensus on Q1 and Q2.

For q3, this is how I interpreted it:
We know that the Average baseline incurred claims for these members is $400 PMPM which means that the contract period incurred claims is $458 PMPM (400*1.07^2), where 458 becomes the target. 50% of anything below this 458 PMPM will be shared with HUB, let "Y" be that PMPM cost. So for question 3, I think we need to work out what that "Y" should be such that the PMPM reimbursement under capitation is same as reimbursement under FFS arrangement.

Nisha Ramanathan

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Oct 11, 2021, 12:55:03 PM10/11/21

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I agree but my calculation doesn't match any of the other numbers I have seen above. I calculated "Y" as 455.82. Did anyone else get this?

Muhammad Nauman Akbani

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Oct 14, 2021, 10:17:24 AM10/14/21

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yeah @nraman, this looks familiar

Felix W

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Oct 22, 2021, 10:10:01 PM10/22/21

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Could you elaborate on how you got 455.82? If 458 is projected incurred PMPM and 455.82 is the new target, does that mean savings is only 1.07?

Thanks

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Celena Robinson

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Sep 5, 2023, 3:33:58 AM9/5/23

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anyone else working on this and want to collaborate? I got a slightly different answer than others

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Donkiss Zidane

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Apr 13, 2024, 9:41:00 PM (11 days ago) Apr 13

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African Grey Parrots

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Apr 23, 2024, 11:19:45 PM (15 hours ago) Apr 23

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Can anyone please clarify the service duration of the contract ? is it 2020 or (2019 & 2020) or (2020 & 2021) , thank you

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