What does PMPM stand for in the context of capitated amount?

The term PMPM stands for "Per member per month," which is commonly used in the context of capitated payment models in healthcare. This model involves paying a set fee to healthcare providers for each enrolled member on a monthly basis, regardless of how many services each member actually uses during that time. This approach encourages providers to focus on preventive care and efficient management of resources, as they receive a consistent payment for each member rather than being reimbursed on a fee-for-service basis.

The use of PMPM simplifies budgeting and financial planning for both healthcare organizations and insurers, as it provides a predictable revenue stream based on the total number of members under a provider's care. Therefore, understanding this term is essential for effectively managing capitated contracts and financial arrangements in a physician practice management context.