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Pediatric Cost Model


​​​​​​​​​The American Academy of Pediatrics is pleased to announce the 2012 Pediatric Medical Cost Model, an actuarial analysis of net medical costs paid by insurers for physician services for children during 2011. OptumInsight, Inc. conducted the current study which updates a similar study completed in 2009.

Available from this model are utilization, unit cost, and per member per month (PMPM) data on a state-by-state basis for both Medicaid/CHIP and Commercial enrollee groups. The PMPM values reflect the estimated amount insurers paid for an array of benefits and coverage policies. In other words, they are the net medical costs paid by the insurer. Medicaid/CHIP costs in this study are based on average Medicaid and CHIP data and include both state-administered fee-for-service and managed care programs.

The model provides state and locale-specific estimation of medical cost (plan-to-provider payment) for medical services to children, such as vaccine administration, preventive and routine office visits, and other physician services. While simple to use, the model allows for a wide range of applications. It can, for example, be used to estimate national or state average PMPM for providing physician service in Medicaid/CHIP or commercial plans. Alternatively, users can customize a number of model parameters to estimate benefit-specific PMPM at any level of co-payment or coinsurance, and for any patient age/gender mix in either or both rural and urban areas in any state. 

Nationally, PMPM (per-member-per-month medical cost) to cover each child for physician services in commercial plans averaged $68 in 2011. PMPM for Medicaid/SCHIP children enrolled in predominantly managed care plans was estimated at $37 for the same period. As of 2011, average Medicaid/CHIP physician payment for pediatric services was estimated at 70% of Medicare, compared to 72% in 2008, 70% in 2004 and 65% in 2002.  Commercial-to-Medicare physician fees were estimated at 142%, 113%, 111% and 115% for 2011, 2008, 2004, and 2002, respectively.

Important Notice and Disclaimer
The study reflects aggregated historical information. It is designed to assist both providers and purchasers of health care services in making independent decisions regarding practice management and the provision and purchase of health care services. The study is being offered for informational purposes and does not reflect the official position of the American Academy of Pediatrics on issues relating to costs or other fee-related information. Study data may not be used for the purpose of fixing prices, fees or other charges or to limit competition or restrain trade in any manner.  Improper use of this information is prohibited by federal and state antitrust laws and is subject to severe penalties. The Academy recommends that the user consult with competent legal counsel about any questions the user has regarding the use of the study data.

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