1. Providers and managed care plans negotiate a per member per month (PMPM) amount per enrollee to cover the expected cost of services to be provided to a member. The provider gives all contracted care and services to members for a prospective payment with retroactive adjustments, taking the risk that the capitation rate will cover all of the costs of care to the members. Although cap rates are usually fixed, they can be adjusted for the age or gender of members based on actuarial (statistical) projections of health care utilization. 2. Under Medicare guidelines, fixed amount the Centers for Medicare and Medicaid Services (CMS) pays to an approved managed care plan selected by an enrolled Medicare beneficiary.