Daily charge for hospital care that includes services and supplies given to the patient and excluding professional fees of nonstaff physicians.

1. Cost per day derived by dividing total costs by the number of inpatient days of care given. Per diem costs are an average and do not reflect the true cost for each patient. 2. Phrase used in managed care plan contracts that refers to reimbursement made to the hospital from which a patient is transferred for each day of stay. The formula for determining the per diem rate is to divide the full diagnosis-related group (DRG) payment by the geometric mean length of stay (GMLOS) for the DRG. The payment rate for the first day of stay is twice the per diem rate, and subsequent days are paid at the per diem rate up to the full DRG amount. 3. In a managed care plan, contracted amount paid for an inpatient that is calculated per day per type of stay.

Single charge for a day in the hospital regardless of actual charges or costs incurred (e.g., a plan that pays $800 for each day regardless of the actual cost of service). Some insurance plans may have separate categories of per diem (e.g., intensive care unit, medical, and surgical, each with a different reimbursement rate). Also called per diem payment.

Cost for each insurance plan’s enrolled member for each month (each effective member for each month the member was effective). This is calculated by taking the number of units divided by member months. A variation is called per contract per month (PCPM).

Cost for each insurance plan’s enrolled member for the year. Also see per member per month (PMPM).