Daily charge for hospital care that includes services and supplies given to the patient and excluding professional fees of nonstaff physicians.
Insurance Encyclopedia
Per diem payment
See: per diem reimbursement.
Per diem rate
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.
Per diem reimbursement
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.
per member per month (PMPM)
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).
per member per year (PMPY)
Cost for each insurance plan’s enrolled member for the year. Also see per member per month (PMPM).
Per occurrence
See: Excess Per Occurrence Reinsurance.
Per occurrence limit
In liability insurance, the maximum amount the insurer will pay for all claims resulting from a single occurrence, no matter how many people are injured, how much property is damaged, or how many different claimants may make claims.
Per occurrence/per loss excess reinsurance treaty
An agreement under which losses above a certain dollar amount are ceded to the reinsurer, who is responsible for all losses from any one exposure above this amount up to the reinsurance limit. The retention is expressed as an amount incurred per occurrence. An occurrence may be one hurricane, one flood, or one accident that results in injuries to multiple people.
Per Person Limit
In liability Insurance, maximum amount the Insurer will pay for bodily injury to any one person in any one accident.
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US: In liability insurance, the maximum amount the insurer will pay for one person’s injuries. If two people are injured in an auto accident and the at-fault driver’s policy has a $50,000 per person limit, the insurer will pay no more than $50,000 to each person for his or her injuries. If one person’s injuries are worth $25,000 and the other person’s are worth $75,000, the first claimant will receive $25,000 and the second will receive the per person maximum of $50,000 from the insurer.