How this settles: Capitation revenue = rate × lives × 12. Medical cost = actual PMPM × lives × 12. The medical loss ratio is cost over revenue. Stop-loss reinsures any medical cost above the attachment point, so only the recognized cost flows downstream. The result is measured against the MLR target — recognized cost below the target is a surplus, above it is a deficit. The risk corridor caps that result on both sides at a percent of revenue, the quality withhold is earned back per the quality score on a surplus, and the remainder is the annual surplus or deficit. This is a planning model, not a contract; final settlement follows your executed agreement.