Capitation is a fixed, pre-paid payment model used by managed care organizations (MCOs) to control healthcare costs while ensuring efficient resource utilization. Under this model, physicians receive a set amount per patient, per unit of time, regardless of services provided.
How Capitation Works:
- Payments depend on covered services, enrolled patients, and contract terms.
- Rates vary by region, based on local healthcare costs and service utilization.
- Risk pools may withhold a portion of payments, reimbursed if financial targets are met.
Primary Care Capitation Services:
- Injections, immunizations, and preventive care.
- Diagnostic, treatment, and counseling services.
- Outpatient lab tests and routine screenings.
Specialist Referrals:
- Some plans include capitation for referrals, increasing financial risk.
- Others use fee-for-service or discounted fee schedules.
Capitation shifts financial responsibility to providers, encouraging cost-effective care while maintaining quality. For practice managers and healthcare owners, understanding capitation is key to optimizing revenue and patient outcomes.