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Capitation Payment Methodologies

Capitation Payment Methodologies

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Running Head: CAPITATION PAYMENT METHODOLOGIES 1

Capitation Payment Methodologies

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CAPITATION PAYMENT METHODOLOGIES 2

Capitation Payment Methodologies

Capitation is a payment method whereby an individual provider, a group of various

health care providers, or a managed-care plan receives a monthly fixed fee mainly in return

for delivering particular or all health services usually to a family or a single patient. It is

paramount to note that the capitation fee has to be paid regardless of the number of instances

that care occurs. For capitation payment, there is normally a huge risk, which is incurred by

the provider whereas the insured person and the physician share the risk. The capitation

payment cover is only paid for the stipulated amount in accordance to the terms and

conditions in accordance to American Medical Association (2014).

There are various capitation payment methodologies, which are undertaken between

providers and payers, and Medicaid or Medicare with commercial MCO (Managed Care

Organizations). Payers normally refer to insurance companies whereas providers refer to

hospitals and doctors. Medicaid is a federal-state program, which pays for various health care

services to majority of the low-income people including the elderly who qualify. Medicare is

a federal program, which pays for majority of health care services mainly for people who are

older 65 and above, disabled, or blind (Diffen, n.d.).

Under the capitation payment system, the physicians (healthcare service providers)

are paid a fixed monthly fee for each person who is assigned mainly to that physician

regardless of the patients seeking care per a certain period. The remuneration amount payable

is based on the expected utilization health care for that patient. Other factors that are

considered include geographical location, type of employment, sex, race, and age (Diffen,

n.d.).

In conclusion, the capitation payment system offers certainty to both payers and

providers as to the care delivery financial aspects. The providers (hospitals, doctors) usually

assume the risk of many patients falling sick as well as needing care than expected.

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Capitation Payment Methodologies Name Institution Capitation Payment Methodologies Capitation is a payment method whereby an individual provider, a group of various health care providers, or a managed-care plan receives a monthly fixed fee mainly in return for delivering particular or all health services usually to a family or a single patient. It is paramount to note that the capitation fee has to be paid regardless of the number of instances that care occurs. For capitation payment, there is normally a huge risk, which is incurred by the provider whereas the insured person and the physician share the risk. The capitation payment cover is only paid for the stipulated amount in accordance to the terms and conditions in accordance to American Medical Association (2014). There are various capitation payment methodologies, which are undertaken between providers and payers, and Medicaid or Medicare with commercial MCO (Managed Care Organizations). Payers normally refer to insurance companies whereas providers refer to hospitals and doctors. Medicaid is a federal-state program, which pays for various health care services to majority of the low-income people including the elderl ...
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