{"id":20608,"date":"2018-11-08T09:00:46","date_gmt":"2018-11-08T14:00:46","guid":{"rendered":"http:\/\/www.carecloud.com\/continuum\/?p=20608"},"modified":"2025-10-21T17:16:14","modified_gmt":"2025-10-21T17:16:14","slug":"capitation-payments","status":"publish","type":"post","link":"https:\/\/carecloud.com\/continuum\/capitation-payments\/","title":{"rendered":"Capitation Payments – What You Need to Know"},"content":{"rendered":"

The Affordable Care Act (ACA) in 2010 prompted an ongoing effort to reduce healthcare costs while striving to improve quality patient care. A push toward paying for value with a focus on clinical outcomes, incentives, and mandatory reporting, has led to increased cost control efforts. The intent is to improve the quality and overall population health while reducing waste by changing how payment is received, and how healthcare is delivered. <\/span><\/p>\n

Capitated care shifts the role of managing the amount, form, and cost of care to the providers. This is a departure from the traditional<\/span> fee-for-service model<\/span><\/a> which utilizes a set fee for each service. This can allow providers to invest in quality improvements to increase their efficiency, and give them the opportunity for financial rewards while sharing in the risk of potential losses.<\/span><\/p>\n

What is Capitation?<\/span><\/h2>\n

Capitation payment is a model of reimbursement in which the providers receive <\/span>a fixed amount of money per patient.<\/span><\/a> This is paid in advance, for a defined time, whether the member seeks care or not. Ideally, patients who have little utilization will naturally balance out with the patients who have higher utilization. Capitation payments are developed based on the number of patients, the expected average amount of healthcare utilization for each patient during a specific time frame, and can vary based on the geographic area.<\/span><\/p>\n

As a <\/span>value-based <\/span><\/a>reimbursement strategy, capitation payments include quality measures and standards to deter withholding treatment for financial gain. The physician, a network of hospitals and physicians, or a primary care network, agree to provide specific preventive services that can be completed in the office and usually include a focus on: <\/span><\/p>\n