Capitation Agreement

The groups most likely to benefit from a procurement system are HMOs and IPAs. Under a contract, the health care provider receives a fixed amount in dollars per month to see patients, regardless of the number of treatments or the frequency with which the physician or clinic sees the patient. The agreement provides that the supplier receives a lump sum payment in advance per month. Whether or not the patient needs benefits in a given month, the provider will continue to collect the same fees. The more treatment a patient needs, the less money a health care provider earns per treatment. Traditionally, payers have reimbursed health care providers for the costs of the services provided or the volume of services provided. But new types of health plans are moving from volume payment to value payment – taking into account costs, consumer health outcomes and consumer experience – with top performance rates based on the most “advanced” performance on the scale. This approach to group payments is sometimes referred to as the “disease head.” It`s a very small step away from full capitation. It attempts to reduce actuarial risk analysis at the individual level of patients rather than analyzing risk for a group of patients. Such an analysis is technically difficult. In addition, this approach could provide a strong incentive for care groups to select patients, conditions and treatments based on financial performance, not patient needs. According to the American College of Physicians, the following are covered by most capitation plans: For example, a health maintenance organization (HMO) can enter into an agreement with a family physician (PCP) or medical group for one year, with a negotiated rate of $50 per patient per month. The HMO may require that 10% of this amount be withheld, or USD 5 per patient per month, and distribute it into the “risk pool.” In this scenario, the actual payment that the health group/PCP receives per member per month is $45.

In contrast, a study by the Center for Studying Health System Change in Washington, D.C., reported that up to 7% of physicians actively reduced their services through financial incentives and concluded that “group income in the form of capitation is an incentive to reduce services.” On the other hand, a PBS article defines global capitulation as an agreement “in which entire networks of hospitals and doctors come together to obtain individual fixed monthly payments for members enrolled in the health plan; Below the overall per capita limit, providers sign a single contract with a health plan covering the care of groups of members, and then they must define a method of sharing head control. Capitation agreements or contracts are made by the health care provider and the payer to set rates and other details. These agreements may also include a list of services that the health plan provides to the patient, such as prevention services, drugs and vaccines, laboratory tests, routine examinations and other diagnostic and treatment services. In the capitation model, providers are paid for each registered patient or per member per month (PMPM). It is called a per capita package or a per capita package, sometimes called a “ceiling.” Payment varies depending on the head purchase agreement, but in general it is based on characteristics such as the age of the registrant. Changing the plan based on the specific characteristics of patient groups is a way to compensate medical care providers who are expected for similar conditions within a group. Health insurance companies use premiums to control health care costs. Capitation payments control the use of health resources by exposing the physician to financial risk to patient services.