Health Blog

Tips | Recommendations | Reviews

What Does Capitation Mean In Healthcare?

What Does Capitation Mean In Healthcare
Capitation: A way of paying health care providers or organizations in which they receive a predictable, upfront, set amount of money to cover the predicted cost of all or some of the health care services for a specific patient over a certain period of time.

What is capitation defined as?

Understanding Capitation Patrick C. Alguire, MD, FACP Director, Education and Career Development Capitation payments are used by managed care organizations to control health care costs. Capitation payments control use of health care resources by putting the physician at financial risk for services provided to patients.

At the same time, in order to ensure that patients do not receive suboptimal care through under-utilization of health care services, managed care organizations measure rates of resource utilization in physician practices. These reports are made available to the public as a measure of health care quality, and can be linked to financial rewards, such as bonuses.

Capitation is a fixed amount of money per patient per unit of time paid in advance to the physician for the delivery of health care services. The actual amount of money paid is determined by the ranges of services that are provided, the number of patients involved, and the period of time during which the services are provided.

Capitation rates are developed using local costs and average utilization of services and therefore can vary from one region of the country to another. In many plans, a risk pool is established as a percentage of the capitation payment. Money in this risk pool is withheld from the physician until the end of the fiscal year.

If the health plan does well financially, the money is paid to the physician; if the health plan does poorly, the money is kept to pay the deficit expenses. When the primary care provider signs a capitation agreement, a list of specific services that must be provided to patients is included in the contract.

Preventive, diagnostic, and treatment services Injections, immunizations, and medications administered in the office Outpatient laboratory tests done either in the office or at a designated laboratory Health education and counseling services performed in the office Routine vision and hearing screening

It is not unusual for large groups or physicians involved in primary care network models to also receive an additional capitation payment for diagnostic test referrals and subspecialty care. The primary care physician will use this additional money to pay for these referrals.

  • Obviously, this puts the primary care provider at greater financial risk if the overall cost of referrals exceeds the capitation payment, but the potential financial rewards are also greater if diagnostic referrals and subspecialty services are controlled.
  • Alternatively, some plans pay for test and subspecialty referrals via fee-for-service arrangements but are more typically paid via contractually agreed-upon fee schedules that are discounted 10% to 30%, compared to the local usual and customary fees.
See also:  Who Owns Envision Healthcare?

Below is an example of a capitation rate schedule. It is for illustrative purposes only and does not imply a standard for comparison purposes. The jargon used by managed care organizations for the capitation rate is PMPM (per member, per month).

Member’s Age Capitation per Member, per Month 10% Withhold Payment per Member, per Month
0-1 $25.00 $2.50 $22.50
2-4 $10.00 $1.00 $9.00
5-20 $5.00 $0.50 $4.50
> 20 $15.00 $1.50 $13.50

Other plans may have different schedules based on patient sex, different categories of ages, and different withhold amounts. : Understanding Capitation

What is the definition of capitation quizlet?

What is the definition of capitation? A reimbursement system whereby a physician receives a certain amount of money for each patient/member enrolled in his/her practice during a specified time period (usually a year)

What is another word for capitation?

What is another word for capitation?

duty levy
poll tax head tax
capitation tax head money
assessment tariff
impost excise

What is the meaning of capitation fee?

Definition. In the context of Indian law, a capitation fee refers to the collection of payment by educational bodies not included in the prospectus of the institution, usually in exchange for admission to the institution.

Which of the following best explains capitation?

Which of the following best describes capitation? A payment mechanism in which health care services are included under one set fee per covered individual.

What is the origin of capitation?

From Latin capitationem, from caput (‘head’).

What is the origin of the word capitation?

Capitation (n.) 1610s, ‘counting of heads,’ from Late Latin capitationem (nominative capitatio) ‘the poll tax,’ noun of action from past participle stem of a verb derived from caput ‘head’ (from PIE root *kaput- ‘head’).

How do you use capitation in a sentence?

A tax, charge, or amount that is fixed at the same level for everyone: Doctors receive capitation of $33.85 per patient.

What is another word for insurance fee?

Noun. payment for insurance.

What is capitation fee tennis Ireland?

Tournament Capitation Fees Each player that enters a tournament sanctioned by Tennis Ireland pays a Capitation Fee to Tennis Ireland on top of the tournament entry fee(s). The capitation fees that are currently applicable are: Junior: €4 (no fee for under 10) Senior: €6.

See also:  Does United Healthcare Offer A Flex Card?

What is the capitation fee in Karnataka?

The capitation fees for aspiring doctors ranges from a staggering Rs 60,000 for a local resident to Rs 3.25 lakh for a foreigner.

Who benefits most from capitation?

Capitation Fee Benefits – A capitation fee system is ideal and very beneficial for HMOs, IPAs, and basically any type of payer organization. At the same time, providers can also decrease their record-keeping expenses with this system. This is because providers under an IPA won’t need to hire a lot of billing staff to process all their payments.

  • In addition, providers won’t have to wait for the reimbursement of their services because they earn a capitation fee every month.
  • As a result, you minimize the costs and extra processes that can hinder a provider’s operation.
  • This means that providers and similar practices can attend to more patients without spending too much money on operational costs.

Finally, the bottom line of a capitation fee system is that IPAs and other payer organizations can help minimize the number of services that they have to pay for. Basically, this system discourages providers from extensively giving out services and expensive procedures to earn more than necessary.

  • As a result, payer organizations can avoid enormous bills for services that aren’t very crucial for the patient’s care.
  • At the same time, this also helps patients save time and energy by avoiding unnecessary services.
  • Technology for Capitation Systems Paying providers with a capitation fee can help large organizations earn more revenue by minimizing costs.

However, because a capitation system incentivizes providers to enroll more patients, organizations like HMOs and IPAs have to effectively track and manage thousands of patient data. As a result, organizations need to rely on advanced technological solutions so they can effectively process all their data flow.

That’s why management software, like QuickCap 7, are now designed to efficiently take care of healthcare related data sharing, data processing, and billing processes. QuickCap can handle all your capitation needs! QuickCap 7 is a web-based application that you can use for all your capitation needs. From member data, provider contracting, and claim billing, QuickCap is a one-stop software for IPAs, HMOs, and any type of healthcare payer organizations.

Capitation Payment in Healthcare: How does it work?

QuickCap has the following features for all of your capitation needs:

Easily upload claims, authorizations, and member information with extensive EDI features Specify provider contracts and capitation rates for different providers Keep track of all your member and patient records in one system More capitation fee specific features at your fingertips!

See also:  How Does Healthcare Contribute To Climate Change?

With QuickCap, you can simplify your healthcare workflow processes, accelerate your clinical data procedures, and improve your financial outcomes. Learn more about MedVision’s capitation features. : The Role and Benefits of Capitation in Healthcare

What is episode of care reimbursement?

Episode of Care Episodes of care bundle all services provided within a specific time frame for a single health condition or medical event instead of using a model. By bundling all these services, care becomes more comprehensive and there is also a cost reduction.

  1. These two primary benefits of episodes of care programs, quality of care and cost reduction, are interrelated.
  2. This is because financial incentives offered for episodes of care are based on improved patient outcomes.
  3. This means that better patient care lowers costs while also making the entire healthcare process more efficient.

Additionally, by having a single price for all phases of care for a patient, all clinicians working together can better focus their efforts on the long-term outcome, not just completing a single aspect of the care. : Episode of Care

What is a capitation in the UK?

Meaning of capitation fee in English in the UK, a payment or charge that is made for each patient in a particular area or each student in a school : The basic idea is that patients pay a flat-rate capitation fee to a health-care organisation that is then responsible for providing necessary treatment.

What is the origin of the word capitation?

Capitation (n.) 1610s, ‘counting of heads,’ from Late Latin capitationem (nominative capitatio) ‘the poll tax,’ noun of action from past participle stem of a verb derived from caput ‘head’ (from PIE root *kaput- ‘head’).

What is the origin of capitation?

From Latin capitationem, from caput (‘head’).

What is an episode of care definition?

Dictionary A-Z Menu A-Z Definition Search A B C D E F G H I L M N O P R S T U V W Z Definition An episode of care is an inpatient episode, a day case episode, a day patient episode, a haemodialysis patient episode, an outpatient episode or an AHP episode.

an inpatient in an inpatient episode within a specialty an outpatient in an outpatient episode within a specialty a physiotherapy patient in a physiotherapy episode.

These episodes comprise a series of service contacts as, for example, in an outpatient episode or a period of continuous contact as in an inpatient episode. It is important to note that a person may be in more than one episode at a time. Thus episodes and/or individual service contacts may be used as basic building blocks and combined as required to build up patient profiles.