A quick guide to capitation
Capitation has three main aspects, says Joy Diffendal, MBA, executive director of Empire Physicians Medical Group in Rancho Mirage, CA.
Those aspects are listed below:
- There's a formula for establishing a primary care physician capitation fee and a specialty care physician capitation fee.
These are generally paid in arrears on the third week of each month.
- Physicians don't receive money each time they see a patient.
Generally they're paid based on a defined population that is assigned each month to that medical group, and the money paid is based on how many dollars are allocated through the capitation formula.
The theory behind capitation: "If you manage the care appropriately then usually the amount you are paid will exceed costs," Diffendal says. "We believe you need to do the right thing for patients. If you give patients appropriate care in the beginning, then it should save money in the long run."
- Normally, providers do not take risk for medical care that is outside of their service area.
Specific exclusion or provisions for out of network care should be stated clearly in the contract. However, if a patient needs a rare form of treatment that is not offered by the provider, such as a bone marrow transplant, then that may be included in the provider's global risk contract.
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