Capitation is a means of paying physicians associated with managed care organizations (MCO) as a way to promote efficiency. The amount physicians receive covers a portion of the anticipated cost of delivering services.
Payment Method
An MCO, otherwise known as a health insurance plan provider, pays its contracted physicians a monthly payment to provide services to plan enrollees.
Services Covered
The payment covers services, such as disease prevention, medications, some testing, counseling and regular screenings for vision and hearing, among others negotiated between the MCO and physicians in the plan.
Amount
The amount physicians are paid is determined by the number of enrollees who have selected them as their primary care providers.
Cost Control
The physician receives payments regardless of whether or not services are rendered. This is meant to control health resources and prevent overuse of services. If a patient comes in multiple times in a single month, the doctor still only receives the monthly rate.
Physician Incentive
The incentive for physicians, contracted with an MCO, is to keep patients healthy by focusing on prevention, which also helps to ensure low health care costs.
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