Meaning Of Capitation Agreement

Most healthcare groups now navigate through a complex mix of reduced fees for Dener (commercial insurance) and on a case-by-case basis (Medicare, plus some commercial insurance) payment. Population-based payments – direct payments to care groups – remain relatively rare. But if it were broader, groups that aggressively reduce waste, as Intermountain did, would benefit financially; revenues collected for the treatment of each patient would remain stable, while their costs would decrease. The key is to identify and reach the inflection point: the share of a group`s total that must be generated by debt per capita in order for the profits from waste disposal under the PBP to outweigh the losses resulting from other payment systems. The term capitation comes from the Latin word for caput, which means head, and is used to describe the number of employees within an HMO or similar group. An example of a capitation model would be an PPI that would negotiate a fee of $500 per year per patient with a licensed PCP. For an HMO group of 1,000 patients, the PCP would receive $500,000 per year and in exchange, it expects them to provide all authorized medical services for the 1,000 patients for this year. Per capita choice is supposed to reduce costs and improve outcomes, but it has its own drawbacks. The amount of the premium payment per person is based on various factors, including the expected average use of members` health and the local cost of medical services. RevenueXL Inc. offers comprehensive solutions for medical practices, including practice management or medical billing software solutions – such as PrognoCIS EHR software, which can be implemented to automatically distinguish premium and fee fees. PrognoCIS also has reports that can help users see the expected premium payment from private insurance versus the planned Medicare payment, which helps them assess more timely and more accurately their expected cash flow. 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.