What is a "capitation payment"?

A capitation payment is a payment model where providers receive a predetermined amount of money per patient for a specified period, regardless of the number or types of services provided. This model encourages health care providers to focus on preventive care and managing their patients' overall health rather than on the volume of services rendered.

In this arrangement, providers take on the financial risk of patient care since their reimbursement does not fluctuate based on the level of service provided; instead, they receive a fixed payment for each patient within a defined timeframe. This system aims to control costs and improve quality of care, as providers are incentivized to keep patients healthy and reduce unnecessary treatments.

The other options do not accurately describe capitation payments. Some suggest separate billing for services, a focus solely on patient satisfaction, or a limitation to private insurers, which are not inherent characteristics of the capitation model. The defining feature of capitation is the fixed payment based on patient enrollment rather than service utilization.