payments only should be adjusted by the age of patients being served; this cannot be falsified--older patients tend to use more health care services.
This can be a problem if the provider has a manually intensive procedure for generating claim reports from all of the HMOs for which they have capitation
The impact of capitation
on spending growth depends on the rate at which the capitation
rate rises as well as the political sustainability of the system.
As a result, it has become apparent that the demographic basis of capitation
rates does not sufficiently reflect the relative health based risk of prepaid populations.
In regions where capitation
has not taken hold, hospitals are caught in an increasingly tight squeeze.
But if capitation
is going to catch on in other markets in which it has not yet made a dent, it will have to transform itself.
Ethical guidelines for physician compensation based on capitation
A 1999 nationwide survey by the Healthcare Intelligence Network (Atlanta, GA) has shown that doctors are losing money on capitation
contracts; fewer than one-third of the surveyed medical practices reported making a profit on capitation
, down from 52% in 1997, reports American Medical News.
By giving doctors the money upfront in a process that's known in the industry as capitation
, the doctors decide what's medically necessary while still within budget.
Defined as predetermined payment rates for service utilization, payment capitation
bases reimbursement on measurements such as per diem, per enrollee, per procedure, and per admission (Landry & Cox, 1996).
contract should state not only the per member/per month (pm/pm) rate but also a list of services covered by the capitation
payment by CPT code.