What Are Capitation Reimbursement Models, Key Strategies?

Compared to traditional fee-for-service models, which pay physicians for the volume of services provided, capitation models pay physicians a fixed amount per patient, per unit of time, whether or not the individual seeks care. Capitation payments are paid prior to care delivery and are determined by the range of services provided, as well as average utilization of those services and local cost of care.

Often, payers establish risk pools made up of a percentage of the capitation payment withheld from physicians until the end of the year. This shared-savings/shared-risk model incentivizes providers to lower costs by offering them the risk pool funds as a reward for reaching quality measures.

The experts said that organizations should set aside payments for expensive items, like specialty drugs and devices, to ensure they can cover those costs if complications occur in care delivery.