Capitation payments,

Definition of Capitation payments:

1. Capitation payments are payments agreed upon in a capitated contract by a health insurance company and a medical provider. They are fixed, pre-arranged monthly payments received by a physician, clinic or hospital per patient enrolled in a health plan, or per capita. The monthly payment is calculated one year in advance and remains fixed for that year, regardless of how often the patient needs services.

2. The monthly payment that an insurance company sends to medical providers determined by the capitation contract. The payment is fixed and calculated the year before the contract. The services that a patient uses do not determine capitation payments.

3. Rates for capitation payments are developed using local costs and average utilization of services, and therefore, can vary from one region of the country to another. Many plans establish risk pools as a percentage of the capitation payment.

How to use Capitation payments in a sentence?

1. Capitation payments are designed to lower the high costs of healthcare.
2. HMOs and IPAs may likely reap benefits from operating in a healthcare capitation payment system.
3. A capitation is a fixed-amount type of health care payment system. .
4. It used by physician associations or insurers to pay hospitals or doctors per enrolled patient for a specific amount of time.