Capitation Agreement Example

HMOs have used a number of instruments to limit healthcare consumption. For example, many have imposed that family physicians act as door guards. Healthcare providers had to obtain permission from nurses and doctors from insurance companies to make transfers to specialists and order surgical procedures, imaging and hospitalizations. In some cases, HMOs transferred a portion of the capitulated insurance payment to provider groups in order to cover all necessary services, which transferred the financial risk to them. The groups most likely to benefit from a capitation system in the health sector are HMOs and IPAs. Under a capitulation contract, the health care provider receives a set amount of dollars per month to see patients, regardless of the number of treatments or how often the doctor or clinic sees the patient. It has been agreed that the supplier will receive a fixed deposit agreed in advance per month. Whether or not the patient needs services in a given month, the provider always receives the same fee. The more care a patient needs, the less money a care provider earns per treatment. Capitation-style health contracts have been put in place with the aim of improving incentives for efficiency, cost control and prevention in the health sector. Since most people enrolled in a health plan will never use the services in a given month, capitance agreements should of course compensate high-frequency users with plan members who receive little or no health care each month. Since the doctor, hospital or health system is responsible for the health of the registered member regardless of the cost, capitulation theoretically encourages the health care provider to focus on health examinations (mammograms, pap smears, PSA tests), vaccination, pregnancy preparation and other preventive care that can help maintain the health of plan members, with less dependence on expensive specialists.

In the fall of 2015, Intermountain took advantage of the savings made through waste disposal to offer a new insurance system to professional customers. In general, there are three types of surrender agreements, depending on the relationship between the paying agency and the payee of the payment: for example, a healthcare organization (HMO) may enter into an agreement with a family doctor (PCP) or medical group for one year with a negotiated rate of $50 per patient per month. . . .