What does "capitation" refer to in healthcare reimbursement?

Capitation refers to a payment model in healthcare where providers receive a predetermined, fixed amount for each patient assigned to them, regardless of the number of services the patient actually uses. This model is designed to encourage providers to offer efficient care since their payment is not directly tied to the volume of services performed. By receiving a set amount per patient, providers have a financial incentive to focus on preventive care and the overall health of their patients, rather than on providing more treatments or services. This payment structure aims to promote cost-effective care while managing patient populations effectively.

In contrast, other models mentioned, like fee-for-service or incentive programs, focus on payment structures based on the quantity of services provided or specific performance targets, which differ from the idea of a fixed payment per patient seen in capitation.