Which statement best describes capitation in relation to per-capita payments?

Which statement best describes capitation in relation to per-capita payments?

• A. Capitation is a per-capita payment that covers a defined set of services
• B. Fee-for-service is a per-capita payment
• C. Indemnity uses per-capita payments
• D. Sliding scale uses per-capita payments

Answer: (A)

Capitation is a per-person payment that covers a defined set of services. In this arrangement, a health plan or provider receives a fixed amount for each enrolled patient over a set period (often monthly), and that amount is meant to cover a specified bundle of services. Because the payment is flat, the provider has an incentive to manage care efficiently and emphasize preventive, appropriate care within the covered services, since costs beyond what’s included fall under the provider’s responsibility. This distinguishes capitation from fee-for-service, where payment is tied to each individual service performed, and from indemnity or sliding-scale arrangements, which do not use a fixed, limited per-person payment covering a defined service set.

Capitation is a per-person payment that covers a defined set of services. In this arrangement, a health plan or provider receives a fixed amount for each enrolled patient over a set period (often monthly), and that amount is meant to cover a specified bundle of services. Because the payment is flat, the provider has an incentive to manage care efficiently and emphasize preventive, appropriate care within the covered services, since costs beyond what’s included fall under the provider’s responsibility. This distinguishes capitation from fee-for-service, where payment is tied to each individual service performed, and from indemnity or sliding-scale arrangements, which do not use a fixed, limited per-person payment covering a defined service set.