Home Forums Discussions General Discussion Q) pay per service vs. capitation

Hi,

Which payment system for HMO is better, the pay per service or per capitation?

My practice is open for one year already but still I am struggling building up patients.

Anyone has experience with pay per capitation? Is it something you may want to continue ? For instance,for ancillary services performed in the office(x-ray, lab...) how are they paying us? The the capitation pay only pay for visit?

How long does it take to change to this? Have to sign a new contract or just a phone call?

Thank you.

It totally depends on what the cap rate, and the age and sex mix are. I have seen models that pay flat cap regardless of age and those that do age adjusted but only pay $3-6.00 per member month. At this rate one visit would exceed the annual payment. Again, very important is what is included and excluded from cap. They should be able to give you a list of above cap items. Study it for those items such as xray and lab that you do in the office. Blood draws may be in cap, Hgb may as well. Why bother, except for the convienence to the patient.

Other models are more generous. Pay per service is more equitable but that depends on what percent of medicare (the commonly used standard) they are paying. They expect a discount because they are funnelling you patients. The question is whether the patients are worth the bother. There are often restrictions about self referring, so they may not want to pay a visit and EKG or spirometry, preferring you to send elsewhere for more time and less convienence.

You would need to sign a contract, I doubt a phone call will do, unless you are an add on specialist, where they could drop you at any time they found someone accepting less money.

Even if all is included in cap, you still have to bill so they can assess the value of your services. So there are still fees involved.

Only Aetna does cap for a few plans in NYC. It is a TOTAL RIP OFF. Not only that, when you attempt to call contracting to discuss not accepting those plans or not taking cap, they only have voice mail and will not return your calls. And they wont provide an address to write to.