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Capitation Payment Methodologies

Discuss capitation payment methodologies between payers and providers, and Medicare or Medicaid with commercial Managed Care organizations (MCO). Explain at least three important aspects that you as a medical business professional would need to understand when negotiating payment contracts either between a provider and the MCO, or negotiating between the MCO and Medicare.

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The methodology of capitation is the prepaid medical care that is used in the resistance of fee-for-service arrangements that exists in traditional healthcare systems (Tulchinsky & Varavikova, 2009). Under the capitation system, the healthcare service providers (physicians) are paid a fixed amount by responsible authority to each individual person that is enrolled for healthcare services.

Payer and Provider:
In the care services, the hospitals and related physicians play the role of providers. They make the availability of management, and administrative functions handle the care service contract with customers (Wolper, 2004). In context of this, the health insurance companies also play the role payer that provides adequate finance to the healthcare service providers under the agreement with customers initially. So, insurance ...

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The solution discusses capitation payment methodologies.