Which statement is NOT true regarding the concept of "capitation"?

Which statement is NOT true regarding the concept of "capitation"?

• A. each service is paid based on the actual charges.
• B. the volume of services and their expense do not affect reimbursement.
• C. capitation means paying a fixed amount per member per month.
• D. capitation involves a group of physicians or an individual physician.

Answer: (A)

The statement that is not true regarding capitation is the one that indicates each service is paid based on the actual charges. In a capitation payment model, healthcare providers receive a predetermined, fixed amount per member per month, regardless of the number or types of services that are provided. This payment structure means that the cost of care is not directly tied to the volume of services rendered or their specific charges. The essence of capitation is that it emphasizes cost management and efficiency among providers. Since the reimbursement remains constant regardless of service usage, this model incentivizes providers to focus on preventive care and managing patient health, rather than simply increasing the volume of services provided. Thus, the other statements about capitation being unaffected by the volume of services, involving a fixed payment per patient, and typically being associated with a group or individual physician are accurate and align with the core principles of capitation.

The statement that is not true regarding capitation is the one that indicates each service is paid based on the actual charges. In a capitation payment model, healthcare providers receive a predetermined, fixed amount per member per month, regardless of the number or types of services that are provided. This payment structure means that the cost of care is not directly tied to the volume of services rendered or their specific charges.

The essence of capitation is that it emphasizes cost management and efficiency among providers. Since the reimbursement remains constant regardless of service usage, this model incentivizes providers to focus on preventive care and managing patient health, rather than simply increasing the volume of services provided. Thus, the other statements about capitation being unaffected by the volume of services, involving a fixed payment per patient, and typically being associated with a group or individual physician are accurate and align with the core principles of capitation.