Report Example on Capitation Payment Method

Introduction

Under this method, fixed payment to providers is made for enrollee or covered life independent with the normal amount of services provided. The providers are being reimbursed based on the number of services provided. Concisely, the services provided can be defined as a diagnosis, visits, an episode, and hospital day. The Capitation payment is automatically different from other reimbursed methods and should be placed or treated as a separate category (Wilson et al.,2017). Under this reimbursed method, a fixed amount covering life per period(monthly) is paid to the provider regardless of its services. For instance, the primary care might be given $15 in a month per member for nursing hundred members of a Health Maintenance Organization plan (Korachais et al.,2019).

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Fee Service Method

This method has three primaries of healthcare and hospitals reimbursed methods such as prospective payment, charged, and cost-based methods. To begin with the Cost-based method, under this method, the payer reaches the consensus of reimbursing the provider for the incurred costs in providing the required services to the incurred demographic (Wilson et al.,2017). The cost-based reimbursement guarantees that the payer payments will cover the cost of providers. Again, the Charged-Based reimbursement method offers providers official lists of prices for services and goods rendered. In the charge-based method, payers pay or billed charges as they pay according to the chargemaster (Korachais et al.,2019). Lastly, in the Prospective Payment method of reimbursement, the payer establishes the pay rate before providing the services. In this method, the payment rates are not related to either chargemaster or costs rates. The most used units of payment systems under this method are the procedure, per diagnosis where the doctor is being paid depending on the patient's diagnosis, Per diem, and bundle payment.

HMO and PPO

Health Maintenance Organization (HMO) is defined as a type of health plan that provides a local form of hospitals and doctors for individuals to make decisions from them and usually have a lower premium than OPP health plan. The HMO plan can be of more choice when choosing the main primary care provider to help coordinate personal health care and be positively willing to offer high deductive payment to get lower monthly premium insurance (Geissler et al.,2020). HMO plans are affordable since there are lower monthly premiums and no annual or low deductible. The Health Maintenance Organization requires a PCP model of referrals to showcase caregivers for un-emergency needs. Lastly, the HMO plan normally offers a network provider list that includes the specialists. Notably, when someone suggests visiting the doctor outside the network, the coverage will not be given, and the full cost of the visit has to be paid.

Preferred Provider Organization (PPO) refers to the health plan, which offers a wider network with more hospitals and doctors, and individuals can choose the appropriate way to go. The pocket cost is usually higher than that of the HMO plan. For example, if someone is willing to pay higher premiums to get flexibility in choosing healthcare and personal physicians and get more choices, he/ she has to choose the Preferred Provider Organization health plan (Chang et al., 2020). Furthermore, the POP plan provides flexibility in selecting hospitals and doctors. The plan offers few restrictions on visiting the provider of out-of-network. The plan, in some occurrence, covers the visiting costs providers to out -of -network.

Conclusion

Thus, the Capitation method drastically changes the financial environment of caregivers' providers. The method has implications for financial management, managerial accounting, and financial accounting.

References

Chang, E., Lin, V., Goh, R., Chan, C., Ong, M. K., Hui, E., & Sarkisian, C. (2020). Differences Between Current and Desired Physician Hypertension Management Roles Among Chinese American Seniors: a Qualitative Study. Journal of General Internal Medicine, 1-7.
https://doi.org/10.1007/s10903-008-9222-7.

Geissler, K. H., Lubin, B., & Ericson, K. M. M. (2020). The association between patient sharing network structure and healthcare costs. PloS one, 15(6), e0234990.
https://doi.org/10.1371/journal.pone.0234990

Korachais, C., Ir, P., Macouillard, E., & Meessen, B. (2019). The impact of reimbursed user fee exemption of health center outpatient consultations for the poor in pluralistic health systems: lessons from a quasi-experiment in two rural health districts in Cambodia. Health Policy and Planning, 34(10), 740-751.
https://doi.org/10.1093/heapol/czz095

Wilson, F. A., Rampa, S., Trout, K. E., & Stimpson, J. P. (2017). Telehealth delivery of mental health services: an analysis of private insurance claims data in the United States. Psychiatric Services, 68(12), 1303-1306. https://doi.org/10.1176/appi.ps.201700017.