What does capitation refer to in physician payment models?

• A. Paid per patient enrolled, regardless of services
• B. Paid per service rendered
• C. Salaried fixed annual amount
• D. Bonus for high-volume services

Answer: (A)

Capitation is a payment approach where a clinician or practice receives a fixed amount for each enrolled patient for a defined period (often per member per month), regardless of how many services that patient uses. This setup shifts financial risk to the provider and encourages efficient, preventive, and coordinated care to keep costs down. It differs from paying per service (fee-for-service), which rewards more procedures; from a salary, which is a fixed amount not tied to patient enrollment; and from bonus payments that reward higher service volume. In short, capitation pays for each enrolled patient, not for each visit or procedure.