The difference between capitation and fee for service reimbursement Introduction: Fee for service can be defined as model of payment wherein services are segregated and paid separately. The payment in health care is based on the quantity of care in comparison to the quality of care therefore physician will be given an incentive to provide more treatments. A fixed per capital payment is made under capitation by managed care group to the provider of medical service on a periodic basis in lieu of service provided to registered individuals, whereas no fixed payment is made under a fee for service arrangement. Service providers are required to share the bill for the services provided by them and they are being paid for each service on predetermined rates. Risk under capitation is assumed by hospitals and doctors whereas risk under fee for service is assumed by insurance companies. The focus under capitation lies on the wellness of the enrolled individuals and keeping people healthy, whereas the focus under fee for service lies in treating the illness, problems and work with assigned patients. Less focus lies in prevention and wellness. It can be concluded in capitation system, payment is made to the doctor for each patient to which service is provided by them, whereas under fee for service system, the payment is made to the doctor on the basis of procedure that have been used by him in providing treatment to the patient.

6th Edition

ISBN: 9781567937411

Author: Louis C. Gapenski, Kristin L. Reiter

Publisher: Health Administration Press

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