What is the capitation model of reimbursement?

• A. A flexible payment amount to providers
• B. A variable payment amount to providers
• C. A minimal payment amount to providers
• D. A fixed payment amount to providers

Answer: (D)

Capitation means a provider is paid a fixed amount for each enrolled patient over a defined period, typically per member per month, regardless of how many or which services the patient uses. Because the payment is fixed per patient, the provider’s revenue does not vary with the number of visits or procedures, which is why this description fits best as a fixed payment amount to providers. This setup shifts some financial risk to the provider and encourages cost-conscious, preventive care; the capitation amount may be adjusted for patient risk or other factors, but the core idea remains a constant, per-patient payment.