What are the major differences between fee-for-service and capitation payment methods? What provider incentives are created under each of these methods? Which of these two payment methods carry the least risk and the most risk for providers? Please provide references and a min of 250 + words.
Please find below a guideline for a discussion on fee-for service and capitation payment methods in pont form for you to prepare a 250 word write up.
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Fee-for-service and capitation payment methods
1. What are the major differences between fee-for-service and capitation payment methods?
1.1. Capitation and fee-for-service (FFS) are two different methods that are used to pay for services provided by health care providers
1.2. Capitation refers to a predetermined payment amount paid by a payer or managed care organization (such as a Health Management Organization) to a service provider (such as a doctor) for every patient (per capita) who is enrolled in that HMO that they see (i.e. in which physicians receive a fixed salary regardless of level of care provided physicians are reimbursed according to volume of care provided) Slattery et.al 2013. For example if a doctor is part of an HMO that has enrolled 250 patients at a rate of $10 per patient, the doctor will be paid a monthly rate which assumes that they have seen all the 250 patients i.e. $2500.
1.3. A Fee for Service (FFS) is a payment system whereby service providers (e.g. doctors) are paid for each service they provide at a rate that is predetermined for each service (i.e. physicians are reimbursed according to …
Capitation and fee-for-service (FFS) are two different methods that are used to pay for services provided by health care providers. These methods differ in incentives and risks to the providers.
This guideline which is in point form provides an outline for preparation of a narrative to discuss the diffrenecs, incentives and risks associated with each method.
References have been included therein for the student’s further reading.