This term can have many meanings. Capitation represents a set dollar limit that is
paid to a provider by an insurance company for treating their members. This set
dollar limit can be based on a monthly dollar amount, a per patient dollar amount
or a per claim dollar amount. The insurance company can say that they will pay
the provider $3,000 per month. This can equate to $10 per day. If the provider
treats 10 patients per day, the provider makes $1.00 per patient per visit. The
provider may be required to submit a claim but there won’t be any additional
payment on the claim. The payment per claim could be $90 per claim. This means
you send a claim and each claim should be paid $90 regardless of how many codes are submitted. With a per claim payment, the biller must keep a close eye on the
claim payments, this is because some insurance companies will pay the claim less
than the amount agreed upon in the contract. This will require you to appeal the
incorrect payment and continue until it is paid correctly. Before agreeing to a
capitated amount, the provider should make sure the capitated amount is fair and
reasonable. This is something that will be discussed more in another document on
Insurance Contracts.
Carrier:
This is nothing more than a shorter name for an insurance company. For example.
First Coast is the local carrier for Medicare Part B for Florida and Georgia.
Anoher example would be, $75 is the usual and customary reimbursement amount
for the carriers in our geographical area. In simplistic terms, all the insurance
companies in our area pay $75 for a claim.
