Certified Nurse Manager and Leader (CNML) Practice Test

Capitation in healthcare refers to what kind of payment structure?

1. Payment to providers based on patient outcomes

2. Fixed rate paid per patient per month

3. Variable payments based on service volume

4. Fee-for-service payments for each visit

The correct answer is: Fixed rate paid per patient per month

Capitation in healthcare is a payment structure in which a healthcare provider is paid a fixed amount per patient for a specified period, typically on a monthly basis. This model encourages providers to deliver necessary care without direct correlation to the amount of services provided, as payment is not contingent on the number of visits or services rendered, but rather on the overall management of a patient’s health. This method contrasts with other payment models, such as fee-for-service, where providers are reimbursed for each individual service rendered, leading to potential increases in service volume without necessarily improving care quality. A fixed rate in the capitation model facilitates budget predictability for both insurers and providers and incentivizes providers to focus on preventative care and the overall health of their patient population rather than simply the volume of services delivered.