Capitated payments are a contractual agreement between the provider and the patient. In this method, the patient or the insurance company pays the provider’s entire fee well in advance. It covers personal visit fees, transportation fees, emergency, and other such charges.

The benefits covered under capitated Providers agreement are listed below.

• A fixed or pre-agreed fee is collected in advance.
• Healthcare professionals or managed care organization are given free rein to manage all the costs within the allocated budget.
• Focuses on preventive care that encourages cost reduction.
• The insurance company or an intermediary allocates the budget amount that varies according to the patient’s health condition.
• The upfront amount is calculated in advance, which results in cost savings.
• The plan includes diagnostics, immunizations, injections, and laboratory costs.
• Health screening, counseling, and counselling services are included in this plan.
• Fees are paid on a per-patient basis.

This arrangement helps the service providers, healthcare professionals, and the government. A fixed amount is paid annually to the healthcare professionals. The capitation providers should treat the number of patients covered under the contractual agreement.

It reduces providers’ bookkeeping, accounting, and all other administrative costs and encourages cost savings.