Which statement about capitated payments is true?

• A. The payment is fixed and independent of the number of services actually provided
• B. The payment varies with services rendered
• C. Capitated plans reimburse only for hospital stays
• D. Capitated plans are the same as fee-for-service plans

Answer: (A)

Capitation means a provider is paid a fixed amount per enrolled patient per period to cover a defined set of services, regardless of how many services the patient actually uses. Because the payment is fixed, the provider’s compensation does not vary with utilization, so they must manage care within that budget. This arrangement shifts financial risk to the provider: if utilization is high or care is expensive, costs come out of the fixed payment. To prevent under-service, capitation often includes quality requirements and sometimes risk adjustment or care-management supports. Capitated plans cover a broader range of services, not just hospital stays, and they are not the same as fee-for-service plans, where reimbursement happens for each service rendered.