________ is not based on a specific procedure or hospital stay, as it is based on a per-member-per-month (PMPM) methodology.

________ is not based on a specific procedure or hospital stay, as it is based on a per-member-per-month (PMPM) methodology.

• A. Capitated payment
• B. Block payment
• C. Transfer payment
• D. Bundled payment

Answer: (A)

Capitation uses a fixed per-member-per-month payment to providers to cover the care of a defined population. Because the payment is set per member each month, it isn’t tied to any specific procedure or hospital stay. The provider must manage care within that PMPM amount, regardless of how many services a member uses. This differs from bundled payments, which are tied to an episode of care (a specific procedure and the related services for that episode). It also isn’t a lump-sum for a defined block of time or a general transfer of funds between parties, which do not use a PMPM structure. For example, if a network is paid a fixed amount per member per month, that payment stays the same whether a member has one visit or many, and the provider assumes the financial risk of delivering the required care within that fixed PMPM allotment.

Capitation uses a fixed per-member-per-month payment to providers to cover the care of a defined population. Because the payment is set per member each month, it isn’t tied to any specific procedure or hospital stay. The provider must manage care within that PMPM amount, regardless of how many services a member uses.

This differs from bundled payments, which are tied to an episode of care (a specific procedure and the related services for that episode). It also isn’t a lump-sum for a defined block of time or a general transfer of funds between parties, which do not use a PMPM structure.

For example, if a network is paid a fixed amount per member per month, that payment stays the same whether a member has one visit or many, and the provider assumes the financial risk of delivering the required care within that fixed PMPM allotment.