Question

Please, give a short and good answer.

Suppose your small, general medicine physician group is offered a capitated managed care contract. Through this contract, the group will be paid on a capitated basis. This means that the medical group will be paid a fixed amount for each patient and will be responsible for all of the costs of each patient’s care. What are the pros and cons of such a contract? What are the key pieces of information provided in this scenario that are critical to the decision to accept or reject the capitated contract? If you were the practice manager, what additional information would you want to have in making this decision?

Answer 1

In Capitated contract, the fixed amount is paid for the physician for each patient irrespective of the treatment or service being provided. Some of the pros, it limits the unnecessary services offered to patients which raise the medical costs. Telemedicine usage of providers has been increased. The physician will have a predictable cash flow every month. The fee payment is simpler which does not include billing and coding for every service. The physician provides quality and well-service to the patients because of the financial security. The cons are the patients have limited choices in the selection of treatment. The clinical performance cannot be evaluated. It urges the physician to care for too many patients. The physician can choose the favor cases.

The capitated contract rewards the physician group who provides well-efficient care. The income level may vary from one year to the next year. The capitation managed care contract will provide all services to the patients. The incentives and the bonus are not guaranteed. Some patients need little care whereas some patients need extensive care. But the physician has to reimburse the payment for every patient within the given period irrespective of the treatment provided. Further, the physician has the opportunity to save money by minimizing the care and services provided to the patient.These are the issues present in accepting or rejecting the capitated contract.

As a practice manager, I need the information of the medical area where the practice has to be taken. The availability of EHR software services, billing services and the supplement of service that are infeasible.