Which payment model is described as paying a fixed amount per member per month regardless of services provided?

Which payment model is described as paying a fixed amount per member per month regardless of services provided?

• A. Fee for service
• B. Capitation
• C. Collective bargaining
• D. Joint venture

Answer: (B)

Capitation pays a fixed amount per member per month, regardless of the number or type of services used in that month. This setup transfers financial risk to the provider and encourages efficient care, preventive services, and careful care coordination, since costs must be covered within the same fixed payment. In contrast, fee-for-service reimburses for each service provided, which can create an incentive to deliver more services. Collective bargaining is a process for negotiating wages and benefits, not a payment model for patient care. A joint venture is a collaborative business arrangement with shared ownership and risk, not a per-member monthly payment approach.

Capitation pays a fixed amount per member per month, regardless of the number or type of services used in that month. This setup transfers financial risk to the provider and encourages efficient care, preventive services, and careful care coordination, since costs must be covered within the same fixed payment. In contrast, fee-for-service reimburses for each service provided, which can create an incentive to deliver more services. Collective bargaining is a process for negotiating wages and benefits, not a payment model for patient care. A joint venture is a collaborative business arrangement with shared ownership and risk, not a per-member monthly payment approach.