• Mon. Jul 14th, 2025

How do capitated fees reduce medical expenditure?

BySimson Arulandu

May 21, 2025

Capitation fees (CA) are an arrangement where a medical group receives upfront fees in advance. The capitation payment covers all the costs and expenses for a specific period. When providers come under capitated medical groups, the physicians must compulsorily treat the patients for a particular period.

Most healthcare providers in the USA are covered under primary care partners. The key features in the capitation fee group are listed below.

  • Comprehensive preventive health-checkups, immunizations, vision care, mental health, and hearing tests.
  • Dental care and diagnostic services.
  • Ambulance, emergency transportation, doctor visits, and laboratory tests.
  • Health education, counseling, and medication administration.

The medical group receives a lump sum payment as a one-time fee per patient. The coverage, plans, and terms vary from one company to another. When in force, the healthcare providers and payers can identify the stopgaps, stop-loss protection, and risks.

Patients are motivated to undergo preventive healthcare checkups, which results in cost savings. Before signing the contract, the healthcare providers should explore the type of plans, risk-bearing effect, accountability, responsibility, and risk group.

There are certain limitations in the capitation fee contract. Patients may encounter limitations on the types of plans. The contract should be beneficial for both the patient and the provider.