Capitation, Primary Care

Primary care capitation refers to capitated payments for primary care services only. It does not include payments for other professional, facility, or ancillary services. With regards to primary care capitation for family physicians, it is the position of the AAFP that:

  1. Any contract which includes capitated payments for primary care services should identify, by CPT code, the services included in the capitation rate which should, in turn, reflect the scope of services included in the rate (e.g., if the scope increases, so should the capitation rate).
  2. Health plans should recognize that family physicians have varying scopes of practice, and accordingly, specific services provided by a family physician, and not included in the capitation rate, should be listed by CPT code, and paid for separately.
  3. The capitation rate should explicitly acknowledge and include the family physician's care management function (i.e., the physician work associated with care plan oversight, coordination of care, drug management, etc.).
  4. The capitation rate should also cover the cost of any additional practice expenses (e.g., non-physician staff, equipment, etc.) required to meet the burden of the health plan's requirements (e.g., quality assurance, precertification, referral management, credentialling, costs of providing QI/UR and outcome data, etc.).
  5. Health plans which capitate their physicians should provide incentives to patients and physicians which encourage care in the most appropriate setting (e.g., lower co-pay for office versus ER visit, additional payment for extended office hours).
  6. The method and quality of care should not be affected by the method of payment; that is, physicians should not discriminate among patients based on the method of payment.

(1997) (2011 COD)