What does system capitated service mean and fee for service?

Question

I work for an ophthamologist who takes HMO patients. I've noticied that on some EOMB's it says system capitated service but have no check attached. Then there are services that are fee for services that do have checks attached. What do both these terms mean? Try to dumb it down for me! Thanks :)

Answer 1

Very basically, fee for service means the doctor gets paid for every service that is provided to the patient, hence the check would be attached to the EOB. Capitation pays the PMD (Primary Care Doctor) "per head" or per patient each month that is on his roster regardless if service is provided or not. The cost for care of a patient's care that the doctor orders, then comes out of this pool of money.

Answer 2

Capitation agreements mean that your provider is paid a set dollar amount per month to see patients regardless of services performed. My physician has a capitation agreement with my insurance plan for $125 per month. That means no matter how many times I come to his office per month and no matter what services he provides, he is only going to get $125 per month to see me. If I don't come in his office for a month or 6 months or a year, he still gets $125 per month per the capitation agreement. If he has a fee for service contract (commonly abbreviated as FFS) he will be paid a contracted amount for each service provided that he is contracted to perform. There are also contracts called "limited fee for service" in which the provider is paid a capitated rate for office visits but may have bill-aboves for other services performed (such as pregnancy tests, etc.)