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Many healthcare delivery organizations have adopted some form of value-based payment model in recent years, shifting the healthcare focus from quantity of services to quality of outcomes. In a promising trend for healthcare overall, more than half of healthcare payments in 2023 were part of a value-based care reimbursement model. Capitation – which provides a set fee per patient for a defined period – is one of the payment models playing a big role in this transformation. By giving providers a fixed budget, capitation incentivizes preventive care, effective chronic condition management, and ultimately can reduce unnecessary healthcare costs – all hallmarks of value-based care.
The Centers for Medicare and Medicaid Services (CMS) has stated its goal to have all traditional Medicare beneficiaries in a care relationship with quality and cost accountability by 2030. One of the most advanced ACO initiatives they’ve launched is ACO REACH (Realizing Equity, Access, and Community Health), which includes global capitation for aligned beneficiaries. Most recently, CMS announced a similar program to advance flexibility for ACOs to move toward value-based care through the ACO Primary Care Flex program. Together, along with other initiatives, the Center for Medicare and Medicaid Innovation Center (CMMI) is demonstrating that accepting risk through capitation arrangements is here to stay. Efficiently administering capitated payments requires a robust technological foundation with advanced funds flow analytics. Payment technology designed specifically for capitation administration offers a path to optimize funds distribution and ensure financial sustainability.