What does the term "capitation" refer to in reimbursement models?

Capitation refers to a reimbursement model in which healthcare providers receive a fixed amount of money per patient, typically on a monthly basis, regardless of the number of services the patient uses. This model incentivizes providers to focus on the quality of care and preventive measures since their reimbursement is not directly tied to the volume of services rendered. Instead of billing for each service performed, providers receive a set payment to manage the overall healthcare and wellness of their assigned patients, encouraging efficient and proactive care. This system aligns with efforts to control healthcare costs while promoting patient-centered care.