Definition - What does Capitated Contract mean?
Capitated contracts are health insurance plans in which a healthcare provider is paid a flat fee for every single patient that is covered by the plan. So, under a captitated contract, it doesn't matter how much care each patient receives, the payments issued by the insurer to the providers will be the same for each patient.
Insuranceopedia explains Capitated Contract
Capitated contracts can be very appealing to healthcare providers because they make the billing process much simpler. It also allows healthcare providers to make accurate estimates about how much money they will make every month.
Capitated contracts are an alternative to standard healthcare billing in which healthcare providers send a bill to insurance companies for every service rendered. This standard method is very tedious and time consuming compared tot he streamlined billing of capitated contracts.
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