What does the term "capitation" mean in the context of healthcare reimbursement?

The term "capitation" refers to a payment model in which healthcare providers receive a fixed amount of money per patient, typically on a monthly basis, regardless of the number or type of services provided to that patient. This model encourages providers to focus on maintaining patient health and reducing unnecessary services since their revenue is not directly tied to the volume of care delivered.

In capitation, providers are incentivized to manage resources efficiently and provide preventive care, as their payment is predetermined based on the number of enrolled patients rather than the specific services rendered. This can lead to a more coordinated approach to patient care and cost management.

The other options outline different concepts that do not accurately describe capitation. Fee-for-service is a model based on billing for each individual service, cost-sharing involves shared expenses between insurers and patients, and rewarding high-quality care relates to pay-for-performance models, which are distinct from the capitation structure.