Also known as: capitation payments · capitation
Written by attorneys · grounded in primary & secondary sources — see below
2 senses
A direct tax levied on each individual without regard to property or income. The Constitution requires any such tax to be apportioned among the states according to their respective populations as determined by the census.
A direct tax levied on each individual without regard to property or income. The Constitution requires any such tax to be apportioned among the states according to their respective populations as determined by the census.
Select any source to read its text and confirm it supports the definition.
A prospective payment method under which a healthcare provider or plan receives a fixed sum per enrollee for a defined period regardless of the volume of services actually rendered. This structure shifts financial risk to the provider and creates incentives to limit unnecessary care while emphasizing prevention.
Select any source to read its text and confirm it supports the definition.
A prospective payment method under which a healthcare provider or plan receives a fixed sum per enrollee for a defined period regardless of the volume of services actually rendered. This structure shifts financial risk to the provider and creates incentives to limit unnecessary care while emphasizing prevention.
Each sense below has its own examples, sources, and questions.
Congress enacts a statute requiring every adult resident to pay five hundred dollars annually to the Treasury. Catherine Carter, a resident of a populous state, refuses payment and challenges the levy. Because the tax is imposed on individuals without apportionment by census, the statute violates the constitutional restriction on capitation taxes.
Any capitation tax must be apportioned among the states according to their respective numbers as determined by the census. Without apportionment the tax is invalid.
Supporting sources
No. The Sixteenth Amendment authorizes unapportioned income taxes. The capitation prohibition applies only to direct per-person taxes that are not income taxes.
Supporting sources
Continental Bank contracts with an HMO to cover its employees. The HMO receives a monthly capitation payment of two hundred dollars for each enrolled employee. When one employee requires extensive specialist care, the HMO absorbs the cost above the fixed amount, illustrating how the payment method transfers utilization risk to the provider.
Under capitation the provider receives a fixed per-enrollee sum regardless of services rendered. Fee-for-service pays the provider for each service actually delivered, creating opposite utilization incentives.
Supporting sources
Policymakers sought to control costs after DRG systems proved insufficient. Capitation encourages HMOs and accountable care organizations to limit unnecessary services and emphasize preventive care.
Supporting sources