The amount specified in a Personal Accident Insurance Policy for payment in the event dismemberment and sight losses to the insured or on death of the insured to the nominee.
Insurance Encyclopedia
Capital Transaction
The sale of a capital asset, such as stock, which results in the transaction being taxed as ordinary income and not as a dividend.
Capital unit
A charging device used by unit trust managers. In the early years (e.g. up to three) premiums are allocated to capital units in order to recover expenses.
Capitalised value
The amount used for underwriting in relation to occupational pension schemes policies when a pension provision is to be made for a member’s spouse or other dependants.
Capitated payment
Annual fee paid by the insurance company to the physician, hospital facility, or network that provides health care to a patient.
Capitation
A risk arrangement in a managed care environment in which a health care provider is paid a fixed amount per month for each enrolled member in a health plan regardless of the actual number or nature of services provided to each person. The capitation contract may include a risk sharing arrangement, in which there is an allocation of financial results, both favorable and unfavorable, among the participants to the agreement.
***
A method of payment for health services in which a physician or hospital is paid a fixed per capita amount for each person served regardless of the actual number of services provided to each person.
capitation (cap or CAP)
System of payment used by managed care plans in which physicians and hospitals are paid a fixed, per capita amount for each patient enrolled over a stated period of time (month or year), regardless of the type and number of services provided; reimbursement to the hospital on a per member per month (PMPM) basis to cover costs for the members of the plan.
Capitation basis
Method of compensation used by managed care plans in which a provider is paid either a flat amount per year per subscriber or a predetermined amount for each service. For the flat amount per year arrangement, the provider must treat the subscriber as often as needed during the year.
Capitation rate (cap rate)
1. Providers and managed care plans negotiate a per member per month (PMPM) amount per enrollee to cover the expected cost of services to be provided to a member. The provider gives all contracted care and services to members for a prospective payment with retroactive adjustments, taking the risk that the capitation rate will cover all of the costs of care to the members. Although cap rates are usually fixed, they can be adjusted for the age or gender of members based on actuarial (statistical) projections of health care utilization. 2. Under Medicare guidelines, fixed amount the Centers for Medicare and Medicaid Services (CMS) pays to an approved managed care plan selected by an enrolled Medicare beneficiary.
Capped fee
See: fee schedule.