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.

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.

Durable medical equipment that costs more than $150 (e.g., nebulizers, manual wheelchairs) and is rented by the supplier to Medicare beneficiaries more than 25% of the time.

Insurer that is created and owned by one or more noninsurers to provide their owners with insurance coverage.
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An insurance or reinsurance subsidiary of an industrial company, trade association, or not-for-profit organization. Captives insure or reinsure parent-related business, non-parent business, or both. Though the number of domestic captives is increasing, most captives are still located in tax-advantaged offshore domiciles, such as Barbados, Bermuda, or the U.K.’s Channel Islands.

Percentage of a provider’s care to be given under an exclusive managed care and/or capitation contract.

Providing to an individual hospital accommodations, comfort, diagnosis, and treatment of a condition and implying responsibility for services, equipment, supplies, and rehabilitation.