Under capitation, which payment arrangement is typical?

• A. Per member, per month
• B. Per visit
• C. Per service
• D. Per day of hospitalization

Answer: (A)

Capitation is a payment model where a provider gets a fixed amount for each enrolled member over a set period, usually per month, to cover a defined set of services. The typical arrangement is per member per month because the payment is fixed upfront and is not tied to the number of visits or services a member uses. This shifts financial risk to the provider and motivates efficient care and emphasis on preventive services within the agreed scope. In contrast, paying per visit or per service (fee-for-service) rewards higher utilization, and paying per day of hospitalization ties dollars to inpatient days, which are not characteristic of capitation.