Capitation and the Evolving Roles of Providers and Payers in New York

Read the related press release.

Capitation-giving provider groups a flat fee for all the health care required by a defined population-increases providers' financial risk, as well as their incentives for providing high-quality and efficient care. Many payers (including CMS and New York State's Medicaid program) have proposed that it is important for accountable care arrangements to migrate from shared savings to shared risk or capitated models, a change that is underway nationwide. This shift involves a major change for provider groups and payers alike, as the health care system moves away from fee-for-service structures and toward value-based payments.

This report describes the basics of capitation, spelling out the range of new skills and capacities required by providers to be successful at it. It lays out the changing roles for accountable care organizations and payers, and notes the different ways accountable care organizations may acquire needed infrastructure. It also lays out the benefits and implementation challenges for various groups affected by the shift: providers, health plans, consumers, and policymakers.