Could capitation be the hot new payment trend?

While capitation never disappeared, its heyday ended more than a decade ago--or so most hospitals thought. Pennsylvania's largest health insurer, Pittsburgh-based Highmark Inc., could be in the initial stages of negotiating "global" capitated payments with some of the state's rural health systems, says the American Medical News.

Neither Highmark nor Meadville Medical Center or Heritage Valley Health System (the two systems that local media have identified as potential partners) will comment on any negotiations. However, Highmark is "in the most preliminary stages of discussion" to determine whether providers are willing to consider "alternative reimbursement approaches, consistent with some of the approaches being discussed during the healthcare reform debate," says Highmark spokesman Michael Weinstein.

Highmark hasn't had any capitated contracts with healthcare providers since 2006. However, a kinder, gentler capitation that involves more than denying care to control costs is now an option. Highmark has been "an avid watcher" of the Pittsburgh Regional Health Initiative's (PRHI) work to develop a type of global payment/integrated care model called an accountable care organization for rural hospitals and physicians that aren't formally integrated, says PRHI spokesman Cliff Shannon. To date, the PRHI's pilot projects haven't changed payment structures, but such changes are likely in the future, he says.

If Highmark does pursue global payments to hospitals, the change shouldn't be a total shock. As of July 2009, HMOs had 3.5 million enrollees in Pennsylvania (a 28 percent penetration rate), according to statistics from the Kaiser Family Foundation. 

To learn more about Highmark's plans:
- read the American Medical News article

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