The need to manage and reconcile capitation payments

As capitation becomes a more common method of paying providers, healthcare financial managers must determine if these payments are being made correctly. The reconciliation process under capitation contracts is new for most financial managers. Standard industry conventions for payers and providers are needed to reduce the associated administrative costs for this type of payment. Recent efforts to create an American National Standards Institute (ANSI) X12 capitation payment standard have focused on provider information needs under capitated payment agreements. A solution is at hand if providers and payers can agree on a standard for reconciling capitation payments.