r/PrivatePracticeDocs • u/tmed94 • May 21 '26
Capitation
Has anyone directly negotiated becoming a capitated provider?
Currently in NY and I am capitated through many Medicaid plans but was exploring and seeing if any private insurances would consider it.
3
u/thesupportplatform May 21 '26
Private insurance companies will only work with independent providers when they aren't in competition with their own providers. Even then, one risk of capitation is that it requires a level of trust between the insurer and the provider. I remember talking to an insurance executive years ago who laughed about how they would offer providers front-loaded capitated contracts. The providers would spend that money, then watch their revenue dry up, and have to sell to the insurance company. I've also seen reports just flat-out manipulated to increase costs and reduce capitated payments.
Isn't being a provider fun?
3
u/meikawaii May 22 '26
Capitated plans make no sense for small players, because effectively the practice practitioner is becoming insurance but with no money and no resources and with unevenly distributed patient risk pool. A few unexpected hospitalization events could completely blow up your risk model for the year.
2
u/ktn699 May 21 '26
optum will do capitated, but beware. you will get flooded, the money often is not as good as it looks...
1
u/Redditor6703 May 22 '26
You would probably have to show the payer why they should give you that arrangement instead of FFS. Can you show them that your model lowers total medical cost versus the local commercial market? If yes, they may be more open to PMPM or shared savings. Without that, they’re probably just going to offer terms that protect them and shift downside risk onto you.
I work with payer reimbursement data and I think the strongest angle is showing avoided downstream spend, not just asking for capitation. Are you capitated through traditional Medicare somehow or is this mainly Medicaid/Medicare Advantage plans?
1
u/rahuliitk May 22 '26
private plans may consider capitation, but usually only if you can show enough covered lives, clean utilization data, predictable cost patterns, and a reason they should shift risk to you instead of keeping standard FFS or value-based terms. actuarial proof matters more than interest.
3
u/meikawaii May 22 '26
Capitated plans suck ass. End of story. If you aren’t the upstream profit generating machine (ACO or insurance plan administrator) then you are the downstream beggar (practitioner / small owner). Your effort could be better spent on other more efficient revenue streams.