TDMR has confirmed rumors that a number of Texas dental providers have been approached by DentaQuest to change their payment method from managed fee-for-service to capitation.
Capitation to “share the financial risk” with providers
A capitation payment is a fixed amount of money per patient per unit of time paid in advance to a healthcare provider for the delivery of healthcare services.
Per the American College of Physicians,
“Capitation payments are used by managed care organizations to control health care costs. Capitation payments control use of health care resources by putting the physician at financial risk for services provided to patients. At the same time, in order to ensure that patients do not receive suboptimal care through under-utilization of health care services, managed care organizations measure rates of resource utilization in physician practices. These reports are made available to the public as a measure of health care quality, and can be linked to financial rewards, such as bonuses.”
“The actual amount of money paid is determined by the ranges of services that are provided, the number of patients involved, and the period of time during which the services are provided. Capitation rates are developed using local costs and average utilization of services and therefore can vary from one region of the country to another. In many plans, a risk pool is established as a percentage of the capitation payment. Money in this risk pool is withheld from the physician until the end of the fiscal year. If the health plan does well financially, the money is paid to the physician; if the health plan does poorly, the money is kept to pay the deficit expenses.”
Concern meetings misinterpreted
Brenda Walker, DentaQuest’s Director, Provider Engagement for Texas, New Mexico and Colorado, told TDMR that she was frustrated that some providers were misinterpreting these meetings and talk about capitation payments as something dark.
She said that the company was required by their state contract to come up with and implement alternative payment plans to fee-for-service this year or the company would face penalties from the state if a minimum amount (2% this year) was not so billed. She said providers needed to “share in the risk-taking” with the company.
In an email followup, Walker provided a copy of the DMO contract and the particular section that applied (see PDF excerpt below).
Company unwilling to provide more information
However, when asked her if someone in the company would provide us with a statement or article to explain the situation, she demurred.
She wrote back: “Thanks for the offer, but we do not wish to make any statements or submit any information for publication. I would like to let you know that there are negotiations that are taking place based on the requirements, and we do have entities that are excited and willing to work with us.”
TDMR is looking further into this issue.dental-services-contract