Under a 'capitation' payment arrangement, an HMO pays a network physician:

Explanation

Under capitation, the HMO pays the physician a set amount for each enrolled member per month (per capita), whether or not that member seeks care, which shifts some financial risk to the provider and encourages efficient, preventive care. It is the opposite of fee-for-service, which pays per service. It is not a claim-triggered or year-end-only payment. Capitation is a hallmark of the HMO managed care model.