Practice Quiz

Health and Life Insurance

Category - Theory

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If a provider is paid a specific monthly fee for each subscriber to the plan, this is known as:
  1. Capitation fee
  2. Fee-for-service
  3. Indemnity
  4. Managed care.
Explanation
Answer: A - If a provider is paid a specific monthly fee for each subscriber to the plan, this is known as capitation. Capitation works to help the company cover expenses. If there are more capitation fees paid than used, the company will make a profit. Likewise, if there are many benefits being used the capitation fee must be used to cover those and therefore the company is not making money.

Theory
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