On Nursing Capitation Reimbursement?

Partial-Risk Medicare Nursing Capitation Economics is Still Not Working!

By Dr. David E. Marcinko MBA CMP®

SPONSOR: http://www.CertifiedMedicalPlanner.org

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Capitated reimbursement is predominantly, but not exclusively, within the realm of physician providers. But, a decade ago Community Nursing Organization project examined an innovative approach to community nursing and ambulatory care services for Medicare beneficiaries. The hypothesis was that provision of such services would promote the timely and appropriate use of health care and to reduce the use of costly acute care services.

Organizations participating in the CNO demonstration were paid a fixed per-member-per-month capitated rate for covered services. But, the participating CNOs were only at risk under capitation for a subset of Medicare benefits [partial-capitation or carve-out]. The financial incentive was to minimize utilization covered under the capitated payment, but not necessarily to minimize utilization of services not covered because traditional Medicare, not the CNO, would be at risk.


Final results indicated that the CNO model under partial capitation led to increased Medicare costs based on findings consistent across several analytic approaches. The cost differences between treatment and control or reference groups persisted after the application of increasingly complex risk-adjustment methods.

Moreover, the differences increased over time and were robust to changes in the way CNO participation was defined.

Lastly, there was no statistically significant evidence of increase in physical or social functioning of the treatment group, as compared with the control group. CNOs cost more without providing any health benefits along dimensions measured

[Source: Voluntary Partial Capitation: The CNO Medicare Demonstration Project, Austin Frakt, Steve Pizer, Robert Schmitz, and Soeren Mattke – Health Care Financing Review 2005).

Your thoughts are appreciated.

CAPITATION ECONOMICS WHITE-PAPER: https://healthcarefinancials.files.wordpress.com/2008/11/capitation-actuarial-medical-econometrics.pdf

SECOND OPINIONS: https://medicalexecutivepost.com/schedule-a-consultation/

INVITE DR. MARCINKO: https://medicalexecutivepost.com/dr-david-marcinkos-bookings/

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One Response

  1. States With Largest Nursing Home Survey Backlogs

    The Office of Inspector General conducted a review to determine the number and results of onsite surveys of nursing homes during the COVID-19 pandemic. According to the results, most of the nursing homes in the following 5 states did not have a standard survey in the last 16 months:

    • 96% of nursing homes in Connecticut
    • 93% of nursing homes in Georgia
    • 92% of nursing homes in Oregon
    • 91% of nursing homes in



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