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against a capitation budget.7 In particular, petitioner
consulted a variety of sources to determine an estimate of market
rate charges or fees for specific physician services. Petitioner
then applied a discount to the estimated market rate fee to
determine the amount of the fee to be paid to the physician
medical group providing services to SelectMed enrollees. As of
1999, petitioner applied a 25-percent discount to estimated
market rate fees for PCPs. Petitioner then reconciled the
discounted fees for services paid to each physician medical group
on a monthly basis against the group’s capitation budget.8 When
the total fees that petitioner paid to a physician medical group
were less than the group’s capitation budget, petitioner paid the
difference to the group. However, when the total fees that
petitioner paid to a physician medical group were greater than
the group’s capitation budget, the group was required to pay the
difference to petitioner.
Petitioner compensated SCPs on a discounted fee-for-service
basis settled against a capitation budget. As of 1999,
7 Eighty percent of SelectMed and SelectMed Plus enrollees
resided in Salt Lake, Davis, and Weber Counties, Utah. Although
the record is not clear on the point, we assume that PCPs from
other areas also were compensated on a discounted fee-for-service
basis.
8 The term “capitation” refers to the practice of paying a
physician group a fixed fee for each enrollee under the group’s
care.
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