Issue Brief: Calculating Adjustment Factors for Primary Care Capitation Payments in California

August 2024 - Since the fall of 2023, Onpoint Health Data has been supporting the California Advanced Primary Care Initiative (CAPCI) through our work as the data management and analytics vendor for California's Integrated Healthcare Association. One of CAPCI's focus areas is capitation.

Capitation, a form of non-claims payment, is common in California. Unlike a fee-for-service (FFS) model – in which healthcare providers are paid based on the volume of specific services that they provide to patients – capitation pays providers based on the number of patients under their care.

To help address our clients' interest in focusing on primary care, Onpoint developed a method to adjust capitation payments related specifically to primary care – the amount paid to a practice for primary care for a specific population – by calculating adjustment factors based on the interrelationship between primary care spending and a patient’s age, sex, health status, and health plan type (i.e., commercial, Medicaid, Medicare). In this brief, we describe our method and provide examples of how these adjustment factors can be used. Read the full issue brief here...