While employers generally paid HMOs on a capitated basis, most HMOs continued to pay care delivery groups using fee-for-service and per case methods. ... HMOs employed a series of tools to limit health care consumption. For example, many mandated that primary care physicians act as gatekeepers.

Do HMOs use capitation?

Health maintenance organizations (HMOs) and independent practice associations (IPAs) often use capitation programs. The payment varies depending on the capitation agreement, but generally, they are based on characteristics such as the age of the individual enrolled in the plan.

Are PPO plans capitated?

Whether youre aware of it or not, most physician groups participating in preferred provider organization (PPO) contracts with insurers are capitated — even though the contracts are presented as discounted fee for service (FFS).