Capitation Insurance Plans (HMO/DMO)
Capitation is also known as HMO/DMO. Set up this type of Insurance Plan when you receive a flat fee every month, regardless of what work is done on the patients. Patients pay a flat fee for some procedures and no fee for other procedures. Sometimes, a fee for the lab portion can be billed to insurance.
Note: To set up a plan that has co-pays and makes supplemental payments (mixed capitation), see HMOs/DMOs with Supplemental Payments and Copays instead.
Turn on Capitation: To show Capitation as an option on the Edit Insurance Plan window, in the Main Menu, click Setup, Advanced Setup, Show Features, then check the Capitation box.
Follow these steps to set up the plan:
- For any patient portions, set up a co-pay Fee Schedule. For each procedure code enter the fee the patient must pay.
- On the Edit Insurance Plan window, set the following:
- Plan Type: Capitation. All benefit percentages will clear.
- Don't Substitute Codes: If the plan does not downgrade procedures (e.g. posterior composites), check this box so that substitution codes are ignored and not used for estimates. If the plan does downgrade procedures (this is uncommon), uncheck the box so that substitute codes are used for estimates. See Procedure Downgrades.
- Fee Schedule: none. The Provider's UCR fees will be used in the Treatment Plan and in the Account, but will not affect the patient's balance when procedures are complete.
- Patient Co-Pay Amounts: The new co-pay fee schedule.
If You Need to Bill Insurance (rare)
- In the Account module, select the procedure and click New Claim.
- On the Edit Claim window, double click on the procedure.
- Change the Fee Billed to Ins amount to the amount the carrier is required to pay.
- Change the Insurance Estimate to the same amount.
- Click OK, then send the claim. If you do not expect to apply a payment for the claim, we recommend marking the claim as 'received' so it doesn't show on the Outstanding Insurance Claims report.
Because the claim is for a capitation insurance plan, the amount expected from insurance will not be applied to the patient balance.
Insurance Payments: When you receive the monthly payment from the carrier, do not enter the payment in the claim. Instead, record the payment in a dummy patient for the carrier:
- Create a dummy patient with the same name as the carrier.
- Apply all payments to that patient. You have a few options:
Option 1: Apply as patient payments to dummy patient with carrier name.
If Enforce Valid Paysplits is set to 'Auto-Split Only' or Don't Enforce', allocate the pay splits to a specific provider by editing the pay split.
If Enforce Valid Paysplits is set to 'Enforce Fully', the pay splits will be tracked as Unallocated/Unearned Income.
Option 2 ('Enforce Valid Paysplits' settings can be 'Enforce Fully', impacts production):
Another option is to
add a 'capitation payment' procedure for the full payment amount, however this will impact production values.
Option 3 (if you must have payments show as insurance payments):
Apply as insurance payments so they show on your reports and deposit slips as insurance payments.
a. Add the capitation insurance plan to the dummy patient.
b. Create a dummy procedure with no fee.
c. Create a dummy claim with at least one procedure and 0 fee.
d. Enter the first payment by total.
e. Each time you receive a payment, add the new payment By Total on the same claim (not to the actual patient's claims).
We do not recommend having more than one capitation plan for a single patient. If you do so, you must manually change the secondary capitation plan’s writeoff amounts for each procedure and Open Dental reports will give incorrect production numbers. To fix production numbers, run Query #911, then delete any duplicate 'CapCom' status insurance estimates so that there is only one 'CapCom' estimate for each procedure.
Also do not manually add insurance estimates with a 'CapCom' status; they are created automatically. If you have duplicates, production numbers will be inaccurate. To fix production numbers, run Query #911, then delete any duplicate 'CapCom' status insurance estimates so that there is only one 'CapCom' estimate for each procedure.
Capitation Utilization Report: This report can be run at the end of each month to show all procedures for a date range performed for capitation, along with the provider fees and the patient co-pay. See Capitation Utilization Report.
Production and Income Reports include production from capitation as Procedure Fee - Capitation Writeoffs (as part of the (gross) Production column). For most procedures this contribution is $0, but if there is a patient portion (copay) then the capitation writeoff will be less than the fee and thus the patient portion is part of the production.
Accounts Receivable (A/R) Report: Capitation payments entered under a dummy patient will reflect as credits in the A/R report. This can be avoided by using a billing type that is excluded when running the A/R report.
This section is very technical: Internally, a capitation claim creates a second Claim Procedure.
- The first claim procedure has a status of CapComplete and contains the procedure writeoff.
- The second claim procedure has a status of CapClaim and is only used to show the procedure detail for the claim. The status will not change when the claim is received.
Payment entry on individual capitation claims is a feature that does not yet exist. In other words, it's a Feature Request.