Capitated payments incentives: Which statement best describes the incentive effect of capitated payments compared with discounted FFS?

• A. Capitated payments tie payment to the actual services delivered, regardless of cost.
• B. Capitated payments fix a PMPM amount irrespective of services, incentivizing cost containment and efficiency.
• C. Discounted FFS pays for services rendered with negotiated discounts, linking revenue to utilization.
• D. Capitated payments reward higher volumes of services to maximize revenue.

Answer: (B)