Which statement about capitation risk and mitigation is accurate?

• A. Capitation risk means patient dissatisfaction leads to more visits.
• B. Capitation risk is about marketing budgets and patient recruitment.
• C. Capitation risk cannot be mitigated by any strategy.
• D. Capitation risk is the possibility that costs exceed the fixed payment; mitigated through risk adjustment, care management, utilization controls, and careful budgeting.

Answer: (D)

Capitation fixes a monthly payment per member to cover many services, so the financial outcome depends on actual care costs. If those costs exceed the fixed payment, capitation risk arises. The statement that captures this risk and how to shrink it is that risk can be mitigated through risk adjustment, care management, utilization controls, and careful budgeting. Risk adjustment makes payments reflect patient complexity, so high-risk patients don’t drain resources unfairly. Care management coordinates care and emphasizes preventive and chronic-disease programs to avoid costly events. Utilization controls help prevent unnecessary services and inappropriate intensity of care. Careful budgeting, including forecasting and setting aside reserves, helps manage cash flow and outliers. Together, these strategies align payments with true costs and reduce the likelihood that expenses outpace the fixed capitation amount. The other ideas don’t fit capitation: dissatisfaction-driven more visits isn’t the core financial risk under capitation, marketing budgets and recruitment aren’t tied to capitation economics, and saying no strategy can mitigate capitation risk is simply incorrect.