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Essay text:
If the healthcare delivery system does not have a cost accounting system or the ability to develop cost information on each payer and service line, then it will become necessary to find a way to develop such information prior to entering into a capitation contract. A six step method is recommended for developing a capitation payment rate. Cost accounting information is used as well as data from a market study. The steps are:
1. Determine the delivery system cost base
2. Develop use rates
3. Calculate capitation rates
4. Adjust rates for impact of incremental volume
5. Negotiate the contract
6...
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