How would capitated payment mechanisms work?
Some proposals would shift “full financial risk” to the private sector entity managing the prescription drug benefit. Under these approaches, a plan would receive a fixed or capitated amount to provide all the beneficiaries prescription drug needs, regardless of the cost of those drugs, or the number of drugs being taken. These “full financial risk” capitation approaches have significant potential negative implications for quality of care. That is because providers are placed at risk for the cost of purchasing and dispensing drug products and providing pharmacy services, over which they have no control. For example, to stay below the reimbursement “cap”, drugs that are less expensive but less effective may be provided to the patient. Because of the unpredictability in prescription drug utilization, there are few private-sector prescription drug benefit programs that are partially capitated, and we are not aware of any with full capitation for older Americans. Making matters worse, it h
