If other physicians are used for coverage, vacation, or second opinions, then dollars are deducted from the capitated amount to compensate them. If there were only one specialist under a capitated area, the above calculation would be appropriate. The capitation rate is calculated as above, totaling the dollars paid to all physicians in a specialty area. Each physician receives an amount proportional to the number of referrals for the previous month. The amount paid to each physician is not based on diagnosis, nor on the nature or number of procedures performed.
Payment is made solely on the ratio of referrals from the primary care physician.
In the event that the specialist makes a referral back to himself, the referral is not counted for the purpose of reimbursement. Only referrals from primary care to appropriate specialists are used for distribution ratios. This prevents the specialist from having to contact the primary care provider to refer patients back each week for follow-up, or from increasing the percentage of referrals to themselves by addressing one issue today and asking for a second referral to address another pathologic condition. This is best illustrated by the patient who upon being referred to an otolaryngologist for a basal cell carcinoma on the nose, was asked to go back to the primary care provider to get another referral so that he could care for the incidental squamous cell carcinoma on the ear noted during the initial ENT exam. There are two methods to use when compensating for highly technical procedures or training.