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Go back to basics when negotiating new cap contracts

Considering the renewed interest in capitation that's likely to be prompted by Blue Cross Blue Shield of Massachusetts' (BCBSMA) alternative quality contract (AQC) (see "Blue's model may breathe new life into global cap" on p. 1), provider organizations should revisit the assumptions they make when they negotiate cap contracts and accept PMPM rates, says Robin Fisk, Esq., principal at the Fisk Law Office in Ashland, NH. A decade ago, Fisk represented payers during cap contract negotiations. Frequently, providers didn't do the math before they accepted capitation deals, she says, so they learned too late that their PMPMs resulted in payments that sometimes translated into just 20%-30% of charges.