Risky business: the risk-based, risk-sharing capitated HMO.

Hospitals are encountering a new type of HMO--the risk-based, risk-sharing capitated HMO. This new HMO arrangement redefines the role of the hospital, the physicians, and the HMO plan involved. Instead of placing the HMO at risk, the hospital and physicians are now financially responsible for services covered under the HMO plan. The capitated HMO is reduced to a third-party payer, serving as a broker between subscribers and providers. In this first of two articles on capitated HMOs, the risk-based, risk-sharing capitated HMO and its relationship to hospitals and physicians is defined. The second article will take this definition and apply it to managing, monitoring, and reporting on these types of programs from an accounting perspective.