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Documentation Index

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Overview

Capitation is a payment model in which a payer pays your practice a fixed, periodic amount (typically per-member-per-month, or PMPM) to cover the care of an assigned panel of members, regardless of how many services those members receive. Because Elation Billing is built around patient-level claims, capitation payments are tracked using a payer-level “placeholder” patient so that the lump-sum check can be received, applied, and reconciled. Use this workflow when:
  • You receive a periodic lump-sum check from a payer for an assigned member panel.
  • You need to track non-claim-based payments such as Prop 56 supplemental payments or other PMPM-style programs.
If the payment is tied to specific patient claims (fee-for-service), use Posting a Payment in Elation Billing instead.
This method can also be used to track payments like Prop 56 (a California Medi-Cal supplemental payment program). Use selections you’ll remember and apply them consistently across every capitation payment from the same payer.

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Before you begin

  • The payer must be set up in Elation.
  • You must have a Billing role with permission to create patients, create Superbills, and post payments.
  • Decide on a custom CPT code (for example, CAP) that you will use for every capitation Superbill. The custom CPT code cannot be saved, so it will need to be manually added to the claim each time.
  • Have the remittance advice or check details on hand (check number, date, amount, payer).

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Workflow

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Step 1: Create a placeholder Capitation patient

If this is your first capitation payment from this payer, create a placeholder patient that represents the payer’s capitation account.
1
Create a new patient (see Add a new patient) with:
  • First Name: The payer name (for example, Aetna)
  • Last Name: Capitation
  • DOB and Sex: any value (required fields, but not used for capitation).
2
Leave address and insurance fields blank — this patient is for accounting purposes only.
3
Reuse this same placeholder patient for every future capitation payment from the same payer.
To keep capitation patients out of clinical patient lists, mark the patient as inactive after creation, or use a consistent naming prefix (for example, ZZZ Aetna Capitation) so they sort to the bottom of search results.

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Step 2: Create a Superbill for the capitation period

1
Create a new Superbill on the placeholder patient.
2
Set:
  • **Rendering Provider - **your practice’s default billing provider, or the provider listed on the capitation contract.
  • Service Location - for POS select office (11) or whichever POS your practice uses for capitation reporting.
  • From and Thru dates: the dates of service the capitation check covers (typically the calendar month).
    Rendering Provider and Service Location settings can be defaulted in the Settings → Practice Settings → Claim Defaults.
3
Add a single claim line:
  • Code: your custom capitation code (for example, CAP).
  • CHG (Charge): the full dollar amount of the capitation check.
  • Diagnosis: any valid diagnosis code your practice uses as a default (for example, Z00.00) — for capitation claims that are not submitted, this is for internal tracking only.
4
Save the Superbill.
Do not Lightning Bill the Superbill since there’s no insurance tied to the placeholder patient. Instead you can add the Superbill to a Worklist (e.g., by adding a Capitation Tag) if you want to can keep track of it more easily.
Create a new Superbill for each capitation period (usually monthly). Reusing the same placeholder patient is expected; reusing the same Superbill is not.

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Step 3: Post the payment and apply the Superbill

1
Post the payment as you would any insurance check — see Posting a Payment in Elation Billing.
  • Payer: the capitation payer.
  • Payment Method: how the payer paid you.
  • Check/Reference #: the actual check or EFT reference number; use a consistent convention (for example, CAP-YYYY-MM) if no check number is available.
  • Payment Date: Date the check was deposited or EFT was sent.
  • Posting Date: Typically today’s date since you’re working on posting the payment now.
  • Amount: the full check amount.
2
Add the capitation Superbill from Step 2 to the payment. The Superbill number is located at the top of the claim page, next to the patient name.
3
Apply the full payment amount to the CAP claim line so the Superbill balance is $0.00.
4
(Recommended) Change the Bill To field to SETTLED. This is not required, but is recommended.
5
Save the payment.

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Step 4: Document and verify

1
Add a Payment Note describing the capitation period covered (for example, Aetna capitation - October 2026, 412 members).
2
Confirm the Superbill shows a $0.00 balance and a status of SETTLED.
3
Confirm the payment appears on the placeholder patient’s payment history.

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Settling a patient claim to capitation

If you don’t send capitation claims (e.g., $0 claims) to the payer and there’s an outstanding balance on the claim, settle the claim to capitation so it closes out without affecting A/R.
1
Open the patient’s record.
2
Click Claims → Charges.
3
Select the charge(s) that are part of the capitation payment period.
To select multiple lines at once, hold Shift and click to select a continuous range (for example, A through Z), or hold Ctrl (Windows) / Cmd (Mac) and click to select non-adjacent lines (for example, A, C, G).
4
Click the Settle button.
The confirmation pop-up will tell you how many lines were selected and will be impacted. If it shows 0, no claim was selected and the page will appear to stall trying to take action on nothing — close the pop-up and re-select the claim(s) before trying again.
5
Select Capitation as the Reason.
6
Click Settle Now.
7
The claim balance will now be $0.00.
Run a monthly reconciliation: Use the Charges and Financial Transactions Report to look for claims from eligible members and make sure their balances are settled if payment was received.

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Special cases

  • Recurring monthly capitation: Reuse the same placeholder patient. Create a new Superbill for each month.
  • Retro adjustments / take-backs: Follow Posting Voided, Reversed, or Updated Payments.
  • Mid-month member adds or terms: If the payer issues an off-cycle adjustment check, post it as a separate payment on the same placeholder patient with a Note explaining the adjustment.
  • Stop-loss or carve-out payments: Track these separately using a distinct placeholder patient (for example, Aetna Stop-Loss) so they don’t co-mingle with PMPM revenue.
  • Multiple practice locations under one contract: If you need per-location reporting, create one placeholder patient per location (for example, Aetna Capitation - Downtown).
  • Prop 56 and other supplemental programs: Use the same workflow with a distinct placeholder patient (for example, Medi-Cal Prop 56) and a distinct custom code so the revenue can be reported separately.

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Reporting and reconciliation

  • Capitation revenue posted this way will appear in standard payment reports filtered by the placeholder patient or the custom CAP code.
  • To separate capitation from fee-for-service revenue, filter or group reports by the custom code (for example, CAP) or by the placeholder patient.