Administrative competencies for physician organizations with capitation

In California, it is common for HMOs to capitate physician organizations (e .g., independent practice organizations and multispecialty medical groups) for all professional and outpatient ancillary services land to share risk f or inpatient care) under professional risk capitation contracts. This arran gement exports most of the financial risk from the HMO to the physician org anization. When HMOs and physician organizations contract under these arran gements, HMOs delegate many of their administrative functions to physician organizations-giving the physician organization authority to make the decis ions needed to manage capitated risk. As a result, administrators of physic ian organizations must be competent in such areas as provider network devel opment, financial forecasting, utilization and quality management, contract negotiation, and establishing systems for claims, reporting, authorization s, and the like. In this study four HMO and 22 physician organization administrators were in terviewed concerning key administrative competencies for managing capitatio n contracts. The competencies were assessed as key administrative work acti vities that required specific knowledge, skill, or ability to perform. Identifying these competencies is important for physician organizations pre paring for capitated risk and will be essential for organizations preparing for HMO or Medicare capitation.