Individual and Family Kaiser Health Insurance

Individual and Family Health Insurance Plans

Get Instant Quotes, Compare and Save

Group Health Insurance Plans

Get Quotes, Compare and Save

How are Kaiser Permanente physicians compensated?

Our doctors are compensated as a result of a two-step process: (1) Health Plan pays the Medical Group; and (2) the Medical Group pays the doctors. A summary of these steps is provided below.

Health Plan pays the Medical Group

Each year at Kaiser Permanente, the Health Plan and the Medical Group in each region negotiate and agree on the total amount of money that is estimated will enable our physicians and other clinicians to provide the amount of professional medical care that our members are expected to need in the upcoming year. This estimate is based on the previous year's performance (and the years prior to that), and also includes administrative and other expenses associated with operating the Medical Group.

That total is then divided by 12 months, and then divided by the number of expected members in the coming year. That calculation results in an amount of money (the "capitation") that the Health Plan pays to the Medical Group on a monthly basis for each member.

In addition, the Health Plan reimburses the Medical Group for its actual cost for certain medical and other expenses that may be difficult to forecast, such as transplants and contingent expenditures. The total is called the "basic contractual payment."

In the event that the total of all payments, as adjusted throughout the year, is insufficient to provide the needed care, Kaiser Permanente dips into its reserves for shortfalls. Then, during the following year, dues may be raised and reserves replenished. If the basic contractual payments, including the capitated payments, are greater than the actual cost of the necessary medical care, then the Medical Group, as a whole, is permitted to share in some of the surplus.

The remainder is retained by the Health Plans to fund reserves, build hospitals and/or other medical facilities, keep dues lower than they otherwise would be, and the like. Some of the regional Health Plans also reward a Permanente Medical Group for improvements in member satisfaction and/or improvements in preventive medicine or other quality standards.

Medical Group pays the doctor

After the Health Plan pays the Medical Group, the Medical Group uses that money to pay its doctors and other personnel, and to meet its other expenses.

The primary compensation method used by all of the Medical Groups is salary. Salary generally varies with medical specialty and tenure. Smaller amounts of additional compensation may be paid for, among other things:

board certification
achievement of specified clinical quality measures
achievement of member satisfaction levels
productivity
continuing medical education
managerial work
work performed in excess of normal work time, etc.

In addition, in some Medical Groups, the excess money that the Medical Group retains, if the basic contractual payments exceed the actual cost of care on a regional basis, also may be used to pay additional compensation to doctors and other personnel.

As of 2006, approximately 95 percent of physician compensation was paid in salary.

This is a summary of the arrangements between each of the regional Health Plans and Medical Groups and each of the Medical Groups and their respective doctors. These arrangements vary by region.

Some people believe that capitation payments carry an incentive for preventive medicine to keep patients healthy. Other people believe that capitation payments provide physicians an incentive to withhold treatment.

We believe that our compensation process does not create an incentive for our physicians to make patient care decisions based upon factors other than the medical needs of the patient because:

Kaiser Permanente's form of capitation is based upon collective performance, rather than the individual performance of a physician, and
Permanente physicians are compensated primarily by salary.

faq:
- Individual and Family

Follow us on:

Twitter

Kaiser Permanente News

Kaiser Permanente Joins HBO and Leading Health Org...
Tonight, many people will tune in to watch the premiere of The Weight of the Nation on HBO, a four-part documentary series about the obesity epidemic, co-sponsored by Kaiser Permanente and four other health organizations.

Common HSA Questions

Who can get an HSA?

Anyone who buys a qualified high-deductible health insurance policy can contribute to an HSA, although you cannot make new contributions to an HSA after you sign up for Medicare.

How much can I contribute annually to an HSA?

In 2010, you can contribute up to $3,050 to an HSA if you have self-only coverage or up to $6,150 for family coverage. If you're 55 or older, you can contribute an extra $1,000 in 2010.

Can any high-deductible health insurance policy qualify for an HSA?

Any high-deductible health insurance policy can qualify, as long as it meets the IRS requirements. In 2010, the deductible must be at least $1,200 for individuals or $2,400 for families, and the annual out-of-pocket expenses cannot exceed $5,950 for self-only coverage or $11,900 for family coverage, including the deductible and co-payments (but not premiums). Individuals can buy high-deductible policies on their own or through their employers.

How and where can I open a health savings account?

It depends on if you're buying coverage on your own or getting it through your employer.

On your own. Kaiser Permanente offer variety of HSA qualified policies.

Would I fund an HSA with pre- or post-tax dollars?

If your employer offers a high-deductible health insurance policy, you may be able to make pretax contributions, like you would with a flexible-spending account. If you open the HSA on your own, your contributions will be deductible when you file your taxes, even if you don't itemize.

You can now deduct your contributions up to the $3,050/$6,150 limit -- plus an extra $1,000 if 55 or older -- regardless of the size of the deductible.

Do the tax benefits phase out at certain income levels?

Unlike many other tax breaks, there aren't any income limits. Anyone who buys a qualified high-deductible policy can open an HSA, as long as they have not yet signed up for Medicare.

What's the difference between HSAs and the flexible-spending accounts? It seems they are for the same purpose.

The tax benefits of both plans are quite similar, but there are several differences. The biggest and most important difference is that your HSA balances can roll over from year to year and continue to grow tax-deferred.

If my employer offers both, can I fund my flexible spending plan, too?

No. You cannot have an HSA if you use a flexible-spending account to pay health-care costs or if you have other medical coverage (say, through a spouse's policy). However, if your flex plan restricts reimbursements to wellness care (such as annual physicals) and vision and dental care, you can have an HSA, too.

If I set up HSA through my employer, what happens if I switch jobs?

You can keep the money in an HSA account even after you leave that job, similar to a 401(k). But you will get stuck with a 10% (20% beginning in 2011) penalty -- plus an income-tax bill -- if you use any of the money for nonmedical expenses before age 65.

What happens if I want to withdraw the money for nonmedical expenses after age 65?

You won't be hit with the 10% (20% beginning in 2011) penalty if you use the money for nonmedical expenses after age 65, but you would still have to pay income taxes on the money. Keep in mind that you can continue to withdraw money from the account tax-free for qualified medical expenses after age 65.

Can a couple who is planning to retire early open an HSA?

Sure. Anyone who has not signed up for Medicare can contribute to an HSA if he or she buys a high-deductible health insurance policy, and you can contribute an extra $1,000 in 2010 if you're 55 or older.

You can't make new HSA contributions after you start receiving Medicare, but you can still use the money in your account tax-free for medical expenses at any age. You'll owe income taxes on the money -- but no penalty -- if you withdraw the money for nonmedical expenses after age 65.

Do contributions to an HSA in any way affect one's ability to contribute to an individual retirement account?

No. Your HSA contributions won't affect your IRA limits. It's just another tax-deferred way to save for retirement.

This web site is owned and maintained by Health Coverage Insurance Services, Inc, which is solely responsible for its content. This site is not maintained by or affiliated with Kaiser Permanente®, and Kaiser Permanente bears no responsibility for its content. The e-mail addresses and telephone numbers that appear throughout this site belong to Health Coverage Insurance Services, Inc., and cannot be used to contact Kaiser Permanente. Health Coverage Insurance Services, Inc is an authorized Agent for Kaiser Permanente. Kaiser Permanente org, Kaiser.com, Kaiser.org, KP.org, KP.com, KaiserQuotes, KFP, KPF are the official websites and trademarks of the Kaiser Inc. Copyright © 2011 Health Coverage Insurance Services, Inc. LC 0E75959, All Rights Reserved.