The need for alternatives to capitation under managed care.

Health reform requires the merging of traditional insurance and health financing tools. At the center of this intersection may be the need for risk adjustment of capitated payments. For ambulatory services ACGs and capitation are but one possible fate for provider payment in a managed care-dominated future. It is the authors' opinion that such an approach fails to meet the demands of risk adjustment as well as other needs related to provider payment under managed care and health reform.