Used as an incentive to encourage providers to reduce utilization of services, a percentage of a provider's payment is "held back" during the plan year to offset or pay for any cost overruns for referral or hospital services. Portion of a claim deducted and held by a health plan before payment is made to a capitated physician. A form of compensation whereby a health plan withholds payment to a provider until the end of a period at which time the plan distributes any surplus based on some measure of provider efficiency or performance. That portion of the monthly capitated payment to providers withheld by the MCO to create an incentive for efficient or reduced utilization of care or services. A provider that exceeds their withhold amount does not receive a dispersion at the end of the contract period. See also PCR or physician contingency reserve.
The portion of the monthly capitation or FFS payment to physicians that is withheld by an HMO until the end of the year (or other time period) to create an incentive for efficient care. The withhold is "at risk": physicians (or groups of physicians) who exceed utilization norms do not receive it. Thus, it serves as a financial incentive for lower utilization. The withhold can cover all services or be specific to hospital care, laboratory use, or specialty referrals.