(1) Method of payment for health services in which the insurer pays providers a fixed amount for each person served regardless of the type and number of services used. (2) A dollar amount established to cover the cost of health care services delivered to a person during a specified length of time. The term usually refers to a negotiated per capita rate to be paid periodically to a health care provider by a MCO. The provider is then responsible for delivering or arranging the delivery of all health services required by the covered person under the conditions of the provider contract.