Retainership vs Fee-for-Service: Structuring HMO Billing in Nigeria

Most Nigerian hospitals on HMO panels are paid two different ways at once — and bill for them as if they were the same. That's a quiet revenue leak. Here's the difference between retainership/capitation and fee-for-service, and how to bill each so the money actually lands.

Capitation / retainership

Under capitation (often called retainership), the HMO pays a fixed amount per enrolee per period, whether or not the patient shows up. It rewards keeping enrolees well and managing utilisation. The risk: if your costs per enrolee exceed the capitation, you lose money — so you need to track utilisation against the capitation pool.

Fee-for-service

Under fee-for-service, you bill per service delivered — each consultation, test, procedure and drug, at the scheme's agreed tariff. It rewards volume, but every claim must be authorised, correctly priced and submitted on time, or it gets rejected.

Why it matters for billing

A hospital usually has both: some schemes on capitation, some on fee-for-service, sometimes the same scheme split by service type. If your system can't tell them apart, capitation gets double-billed, fee-for-service gets under-claimed, and reconciliation becomes guesswork.

How DawaHQ helps

DawaHQ lets you configure each HMO/NHIA scheme on capitation or fee-for-service, with its own tariffs, service caps and co-pay rules. Fee-for-service claims are linked to the encounter, batched per scheme, and tracked through approval, part-payment or rejection; payments are reconciled additively against the invoice with shortfalls billed to the patient. So both payment models are handled in one workflow — and you can see, per scheme, exactly what you're owed.

Explore HMO & NHIA claims, read why claims get rejected, or book a demo.