It is a pricing model in which vendors are paid for a set of amounts instead of the services. This type of pricing model, can however be a bit of a risk as the vendors profitability depends on how much the service are used or not used.

In the USA, capitated pricing is usually referred to a pricing model which is used by healthcare providers in order to systematize the price or cost of devices and products around the industry which is based on the level and quality of the product.