CARVE-OUTS

A reimbursement method whereby certain medical services are separated from payment arrangement and paid differently; providers usually carve out expensive services. Extra payment that an institution obtains in addition to the main payment.
HMO plan negotiates with a pediatrician to provide primary care services, such as office visits and basic labs, at a capitated rate. However, the physician negotiates carve-out for vaccinations/immunizations. Payment does not come out of physician’s capitated payment, but these services are paid fee-for-service.