Final answer:
Mental health services are typically carved out when an MCO uses capitation, due to the complexity and unpredictability of the care required.
Step-by-step explanation:
When an Managed Care Organization (MCO) adopts capitation as the primary method of payment, the service that is likely to be carved out is c. Mental health. In capitation, providers are paid a set fee per patient regardless of how many services that patient uses, which could motivate providers to limit services to control costs.
Specialty services, such as mental health, are often more complex and unpredictable in terms of necessary care; therefore, they are commonly 'carved out' to separate payment arrangements that ensure that these services are adequately funded and managed. This allows MCOs to mitigate financial risk associated with these services.