Fee-For-Service
A fee-for-service is a payment model where providers are paid a fee for each service rendered.
What is a Fee-For-Service?
Fee-for-service is a method in which doctors and other health care providers are paid for each service performed. Examples of these services include tests and office visits. It is the dominant physician payment method in the United States.
This model contrasts with other payment systems where providers might be paid a fixed amount per patient (capitation) or a bundled payment for a course of treatment. Under fee-for-service, the more services a provider performs, the more they are paid, which can influence the volume of care provided.
What is the difference between a Fee-For-Service and Capitation?
Fee-for-service and capitation are two contrasting methods for paying healthcare providers. Fee-for-service pays providers for each individual service rendered, while capitation involves a fixed payment per patient, regardless of the services provided.
Under fee-for-service, providers are paid for each service performed (e.g., tests, office visits), incentivizing a higher volume of services.
Capitation involves paying providers a fixed amount per patient, irrespective of the number of services provided to that patient.
Fee-for-service is the dominant physician payment method in the United States, contrasting with capitation where providers might be paid a fixed amount per patient or a bundled payment for a course of treatment.
What are examples of a Fee-For-Service?
A patient visits their primary care physician for a routine check-up, and the doctor bills the insurance company for the office visit, separate from any tests or procedures performed during that visit.
A patient receives a diagnostic MRI scan, and the imaging center charges the patient's insurance for the MRI procedure itself, and separately for the radiologist's interpretation of the scan.
A surgeon performs an appendectomy, and the hospital bills for the operating room time, the surgical supplies, and the surgeon bills separately for their professional services.
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