What is fee-for-service (FFS)?

What is fee-for-service (FFS)?

• A. Bundled payments for episodes of care
• B. Pay-for-performance models that reward outcomes
• C. Payment for service performed --> incentivizes volume
• D. Capitation paid per patient over a set period

Answer: (C)

Fee-for-service reimburses providers for each service performed, so payment rises with more visits, tests, or procedures. This creates an incentive to increase the number of billable services, which often leads to higher care volume and higher costs, sometimes with less emphasis on overall value or outcomes. Other models work differently: bundled payments provide a single fixed amount for an entire episode of care, pushing teams to coordinate and constrain costs; pay-for-performance ties reimbursement to meeting quality or outcome targets, rewarding better results rather than sheer service count; capitation pays a set amount per patient over a period of time, incentivizing cost containment and preventive care.

Fee-for-service reimburses providers for each service performed, so payment rises with more visits, tests, or procedures. This creates an incentive to increase the number of billable services, which often leads to higher care volume and higher costs, sometimes with less emphasis on overall value or outcomes.

Other models work differently: bundled payments provide a single fixed amount for an entire episode of care, pushing teams to coordinate and constrain costs; pay-for-performance ties reimbursement to meeting quality or outcome targets, rewarding better results rather than sheer service count; capitation pays a set amount per patient over a period of time, incentivizing cost containment and preventive care.