Fee-for-Service (FFS) is a traditional payment model within the healthcare sector where providers, such as doctors and hospitals, are paid separately for each service they perform. This can include visits, tests, procedures, and other healthcare services.
Instead of receiving a flat rate or pre-determined salary, healthcare providers bill for each individual treatment or test they administer to a patient. This method allows for a direct correlation between the services provided and the payment received, making it a straightforward and transparent way to manage healthcare costs.
Other payment strategies encompass comprehensive package pricing, patient-focused care networks, and coordinated care entities.
Fee-for-service is typically applied to outpatient care covered by Medicare Part B.
The Fee-for-Service (FFS) model in healthcare offers numerous benefits, including giving patients the autonomy to select their healthcare providers and services, thus not restricting them to a predefined network.
It also motivates healthcare professionals to deliver detailed and comprehensive care, as they are compensated for each individual service they provide, fostering an environment where more thorough diagnoses and treatments are pursued for the benefit of patient health.
However, it is important to note that while FFS has its advantages, it also has drawbacks, such as potentially leading to unnecessary tests or procedures as providers are incentivized to offer more services.