What is the Fee-for-Service (FFS) model?

The Fee-for-Service (FFS) model is a reimbursement approach where healthcare providers receive individual payments for each specific service they deliver to patients. This model operates on the principle that providers are incentivized to offer more services since they are compensated based on the number of services rendered, regardless of the patient’s overall health outcomes. In essence, when a provider performs a procedure or conducts a test, they bill for that specific service, receiving a fee that corresponds to that particular action.

This model contrasts with other reimbursement methodologies, such as bundled payments or value-based care, which focus on patient outcomes or provide a lump sum payment for a series of services. The FFS model allows for greater flexibility and allows patients to access a wide range of services, but it can also lead to over-utilization of services, as providers might be encouraged to perform more procedures to increase their revenue.