What Does Fee-for-Service Mean?
Fee-for-service refers to the method of billing used by the health industry that allows the physician or other practitioner to charge the health insurance plan or the patient for any services rendered or for each patient encounter. You will find that a major portion of doctors in the U.S. are currently using this billing method. Many health plans will go to great lengths to avoid engaging in what's known as a fee-for-service payment contract, mainly due to increased expenditures when a doctor's fee increases, as well as additional units of services that are being provided and the use of more expensive services replacing less expensive ones. This system is designed to compare with salary, per capita, or other prepayment systems, wherein the payment made to the physician does not change with the actual number of services used.
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