Payment of health or medical services based on the service rendered rather than through a salary or capitation policy.
Method of charging whereby a physician or other practitioner bills for each encounter or service rendered. This is the usual method of billing by the majority of the country’s physicians. Under a fee for service payment system, expenditures increase not only if the fees themselves increase but also if more units of service are charged for, or more expensive services are substituted for less expensive ones. This system contrasts with salary, per capita or prepayment systems, where the payment is not changed with the number of services actually used or if none are used. While the fee-for-service system is now generally limited to physicians, dentists, podiatrists and optometrists, a number of other practitioners, such as physician assistants, have sought reimbursement on a fee for service basis.
A method of paying physicians and other health care providers in which each service (for example, a doctor’s office visit or operation) carries a fee. The physician’s income under this system is made up from the fees she collects for services. Alternative methods of income for physicians are: (1) a salary, such as one paid by a health maintenance organization (HMO); and (2) a capitation payment system, in which the physician is paid a predetermined amount for each patient for which she assumes responsibility (rather than each service she renders) during a given period of time. Note that the capitation method can be applied via some type of organization, for example, an HMO; in that case the capitation payment is made to the HMO, which in turn pays the physician in the manner decided by the HMO.
Payment for specific health care services provided to a patient (as opposed to payments received for the number of patients seen, the number of hours worked, or the number of patients enrolled in a health care panel). The individual or an insurance carrier may make the payment.