Commission for Case Manager Certification (CCMC) Exam 2025 – 400 Free Practice Questions to Pass the Exam

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What is 'fee for service' in health insurance?

Payment is based on the number of patients seen

Providers are paid a flat rate for all services

Providers receive payment for each individual service rendered

'Fee for service' in health insurance refers to a model where healthcare providers are compensated for each individual service rendered to patients. This means that every procedure, consultation, or treatment provided results in a separate charge and payment. This model incentivizes providers to deliver more services, as they are directly paid for each one, which can lead to a higher overall cost for patients or insurers if many services are rendered.

The structure of 'fee for service' contrasts with other payment models, such as capitation, where providers receive a flat rate for a set period regardless of how many services are delivered. In a 'fee for service' system, the focus is on the volume of services provided rather than the quality of outcomes or patient satisfaction, which can both enhance revenue for healthcare providers and potentially result in unnecessary procedures if not monitored adequately.

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Patients pay a fixed amount for each procedure

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