What is fee-for-service reimbursement?

• A. Payment for each individual service provided
• B. Payment for the entire service provided
• C. Payment made by clients to health insurance companies
• D. Payments made using a health savings account

Answer: (A)

Fee-for-service reimbursement means payment is made for each service provided, not for a bundle of care or an overall outcome. In this model, a provider bills separately for every individual service—such as a visit, a test, or a procedure—and the payer reimburses for each one based on a set rate or negotiated agreement tied to specific service codes. Because payments accrue with each separate service, this approach tends to incentivize delivering more services. It contrasts with other payment methods: paying for an entire episode or bundle of care, paying a fixed amount per patient (capitation), or payments that come from clients or through health savings accounts, which are not about per-service reimbursement.