Reimbursement Methods: Fee-For-Service vs Capitation

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Reimbursement Methods Fee-For-Service vs
Capitation
As the present USA healthcare trends focusing
more on Reimbursement Methods like value-based
care, the fee-for-service is under intense
scrutiny. Often labeled as an antiquated payment
model, it promoted over-utilization by physicians
and patients, while creating fragmentation among
healthcare service providers. The Affordable
Care Act of 2010, along with MACRA legislation in
the year 2015, has slowly helped to redirect
healthcare payment reform away from
fee-for-service to a capitation payment system.
However both models are widely used and they
both have been criticized for various reasons.
Now the present healthcare focus is emphasizing
quality, efficiency, care coordination, cost
control, and preventive health, capitation is
developing as the model of choice for the
value-based care movement. The traditional model
of paying for individual services on a
case-by-case basis is being challenged by the
newly introduced alternative model known as
capitation. Capitation is a quality-based system
measured by health outcomes, patient
satisfaction, and clinical compliance. It has
proved to be a great system for cost-conscious
employees, but it might not be for
everyone. Fee-For-Service vs Capitation
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Reimbursement Methods Fee-For-Service vs
Capitation

• Reimbursement Methods Capitation
• This reimbursement method will be given the
  primary care provider or physician practice a set
  fee per year or month for each patient. This new
  model aims to offer a perfect balance of patient
  protection with incentives to restrain the costs.
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• This method gives doctors, not the payers, more
  control over decisions about care, while also
  restraining unnecessary spending.
• It inspires clinicians to limit unnecessary
  medical services that raise costs without adding
  value.
• It makes it stress-free for providers to use
  things like telemedicine that arent easily
  compensated under traditional fee-for-service
  models.
• It makes costs much more foreseeable for payers
  and gives the doctors and other providers a more
  predictable monthly cash flow.
• It can be simpler to administer a fee per
  patient rather than complicated billing and
  elaborate coding for every visit and procedure.

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Reimbursement Methods Fee-For-Service vs
Capitation

• Reimbursement Methods Fee For Service Model
• Every patient visit, evaluation, treatment,
  procedure, test, etc. is billed by the provider
  to a third-party payer for payment.
• The fee-for-service payment structure leaves the
  provider and patient absolved from fiscal
  accountability, which arguably encourages
  over-utilization by both parties, leading to an
  increase in overall healthcare costs over time.
• If patients need more care than expected, the
  burden of cost overages lies with the payer, not
  the provider.
• This arrangement creates a scenario with inherent
  financial uncertainty for the payer concerning
  medical care costs and payment, explaining in
  part the ongoing rise in health insurance
  premiums
• Liked what you read. For more such reads and
  leveraging the in-depth understanding of the
  medical billing and coding process, connect with
  experts like MBC.
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Reimbursement Methods Fee-For-Service vs
Capitation
Medical billing has delivered the highest
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