What type of service does the Fee for Service model typically involve?

The Fee for Service model typically involves payment upon completion of services rendered. This model is based on the premise that healthcare providers are compensated separately for each service they deliver. Patients or their insurers pay for individual services (such as consultations, tests, or procedures) after they have been provided.

This payment structure encourages the delivery of more services, as each service results in an additional payment. It aligns directly with the volume of care delivered, which is a key characteristic of the Fee for Service approach. As such, providers bill for each appointment, diagnostic test, or treatment received, making it clear how costs accumulate.

In contrast, bundled payments group multiple services under a single payment, while capitation involves a fixed payment per patient regardless of the number of services provided, and retainer model fees imply a prepaid fee structure for ongoing access rather than individual service pay-per-use.