What describes fee-for-service payment in healthcare?

• A. Paid per visit/procedure
• B. Salary-based payment
• C. Per diem
• D. Capitation

Answer: (A)

Fee-for-service is a payment model where providers are paid for each individual service performed. Reimbursement is tied to the quantity of care—each visit, test, or procedure is billed separately, often using standardized codes. This setup means that increasing the number of billable services can raise overall payments, which is why it’s described as paying per visit or per procedure.

In contrast, salary-based payment gives a fixed regular amount regardless of services provided; per diem pays a daily rate for a patient stay; and capitation provides a fixed amount per patient per period, regardless of how many services are used.