Which term is not described as a payment model in the material?

• A. Fee-for-service
• B. Episode-based payment
• C. Per diem
• D. Capitation

Answer: (D)

Understanding how different payment models allocate risk and incentives helps explain why one term doesn’t fit with the others. Fee-for-service pays for each individual service rendered, which tends to reward more services. Episode-based (bundled) payments give a single payment for all the care tied to a defined episode, promoting coordination across the entire care episode. Per diem provides a fixed daily rate for a patient’s stay or days of care, regardless of the exact services used.

Capitation, on the other hand, is a different approach where a fixed amount is paid per patient per period to cover a defined set of services. This model shifts financial risk to the provider and emphasizes care management and cost containment. If the material didn’t describe capitation, that’s why it’s the term not described among the payment models.