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What is fee-for-service?

Fee-for-service is a system of health insurance payment in which a doctor or other health care provider is paid a fee for each particular service rendered, essentially rewarding medical providers for volume and quantity of services provided, regardless of the outcome.

This is in contrast to alternative models, including bundled payment, patient-centered medical homes, and accountable care organizations.

There has been a shift in the last several years away from fee-for-service payment models and towards value-based payments that reward medical providers based on efficiency and patient outcomes, rather than the volume of services provided.