One difference between a fee-for-service (FFS) reimbursement arrangement and capitation is that the FFS arrangement:
A) Is a prospective payment system, whereas capitation is a retrospective payment system
B) Has a potential to induce providers to underutilize medical resources, whereas capitation does 71 not have this potential disadvantage
C) Bases the amount of reimbursement on the actual medical services delivered, whereas reimbursement under capitation is independent of the actual volume and cost of services provided
D) Is most often used by health plans to reimburse healthcare facilities, whereas capitation is most often used by health plans to reimburse specialty care providers

Question

One difference between a fee-for-service (FFS) reimbursement arrangement and capitation is that the FFS arrangement:
A) Is a prospective payment system, whereas capitation is a retrospective payment system
B) Has a potential to induce providers to underutilize medical resources, whereas capitation does  71 not have this potential disadvantage
C) Bases the amount of reimbursement on the actual medical services delivered, whereas reimbursement under capitation is independent of the actual volume and cost of services provided
D) Is most often used by health plans to reimburse healthcare facilities, whereas capitation is most often used by health plans to reimburse specialty care providers

Quizplus · Accepted Answer

A fee-for-service reimbursement arrangement reimburses healthcare providers based on the actual medical services delivered, while capitation is a per-member per-month payment system that does not depend on the actual volume or cost of services provided. This means that healthcare providers in a capitated system are incentivized to provide efficient, high-quality care rather than maximizing the number of services they deliver. FFS reimbursement, on the other hand, may incentivize providers to overuse medical resources and perform unnecessary services in order to increase their reimbursement.

One Difference Between a Fee-For-Service (FFS) Reimbursement Arrangement and Capitation