In a fee-for-service plan, how are benefits paid?

In a fee-for-service plan, benefits are paid based on the services actually provided to the patient. This model allows patients to receive care as needed, and they or their insurers are billed for each service rendered. The distinction lies in the fact that benefits correspond directly to the individual medical treatments or procedures received, rather than being tied to a predefined fee structure or requiring prior authorization.

This system provides flexibility and often encourages patients to seek additional services since there is compensation for each service provided. It contrasts with other payment models, such as capitation, where healthcare providers are paid a set amount per patient regardless of service use, or managed care models that require pre-approval for services. The fee-for-service approach ensures that providers are incentivized to deliver specific treatments based on patient needs, reflecting the principle of paying for actual healthcare delivered.