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what is payment model

What is payment model?

What is payment model?

A payment model is a methodology developed by payers for health care services. Currently in 2018 the payers are moving away from FFS (fee for service) volume driven services to instead a value driven model. This transformation includes an incentive for providers on cost, outcomes as well as quality.

Value based care vs fee for service

Value based care encourages healthcare providers to deliver the best quality care for the most reasonable cost, improving the overall value of care. Value based care is a reimbursement methodology that challenges the decade-old “volume-based care” associated with fee-for-service. The conventional fee-for-service (FFS) reimbursement model is slowly being replaced by value-based care.

Managed care vs fee for service

The entire healthcare industry is in the middle of a payment system transition. The transition is between payments based off volume of services provided (fee-for-service) is slowly but surely being replaced by payments based off the value of the services (alternative payment models and value-based care). The largest difference between managed care versus fee-for-service is with FFS, you are able to see any physician you want, whenever it is necessary, but under managed care there is a strong financial incentive to only see physicians who are affiliated with the managed care plan.

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