Which statement about fee-for-service reimbursement is true?

Fee-for-service reimbursement is a payment model where healthcare providers are compensated for each service performed. This system often incentivizes providers to offer more services rather than focusing solely on patient outcomes. As a result, there can be a tendency to provide unnecessary healthcare services because the more procedures, tests, and consultations a provider performs, the higher the reimbursement they receive. This alignment can lead to a higher volume of care, regardless of whether all services are essential for the patient’s health.

The other statements about fee-for-service reimbursement present scenarios that do not accurately reflect how this model operates. For instance, it does not impose restrictions on the amount of services a provider can offer nor is it used exclusively for outpatient care; it is applicable in various care settings. Furthermore, fee-for-service does not ensure equal compensation among providers, as reimbursement rates can vary significantly based on several factors, including the type of service, provider contracts, and geographic location.