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Learn The Lingo

Learn the Lingo: Key Terms for Navigating the Value Based Care World

With the shift toward value-based payment models, pharmacists are seizing new opportunities to improve patient care in medical homes, accountable care organizations, and other innovative care models. This resource includes acronyms and terminology commonly used when practicing in or discussing innovative practice models. Each term includes a short description and references so you can further your practice in a value based care world. This is the first of multiple volumes that will be published by the Medical Home/ACO SIG.

Annette Jones
/ Categories: Learn the Lingo

Fee-for-service

Definition: Fee-for-service (FFS) is a traditional health care model in which health care providers and hospitals are reimbursed based on the number of services and procedures they provide. This model focuses on volume of services provided.1

How it relates to ACO/PCMH: One of the common reimbursement models for services provided in health care is FFS.2 This model may result in high out-of-pocket costs for individuals or high costs for their health plan and can result in uneven care between patients, excessive services, and health care inflation.1 An example of FFS would be physicians billing the insurance company for every service, test, or procedure that is provided to each patient. In this scenario, the physician is rewarded for seeing a greater number of patients and is incentivized to perform more procedures in order to receive higher reimbursement regardless of the overall health outcomes of their patients. This model of reimbursement does not promote efficiency and quality in care and fails to consider the improvement of a patient’s health condition over time, a failure which can raise the cost of health care. The disproportional increase in costs and complexity of health care gave rise to value-based health care models which place more emphasis on quality of care.3

Involved organizations/oversight: Medicare, Medicaid, Affordable Care Act

Resources:

  1. PrognoCIS. What is fee for service in healthcare? PrognoCIS. https://prognocis.com/what-is-fee-for-service-in-healthcare/
  2. DECO. Guide to healthcare reimbursement models. DECO. https://www.decorm.com/guide-to-healthcare-reimbursement-models/
  3. Prasad A. What is fee for service (FFS) in healthcare? RevenueXL: Accelerating healthcare revenues. https://www.revenuexl.com/blog/fee-for-service

 

Contributing Author:

Neeloufar Fakourfar, PharmD, BCACP, APh

Clinical Assistant Professor of Pharmacy Practice

Chapman University School of Pharmacy

 

 

 

 

 

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