What does "fee-for-service" reimbursement entail?

The concept of "fee-for-service" reimbursement refers to a payment model that compensates healthcare providers, including pharmacies, based on the specific services rendered to patients. In this model, each service or procedure performed is billed separately, and the provider receives payment for each individual service. This means that the more services a pharmacy provides, the more they earn.

This reimbursement method encourages providers to deliver a wide range of services because they are directly compensated for each one. It contrasts with other payment structures, such as bundled payments or capitation, where providers receive a set fee regardless of the number of services rendered. Understanding this model is essential for pharmacy professionals, as it highlights the financial incentives that can influence the services offered to patients and the overall healthcare delivery system.

In the other options, prepaid methods would indicate that pharmacies are paid upfront without a direct correlation to the services provided, while receiving bonuses for efficiency relates to a performance-based structure rather than fee-for-service. A flat fee for all patient services differs from the fee-for-service approach, focusing instead on a single payment amount rather than itemized billing.