The American health industry has recently shifted from a fee-for-service (FFS) model to the payment model that reimburses and rewards physicians for taking a holistic approach to care. The new reimbursement model is known as “value-based care” or “free-for-value.” It aims to eliminate the FSS model which involves charging the insurers and patients solely on the number of procedures or treatments performed.

Value-Based Care Vs Fee-For-Service—what are the key differences in each of these systems? What is the origin of value-based care? The aim of this post is to help the US healthcare professionals, medical coders, and billers to know everything about the two models with the transition in full swing.

What Is Value-Based Care?

American healthcare professionals are reimbursed with incentives/ payments for taking a holistic approach to care at a low cost. This system is known as the value-based care system in the US, which demands that clinicians use best practices while treating patients. This payment model compels the doctors to prioritize the quality of care provided to patients. In this philosophy of care, doctors focus on the quality, efficiency, and overall outcome of care and are paid accordingly.

When successful, the paying for performance further motivates the healthcare team to intentionally consider providing quality care at a low cost and to improve the patient’s healthcare outcomes. Thus, the value-based care model encourages effective coordination and communication among physicians across specialties.

What Is Fee-for-service?

Fee-for-service or FFS is the healthcare payment model where physicians and clinicians are paid based on the number of services, treatments, and procedures that they provide to patients. In this healthcare model, medical professionals are compensated by government agencies and insurance companies every time patients have appointments/surgical consultations/hospital stays. Healthcare professionals are reimbursed regardless of whether the outcome of the test or procedures is positive or negative. FFS is the traditional payment model that unbundles the medical services involved to pay separately for each service availed.

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