What does the term 'fee-for-service' imply in medical billing?

The term 'fee-for-service' in medical billing indicates that payment is made after services are rendered. This model means that healthcare providers bill for each individual service they provide, and payment is collected after the patient has received that care. In this context, the healthcare provider is reimbursed for the specific services rendered to the patient, which can include consultations, diagnostic tests, and treatments.

This approach contrasts with other models, such as capitation, where a set amount is paid in advance for a range of services, regardless of the number of services utilized. In fee-for-service arrangements, the more services that are provided, the higher the provider's earnings, as each service is billed separately. The notion of payment after services distinguishes this model, as opposed to prepayment or fixed amounts paid by insurance plans regardless of the care given.