Fee-For-Service Plan

What Does Fee-For-Service Plan Mean?

A fee-for-service (FFS) plan is a type of health insurance in which healthcare providers are reimbursed by insurance companies for each service rendered. These plans typically do not have a network, allowing the policyholder to see any provider they choose. However, FFS plans are often more expensive than other alternatives. On the provider side, the per-service billing model is one reason practices like medical offices carry their own business coverage, since each patient visit creates documentation and liability exposure tied to a separate claim.

Insuranceopedia Explains Fee-For-Service Plan

Fee-for-service plans are becoming less popular in the health insurance industry because other plan types, such as HMOs and PPOs, are often more cost-effective for insurers. HMOs and PPOs include networks of providers with whom the insurance company prefers to work. However, regardless of whether a plan is an FFS, HMO, or PPO, the primary goal of the health plan is to provide coverage for healthcare expenses. The reimbursement structure also affects what providers themselves pay for protection: the cost of doctors and physicians insurance depends partly on practice volume and billing patterns, both of which look different under FFS than under capitated network plans.