Guided Notes

How Providers Get Paid: Reimbursement Methods

Fee-for-service, the Medicare Physician Fee Schedule and RVUs, APCs for hospital outpatient, MS-DRGs for inpatient, capitation, and value-based payment.

Payment models

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ModelHow it paysWhere used
Fee-for-service (fee schedule)Per service, by a set price listPhysicians, most commercial contracts
Percent of chargesA percentage of billed chargesSome commercial/out-of-network
Prospective payment (PPS)Fixed amount per case/visit set in advanceMedicare inpatient (DRG), outpatient (APC), SNF, home health
CapitationFixed amount per member per month (PMPM)HMOs, some primary care
Value-basedPayment linked to quality/cost resultsACOs, bundled payments, MIPS
← Payment Posting & Reconciliation