What is the concept of fee-for-service?

• A. Payment based on outcomes and quality
• B. Salary-based payment
• C. Payment for each service provided, regardless of quality or need
• D. Capitation

Answer: (C)

Fee-for-service means payment is made for each individual service provided, so total compensation rises with the number of visits, tests, or procedures, regardless of whether the care improves health. This directly describes paying for each service, not tied to outcomes or overall quality, which is why it’s the best answer. In practice, this can lead to more services being performed and higher costs, since more care means more payment. By comparison, salary-based payment provides a fixed wage, capitation pays a set amount per patient regardless of services used, and value-based or outcomes-based payment ties compensation to health results and quality measures. Understanding this helps explain how payment models shape provider behavior and healthcare costs in public health and Medicaid reforms in North Carolina.