In a fee-for-service reimbursement system, payments are based on which of the following?

• A. The patient’s income level.
• B. A fixed annual capitation.
• C. The provider's tenure.
• D. The type and amount of service provided.

Answer: (D)

In a fee-for-service system, payments follow the actual care provided. Each service has a price, and billing occurs for every service performed, so the total reimbursement grows with the type and amount of care delivered. This means more or more complex services lead to higher payments. It isn’t based on a patient’s income level, it isn’t a fixed amount paid per patient each year (capitation), and it isn’t tied to how long a provider has worked there. For example, a visit plus any tests or procedures are billed separately, with payments determined by the specific services rendered.