Which statement correctly describes fee-for-service reimbursement?

• A. Insurance covers a percentage and you pay the rest.
• B. Hospitals receive a fixed payment per day regardless of services.
• C. Care is prepaid with a cap on total cost.
• D. Payment is based on patient satisfaction.

Answer: (A)

Fee-for-service reimbursement means providers are paid for each service they perform. In this setup, the insurer covers a portion of the allowed charge, and the patient pays the remainder through coinsurance, deductible, or copays. This matches the idea that the insurer covers a percentage and the patient pays the rest. It differs from fixed per-day or capitation arrangements, which pay a set amount regardless of services, and from payments tied to patient satisfaction or outcomes, which focus on quality rather than the volume of services provided. The key point is that payment follows the services rendered, with cost-sharing between insurer and patient.