One Difference Between a Fee-For-Service (FFS) Reimbursement Arrangement and Capitation

question 148

Multiple Choice

One difference between a fee-for-service (FFS) reimbursement arrangement and capitation is that the FFS arrangement:

• A) Is a prospective payment system, whereas capitation is a retrospective payment system
• B) Has a potential to induce providers to underutilize medical resources, whereas capitation does  71 not have this potential disadvantage
• C) Bases the amount of reimbursement on the actual medical services delivered, whereas reimbursement under capitation is independent of the actual volume and cost of services provided
• D) Is most often used by health plans to reimburse healthcare facilities, whereas capitation is most often used by health plans to reimburse specialty care providers

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Definitions:

Requirements Contract

A contract in which one party agrees to purchase all of its required goods or services from the other party.

Exclusive Dealing Contracts

Agreements where a retailer or distributor is obligated to buy from only the contracted supplier, thereby limiting the retailer's ability to purchase from other vendors.

Sufficient Consideration

A vital element in contract law, referring to something of value exchanged between parties that is necessary to form a legally binding agreement.

UCC

Uniform Commercial Code, a comprehensive set of laws governing commercial transactions in the United States.