What payment system pays health care providers for each service performed?

• A. Salary-based payments
• B. Fee-for-service
• C. Block grant
• D. Capitation

Answer: (B)

Paying for health care per service performed is a fee-for-service model. In this system, each distinct service—an office visit, a lab test, an imaging study, or a procedure—gets tied to a separate payment. The provider’s reimbursement increases with the number and type of services delivered, so the payer tends to pay for every billed service.

In contrast, salary-based payments give a fixed regular income regardless of how many services are provided; capitation pays a set amount per patient for a period, independent of the exact number of services used; and a block grant is a lump-sum funding to an organization for a defined purpose, not tied to individual services.