Fee-for-Service vs Value-Based

Fee-for-Service (FFS) pays per encounter or service rendered (volume-based). Value-Based Care pays for outcomes, quality measures, or population health (e.g., shared savings, bundled payments, capitation). Medicare is shifting toward value: ACO REACH, MIPS payment adjustments, Bundled Payments for Care Improvement (BPCI). Most practices today carry a mix: FFS commercial revenue plus value-based Medicare Advantage and ACO contracts. Revenue Cycle Management complexity increases as the value-based portion grows.