Which reimbursement methodology increases payment if health care service fees rise?

The fee-for-service reimbursement methodology directly aligns provider payment with the specific services rendered. Under this model, healthcare providers are compensated separately for each service, procedure, or consultation that they provide to patients. Consequently, if the fees associated with these services increase—for instance, due to adjustments in medical billing standards, inflation, or changes in market rates—providers benefit from adjusted payments that reflect these increased fees.

This method encourages providers to deliver care as needed, since they are paid for each individual service. Therefore, as healthcare service fees rise, providers can expect to receive higher reimbursements, creating a direct correlation between service charges and payment amounts in this model.

In contrast, other methods like capitation and sub-capitation involve fixed payments per patient over predetermined periods regardless of individual service usage, which means providers do not benefit from increased service fees. They are instead incentivized to manage care within the constraints of set payment structures.