What are the two main types of reimbursement models?

• A. Fee for Service (FFS) and Capitation
• B. Fee for Service (FFS) and Alternative Payment Models (APMs)
• C. Capitation and Global Budgets
• D. Salary-based and Per diem

Answer: (B)

The main idea here is distinguishing how providers get paid: one approach pays for each service delivered, while the other uses pay structures that reward value, quality, and cost control. Fee-for-service is the traditional model that reimburses per unit of service, which can incentivize higher service volume. Alternative Payment Models group together value-based arrangements aimed at improving outcomes and reducing costs, including capitation, bundled payments, and shared savings. These models shift some financial risk to providers and align incentives with overall care value.

Capitation and global budgets are specific ways to implement payment under broader value-based approaches, rather than the broad categories themselves. Salary-based and per diem are provider compensation methods that don’t represent the broad spectrum of reimbursement models in the same way.