In managed care reimbursement, which method may be used?

• A. Fee-for-service
• B. Episode-of-care
• C. Either fee-for-service or episode-of-care
• D. None of the above

Answer: (C)

In managed care reimbursement, payment methods are chosen to balance cost control with provider incentives, and plans may use more than one approach. Fee-for-service pays for each individual service, which supports access and provider choice but can encourage more procedures. Episode-of-care (bundled payments) covers all the services involved in a defined episode of care, promoting care coordination and predictability of total costs. Depending on the contract and the care setting, a managed care arrangement may use either method or mix them across services or providers. Therefore, both fee-for-service and episode-of-care may be used.