What is the difference between medical fee for service and managed care?

Asked by: Santos Lindgren V  |  Last update: October 2, 2025
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Under the FFS model, the state pays providers directly for each covered service received by a Medicaid beneficiary. Under managed care, the state pays a fee to a managed care plan for each person enrolled in the plan.

What is the difference between fee for services and managed care?

With FFS, a person can visit any physician's office of their choice. While with managed care there is a strong financial incentive to consult with only those physicians who are covered under the managed care plan. Choosing a Specialist: With FFS, a person can choose any specialist they like.

What does medical fee-for-service mean?

A method in which doctors and other health care providers are paid for each service performed. Examples of services include tests and office visits.

What is the difference between MCO and PCCM?

MCO refers to risk-based managed care; PCCM refers to Primary Care Case Management. FFS/Other refers to Medicaid beneficiaries who are not in MCOs or PCCM programs.

What is the difference between a capitated managed care model and a fee-for-service reimbursement system?

In capitated payments, healthcare providers are paid based on how many patients they see over a period of time. In fee-for-service, however, healthcare providers are paid based on the quantity of services, screenings, tests, or procedures carried out during the course of treatment.

What is Fee for Service vs Managed Care and Why Does it Matter?

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What is managed care reimbursement?

States contract with managed care organizations (MCOs) to provide coverage for specific services to enrolled Medicaid beneficiaries. In return for covering those services, MCOs are paid a set monthly capitation payment.

Is capitation a form of managed care?

California operates several forms of managed care programs for Medicaid enrollees, most of which are paid through capitated systems. The basic rate setting process for all models paid through capitation is the same, with some slight variation depending on the specific delivery model.

What is the difference between MCO and MSO?

A Manufacturer's Certificate of Origin (MCO), also known as a Manufacturer's Statement of Origin (MSO), is a specified document certifying the country of origin of the merchandise required by certain foreign countries for tariff purposes.

What is the largest MSO in healthcare?

For instance, in June 2022, a coalition of leading independent orthopaedic and musculoskeletal (MSK) specialists announced the launch of MedVanta, nation's largest physician-owned and operated musculoskeletal management services organization.

What does the capitated rate per member per month cover?

Capitation fee, or capitation rate, is the fixed amount paid from an insurer to a provider. This is the amount that is paid (generally monthly) to cover the cost of services performed for a patient. Capitation fees can be lower in higher population areas.

What are the disadvantages of fee-for-service?

This can lead to higher administrative costs and lower efficiency. Downside risk: Providers may not be reimbursed for all services they bill for, which can lead to financial risk. Higher healthcare costs: FFS can lead to higher healthcare costs since providers are incentivized to perform more services.

What is the difference between FFS and PPO?

Fee-for-Service (FFS) Plans with a Preferred Provider Organization (PPO) An FFS option that allows you to see medical providers who reduce their charges to the plan; you pay less money out-of-pocket when you use a PPO provider. When you visit a PPO you usually won't have to file claims or paperwork.

What are the two primary concepts of managed care?

Managed care is built on two primary concepts: to promote good health and to practice preventive medicine. What is the goal of managed care? The goal is to reduce the cost of medical expenses by maintaining a healthy lifestyle.

What do you mean by managed care?

The term “managed care” is used to describe a type of health care focused on helping to reduce costs, while keeping quality of care high. The most common health plans available today often include features of managed care. These include provider networks, provider oversight, prescription drug tiers, and more.

What is the medical fee-for-service?

Otherwise known as FFS for short, Fee for Service is a type of payment model in healthcare that sees providers bill patients on a per-service or per-procedure basis. If you have a surgery performed, you pay for that surgery – it doesn't get much more straightforward than that.

How do MCOs make money?

Under capitated managed care, Medicaid agencies pay MCOs a “per member per month” rate. In exchange for this rate, the MCO provides the services and administrative benefits outlined in the contract; effectively, this shifts risk associated with unpredictable costs from the Medicaid agency to the MCO.

How does an MSO work in healthcare?

Clinical Integration & Physician Alignment: MSOs help physician groups acquire and maintain the various doctors necessary to provide a complete spectrum of care. There is a constant changing of clinicians and staff, necessitating recruitment, training and development of various professionals.

How does an MSO make money?

Under the management services agreement (MSA), the MSO and the healthcare organization negotiate terms, including the purchase of assets and the commission based on collected fees for services. MSOs often buy office space or medical equipment and lease it back to the managed healthcare organization.

Is HMO and MCO the same?

As part of a managed care system, an MCO agrees to offer its services at a reduced cost, along with other MCOs in the network. There are four types of managed care organizations or plans: Preferred Provider Organization (PPO) Health Maintenance Organization (HMO)

What is required for a MSO in Florida?

In addition to the assignments stated herein, the manufacturer's statement of origin shall contain a certification of the identification and description of the motor vehicle or mobile home delivered and the name and address of the distributor, licensed dealer, or other person to whom the motor vehicle or mobile home ...

What are the two major forms of managed care?

Managed Care
  • Health Maintenance Organizations (HMO) usually only pay for care within the network. ...
  • Preferred Provider Organizations (PPO) usually pay more if you get care within the network. ...
  • Point of Service (POS) plans let you choose between an HMO or a PPO each time you need care.

Who grants preauthorization for treatments?

A pre-authorization may be required by your insurance company prior to you receiving certain medications, tests or health services.

Is Aetna a managed care?

The Aetna® Medicaid managed care plan, Aetna Better Health, goes beyond traditional medical coverage to provide an array of affordable, accessible care options designed to enhance members' overall well-being.