The Healthcare Industry's Shift from Fee-for-Service to Value-Based Reimbursement

The health care payment system has slowly evolved over the past few decades and at an accelerated pace since the passage of health care reform legislation in 2010.

Historically, U.S. health care providers have been reimbursed on a fee-for-service (‘‘FFS’’) basis. But the health care payment system has slowly evolved over the past few decades and at an accelerated pace since the passage of health care reform legislation in 2010. This legislation, the Affordable Care Act, which incorporated a number of initiatives promoting more value-based care, recognized that the traditional FFS model is inherently inefficient because providers are paid every time they provide a service, so the incentive is to provide more services.