As a healthcare provider, it’s essential to consider your opportunities when considering provider contracts for health care services. Unfortunately, not all provider contracts are created equal. Different types of Healthcare Provider Contracts have major differences in their payment systems that can significantly affect your revenue, the overall success of your facility, and even patient outcomes.

Each contract has its nuances and unique specifications and must be considered in an independent context before signing with a specific healthcare contract management system. With that being said, there are two general types of healthcare provider contracts for health care services you should be familiar with: 

-fee for service and 

-predetermined per-person payments.

To help you find the system that best suits your needs, this simple guide breaks down the pros and cons of all types of healthcare provider contracts.  

Fee For Service 

In a fee-for-service model, healthcare providers are paid via invoices for services rendered. In this system, each service’s cost is charged to the patient and their insurer by the provider. As a result, different services carry different price tags. In some fee-for-service cases, providers may charge patients on a sliding scale according to their income level.  

Pros of Fee For Service Contracts

Cons of Fee For Service Contracts 

Predetermined Per-Person Payments  

In a predetermined per-person payment model, providers receive a set payment for each person assigned to their care, regardless of whether or not those patients seek medical services. This system may also be referred to as a capitation model. 

For example, a physician may be paid $50 per month for 100 people under their care ($5000). If the physician only sees 30 of their patients in January, they will still be paid $5000 for that month. 

Pros of Predetermined Per-Person Payments 

Cons of Predetermined Per-Person Payments  

Choosing the Right Type of Healthcare Provider Contract for You 

Fee for service and predetermined per-person payment models have benefits and drawbacks that must be balanced before agreeing to a provider contract management system. Plus, the payment model is only one aspect of this dense and complex business agreement.  

Fortunately, third-party contract management firms like Contracting Providers help guide providers toward contracts best suited to their needs. With Contracting Provider, you can rest assured that your provider contracts will result in higher revenue. Contracting Providers also monitors your contracts after you sign, notify you of any changes, analyze your data, and creates valuable insights about your organization’s growth. 

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