What is a primary function of fee-for-service in healthcare?

The primary function of fee-for-service in healthcare is closely related to the collection of patient payments. In a fee-for-service model, healthcare providers receive payment for each specific service rendered to patients. This means that providers are compensated for individual procedures, tests, and consultations, which leads to a more direct correlation between the amount of care provided and the revenue generated.

This model incentivizes providers to offer more services since their income is directly tied to the number of services they deliver. As a result, the collection of payments from patients or their insurance plans is a fundamental aspect of how fee-for-service operates. It creates a system where clear billing for services can be established, allowing for straightforward payment collection from patients or third-party insurers.

In contrast, options like authorization and referrals, immediate patient diagnosis, and insurance premium calculation do not represent the primary function of the fee-for-service model. While they may be associated with healthcare processes, they are not the central focus of how fee-for-service arrangements work in terms of billing and payments.