Medicaid FFS Explained

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  • Medicaid FFS refers to state-run Medicaid fee-for-service systems. Find out more about this payment system and other types of Medicaid provider payment models.

Medicaid fee-for-service, or Medicaid FFS, pertains to how Medicaid services are delivered to the beneficiary and how those services are paid for. Learn more about Medicaid FFS and why it might be important for your Medicaid enrollment.

What Is Medicaid FFS?

Medicaid FFS stands for Medicaid fee-for-service. Individual states administer Medicaid programs, and states deliver and pay for these Medicaid services through a fee-for-service system, which directly pays physicians, clinics, hospitals and other medical providers a fee for each service they provide their patients with Medicaid plans.

Fee-for-service systems, by definition, reward volume — the more services provided, the more money medical providers receive from the states — and this volume is irrespective of the quality of care or patient outcomes.

With Medicaid FFS, beneficiaries are essentially on their own to find providers who accept Medicaid policies and serve new patients.

Other Payment Models

Medicaid FFS is a type of payment model for Medicaid service delivery. Within an FFS system, the individual state's Medicaid agency establishes fee levels for covered services, and it pays providers directly for each service they deliver to Medicaid beneficiaries.

By participating in a Medicaid FFS system, providers are not risking anything financially. Except within a Primary Care Case Management (PCCM) delivery system, there is usually no organized Medicaid provider network in a Medicaid FFS system.

There are other payment models besides Medicaid FFS, and they include:

  • Capitation
  • Care Management Fee 
  • Pay-for-Performance (P4P)
  • Shared Savings Arrangements (Gain-Sharing)
  • Shared Risk Arrangements (Risk-Sharing)
  • Episode of Care (EOC) Payment
  • Global Bundling
  • Delivery System Reform Incentive Payment (DSRIP)

More Information About Medicaid FFS

To find out more information about whether your state uses a Medicaid FFS system, consult your state's Medicaid resources. Medicaid programs vary widely by state, so it's important to consult resources specific to your location. Find out more by visiting Medicaid.gov or your state's Medicaid page.