Understanding How Doctors Get Paid by Insurance Companies

There are a few different ways that insurance companies pay doctors. The most common method is called fee-for-service, in which the insurance company pays the doctor a set amount for each service provided. For example, if a doctor sees a patient for an office visit, the insurance company might pay the doctor $50.

Another method of payment is called capitation, in which the insurance company pays the doctor a fixed amount per patient, regardless of the number of services provided. For example, if a doctor has 1,000 patients, the insurance company might pay the doctor $50 per patient per month, regardless of how many times the patients see the doctor.

A third method of payment is called salary, in which the insurance company employs the doctor directly and pays the doctor a salary. In this case, the doctor does not bill the insurance company for services provided.

The best method of payment for a given doctor depends on a number of factors, including the size of the doctor's practice, the type of services provided, and the doctor's preference.