Question: There are various payment methods used to pay providers. Fee-for-service reimburses on the basis of each patient encounter. Capitation payment is not tied to utilization

There are various payment methods used to pay providers. Fee-for-service reimburses on the basis of each patient encounter. Capitation payment is not tied to utilization but rather to the number of covered lives. What is the major difference between the financial risks to providers of fee- for service and capitations?

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