What type of financial model does an ACO primarily use for provider compensation?

The correct answer, fee-for-service basis, is often seen in Accountable Care Organizations (ACOs), especially in their earlier stages. This model allows providers to receive payment for each individual service rendered to patients. ACOs aim to improve care coordination and quality while also reducing unnecessary costs, and the fee-for-service model can complement these efforts by ensuring that providers are reimbursed for the services they provide.

In many instances, ACOs may begin with a fee-for-service mechanism while progressively adopting more value-based payment strategies. This initial model retains the traditional world of reimbursement that many providers are accustomed to before fully transitioning into a value-oriented reimbursement structure.

Each of the other options presents different methodologies that may be used in varying healthcare settings or as ACOs evolve. Capitation provides a fixed payment per patient over a period, which might be challenging for ACOs managing diverse patient populations with varying healthcare needs. Bundled payment involves a single payment for a group of services, which can be part of ACO strategies but does not represent the primary compensation model. Flat rate payment is also less common in ACOs as it does not account for variability in patient needs and services provided.

Each model has its place in the healthcare payment landscape, but A