Which statement differentiates fee-for-service from managed care?

• A. Fee-for-service has high control over health promotion; managed care has minimal cost controls.
• B. Fee-for-service involves provider risk sharing; managed care involves payer risk only.
• C. Fee-for-service offers freedom of choice and fewer internal controls; managed care uses provider networks and utilization review.
• D. Fee-for-service requires PCP as gatekeeper; managed care eliminates referrals.

Answer: (C)

The main idea here is how payment models shape patient freedom and internal controls in delivering care. In a fee-for-service setup, providers are paid for each service they perform, which typically means patients can choose almost any clinician and there are fewer centralized controls over what services are ordered. There isn’t a built-in gatekeeping or formal network requirement, so decisions tend to follow the clinician’s judgment and the patient’s preferences.

In contrast, managed care uses networks and explicit utilization management to control costs and coordinate care. Patients may be limited to a network of approved providers, and services often require referrals or preauthorization, with utilization review guiding what is approved and paid for.

So the correct distinction is that fee-for-service offers freedom of choice and fewer internal controls, while managed care relies on provider networks and utilization review to regulate care.