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"Fee-For-Service (FFS)" means that providers are paid a specified amount for each service provided -- a fee for each service. "Indemnity" originally meant that insured people were billed by their providers, paid these bills themselves, submitted the bills to their insurance company, and then were reimbursed ("indemnified") for the bills by the insurance company. With traditional indemnity insurance, insured people could go to any physician or provider. Providers had no direct contracts with the insurance company and the insured person was the "middle man" for the transfer of money from insurance company to provider. FFS as a method of payment can be used with or without a contract between the insurance company and provider, including arrangements in which the provider bills the insurance company directly. Although the terms "FFS" and "indemnity" have different meanings, they have been used together so much that many people now use them interchangeably. Fee-for-Service insurance seldom pays 100% of what providers charge anymore. The "Allowable Amount" is the price that an insurance company will pay for a given service. Sometimes the allowable amount is based on a negotiated "Fee Schedule." Sometimes it is based on the "Usual and Customary Charge" for providers in a given geographic area. "Balance Billing" happens when a provider bills you for the difference between what they charge and the allowable amount. Some contracts between insurers and providers do not allow providers to balance bill. A provider who "Accepts Assignment" agrees not to balance bill patients. You should ask if your provider accepts the allowable payment from your insurance plan as payment in full so that you are not unpleasantly surprised by any balance billing. Many FFS plans do not even pay all of the allowable amount. They generally require you to pay up to a deductible (perhaps $250 for an individual) and a coinsurance payment (perhaps 20%).
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