An alternative funding model (i.e. alternative to fee-for-service) of payment may be used when a doctor is responsible for providing services not covered under the fee-for-service model such as teaching medical students or doing medical research. These services don't have fee codes because fee codes only cover direct patient care.

Alternative funding models may also be used to support the provision of services in rural communities and/or new collaborative models of care.

Most doctors paid through alternative funding plans are specialists working in hospital settings such as Halifax’s Queen Elizabeth II Health Sciences Centre and IWK Health Centre. In some cases, rural doctors are paid under this model.

Each alternative funding agreement is negotiated separately between Doctors Nova Scotia, the Department of Health and Wellness, district health authorities, physicians and, when appropriate, Dalhousie University.