A Private Fee-for-Service (PFFS) plan is a type of Medicare Advantage plan (Medicare Part C) offered by private insurance companies contracting with the federal government. These plans provide all the benefits of Original Medicare (Part A and Part B), often including extra benefits like vision, dental, and hearing coverage. Unlike many other Medicare Advantage options, PFFS plans operate without a traditional, restrictive network of providers. The core distinction of a PFFS plan lies in how it handles provider payments, affecting the flexibility and certainty of your healthcare choices. Enrolling in a PFFS plan means you receive your Medicare coverage through the private company instead of directly through the government.
The Private Fee-for-Service Model
The operational mechanics of a Private Fee-for-Service plan center on the plan administrator’s role in determining payment rates for medical services. The private insurance company sets the fixed amount it will pay doctors, hospitals, and other healthcare providers for each specific service. This payment schedule is not tied to a provider’s network status, but rather to the service itself. For certain services, such as chemotherapy, dialysis, and skilled nursing facility care, the plan cannot charge beneficiaries more than Original Medicare would.
The plan’s payment rates often mirror or exceed those paid by Original Medicare to ensure broader provider acceptance. The plan must make its specific payment terms and conditions readily available to all providers. This model allows beneficiaries to see specialists without needing a formal referral, which differs from some managed care plans.
Accessing Care and Provider Agreements
The most distinctive feature of a PFFS plan is that accessing care relies on a provider agreeing to the plan’s specific payment terms. Unlike a standard network where a provider contracts to treat all members, a PFFS provider chooses whether to accept the plan’s terms on a visit-by-visit basis. A doctor may accept the PFFS plan for one service but decline it for another.
When seeking care, you must present your plan membership ID card, which provides the provider access to the plan’s payment terms. If a provider furnishes non-emergency services after being informed of the PFFS enrollment, they are considered a “deemed provider” and are legally bound by the plan’s terms for that visit. However, a provider is not obligated to treat PFFS members and can refuse the terms, requiring the patient to seek care elsewhere. The beneficiary is responsible for confirming the provider’s willingness to accept the plan before receiving non-emergency care. If a provider refuses the terms, the patient is responsible for the entire cost of the service.
PFFS Compared to Network-Based Medicare Plans
PFFS plans structurally differ from common network-based Medicare Advantage options, such as Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs). HMOs require members to use a specific network and typically require a primary care physician (PCP) and referrals. PFFS plans offer greater flexibility, generally not requiring a PCP or referrals, and allow members to see any Medicare-approved provider who agrees to their payment terms.
PPOs offer a middle ground, featuring a network of preferred providers while allowing members to see out-of-network providers for a higher cost. PFFS plans, in their purest form, rely on the provider’s individual acceptance of payment rates for each service, not an established network. This reliance on acceptance introduces uncertainty compared to contracted networks. Some PFFS plans now incorporate networks where providers agree to always treat plan members, reducing this uncertainty.
Understanding the Financial Commitments
Enrollment in a Private Fee-for-Service plan requires beneficiaries to continue paying their Medicare Part B premium. The PFFS plan may also charge an additional monthly premium. Costs for services are managed through deductibles, copayments, and coinsurance defined by the plan.
The cost-sharing structure often differs based on provider acceptance. If you see a provider who agrees to the plan’s terms, you pay the plan’s set deductible, copayment, or coinsurance. If the plan has a network and you use an out-of-network provider who accepts the terms, your cost-sharing may be higher. Like all Medicare Advantage plans, PFFS plans must include an annual limit on out-of-pocket spending. Once this maximum is reached, the plan pays 100% of the cost for covered services for the remainder of the year.