Medicare FFS, or Medicare Fee-For-Service, is the original government-run Medicare program that pays healthcare providers separately for each service they deliver to you. It consists of two parts: Part A for hospital care and Part B for doctor visits and outpatient services. Unlike Medicare Advantage plans offered by private insurers, FFS Medicare has no provider network, meaning you can see any doctor or hospital in the country that accepts Medicare.
How the Fee-For-Service Model Works
The “fee-for-service” label describes how providers get paid. Every time you receive a covered service, whether it’s a blood test, an office visit, or a surgery, Medicare pays your provider a set amount from its fee schedule for that specific service. This is the opposite of how Medicare Advantage works, where insurers receive a fixed monthly payment per enrollee regardless of how many services that person uses.
For you as a patient, the FFS model means two practical things. First, you generally don’t need prior authorization before getting a test or procedure. Second, you don’t need a referral to see a specialist. If you want to book an appointment with a cardiologist or orthopedic surgeon directly, you can.
What Part A and Part B Cover
Part A covers inpatient hospital stays, skilled nursing facility care, hospice, and some home health services. Most people don’t pay a monthly premium for Part A because they or a spouse paid Medicare taxes for at least 10 years while working. You do pay a deductible each time you’re admitted to the hospital.
Part B covers doctor visits, outpatient procedures, lab tests, preventive screenings, durable medical equipment, and mental health services. The standard Part B premium is $185 per month in 2025, though higher earners pay more based on income. After meeting a $257 annual deductible, you typically pay 20% of the Medicare-approved amount for each service, with Medicare covering the remaining 80%.
One important thing FFS Medicare does not include is prescription drug coverage. If you want help paying for medications, you need to enroll separately in a Medicare Part D plan, which is sold by private insurance companies approved by Medicare. Part D is optional, but enrolling late can result in a permanent penalty added to your premium.
Provider Access and Choice
This is where FFS Medicare has its biggest advantage. You can visit any doctor or hospital in the United States that accepts Medicare, with no network restrictions and no need to coordinate through a primary care physician first. That flexibility matters if you travel frequently, split time between two states, or want access to specialists at major medical centers far from home.
The pool of available providers is enormous. About 98% of non-pediatric physicians in the U.S. participate in the Medicare program. Participating providers agree to accept Medicare’s approved fee schedule amount as full payment, so your costs are predictable. A small number of physicians are “non-participating,” meaning they still see Medicare patients but can decide on a case-by-case basis whether to accept Medicare’s approved amount. In that situation, you could owe a bit more. Only about 1.2% of physicians have opted out of Medicare entirely. Those doctors can charge whatever they want, and Medicare won’t cover any portion of the bill.
Costs Without a Spending Cap
The most significant financial risk in FFS Medicare is that there is no annual out-of-pocket maximum. Medicare Advantage plans are required to cap your yearly spending, but Original Medicare is not. That 20% coinsurance under Part B has no ceiling, so a major illness or extended hospital stay can produce very large bills. If you have a $200,000 surgery, your 20% share is $40,000.
This is why many people on FFS Medicare purchase a Medigap policy, also called Medicare Supplement Insurance. Medigap plans are sold by private insurers and help cover the gaps: deductibles, coinsurance, and copayments that Original Medicare leaves you responsible for. Depending on the plan you choose, a Medigap policy can eliminate nearly all out-of-pocket costs beyond your monthly premiums. You must have both Part A and Part B to buy one.
The tradeoff is cost. Between your Part B premium, a Medigap premium, and a Part D drug plan premium, monthly expenses for well-covered FFS Medicare can add up. But for people who value unrestricted provider choice and dislike the prior authorization requirements common in Medicare Advantage, that cost is worth it.
How FFS Medicare Compares to Medicare Advantage
Medicare Advantage plans (Part C) are an alternative way to receive your Medicare benefits through a private insurer. They often bundle hospital, medical, drug, and sometimes dental or vision coverage into a single plan, frequently with lower premiums. But they come with restrictions that FFS Medicare does not have.
- Network limits: Medicare Advantage plans typically require you to use doctors and hospitals within a specific network. Going out of network for non-emergency care costs more or isn’t covered at all. FFS Medicare has no network.
- Referrals: Many Medicare Advantage plans require a referral from your primary care doctor before you can see a specialist. FFS Medicare does not.
- Prior authorization: Medicare Advantage plans frequently require plan approval before covering certain tests, procedures, or medications. FFS Medicare rarely requires prior authorization.
- Out-of-pocket cap: Medicare Advantage plans must include an annual spending limit. FFS Medicare has none unless you add a Medigap policy.
Neither option is universally better. FFS Medicare tends to work well for people who want maximum flexibility, already have doctors they want to keep, or need frequent specialist care. Medicare Advantage can be a better fit for people who want lower premiums, integrated drug coverage, and extra benefits like dental, as long as they’re comfortable using a defined provider network.
How to Enroll
Most people first become eligible for Medicare at age 65. Your Initial Enrollment Period lasts seven months: it starts three months before the month you turn 65 and ends three months after that month. If you’re already receiving Social Security benefits, you’ll be enrolled in Part A and Part B automatically. Otherwise, you sign up through the Social Security Administration.
FFS Medicare is the default. You’re placed in Original Medicare unless you actively choose a Medicare Advantage plan instead. If you want to add drug coverage, you enroll in a standalone Part D plan during the same enrollment window. If you want supplemental coverage, you shop for a Medigap policy from a private insurer, ideally during the six-month Medigap open enrollment period that starts the month you turn 65 and are enrolled in Part B, when insurers can’t deny you coverage or charge more for preexisting conditions.