Ron Elledge is a seasoned Medicare consultant and author of “Medicare Made Easy.” As a Medicare expert, he regularly consults beneficiaries on Medicare rules, regulations, and strategies.
Medicare Private Fee-For-Service (PFFS) plans are just one out of many different types of Medicare Advantage plans available once you become eligible for Medicare. Where Original Medicare offers the basics of hospital insurance under Part A and medical insurance under Part B, opting into one of the Medicare Advantage plans combines those two types of coverage into a single all-in-one package, and may potentially offer coverage for prescription drugs, vision, hearing, and dental. Medicare Advantage plans are available for additional premium payments and are offered by private insurance companies that have been approved by Medicare.
Medicare PFFS plan’s premiums are often higher than other types of Medicare Advantage plans, though they do limit their enrollee’s out-of-pocket expenses each year. Beneficiaries can choose any provider or facility that accepts their payment plan without concern as to whether they are part of the plan’s network or not. PFFS plans each establish their own fixed, pre-set rates for services within the limits established by CMS. Keep in mind that these plans have limited availability and are mainly available in rural parts of the country.
Medicare PFFS plans offer advantages and disadvantages, and it is important that you understand all of their ins and outs before making any decision. This guide has been put together to answer the most commonly asked questions that Medicare enrollees have about private fee for service plans.
What is a Medicare PFFS Plan?
Medicare PFFS plans aren’t as popular as HMO or PPO plans. This is likely due to their availability; there are less than 50 PFFS plans available in the U.S. They are purchased through private insurers that have contracted with Medicare to provide all of the coverage offered under Medicare Part A and Part B, as well as additional benefits. Each PFFS plan has its own schedule of what it will pay for medical services and how much the enrollee will pay, and as long as a provider agrees to accept the PFFS payment, enrollees are free to choose them. Enrollees are not required to select a primary care physician and their plans do not require referrals to see specialists. Many PFFS plans have an established network of providers that have already agreed to accept their payments, while providers who are not part of the network can choose to accept or not accept the coverage on a per service basis.
Medicare PFFS plans cover everything that Medicare Part A and Part B do, including doctors’ visits and preventive care, hospital stays and emergency room visits, short-term rehabilitation stays, medical equipment, ambulance rides, and emergency room visits. As Medicare Advantage plans they may also offer additional benefits such as prescription plan coverage, dental, vision, and hearing care. If a Medicare PFFS plan doesn’t offer prescription plan coverage, unlike HMO and PPO plans, enrollees are permitted to purchase a separate Medicare Part D plan.
Advantages of a Medicare PFFS Plan
Because many Medicare PFFS plans have no formal network, they provide their enrollees with the greatest degree of flexibility in choosing their healthcare providers. As long as a physician or facility is Medicare approved and willing to accept the payment plan offered by the individual Medicare PFFS plan for the service needed, the enrollee is free to use them. Additionally, enrollees who choose Medicare PFFS plans do not need to select a primary care physician or get referrals to see specialists.
Many Medicare PFFS plans offer prescription drug coverage, but if you choose one that doesn’t offer this option you are free to purchase a separate Medicare Part D plan. As a Medicare Advantage plan, all enrollees in Medicare PFFS plans have a maximum amount that they will pay out-of-pocket. Finally, though providers may choose not to provide services based on your Medicare PFFS plan’s fee structure, they are always required to provide treatment for a medical emergency.
Disadvantages of a Medicare PFFS Plan
Though Medicare PFFS plans offer their enrollees the freedom to choose their own physician and facilities, that flexibility usually comes at a higher monthly premium, and there is no limit to the copayments that a PFFS can charge. Additionally, only providers that have agreed to be part of an individual PFFS plan’s network are certain to accept its payments. This means that enrollees will need to confirm that a provider accepts their plan’s fee structure for each specific service or risk having to pay the provider’s fee themselves.
Medicare PFFS plans may not be available in your area, and physicians and facilities may choose to accept the Medicare PFFS plan’s payment for some services and not for others. Adding to the overall costs of a Medicare PFFS plan, out-of-network doctors that do accept their payment plan are permitted to charge up to 15 percent above the plan’s payment for services.
Who is eligible for a Medicare PFFS Plan?
Anyone who is enrolled in Original Medicare Parts A and B is eligible for a Medicare PFFS plan as long as one is available in their area. Those who have been diagnosed with End-Stage Renal Disease are eligible for Medicare, but are not able to sign up for a Medicare PFFS plan.
How much does a Medicare PFFS Plan cost?
Medicare beneficiaries who choose a Medicare PFFS plan can expect to pay the plan’s monthly premium in addition to their monthly Medicare Part B premium. Additionally, they will be asked to pay whatever copayment or coinsurance amount the plan’s schedule of fees dictates for the particular service that they need. That copayment can be as much as 15 percent above the plan’s approved cost of service.
How do I enroll in a Medicare PFFS Plan?
Enrollment in a Medicare PFFS plan is a time-sensitive process. Though those who are newly eligible for Medicare have a seven-month window during which they can enroll, the window of opportunity is narrower for those who wish to make changes to their existing Medicare coverage.
- Those who are newly eligible for Medicare because they are about to turn 65 can sign up for Medicare PFFS starting three months before the month they turn 65 through three months after the month they turn 65.
- Those who are under the age of 65 and have a disability can sign up for a PFFS plan during the 21st through the 24th month of benefits with coverage beginning the first of the 25th month when their Medicare begins or for two months after it begins.
- Those who have been receiving disability payments and who turn 65 can enroll in a Medicare PFFS plan during the seven-month period that starts three months before the month they turn 65 through the third month after the month in which they turn 65.
- Those who have Medicare Part A coverage and who enrolled in Medicare Part B during the January 1st through March 31st General Enrollment Period can sign up for a Medicare PFFS plan between April 1st and June 30th.
- Anybody who is already enrolled in Original Medicare A and B can enroll in or switch to a different Medicare Advantage plan during the Annual Enrollment Period (AEP) between October 15th and December 7th with coverage beginning January 1st.
- Anybody who is already enrolled in a Medicare Advantage plan can switch to another Medicare Advantage plan during the Medicare Advantage Open Enrollment period from January 1st through March 31st with coverage beginning the first day of the following month.
Enrollment is most easily accomplished online.
Who should get a Medicare PFFS Plan?
Medicare PFFS plans represent a good choice for Medicare beneficiaries who are willing to pay more for a plan that may include coverage for vision, dental, and hearing benefits as well as prescription drugs while also providing the freedom to choose their own providers.