Did you know that Medicare Advantage plans come in several different types? Each one operates slightly differently, and understanding how yours works is key to maximizing your benefits. Today, we’re going to explore a specific type of Medicare Advantage plan known as a Private Fee-for-Service (PFFS) plan.
How Do PFFS Plans Work?
PFFS stands for “Private Fee-for-Service,” a type of Medicare Advantage plan, also referred to as Medicare Part C. These plans are offered by private insurance companies, but they must be approved and regulated by the federal Medicare program.
Essentially, a Medicare Advantage plan replaces Original Medicare (Parts A and B), with your medical claims being handled by the private insurer rather than the government. Like all Medicare Advantage plans, PFFS plans are required to provide at least the same benefits as Original Medicare. While the federal government no longer pays your claims, you’ll still be responsible for your monthly Part B premium.
Many Medicare Advantage plans have networks of healthcare providers that members must use. Receiving care outside of this network often leads to higher out-of-pocket costs or even no coverage. However, PFFS plans work differently—there’s no network restriction. Members can visit any doctor or facility that agrees to the plan’s payment terms.
PFFS plans set their own rates for how much they’ll pay providers and how much the member will need to cover for services. Providers have the option to reject these rates or charge higher fees, as they’re not locked into long-term agreements with the plan. They can also stop accepting the plan’s terms at any time, which can make it challenging for beneficiaries to know which providers will accept their plan.
What Do Medicare PFFS Plans Cover?
PFFS plans provide coverage for all the same services as Medicare Parts A and B. Part A serves as your hospital insurance, covering inpatient hospital stays, skilled nursing facility care, hospice, and home health care. Essentially, it handles the “room and board” aspects of hospital stays. Part B is your outpatient medical insurance. It covers medically necessary services and preventive care, such as doctor visits, ambulance services, durable medical equipment (DME), lab tests, radiology, and various screenings and exams aimed at prevention.
Although Medicare Parts A and B offer valuable coverage, they typically only pay about 80% of approved services. In many cases, PFFS plans cover more than 80%, which can help reduce the out-of-pocket costs for beneficiaries.
Similar to other Medicare Advantage plans, PFFS plans may also include additional benefits not found in Original Medicare, such as dental, vision, and hearing services.
Some PFFS plans provide prescription drug coverage, while others do not. If the plan includes drug coverage, it will come with a specific formulary, so it’s important to check if your current medications are covered. If a PFFS plan lacks drug coverage, you have the option to enroll in a stand-alone Part D plan, which only covers prescription drugs. Ensuring you have drug coverage is crucial to avoid late enrollment penalties down the line.
Advantages and Disadvantages of PFFS Plans
Let’s summarize! While PFFS plans are not as frequently chosen as other Medicare Advantage options like PPO (Preferred Provider Organization) or HMO (Health Maintenance Organization) plans, they can still be a good fit for some people—especially if other choices are limited in their area.
Advantages
- No requirement to select a primary care physician (PCP).
- No need for specialist referrals.
- Maximum out-of-pocket limits to help manage cost-sharing.
Disadvantages
- Providers can stop accepting the plan at any time.
- Providers may charge more than the Medicare-approved rates for services.
- Fewer extra benefits compared to other Medicare Advantage options.
Shop Medicare Advantage Plans with Us
If you’re thinking about enrolling in a Medicare Advantage plan, it’s important to understand how each plan works to make the most of your benefits. Reach out to one of the independent agents at Carolina Senior Benefits to explore your Medicare coverage options!
