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What Is a Medicare PFFS Plan?

Did you know there are several types of Medicare Advantage plans? Each works a bit differently, and you should know how to use it properly to get the most out of your benefits. Today, we'll take a look at one kind of MA plan called a Private Fee-for-Service (PFFS) plan.

How Do PFFS Plans Work?

PFFS stands for "Private Fee-for-Service." A PFFS plan is one kind of Medicare Advantage plan, otherwise known as Medicare Part C. Private insurance carriers offer these plans, all of which must be approved and monitored by the federal Medicare program.

In essence, a Medicare Advantage plan takes the place of Original Medicare (Parts A and B). Instead of your medical claims going to the government, they go directly to the private insurance company. Every MA plan, including the PFFS option, must offer at least as many benefits as Original Medicare. However, even though the federal program will no longer pay for claims, you are still responsible for your Part B monthly premium.

Many Medicare Advantage plans require their members to receive care from in-network providers. Going outside their network of doctors results in higher cost-sharing amounts or no coverage at all. PFFS plans do not require their members to see only in-network healthcare providers. Instead, they can choose to see any provider or facility that agrees to accept the plan's payment terms.

PFFS plans determine how much to pay providers who are willing to accept the plan. They also determine how much the member pays for services. Providers can choose not to accept some of the rates set by the plan and can instead still choose to bill at a higher rate. In addition, since there are no binding contracts, they can agree to stop accepting the plan at any time. This makes it difficult for beneficiaries to know where they can use the plan.

woman with raised hand asking question about Medicare PFFS plansWhat Do Medicare PFFS Plans Cover?

PFFS plans offer coverage for all the same services that Medicare Parts A and B provide.

Part A is your inpatient hospital insurance. Think of it as your "room and board" for inpatient hospital stays. It offers coverage for inpatient hospital care, skilled nursing facility care, hospice, and home health care.

Part B is your outpatient medical insurance. It covers all medically necessary services and preventive care. For example, it covers doctor's visits, ambulance services, durable medical equipment (DME), lab tests, radiology, and preventive exams and screenings.

While Parts A and B provide great benefits, they will only pay about 80% of the covered services. In most cases, the Private Fee-for-Service plan pays more than 80%, leaving beneficiaries with fewer out-of-pocket costs.

Like other Medicare Advantage plans, PFFS plans may offer additional benefits for dental care, vision, and hearing services. These are not included in Original Medicare.

Some PFFS plans offer prescription drug coverage, while others do not. If a plan does have drug coverage, there will be a drug formulary associated with the plan. Therefore, knowing your current prescriptions is essential when picking a PFFS plan. If the PFFS plan does not offer drug coverage, you may enroll in a stand-alone Part D plan. Part D policies offer prescription drug coverage only. Either way, it is essential you have drug coverage to avoid late-enrollment penalties in the future.

Advantages and Disadvantages of PFFS Plans

Let's recap! When it comes to Medicare Advantage plan options, PFFS plans are not as popular as the other choices, like PPO (Preferred Provider Organization) or HMO (Health Maintenance Organization) plans. However, not everyone has access to a wide variety of options.


  • Not required to designate a primary care physician (PCP).
  • No referrals for specialists.
  • Maximum out-of-pocket amounts limit member cost-sharing responsibility.


  • Providers can choose to quit accepting the plan at any time.
  • Providers can choose to charge over the Medicare-approved amount for services.
  • Less extra benefits than most other Medicare Advantage options.

If you are considering enrolling in Medicare Advantage, it's important that you understand how each kind of plan works so you can maximize your benefits. Chat with one of the independent agents at Local Medicare Specialists to learn more about your Medicare coverage!

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