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Private Fee-for-Service Plans

A Private Fee-For-Service (PFFS) plan is a Medicare Advantage (MA) health plan, offered by a State licensed risk bearing entity, which has a yearly contract with the Centers for Medicare & Medicaid Services (CMS) to provide beneficiaries with all their Medicare benefits, plus any additional benefits the company decides to provide. The PFFS plan:

• Pays providers on a fee-for-service basis without placing the providers at financial risk;

• Varies provider payment rates only based on the specialty or location of the provider or to increase utilization of certain preventive or screening services;

• Does not restrict members' choices among providers that are lawfully authorized to furnish services and accept the plan's terms and conditions of payment; and

• Does not permit the use of prior authorization or notification.

PFFS plans can offer full or partial networks of providers, or, in certain cases, they may not use a network of providers at all. No matter what kind of network a PFFS plan provides, its enrollees can see any provider who is eligible to receive payment from Medicare and agrees to accept the plan's terms and conditions of payment.

Chapter 16a (PFFS Plan) of the Medicare Managed Care Manual

On May 27, 2011, CMS released a new Chapter 16a of the Medicare Managed Care Manual, "Private Fee-for-Service (PFFS) Plans." Click below on the link entitled "Private Fee-for-Service (PFFS) Plans" to view the manual chapter. The chapter provides comprehensive guidance on requirements for MA plans offering PFFS plans, including information on member access to services, provider types and payment rules, and terms and conditions of payment.

PFFS-Related Resources

“Related Links Inside CMS” below includes useful resources for MA organizations offering PFFS plans. For information on the PFFS application process, click on “PFFS Application” below. In addition, the “MA Payment Guide for Out-of-Network Providers” serves as a general guide for MA organizations to determine the correct Original Medicare payment for out-of-network providers, in the event that they are required to pay a provider at least the Original Medicare rate for services furnished to a member. The “Beneficiary Guide to Private Fee-for-Service Plans” gives Medicare beneficiaries the tools to determine whether a PFFS plan is right for them. Finally, the link to Health Plans General Information gives visitors access to useful guidance on various areas related to the Medicare Advantage program.