State Society Offers Guide to Medicare Private Fee-for-Service Plans
Enrollment in Medicare Private Fee-for-Service (PFFS) plans has significantly increased over the past few years. In this brief guide, the Pennsylvania Medical Society answers a few common questions about these increasingly popular plans.
- What are PFFS plans?
- How do these plans work?
- What does it mean when a physician is "deemed" to have a contract?
- What is the payment for physicians?
- What companies offer PFFS plans in Pennsylvania?
- Where can I get more information?
1. What are PFFS plans?
In 2007, about 18 percent of those enrolled in Medicare Advantage Plans nationwide were covered by a PFFS plan. Enrollment has increased due to the start of Medicare Part D Prescription Drug benefits and because more beneficiaries have access to a plan in their region. In 2007, 99 percent of Medicare beneficiaries had access to at least one type of PFFS plan.
Congress conceived PFFS plans under the Medicare Plus Choice Program to provide:
- Medicare beneficiaries with a range of choices
- Managed care companies more product flexibility in rural communities, which had been largely underserved in the past
- Beneficiaries with an available “open-access” plan
The plans were refined in the Tax Relief and Health Act of 2006, which allowed Medicare beneficiaries enrolled in traditional fee-for-service Medicare plans a one-time opportunity to enroll in Medicare Advantage plans without drug benefits at any time during the year.
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2. How do these plans work?
PFFS plans operate similar to the original Medicare fee-for-service program, except that they allow unrestricted access to an open network of providers and physicians.
A beneficiary enrolled in a non-network PFFS plan can have access to any physician willing to accept both Medicare beneficiaries and the PFFS plan’s terms of payment. Physicians can choose whether or not to accept the PFFS plan and provide services to an enrollee at each physician visit.
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3. What does it mean when a physician is “deemed” to have a contract?
The patient must provide verification of enrollment at each visit. If these conditions are met and the physician treats the patient, the physician is “deemed” to have a contract with the PFFS plan for that visit.
Physician participation does not extend beyond that visit. A physician chooses to participate with the PFFS plan at each patient visit.
A patient and his or her physician are not permitted to privately contract for services if the physician chooses not to participate in the PFFS plan.
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4. What is the payment for physicians?
PFFS plans that are establishing networks have the ability to set payment levels with participating providers and physicians. If the plan has an open network, the PFFS must pay at least “Original” Medicare rates.
Companies offering these plans are not allowed to pay physicians on a capitated basis or any other method of payment that involves provider risk. The payment rates must be clearly defined for each item or service across all providers.
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5. What companies offer PFFS plans in Pennsylvania?
- Aetna
- American Progressive
- CIGNA
- Coventry
- Geisinger
- HealthMarkets
- Highmark
- Humana
- Independence Blue Cross
- Marquette National Life Insurance
- Mennonite Mutual Aid Association
- Pyramid Life
- Sterling Life Insurance
- Unicare Life & Health Insurance
- Unite Health Care
- UPMC Health Plan
- WellCare
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6. Where can I get more information?
Last Updated: 4/17/2008