Home Business Insights & Advice Understanding PFFS plans: A comprehensive guide to private fee-for-service health insurance

Understanding PFFS plans: A comprehensive guide to private fee-for-service health insurance

by Sarah Dunsby
15th Sep 23 3:47 pm

Although it sounds like a standard army abbreviation, not a lot of people know what a Private Fee-for-Service plan is. So, what is PFFS? It is a form of Medicare Advantage plan provided by non-government insurers. Participants can use the services of any doctor or hospital in the network who agrees to accept the plan’s payment terms. PFFS plans differ from Original Medicare in that they are offered by private insurers, and the plan determines how much it pays providers and how much you must pay for services.

With a PFFS plan, you can generally see any provider you want without needing referrals or choosing from a network. However, the provider must agree to treat you and accept the plan’s terms and conditions of payment. This gives you more flexibility than an HMO or PPO but less predictability in terms of costs.

How do PFFS plans work?

PFFS plans pay doctors and hospitals on a fee-for-service basis, meaning providers are paid separately for each service performed. But unlike Original Medicare, the plan determines the payment amount, not Medicare. This means providers can choose whether to accept the PFFS plan’s terms and conditions each time you receive care.

You must show your plan membership card when you visit a provider. The provider bills the plan directly, and you pay any copays or coinsurance required by your plan. PFFS plans have more flexibility in setting copays and deductibles than Original Medicare.

Comparing PFFS plans to other medicare plans

PFFS plans differ from other Medicare Advantage plans in a few key ways:

  • You can generally see any provider who accepts Medicare. Other MA plans have provider networks you must use.
  • You don’t need referrals to see specialists. HMOs usually require referrals.
  • You don’t have to choose a primary care doctor to coordinate care. HMOs require members to select a PCP.
  • Premiums, copays, and deductibles may be higher than Original Medicare. Costs in MA plans vary.
  • Prescription drug coverage is usually included. You must enroll separately for Part D with Original Medicare.

Pros and cons of PFFS plans


  • Freedom to choose any Medicare provider nationwide.
  • Typically, it includes prescription drug coverage.
  • Don’t require referrals to see specialists.


  • Providers can refuse to accept the plan’s payment terms.
  • Copays and deductibles may be higher than Original Medicare.
  • Plan availability and benefits can vary by location.
  • Lack of care coordination compared to HMOs.

Who should consider a PFFS plan?

PFFS plans may make sense if you want flexibility in choosing providers and don’t need much care coordination. They offer more freedom than network-based MA plans if you travel often or split time between residences. Just be aware that providers can refuse the plan’s payment terms, and out-of-pocket costs may be higher.

Finding the right PFFS plan

If you’re considering a PFFS plan, shop around and compare plans in your area. Look at premiums, deductibles, copays, drug coverage, and extra benefits they offer. Also, check if your preferred doctors and hospitals accept the plan. PFFS plans give you flexibility, but it’s important to understand the potential costs and confirm provider participation first.

The bottom line

PFFS plans offer Medicare beneficiaries more provider choice compared to other Medicare Advantage plans. But there is less cost predictability, and providers can opt out of treating you. Weigh the pros and cons carefully based on your healthcare needs and budget to decide if this plan is a good fit.

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