How Medicare Advantage PFFS Plans Work

December 10, 2019

If you’re considering Medicare Advantage plans and want to understand the private fee-for-service (PFFS) option better, you’re in the right place. We’ll explain how this type of plan works and help you determine whether it makes sense for you.

What is a private fee-for-service (PFFS) plan?

A private fee-for-service (PFFS) plan is a type of Medicare Advantage plan. Medicare Advantage plans are sometimes known as Medicare Part C. Learn to speak the lingo of Medicare with this overview of Medicare’s various parts.

Like all Medicare Advantage plans, PFFS plans are offered by private insurance companies that have a contract with Medicare. Examples of private insurance companies are Blue Cross Blue Shield or Aetna.

Among Medicare Advantage plans, PFFS plans are less commonly used because most Medicare Advantage enrollees sign up for HMO or PPO plans. But that doesn’t mean a PFFS plan isn’t the right choice for you.

What are the pros and cons of private fee-for-service (PFFS) plans?

There is no perfect Medicare plan. But certain features may start to feel more (or less) important to you as you weigh the options. The following lists summarize a few advantages and disadvantages of PFFS plans.

Pros of PFFS Plans

  • You can see any Medicare-approved provider that accepts the terms of your PFFS plan and agrees to treat you.
  • You can see providers in any U.S. state or territory.
  • You don’t need to select a primary care physician, but you can.
  • You can visit a specialist without a referral.
  • Your out-of-pocket costs are capped each year.

Cons of PFFS Plans

  • They are not offered as widely as other types of Medicare Advantage plans (HMO or PPO).
  • The number of providers who accept the plan terms may be limited.
  • Providers can refuse to treat you at any time, as long as it’s not an emergency.

What does a private fee-for-service (PFFS) plan cover?

All Medicare Advantage plans, including PFFS plans, cover everything that traditional Medicare does. Some plans include additional benefits, such as vision, hearing, dental, and prescription drug coverage. If a plan doesn’t offer prescription drug coverage, you can sign up for it separately through Medicare Part D.

With all Medicare Advantage plans, Medicare pays the private insurance company a flat fee to administer your health care benefits. However, PFFS plans differ from other Medicare Advantage plans because the insurance company, not Medicare, determines how much it pays health care providers for each service you use. This is what the “fee-for-service” part of the plan name references.

The insurance company also sets the amount that you pay for services, known as your out-of-pocket costs. Fortunately, Medicare sets an upper limit on your total out-of-pocket costs each year ($6,700 in 2019), and some plans offer lower maximums. This is a key difference between PFFS plans and traditional Medicare, which has no annual cap on out-of-pocket costs.

How do I use a private fee-for-service (PFFS) plan?

If you join a PFFS plan, you will receive a benefit card. Use this card instead of your red, white, and blue Medicare card when you seek medical care. Keep the Medicare card, though, in case you decide to switch back to original Medicare at some point.

On a PFFS plan, you can visit any doctor or facility that meets these requirements:

  • Is approved by Medicare. You can confirm if a provider is Medicare approved on the homepage of, under “Find doctors, providers, hospitals, plans & suppliers.”
  • Accepts your plan’s payment terms. It’s not guaranteed that all providers will accept the terms, even if they’ve treated you before. You must reconfirm at every visit.
  • Agrees to treat you. Providers are required to care for you only in an emergency situation.

Some PFFS plans have a network of providers who will always accept you as a patient. You can visit an out-of-network provider if you choose (assuming they meet the qualifications above), but you will often pay more than you would at an in-network doctor or facility.

In a PFFS plan, you aren’t forced to select a primary care doctor, but you can if you’d like. You also don’t need a referral to see a specialist. Some people prefer not needing to communicate with a primary care doctor before you see a specialist—but it makes you more responsible for coordinating your own care.

Remember, you can change your Medicare plan every year during specific enrollment periods and when certain life events happen to you. Find out exactly when you can change your Medicare Advantage plan.

The bottom line: Who are PFFS plans best for?

PFFS plans are best for people who want the following:

  • A wider range of provider options. With a PFFS plan, you can see any health care provider as long as they accept Medicare and the payment terms of your plan.
  • Freedom to direct their own care. People on PFFS plans can see a specialist without having to visit a primary care physician first.

If you want a plan that likely includes coverage for prescription drugs, vision, dental, and hearing, plus the freedom to see a wide range of providers and the protection of an annual limit on your out-of-pocket costs, a Medicare Advantage PFFS plan may be the right choice for you.

Content on this site has not been reviewed or endorsed by the Centers for Medicare & Medicaid Services, the United States Government, any state Medicare agency, or any private insurance agency (collectively "Medicare System Providers"). is a DBA of Clear Link Technologies, LLC and is not affiliated with any Medicare System Providers.

Kathryn Anne Stewart
Written by
Kathryn Anne Stewart
Kathryn Anne Stewart is a freelance writer who covers the intersection of health and money. She has written for Johns Hopkins Medicine, Weight Watchers, Newsmax Magazine, Franklin Prosperity Report, and the National Hemophilia Foundation, often crafting clear explanations of complex topics. When she's away from her desk, you can find her reading a library book, watching stand-up comedy, or cycling with her husband.
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