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Comparing Medicare Advantage PFFS, PPO, and HMO Plans

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Medicare Private-Fee-for-Service (PFFS), Health Maintenance Organization (HMO), and Preferred Provider Organization (PPO) plans are all different types of Medicare Advantage plans. Medicare Advantage plans are another way to receive your Original Medicare benefits through private insurance companies. All Medicare Advantage plans must offer at least the same level of coverage as Original Medicare. These plans may also offer additional benefits, such as vision, dental, or prescription drug coverage.
Learn the differences in cost and coverage between Medicare PFFS, HMO, and PPO plans.
Medicare PFFS (Private Fee-for-Service) plans
Medicare PFFS plans differ in many ways from other Medicare Advantage plans. One significant difference is that the insurance company, not Medicare, determines how much it pays the provider and how much the beneficiary pays for a covered health service.
Medicare PFFS plans contract with all of the Medicare-participating providers that accept the plan’s payment terms. With a PFFS plan:
You don’t have to choose a primary care physician.
You don’t need a referral to see a specialist.
There is no guarantee a doctor will accept the plan’s payment terms or provide treatment for you, unless your doctor has an agreement with a PFFS network or you require emergency treatment. Non-network doctors and other providers can choose to accept a PFFS plan patient on a service-by-service, patient-by-patient basis. This means a provider can refuse to cover a particular service for a Medicare PFFS member, even if the patient was treated previously or another patient was given the same service. If you have a Medicare PFFS plan, you should confirm that your provider accepts your plan on every visit.
There may or may not be a provider network. If the plan has one, you can typically still go out-of-network if as the providers accept their plan’s payment terms and conditions. Always confirm this in advance because providers can change policies from visit to visit.
The plan must cover any service that’s considered medically necessary under Original Medicare.
You continue to pay the Part B premium, along with a separate premium for your Medicare Advantage PFFS plan.
Your costs in a PFFS plan
Under a Medicare Advantage PFFS plan, besides premium costs, you pay any cost-sharing expenses set by your plan (for example, copayments and coinsurance) at the time you receive the service. After that, the provider bills your plan for the remaining amount. Some Medicare PFFS plans allow “balance billing,” which lets providers charge up to 15% over what the plan pays for a covered service. In this case, you pay the remaining balance or the difference between what the provider charges and the plan’s reimbursement.
Some Medicare Advantage Private Fee-for-Service plans include prescription drug coverage. If your Medicare PFFS plan doesn’t include prescription drugs and you need this coverage, you can stay with the plan and sign up for a Medicare Part D prescription drug plan during the Annual Election Period (AEP), which takes place from October 15 to December 7 every year. You can also switch to a different Medicare Advantage plan during this time.

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