{
  "id": "RL34151",
  "type": "CRS Report",
  "typeId": "REPORTS",
  "number": "RL34151",
  "active": false,
  "source": "EveryCRSReport.com",
  "versions": [
    {
      "source": "EveryCRSReport.com",
      "id": 341565,
      "date": "2007-08-28",
      "retrieved": "2016-04-07T17:56:44.397029",
      "title": "Private Fee for Service (PFFS) Plans: How They Differ from Other Medicare Advantage Plans",
      "summary": "The Balanced Budget Act of 1997 (BBA, P.L. 105-33) established the Medicare+Choice program (now called Medicare Advantage), creating new options for the delivery of required benefits under Medicare. One of these options is a Private Fee-For-Service plan (PFFS), statutorily defined as a plan that (1) reimburses hospitals, physicians, and other providers on a fee-for-service basis without placing the provider at financial risk; (2) does not vary rates for a provider based on utilization relating to that provider; and (3) does not restrict the selection of providers from among those who are lawfully authorized to provide services and agree to accept the terms and conditions of payment established by the plan.\nRecently enrollment in PFFS plans has increased dramatically. In April 2003, there were 22,344 Medicare beneficiaries enrolled in one of the three available PFFS plans and one PFFS demonstration program. In April 2004, CMS had contracts with six PFFS organizations, with total enrollment of 31,550. By April 2007, CMS had 47 PFFS contracts and enrollment had jumped to 1.5 million, an increase of over 4,000% in three years. Approximately 18% of all Medicare Advantage beneficiaries are enrolled in a PFFS plan, and CBO projects this number to grow to approximately one-third of all MA enrollment by 2017. Plans operate in nearly all United States counties, giving every Medicare beneficiary access to at least one PFFS plan.\nThe majority of PFFS enrollees reside in urban areas. However, close to half of all rural beneficiaries participating in Medicare Advantage plans are enrolled in a PFFS plan. Unlike coordinated care plans, which tend to serve more densely populated areas, PFFS plans also choose to serve rural areas. PFFS plans may choose their service areas because (1) Medicare private plan payments are higher than the average cost of traditional Medicare in many of the counties a PFFS plan chooses to serve, and (2) PFFS plans are not required to form networks. Establishing and maintaining networks of providers can be costly, particularly in rural areas.\nCongressional attention to these plans has increased this past year for a number of reasons. First, enrollment in these plans has risen significantly. Second, payments to PFFS plans are typically higher than payments to other managed care plans and higher than expenditures in FFS Medicare. Third, the marketing and sales tactics of PFFS plans has raised concerns related to beneficiary protection. Lastly, PFFS plans are subject to different statutory requirements than other Medicare private plans.\nThis report examines the differences between PFFS plans and other Medicare private plans, specifically local health maintenance organizations (HMOs) and regional preferred provider plans (PPOs). Some of the reasons for growth in PFFS plans are also discussed, as well as advantages and disadvantages of these plans. The report concludes with a brief discussion surrounding current issues.",
      "type": "CRS Report",
      "typeId": "REPORTS",
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      "topics": []
    }
  ],
  "topics": [
    "Economic Policy"
  ]
}