Medicare Advantage Private-Fee-For-Service plans (PFFS) are a hot topic among advocates, beneficiaries and physicians throughout the country. While these plans may work well for some, California Health Advocates and numerous other advocates are hearing of some serious challenges. In California alone, many beneficiaries given misleading or false information have enrolled in PFFS plans only to find that their doctors, hospitals, and other medical providers do not accept these plans. Advocates are receiving panicked calls from such clients. Much of this situation results from misleading marketing materials, and aggressive, in some cases abusive, marketing practices of agents and brokers selling PFFS plans. As a recent policy brief, After the Goldrush: the Marketing of Medicare Advantage and Part D Plans, by California Health Advocates and the Medicare Rights Center, investigates this situation in detail, this article focuses specifically on the impact of PFFS plans and this misleading marketing on physicians. Following a brief description of PFFS plans, types of provider contracts and how they work, the article discusses some key concerns and questions physicians have regarding PFFS plans and important informational resources.
Overview of Private-Fee-For-Service Plans
Unlike Medicare HMOs, PFFS plans do not necessarily limit their enrollees to using a set network of doctors or hospitals. While some plans may establish a network, in general, enrollees can go to any Medicare provider as long as that provider accepts the PFFS plan’s fees and terms. Providers that accept these plans must bill the plan instead of Medicare, agree to the plan’s payment amounts, and may not charge enrollees more than the cost-sharing amounts that are permitted under the plan.
Because some PFFS plans can potentially pay providers less than the Medicare rate for services (if the plan can show that it has an “adequate network” of direct contracting providers), and some providers have decided to only see people in Original Medicare (and not in Medicare Advantage), it appears that a significant number of doctors and hospitals are not accepting patients enrolled in these PFFS plans. Yet even so, because of the way the system is set up, some of these providers have unknowingly found themselves to be in a ‘deemed’ contract with a PFFS plan. This somewhat ambiguous process for becoming a contracted provider with MA PFFS plans represents a new situation for physicians, hospitals and other medical providers alike. Below is a brief description of the PFFS plans’ three types of providers: direct-contracting; deemed-contracting; and non-contracting.
- Direct-contracting – These providers have signed a contract with a PFFS plan, and as mentioned above, are required to accept the plan’s payment amounts, and may charge enrollees no more than the cost-sharing amounts that are permitted under the plan.
- Deemed-contracting – These providers do not have a signed contract with a PFFS plan and do not need to agree affirmatively to accept a PFFS plan’s terms and conditions before being considered a “deemed” provider. A provider is “deemed” if the following three conditions are met:
- The service provided is covered under the PFFS plan and the provider is a Medicare provider.
- The provider is aware in advance (before providing the services) that the individual is enrolled in a PFFS plan. A provider can be informed of the patient’s enrollment through the patient’s enrollment card, or another document from the patient, the Centers for Medicare and Medicaid Services (CMS), a Medicare intermediary/carrier, or the PFFS plan itself; and
- The provider has reasonable access to the plan’s terms and conditions of participation, including provider notice and appeal rights. The Federal government defines “reasonable access” to this information as simply giving physicians access to the plan’s phone, fax, email, and website. Obtaining this information is the provider’s responsibility; whether or not s/he actually looks at this information and agrees to it before giving services does not matter.
As mentioned, a deemed provider is required to accept the plan’s payment amounts, and, similar to a contracted provider, may charge enrollees no more than the cost-sharing amounts that are permitted under the plan.
Note: Being a “deemed” provider for one patient does not mean the provider is “deemed” for all her/his patients in a PFFS plan. Instead, a provider is considered “deemed” per patient, per episode. Yet, once a physician is “deemed” for one patient in a given plan, the physician is likely to be deemed to understand the plan’s payment terms for all future patients in that plan. Therefore, the only way that a physician would not be deemed for every other patient enrolled in that plan to which s/he provides services is if the patient failed to present a current enrollment card.
- Non-contracting – These providers do not have a direct contract with the PFFS plan and are not deemed. They must be paid what they would have received from Original Medicare and must accept that payment as payment in full. A couple examples of non-contracting providers include:
- A provider who provides care in an emergency to an unconscious enrollee and did not know prior to furnishing services that the enrollee belonged to a PFFS plan.
- A provider who, prior to furnishing services, did not have reasonable access to the PFFS plan’s terms and conditions of participation.
Physician concerns, considerations, and resources
A few primary concerns for physicians in contracting directly or having a ‘deemed’ contract with PFFS plans as discussed in a California Medical Association December 2006 Legal Counsel document include:
- Losing the benefit of state law managed care reform laws;
- Depending upon whether the plan has an adequate network or the terms and conditions of a plan’s contract, losing the benefit of having the Medicare fee schedule and its associated payment rates; and
- Bearing the burden of health plan obligations, such as having to provide language assistance to people with limited English proficiency without extra funding from the plan.
In addition, many plans contain “all products/affiliates clauses” that physicians must be aware of. Plans with an “all products” policy require both direct and deemed contracted physicians to also join the plans’ other current and future products, including their HMOs, Medicare and workers compensation products. It is unclear right now whether the “all products” clause applies to PFFS plans.
CMA has serious concerns as to whether or not such contracts are “fair and reasonable under California law and is investigating this issue.
Physicians and other advocates seeking more information on these “all product” clauses including protections pursuant the RICO Settlements, can read CMA ON-CALL document #1075, “All Products/Affiliates Clauses.” This document is free to CMA members and costs $22 for non-members. CMA also has a Managed Care Toolkit with a section called “Managed Care Contracts Deciphered – The Physicians’ Guide to Their Rights and Obligations” that is available at a minimal cost to CMA members. This toolkit identifies potentially problematic provisions in managed care contracts and laws that relate to the “all product” clauses, and offers alternative contract language to consider.
In general, physicians who are engaged in any managed care contracting must be alert to the following issues in the contracting process:
- Whether or not the contract contains an “all products clause” and whether that clause extends to plans offering benefits to Medicare beneficiaries;
- Whether and in what format the plan will notify physicians of the existence of these other products;
- Whether and in what format the plan will notify physicians of any Medicare patients enrolled in these products;
- What the payment terms of any Medicare plans are, as compared to Original Medicare; and
- Whether physicians have the ability to “opt out” of these products.
Any physicians who feel they are being coerced into a plan’s product under unfair circumstances can contact CMA’s Health Law Information Specialists at (415) 882-5144 so that they can follow up with the Legislature and regulators as appropriate.
Steps to minimize effects of PFFS plans on doctors and patients
Physicians who do not want to accept PFFS plans and are concerned about minimizing the effects of these plans on themselves and their patients who, if the physician decides not to participate in PFFS plans, will have to find a new doctor, can take the following suggested steps recommended by CMA:
- Check out the plans in their area. Doctors can look at the terms and conditions of the plans operating in their area; there may be some that will reimburse them at acceptable levels. They can search which and what type of plans are in their area on the Medicare website. Physicians must make sure to evaluate both the fee schedule and payment rules, as PFFS plans are free to impose claims edits or impose other payment rules that may significantly reduce the payment they will receive. (Note: Patients who are covered by Medicare Private Fee-for-Service plans may seek care outside the coverage area of the plan and physicians in those outside areas could still be considered “deemed” contractors, so knowing which plans are in the physician’s practice area does not preclude the physician from being “deemed” to participate in other Medicare Private Fee-For-Service plans.)
- Train their office staff. Doctors can make sure their staff understands which PFFS plans they do and do not accept. This way patients enrolled in those PFFS plans that they do not accept can be notified before they are given an appointment.
- Notify their patients. If a doctor chooses not to accept a PFFS plan, s/he must notify her patients that she won’t be able to treat them unless they switch to a different plan or return to Original Medicare.
- Stay informed on developments in the Federal legislature regarding this issue.
The aggressive, and at times abusive, marketing tactics of agents selling PFFS plans and the lack of plan sponsor oversight, the resulting confusion for beneficiaries as to whether or not they can continue seeing their medical providers, and the confusion of physicians in becoming a “deemed” provider without affirmatively signing/agreeing to a contract, all point to some of the primary concerns regarding Medicare Advantage’s PFFS plans. Indeed, some advocates question for whose benefit these plans were created. The new Medicare Advantage enrollment period established in December 2006 that seems to favor PFFS plans only strengthens this questioning. [Note: This new enrollment period allows individuals in the original, fee-for-service Medicare program one opportunity during the year to enroll in a Medicare Advantage-only plan (meaning an MA plan without Part D coverage). Because of the rules surrounding whether an MA enrollee can seek outside Part D coverage depending upon the type of MA plan s/he is enrolled in, this new enrollment period appears to primarily benefit the sponsors of MA Private Fee-for-Service (PFFS) plans, allowing them to market to beneficiaries in original Medicare year round.]
California Health Advocates is interested in hearing about the experiences of beneficiaries and physicians regarding challenges with these PFFS plans. If you and/or your clients have stories to share, please contact Bonnie Burns (firstname.lastname@example.org ) or David Lipschutz. See the California Health Advocates/MRC policy brief, After the Goldrush: the Marketing of Medicare Advantage and Part D Plans, for more information.