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Fee-for-service joins the Medicare+Choice product line.

Despite hopes that providers would benefit from being able to participate in Medicare + Choice plans such as provider service organizations (PSOs) and coordinated care plans, providers have not realized many of these benefits. Private fee-for-service (FFS) Medicare + Choice plans, the first of which was approved by HCFA in May, allow Medicare beneficiaries to choose their hospitals and physicians and allow providers to be reimbursed on a FFS basis. The FFS option is particularly appealing for providers in rural markets. Financial managers for providers should identify the model that best meets the financial and operational needs of their marketplace.