CMS Pub. 100-16, ch. 1, § 20.4

All PFFS plans must cover all Part A and Part B original Medicare services whether or

not the PFFS plan has a full network of contracted providers. If the PFFS plan is not in a

network area, and does not have a full network of contracted providers, it must pay for

covered services furnished to enrollees by providers with whom they do not have written

contracts by paying at least the original Medicare rate (Section 1852(d)(4) of the Act and

42 CFR 422.114(a)(2)).

PFFS plans may differ in their network requirements. For a given contract year, a

network area is any area that the Secretary determines to have “at least 2 network-based

plans” (Section 1852(d)(5)(B) of the Act). CMS annually announces which counties are

network areas in the Advance Notice. Effective 2011, a PFFS plan operating in a

network area must meet Medicare Advantage network adequacy criteria consistent with

the CMS network management module by having a full network. This means the PFFS

plan must have written contracts with a sufficient number and range of providers to

provide coverage for all Part A and Part B original Medicare services. Similarly, a PFFS

employer/union plan that has waivers under section 1857(i) of the Act must operate as a

full network plan (irrespective of its service area) (42 CFR 422.114(a)(3) and (4)).

PFFS plans operating in non-network areas may choose to meet network adequacy

criteria for original Medicare services by having full networks, or they may choose to

meet network adequacy criteria by stating in their terms and conditions of payment that

they will pay providers with whom the plan does not have a written contract at least the

original Medicare rate.

PFFS plans may offer qualified Part D. If the PFFS plan chooses not to cover Part D, the

PFFS plan enrollees may simultaneously enroll in a PDP (42 CFR 422.4(c)(1), (3)).

PFFS plans are further discussed in chapter 16a.