Out-of-network insurance refers to health care providers not covered by a health insurance plan. This means that the provider is not required to accept the plan’s negotiated rates, and patients may be charged more or the entire service cost. Depending on the plan, out-of-network services may not be covered.
Some health plans, such as HMOs and EPOs, do not reimburse out-of-network physicians at all (unless in emergency cases). Therefore, you, as the patient, will be responsible for the whole amount charged by your healthcare provider if they are not in your insurer’s network. Although other health plans may allow you to visit out-of-network doctors. You should anticipate higher out-of-pocket expenses than seeing an in-network provider.
How to know which Providers are Out-of-Network
Health insurance companies keep network directories that include all of the in-network medical providers. If a provider is not on the list, they will most likely be out-of-network. However, it is also a good idea to phone the provider directly and ask if they are in-network with your health plan.
It’s crucial to note that a given insurance provider will most likely offer multiple forms of coverage in your state, and the networks may differ from one type of coverage to the next. Employer-sponsored plans from an insurer might offer a broader network of providers than their individual or family coverage options.
So, if you’re phoning a healthcare provider’s office to ask if they accept your insurance plan, you’ll need to be more specific than simply saying you have “Anthem” or “Cigna,” because the healthcare provider may be in some networks for those insurers but not all of them.
Why does Out-of-Network Care Cost more?
If your plan doesn’t cover the full amount of your doctor’s bill, you could be liable for the outstanding balance. Many health insurance policies specify the maximum amount they will pay for out-of-network services. If the doctor or facility charges more than your plan is prepared to pay, you may be required to pay the difference in addition to your deductible, copay, and/or coinsurance. In-network doctors and facilities have agreed to charge you no more than the agreed-upon price.
When health insurers do not have a contract with out-of-network doctors and facilities, they have no control over the fees charged for treatments. Rates may be higher than the discounted in-network rate.
Copay is the amount you pay for covered health care at the time of service. When you visit an out-of-network doctor or facility, you will not be charged any copays. However, you are responsible for paying the coinsurance, or a percentage of the covered expenditures. This may be significantly greater than the in-network copay or coinsurance rate.
In-Network vs. Out-of-Network Costs
Even for routine care, out-of-network fees can rapidly accumulate. A serious illness or injury can result in additional expenses of thousands of dollars. Here’s an example of what a doctor might charge for surgery:
| When you select an out-of-network doctor | When you select an in-network doctor. |
| The doctor costs $15,000. | The doctor costs $15,000. |
| Your plan will cover $10,000. | Your plan will cover the contractual rate of $10,000. |
| The doctor will charge you for the $5,000 difference. | The doctor is not entitled to cost you for the difference. |
Drawbacks of using Out-of-network providers
- Employees may choose to use out-of-network providers for a variety of reasons, including personal preference and travel outside of the plan’s geographic territory. However, employing these providers has several drawbacks, including:
- Greater Costs: Businesses that provide insurance to their employees may incur greater costs if employees frequently choose to travel out of network. This could result in higher rates for the corporation and its employees in the long run.
- Administrative Burden: Processing claims for out-of-network care can be more difficult and time-consuming for insurance companies. This administrative burden may increase operational costs.
- Lower Employee Satisfaction: Employees who encounter greater out-of-pocket payments and balance billing when using out-of-network doctors may become unsatisfied with their insurance coverage and their employer’s benefits package.
Frequently Asked Questions?
What are networks in insurance?
A provider network consists of doctors, hospitals, and healthcare providers who have a contractual agreement with a plan to deliver medical services to members. These providers are referred to as ‘in-network’ or ‘network’ providers, while those without a contract are called ‘out-of-network’ providers.
What is the meaning of “out of network?
If a doctor or facility does not have a contract with your health plan, they are termed out-of-network and may charge you the full fee. It is frequently significantly greater than the in-network discounted cost.
What does coinsurance mean?
Coinsurance is the amount an insured person pays for a covered medical service, usually a percentage of the total cost after any deductible or copayment has been met. It’s expressed as a percentage. If you have a “30% coinsurance” policy, that means you are responsible for 30% of the medical bill.