In-Network Versus Out-Of-Network Care

This is general information, not insurance, medical, legal or financial advice. Coverage rules vary by plan, insurer, employer, state and country. All dollar figures here are hypothetical.

What network status means

A health plan negotiates agreements with doctors, hospitals, labs and other providers. Those that sign are in-network, or “participating.” Those that do not are out-of-network, or “non-participating.” The same specialist can be in-network for one plan and out-of-network for another, which is why network status is a fact about the pairing of a provider and a plan, not about the provider alone.

Why costs are usually lower in-network

In-network providers agree to accept the plan’s contracted rate as payment for covered services, together with your cost-sharing. That contracted rate is generally the allowed amount. The provider typically cannot bill you for the difference between its full charge and the contracted rate for a covered service.

Out-of-network providers have no such agreement with your plan. Depending on the plan type, one of several things happens:

• The plan does not cover the care at all, apart from emergencies. This is common in HMO and EPO designs.
• The plan covers part of the care, usually with a separate deductible, a higher coinsurance percentage or both. This is common in PPO and POS designs.
• The plan pays according to its own method for deciding what is reasonable, which may be lower than the provider’s charge.

What may change when you go out of network

1. Coverage. Some plans cover no non-emergency out-of-network care.
2. Deductible. Out-of-network deductibles are often separate and higher. Amounts you pay toward one may not count toward the other.
3. Coinsurance. The percentage you pay is usually higher out-of-network.
4. Out-of-pocket maximum. Plans often have a separate out-of-network limit, and some have no limit at all for out-of-network costs. Amounts above the allowed amount frequently do not count toward the limit.
5. Balance billing. The provider may bill you for the gap between its charge and what the plan allowed, depending on local law. This topic is explained under balance billing.
6. Paperwork. You may have to pay up front and submit the claim yourself.
7. Authorization. Some plans require approval beforehand for out-of-network services, even when they cover them.

A hypothetical example

Imagine a hypothetical plan, a covered service with a billed charge of $1,000, and two cases. Assume the deductible has been met in both cases.

In-network. The contracted allowed amount is $600. Coinsurance is 20 percent. You pay 20 percent of $600, which is $120. The plan pays $480. The remaining $400 is written off by the provider.

Out-of-network. The plan’s allowed amount for this provider is $500, and coinsurance is 40 percent. You pay 40 percent of $500, which is $200. The plan pays $300. If the provider can bill the balance, you could also owe $1,000 minus $500, which is $500. Your total could then be $700.

The same service, with the same plan, costs $120 in one case and potentially $700 in the other. Real figures vary, and some situations are protected by law, but the pattern shows why the question of network status matters.

Situations where the rules can differ

• Emergencies. Many places have rules that require plans to cover emergency care at in-network cost-sharing regardless of the hospital. The details depend on where you live. See the discussion of emergency room coverage.
• In-network facility, out-of-network clinician. You might be treated at an in-network hospital but by a clinician, such as an anesthesiologist or assistant, who is not in the network. These situations are often at the heart of surprise billing, and some places have specific protections.
• Network changes. Providers join and leave networks during the year. A doctor in the directory last year may not be this year.
• Continuity of care. Some plans have transition rules for people in the middle of treatment when a provider leaves the network, but eligibility depends on the plan and place.
• Travel and moving. A national network may cover many areas, but not all, and local plans may be limited to a region.

How to check before you go

• Search the plan’s provider directory for the specific clinician and the specific facility, not just the practice name.
• Call the provider’s office and ask if they are in-network for your exact plan name, not just the insurer’s name.
• Call the plan and confirm, writing down the date, the name of the representative and any reference number.
• Ask about each part of the service, such as the surgeon, the facility, the lab and the anesthesia, since each can have a different status.
• Remember that directories can be out of date. A written confirmation is more reliable than a verbal one.

If you decide to go out of network

Sometimes it is worth it, for a specialty that nobody nearby offers or for a clinician you trust. In that case, you can ask the plan if a network exception is possible, ask the provider for a written estimate and ask whether they offer a self-pay price. Afterward, review the explanation of benefits and the bill carefully. If the amount you are asked to pay looks higher than expected, the first step is a call to the plan and the provider, followed by a claim appeal if it still seems wrong.