A Basic Explanation

Your health plan has a list of doctors, facilities, and other providers who are contracted to offer healthcare services to you at an agreed-upon cost. This is your provider network. All providers and facilities on your plan’s list are considered in-network. Those not included on the list are considered out-of-network.

Health insurance companies want you to stay in-network for two reasons:

  • All providers in the network have to meet their quality standards.
  • In-network care is less expensive for both you and the insurance carrier.

Expert Advice About Provider Networks

No one likes surprises, especially in the form of huge medical bills. That’s why it’s so important to make sure any medical care you receive comes from a doctor or facility that’s part of your network.

Staying in-network helps you avoid unexpected charges since providers must accept their agreed-upon rate, including any payment from you, as payment in full. They aren’t allowed to charge any additional fees — a practice called balanced billing — or they’ll be in violation of their contract with your health insurance company.

Most of your covered medical expenses will get billed directly to your insurer, and once you’ve met your deductible, you’ll only be responsible for a copay or the agreed-upon amount of coinsurance until you reach your out-of-pocket max.

Now, out-of-network providers are a different story. They’re likely to send a bill for the entire cost of your care. Some may even require you to pay their entire fee up front before filing a claim with your insurance company. (In those cases you may only be reimbursed for a portion of the cost. Often, you’ll be on the hook for the entire amount.) Since out-of-network providers don’t have to stick to negotiated rates, their fees can be astronomical.

What else you need to know

1. You’ll be much happier (i.e., you’ll hang on to more of your hard-earned dollars) if your healthcare comes from in-network providers. When you’re choosing an insurance plan, check to see if your favorite doctors are in the plan’s network. And don’t just look at the list on a provider’s website; call each doctor’s office and ask if they take the specific plan you’re considering. (Doctors may accept some plans from a carrier but not others.) Keep in mind that networks change all the time. It’s a good idea to double-check your doctor’s network status before each visit to avoid being hit with unexpected out-of-network charges.

2. Most HMOs and many EPOs won’t accept any out-of-network claims for routine and non-emergency care. Even less-restrictive plans will sometimes reject an out-of-network claim or ask you to pay a significantly higher portion of the bill. In some states, an out-of-network provider can charge you whatever they choose, no matter what your health insurance company says is a reasonable and customary fee for that service.

3. In a true medical emergency, you can go to the emergency room without worrying about excessive out-of-network bills. The Affordable Care Act (ACA) guarantees your right to emergency care, even if it’s at an out-of-network hospital, without prior approval from your insurance carrier. You can’t be charged higher copays or coinsurance either. This is one of the 10 essential benefits covered by the ACA. Once you’re stable, you’ll be transferred to an in-network facility. (From that point on you’ll need to make sure all your providers are in-network. Even though this is not the sort of thing you want to worry about when you’re ill or injured, you really don’t want to be hit with a hefty bill for your care down the road.)