Definition of an Out-of-Network Provider

There May be Times Where an Out-of-Network Provider is Necessary

A patient presents a health insurance card.
A patient presents a health insurance card. Petrol/Getty Images

An out-of-network provider is one which has not contracted with your insurance company for reimbursement at a negotiated rate.

Some health plans, like HMOs and EPOs, do not reimburse out-of-network providers at all (except in emergency situations), which means that as the patient, you would be responsible for the full amount charged by your doctor if they're not in your insurer's network. Other health plans offer coverage for out-of-network providers, but your patient responsibility would be higher than it would be if you were seeing an in-network provider.

In-network Versus Out-of-network Providers: How Do They Differ?

An in-network provider is a doctor or hospital that has signed a contract with your insurance company, agreeing to accept the insurer's discounted rates. For example, the doctor might charge $160 for an office visit, but they've agreed to accept $120 as payment-in-full when a patient with XYZ insurance receives treatment (and they might have agreed to accept $110 as payment-in-full when a patient has ABC insurance). So if the patient has a $30 copay, the insurer pays $90 and the doctor writes off the remaining $40, since it's above the network negotiated rate.

An out-of-netowork provider, on the other hand, doesn't have any contract or agreement with your insurance company (in most cases, they'll be in-network with other insurance plans, even though they're out-of-network with your insurance). So if they bill $160, they'll expect to collect the full $160. Your insurance plan might pay part of the bill, if the plan includes out-of-network coverage. But you'll be on the hook for whatever isn't covered by your insurance—which will be the full amount if your plan only covers in-network care.

Why Is My Doctor Not In My Insurer's Network?

Your doctor may not consider your insurer's negotiated rates to be adequate—this is a common reason for insurers to opt not to join particular networks.

But in some cases, the insurer prefers to keep the network relatively small, in order to have a stronger basis for negotiation with providers. If that's the case, it could be that your doctor would be willing to join the network, but the insurer doesn't have any network openings available for the services that your doctor provides.

Many states have implemented "any willing provider" laws, however, that prevent insurers from blocking providers from the network, as long as they're willing and able to meet the insurer's network requirements. States can impose "any willing provider" rules for health plans that are regulated by the state, but self-insured plans (which are typically used by very large insurers) are subject to federal regulation rather than state regulation, so the "any willing provider" rules don't apply to those plans.

How Do You Know Which Providers Are Out-of-network?

Health insurers maintain network directories that list all of the medical providers who are in-network. If a provider isn't on the list, they're generally going to be out-of-network. But it's also a good idea to call the provider directly and inquire about whether they're in-network with your insurance plan.

It's important to understand here that a particular insurance company will likely have different types of coverage available in your state, and the networks can vary from one type of coverage to another. For example, an insurer's employer-sponsored plans might use a more extensive network than their individual market plans. So if you're calling a doctor's office to see if they take your insurance plan, you'll need to be more specific than just saying you have "Anthem" or "Cigna," as it may be that the doctor is on some networks for those insurers but not all of them.

Reasons for Choosing Out-of-Network Health Care

Although it may initially cost you more money, there may be times when you might find it necessary, or even advisable, to use an out-of-network provider.

Sometimes you have no choice, or it just makes sense to choose a non-network healthcare provider. Below is a list of the scenarios in which you may be able to appeal for in-network coverage, or it may be automatically granted:

Emergencies: In an urgent situation, you must seek the closest available help. The Affordable Care Act requires insurers to cover emergency care as if it's in-network, regardless of whether the emergency care is obtained at an in-network or out-of-network facility. However, the out-of-network emergency room and physicians can still send you a balance bill, and the balance billing is not restricted by the ACA (although some states have restricted it). If it's not truly an emergency, your visit will not be processed as in-network treatment; you should go to a covered provider instead.

Specialized care: If you have a rare ailment for which no specialist is included in your plan, out-of-network care may be crucial.

Changing providers would jeopardize your health: If you're in the middle of treatment for serious or end-of-life issues, and your provider leaves the network, it may be in your best interest to continue that care by going out of network. You can appeal for continued in-network coverage, if only for a period of time or a set number of visits.

Out-of-town care: If you need medical care while away from home, you may have to go out of network, but some insurers will handle your visit to a non-participating provider as if it were in network. However, in-network providers may be available. If it's not an emergency, it's best to contact your insurer first to find out.

Proximity issues: The ACA requires insurers to maintain provider networks that are adequate based on the distance and time that members have to travel to reach a medical provider, but the guidelines in terms of what's adequate vary from one state to another. If you live in a rural area and there is no realistic access to an in-network provider in your area, your continued health may depend upon using a non-participating doctor. In these cases, you may be able to appeal to get coverage for an out-of-network provider in your area.

Natural disasters: Floods, widespread fires, hurricanes, and tornadoes can destroy medical facilities and force people to evacuate to other areas in which they must seek health care. Sometimes, these patients may be eligible for in-network rates as part of a declaration of emergency by the state or federal government.

The out-of-network provider can still send you a bill, even if your insurance covers some of the cost

It's important to note that even if your insurance company treats your out-of-network care as if it's in-network, federal law does not require the out-of-network provider to accept your insurance company's payment as payment in full.

For example, let's say your insurance company has a "reasonable and customary" rate of $500 for a certain procedure, and you've already met your in-network deductible. Then you end up in a situation where an out-of-network provider performs the procedure, but it's one of the scenarios described above and your insurer agrees to pay the $500. But if the out-of-network provider charges $800, they can still send you a bill for the other $300.

This is called balance billing, and it's generally legal if the provider isn't in your health plan's network.

Some states have tackled this issue for some scenarios, including Florida (out-of-network providers who work at in-network hospitals) and New York (emergency situations). But by and large, balance billing is still an issue when patients receive care outside their insurer's network.

Network Adequacy Regulations

The Affordable Care Act and related regulations have implemented rules that apply to plans sold in the health insurance exchanges. These plans are required to maintain adequate networks and up-to-date network directories that are readily available online. But in 2017, the Trump Administration began deferring to the states for network adequacy determinations, which weakened the enforcement of network adequacy standards. And in the years since ACA-compliant plans first became available, networks have narrowed in an effort to rein in health care costs. So for people buying coverage in the individual market, networks are generally smaller than they were in the past, making it essential for enrollees to double check the network of any plan they're considering, if they have a doctor they want to continue to see.

In the small group and large group markets, states also have the ability to review plan filings to ensure that the networks are adequate. But especially in the large group market, the employers tend to have considerable leverage when working with insurers to make sure that the plans they'll be offering to their employees have adequate provider networks.

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