What Does It Mean If Your Insurance Is Out of Network?

Understanding health insurance networks is important for managing healthcare costs. Knowing if a provider is “in-network” or “out-of-network” directly affects how much you pay for medical services. This allows for informed decisions about your healthcare.

Defining In-Network and Out-of-Network

A health insurance network is a group of healthcare providers contracted with an insurance company. These providers offer services to plan members at pre-negotiated rates, typically resulting in lower costs.

In-network providers are part of this contracted group, agreeing to specific payments for their services. Out-of-network providers do not have such an agreement. Their charges are not subject to negotiated rates, potentially leading to higher costs.

Different types of health insurance plans offer varying levels of flexibility regarding network access. Health Maintenance Organizations (HMOs) and Exclusive Provider Organizations (EPOs) generally limit coverage to in-network providers, except in emergencies. Preferred Provider Organizations (PPOs) and Point of Service (POS) plans offer more flexibility, allowing individuals to seek care from out-of-network providers, though usually at a higher cost.

Costs Associated with Out-of-Network Care

Receiving healthcare from an out-of-network provider can lead to substantially higher financial obligations. Out-of-network services often have a separate, elevated deductible. Even after meeting this, the coinsurance percentage (the portion of cost you pay) is typically greater for out-of-network care.

Out-of-network services usually contribute to a separate, higher out-of-pocket maximum. Expenses incurred for out-of-network care do not count towards the in-network out-of-pocket limit, and vice versa. An individual could potentially meet both their in-network and out-of-network maximums in the same year, doubling their financial burden.

Balance billing is a significant financial risk with out-of-network care. This occurs when a provider charges a patient for the difference between their full charge and the amount the insurance company pays. In-network providers agree to accept the insurer’s payment as full compensation, preventing them from balance billing. Out-of-network providers have no such agreement and can bill the patient for the remaining balance.

The No Surprises Act, effective January 1, 2022, provides protections against unexpected balance bills in specific situations. This federal law prohibits balance billing for emergency services, even if the facility or providers are out-of-network. It also protects individuals from balance billing for non-emergency services provided by out-of-network providers at an in-network hospital or ambulatory surgical center. In these protected scenarios, individuals are only responsible for the in-network cost-sharing amounts, such as copayments, coinsurance, or deductibles.

However, the No Surprises Act does not eliminate all instances of balance billing. It generally does not apply to non-emergency care provided at an out-of-network facility, or services from out-of-network providers in settings like a community health clinic or doctor’s office, unless specific notice and consent requirements are met. For certain non-emergency services, an out-of-network provider can still balance bill if they provide proper notice and obtain the patient’s consent at least 72 hours in advance of the appointment. This notice must include a good faith estimate of costs and explain that signing waives balance billing protections.

Steps Before Seeking Out-of-Network Care

Before receiving care from any healthcare provider, confirm their network status. You can verify if a provider is in-network by checking your insurer’s website, contacting the provider’s office directly, or calling your insurance company’s member services line. Relying solely on a provider’s statement or a directory can sometimes lead to inaccuracies, so confirming through multiple channels can help prevent unexpected costs.

Understanding the specifics of your insurance plan’s out-of-network benefits is important. Reviewing the Summary of Benefits and Coverage (SBC) document provided by your insurer can clarify details regarding out-of-network deductibles, coinsurance percentages, and out-of-pocket maximums. If the SBC does not provide sufficient detail, contacting your insurance company directly for clarification is advisable.

For certain out-of-network services, obtaining prior authorization from your insurer is often required. This is an approval from your health plan before you receive a specific service or prescription. Failing to secure prior authorization for a service that requires it, especially for out-of-network care, could result in the insurer denying coverage, leaving the individual responsible for the full cost.

Before receiving non-emergency care from an out-of-network provider, requesting a good faith estimate of the costs is important. Under the No Surprises Act, providers are generally required to give patients such an estimate upon request or when scheduling services. This estimate details the expected charges for the items and services, providing transparency before care is rendered.

In situations where out-of-network care is necessary, attempting to negotiate fees upfront with the provider can reduce costs. Some out-of-network providers may be willing to accept a lower cash price or an amount closer to what an in-network provider would charge. This negotiation can be effective if the provider understands the patient is prepared to pay directly or if they are seeking to avoid the complexities of out-of-network billing.

After Receiving Out-of-Network Care

After receiving out-of-network care, carefully review the Explanation of Benefits (EOB) document sent by your insurance company. This document outlines how your insurer processed the claim, detailing the total charges, the amount your plan paid, and the amount you are responsible for. Compare the EOB with any bills received from the provider to ensure accuracy and identify any discrepancies.

Identifying a balance bill is important, as it represents the amount a provider is charging beyond what your insurance paid. This bill typically arrives after the EOB and indicates the provider is seeking the difference between their original charge and the insurance payment. Recognizing this type of bill is the first step in determining whether it is legitimate or subject to protections under the No Surprises Act.

If a bill appears incorrect or violates protections, such as those provided by the No Surprises Act for emergency or certain in-network facility services, there are steps to dispute it. Initially, contact the provider’s billing department to clarify the charges and explain why you believe the bill is incorrect or prohibited. If the issue is not resolved, reach out to your insurance company for assistance, as they may be able to mediate or provide further guidance.

For unresolved disputes, particularly those related to the No Surprises Act, individuals can file a complaint with a state or federal agency. The Centers for Medicare & Medicaid Services (CMS) has a complaint process for violations of the No Surprises Act, and state insurance departments often handle complaints regarding billing practices. Documenting all communications and retaining copies of bills and EOBs is important for any dispute process.

Even after services have been rendered and a bill has been received, negotiating a lower payment with the provider remains a possibility. Providers may be open to discussing payment plans, offering discounts for prompt payment, or adjusting the bill to a more reasonable amount, especially if the full amount presents a financial hardship. If the out-of-network provider does not submit a claim to your insurer, you may need to self-submit the claim by obtaining an itemized bill and submitting it directly to your insurance company for reimbursement.