In-Network Care:
Health insurance plans contract with providers to create a network. When doctors, pharmacies, labs, hospitals, and other healthcare professionals enter such a contract, they negotiate rates with the insurance company to serve the company’s members. This type of contract is referred to as 'being in-network.' This is beneficial for all parties: providers get access to the plan’s members, insurance companies pay less to contracted providers, and patients get lower prices for services from the plan's providers.
If the service is in-network, the provider must accept the insurance company’s negotiated rate as payment in full. You may still owe payment to the provider, depending on whether you have met your deductible yet. If you have met your deductible, you should not have to pay for services for the rest of the year. If you haven't, the payment will never be for more than what the insurance company allows.
Out-of-Network Care:
If you access care outside of your plan’s network, also known as ‘out-of-network (OON),’ you will lose the health plan negotiated discount. If your health plan makes a payment, you will have to make up the difference between what the health plan pays and what the provider billed. This practice is called balance billing. Some insurance plans may provide some payment to OON providers. However, because the provider is not obligated to accept your plan’s rates for reimbursement, balance billing can still apply.
Accessing care from OON providers carries a financial risk that can be difficult to quantify. Some consumers choose to use OON providers because their preferred provider(s) do not contract with their insurance plan. Individuals with Health Savings Account balances can use those accounts to pay for any balance bills they receive. Otherwise, it is also possible to negotiate for a lower cash rate at the time of service with an OON provider.
Plans that are more likely to have OON benefits are called PPOs. Even then, your cost-sharing expenses (deductible, copays) may be significantly higher when you access OON care. To best optimize your healthcare costs, use providers that are in-network for your health insurance plan.
Check Your Coverage:
The best way to understand your in- or out-of-network benefits is to check your health insurance summary of benefits. You can go to your insurance plan’s online provider search tools, call your insurer’s customer service line, or ask your provider’s office to confirm if a provider participates with your plan. Remember to check the network status of ancillary medical services your doctor might use. This includes labs for bloodwork, physical therapists, labs, and pharmacies.
Learn More:
What You Need to Know Before Getting Out-Of-Network Care | Verywell Health
What You Should Know About Provider Networks | Center of Medicare and Medicaid Services (CMS)
Last Reviewed June 17th, 2024