What Is Out-of-Network Care?

Your costs can add up quickly if your doctor doesn’t have a contract with your health plan.

Out-of-network health care is when you see a doctor or visit a hospital that is not in your health insurance plan’s network. It is usually in your best financial interest to see a provider in network.

Your health insurance company negotiates contracts with your in-network healthcare providers, including doctors, specialists, labs for test results, radiology facilities, and pharmacies. The contracts are an agreement between your health plan and providers about how much the health plan will pay for services. Usually these payments are lower than what your provider normally charges. The contracts also include your share of costs, including copayments, coinsurance, and any deductible in your plan.

If you see a healthcare provider outside of your network, your costs are usually much higher. Providers outside of your network do not have contracts with your health plan, so they have not agreed to lower their rates to provide you with care. Your health plan may also charge you higher copay, deductible, and coinsurance fees.

Out-of-network costs also depend on your type of health plan.

You usually have to pay the full cost of any out-of-network care, except for emergencies, if you have a health maintenance organization (HMO) or exclusive provider network (EPO) plan.

If you have a preferred provider organization (PPO) or a point-of-service (POS) plan, you usually have to pay higher deductible, copay, or coinsurance fees. You may also have to pay a balance bill – the difference (balance) between what your insurance plan agrees to pay for your health service and what your out-of-network provider bills.

You can see a very instructive cost comparison between an in-network bill of $2,800 and an out-of-network bill of $13,600, for the same care, here.

Sometimes your health plan has limited options. Maybe your child has a rare disease, and a specialist or hospital renowned for treating that disease is not your network. For the best care, you may have to go outside your network.

Sometimes you can go out of network by accident. Say your primary care doctor refers you to a specialist. If you don’t make sure that specialist is in your network, you might wind up with a surprise after your appointment – when the bill informs you the specialist was not in your network.

If you’re having surgery, don’t just ask if your surgeon takes your insurance; find out who else is involved in your care and if they are in your network. If you don’t, you may receive extra billing from doctors who work with your in-network surgeon but don’t have contracts with your health plan. These can include radiologists, anesthesiologists, pathologists, emergency room doctors, neonatologists, or assistant surgeons.

The best way to prevent a surprise bill is to know your health plan’s rules up front. Read your insurance policy, especially the Evidence of Coverage, which will describe in detail what your plan covers. Make sure you pay attention to what your plan does not cover.

After your surgery or visit to your provider, your insurance company should send you an explanation of benefits. It will give you a heads up that a bill you didn’t think you’d receive, before you had surgery, might be on its way. Once your bill arrives, call your insurance company to see if any of the charges are errors.

If you do find a surprise out-of-network bill in your mail, and you get nowhere with your insurance company, Community Health Advocates, a free and confidential counseling service, may be able to help.

It is very important to understand all of your out-of-network costs before you sign up for a health insurance plan. You should always consider all of your anticipated healthcare costs, as well as plan for unanticipated healthcare costs, before choosing a health plan.