Sometimes you have no choice, or it just makes sense to choose an out-of-network provider due to the nature of your illness. Although it may initially cost more money, there may be times when it is necessary or even advisable to use an out-of-network provider.
An out-of-network provider does not have a contractual agreement with your insurance company for reimbursement at a negotiated rate. Like HMOs and EPOs, few health plans don’t reimburse out-of-network providers (except in emergencies). This means you would be accountable for paying the full medical costs of the physician’s services.
Other health plans offer coverage for out-of-network providers, but your patient responsibility is higher than if you were seeing an in-network provider. Even with all of these considerations in play, there are times when you have to go with a doctor or clinic outside your insurance company’s network.
Physicians who do not participate in their patients’ health plans are generally reimbursed lower than in-network. The out-of-network reimbursement amounts vary among different carriers. Out-of-pocket expenses to the patient for these providers are also often higher.
Since physicians typically aren’t aware of patients’ network status, they often don’t know if they are in or out of their patients’ plans. Outpatient care is the area where this is most likely to occur; office visits, emergency care and each time they treat you are some examples.
Since physicians do not receive any information about patients’ health plan participation status, it becomes the patient’s responsibility to tell the physician if they have coverage with a specific health plan. Physicians should determine the insurance status of their patients before rendering services, and if a patient is covered, the amount of out-of-network insurance reimbursement they may be able to receive from the patient’s health plan.
Out-of-network physicians may also ask patients for evidence of coverage before providing services. This generally occurs when there is a dispute over whether an individual has insurance since out-of-network reimbursement rates are higher when insurance is contracted than when coverage must be provided on a non-contracted basis.
Federal law does not require any out-of-network provider to accept your insurance company’s payment as payment in full. Out-of-network providers can still bill you, even if your insurance covers some costs. This often occurs even though your insurance company treated your out-of-network care as if it were in-network.
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. An unforeseen situation occurs, and you end up in a position where an out-of-network provider performs the procedure. Your insurance company agrees to pay the $500. However, if the out-of-network provider charges $800 for the service, you would be responsible for paying the remaining $300.
Some states have attempted to tackle this issue, including Florida (out-of-network providers who work at in-network hospitals) and New York (emergency situations). Despite these efforts, balance billing is still a problem for patients who receive care outside their insurer’s network.
When you see an in-network provider for office visits or outpatient care, your insurer generally pays 80% of the reasonable and customary charge (the “usual and customary rate”). In comparison, you pay the remaining 20%. Out-of-network charges are usually 30% higher than in-network because out-of-network providers cannot legally balance bill you after your insurer has paid its portion.
Outpatient wage/supplies costs for out-of-network doctors are also generally 10% higher due to higher overhead. Out-of-network reimbursement rates vary but are usually lower than in-network rates. Out-of-network doctors can bill you for the difference between their charge and what your provider paid. Balance billing is not allowed for emergency care or urgent care visits even if the doctor is out of network.
When considering which health plan to join, determine how much it will cost based on whether your physician will be participating in the plan’s network (and likely reimbursed at 80% of usual and customary) or out of network (reimbursed at a rate that varies according to carrier and type of services).
Keep in mind that insurers have less leverage with physicians who are not contracted, so they sometimes pay only 50 – 65% of the usual and customary. Out-of-network reimbursement can vary by as much as 40% among different insurers. Out-of-network reimbursement amounts vary by region, with some areas paying less than others.
If you are concerned about how much it will cost to see an out-of-network provider, ask your doctor for the going rate that they would typically accept from other patients who pay out-of-pocket in your area (or ask if they have a fee schedule on their website). This way, you and your physician can negotiate both the type of treatment and what the final bill should be before receiving health care services.
Also, remember that physicians might increase their fees to match the market depending on how often patients use this approach. Eventually, patients should contact their insurer to determine if the physician participates in their network and whether a referral is required.
While there are some protections to ensure doctors and hospitals get paid for out-of-network services (such as prior approval from insurers), there have been numerous cases where patients were stuck with exorbitant bills, sometimes years after a procedure took place.
While out-of-network providers must honor the same discounts they give in-network providers, most patients don’t seek this type of assistance. Out-of-network doctors can bill at whatever rate they choose, which is usually higher than what insurers pay.
Physicians aren’t the only ones who can be out of network — it also applies to facilities and suppliers that assist them with procedures, such as anesthesiologists or pathologists. Out-of-network labs also fall under this category. Out-of-network pharmacies are also not subject to the same in-network discounts they would give a member’s health plan.
According to Out Of Network (OON) billing expert Ray Freling of Out Of Network Billing & Insurance Compliance, little can be done when patients receive bills from out-of-network doctors or facilities. He says that if patients want to make sure their doctor is in-network before undergoing treatment, they need to ask about any out-of-network providers involved in their care and use caution if they offer services for which there are no restrictions on how much providers may charge.
It’s frustrating to get unexpected medical bills and overpayments on claims, filling out piles of paperwork and jumping through hoops to get answers. Out-of-network billing is another frustrating layer that patients and doctors need to know.
The best solution is to know who you’re dealing with before the care begins on both sides. Do your homework before you head to the doctor and ask what out-of-network providers will be involved in your care. That way, you can be sure to get the best deal possible.
The ACA 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 online.
In 2017, the Trump Administration began deferring to the states for network adequacy determinations, weakening the enforcement of network adequacy standards. Subsequently, people buying coverage in the individual market find that networks are generally smaller than in the past. For this reason, it becomes essential for enrollees to double-check the network of any health plans they’re considering if they have a specific doctor in mind.
In the small group and large group markets, states can review plan filings to ensure adequate networks. Employers tend to have considerable input despite this leverage when working with insurers, especially in the large group market. Often, they try to make sure that the plans they’re offering to their employees have adequate provider networks. This does not mean that there won’t be cases where an out-of-network provider won’t be essential to care.
It’s great to have options when it comes to your insurance coverage. Still, patients must be prudent in their choices to keep healthcare expenses low. There are numerous tools available, both offline and online, that can help you make better healthcare decisions. With such elements in place, consumers can hopefully figure out what works best for their circumstances and plan accordingly if they have to go out of network.
Keeping an open line of communication with your healthcare providers and your insurance company will help you avoid any surprises regarding out-of-network reimbursement. Educate yourself about the plan before making decisions so that all parties are on board!