In-Network and Out-of-Network Care
Your plan contracts with a wide range of doctors and other practitioners, as well as hospitals, labs, radiology facilities, pharmacies and other providers. These are the providers in your “network.” Each of these providers has agreed to take your plan’s contracted rate as payment in full for services.
That contracted rate includes both your insurer’s share of the cost, and your share. Your share may be in the form of a copay, deductible or coinsurance (see cost sharing).
If you go outside your network, you will likely pay more for your care. That’s partly because providers outside your network have not agreed to any set rate with your insurer. Those providers may charge more. Another reason is that your plan may require higher copays, deductibles and coinsurance for out-of-network care. Or, they may not cover out-of-network care at all, leaving you to pay the full cost.
There are reasons why you might go out of network. If you or a loved one is facing a serious sickness, you may want more choices than you can get in your network. Or, you might go out of network by accident. That can happen if you get care from an out-of-network doc at an in-network facility.
Follow these tips to help handle your costs:
- Ask your PCP to refer you to a provider in your plan’s network.
- Before scheduling a visit with a new provider, ask if he or she accepts your plan and is willing to see new patients.
- Will you be having a complex procedure, like a surgery? If so, ask your doctor whether all of the providers who will join in your care are in your network.
- Suppose you choose to go out of network. If so, ask the provider’s staff before your visit how much he or she will charge. Then, talk to your insurer to find out how much of the cost your plan will cover.
- Is the out-of-network provider’s charge higher than your insurer’s allowed amount? If so, check the FH Consumer Cost Lookup to see what providers in your area usually charge.
Know Before You Go
You’ve probably seen the terms “in-network” and “out-of-network” on your insurer’s website and in your plan description. But, what do these terms mean? And how do they affect how much you have to pay for your care?
Your plan contracts with a wide range of doctors, as well as specialists, hospitals, labs, radiology facilities and pharmacies. These are the providers in your “network.” Each of these providers has agreed to accept your plan’s contracted rate as payment in full for services.
That contracted rate includes both your insurer’s share of the cost, and your share. Your share may be in the form of a copayment, deductible or coinsurance (more information on cost-sharing is available here). For instance, your insurer’s contracted rate for a primary care visit might be $120. If you have a $20 copayment for primary care visits, you will pay $20 when you see a doctor in your network. Your insurer will pick up the remaining $100.
If you go outside your network, it’s a different story. You will likely pay more if you go “out-of-network” for your care. That’s because:
- Providers outside your network have not agreed to any set rate with your insurer, and may charge more.
- Your plan may require higher copays, deductibles and coinsurance for out-of-network care. So, if you normally have to pay 20% of the cost of the service in-network, you may have to pay 30% out-of-network. Often, you’ll have to pay that PLUS any difference between your insurer’s allowed amount and what the provider charges.
- Your plan may not cover out-of-network care at all, leaving you to pay the full cost yourself.
Your costs for out-of-network care also depend on your type of plan:
- In a Health Maintenance Organization, or HMO, or Exclusive Provider Network, or EPO, you generally have to pay the full cost of any out-of-network care, except for emergencies.
In a Preferred Provider Organization (PPO) or Point-of-Service (POS) plan, you will usually have to pay:
- A higher deductible than in-network and or a higher copay
- PLUS a higher percentage coinsurance, which is a percentage of the “allowed amount”
- PLUS, the full difference between the allowed amount and your provider’s actual rate, which could be much higher
These costs can add up quickly, even for routine care. If you have a serious illness, it can mean tens of thousands of dollars more.
So, when you need care, it’s important to find out if all of your providers are in your plan’s network.
In-Network and Out-of-Network Costs in Action: An Example
Let’s look at an example. Say you visit a provider who usually charges $1,000 for a service. But, that provider is in your plan’s network. That means they have agreed to accept your insurer’s contracted rate – say, $500 – rather than the amount they normally charge. How much will you have to pay?
|HMO In-Network||POS In-Network||EPO In-Network||PPO In-Network|
|Provider’s Usual Charge||$1,000||$1,000||$1,000||$1,000|
|Your Plan's Contracted Rate||$500||$500||$500||$500|
|Your Cost Sharing||$10 copay||$10 copay||20% coinsurance||20% coinsurance|
|Your Plan pays||$500 - $10 = $490||$500 - $10 = $490||$500 x 80% = $400||$500 x 80% = $400|
|You pay||$10 (1%)||$10 (1%)||$500 x 20% = $100 (10%)||$500 x 20% = $100 (10%)|
In this case, your insurer will base their share of the cost on the allowed amount for that service. This is the most money that they consider to be a fair and reasonable cost, based on what other providers in the area charge. It is not necessarily the same as your plan’s contracted rate. In this case, let’s say the allowed amount is $800.
So, what does that mean for you?
|HMO Out-of-Network||POS Out-of-Network||EPO Out-of-Network||PPO Out-of-Network|
|Your Plan's Allowed Amount||$0||$800||$0||$800|
|Your Cost Sharing||100%||30% of the allowed amount PLUS the difference between the allowed amount and provider’s charge||100%||30% of the allowed amount PLUS the difference between the allowed amount and provider’s charge|
|Your Plan pays||$0||70% of $800 = $560||$0||70% of $800 = $560|
|You Pay||$1,000 (100%)||30% of $800 = $240 PLUS $1,000 - $800 = $200||$1,000 (100%)||30% of $800 = $240 PLUS $1,000 - $800 = $200|
|Your Total Cost||$1,000 (100%)||$440 (44%)||$1,000 (100%)||$440 (44%)|
Going out-of-network for this sample service could cost you hundreds of dollars more.
Your plan’s actual provisions may be different from those we have used in the examples. Be sure to check your plan booklet, your insurer’s website, or call your insurer so you can be sure you understand how your plan works.
What about Emergencies?
What happens if you suffer a heart attack? Waiting to get care in an emergency is dangerous and can even be life-threatening. So, many plans cover some portion of emergency care no matter where you are, even out of their network area. Once your condition is stable, you will generally be moved to an in-network provider for follow-up care.
But remember, that only applies to real emergencies. You should never go to the emergency room for routine care, like check-ups or vaccinations. Emergency room visits cost more than regular doctor’s visits, and insurers often won’t pay the same amount if it’s not a true emergency. That means you’ll be left with a big bill. Plus, you’ll get better, more personalized care from your own doctor, and you won’t have to wait for hours in the ER.
If you’re not sure what constitutes an emergency, or what emergency costs are covered, ask your insurer.