Health insurers take their provider network management very seriously. It streamlines the claims process and reduces costs for both the insurer and their policyholders. That’s why, when you read through any health insurance policy, you’ll see the words ‘provider’ and ‘network’ several times.
You may also see references to in-network and out-of-network providers. But what exactly does this mean?
If you need out-of-network explained simply, this guide is for you. We look at what it is and how it works. We also examine why, sometimes, using out-of-network providers might be the right option for you.
What Is A Provider?
A provider in the context of health insurance is a doctor, dentist, optician, or any other type of medical or healthcare professional. A hospital may also be a provider, in which case it includes the medical staff at that establishment.
Any medical or healthcare professional may be considered a provider, as they provide services that your health insurance may or may not cover. However, they are not all on the same health insurance provider networks.
What Are Provider Networks?
Provider networks are the groups of such providers listed in your insurance plan.
These network providers have a contract with the insurer, to provide services to the insurer’s policyholders at a discounted rate. This is how your insurer calculates the optimal monthly premium for you. And it’s why using the providers your plan recommends can mean lower out-of-pocket costs for you.
Using Out-Of-Network Providers
Using an out-of-network provider means that you are receiving medical treatment or other healthcare services from a medical/health provider outside of your plan’s provider network.
Check your policy document to know which providers are outside your plan’s network and would be considered out-of-network providers. The providers in your network will be listed there.
Different plans have different ways of handling out-of-network providers. You may pay higher out-of-pocket costs, like a higher copay. Your treatment or service at an out-of-network provider might also not be covered, leaving you to foot the entire bill.
Out-of-network insurance costs more because they have not negotiated favorable rates with your insurer. Those higher costs are then passed on to you. This is one of the biggest drawbacks of using out-of-network providers.
Why You May Choose To Go Out-Of-Network
Although it’s usually cheaper to stick to your plan’s network providers, you may prefer to use an out-of-network provider. These are some examples of when you might choose to use an out-of-network provider:
Your Usual Healthcare Provider Is Not In The Preferred Network
Your trusted family doctor might be outside your insurer’s preferred network.
This could happen if you have moved to a new area or started a new health plan. The network recommended to you is likely close to where you live. But you may prefer to continue seeing your usual doctor for more intimate health issues or your familiar OB-GYN while pregnant.
It can sometimes happen that you’ll find a provider who, while not on your network, is more convenient for you.
They may be closer to where you live or work than the recommended in-network provider for a specific service. If the travel time and cost difference are significant, you may want to choose the closer option.
This is especially relevant if you have to rely on public transportation or find travel uncomfortable while ill or injured.
Out-Of-Network Is Cheaper
It doesn’t happen too often, but you may find a cheaper out-of-network option.
Because of cost-sharing features like deductibles, copayments, and coinsurance, you’ll usually have out-of-pocket costs before your plan starts to cover all costs. This is aside from your monthly premium.
If you find an out-of-network option that is cheaper than the out-of-pocket cost for a particular service, you’ll probably want to choose them instead.
How Out-Of-Network Services Work
Claims For Out-Of-Network Services
Most health plans have preferred networks, and some have exclusive networks. This means you’ll likely have to pay higher deductibles or copays if you do not use these preferred providers. And on an exclusive provider plan (EPO), you may not have any coverage. This means you’ll be paying 100% of the bill.
In-network payments are settled directly between the providers. You can submit the claim electronically through your insurer when using an out-of-network provider (on a plan that allows for it). Some out-of-network providers may submit this on your behalf.
Be aware that your insurer may cover very little of the bill or even decline to pay it. The provider will hold you liable for the difference in such a case. The claims process for out-of-network providers is often slower than with in-network providers.
Negotiating Rates With Out-Of-Network Providers
You are within your rights to negotiate a better rate with an out-of-network provider, for an upfront cash payment.
Smaller, private practices and doctor’s rooms may be willing to negotiate. Unfortunately, there is no guarantee that they will, as they are not legally obliged to do so if they are not on your plan’s network. They are not contractually obligated to your insurer either.
Always do this bargaining ahead of receiving the actual service or treatment.
Appeals And Reimbursement For Out-Of-Network Claims
You can appeal their decision if your insurer denies coverage of your out-of-network medical care. However, you must have a compelling reason for going out-of-network to be successful. This is why you must understand the consequences of using out-of-network providers.
Read through your policy document for your insurer’s appeal procedures and time limits for these appeals. Submit a letter detailing your reasons for going out-of-network. Attach supporting evidence and documents relating to the specified treatment or service, like bills, receipts, or doctor’s letters.
If you know that you will have difficulty sticking to a preferred provider organization (PPO) or exclusive network organization (EPO) on your plan, choose another plan.
Sticking to network providers is often more affordable, but in some circumstances you may end up utilizing an out-of-network service. A plan with an exclusive or preferred network is helpful if you benefit from it. Your choices will always reflect your circumstances.
So, choose the right health plan from the start. The consultants at Enhance Health have the expertise to help you find the type of plan that works for you. If you need help choosing a health plan for your specific needs, give us a call.