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Health Insurance: Out Of Network 101


"Out of network" refers to medical care outside of an insurance company's network. Going out of network costs the insured more than using an in network doctor or facility. This article first describes why costs to the insured are more; what to do before you go out of network to minimize costs, how to guard against unintentionally receiving out of network services, and what to do if you receive a bill for out of network services. 

What insurers pay for out of network treatment and tests

As a general matter, insurance plans with a network pay a smaller percentage of the cost of treatment or tests which are provided out of network. This means you, the insured, pays a higher percentage.

In addition, the percentage is generally based on a standard known as "customary and reasonable" rather than a pre-set amount or the amount you are billed. For example, if the insurer pays 60% of out of network treatment, the bill from the doctor is $1,000 and customary and reasonable in your area is $800: the insurance company will pay 60% of $800 or $480. You, the insured, are obligated to pay the difference between the bill and what the insurer pays.

What to do before you go out of network: 

  • Learn about the provisions in your policy so you know what is covered, how much of the cost is covered, and what you have to pay. 
    • You may be required to call the insurance company and get prior approval. If so, the policy should provide a general idea of what is required to get approval. For instance, that there is no qualified specialist in network.
    • The policy will also tell you what share of the bill the company will pay and what share you will have to pay. Note that the share the company will pay is generally not based on the actual bill. Instead it is usually based on the insurer's schedule or what is "reasonable and customary" in the community. If the doctor's bill is $200, but the "reasonable and customary" bill in your area is $100, and the insurer pays 80% of the bill, you will receive $80 (80% of $100) instead of $160 (80% of $200). Looking at this another way, instead of the $40 you might expect, you will be required to pay $120. (To learn how to find out about health care costs in your community, click here.)
  • Be proactive. To learn how to minimize out of network costs, click here.

How to guard against unintentional out of network services.

  • If you need surgery, in addition to checking whether the surgeon is in network, check on the status of all members of the team. 
    • Don't assume that just because the surgeon or other specialist is in network, so are the other members of the medical team. While your surgeon may be in network, the anesthesiologist and other experts may not be in network. 
    • If the only team members the surgeon generally uses are not in network, weigh the cost savings of insisting on an in network team member against the risk that the doctors are not used to working together. Whether doctors work as a team can effect their response if an emergency occurs.
  • If you enter a hospital, even one which is in network, insist on only being treated by in network doctors and that this be noted in your chart. ive the hospital admissions office a letter asking that all personnel who treat you be part of your insurer's network and that you be notified well in advance if this is not the case. Advance notice gives you the opportunity to decide what you want to do. As a practical matter, hospitals do not genearlly watch for a doctor's network status. When you are feeling well enough, ask each new doctor who shows up whether he or she is part of your network. If you aren't up to it, ask your patient advocate to monitor doctors for you. If you inadvertently receive care by an out of network specialist, see if you can get the specialist to accept the lower out of network fee. Call the hospital or ask the doctor's billing office for a 30-35% redution in the charges stating that is about what your insurer would probably pay.  If he or she won't, see: Arguments To Use Against An Insurer's Denial Of A Health Claim.

What to do if you receive a bill for out of network services:

  • Make sure your insurance plan paid what it should have for the out of network service.
  • If you were treated for an emergency service, make sure the insurer paid at least what it would have paid to an in network provider. Under the Affordable Care Act ("Obamacare"), insurers cannot charge more for co-payments and co-insurance for out of network emergency services than they would charge when you use an in network provider. Insurers must also pay out of network emergency providers according to a standard schedule.
  • Check to see whether your state has any protections concerning what is known as "balance billing" (billing you for the amount your insurer doesn't pay.) For example, your state may have a limit on the amount you can be billed. (For contact information for your state's insurance commission to learn about the law, click here offsite link.)
  • If you will have to pay more than you want, consider negotiating the bill.. 
    • First find out what the in-network rate is for your treatment or test. (To learn how, click here.)
    • You'll probably have to speak directly with the doctor or a supervisor/executive to negotiate the charge.
    • Let the person know how that you are aware that there are varying prices for medical services depending on who pays. Tell how much your insurance company is going to pay and ask if the fee can be lowered to that amount. Keep in mind that you will still have to pay the percentage of the lowered bill required by your insurance policy. (Some doctors have been known to waive the amount you have to pay, but that may not be legal).
    • If the doctor will not accept what the insurance company pays, ask if she or he will accept the in-network rate.
    • If you aren't good at negotiating, or would rather not, ask a family or friend who is good at it, or engage a health advocate. You can find a professional health advocate through the Medical Billing Advocates of America network offsite link or ask your patient navigator or social worker.  
  • If you don't get what you want from your insurance company, appeal. Statistics show that it is always in your interest to appeal. To learn about appealing, click here.

NOTE: Do not assume that a health insurer's directory is up to date. When getting ready to see a new doctor or go to a new treatment facility, confirm that the doctor or facility is in network. 

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