Health care costs in America can be downright confusing no matter how much you have read about them. The lack of transparency over upfront costs, the individual bills that come trickling in months after your procedure and the technical terminology can be enough to make you throw up your hands in confusion.
One of the most confusing aspects of health care billing is the difference between in-network and out-of-network costs. While you probably know that in-network costs are far easier on your wallet, you may not understand why and you may not know how to ensure that you stay within your network. This information will help clear up the confusion and give you a place to start as you decode your health care bills, talk to your doctor’s office about billing and chat with your health insurance agent.
What Is In-Network?
A health insurance network is a group of health care providers and facilities that agree to work with a particular insurance company and to provide complete care through a range of specialties to those individuals who have policies with the company. An in-network provider is one who has agreed with the insurance company to provide services to its clients and who has agreed to the rates decided upon by the insurance company. These rates are usually discounted, making health care far more affordable for the average person.
The size and scope of your health care network will directly depend upon your insurance provider as well as on your insurance plan. Some major nationwide insurers are able to create large networks, making it easy for you to stay within your network. However, others offer very small networks or limited local options.
You will also need to keep in mind the differences between HMO and PPO plans. HMO plans only provide in-network benefits except for emergency care and require individuals to choose their primary care physicians and to get referrals for any additional physicians they see. However, PPO plans include both in-network and out-of-network benefits for general care.
What Is Out-of-Network?
If you do have a PPO plan or other type of health insurance plan that includes out-of-network benefits, you will want to know what you can expect for your charges. Moreover, if you find yourself without out-of-network benefits, you will want to know how to prepare for your next doctor’s visit or medical procedure.
The term out-of-network refers to doctors or medical facilities that are not a part of your insurer’s approved network of providers. They have no contract with your health insurer and can charge you any price they like without any discount on your bill. In addition, these providers do not necessarily meet certain credentialing requirements. You may choose to pay for your appointments out of your pocket on the day of your visit or may still let the charges go through your insurance company to meet certain deductibles.
What Are the Differences Between In-Network and Out-of-Network Bills?
You will quickly find that bills for in-network services will have far less drastic charges and more discounts on them than out-of-network bills will. Out-of-network bills usually feature full-price services. Both you and your insurance company have no control over how much the doctor or facility is charging.
While out-of-network costs can usually still count toward your deductible, you may find that your health insurance company has specific and more stringent rules tied to out-of-network charges compared to inpatient charges. For example, both your deductible and your family cap may be higher. In addition, if the charges are higher than what your insurance company will agree to, you may be held responsible for the difference even if your deductible has been met. Keep in mind that your out-of-network copay and coinsurance costs may also be higher.
In many cases, the difference between an in-network and an out-of-network bill for the same services can be drastic. This is because the doctor or facility is allowed to charge you for any differences between the original charges and the amount your plan pays on an out-of-network bill.
How Can You Determine Which Doctor You Should See?
The choice between an in-network and out-of-network doctor is ultimately up to you. While your insurance provider might make suggestions and provide you with information about who is in-network and what these providers should cover, it is your responsibility to ensure that you are staying within your network before your appointment or procedure. Also, be aware that there is a difference between a provider agreeing to accept your insurance and choosing to provide in-network services.
Today, the easiest way to check into your approved network of providers is to head online to your insurer’s Website. You may also be able to call your insurance provider to verify network status.
Finally, be particularly vigilant of the provider you choose if you are traveling. Your network may change significantly if you are traveling out of state, and charges can be sky-high if you are seeking international care. In general, only emergency care is covered when traveling outside the country.
When Should You Choose an Out-of-Network Doctor?
While in-network is certainly the way to go in most circumstances, there may be some occasions when you prefer or need to see an out-of-network provider. This is most often the case when seeing specialists. Sometimes, your in-network provider may refer you to an out-of-network provider or may have your x-rays read or lab work performed by out-of-network sources. On the other hand, you may purposely decide to see a specific out-of-network provider because your favorite doctor is no longer covered under your current network. Finally, add-on services in certain facilities may not be covered even though the facility itself is in-network. A good example of this is a private hospital room when your insurance company only covers semi-private rooms.
How Can You Avoid Out-of-Network Charges?
Keep in mind that most heath insurance networks frequently change. Even if you have been seeing a certain provider under your policy for years, he or she may not be covered now. Always check with your insurance provider as well as with the doctor’s office or facility before your appointment or procedure to avoid unexpected out-of-network charges. In addition, be particularly vigilant about which providers are covered if you are planning on switching policies or providers and you hope to keep your current doctor.
In addition, be aware that even though you are seeing an in-network provider, diagnostic tests and procedures he orders for you may not be covered in your network. Instead, you can opt to take diagnostic orders to a different in-network facility to save money.
Finally, you might want to ask your insurer about gap coverage if you know ahead of time about an upcoming out-of-network charge. A separate gap insurance policy can also help cover you if you have a very high deductible or limited benefits.
What Should You Do About Surprise Out-of-Network Bills?
No matter how hard you try, you may still find yourself opening a surprise out-of-network medical bill in the coming months. After all, over half of Americans receive surprise medical bills every year. If you do receive one, you do not have to feel powerless when you know the steps to take to protect yourself and to negotiate with both your provider and your insurance company.
First, contact your insurance company to learn more. Perhaps the bill was wrong or was coded incorrectly. A bit of haggling with your insurer may get you the relief you need.
Second, you can try to negotiate your bill with the doctor’s office or hospital if your insurer will not make it right for you. Many facilities are willing to offer a discounted rate if your income falls below a certain level or if you agree to pay in cash or by a certain date. At the very least, the provider should be able to put you on a feasible payment plan.
Knowing the difference between in-network and out-of-network providers could save you hundreds if not thousands of dollars every year, especially if you are planning on a major non-emergency procedure. While out-of-network care may occasionally be necessary, try to reduce your costs by choosing an insurance provider with a large network of providers and by negotiating with health care facilities and doctors for lower costs when heading out-of-network.