Definition of an Out-of-Network Provider

There May be Times Where an Out-of-Network Provider is Necessary

A patient presents a health insurance card.
A patient presents a health insurance card. Petrol/Getty Images

An out-of-network provider is one which has not contracted with your insurance company for reimbursement at a negotiated rate. Some health plans, like HMOs, do not reimburse out-of-network providers at all, which means that as the patient, you would be responsible for the full amount charged by your doctor. Other health plans offer coverage for out-of-network providers, but your patient responsibility would be higher than it would be if you were seeing an in-network provider.

Reasons for Choosing Out-of-Network Health Care

Although it may initially cost you more money, there may be times when you might find it necessary, or even advisable, to use an out-of-network provider.

Sometimes you have no choice, or it just makes sense to choose a non-network healthcare provider. Below is a list of the scenarios in which you may be able to appeal for in-network coverage, or it may be automatically granted:

Emergencies: In an urgent situation, you must seek the closest available help. The Affordable Care Act requires insurers to cover emergency care as if it's in-network, regardless of whether the emergency care is obtained at an in-network or out-of-network facility. However, the out-of-network emergency room and physicians can still send you a balance bill, and the balance billing is not restricted by the ACA (although some states have restricted it). If it's not truly an emergency, your visit will not be processed as in-network treatment; you should go to a covered provider instead.

Specialized care: If you have a rare ailment for which no specialist is included in your plan, out-of-network care may be crucial.

Changing providers would jeopardize your health: If you're in the middle of treatment for serious or end-of-life issues, and your provider leaves the network, it may be in your best interest to continue that care by going out of network.

You can appeal for continued in-network coverage, if only for a period of time or a set number of visits.

Out-of-town care: If you need medical care while away from home, you may have to go out of network, but some insurers will handle your visit to a non-participating provider as if it were in network. However, in-network providers may be available. If it's not an emergency, it's best to contact your insurer first to find out.

Proximity issues: The ACA requires insurers to maintain provider networks that are adequate based on the distance and time that members have to travel to reach a medical provider, but the guidelines in terms of what's adequate vary from one state to another. If you live in a rural area and there is no realistic access to an in-network provider in your area, your continued health may depend upon using a non-participating doctor. In these cases, you may be able to appeal to get coverage for an out-of-network provider in your area.

Natural disasters: Floods, widespread fires, hurricanes, and tornadoes can destroy medical facilities and force people to evacuate to other areas in which they must seek health care. Sometimes, these patients may be eligible for in-network rates as part of a declaration of emergency by the state or federal government.

The out-of-network provider may still send you a bill

It's important to note that even if your insurance company treats your out-of-network care as if it's in-network, federal law does not require the out-of-network provider to accept your insurance company's payment as payment in full.

For example, 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. Then you end up in a situation where an out-of-network provider performs the procedure, but it's one of the scenarios described above and your insurer agrees to pay the $500.

But if the out-of-network provider charges $800, they can still send you a bill for the other $300.

This is called balance billing, and it's generally legal if the provider isn't in your health plan's network.

Some states have tackled this issue for some scenarios, including Florida (out-of-network providers who work at in-network hospitals) and New York (emergency situations). But by and large, balance billing is still an issue when patients receive care outside their insurer's network.

Sources:

Centers for Medicare and Medicaid Services, Center for Consumer Information and Insurance Oversight. Affordable Care Act Implementation FAQs, Set 1. Out-of-Network Emergency Services.

Commonwealth Fund. Balance Billing by Providers: Assessing Consumer Protections Across States. 2017.

Urban Institute. Robert Wood Johnson Foundation. Ensuring Compliance With Network Adequacy Standards: Lessons From Four States. March 2017.