In-network vs. Out-of-network Care

What is a network?

A network (also called provider network or preferred providers) is a group of medical providers (hospitals, doctors, specialists, pharmacies, etc.) that have contracted with an insurance company to provide medical care at an agreed-upon rate.

What is in-network vs. out-of-network care?

In-network care is medical care obtained from a provider within your plan’s network.

Out-of-network care is medical care obtained from providers outside of your plan’s network.

But, what does it all really mean?

What happens if I get out-of-network medical care?

It depends on the specifics of your plan.   While health insurance plans are not required to cover any out-of-network care, many do, at least to some extent.

Here are some things that may happen if you do receive care from out-of-network providers:

• Out-of-network care may not be covered at all, meaning you will be responsible for 100% of the cost.
• You may pay more for out-of-network care because it is covered at a lower rate than in-network care.  For example, you may pay 20% of in-network charges, vs. 40% for out-of-network charges.
• There may be a separate deductible for out-of-network care.
• The out-of-network deductible may also be higher than the in-network deductible.
• Out-of-network care may not be counted toward your annual maximum out-of-pocket limit.
• Out-of-network providers are not required to accept a contracted rate, so you may be balance-billed for some expenses over and above any covered amount.

What happens if I had no choice but to get out-of-network care?

There may be some circumstances which require out-of-network care.  For example:

• You wanted to visit a particular professional or facility for a specific covered treatment or service that was not available in your network.
• You inadvertently got out-of-network care while hospitalized in an in-network facility because one of the physicians working in the hospital (e.g. anesthesiologist, radiologist, etc.) did not participate in your plan’s network.
• You received emergency care at an out-of-network facility.

If one of these situations occurs, you can appeal the decision of your insurance company.  This is where having the assistance of a broker can really come in handy.

This kind of thing really does happen.  Click here to read a real-life situation encountered by one of our clients.

How can I protect myself from expensive, out-of-network care?

The very first line of defense is knowledge!  When purchasing coverage, make sure you know exactly what doctors, pharmacies, hospitals, and other medical facilities are part of the network for any plan you are considering.  And, make sure you understand each plan’s rules regarding use of out-of-network providers.

Once you are covered, when seeking care, always ask if a provider is part of your plan’s network — before obtaining care!

Virginia Medical Plans helps our clients understand and select the best health insurance for their needs.  Give us a call or email!

Health Insurance Glossary

Shopping for health insurance?  Deciphering the costs and provisions of the various plans out there can be very confusing.  Here are some key terms that will help — whether you’re selecting a new plan or just trying to figure out your existing one.

Quick-Reference Guide to Health Insurance Terms

Allowed Amount – (also known as eligible expense, payment allowance, or negotiated rate) Your health insurance company has negotiated a pre-agreed rate schedule for services provided by its preferred (or in-network) providers. The allowed amount is the agreed-upon charge for a particular service.

Balance Billing – When a provider (out-of-network) bills you for the difference between the provider’s charge and the allowed amount.  An in-network provider (or preferred provider) may NOT balance bill for covered services.

Co-insurance – Your share of the costs of a covered health care service, calculated as a percent of the allowed amount for the service.  For example, if your plan is an 80/20 plan, this means that the insurance company will pay 80% and you will pay 20%.  Your share of the co-insurance for out-of-network care is higher than in-network.

Co-payment – A fixed amount (example, $15) you pay for a covered service, usually at the time of service.  The co-payment amount can be different for different services.

Deductible – The amount you pay for covered health care services before your health insurance begins to pay. Not all services may count toward your deductible.  Out-of-network deductibles are higher than in-network deductibles.

Maximum out-of-pocket – the most you pay during a policy period (typically one year), after which your health insurance pays 100% of the allowed amount.  This limit does not apply to premiums, balance-billed charges from out-of-network health care providers, or services that are not covered by the plan.

——————–

Let’s consider a scenario to show how health care costs are shared between you and your insurance company.  Suppose your health plan has the following:

• Deductible:  $1,500
• Co-Insurance: 80/20
• Maximum out-of-pocket: $5,000

Suppose your first medical expense of the policy year is a visit to the doctor.  The allowable charge is $125.  Because you have not met the deductible, you pay the full $125, insurance company pays $0.

As the months go by, you see the doctor several more times, fill prescriptions, and pay for other covered services that cause you to reach your $1,500 deductible.  Now, co-insurance kicks in.

Your next covered medical expense (eg., doctor visit, prescription, etc), will be paid 20% by you, and 80% by the insurance company.

This 80/20 split continues until your total expenditure reaches $5,000.

At this point, you have reached your out-of-pocket maximum.  All of your covered health care expenses will be paid 100% by the insurance company (and you will pay $0) for the rest of the policy year.

It is important to keep in mind that some plans have separate deductibles, co-insurance, co-payment, and other limits for in-network vs. out-of-network providers.  Be sure you know your plan’s rules!

Confused?  Give us a call.  We’ll help you figure it out!