In-network and out-of-network are terms often found in the promotion of health insurance services, and there is very little explanation of their meaning, to be smart with the decision of having an in-network contact or an out-of-network contract, it is important to understand what they mean and what the medical policy covers.
Those terms in general are referred about the existence of an agreement or contract between the health provider and the insurance company. To avoid the unpleasant surprise of an unexpected bill, it is important that individuals understand their insurance (most do not) including the healthcare benefits and the coverage in the policy.
In-Network Provider or Physician Insurance Contracting In-network means the health insurance has a network of practitioners, hospitals, surgery centers, pharmacies and other facilities were there are agreements in which they negotiated fixed rates for their services. The insurance pay most of the cost of the services and the responsibility of the beneficiary is just for the co-payment, which is a small percentage of the price of determined serviced paid in a per-visit basis.
When a patient has an insurance it is important they understand the list of health providers and physicians that have in-network contracts because if a practice schedules an appointment with someone who is not listed, the amount of money out-of-pocket can be higher, or if the insurance plan has a high out-of-network benefit deductible, the full cost of services might be on the patient.
The main advantage of in-network is definitely the rate, the co-payment allows to get medical care at affordable price (the insurance does not cover 100% of the cost). The problem, from the patient perspective is that they might want to see a physician out-of-network and will have to pay the full price for consultations or procedures.
What is Out-of-Network?
Out-of-Network refers to all the physicians, specialist, hospitals and health care providers that are not listed in the network of your insurance company, it does not necessarily mean they will not accept a patient’s insurance, but this modality allows the provider to set rates to their convenience, since there is no established agreement with them.
The out-of-network costs are always higher than in-network because the co-payment or co-insurance paid by the patient is higher and it means more money on the patient, there is actually no need of looking for an out-of-network provider unless it is trusted or you are not satisfied with the in-network providers, which is unlikely to happen.
Other reason to go out-of-network could be if there was an emergency, and in this cases is inevitable since the patient cannot plan this kind of contingencies, even when the emergency is attended in an in-network facility, maybe someone of the staff that attended or any procedure done was out-of-network.
Another way of going out of network for a patient can be through references of a physician to specialists or facilities not listed in the insurance network, in this case a patient can always research and find alternatives to prevent going out-of-network.
Also doctors that were in-network can go out-of-network and not negotiate again with the insurance company. Some insurance companies pay at such a low contract rate that the physician might be best to not contract and take patients who either pay the out of network rate or who switch to another insurance.
The good thing of out-of-network is able to choose who they want to be your care provider. Many providers might be willing to negotiate a cash discount for patients that have out of network insurance.
In conclusion, the decision of going for an in-network provider or out-of-network is easy when the only variable is the money, but for many patients, they care about he provider as well as the quality of care they receive so they may be willing to see a physician out of their insurance network.
Evaluating which contracts should be terminated from in-network status is a separate topic and requires a skilled person/team to make the determination based on various factors.