Network Gap Exceptions

A network gap exception is a tool health insurance companies use to compensate for gaps in their network of contracted healthcare providers. When your health insurer grants you a network gap exception, it’s allowing you to get healthcare from an out-of-network provider while paying the lower in-network cost-sharing fees.

This article will explain how network gap exceptions work, how they can be obtained, and what to expect in terms of out-of-pocket costs if a network gap exception is granted.

What a Network Gap Exception Does

Without a network gap exception, when you see an out-of-network provider, you’ll pay more than you would have paid if you had used an in-network provider.

If you have an HMO or an EPO, your health plan likely won’t pay one dime of the cost of your non-emergency out-of-network care unless you get a network gap exception (because these plans generally don't cover out-of-network care).

If you have a PPO or POS plan, your health plan might help you pay for the care you get out-of-network, even without a network gap exception. However, your deductible, coinsurance, and copayments will be significantly larger when you use an out-of-network provider than when you use an in-network provider. So you might find that although your plan "covers" out-of-network care, you're still on the hook for the entire bill because your out-of-network deductible is so high.

Requesting a network gap exception from your health insurer is formally asking the insurer to cover care you get from an out-of-network provider at the in-network rate. The insurer considers these requests on a case-by-case basis. If your insurer grants the network gap exception, you’ll pay the lower in-network deductible, copay, or coinsurance for that particular out-of-network care.

Why a Network Gap Exception Can Help

First, be aware that your health plan isn’t going to be eager to grant a network gap exception. It’s extra work for them, and it might end up being expensive for them as well.

However, if the health plan doesn’t have an in-network provider that's in your area or if that provider isn't capable of providing the healthcare service that you need, it’s not fair to make you pay higher cost-sharing just because the health plan doesn’t have a sufficiently robust provider network. So, insurers can grant a network gap exception to allow you to get the care you need from an out-of-network provider without paying more than you should have to pay.

Insurance plan networks vary considerably from one health insurance policy to another. Some insurers offer very robust networks with a PPO design that allows members to access care outside the network, while others offer plans with much more limited networks and an HMO or EPO design that requires members to use an in-network provider (or obtain a network gap exception).

More robust networks are more common on employer-sponsored health plans, while more limited networks are more common on the plans that people purchase themselves, in the individual/family market (through the exchange/Marketplace or off-exchange).

But there are rules that insurers have to follow in terms of providing an adequate network for their members. If you think that your insurer is not following the rules, you can contact your state's insurance department, which regulates all individual/family health plans sold in the state (and employer-sponsored plans, if they're not self-insured).

For most state-regulated health plans, including group plans that aren't self-insured, states can set their own rules for network adequacy. This means there's variation from one state to another in terms of what's considered adequate.

Enforcement of network adequacy rules for plans sold through the Marketplace/exchange used to be overseen by the federal government, but was turned over to the states as of 2018. However, the federal government again began enforcing Marketplace network adequacy rules as of 2023.

The network adequacy rules for Marketplace plans became even more robust as of 2024, with network adequacy standards now including maximum wait times for appointments.

For 2025 and future years, the federal government has proposed a rule change that would require state-run exchanges to follow the same time and distance network adequacy standards that the federally-run exchange (HealthCare.gov) uses.

What You'll Pay With a Network Gap Exception

If your health plan approves a network gap exception, it means they'll agree to treat that particular service from that particular provider as if it's in-network. That means you'll be responsible for your in-network deductible, copays, and coinsurance, rather than the plan's out-of-network cost-sharing. Or, in the case of a plan that doesn't cover out-of-network care at all, it will mean you'll have coverage for the service in question, as opposed to having no coverage.

But that doesn't necessarily mean that the provider will have to accept your health plan's reasonable and customary rate as payment in full. Depending on the specifics of the one-time agreement that the provider enters into with the health plan (and depending on state rules, for some health plans), the provider may or may not be allowed to send you a balance bill for the portion of their charges above the health plan's reasonable and customary amount.

If you're trying to set up a network gap exception for a particular service with a particular medical provider, you'll want to have a conversation with them about the financial details. Find out whether they'll accept your health plan's rate as payment in full, assuming the network gap exception is approved. If not, try to get an idea of how much extra you might have to pay, even after you've met your health plan's regular cost-sharing requirements.

Reasons You May Get a Network Gap Exception

You’re unlikely to be granted a network gap exception unless the following are true:

1. The care you’re requesting is a covered benefit under your plan, and is medically necessary.
2. There is no in-network provider capable of providing the service you need within a reasonable distance/time from your home, and within a reasonable wait time for the appointment.
3. If you purchase your health insurance through HealthCare.gov, a reasonable wait time for an appointment is defined as within 10 business days for mental health care, 15 business days for primary care, and 30 days for specialty care, assuming the issue is non-urgent. (For 2025 and future years, a proposed rule change would apply these same requirements to plans sold through state-run Marketplaces as well.)

If your situation fits the above requirements and you’ve located an out-of-network provider that meets all of your needs, you may submit a request to your health insurance company for a network gap exception. In some cases, the out-of-network provider may be willing to do this for you; in other cases, you’ll have to do it yourself.

You should ask for the network gap exception before getting the care. If you wait until after you’ve gotten the care, your health plan will process the claim as out-of-network and you’ll pay more.

Gap Exception Is Temporary and Only Covers One Specific Service

A network gap exception doesn’t give you carte blanche to see an out-of-network provider for whatever service you wish, at any time you wish. Instead, when an insurer grants a network gap exception, the exception usually only covers one specific service provided by a particular out-of-network provider during a limited time frame.

What You'll Need for Your Exception Request

The information you’ll need at hand when requesting a network gap exception includes:

• The CPT or HCPCS code describing the healthcare service or procedure you need.
• The ICD-10 or ICD-11 code describing your diagnosis.
• The out-of-network provider’s contact information.
• A date range during which you expect to receive the requested service. For example, from August 1, 2024, to November 1, 2024.
• The names of any in-network providers of the same specialty within your geographic area along with an explanation as to why that particular in-network provider isn’t capable of performing the service.

To make sure the network gap exception includes the services you need, get the CPT codes, HCPCS codes, and ICD-10 or ICD-11 codes from your out-of-network provider. If this is difficult because you haven’t actually had an appointment with that provider yet, the physician who referred you may be able to provide you with the needed medical codes.

Depending on the circumstances, the out-of-network provider might be the one submitting the network gap exception request, or it might be the patient's responsibility. But ultimately, the patient is responsible for charges that don't get paid by health insurance, so the buck stops with the patient either way.

Explaining Why Your In-Network Provider Won't Cut It

If there are any in-network providers of the same specialty as the out-of-network provider you’re requesting a network gap exception for, you will need to explain to your health insurance company why you can’t use the in-network provider.

Here’s an example. Let’s say you need ear surgery and are requesting a network gap exception to cover an out-of-network otolaryngologist doing the surgery. However, there’s an in-network otolaryngologist within your geographic area.

The in-network otolaryngologist is elderly, has a hand tremor, and thus no longer performs surgery. If you’re not proactive in explaining to your health plan why the in-network otolaryngologist can’t provide the service you need, your request is likely to be denied.

The out-of-network provider may be able to provide a detailed explanation of why the in-network providers will not be able to adequately address your needs, so it's wise to seek out their help with this.

What to Do If Your Request Is Denied

Don't give up even if your request is denied. Call your health insurance company to find out why. Sometimes, requests are denied for a simple reason such as: 

• The insurer was unable to contact the out-of-network provider’s office.
• The insurer thinks there are in-network providers capable of providing the same service.
• The insurer doesn’t have your correct address and thus thinks you live closer to in-network providers than you do.
• The insurer's records indicate that an in-network provider in your area is accepting new patients, but the provider is not actually doing so. The health plan needs to update its files, but also needs to ensure that members can access the care they need.

All of these mistakes can be cleared up. Once you understand why the request was denied, you can either appeal that decision or submit a brand new request that includes additional information to bolster your request.

Summary

A network gap exception can be granted by a health plan in order to treat a particular medical service as if it's in-network, even though it's done by an out-of-network provider. These exceptions are considered on a case-by-case basis. They can be granted if there are no in-network providers within a reasonable distance/time who can provide the care that the patient needs in a timely manner.

Your health plan should be able to ensure that you can receive the medical care you need within a reasonable time and without traveling an unreasonable distance to reach the provider. The specifics of what's considered reasonable will vary depending on where you live and the type of coverage you have. But if you feel like the care you need cannot be obtained within your health plan's network, it's worth reaching out to the plan to see if they'll approve an exception that will allow you to see an out-of-network provider.