What You Need to Know Before Getting Out-Of-Network Care

There are lots of reasons you might go outside of your health insurance provider network to get care, whether it's by choice or in an emergency. But depending on the circumstances, getting care out-of-network can increase your financial risk as well as your risk of having quality issues with the health care you receive. While you can’t entirely eliminate your increased risk, you can decrease it if you do your homework in advance.

This article will help you get a clear understanding of the risks involved with getting medical care outside your health plan's network, what you can do to manage those risks, and the consumer protections that are available in certain circumstances.

Financial Risks

There are several financial risks you may take when you go to an out-of-network provider or facility. The cost varies depending on the type of insurance you have, so if possible, review your plan and know what's covered ahead of time.

You lose the health plan discount

When your health insurance company accepts a physician, clinic, hospital, or another type of healthcare provider into its provider network, it negotiates discounted rates for that provider’s services. When you go out-of-network, you’re not protected by your health plan’s discount.

The only negotiated discount you’re going to get is the discount you negotiate for yourself. Since you don’t have high-powered negotiators on staff making sure you get a good deal, you have an increased risk of getting charged too much for your care.

Your share of the cost is higher

Your share of cost (also known as cost-sharing) is the deductible, copay, or coinsurance you have to pay for any given service. When you go out-of-network, your share of the cost is higher. How much higher it is will depend on what type of health insurance you have.

• HMO or EPO Plan: If your health plan is a health maintenance organization (HMO) or exclusive provider organization (EPO), it may not cover out-of-network care at all, unless it's an emergency. This means you’ll be responsible for paying 100% of the cost of your non-emergency out-of-network care. Keep in mind that this means 100% of what the provider bills since there is no network-negotiated rate with a provider who isn't in your health plan's network.
• PPO or POS Plan: If your health plan is a preferred provider organization (PPO) or point-of-service (POS) plan, it may pay for part of the cost of out-of-network care. However, it won’t pay as large a percentage of the bill as it would have paid had you stayed in the network. For example, you may have a 20% coinsurance for in-network care and a 50% coinsurance for out-of-network care. Even your deductible is likely to be different, as most PPO and POS plans have higher deductibles for out-of-network care (and they have to be met in addition to the in-network deductible; the amounts you paid toward your in-network deductible do not count towards meeting the out-of-network deductible). So if your health plan contributes to the cost of out-of-network care, you may discover that you have one deductible for in-network care and another, higher, deductible for out-of-network care.

You can be balance-billed

When you use an in-network provider for covered health plan services, that provider has agreed not to bill you for anything other than the deductible, copay, and coinsurance that your health plan has negotiated. If you've met your cost-sharing obligations, your health plan may pay additional amounts on top of what you owe, but the provider has agreed in advance to accept the health plan's negotiated rate as payment in full.

When you use an out-of-network provider, not only can that provider charge you whatever they want, they can also bill you for whatever is left over after your health insurance company pays its part (assuming your insurer pays anything at all towards an out-of-network bill). This is called balance billing and can potentially cost you thousands of dollars.

But as described below, new federal consumer protections took effect in 2022 to protect people from balance billing in situations where they had no control over whether the treatment was received from a network provider.

Balance billing has historically tended to happen in three situations. One is voluntary while the other two are generally situations where the patient has limited control over who provides the treatment (these are called "surprise" balance bills): And fortunately for patients all across the country, the federal No Surprises Act took effect at the start of 2022, protecting consumers in the involuntary situations.

• You choose to use an out-of-network provider (no change under No Surprises Act). There can be a variety of reasons for this. Maybe the out-of-network provider has better reviews for the service you need, or a more convenient location or schedule. Whatever the reason, if you're choosing to go outside your health plan's network, you'll want to make sure you fully understand how this will affect your coverage and how much you're likely to pay for the care you receive. There are generally no consumer protections available for situations like this, if you're making the decision yourself and could have opted for in-network providers instead.
• You receive emergency care at an out-of-network facility or from an out-of-network provider (balance billing no longer allowed, under No Surprises Act). Under the Affordable Care Act (ACA), insurers are required to count emergency care as in-network, regardless of whether it's received at an in-network facility or not. That means they can't require a copayment or coinsurance that is more than required for in-network services. However, the ACA doesn't require insurers to cover the out-of-network provider's "balance bill." Prior to 2022, the out-of-network healthcare provider or emergency room could still send you a bill for the remainder of charges, unless a state had implemented its own balance billing protections (and state rules only apply to state-regulated plans, which do not include self-insured plans).
• You receive elective nonemergency care at an in-network facility but from an out-of-network provider (balance billing no longer allowed, under No Surprises Act). This is also referred to as "surprise" balance billing. In this case, you may seek care at an in-network medical facility, but unknowingly receive treatment from an ancillary provider (a radiologist or anesthesiologist, for example) who isn't contracted with your insurance company. As is the case for emergency care, the No Surprises Act also prohibits surprise balance billing if the patient goes to an in-network facility but unknowingly receives care from an out-of-network provider while at the in-network facility.

For several years, states had been taking action to protect consumers from surprise balance bills, but states cannot regulate self-insured health plans, which provide insurance for the majority of covered workers at very large businesses.

This is why the No Surprises Act was necessary. Even if every state had addressed surprise balance billing, the majority of people with employer-sponsored health insurance would still not have been protected from surprise balance billing.

While there has long been widespread agreement among lawmakers that patients should not be stuck in the middle of surprise balance billing situations, there was considerable disagreement in terms of the solution.

This is why it took so long for federal surprise balance billing protections to be enacted. But the No Surprises Act does provide substantial protection to consumers. Balance billing is prohibited under this law in emergency situations as well as situations in which the patient goes to an in-network facility but unknowingly receives care from an out-of-network provider.

But it's important to understand that the No Surprises Act is designed to protect consumers in situations where they essentially have no choice in terms of which providers treat them. If a consumer does have a choice, balance billing and higher out-of-pocket costs should still be expected.

Choosing to go outside the network: The cap on your out-of-pocket maximum will be higher or nonexistent

Your health insurance policy’s out-of-pocket maximum is designed to protect you from limitless medical costs. It places a cap, or maximum, on the total amount you’ll have to pay each year in deductibles, copays, and coinsurance.

For example, if your health plan’s out-of-pocket maximum is $6,500, once you’ve paid a total of $6,500 in deductibles, copays, and coinsurance that year, you can stop paying those cost-sharing charges. Your health plan picks up 100% of the tab for your covered healthcare costs for the rest of the year.

However, many health plans don’t credit care you get out-of-network toward your out-of-pocket maximum. Since the out-of-pocket maximum may be the only thing standing between you and financial ruin if you develop a costly health condition, choosing to get care out-of-network will increase your financial risk. 

Some health plans have a second (higher) out-of-pocket maximum that applies to out-of-network care, but other plans don't cap out-of-network costs at all, meaning that your charges could be unlimited if you go outside your plan's network.

Quality of Care Issues

Many people who seek care out-of-network do so because they feel they can get a higher quality of care than their health plan’s in-network providers will provide. While this may or may not be true, be aware that you may lose some quality protections when you go out-of-network, and you'll have to bear more of the care coordination burden.

You’ll lose health plan screening of providers

Before allowing healthcare providers to participate in its provider network, your health plan screens them. This may be as simple as checking that the provider's licenses are in good standing or that facilities are accredited by recognized health care accrediting organizations like JCAHCO.

However, the credentialing process can be much more complex and detailed than that, providing a service that would be difficult for you to duplicate yourself. Additionally, many health plans have ongoing programs monitoring the quality of care provided to their members by their in-network providers. Providers not measuring up to quality standards risk getting dropped from the network.

When you go out-of-network, you lose the safety net of your health plan’s quality screening and monitoring programs.

You may have problems with the coordination of your care

Especially in health plans that won’t pay anything for out-of-network care, you may have issues with coordination of the care given by an out-of-network provider with the care given by your in-network providers.

Ultimately, it's your responsibility to make sure that your in-network healthcare providers know what your out-of-network practitioner is doing, and vice versa. You’ll be both the patient and the information conduit between your regular in-network providers and your out-of-network provider. 

You won’t have to step in just once to fill this communication gap. You’ll have to do it each and every time you have an appointment, get a test, have a change in your health, or a change in your treatment plan.

You’re not just bridging the communication gap between your healthcare providers, either; you’ll be doing it between your out-of-network provider and your health plan, also. For example, if your out-of-network cardiologist wants to order a test or treatment that requires ​pre-authorization from your insurance company, you’ll be the one responsible for making sure you get that pre-authorization (assuming your plan provides some coverage for out-of-network care). If you don’t get the pre-authorization, your health plan can refuse to pay.

You'll lose your health plan's advocacy with providers

If you ever have a problem or a dispute with an in-network provider, your health insurance company can be a powerful advocate on your behalf. Since your health plan represents thousands of customers for that provider, the provider will pay attention if the health plan throws its weight behind your argument. If the health plan doesn't think the provider is behaving appropriately, it could even drop them from its network. Although things rarely progress this far, it's nice to know you have someone with clout on your side.

On the other hand, an out-of-network provider couldn't care less what your health insurance company thinks. Additionally, no matter how egregious the incident that sparked your dispute was, your health insurance company isn't going to waste its time advocating for you with an out-of-network provider it can't influence.

Managing Risks

If you decide to use out-of-network care, you'll have an important role in making sure you get quality care from your out-of-network provider.

• Research the best care. When possible, research your physician or healthcare provider's credentials and background. This can involve looking up their license, board certification, medical school, residencies, and any disciplinary actions.
• Request your medical records. Make sure your out-of-network providers have the medical records from your in-network providers, and that your in-network providers have the records from your out-of-network providers. 
• Take your own notes when you get care. By taking your own notes, you can give a quick verbal update to your providers about changes in another provider's plans for your care. You should be able to explain why a provider made the changes in your plan of care that they made, not just what the changes were. 
• Negotiate your rate. Plan on negotiating a discounted rate with your out-of-network provider so you don't pay the “rack rate.” Since you'll be paying for a larger portion of your care when it's out-of-network, you need to know what the cost will be before you get the care. If your health plan contributes toward paying for out-of-network care, ask what its reasonable and customary rate is for the care you’ll require. 

Summary

Almost all health insurance plans in the U.S. have provider networks. In order to get the best price, and in some cases, any coverage at all, a plan member will need to use medical providers who are in the plan's network. A member might choose to go outside the network for a variety of reasons, but should do so with a full understanding of how that will affect their coverage and cost.

As of 2022, the federal No Surprises Act protects consumers from "surprise" balance billing from out-of-network providers. This means that patients no longer face higher bills from out-of-network providers in emergencies, or in situations in which the patient went to an in-network facility but received care from an out-of-network provider while at that facility ("facility" refers to hospitals, hospital outpatient centers, and ambulatory surgery centers).

A Word From Verywell

Your health plan likely has a provider network that you're either required to use in order to have coverage, or encouraged to use in order to get lower out-of-pocket costs. You can choose to go outside the network if you prefer that. But you should only do so if you understand how this will affect your coverage and costs.

In some situations, you have no choice. This includes emergencies as well as situations in which you select an in-network medical facility but don't realize that some of the providers at that facility don't have contracts with your insurance company. Sometimes this can even apply to providers you don't interact with at all, such as the supplier who provides your post-surgery knee brace, or the assistant surgeon who comes into the room after you're already under anesthesia. Fortunately, the No Surprises Act began protecting consumers from these "surprise" balance bills in 2022.