Understanding Out-Of-Network Health Care Costs and Why They Matter

Explore the meaning of an out-of-network expenses and how they can impact you when seeking health treatment.


Health insurance policies typically cover visits, treatments, and other services performed by providers and in facilities with which contracts are maintained. But what happens when a patient seeks treatment with a healthcare provider or in a facility that’s not contracted with their policy? This situation creates an out-of-network expenses, which we explain in detail below.

What is an Insurance Network?

An insurance network, also referred to as a provider network, is a list of healthcare providers and facilities with which a health insurance company is contracted to provide medical care to its members. Those on this list are called “in-network” or “network” providers and typically appear first on searches performed by members when seeking medical care.

Insurance companies determine which providers and facilities to include in their networks based on various factors. One key factor is whether a provider will accept a specific rate for a particular service. If a provider or healthcare organization doesn’t agree to the offered rate for various procedures, they do not become in-network on the insurance policy. Instead, the insurance company deems them to be out of the network.

Different health plans offered by one insurance company often have different networks. If an individual wants to continue to seek treatment with a particular provider or in a specific facility, they may have to choose a higher-level plan to ensure that their desired selection is in-network.

Related: How Health Insurance Claims Are Processed

Out-of-Network Expenses

Out-of-network expenses refers to a patient being responsible for any charges incurred with an out-of-network healthcare provider. When you have health insurance, it’s your responsibility to make sure that every healthcare provider and facility you use is in-network on your plan. You can verify this by contacting your insurance company directly and providing the name of the doctor or facility.

Although a physician or facility representative might claim to be in-network on your plan, it’s still essential to verify yourself. Just because a provider accepts your insurance doesn't mean they're in-network.

If you choose to go out of network for healthcare services, whether intentionally or unknowingly, you will be responsible for a larger portion of the total cost. Some policies have no out-of-network benefits (other than for emergencies), which means you could be on the hook to pay the entire bill.

If your policy does include out-of-network benefits, you’ll still end up paying more because the out-of-pocket (OOP) amount is usually much higher than the in-network OOP total. You may also have a higher deductible, or the billed costs may not apply to your deductible at all.

Related: 6 Key Health Insurance Terms You Should Know

Balance Billing

Seeking treatment from an out-of-network provider may subject you to balance billing, or receiving a bill for the difference between the negotiated or accepted rate and the total billed by the provider. If you choose to visit an in-network facility or provider, you will not be balance billed.

Here’s a real-life example: Your insurance company agrees to pay $75 for an office visit with a specialist. But the specialist you see (who is out-of-network on your plan) charges $250 for that visit. You could get balance-billed, requiring you to pay the remaining $175.

Now that you understand how insurance networks work, you can decide where to seek treatment and how to find a provider that’s in your network. If you have questions, contact your insurance company to learn more.

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