Many health insurance policies, especially those offered on the State and Federal Exchanges, don’t offer out-of-network coverage. When they do, it still doesn’t mean that 100 percent of your medical bill would be covered for treatment with an out-of-network provider. If you are treated by a provider who was not within your insurance company’s network, you could end up being financially responsible for a substantial portion of the bill — if not the entire cost. It’s crucial to understand how your insurance company handles out-of-network treatment so you can make informed financial decisions about your treatment options.

Why Does Out-of-Network Care Cost More?

In network providers are bound by their contracts with insurers that limit their compensation to the contracted, allowed rate for any service they might provide. If a doctor charges $500 for an office visit, but the Oxford contract allows $100 for that service, $100 is the most the patient would be responsible to pay for that service. In contrast, there are no contracts between out-of-network providers and insurance companies and therefore their fees at not limited in any way.

Using the same example, if the Oxford policy provided out-of-network care and allowed $100, you would be responsible for the remaining $400. In essence, out-of-network coverage functions more as a reimbursement of some portion of the fee rather than covering the care in full.

Understanding Out-of-Network Reimbursement

If you know you’d like to see an out-of-network provider, you should evaluate how much it will cost before getting treated to avoid unexpected medical bills. Being proactive about your options can help save you a significant amount of money.

Every insurance company has a different formula to determine the allowed amount for out-of-network services. It may be determined by calculating:

  • a certain percentage above what Medicare would have allowed;
  • the average of what the insurance company pays in network providers; or
  • the usual and customary amount per the geographic area, among other formulas.

This information is usually hidden within your insurance policy, and it may take several conversations with the insurance company to get the information you’re looking for. Regardless, it’s crucial to understand that you’ll end up being billed by the provider for the balance that remains after the insurance company pays their allowed amount.

Deductibles & Co-Pays for Out-of-Network Treatment

How much you end up owing for out-of-network treatment can also depend upon whether you have a co-pay or co-insurance. If you have out-of-network coverage in your policy, you may have a higher co-pay for out-of-network care.

Also, if your deductible hasn’t been met, you’d still be responsible for satisfying it. Often, insurance policies have separate (and sometimes higher) deductibles for out-of-network care that must be met, even if you’ve already satisfied your in-network deductible.

Surprise Medical Bill Laws

A number of states have enacted surprise medical bill laws that protect patients in the event of an emergency. Under these laws, you must be informed in writing that the provider was not within your insurance network and sign a consent form to acknowledge your financial responsibility for their care. Otherwise, you can’t be held financially responsible for out-of-network treatment costs. For instance, if you went to an in network emergency room while unconscious, and you were treated by any out-of-network doctors or specimens were sent to out-of-network labs, your financial responsibility for that care would be limited to the requirements of your in network coverages. In states that don’t have surprise medical billing laws, there are no protections for emergency care, and you could be responsible for your entire bill.

Even if your state has surprise medical bill protections, these laws don’t apply to employer self-funded plans since they are regulated by ERISA federal law — not state law. There is currently no federal law in place to prevent surprise medical bills.

Avoiding High Costs for Out-of-Network Treatment

The best way to avoid high costs for out-of-network treatment is to find out in advance whether your doctor is in your insurance network. If you are considering an out-of-network provider, contact the insurance company to find out what formula is used to determine the allowed amount of a particular out-of-network service — it’s helpful to provide procedure codes to get a more specific answer. You’ll also want to make sure you know what your deductible and cost-share will be.

If your visit was an emergency, and your state doesn’t have a surprise medical bill law, you may be able to negotiate with the provider. Sometimes, they will be willing to reduce their fee in exchange for a one-time settlement payment.

In addition, ambulances are often out-of-network with many plans. Some policies only cover ambulance transport if you are admitted to the hospital as an in patient. It’s best to consider alternative transportation, unless it’s a true emergency. Although the insurance company will probably reimburse something, you may be held responsible for the full amount of the ambulance bill.

How Systemedic Can Help With Out-of-Network Bills

If you’ve received an excessive bill for out-of-network treatment, an experienced medical bill dispute advocate can help negotiate a reduction. If you know you need ongoing treatment from an out-of-network provider, an advocate may also be able to negotiate the costs upfront.

Systemedic has been providing help with medical bills for over 30 years and knows what it takes to negotiate out-of-network medical bills quickly and effectively. Offering a fee-based service for those looking to dispute their medical bills, our medical bill dispute advocates are skilled in navigating the insurance maze and will not take “no” for an answer. Contact us for a consultation.