What an Out-of-Network Provider Means

An out-of-network provider is one which has not contracted with your insurance company for reimbursement at a negotiated rate.

This article will explain the difference between in-network and out-of-network providers, and why you might end up paying a lot more for your care if you choose to use an out-of-network provider.

Some health plans, like HMOs and EPOs, generally do not reimburse out-of-network providers at all (except in emergency situations), which means that as the patient, you would be responsible for the full amount charged by your healthcare provider if they're not in your insurer's network.

Other health plans offer coverage for out-of-network providers, but your out-of-pocket costs would be higher than they would be if you were seeing an in-network provider.

In-Network Versus Out-of-Network Providers

An in-network provider is a healthcare provider or hospital that has signed a contract with your insurance company, agreeing to accept the insurer's discounted rates. For example, the healthcare provider might charge $160 for an office visit, but they've agreed to accept $120 as payment-in-full when a patient with XYZ insurance receives treatment.

So if the patient has a $30 copay, the insurer pays $90 and the healthcare provider writes off the remaining $40 since it's above the network negotiated rate. The initial $160 charge is reduced by $40 to get it down to the network negotiated rate of $120. That amount is then split between the patient and their insurance, with the patient paying the $30 copay and the insurance plan paying the other $90.

(It's important to note that a provider might have several different negotiated rates with different insurance companies. So although in this example they agreed to accept $120 if the patient has XYZ insurance, they might accept $110 as payment in full if the patient has ABC insurance.)

An out-of-network provider, on the other hand, doesn't have any contract or agreement with your insurance company (they might be in-network with other insurance plans, but they're considered an out-of-network provider if they aren't contracted with your insurance). So if they bill $160, they'll expect to collect the full $160.

Your insurance plan might pay part of the bill if the plan includes out-of-network coverage. But you'll be on the hook for whatever isn't covered by your insurance—which will be the full amount if your plan only covers in-network care, or if you haven't yet met your out-of-network cost-sharing.

As described below, there are rules to protect consumers from being billed the provider's full charge in certain circumstances when the patient essentially had no choice but to use an out-of-network provider.

Why Is Your Healthcare Provider Not in Your Insurer's Network?

Your healthcare provider may not consider your insurer's negotiated rates to be adequate—this is a common reason for insurers to opt not to join particular networks.

But in some cases, the insurer prefers to keep the network relatively small so that it has a stronger basis for negotiation with providers. If that's the case, it could be that your healthcare provider would be willing to join the network, but the insurer doesn't have any network openings available for the services that your healthcare provider provides.

Many states have implemented "any willing provider" laws, however, that prevent insurers from blocking providers from the network, as long as they're willing and able to meet the insurer's network requirements.

States can impose "any willing provider" rules for health plans that are regulated by the state. But self-insured plans (which are typically used by very large insurers) are subject to federal regulation rather than state regulation. So the "any willing provider" rules don't apply to those plans.

How to Know Which Providers Are Out-of-Network

Health insurers maintain network directories that list all of the medical providers who are in-network. If a provider isn't on the list, they're generally going to be out-of-network. But it's also a good idea to call the provider directly and inquire about whether they're in-network with your insurance plan.

It's important to understand here that a particular insurance company will likely have different types of coverage available in your state, and the networks can vary from one type of coverage to another.

For example, an insurer's employer-sponsored plans might use a more extensive network than their individual/family (self-purchased) plans.

So if you're calling a healthcare provider's office to see whether they take your insurance plan, you'll need to be more specific than just saying you have "Anthem" or "Cigna," since it's possible that the healthcare provider is in some networks for those insurers but not all of them.

Reasons for Using Out-of-Network Health Care

Although it may initially cost you more money, there may be times when you might find it necessary, or even advisable, to use an out-of-network provider.

Sometimes you have no choice, or it just makes sense to choose a non-network healthcare provider. Below is a list of the scenarios in which you may be able to appeal for in-network coverage, or it may be automatically granted.

(Depending on the circumstances, you can submit a network appeal before or after you seek medical treatment; here's an example of a network appeal letter sent after a claim is denied due to network restrictions):

Emergencies: In an urgent situation, you must seek the closest available help. The Affordable Care Act (ACA) requires insurers to cover emergency care as if it's in-network, regardless of whether the emergency care is obtained at an in-network or out-of-network facility.

Prior to 2022, emergency providers in many states could still send the patient a balance bill. That is no longer allowed, however, due to the No Surprises Act.

With the exception of out-of-network ground ambulance charges, patients can no longer be balance billed by out-of-network providers in emergency situations. (A committee has been formed to provide recommendations for increasing transparency and balance billing protections related to ground ambulance charges.)

It's important to note that if it's not truly an emergency, your visit will not be processed as in-network treatment; you should go to a covered provider instead.

Out-of-network providers at in-network facilities: Even though your local hospital might be in-network with your health plan, some of the doctors and other medical providers who work there might not have contracts with your health plan (this varies depending on the hospital's business practices).

Fortunately, the No Surprises Act also protects patients from receiving surprise balance bills from out-of-network providers who treat the patient at an in-network hospital. So if the anesthesiologist who assists with your surgery isn't in-network, you won't receive unexpected out-of-network charges from them as long as the hospital you're using is in-network with your health plan.

Specialized care: If you have a rare ailment for which no specialist is included in your plan, out-of-network care may be crucial. Depending on the circumstances, your health insurer may grant an exception and cover the treatment as if it's in-network, although the provider may still balance bill you if they don't consider the insurer's reimbursement to be adequate.

Changing providers would jeopardize your health: If you're in the middle of treatment for serious or end-of-life issues and your provider leaves the network, it may be in your best interest to continue that care by going out of network. You can appeal for continued in-network coverage for a short period of time or a set number of visits.

Out-of-town care: If you need medical care while away from home, you may have to go out of network, but some insurers will handle your visit to a non-participating provider as if it were in-network.

In-network providers may be available, however, so if it's not an emergency, it's best to contact your insurer first to find out. And insurers with localized coverage areas may not cover any non-emergency care outside of their network service area. If you're planning a trip, it's wise to check with your insurer to see whether you'll have anything beyond emergency coverage while you're away from home.

Proximity issues: The ACA requires insurers to maintain provider networks that are adequate based on the distance and time that members have to travel to reach a medical provider, but the guidelines in terms of what's adequate vary from one state to another. (Note that the federal government is imposing additional network adequacy rules and regulatory oversight as of 2023.)

If you live in a rural area and there is no realistic access to an in-network provider in your area, your continued health may depend upon using a non-participating healthcare provider. In these cases, you may be able to appeal to get coverage for an out-of-network provider in your area.

Natural disasters: Floods, widespread fires, hurricanes, and tornadoes can destroy medical facilities and force people to evacuate to other areas in which they must seek health care. Sometimes, these patients may be eligible for in-network rates as part of a declaration of emergency by the state or federal government.

Out-of-Network Providers Can Still Bill You In Some Cases, Even if Your Insurance Covers Some of the Cost

It's important to note that even if your insurance company makes an exception and treats your out-of-network care as if it's in-network, federal law may not require the out-of-network provider to accept your insurance company's payment as payment in full.

(As noted above, this changed as of 2022 for emergency care as well as most scenarios in which a patient receives care at an in-network facility, but is treated by at least one out-of-network provider during the visit.)

For example, let's say your insurance company has a "reasonable and customary" rate of $500 for a certain procedure, and you've already met your in-network deductible. Then you end up in a situation where an out-of-network provider performs the procedure, but your insurer agrees to pay the $500. But if the out-of-network provider charges $800, they can still send you a bill for the other $300.

This is called balance billing, and it's generally legal if the provider isn't in your health plan's network. However, it's not legal if the situation was an emergency, or if the patient went to an in-network facility and was (generally unknowingly) treated by an out-of-network provider while there. These are important consumer protections that were implemented as of 2022, thanks to the No Surprises Act.

Although many states had already implemented rules to protect patients in those situations, there were many other states that had not taken action. And state-based health insurance regulations don't apply to self-insured health insurance plans—which cover the majority of people who have employer-sponsored health insurance. This is why the federal No Surprises Act was so important—it filled in the gaps.

Network Adequacy Regulations

The ACA and related regulations have implemented rules that apply to plans sold in the health insurance exchanges. These plans are required to maintain adequate networks and up-to-date network directories that are readily available online.

In 2017, the Trump administration began deferring to the states for network adequacy determinations, which weakened the enforcement of network adequacy standards. That changed as of 2023, however, after the Biden administration finalized a rule change that puts the federal government (the Centers for Medicare and Medicaid Services) in charge of ensuring that health plans sold via HealthCare.gov have adequate networks.

Under the new rules, starting in 2024, the federal government will also ensure that health plans sold via HealthCare.gov are in compliance with appointment wait time standards. This will be in addition to the current time and distance standards that are used to ensure that patients don't have to travel an unreasonable time or distance to see a provider.

In the years since ACA-compliant plans first became available, networks have narrowed in an effort to rein in healthcare costs. So for people buying coverage in the individual market, networks are generally smaller than they were in the past.

And HMOs and EPOs have become the dominant types of managed care in the individual/family market (as opposed to PPOs, which used to dominate that market).

This makes it essential for enrollees to double-check the network and coverage rules of any plan they're considering, particularly if they have a healthcare provider they want to continue to see.

In the small group and large group markets, states also have the ability to review plan filings to ensure that the networks are adequate. But especially in the large group market, employers tend to have considerable leverage when working with insurers to make sure that the plans they'll be offering to their employees have adequate provider networks.

Summary

An out-of-network provider is one that has not signed a contract with a given health insurance plan, agreeing to accept a negotiated reimbursement rate as payment in full. A provider might be in-network with one health plan but out-of-network with another. And in some cases, a health insurer might have different providers in-network for different types of coverage (small group versus individual/family, versus Medicare Advantage, for example).

If a patient chooses to use an out-of-network provider, they may find that they have to pay all of the bill themselves, or that their out-of-pocket costs are higher than they would have been with an in-network provider (the specifics will depend on the health plan and the circumstances).

Under the No Surprises Act, which took effect nationwide in 2022, patients cannot be charged more than their regular in-network cost-sharing in two out-of-network circumstances: Emergencies, and out-of-network care that's provided at an in-network facility.

A Word From Verywell

It's generally in your best interest to try to use an in-network provider whenever possible. This will keep your costs lower and reduce administrative hassle (since the provider will bill your insurer directly, as part of their network agreement). But if you have no choice but to use an out-of-network provider due to an emergency or an out-of-network provider working at an in-network facility, the No Surprises Act protects you from unexpected medical bills.