In-Network Vs. Out-Of-Network Doctors: What’s The (Financial) Difference?

Although the Affordable Care Act made it possible for nearly 20 million Americans to access healthcare, medical expenses can be a huge financial burden regardless of whether you have coverage or not. In fact, a 2014 survey found that 20% of insured people in the U.S. still struggle to pay their medical bills. There are undoubtedly several reasons for this hardship, but one big contributing factor is out-of-network treatment. Unfortunately, many patients don’t know they’re receiving care from an out-of-network doctor until they receive a surprisingly steep bill in the mail.

For these patients, the monetary difference can be huge. While the total cost of treatment might be roughly the same between in-network and out-of-network doctors — say, $300 — you’ll receive far more coverage when you see a doctor in your network. Not only will your insurance company cover about $140 of that $300 treatment, but you’ll also receive an $85 discount applied for a negotiated rate with your insurer. That means you’ll have to pay only $75 out of pocket. But if you go outside your network, you won’t get that discount; instead, you’ll be on the hook for $160.

To make matters worse, out-of-network healthcare providers don’t always have patients’ best interests at heart (when it comes to their payment, that is). In a recent analysis of more than 2 million emergency department visits, researchers found that more than one-fifth of patients who visited ERs within their health insurance networks were actually treated by out-of-network physicians. To their surprise, these patients were stuck with charges that were not covered by their insurers. On top of that, the study found that these out-of-network ER doctors were paid nearly 2.7 times more than in-network doctors were paid for the exact same services.

In addition, patients in certain states have to deal with what’s known as balance billing — the healthcare provider’s ability to bill a patient for the entire unpaid balance (rather than just a copay or deductible) after the insurance company pays for its portion. Between 2012 and 2015, balance billing complaints in Texas rose by an astounding 1,000%. Some providers will even ask an ER patient to sign a document that states they’ll pay the full healthcare fee, regardless of what their insurer tells them they owe, which essentially creates a new contract that overrides their insurance policy. If a patient refuses to sign, the provider may refuse to treat them.

Even if the quality of care remains constant between in-network and out-of-network providers, the costs could not be more different. It may be tough in an emergency healthcare situation, but remind yourself to make sure your provider is truly within your network. By taking this extra precaution, you’ll save yourself from severe financial stress.

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