Table of ContentsView AllTable of ContentsFinancial RisksQuality of Care IssuesManaging Risks
Table of ContentsView All
View All
Table of Contents
Financial Risks
Quality of Care Issues
Managing Risks
But depending on the circumstances, getting careout-of-networkcan increase your financial risk as well as your risk of having quality issues with the health care you receive. Doing your homework in advance can help to mitigate these risks.
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It’s important to have 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.
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 it’s a good idea to review your plan and know what’s covered ahead of time.
You Lose the Health Plan 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 ascost-sharing) is thedeductible,copay, orcoinsuranceyou 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.
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, but 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 calledbalance billingand can potentially cost you thousands of dollars.
However, 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 Example
Say you decide to use an out-of-network provider for your heart catheterization. Your PPO has a 50% coinsurance for out-of-network care, and for this example, we’ll say you’ve already met your out-of-network deductible. So you assume that your health plan will pay half of the cost of your out-of-network care, and you’ll pay the other half. The heart catheterization comes with a bill of $15,000, so you think you’ll owe $7,500.Instead, your PPO will look at that $15,000 bill and decide that a morereasonable chargefor that care is $6,000. The PPO will pay for half of what they consider the reasonable charge, which is $3,000.The out-of-network provider doesn’t care what your health plan thinks is a reasonable charge. It credits your PPO’s $3,000 payment toward the $15,000 bill and sends you a bill for the balance, which is why it’s called balance billing. You now owe $12,000 rather than the $7,500 you thought you’d owe.
Balance Billing Situations
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).Fortunately for patients all across the country, the federalNo Surprises Acttook effect at the start of 2022, protecting consumers in these involuntary situations.
For several years, states had been taking action to protect consumers from surprise balance bills, but states cannot regulateself-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. However, 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.
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 will 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.
In 2025, the highest allowable out-of-pocket limit for in-network care is $9,200 for a single individual (assuming their health plan isn’t grandfathered or grandmothered).But a plan that covers out-of-network care can set a higher out-of-pocket cap for those services, or not cap them at all. Thus, it’s important to understand your policy’s rules for this before choosing to receive out-of-network care.
The federal No Surprises Act provides significant protection from surprise balance billing as of 2022. The law protects consumers in two situations: emergencies and scenarios in which the patient receives care at an in-network facility but unknowingly receives care from an out-of-network provider while at the in-network facility.
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
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
Ultimately,it’s your responsibilityto 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-authorizationfrom 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.
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.
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.
Since 2022, the federal No Surprises Act has protected 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).
In other situations, 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.
10 Sources
Verywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read oureditorial processto learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
Kona M.State Balance-Billing Protections. The Commonwealth Fund.
Koski-Vacirca, Ryan; Venkatesh, Arjun. Health Affairs.Rulemaking For Health Care Affordability: Implementing The No Surprises Act.
HealthCare.gov.Using your health insurance coverage: Getting emergency care.
Centers for Medicare and Medicaid Services.Affordable Care Act Implementation FAQs - Set 1.
Pollitz, Karen. Kaiser Family Foundation (KFF).No Surprises Act Implementation: What to Expect in 2022.
Hoadley J, Lucia K, Kona M.States are taking new steps to protect consumers from balance billing, but federal action is necessary to fill gaps. The Commonwealth Fund.
Haefner M, Rappleye E.New federal surprise billing laws proposed: 7 things to know. Becker’s Hospital Review.
HealthCare.gov.Out-of-pocket maximum/limit.
Cigna.Claims and explanation of benefits (EOB).
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