In-Network vs. Out-of-Network - #MedicalBillerExplains Ep. 2

If you have health insurance, you might think that that means you're able to go to any doctor or any hospital, easy as can be. But of course, it's a little bit more complicated than that. We talk about what in-network and out-of-network mean in the context of health insurance.

In-Network vs. Out-of-Network - #MedicalBillerExplains Ep. 2
Photo by National Cancer Institute / Unsplash


Frederick McNulty, Finestra: Hey everyone, welcome to our channel. I'm Frederick McNulty, Director of Content at Finestra. In this series, we're going to be asking the most common questions about healthcare in the United States and hearing answers from certified experts.

Amethyst Storey: Hi, I'm Amethyst Storey. I'm a certified professional biller through the AAPC. I've been in healthcare for 19 years and a medical biller for 16 years. Great to be here with you.

FM: If you have health insurance, you might think that that means you're able to go to any doctor or any hospital, easy as can be. But of course, it's a little bit more complicated than that. In this video, we're going to be talking about what in-network and out-of-network mean in the context of health insurance.

I was hoping that we could start with the basics here. What is a hospital?

AS: A hospital is usually where you go to receive emergent care or to have a procedure or a surgery done. It's generally not for things that you could see your primary care provider with. For example, you don't generally go to a hospital for primary care or preventative care, physicals. It's normally if you had an accident, something emergent happened and you need care right now. Most of the time, life or death situations, situations that maybe can't be handled by a doctor's office because they don't have the supplies to do it, or surgeries where anesthesia is required.

FM: It sounds to me that a hospital is quite different from, say, your local doctor's office. What exactly would you say is a doctor's office in this context?

AS: Your doctor's office is generally where you would go if you had–for example, you needed preventative care, you needed to get vaccines, or you needed your annual physical done to make sure that there was nothing going on that needed to be taken care of. You go to a doctor for certain chronic conditions that are not life-threatening but still need to be treated. It's kind of like your home for medical care. They keep track of everything that's going on with you, and refer you out to specialists or the hospital if there's something urgent that they're not able to take care of.

FM: You brought up being referred by your local doctor's office to a specialist. What is a specialist?

AS: A specialist is generally a doctor that is not in internal medicine or a family doctor. It's things like endocrinologists, which handle diabetes and endocrine issues. It's things like a dermatologist that handles things to do with your skin. It's a doctor that specializes in a very specific area of healthcare.

FM: Put simply, what does it mean to be in-network or out-of-network?

AS: Simply in-network means that your doctor has a contract with your insurance company. Out-of-network means the doctor does not have a contract with your insurance company.

FM: How do you know if a provider or a hospital is in-network as opposed to being out-of-network?

AS: There's a few ways to know if your provider is in or out-of-network. You can choose a provider yourself and call the office and ask them if they're in or out-of-network with your particular plan. You can go on the website for your insurance plan, and there's always a link on there that says “Find a provider,” and it will tell you which providers are in-network with your specific plan. Or, you can call the insurance company and they can give you that same list of providers. It’s whatever you're comfortable with.

FM: Let's say that you are in a situation where you need healthcare and your only choice at the moment is a provider or a hospital that's out-of-network. What happens then?

AS: If your only choice of healthcare and the area that you're in is out-of-network, there's two things that can be done. One, it's going to depend on if it's emergent care, or if it's a regular healthcare situation. You can always file an appeal with your insurance company, which basically just means you're essentially writing a letter that says there were no in-network providers in my area available to me. Can you please cover this visit for this out-of-network provider. Your provider that you see can also help you with a letter of appeal, although sometimes appeals are better processed when they come from the patient. But if you have a hard time with that, your provider can always help you with that letter.

FM: Do insurance companies typically respect letters of appeal? What does that process look like?

AS: The process is a little bit different depending on if it's coming from a patient or a provider. The process–when it's coming from a provider–is that the provider's office will send a letter requesting an exception for that particular visit on the basis that there are no in-network providers in your area. They will review it. Sometimes they will come back and say, yes, we'll pay this. Sometimes they'll come back and say, no, there's another provider in a certain radius that was in-network that you could have gone to.

The next level to go from there is that the patient can appeal it. If there was a reason why you couldn't go to an in-network provider in that radius–say the radius is 50 miles, but the patient doesn't have a car and you don't have the ability to travel that far–you can write a letter on that basis. And the insurance company will also review that.

FM: What would you say the approval rate is like?

AS: The approval rate for appeals really depends, but I would probably say that when I get appeals, maybe 50% of the time they get paid. And 50% of the time I have to escalate them to a second level appeal.

FM: In situations where an ambulance is called - how do ambulances fit into this all?

AS: Ambulances are different. When you call for an ambulance, it's an emergency situation. You don't get to pick the ambulance company that comes to you. They either have a contract with your insurance company or they don't. They will get your insurance information usually after the fact and bill your insurance company, and then they'll mail you a bill. If the bill looks wrong–it looks like maybe they didn't submit it to your insurance company, you feel like it was billed wrong–you can always call the ambulance company and ask them if they billed your insurance company, and if they did, you can ask them if they have a contract with your insurance company.

If the case is that they don't have a contract with your insurance company, you would still be responsible for the out-of-pocket amount; however, you can set up a payment plan with them. You don't have to pay that whole out-of-pocket amount at once. You're not going to get any kind of interest fees or anything like that. You just call them up, explain to them what you can afford and pay them as much as you can pay them each month.

FM: It seems to me that emergency care is treated separately from other sorts of care. Could you speak a little bit about that?

AS: Yes. Emergency care is very different from your regular provider’s office or your routine care. In an emergency situation. You're not going to have the time to call and find out if your provider, your hospital or your ambulance is in-network. With emergency care, they are not allowed to charge you a higher amount. There is usually, with your typical insurance plan, you'll have a co-pay for the emergency room. You'll have a copay for urgent care, if that's the situation. They can't charge you any more than that amount, whether they're out-of-network or not, because it's an emergency situation and it's treated differently.

FM: How is the determination made that something is an emergency versus not. If I have a bad stomach ache, for example, what makes that an emergency as opposed to just a run-of-the-mill health issue?

AS: The difference is going to be based on whatever diagnosis that the doctor who sees you provides. For example, if you have a stomach ache and it's due to some kind of urgent issue and it could kill you, and they have to do some kind of surgery or some kind of procedure to fix it, that's considered emergent. If it's just a really bad stomach ache and they can relieve it with medication and send you home on your way, and you don't become inpatient, or it's not an urgent issue that would be considered non-emergent and it's billed a little differently. But your insurance company doesn't just go by the procedure code. They go by the diagnosis to determine the medical necessity.

FM: So if I were to have–just to use the stomach ache example–a really searing stomach ache pain, and I go to the hospital thinking it's an emergency, but the doctor doesn't classify it as such. Could I be stuck with a more expensive bill?

AS: The answer is yes. It all is based on the diagnosis. So if you have really bad stomach pain, of course, go to the hospital and get it treated. But if the diagnosis doesn't match and the insurance company says that it's not medically necessary, it wasn't an emergency, then it's billed as a regular medical claim rather than an urgent medical claim.