Healthcare systems such as Health Maintenance Organizations (HMOs) and Preferred Provider Organizations (PPOs) attempt to save on medical costs by forming networks of providers. The providers give discounts on their services in exchange for larger numbers of customers and guaranteed payments.
As a result, you usually have significant financial incentive not to go outside the provider network supported by your insurance company. Depending on your plan, out-of-network costs are either slapped with large surcharges or not covered at all.
Even so, there are situations where you may want to either go out of network, or have other circumstances that make the cost irrelevant.
- Emergency Situations – In true emergencies, virtually any plan will accept the closest facility that is available. You will, however, need to contact the insurance company or your PCP (primary care provider) quickly to be covered – usually within 48 hours. If you are not capable, someone authorized to act for you will need to make the notifications.
Verify with your policy what is defined as an emergency to avoid any nasty surprises. Do not assume anything.
- Traveling – It is wise to check your health plan before you travel to verify if there are any in-network options at your destination. You will then know where to go if there is an issue. If not, you know you will need to make some phone calls to get authorizations for coverage.
Generally, the above rules on emergencies are valid when you are traveling. The definition of emergency is key.
- No Network Physicians Available – If you need care by a specialist that is not available in your network and/or within a reasonable distance, you may be able to receive pre-approval to go out of network. Pre-approval is a must. Expect a fight on the definition of “reasonable distance”.
- Trusted Doctor – If you have a doctor you trust above all others, especially a specialist, then you may consider it worth paying the out-of-network price. In that case, try to negotiate a lower payment in exchange for your loyalty. If you can afford it, offer cash payments in exchange for a discount.
- Disaster – If the facility itself is overwhelmed or hit by a natural disaster– for example, the Joplin, Missouri tornado that decimated a major local hospital – your plan may allow for out-of-network care caused by a capacity problem.
- Uncovered Procedures – Items like elective cosmetic surgery are not covered by health insurance, so network affiliations are irrelevant.
The most important thing is that you read and understand your health insurance plan before you are lying on the sidewalk, contemplating why your knee is bending in the opposite direction. You need to know exactly what procedures need out-of network pre-approval and how the charges are calculated. You also need to know who is in the provider network, and not just for primary care.
Even then, you may be caught by surprise. For example, it is possible that your surgeon is in network but an out-of-network anesthesiologist is brought in to assist. You can try to clear this in advance if you are having elective surgery but there are few guarantees.
There are three takeaways: try to stay in network whenever possible, seek approval in advance for out-of-network visits, and fight any sneaky out-of-network charges.
We may add a fourth takeaway: don’t buy a health plan with absolutely no out-of network options. If you do, you are on your own in negotiating your out-of-network health care bills. That’s enough to require fresh medical care… or at least some over-the-counter headache medications.