Eli5 how can your doctor’s office accept your insurance but still be out of network?


Eli5 how can your doctor’s office accept your insurance but still be out of network?

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Insurance will have in network and out of network rates. In network gets special lower rates than out of network. So a doctors office can still accept it but not be in contact with that insurance.

Your insurance has an advertised price for a procedure saying “we will pay upto X price”. If the doctor thinks “well that’s a fair price” then they accept the insurance. If not, they don’t.

Sometimes they’ll ask you to cover the difference between what insurance will pay and what the doctor charges.

These are different from co-pays, which the insurance expects you to pay before the insurance pays, meaning you pay no matter how much the insurance covers, even all of it.

Both of those (“in network” and “out of network”) can accept your insurance, and your insurance will pay a portion of the costs.

The main difference is that “in network” has agreed on what the cost of a procedure will be, and exactly how much insurance will pay for (taking into account deductibles and co-pays, and what insurance covers – for instance 80%). There is a fixed total cost.

Out of network means the doctor has not agreed to a price with you and your insurance company. The doctor can charge you much more. So you insurance will pay a certain amount but the doctor will bill you directly for the remaining costs.

For instance, you need surgery and it costs $5,000 according to your insurance company. An in-network place will charge you $5000 (and for instance, you might bay $1000 deductible plus 20% of remainder for a total of $1800).

However, go to an out-of-network place, and they might charge you $10,000. You insurance will kick the same $3200 dollars (maybe, they could just say it is flat out not covered), so you have to pay the remaining $6800.

Keep in mind you are always still paying your premiums for health insurance, but if you don’t follow their rules and see their in network people, you typically get screwed. And this is a small example (like getting a wart removed). There can be medical bills in the 10s of thousands or hundreds of thousands dollars easily.

Note: this only occurs in the USA.

In a world without insurance, you’d go to a doctor when you had a problem and they’d fix you and send you a bill, which you’d pay in full.

Insurance adds a layer to that, where you pay them a fixed amount every month and in turn they pay the doctor’s bills.

Rather than paying 100% of everything, the insurance companies have certain rules – you have a deductible that you must meet yourself first, they will only cover certain procedures, they will only cover a max amount or percentage for each procedure and you must pay the rest yourself, and more.

Now, insurance companies also have tie-ups with certain doctors and hospitals. These doctors will have special rates just for your insurance provider, and so your insurance will cover more of the cost than normal. These are called in-network doctors.

This doesn’t mean that out of network doctors won’t be covered at all, but your insurance will just have stricter rules for them.

“In network” means the doctor or location has a contract with insurance regarding payment rates and other details of coverage. Typically, this contract will also include provisions such as no “balance billing”, where the doctor can charge you more than your insurance thinks is acceptable, requiring you to foot the bill.

A doctor or location “accepting” insurance means they are willing to bill the insurance directly. A location not accepting your insurance does not mean your insurance won’t cover the work, but merely that you’ll need to pay the doctor directly and file a claim with the insurance to be reimbursed.


Presuming the US: There are also a few specific laws in place, such as insurance having to treat all emergency care as “in network” and balance billing being disallowed for such care. You also cannot be billed as “out of network” if you go to an “in network” facility and are treated, fully or partially, by an out of network provider, unless you are reasonably warned ahead of time that the provider is out of network.