Out-of-Network Services

In some managed care contracts there is a clause that addresses “out of network” service. Each insurance plan outlines what services will be paid, the amount of payment for the service, and what facilities and/or providers will be paid without additional cost. The contracts clearly outline these circumstances. When the insured signs up for the particular insurance carrier, a provider manual is generated that describes what services are considered “in network.”

Each insurance company contracts with individual practitioners, hospitals, laboratories, and other health care providers in the areas of coverage. The rates are negotiated with these entities with the promise that there are a “guaranteed number of lives” that will be directed to them for care. The rates include office visits, radiology reimbursement, laboratory costs, and hospital rates. In some cases the hospital rates are paid for by specific DRG (diagnosis-related groups), per diem, or case rates.

In addition, there may be negotiated rates that outline home care services, long-stay facilities, and subacute care.

The decision to go to the hospital, practitioner, or laboratory that is included in the network assures either a small copayment or no payment from the insured. However, when the insured decides to use an out-of-network practitioner for care, there is either a large copayment or full payment.

According to the managed care companies, these networks keep costs and premiums down, provide a wide variety of services, and allow the insured to make personal choices of their health care providers.