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Out-of-Network Providers
Out-of-network charges are incurred by those insured under a PPO plan but use a medical provider that is not contracted with the PPO network providers. Patients that use Out-of- network providers will incur higher out-of-pocket expenses, deductibles and co-insurance. Out-of-network providers are an extension of PPO under most benefit plans. The disadvantages of using in-network-providers far outnumber those of out-of-network providers. Most people that are enrolled in a PPO that use an out-of-network provider do so because they may have a specific medical condition that requires special care. In these cases, the issue at hand is personal and important to the patient such that they are willing to incur the higher out-of-pocket expenses, co-pays, and deductibles. Insurance companies are able to keep costs down through HMOs and PPOs in that they are able to contract lower healthcare costs with a group of providers. See www.ccnusa.com for example of a list of providers. Therefore they highly prefer insured use these programs, as such they charge the higher deductibles and co-insurance payments for the use of out-of-network providers. HMOs and prescription drug plans do not offer out-of-network benefits.
Advantages of Out-of-Network Providers
When an insured opts to use an out-of-network provider, he or she can choose any healthcare provider. For example, a couple going through infertility problems can choose the best reproductive endocrinologist and a heart patient may choose the best known cardiologist recommended by a friend or family member. Patients can seek out the best physicians or specialists in whatever affliction they may have. When out-of-network providers are used, no referrals are needed, except for hospitalization in some plans.
Most doctors choose to remain out of network because they want autonomy in treating their patients. They want complete control in treating their patients and provide the highest level of quality care without the interference of insurance companies. Some doctors want to protect and keep confidential treatment records of the insured and not provide them to the insurance companies. See www.psychologyinfo.com/consumers/network.html In both cases, the patient’s best interest is looked out for and doctors are free to treat their patients as they see fit. The insurance company does not dictate the course of treatment.
Generally, doctors participating in an HMO and PPO are rewarded in their efforts to keep costs down. They receive incentives such as bonus from the insurance companies. This motivation for bonuses from insurance companies is lacking with out-of-network providers, so they are not conflicted in choosing the right treatment options for their patients and lowering costs for the HMO or PPO.
Disadvantages of Out-of-Network Providers
The most apparent disadvantage is higher costs in the form of higher co-payments, deductibles and co-insurance payments. Personal choice, a subsidiary of Blue Cross and Blue Shield has the following out-of network deductibles:
Benefit In-Network Out-of-Network
Preventative Care $5 Co-payment 50%, after deductible
Pediatric Immunization 100% 50%, after deductible
Routine ob/gyn exams 100% 50%, after deductible
Mammogram 100% 50%, after deductible
Maternity
First visit 100% 50%, after deductible
Hospital 100% 50%, after deductible
Outpatient laboratory 100% 50% after deductible
Outpatient Diabetic Education 100% Not covered
In the Blue Cross Plus plan offered to
The average co-insurance after deductibles are met is on the average 50% in most out-of-network plans compared to no co-insurance in HMOs and 20% in PPOs. Annual deductibles when out-of-network provides are used ranged from $5000 to $8000 for a family coverage and $3000-$5000 for a single coverage. That means, before the insurance company can make a single payment to an out-of-network provider, the insured must have first paid $3000-$8000 depending on whether it’s a single or family coverage.
Generally when an out-of-network provided is used; the patient must pay the physician upfront then file a claim for reimbursement. This can cause an enormous stress as it means that patients will be forced to use in-network-providers when they cannot come up with the necessary cash to pay an out-of-network physician upfront.
These higher co-insurances and deductibles can eventually cause financial instabilities in some families such as those that could lead to bankruptcy. Visit www.ibx.com/broker_forms/zpcoption2.pdf and www.bluecrossca.com/clients/uofc/uc for information on co-insurance and deductibles.
Compare and Contrast Out-of-Network Providers to PPO and HMO
Out-of-network plans are significantly costlier to the employee compared to HMO and PPO. Looking at it from a costs perspective only, it makes HMOs very attractive. The consequences of using out-of-network providers can result in patients using HMOs or PPOs while maybe compromising their healthcare needs. The major benefit to the employee is freedom to choose any doctor and knowing that the insurance company will not dictate treatment options. Because healthcare cost at the out-of-network level is significantly more expensive that HMO and PPO, employers are protected by the reduced level of coverage in terms of higher co-payments, deductibles and co-insurance such that the employees that chooses to use an out-of-network provider bears the eventual costs.