How Does Out of Network Insurance Work: A Quick Guide

Health insurance policies can be tricky to understand, and out-of-network coverage can be even more confusing. In this quick guide, we’ll explain how out-of-network insurance works and what you need to know to make informed decisions about your healthcare.

What is Out-of-Network Insurance?

Out-of-network insurance is when your health insurance policy covers services received from healthcare providers who are not in the insurance company’s network. Typically, insurance plans contract with specific providers for preferential pricing, which is why going out of network can create additional costs for patients.

Out-of-Network Costs

When you receive care from an out-of-network provider, the insurance company may cover a portion of the costs but they will often require you to pay more out of pocket. The insurance company will reimburse you for a percentage of the services you receive from an out-of-network provider. However, often the provider charges the patient for the difference between what the insurance company pays and what they feel they are entitled to. This is known as the “balance billing” or “extra billing” and can leave patients with a large expense which they must pay out of pocket.

How Does Out-of-Network Insurance Work?

Referral/Prior Authorization

Some insurance policies may require a referral or prior authorization from your primary care physician (PCP) to see an out-of-network specialist to avoid balance billing. Other policies may not require a referral, but it’s always a good idea to check before you see a provider outside of your network.

Costs and Benefits

Before choosing an out-of-network provider, it’s important to understand the difference in costs and benefits. In most cases, in-network providers offer lower costs and fewer out-of-pocket expenses. However, if you have a specific medical condition and can’t find appropriate care within your network, out-of-network providers may be your only option, and you must consider the benefits of seeking out of network care.

Steps to Follow When Utilizing Out-of-Network Insurance

Researching Providers

It’s essential to thoroughly research providers before choosing an out-of-network healthcare provider. Several resources can be helpful; for instance, you can check reviews of providers online or ask for recommendations from friends or family members in the area. It’s important to do this research to make sure you’re working with a reputable and trustworthy provider.

Checking Insurance Benefits

Once you have chosen an out-of-network provider, it’s essential to understand your insurance benefits to avoid unexpected costs. You should call your insurance company and ask what percentage of the treatment they cover and what the out-of-network out-of-pocket costs are. In this manner, you can get an idea of what costs will come out of your pocket and plan accordingly.

Verification of Eligibility

Before the procedure, ask your insurance company to check your eligibility for out-of-network benefits. This helps you to avoid any costly surprises. Verification of eligibility will provide you with an accurate estimation of your medical procedures’ expense and how much you will have to pay out of pocket.

Submit Claims Promptly

When the procedures are done, submit claims promptly. Usually, claims for out-of-network providers may take more time and require more information, so it’s important to have all the necessary data on hand for a quick response. Any delay in submitting your claim form may result in a longer processing time.

When to Use Out-of-Network Insurance

Emergency Care

In an emergency, you may need to use an out-of-network provider for care with no other alternatives. If it is an emergency and you need to visit the emergency room, and there was no availability of In-network providers, go for it then. Keep all receipts and contact your insurance company as soon as possible, providing them with all the billing information. They will be able to determine how much of the cost will be covered.

Specialist Care

Specialist care needed for a unique condition or procedure may be only available out of network for care. In some situations, receiving out-of-network care may be essential to determining a diagnosis, receiving specific treatment, or getting additional options for care. Always check with your insurer to see what may be covered and any potential additional costs.

Out of Network Insurance: The Bottom Line

Out-of-network insurance coverage can be a bit difficult to navigate, and the rules may differ depending on the insurance company and the type of policy you hold. Before choosing an out-of-network provider, research your policy and check the costs and benefits to make an informed decision.

Working closely with the insurance company to understand the benefits available and the different costs associated with out-of-network care, and always ensure you understand the billing and payment processes involved. Ultimately, staying informed and communicating with your insurance company can save you from expensive bills later on.


  • Can I see an out-of-network healthcare provider under any circumstances?

    Yes, but the cost may be higher, and you will have to pay more out of pocket.

  • Do I need a referral from my PCP to see an out-of-network provider?

    Some policies may require a referral or prior authorization from your PCP to avoid balance billing; however, please consult with your insurer regarding the same.

  • How do I know how much an out-of-network provider will cost?

    You can call your insurance company and ask them what percentage of the treatment they cover and what the out-of-network out-of-pocket costs are. By doing so, you can get an idea of what costs will come out of your pocket and plan accordingly.


1. U.S Department of Labor. Health Insurance Plans and Benefits. Retrieved from

2. Out-of-Network Coverage. Retrieved from

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