Provider Networks: What are they & why are they important?

What is a provider network?  And why is it important to you?

Provider networks are groups of doctors and medical facilities contracted to perform medical services at a discounted rate for the members of health insurance plans.  The participating doctors and medical facilities in a provider network are referred to as “in-network.”  Conversely, doctors and medical facilities not participating in the provider network are considered “out-of-network.”  Participating doctors and facilities vary from network to network, as well as carrier to carrier.

The benefit of provider networks is that if you choose to see an in-network provider you can take advantage of the providers discounted rate and consequently keep healthcare costs lower.  Healthcare providers also benefit from provider networks since they are able to get more patient referrals through the network.

When shopping for healthcare insurance it is important to ask questions about provider networks.  For example, how large is the network?  Are there in-network providers located near me?  Is my preferred provider part of the plan network?

If you already have a preferred doctor, it is important to find out if that doctor is part of the provider network for the plan you are considering.  If your preferred doctor is not part if the provider network for a particular plan you may want to consider another health insurance plan with a different provider network, or you could accept the high cost of seeing an out-of-network provider.

It is also important to note that some plans, generally PPOs, will offer limited coverage for out-of-network providers.  However, HMOs will not cover any care from out-of-network providers.

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