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In-Network vs. Out-of-Network

Posted by Daniel Ramsey on June 26, 2019
Daniel Ramsey

There are many important decisions to make when starting a PT, OT, or SLP private practice. One crucial decision is whether to be in or out-of-network with insurance plans offered to members in the practicing area. 

Man helping elderly woman with crutches

With the current landscape of healthcare, the decision to be in or out-of-network can have a significant impact on a practice. But what does it mean to be an in-network provider? What are the implications of being out-of-network? Let's look at the definitions of in-network and out-of-network so providers can make the most informed decision for their business.

What is an in-network provider?

In-network providers have met the credentialing requirements and have a signed contract with an insurance company to receive a negotiated (discounted) rate for services provided. 

Pro: Patients can use their benefits, often resulting in a decreased financial responsibility for them.

Con: Providers experience higher adjustments when charges are not within negotiated rates.

What is an out-of-network provider?

Out-of-network providers do not have contractual agreements with insurance companies. Therefore, these providers can charge patients the full amount for the services rendered. 

Pros: Providers can receive higher reimbursement when paid at the full charge amount.

Cons: Patients do not always have out-of-network benefits, and even if they do, patients are often left with a higher financial responsibility.

The Bottom Line

Simply put, in-network providers reduce the financial responsibility that patients are left with while out-of-network providers get paid more at the expense of the patient.

Providers who are opening their own practice should consider the pros and cons of joining insurance provider network's and determine which option is best for the long-term success of their business.

Topics: Credentialing

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