Insurance 201 — In-Network, Out-of-Network, and What It Means for You

A couple sits together at home reviewing paperwork using a calculator and computer - assessing insurance coverage.

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Understanding commercial healthcare benefits can be tricky and often causes increased anxiety when a person is already faced with navigating the healthcare system. This includes seeking physical therapy care for pain or injury. The confusion that all the ins and outs of medical insurance includes should not stop you from receiving the care you need. At Therapeutic Associates Physical Therapy, our goal is to ensure you feel confident in understanding the cost of care, what your insurance will cover, and your financial responsibility. 

Understanding in-network vs. out-of-network insurance coverage

Because there are many variables when it comes to individual health insurance companies and coverage, it is always challenging to provide answers that apply to every situation or patient.

One of the obstacles many face when seeking to understand these variables is the use of specific terminology.

In our previous blog post, Insurance 101, we walked through some of the most common terms often included in insurance lingo, including deductible, copay, coinsurance, referral required, authorization required, maximum out-of-pocket costs, and benefit limits. Hopefully that blog helped clarify how those variables work in relation to one another and impact your coverage and cost. 

two young women look together at a laptop computer

The next factor that patients often find confusing concerns how a provider being in-network or out-of-network impacts the patient’s out-of-pocket costs. Another term that may arise in this conversation is “contracted rate.” Most people know that choosing an “in-network provider” will save them money, but many are not quite sure what that means. The terms can be confusing, but once you understand them, your insurance coverage will make more sense.  

In-Network:

A provider is considered “in-network” if they are contracted with your insurance company to accept negotiated rates for covered services, which are typically lower than the normal billed rate. An insurance company’s network of healthcare providers includes doctors, specialists, physical therapists, dentists, hospitals, surgical centers, imaging facilities, pharmacies, and more. This ensures easy access to a wide range of in-network care. When seeing an in-network provider, you will only pay your copay or coinsurance along with your deductible.  

Out-of-Network:

A provider without a contract with your insurance company is considered “out-of-network.” This does not necessarily mean you won’t have any coverage with that provider. If your policy includes “out-of-network benefits,” it will pay a pre-determined amount for covered services received out of network, leaving you responsible for any difference in the final bill. When a provider is out of network, they have not negotiated a discounted rate with your insurer, therefore your bill will be the normal, full rate.

It’s important to note that your portion of a bill from an out-of-network provider will often be in addition to your deductible, copay, or coinsurance. Furthermore, not all insurance policies include out-of-network benefits, in which case, if you see a provider who is not in-network, you will be responsible for paying entirely out-of-pocket.  

Contracted Rate:

The contracted rate is the dollar amount an in-network provider has agreed to receive/accept as payment from your insurance company for the service they provide. This is often a negotiated/discounted rate and can vary vastly from one insurance company to another and even from one policy to another.  

Maximum Allowed Amount:

Another way to look at the contracted rate, the maximum allowed amount refers to the absolute top dollar amount that an insurance company will pay to an in-network provider for any given service based on the contract in place. This amount does not change, even if the provider submits a higher charge. The difference between what is billed and what is allowed is not the patient’s responsibility, because there is a contract in place between the provider and the insurer. 

Insurance coverage for physical therapy

A question about insurance that often comes up when a person first contacts one of our clinics to begin their physical therapy journey is whether we “accept” or “take” their insurance. This is typically in reference to a provider being “in-network” with an insurance company with a signed contract in place.

PT Rob Barnes assists a young female patient with balance and strength work in clinic at Boise PT

After an appointment with your physical therapy team at Therapeutic Associates, we submit a claim to your insurance based on the services provided during that session. Each type of service has a certain code associated with it, and each code has a maximum allowed amount that the insurance will pay. 

As your partner on your road to recovery, our focus is ensuring your treatment is customized to get you to your goals as quickly and safely as possible. We do not plan any aspect of patient care around codes, but simply apply the codes to the bill as accurately as possible after each appointment. 

Throughout your care, we are constantly reassessing your situation, which changes based on your progress, and as such your treatment plan is fluid and flexible, making it impossible to pre-determine which codes will be billed for each appointment.  

Let’s use an analogy. Say you are in a minor car crash, and you call a body shop to ask about repairs. It would be impossible for the mechanic to give you an estimate of what the cost will be just by talking to you. They would first need to assess the car in person to try to determine the extent of the damage and to formulate a plan for the repair. Only then could they provide a reasonably accurate estimate or bid. Even then, most people understand that this amount can change if other issues come up during the repair process, such as an additional part was broken that could not be seen prior to beginning the work.  

This functions much like a PT assessing your body for dysfunction and to understand the root cause of your condition. So, when a person wants to know on the first visit before they’ve seen a provider how much their physical therapy care will ultimately cost, we cannot provide a truly accurate estimate because, like the mechanic, we have not been able to fully assess the problem(s) or formulate a plan for recovery. 

Physical therapist Rob Barnes assesses a patient's knee during intake at a PT appointment.

Using the same analogy, let’s say that your car crash is covered by your insurance. If your body shop is contracted with your insurance company, they will negotiate the charges, and you will simply pay your deductible. If your body shop is not under contract with your insurance company, you can still elect to have them do your repairs, but your insurance company will not have any input on how much the body shop charges you, and you would be responsible for any charges not covered by your insurance company.

Similarly, if you have a certain physical therapist you prefer to work with and they are out of network with your insurance, you can still go to them for your PT care, and if your policy has out-of-network benefits, some of the cost will be covered.

If your policy does not include out-of-network coverage, direct access laws still allow you to see any physical therapist you choose, though it is important to realize that your insurance may not pay, and the responsibility for all charges then falls on you.  If this is the case, Therapeutic Associates will work with you on a cash-pay plan to get you the care you desire and need.

Understanding healthcare benefits

We hope this blog series is helping you understand a little more about how insurance works and that you now have a better grasp of your coverage. We encourage you to call your insurance company to learn about the outpatient physical therapy benefits included in your individual plan. 

If you need help, our clinic administrators are more than happy to review your insurance coverage with you and explain payment expectations. 

Whether you are a first-time patient of physical therapy or a loyal, returning customer, it is our goal that you feel confident in understanding your insurance coverage.

Don’t miss the first installment of this blog series — Insurance 101: Navigating Commercial Healthcare Benefits — where we break down commercial healthcare benefits, helping you understand key insurance terms like deductibles, copays, and coinsurance to make informed care decisions.

Insurance 101:

Navigating Commercial Healthcare Benefits
part one
older couple gardening

Get back to what you love.

As physical therapists, we know the importance of pain-free movement for overall health and well-being and we’re here to help. If you ‘re battling nagging pain or an injury, don’t let confusion about insurance stand in your way – get started with PT today! 

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