What Is Out-of-Network? Definition for Cash-Based Clinics
Out-of-network means a clinic has no contract with a patient's insurance plan, so it sets its own prices, the patient pays the clinic directly, and the patient may claim partial reimbursement from their insurer.
Out-of-network means your clinic has not signed a contract with the patient's insurance plan. You set the price, the patient pays you at the visit, and if their plan has out-of-network benefits they file a superbill and get some of it back. A chiropractor who charges $85 per adjustment out-of-network collects $85 every time, instead of waiting weeks for whatever the plan's fee schedule allows.
What is the difference between in-network and out-of-network?
In-network means the clinic has a contract with the insurer; out-of-network means it does not. HealthCare.gov defines a network as "the facilities, providers and suppliers your health insurer or plan has contracted with to provide health care services" (HealthCare.gov). That contract sets the allowed amount the clinic accepts, the paperwork it does and, often, how many visits get approved. Out-of-network clinics skip all of that. The patient feels the difference: HealthCare.gov says out-of-network coinsurance "usually costs you more than in-network coinsurance" (HealthCare.gov). So the clinic has to give people a reason to pay more, which is a marketing job, not a billing one.
What is balance billing, and does it matter out-of-network?
Balance billing is billing the patient for the gap between your charge and the insurer's allowed amount. HealthCare.gov defines it exactly that way and adds that "a preferred provider may not balance bill you for covered services" (HealthCare.gov), because the network contract forbids it. Most cash clinics never run into the question, because they collect the full fee at the visit and leave reimbursement between the patient and the insurer. Where it gets messy is a hybrid clinic that is in network with some plans and out with others. If that is you, read up on running a hybrid cash and insurance practice before you set prices.
Is out-of-network the same as going cash-based?
For commercial insurance, mostly yes: leaving networks is the core move in deciding whether to drop insurance. Medicare is the exception. CMS lists physical therapists and chiropractors among providers not eligible to opt out of Medicare (CMS), so "out-of-network" does not describe your relationship with Medicare patients. You need a separate plan for them. When patients ask on the phone, the do you take insurance script gives the front desk a clean answer.
This is general information, not legal or billing advice; check your state board and a healthcare attorney before you change how you bill.
Questions owners ask
Can patients use insurance at an out-of-network clinic?
Often, yes, indirectly. If their plan has out-of-network benefits, they pay the clinic and then submit a superbill to their insurer for partial reimbursement. HMO plans frequently have no out-of-network benefits at all.
Is out-of-network the same as cash-based?
Close, but not identical. A cash-based clinic is out of network with commercial insurers, but Medicare works differently: physical therapists and chiropractors cannot opt out, so Medicare patients follow their own rules.
Why would a clinic choose to be out-of-network?
To set its own prices and visit lengths, stop waiting on reimbursements, and drop the staff time spent on authorizations and denials. The trade-off is that the clinic has to sell its value to patients who pay more up front.