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In-Network vs. Out-of-Network: Which is Right for You?

Written by: Mediware on Monday, September 18, 2017 Posted in: Outpatient Rehab, Billing, business best practices, insurance, physical therapy, reimbursements

in network vs out of network

When starting up new clinics, rehab professionals often wonder if they should choose in-network or out-of-network payment systems. There’s no right or wrong answer, but there are a few differences to keep in mind as you decide what’s best for your clinic. Here a few facts that will help you make an informed decision:

In-network pros and cons

Clinics who choose an in-network payment model must agree to accept contractual rates, which may not always be desirable. This is not as good as if you billed out-of-network and received the full billed charges, but it does give you access to more patients as an in-network provider.

Referring physicians appreciate the ease of “one-stop shopping.” They want to deal with clinics that are in-network across the board, so there is value in being an in-network provider despite having to accept the often-undesirable network reimbursement. And certainly patients want to make the most of their health insurance, so they’re more likely to choose providers within their networks.

Out-of-network pros and cons

Clinics that are out-of-network can bill according to their own pricing and don’t have to accept contractual rates. Out-of-network providers can also bill patients for whatever their insurance plans don’t pay – or not. When you’re out-of-network, you aren’t bound by the terms and conditions of that payer, and you have the ability to negotiate. If you’re in-network, you’re contractually obligated to collect copays, co-insurance, unmet deductibles, etc. Waiving those could constitute insurance fraud. But if you’re out-of-network, you’re not bound by the payers’ rules and can bill patients as much or little as you want.

Note: This does not apply to Medicaid beneficiaries. In most states, if you’re not an in-network Medicaid provider, you can’t bill patients for what Medicaid would have but does not pay you.

Therefore, your reimbursement per visit is generally better when you’re out-of-network, but you’re likely to be selected by fewer patients in need of therapy.

What’s the best choice for you?

Providers must decide strategically, and there’s no right or wrong answer. Evaluate what is more important to your clinic – volume or profitability on a per-claim basis? When in doubt, we recommend being in-network, but this is a strategic decision that only you can make for yourself.

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