UNDERSTANDING HEALTH INSURANCE NETWORKS

Health insurance companies and HMOs try to keep costs down by negotiating agreements with doctors and hospitals to provide health care at a lower cost in exchange for more patients. These contracted providers make up the insurance company's or HMO's network, and using them can significantly lower your out-of-pocket costs. This publication describes the protections and rules that apply to different types of network plans.

For general information about health insurance, read TDI's publication Your Health Care Coverage. If you're shopping for health insurance, visit www.TexasHealthOptions.com for helpful tips and information.

This publication applies to your health plan if your insurance card has "TDI" or "DOI" on it. This publication doesn't apply to Medicare, Medicaid, workers' compensation, federal or state employee health plans, or self-funded plans. Employers who self-fund their health plans pay the costs of their employee's health care themselves, rather than buying coverage from an insurance company or HMO.

Types of Network Plans

Health maintenance organizations (HMOs) - An HMO is a type of network plan. It will usually only pay for your care if you use doctors and hospitals in its network. There are exceptions for medical emergencies and for medically necessary services that aren't available in the HMO's network. Since HMOs only provide coverage if you use their network doctors and hospitals, they must make sure their providers give quality care, and are subject to more oversight by TDI.

HMO plans may require you to choose a primary care physician to help manage your care. They also usually require you to get a referral from your primary care physician before you can go to a specialist.

Preferred provider plans (PPOs) - A PPO plan is a network plan that gives you the option of using out-of-network doctors and hospitals and doesn't require you to choose a primary care physician or get referrals to go to specialists. If you use an out-of-network doctor or hospital, you will probably have to pay more out-of-pocket. For example, if your PPO plan pays 80 percent of your claim if you use in-network providers, it might cover only 60 percent if you go out-of-network. You would be responsible for paying the difference.

Exclusive provider benefit plans (EPOs) - EPOs are a relatively new network plan that blend some features of PPO and HMO plans. Like HMOs, there is usually no coverage for providers outside the EPO network. However, like PPOs, EPOs don't require you to choose a primary care physician and you may use their in-network doctors and hospitals, including specialists, without first getting a referral. EPOs are generally regulated as a PPO product with some added HMO-like protections.

Network Consumer Protections

PPOs, HMOs, and EPOs all have similar network requirements:

  • These plans must provide a network with enough qualified doctors and hospitals to make sure that covered services are reasonably available and that you have choice, access, and quality care.
  • General doctor and hospital care must be available within 30 miles (within 60 miles in rural areas for PPOs and EPOs).
  • Network specialty doctors and hospitals must be available within 75 miles.
  • Emergency hospital care (including general, specialty, and psychiatric hospitals) must be available 24 hours a day, seven days a week.
  • Nonemergency urgent care must be available within 24 hours for medical and behavioral health conditions.
  • Routine care must be available within three weeks for medical conditions and two weeks for behavioral health conditions.
  • Preventive care services must be available within two months for a child, or earlier if necessary for specific preventive care services, and within three months for an adult.
  • Insurance companies and HMOs may not give doctors and hospitals financial incentives to limit medically necessary care or interfere with the relationship between patients and their doctors.
  • If you get services from an out-of-network doctor or hospital because of an emergency or because there wasn't a network provider available, the plan will usually pay more than if you voluntarily go to a provider outside the network. See Payment of Out-of-Network Claims below.
  • Different plans offered by a carrier may have different networks of doctors and hospitals. When shopping for coverage, check your specific plan's provider directory to make sure that any doctor or hospital that's important to you is in that network. Even though every plan must have a network that meets TDI's requirements, doctors and hospitals may enter and leave networks throughout the year. It's important that you check the carrier's provider directory throughout the year to make sure that the doctors you're using are still in your plan's network.
  • Insurance companies and HMOs must make accurate directories of network providers available.
  • If you go to an out-of-network doctor or hospital, the provider may bill you for the difference between what your plan pays and what the provider's charge is. This is called balance billing. This bill will be in addition to any deductible, copay, or coinsurance that you owe. Network doctors and hospitals aren't allowed to balance bill you. For more information, read TDI's Avoiding Surprise Bills page.

Network Requirements Specific to PPOs and EPOs

  • If you ask, PPO and EPO companies must give you a detailed summary of your insurance policy, including any drug formulary limitations.
  • Insurance companies must give you information about their networks, including details about any shortages in a network.
  • Regarding network hospitals, insurance companies must tell you:
    • which hospitals have agreed to help make sure network doctors and hospitals perform all services
    • which hospitals are lacking different types of network doctors
    • the amount of claims that have come from out-of-network doctors at each hospital (if this number is high, you should pay special attention to who treats you)
    • who the network doctors at the hospital are
    • about any large decrease in the number of network doctors at a network hospital
  • If you ask, insurance companies must give information about your estimated out-of-pocket cost for proposed care. They have 10 days to give you estimated cost information for out-of-network providers. Most doctors and hospitals must also give you an estimate of what they will charge.

Payment of Out-of-Network Claims

If you get out-of-network care because of an emergency or because no network providers were available, special rules apply, but the rules are different for PPOs, EPOs, and HMOs:

PPOs:

  • The PPO must pay the claim based on the usual or customary billed charge for the service.
  • Your coinsurance must be the same as for in-network claims.
  • The PPO must apply the amounts you pay for this care to your deductible and to your in-network out-of-pocket maximum.
  • If you are balance billed by a doctor at a hospital, you may be able to require the PPO and the doctor to participate in mediation to resolve the claim. For more information, visit the  about mediation, visit the Mediation for Out-of-Network Hospital-based Health Care Provider Claims page.

EPOs:

  • The EPO usually must pay the claim so that you don't have to pay more than your normal in-network copay, deductible, and coinsurance. If you get a bill from an out-of-network doctor or hospital in the case of an emergency or an inadequate network, call your insurance company about the bill.
  • The EPO may have procedures for out-of-network claims, such as:
    • facilitating the selection of an out-of-network doctor or hospital, or
    • mediating claims by out-of-network doctors or hospitals

HMOs:

  • The HMO usually must pay the claim so that you don't have to pay more than your normal in-network copay, deductible, and coinsurance. If you get a bill from an out-of-network doctor or hospital in the case of an emergency or an inadequate network, call your HMO about the bill.

For More Information or Help
For answers to general insurance questions or for information on filing an insurance-related complaint, call the Consumer Help Line at 1-800-252-3439 or visit our website.

Insurance Complaints
For information on filing an insurance-related complaint, visit our complaints website or call the Consumer Help Line.

Help Us Prevent Insurance Fraud
Insurance fraud is a crime. If you believe you've been a target of insurance fraud or you become aware of a fraud operation, report it to the TDI Fraud Unit online or by calling the Consumer Help Line.



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Last updated: 05/03/2016