Why do insurance companies have “networks”?

Why do insurance companies have “networks”?

Insurance companies maintain networks primarily to control and predict costs. Instead of paying a doctor’s bill for a particular service, insurance companies create networks in which doctors agree to accept a reduced payment (the “allowable payment”). Because insurance companies discourage their members from going to out-of-network doctors, doctors accept reduced payment to be in-network. Network contracts may have other requirements or restrictions on participating providers.

Can a pediatrician be a member of different networks?

  • An insurance company may operate multiple networks, and a pediatrician may be in a network with none, some, or all of them. Some networks may be operated on behalf of a government line of business, such as Medicaid, SCHIP, or Medicare. Other networks might take one or more of the following forms:
  • Point of Service (POS)
  • Preferred Provider Organization (PPO)
  • Health Maintenance Organization (HMO)

Can my child see doctors and other providers who are not in my health plan?

  • While it is possible to get a referral outside of your plan, managed care plans typically do not approve care from out-of-network doctors and other providers, such as clinical psychologists, physical therapists, etc. You may have to pay some or all of the charges from an out-of-network provider. Check with your plan for details. There are Preferred Provider Organizations (PPOs) that allow you to see providers outside of your plan, but additional fees will be required.

Will my child’s health care be paid for if he or she is injured while out of town?

  • Health care for serious problems that are covered by your plan will probably be paid for. Elective services will probably not be covered. Check with your plan for details, such as if you need prior approval from your pediatrician for non-emergency, acute care.

Note: Exceptions may be made for college students who attend school away from home.

What is a “true emergency”?

  • Most managed care plans define a ” true medical emergency ” as a sudden, unexplained, or potentially life-threatening medical situation, or a very serious illness or injury for which you don’t have time to call your pediatrician. 

Most plans will pay for emergency room care for a true emergency. Follow-up care (such as removing stitches) should be done at your pediatrician’s office. Your plan will not pay for follow-up care performed in the emergency room.

Can my child see doctors and other providers who are not in my health plan?

  • While it is possible to get a referral outside of your plan, managed care plans typically do not approve care from out-of-network doctors and other providers, such as clinical psychologists, physical therapists, etc. You may have to pay some or all of the charges from an out-of-network provider. Check with your plan for details. There are Preferred Provider Organizations (PPOs) that allow you to see providers outside of your plan, but additional fees will be required.

Will my child’s health care be paid for if he or she is injured while out of town?

  • Health care for serious problems that are covered by your plan will probably be paid for. Elective services will probably not be covered. Check with your plan for details, such as if you need prior approval from your pediatrician for non-emergency, acute care.

Note: Exceptions may be made for college students who attend school away from home.

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By Michael Caine

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