Health Insurance Provider Networks

Health insurance provider networks are composed of health care practitioners and medical facilities that have signed contracts with insurance companies to offer their services for scheduled fees. Network membership offers advantages to insurance companies and health care providers alike. In exchange for belonging to a network, a doctor, hospital or clinic can expect to receive a certain amount of business from the insurer's policyholders. Meanwhile, the insurer can cover services for its members at rates that are favorable to the company.

When you enroll in a health insurance plan that includes a provider network, you will receive a health insurance brochure or directory of medical practitioners and facilities that are included in the network. You can use this directory as a guide to planning your medical treatment. With some health insurance plans, you must have a referral from your primary doctor before scheduling specialist consultations, diagnostic exams or outpatient procedures, even if the practitioners are listed in the directory.

Provider Networks in Managed Care

If you are covered under a managed care health insurance policy, such as a Health Maintenance Organization (HMO) or Preferred Provider Organization (PPO), your plan may restrict you to the members of a provider network. With a managed care plan, your health care is coordinated by a primary care provider, or PCP, who belongs to the network. Your PCP organizes your medical treatment by referring you to specialists or facilities that are within the network.

Managed care insurance plans vary in the range of treatment options that they offer their policyholders. With most HMO plans, your insurance provider will not cover the cost of seeing a health care provider outside of your network. If your PCP believes that you need to see a specialist or visit a facility that's not included in your network, you must have a referral from your PCP, and the insurance company must authorize the visit. An insurance provider may deny the request if a provider who offers similar services is available within the network.

PPO plans may be more expensive than HMO plans, but policyholders have more flexibility in their treatment options. A PPO includes a network of doctors, hospitals, therapists and other providers who offer treatment to policyholders in exchange for a lower scheduled fee. The policyholder can see out-of-network providers at at a higher fee. The plan may also include a deductible for visiting out-of-network providers. Because each plan varies in its network restrictions, it is important to know your plan's referral policies before you schedule appointments.

Managed Care Alternatives

Although health insurance plans with provider networks can offer comprehensive benefits at affordable rates, many consumers prefer more freedom of choice in their medical treatment. Fee for service plans give you the option to choose the health care providers you want to see in exchange for assuming a higher percentage of the financial responsibility. The plan may include a network of preferred providers; however, you are not limited to the doctors or facilities in this network.

Fee for service plans include High Deductible Health Insurance Plans, or HDHPs, which are often paired with Health Savings Accounts, or HSAs. These high deductible plans offer greater flexibility, but you must pay a larger deductible. You can pay for the deductible, copayments and other medical services or prescribed medications using the funds in your HSA, a tax deferred savings account.

Provider networks offer certain advantages to insurance companies, health care practitioners and policyholders. However, using a provider network may restrict your treatment options. When you're looking for an insurance plan, consider the degree of flexibility you need in your medical care.

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