Out-of-Network Care: Costs, Protections, and Best Practices

Out-of-network care is confusing and expensive for employees, and a headache for employers. "Out-of-network" means the doctor or hospital has no contract with your insurance company. When you use one, your plan's rules change: you face higher out-of-pocket costs and messier claims. The No Surprises Act puts a floor under the worst of it, but it doesn't cover every situation.

The Financial Hit: Higher Costs and Balance Billing

Most health plans push you to stay in-network. Out-of-network care works differently: a higher deductible, higher coinsurance, and no contracted rate. Many plans have a separate, higher deductible for out-of-network services. After you hit that deductible, the plan pays a smaller share of the allowed amount than it does in-network, so your coinsurance runs higher. The largest cost is the gap between the provider's actual charge and the plan's allowed amount. Providers routinely charge more than the plan allows, and without a contract, you owe the full difference. That's balance billing, and it's what turns a routine procedure into a surprise bill.

What the No Surprises Act Does

Because surprise bills got so bad, the No Surprises Act (NSA) took effect on January 1, 2022. It gives you key protections in three situations: emergency care; non-emergency care at an in-network facility where an out-of-network provider shows up, like an out-of-network anesthesiologist during an in-network surgery; and air ambulance transport. In these cases, the law:

• Prohibits Balance Billing: The out-of-network provider can't charge you more than your in-network cost-sharing (deductible, copay, coinsurance).
• Determines Payment via Arbitration: The plan and provider negotiate. If they can't agree, an independent dispute resolution (IDR) process settles the payment, using the Qualified Payment Amount (QPA), the median contracted in-network rate for the service in that area, as the reference point.
• Requires Advance Notice and Consent: For scheduled, non-emergency care from an out-of-network provider at an in-network facility, the provider has to tell you at least 72 hours ahead that they're out-of-network and what it'll cost. You have to voluntarily agree to proceed and accept balance billing. This waiver option doesn't apply to ancillary services like anesthesiology, pathology, or radiology; those stay protected regardless.

HR teams should communicate one limit clearly: these protections don't cover everything. They don't apply when an employee knowingly and voluntarily chooses an out-of-network provider for non-emergency care at that provider's own office.

Ground Ambulances: The Gap the No Surprises Act Left

One gap in the NSA deserves attention from benefits teams: ground ambulances. The law bans balance billing for air ambulance transport, but CMS guidance is explicit that ground ambulance providers are not covered by that prohibition. When an employee calls 911, no one chooses which ambulance service arrives, and that service may have no contract with the plan.

The Advisory Committee on Ground Ambulance and Patient Billing, a federal committee created under the NSA, issued recommendations in the fall of 2023 to extend protections to ground ambulance transport. Several states have since passed their own limits on ground ambulance balance billing, but Congress has not closed the gap. For employers, the practical moves are the same ones this post covers: clear employee education, bill review services that can negotiate ground ambulance charges, and knowing which state protections apply to the workforce.

What Employers Should Think About, and a Different Way

When you're designing benefits, out-of-network coverage is a tool for controlling costs and steering where people go. Offering some out-of-network benefits (a PPO-style plan) gives employees choice, but it costs more. Plans with no out-of-network coverage (like HMOs or EPOs) are cheaper but limit choice. The admin work is heavy too: adjudicating claims, negotiating payments under the NSA, and helping confused employees.

That's where a model like WellthCare offers a different approach. Traditional systems create in-network/out-of-network tension. WellthCare's Health-to-Wealth platform aligns incentives from the start to reduce that friction. With $0 co-pay care through its own front-end and partner providers, employees get high-value, transparent care first. That means fewer reasons to wander off to an unknown out-of-network provider. And its integrated WellthCare Complete™ self-funded offering and WellthCare Pharmacy™ replace the opaque BUCA (Blue Cross, UnitedHealth, Cigna, Aetna) and PBM (pharmacy benefit manager) networks with a transparent system, removing the in-network/out-of-network headache and the surprise billing that comes with it. WellthCare, the first Health-to-Wealth Benefit System, removes the in-network/out-of-network divide entirely by combining transparent $0-copay care with earned store rewards and automatic retirement contributions, turning healthcare into a compounding asset.

Best Practices for Benefits Administrators

1. Clear Communication is Critical: During enrollment and year-round, use multiple channels to explain what "out-of-network" means, the NSA protections, and the real cost difference. Give employees tools like cost estimator apps and hold carriers to good directory accuracy.
2. Design Plan Tiers Carefully: Look at where your workforce is spread out and how much they need specialists. Consider offering one plan with out-of-network coverage and one without, with a clear price gap.
3. Bring in Bill Review Services: Partner with vendors that review and negotiate medical bills. They can help employees in cases the NSA doesn't cover, including ground ambulance charges.
4. Check Out Integrated Models: Look beyond traditional insurance carriers. Integrated models that focus on preventive, upfront care with aligned economics, like WellthCare, reduce out-of-network use and the admin chaos that follows, saving money and improving satisfaction.

Dealing with out-of-network care comes down to managing risk, cost, and complexity. The No Surprises Act is a strong safety net, but the most effective benefits strategies are the ones that redesign the system so out-of-network care becomes something employees rarely face and rarely fear.