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In-Network vs. Out-of-Network PT: What does that really mean?

Aug 23, 2022

The insurance industry in America is not the easiest thing to navigate. There are many industry-specific terms and exceptions, and sometimes it’s challenging to figure out what is covered and how much you’ll owe.

On top of that, there’s the concept of in-network and out-of-network providers. Is in-network better than out-of-network? Does the designation have anything to do with the level of service or care you’ll receive from the provider?

We are an out-of-network physical therapy practice, and we love this question. Let’s dive into what it means.



In-Network vs. Out-Of-Network


Many insurance companies have contracted relationships with certain health care providers, referred to as in-network providers. These providers agree to provide services at a discounted rate, and in return, insurance companies steer patients to work with them. 

So if you’re paying monthly for your health insurance, and the rates are discounted, why not see an in-network provider? Why would someone see an out-of-network PT?


Not all physical therapy services are equal.


Simply put, you get what you pay for. 

Going in-network may be less expensive, but that all depends on your coverage. What surprises most people is that it's not always cheaper in-network.

And there are other disadvantages that come with a typical in-network practice.

When a medical provider participates in an insurance plan, they are only allowed to collect the copay and the contracted amount from the patient or insurance company (depending on deductible), regardless of the actual bill.



There are many problems with this model:


1. The insurance companies have all of the power.


The insurance companies control the services provided and the number of visits allowed. This means you could need a service that’s not covered, or your issue may not be resolved by the time you’ve hit your visit limit.

Is the insurance company the expert on what you need? Does the insurance company know how many visits it will take to meet your needs? And what if you have multiple issues going on with your body?

The medical provider’s hands can be tied with specific treatment techniques or treating multiple issues simultaneously. Instead of treating the body as a whole, one part of the body often becomes the focus, which leads to the root of the problem remaining unresolved.


2. Insurance companies typically reimburse in-network providers significantly less than the amount billed.


If that’s surprising to you, you’ll probably also be shocked to learn that reimbursement rates have declined significantly in recent years despite inflation and increased overhead costs. Unfortunately, this means many in-network PTs see a higher volume of patients to make up for reduced per-patient reimbursement from insurance companies. 

When a PT has to take on more patients to bridge the gap with the insurance company, the environment changes from personal care to a “PT mill.” When this happens, there’s less one-on-one time with your PT because they work simultaneously with multiple patients. You spend more time with non-medical professionals, often high school students, taking you through “cookie-cutter” exercises that you could find on Google. This model can prolong recovery and increase costs with copays adding up.


3. Medical providers get overworked, deal with mental/physical fatigue, and feel the effects of workplace burnout.


What does that mean for patients? I have previously worked at in-network practices, seeing 15-22 patients a day. Not having enough time to work with each patient is highly frustrating and exhausting, leading many providers to burnout. This environment makes it impossible to give each patient the best quality of care and your full attention.



The Bottom Line:


Many of our system’s best healthcare providers and specialists are moving to out-of-network. They do not want insurance companies to dictate what patients do and do not need. They want to spend the necessary time with each patient, get to the root of the problem, and deliver the highest quality of care. After all, this is why we got into the healthcare field in the first place!!


Thanks for reading!

-Dr. Dan



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