Every health plan has a network of doctors and medical facilities with whom they have negotiated contracts to pay a fixed amount for a given service. In essence, insurance companies negotiate discounts with certain providers. Providers that are part of that network are called “in-network” and the remaining providers are called “out-of-network.”
If you choose to see an out-of-network doctor, an insurance company would have to pay more for the services you receive, so they discourage you from going out-of-network. HMO and EPO plans will not cover any of the costs if you see an out-of-network provider (except in certain emergency cases). PPOs require members to pay a larger co-pay or co-insurance amount when they visit an out-of-network provider, so receiving out-of-network care is more expensive.