Provider Networks

When Your Grass Gets Trampled

Health Coverage

My next post on this blog was going to be about what to do if your doctor or health care provider leaves your carrier’s network. But KFF Health News beat me to it with an article appropriately titled, So Your Insurance Dropped Your Doctor. Now What?

Nationwide, contract disputes are common, with more than 650 hospitals having public spats with an insurer since 2021. They could become even more common as hospitals brace for about $1 trillion in cuts to federal health care spending prescribed by President Donald Trump’s signature legislation signed into law in July.

The article is well-written and covers the basics, but I do have a quibble with its item #2, when the article notes that rifts between hospitals and insurers often get repaired. It then goes on to state that most of those breakups ultimately get resolved within a month or two[.] So your doctors very well could end up back in the network after a split.

Historically, that’s not incorrect, but the recent Johns Hopkins/UnitedHealthcare and Memorial Healthcare/Florida Blue disputes both involved negotiating parties walking away from the table. The network contracts lapsed, and as of this writing, Johns Hopkins is still out-of-network with UnitedHealthcare and Memorial Healthcare is still out-of-network with Florida Blue. Some of the disputes I’ve picked up for the Network Contract Watch have included language suggesting more of this could happen.

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Introducing the Network Contract Watch

About

A primary feature of this new blog and web site can be found on the home page and in the top menu: the Network Contract Watch.

Why does this matter?

The vast majority of health coverage plans in the United States — but not all! — make use of a provider network. Provider networks are created by negotiation of contracts between payors (the carriers) and providers (health care professionals). While the ins and outs of provider network contracts are extremely complicated and involve legal professionals, this is essentially what they do:

  • The providers agree to discount their rates for patients who use that payor.
  • In return, the payor agrees to “drive” its members toward these payors, so that they can make up the discounted rates with higher volume.
  • Payors often do this by severely limiting members’ coverage for care that’s received outside the network, up to and including not covering it at all.

There are a number of reasons that provider networks exist, and a full explanation of that would take an entire post of its own. The important part for consumers to understand is that their out-of-pocket costs are always going to be lower for care received from providers in the network, with the difference easily running into hundreds or thousands of dollars.

Thus, network contract negotiations between payors and providers directly impact consumers’ out-of-pocket expenses. That’s you — and your money!

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