Insights
How Do Practices Manage Out-of-Network Claims?
Practices verify network status, notify patients in writing, follow balance-billing rules, and track OON claims separately with different workflows.
Practices manage out-of-network claims by verifying network status before the visit, notifying patients in writing, following state balance-billing rules, and tracking OON claims separately. Payment timelines, reimbursement rates, and appeal paths differ from in-network claims, so your billing team must apply OON-specific workflows. MB Claims provides medical billing and denial management for US physician practices, including out-of-network claim submission and follow-up.
How do you confirm network status before a visit?
You confirm network status by checking the payer's online provider directory, calling the payer's contracting department, and reviewing the provider's current credentialing file. Your front-desk staff should query the directory using the rendering NPI and service location ZIP, call the provider line to confirm active participation and effective dates, and compare results against your internal credentialing tracker.
Documentation steps include:
- Record the inquiry date, representative name, and reference number in the patient chart or practice management system.
- Note any discrepancies between the online directory and your credentialing records.
- Flag mismatches that may signal a pending termination, lapsed contract, or uncompleted application.
Resolve all discrepancies before submitting the claim to avoid surprise denials.
What balance-billing rules apply?
Balance-billing rules depend on whether the visit is emergency care, non-emergency care at an in-network facility, or elective care at an out-of-network facility, plus the patient's state law. Federal No Surprises Act protections apply to emergency services regardless of network status and to non-emergency services performed by out-of-network providers at in-network facilities unless the patient signs an advance consent form.
In these protected scenarios, you may bill the patient only the in-network cost-sharing amount; the balance must be resolved through the payer or the federal IDR process.
For elective visits at out-of-network facilities, many states permit balance billing after written patient notice. Review your state's balance-billing statute and obtain signed acknowledgment before service. Never balance-bill Medicare or Medicaid patients without checking participation rules.
| Task | In-Network Claim | Out-of-Network Claim |
|---|---|---|
| Eligibility check | Verify active coverage and benefits | Verify OON benefit tier and patient responsibility |
| Patient notice | Standard consent to treat | Written OON acknowledgment with charge estimate |
| Fee schedule | Contracted rate applies | Billed charges, paid at usual-and-customary or plan allowance |
| Appeal basis | Contract language and fee schedule | Usual-and-customary benchmarks and medical necessity |
| Balance billing | Prohibited except copay/deductible/coinsurance | May be allowed for elective care (check state law) |
| Payment timeline | Typically faster | Often slower; varies by payer |
How do out-of-network appeals work?
Out-of-network appeals follow the payer's standard appeal process but rely on usual-and-customary reimbursement benchmarks rather than a contracted fee schedule. Your appeal letter should attach the claim and remittance showing the OON payment, cite the usual-and-customary rate for the CPT code in your geographic area using a FAIR Health or similar benchmark report, and include documentation supporting medical necessity.
Additional steps:
- Request reconsideration under the payer's out-of-network benefit language.
- If the first-level appeal fails, escalate to external review or the state insurance department.
- For No Surprises Act claims, initiate the federal Independent Dispute Resolution process within 30 days of the final internal denial.
Payers often underpay out-of-network claims by applying the Medicare rate or an arbitrary percentage, so benchmark data strengthens your position.
What notice do you give patients before an OON visit?
You provide a written notice explaining that the provider is out of network, the patient's financial responsibility may be higher, and an estimate of charges. Your patient notice should include the provider's name, NPI, and specialty; a statement that the provider does not have a contract with the patient's plan; an estimate of charges based on your fee schedule; and a clear statement of the patient's financial responsibility.
The notice must also include:
- A statement that the patient is responsible for any amount the payer does not cover, unless prohibited by law.
- The patient's signature and date.
For elective procedures at an in-network facility, federal rules require a Good Faith Estimate in advance. Retain the signed notice in the patient's billing record to support any balance-billing action.
How MB Claims handles this
MB Claims provides medical billing and denial management for US practices, including out-of-network claim workflows. The team verifies network status during eligibility checks and flags OON visits so your front desk can obtain patient acknowledgment. Claims are submitted with the appropriate OON indicator and tracked separately in the practice management system. When an OON claim underpays, MB Claims prepares an appeal citing usual-and-customary benchmarks and medical necessity documentation.
The billing team follows state balance-billing rules and ensures patient notices are documented to maintain compliance. MB Claims signs a business associate agreement with every client and operates under HIPAA safeguards. Practices can request a free medical billing A/R audit at https://www.mbclaims.com/free-medical-billing-audit/ or email hello@mbclaims.com; written review within 5 business days of receiving summary reports.
Frequently asked questions
Can a practice bill a patient for the difference between billed charges and OON payment?
Yes, for elective care at an out-of-network facility, unless prohibited by state law or the No Surprises Act. Always provide written notice before service and check your state's balance-billing statute.
How do you estimate usual-and-customary rates for OON appeals?
Use a published database such as FAIR Health, a regional fee survey, or Medicare rates multiplied by a defensible percentage. Attach the benchmark report to your appeal letter to support the requested reimbursement.
What is the Independent Dispute Resolution process?
A federal arbitration process for No Surprises Act claims. Either party may initiate IDR within 30 days of the final payer determination. The arbiter selects one party's offer based on the median in-network rate.
Do OON claims require different diagnosis or procedure codes?
No. CPT and ICD-10 codes remain the same. The claim form includes an OON indicator, and the payer applies its out-of-network benefit schedule to determine payment.
How should practices track OON claims separately?
Flag the claim with an OON status in your practice management system and run separate A/R aging reports. OON claims need different follow-up scripts and may require benchmarking for underpayment appeals.
Outsource medical billing, coding, or credentialing with a HIPAA-aligned RCM team. Request a free medical billing audit at https://www.mbclaims.com/free-medical-billing-audit/ or email hello@mbclaims.com.
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