How to Understand Health Insurance Billing and Reimbursement

Insurance carriers negotiate with providers to accept specific rates for the various procedures they perform. If the providers agree to these rates and they sign a contract with an insurance carrier, the provider becomes an in-network (INN) provider. After each patient visit, a claim is submitted to the insurance carrier for reimbursement based on the contract with the insurance company. If the provider does not sign the contract, it is considered an out of network (ONN) provider. The provider still however may submit a claim for reimbursement.

Things You'll Need

• Member identification card
• Explanation of benefits
• Provider billing statement

Show More

Instructions

• 1

  Understand whether the provider you are seeing is an in-network (INN) or an out of network provider (OON) with your insurance company. If you are not sure, you can call the member services phone number located on the back of your insurance card to ask.

• 2

  Compare the amount your explanation of benefits shows you owe your provider compared to the amount your provider’s billing statement shows you owe The explanation of benefits will show the amount your insurance company is paying to your provider and the provider billing statement will list the insurance payment made by your insurance carrier.

• 3

  Recognize if your provider is under contract (INN) with your insurance carrier. If you see an INN provider and the amount your provider submits to your insurance carrier is higher than the amount your insurance carrier will pay, the insurance company makes an adjustment on your explanation of benefits. This adjustment is the amount not allowable by the contract. Your insurance company will not pay the higher amount, nor are you responsible for the amount not allowed.

• 4

  Identify if your provider is out of network. OON providers are not governed by a contract with your insurance carrier. So like an INN provider, an OON provider may submit a bill that is higher than the amount your insurance company will pay. However unlike an INN provider, if your insurance carrier does not allow a portion of the charge, you are responsible to pay the unallowable amount to your OON provider.