In-Network vs. Out-of-Network: What’s the Difference?

Patients who come to your practice have one of many available health insurance plans. If you have signed a contract with a specific payor, your practice is in-network for people with an insurance plan from that payor. However, different insurance plans also determine whether the patients receive coverage for visiting in-network or out-of-network practices. 

Read on to learn more about the pros and cons of each type, and discover where you can get professional help for payer contracts, credentialing, and payer enrollment in Houston, Texas.

What Is In-Network Insurance?

For healthcare practitioners, being in-network means that their practice has signed an agreement with a payor that offers a specific healthcare insurance plan. A payor builds a network of trusted providers, which includes hospitals, medical practices, doctors, pharmacies, etc. 

Being in-network helps healthcare practitioners attract patients to their practice because most people choose in-network providers. The main reason is the lower cost of using their services.

As a practice owner, you usually have to accept a discounted rate for in-network services. That means if a patient comes to your office, and you typically charge $500 for a service, you may receive a reimbursement of $350 from the payor. You are not allowed to bill the patient for the difference. 

Being in-network means that a medical practice has a signed agreement with a payor, which means that the payor covers the cost of provided services instead of the patient. 

What Does It Mean to Be Out-of-Network?

Being out-of-network means a medical practice doesn’t have a signed contract with a specific insurance provider. That’s why a medical professional can bill a full price for the services they provide to the patient.

Some medical plans cover service costs for patients, even when they visit an out-of-network medical provider. However, they usually have a limited amount, and the patient is responsible for covering the difference. That can result in much higher prices for specific medical services.

Being out-of-network means you don’t have a contract with a specific payor. 

Pros and Cons of In-Network and Out-of-Network Coverage

Contracting and being in-network are essential for the financial well-being of any medical practice. However, both in-network and out-of-network have certain pros and cons. Learn more about them below.

In-Network Pros and Cons


  • It allows you to receive compensation from payors
  • It attracts more patients to your practice
  • It improves your professional image
  • It increases your authority and trustworthiness
  • It boosts the quality of care
  • It helps you comply with regulations
  • It installs procedures to reduce medical errors
  • It increases your bottom line
  • It offers additional protection in case of lawsuits


  • You usually have to accept a discounted price for provided services
  • Credentialing process is often long and complex
  • You usually need professional support to negotiate better contract terms
  • You are subject to payer audits

Out-of-Network Pros and Cons


  • You are allowed to charge full price for your services
  • You typically receive reimbursement sooner
  • You don’t have to go through a lengthy credentialing process
  • Staying out-of-network is sometimes more cost-effective
  • You don’t have to go through payer audits


  • Patients usually choose an in-network provider
  • Patients may trust you less 
  • The reimbursement process is often more challenging
  • Payers don’t monitor the quality of care
  • More complicated coordination with other healthcare institutions

Being both in-network and out-of-network has certain benefits and drawbacks. Carefully weigh them to make the best decision for your practice.

Payer Contracts, Credentialing, and Payer Enrollment in Houston, Texas

As a practice owner, you want to make the best decision for your practice and join specific networks to attract more potential patients and boost revenue. At Peregrine Healthcare, we can help you do that.

We are a healthcare consultant agency that helps practice owners and managers install processes that promote efficiency and boost revenue. We have more than 30 years of combined experience in the industry, and we’ve served over 140 clients. With our full transparency, carefully crafted services, dedication, and expertise, you can rest assured knowing you are in good hands.

Contact Peregrine Healthcare to learn more about our contracting, credentialing, payer enrollment, consulting, marketing, and other services.

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