In PPOs, what is the difference between in-network and out-of-network providers?

• A. In-network providers have higher co-pays and lower reimbursement rates.
• B. In-network providers have identical costs as out-of-network.
• C. Out-of-network providers have lower co-pays.
• D. In-network providers have lower co-pays and higher reimbursement rates.

Answer: (D)

In PPOs, network status affects both what you pay at the point of service and how much the insurer pays the provider. In-network providers have negotiated discounts with the insurer, so patients pay lower co-pays and the insurer reimburses the provider at a higher share of the allowed amount. This combination makes in-network care cheaper for the patient and more favorable for the provider financially. Out-of-network care lacks those negotiated rates, so costs to the patient are higher and reimbursement to the provider is lower (often with balance billing). That’s why the statement that in-network care involves lower co-pays and higher reimbursement rates best matches how PPOs work.