Contracted vs Non-Contracted – What’s the difference and Why Should You Care?

In the healthcare industry, providers (hospitals, doctors, etc.) have an option to either contract with an insurance carrier or not. One may ask, well, why wouldn’t you?

Sometimes, the contracts are just poor and unfair to both providers and patients. The rates for reimbursement are bad, the rules are ridiculous, and the timing for reimbursement can chokehold a medical practice quickly.

If a provider of healthcare services is contracted, that means they have entered into a legally binding agreement to provide services to an insurance company’s patient population for a certain price, and that they have agreed to the insurance companies’ rules. Different entities can and will negotiate for different pricing, so it won’t necessarily be the same if you go to different providers that are contracted with your insurance companies. At one of the organizations I worked for, we had three different pay scales depending on what provider you saw.

When a provider is non-contracted, it means that there is no contract between your healthcare provider and an insurance company, and the provider doesn’t have to follow the insurance company’s rules. Below are what you can expect:

  1. The provider of service can charge whatever they want.
  2. They can and probably will ask for the money for the visit up front.
  3. They don’t have to submit the claim to your insurance company; it’s a courtesy if they do.
  4. It will hit your out-of-network deductible, if you have one.
  5. If they don’t ask for the money upfront and bill your insurance on your behalf, the insurance company will send the check to you and not the provider.

It’s very important that you are aware of this no matter where you go, even the emergency room. It will prepare you for unexpected bills or, at best, keep you from having them.


  1. Ask your providers prior to obtaining services if they are in network with your insurance company.
    1. Confirm with your insurance company that the information given is accurate. I can honestly tell you that providers often have out-of-date or otherwise incorrect information.
  2. If you are going to a provider group, the group may be contracted but not the provider—ensure that the provider you are seeing is contracted with the group.
    1. Example – There are fifteen doctors at the medical group, and you are going to see Dr. #10, who is new and isn’t tied to the contracts yet. When they submit the claim to your insurance, they will process it as out-of-network because Dr. #10 specifically isn’t contracted with them yet. Sometimes, they will send the claim with a different provider listed, who you didn’t see, in order to get the claim paid—that is fraud.
    2. Call your insurance company and confirm that the provider is contracted.
  3. If you do go to an out-of-network provider, ASK what the cost will be prior to your visit
  4. If the provider will bill your insurance as a courtesy and they don’t ask for the money up front, the insurance company will most likely send you the check. Get that money to your provider ASAP—it’s not a mistake. Insurance companies typically don’t pay providers who aren’t contracted with them directly.



Out-of-Network: When a healthcare provider, hospital, or ancillary service does not have a contract for fixed pricing with your insurance company, and you will be subject to paying their rates instead of a pre-negotiated rate.

In-Network: When a healthcare provider, hospital, or ancillary service has a contract for fixed pricing with your insurance company and you will be subject to paying their pre-negotiated rates.

Deductibles: An amount that insurance policies may or may not include that must be met prior to an insurance company paying out any portion of a claim submitted by a healthcare entity on your behalf.

Emergency Room: Part of a hospital meant to be used for acute issues, where patients can remain for under 23 hours.

Claim Form/HCFA 1500: A document that denotes information about you and your provider, and lists the services that were provided during the visit. Most of the time this is submitted electronically to your insurance company, but sometimes, it’s sent by mail.

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