Should You Go In or Out of Network? A Guide for Physicians Starting a Private Practice
Starting your own practice is a bold and empowering step. As a physician or other healthcare provider, you’re not just building a business, you’re shaping the kind of care you want to deliver on your terms.
One of the earliest (and often most confusing) decisions you'll face is whether to join insurance panels (in-network) or operate independently (out-of-network).
Each model comes with distinct pros, cons, and trade-offs, and the right choice depends on your goals, patient population, and values. This guide will help you navigate that choice clearly and confidently.
Understanding the Models
The first step to anything is understanding the process. When it comes to insurance, there are two major models you decide between when starting your private practice.
In-Network Care
When a provider is in-network, it means they have signed a contract with the payer. This contract establishes a fee schedule for each CPT code and obligates the provider to accept the contracted rate as payment in full, regardless of their usual charge.
Patients benefit from lower cost-sharing (copays, deductibles, coinsurance), and providers typically receive quicker, more predictable reimbursement.
“The way we are paid through the insurance companies, especially Medicare and Medicare Advantage, is through a series of quality metrics.
As primary care doctors, we’re responsible for depression screening, fall screening, dementia screening, blood pressure control, A1Cs, kidney function tests, making sure patients are on the right medications—just a huge list. If we jump through all of those hoops, we get graded, and the higher your score, the more Medicare will pay you.”
Out-of-Network Care
Payer fee schedules do not bind providers who remain out-of-network. They may bill their standard charges, but insurers will only reimburse based on their own “allowed amounts.” Payment is made at the out-of-network benefit level, which is usually a fraction of the provider’s billed charges.
The difference between the provider’s charge and the insurer’s allowance can be balance billed to the patient, which often creates a higher financial burden and dissatisfaction.
Superbills and Billing Options
Out-of-network providers can structure billing in two ways:
Direct billing to the insurer: The provider submits a claim as usual. The payer processes it as an out-of-network claim, pays its portion, and the provider then bills the patient for their cost share and any balance due.
Issuing a superbill: Some practices require patients to pay in full at the time of service and then provide a superbill. The superbill includes patient and provider identifiers, CPT codes (services performed), ICD-10 codes (diagnoses), and billed charges. Patients submit the superbill to their insurer for potential reimbursement. This approach shifts administrative work to the patient but eliminates collection risk for the provider.
Key Exceptions to Out-of-Network Rules
While out-of-network reimbursement is typically less favorable, providers should be aware of scenarios where payers must treat out-of-network services as in-network:
Emergency services: Federal law requires insurers to cover emergency care at in-network rates, regardless of provider network status, and prohibits balance billing in these circumstances.
Network gaps: If a payer lacks an in-network specialist in a geographic area, patients or providers can request a network gap exception so that services are reimbursed with patients paying only in-network rates if approved.
Facility-based services: Under the No Surprises Act, certain hospital-based providers (e.g., anesthesiology, pathology, radiology) are protected categories. When services are delivered at an in-network facility, insurers must cover them at in-network rates even if the individual provider is out-of-network.
Specialized care: For rare or highly specialized treatments not offered by in-network providers, insurers may grant prior authorization for in-network level reimbursement from an out-of-network provider.
“Going out of network gave me the ability to decide how much time I spend with a patient, to really give them the attention they deserve, and to control my schedule. A lot of the beauty of private practice is being your own boss — you set the culture, the hours, and the kind of care you want to deliver.”
What are the pros and cons?
In-network arrangements offer convenience and steady referrals but often require you to accept lower fees, deal with claim denials, and navigate administrative hurdles. Out-of-network models provide greater autonomy over your time, pricing, and services, but with potentially slower practice growth due to less convenient access for patients.
| Model | Pros | Cons |
|---|---|---|
| In-Network |
|
|
| Out-of-Network |
|
|
How Do I Choose?
With both of these options offering benefits and drawbacks, you may be wondering how you can decide which model is best for you. Here are some questions you can reflect on, to help you get a better idea of which model aligns with your practice goals.
Define Your Practice Vision
Ask yourself: Do you want high patient volume and accessibility, or more freedom in how and when you practice? In-network may provide a larger, quicker caseload. Out-of-network may allow more control, less burnout, and the ability to prioritize quality over quantity. However, you may face the burden of patients who want to see you finding themselves unable to do so financially.
Understand Your Market
Your ideal model depends on your local population. In areas where patients heavily rely on insurance to afford care, being in-network might be necessary to stay competitive. In higher-income or urban areas, patients may be more accustomed to paying out-of-pocket or using out-of-network benefits.
Consider Administrative Capacity
Being in-network often means hiring staff or outsourcing billing to manage claims, pre-authorizations, and denials. Out-of-network doesn’t eliminate admin work (especially for providing superbills), but it allows for simpler operations and more direct control over the business side.
Know the Payer Landscape
Not all insurance companies are equal. Some may offer favorable reimbursement and efficient claim handling, while others are notorious for delays or denials. Research the major payers in your region before committing.
Hybrid as a Stepping Stone
Many providers begin in-network to grow their patient base, then transition to out-of-network once they’re established. This hybrid model can help you maintain financial stability while testing different systems and workflows. You can also make it so you are in-network for certain insurance companies but not all.
“The model I’m exploring is the direct patient care model. It really is fee-for-service. The idea is just that we have transparent prices. In cancer care specifically it’s important for patients to understand.
Over 50% of insurance is delivered through employers. What I’m interested in now is talking with employers and saying, why don’t we explore managing these benefits outside of the traditional insurance system, contracting directly with doctors who can tell you exactly what the cost of the procedure will be?”
Addressing the Cost Factor
After you answer these questions, you may be left wondering how these models affect your bottom line. Let’s be direct, in-network reimbursement rates are almost always lower than what you could charge privately. But the catch is that out-of-network patients pay more out of pocket, even if they’re insured.
Here’s how the cost factors break down:
In-Network: You’re paid a negotiated rate, which may be significantly less than your market value. While you’ll potentially see more patients (good for healthcare access), you’ll also need to see more just to match the revenue of a smaller, higher-paying caseload.
Out-of-Network: You set your own prices and can implement sliding-scale fees as needed. Based on whether you decide to bill insurance out-of-network or provide patients with superbills determines how much patients pay up front, but generally speaking patients do end up with a higher financial burden, limiting who can come see you, and potentially, if you make more money.
Importantly, many insured patients today still face high deductibles and may pay close to your full fee anyway, even when seeing an in-network provider.
Additionally, insurance companies frequently deny coverage, delay payment, or require documentation that drains your time and energy. This often results in a dynamic where you’re doing more work for less pay, with less control. Remember: no model is universally better. It’s about aligning with your practice goals, personal boundaries, and long-term vision.
How Do I Switch?
Many physicians are already employed in a system that is in-network for payers. If you're already in-network but are considering transitioning out, here’s how to do it smoothly:
Start Gradually: Begin by reducing the number of insurance plans you accept. Inform existing patients well in advance and provide them with resources to navigate the change.
Communicate Transparently: Be clear about why you're making the switch, whether it’s for improved care quality, reduced administrative burden, or to offer more personalized service. Offer support by generating superbills and educating patients on how to seek reimbursement.
Re-evaluate Your Fee Structure: Set clear, competitive rates and consider a sliding scale or package model. Make sure your pricing reflects both your expertise and your costs.
Streamline Billing Systems: If you're out-of-network, invest in software or services that make generating superbills and managing payments easy (for both you and your patients).
Give It Time: Expect some attrition, but also anticipate that the patients who stay, or newly seek you out, will be more aligned with your approach and values. Many physicians find that going out-of-network increases their job satisfaction and revenue long-term.
“After the letter went out, I had a one-on-one conversation with each of my patients over the next three months. I was nervous, because I knew I’d be losing a lot of patients, but most completely understood. By the end of that period, I actually had more than anticipated patients who wanted to partner with me in this model.”
What Else Should You Consider?
Autonomy Can Reduce Burnout
Being out-of-network allows you to set your own hours, limit your caseload, and offer care in the way you believe is most ethical and effective. This can be especially important for physicians balancing practice ownership with family life or other commitments.
You Can Still Be Accessible
Out-of-network doesn’t mean inaccessible. Offering sliding-scale options, flexible appointment models (like telehealth), and patient education about insurance reimbursement can help maintain access while retaining control.
Specialization Supports Independence
If you offer a niche or high-demand service, patients may be more willing to pay out-of-pocket. Branding yourself as a specialist can support the transition to an out-of-network model.
Your Business, Your Boundaries
You’re allowed to build a practice that supports your well-being as much as your patients’. Your medical training, experience, and time are valuable, your business model should reflect that.
A Note for Surgeons:
If you're a surgeon, your relationship with insurance companies—and hospitals—may be more complex. Access to hospital operating rooms often depends on credentialing and insurance contracts. Many hospitals and surgical centers require you to be in-network with certain payers to gain OR privileges, or at least be on staff. This can significantly impact your ability to operate as an out-of-network provider.
Even if you're primarily out-of-network, you may need to maintain specific in-network relationships to access the facilities where you perform procedures. Be sure to research local credentialing requirements and hospital policies before finalizing your model.
The Bottom Line for Providers
Network participation fundamentally shapes both reimbursement and the patient’s financial experience. In-network status ensures contractual predictability but at reduced rates, while out-of-network status allows greater charge flexibility but shifts financial responsibility onto patients and may slow collections. Providers should weigh these trade-offs carefully, educate patients clearly about their financial exposure, and be aware of legal protections that may override standard out-of-network rules.
“Dentistry, the way it’s always been done, wasn’t built to support women who want to have a family and a practice. You have to make it your own. Ask yourself: what would my perfect practice look like to balance family and profitability? And then build in that direction.”
Final Thoughts
Choosing between in-network and out-of-network models is one of the most important decisions you'll make when starting your practice. It impacts your finances, your daily operations, your patient relationships, and your personal quality of life.
Take the time to explore what aligns best with your goals, not just as a physician, but as a business owner and a person. Whether you prioritize accessibility or autonomy, stability or freedom, know that there is no one “right” way—only what’s right for you.
No matter where you are in your journey, from thinking about leaving an employed position, to practising privately for decades, remember we are walking by your side and ready to share our collective knowledge to make your path a little easier.
