Should I Use Preferred Providers With my FEHB Plan?

We rate plan costs based on the assumption that you will always or almost always want to use preferred providers, also known as "staying in the network". Your cost is always lower, usually far lower, when you do. However, all national plans, except Blue Cross Basic and FEP Blue Focus, allow you to obtain care out of network on a fee-for-service basis, but limits reimbursement for doctors who are not in the network to a schedule of charges. This can sometimes be a valuable flexibility. But you face not only a higher copayment, but also an additional risk. The plans set limits on the fee they will recognize. For example, the plan may charge a flat amount of $20 to PPO users. For doctors outside the PPO, the plan may pay 70 percent of the cost up to $80 for a procedure, but if the physician charges $100 you will pay $30 plus the extra $20, or half the total bill compared to only $20 if you use the preferred provider. You can sometimes negotiate fees down, and we urge this strategy for non-preferred providers. This problem goes away if you have Medicare Parts A and B, since most of the national plans waive most doctor and hospital cost-sharing whether you obtain care in or out of the network. Even in HMOs that don't waive these costs, you can use Medicare to go out of network. Therefore, for retirees who participate in Medicare Parts A and B preferred provider restrictions disappear when enrolled in most plans. You can go to any hospital and almost any doctor without penalty. Moreover, persons over age 65 who are in any plan are by law guaranteed a Medicare rate and can use all doctors who have not opted out of Medicare with substantial protection, even if cost sharing is not eliminated.

For provider choice, the value of the PPO benefit depends in part on how many doctors and hospitals participate. Blue Cross has agreements with about half of all physicians and most hospitals to be preferred providers. Most other plans also offer you a wide choice. For example, GEHA, APWU, NALC, and other national plans use UnitedHealthcare, Aetna, and other insurance carriers to provide an almost equally broad selection of providers. However, it is prudent to check provider lists, particularly if you live in a rural area. The best way to check for overall choices is to use the online provider directory provided by the plan. Or, for a specific provider, simply call the office and check not only whether he or she is currently participating, but also whether he or she intends to continue with the plan.