Hospital Leaving Your Insurance Network: What To Do

You just got a letter — or saw a news alert — saying your hospital or health system may no longer be covered by your insurance plan. Maybe a contract deadline is looming, or the break has already happened. Either way, you have a surgery scheduled, a specialist you've been seeing for months, or a pregnancy that's due before this mess gets resolved. This article explains exactly what that contract dispute means for your bills, what legal protections you have right now, and the specific steps you can take to protect your care and your wallet.

What a Contract Dispute Actually Means for You

When a hospital system and an insurance company can't agree on reimbursement rates, the hospital can drop out of your insurer's network — or the insurer can remove them. From that point forward, the hospital is considered out-of-network, which means your insurer treats it like any other facility that never had a contract with them.

Out-of-network cost-sharing is almost always dramatically higher than in-network. Depending on your plan type, you may face:

• A separate, higher out-of-network deductible (sometimes $5,000–$10,000 or more per person)
• Higher coinsurance — for example, you pay 40% instead of 20% after your deductible
• No coverage at all if you have an HMO or EPO plan — these plan types typically pay nothing for out-of-network care except in emergencies

If you're unsure which type of plan you have and why it matters, our guide on HMO vs. PPO vs. EPO plan types breaks down the differences and what they mean for out-of-network access.

A concrete example: what the cost difference looks like

Say you have a PPO plan with a $1,500 in-network deductible and 20% coinsurance, and you're scheduled for a knee replacement at a hospital that just left your network. In-network, your total out-of-pocket for a $40,000 procedure might be around $6,500 (your deductible plus 20% of the remaining balance, up to your out-of-pocket maximum). Out-of-network, with a $4,000 separate deductible and 40% coinsurance — and a higher out-of-pocket maximum — you could owe $15,000 or more for the exact same procedure at the exact same facility. If your plan is an HMO or EPO, your insurer may pay nothing, leaving you responsible for the entire bill.

Your Legal Right to Continuity of Care

Federal law and most state laws require insurers to protect patients who are already in active treatment when a provider leaves their network. This protection is called continuity of care, and it means your insurer must cover your ongoing treatment at in-network rates for a set period — even after the contract expires.

Under federal guidance from the Centers for Medicare and Medicaid Services (CMS), insurers are expected to maintain continuity of care for patients in active treatment during network changes. The NAIC Network Adequacy Model Act — a model framework that many states have adopted — specifically requires continuity of care protections of at least 90 days for patients in ongoing treatment.

Who qualifies for continuity of care protection?

You are most likely protected if you are currently receiving care for any of the following:

• An ongoing course of cancer treatment (chemotherapy, radiation, immunotherapy)
• A pregnancy (typically covered through postpartum care, up to 6 weeks after delivery)
• Post-surgical follow-up or rehabilitation from a recent procedure
• A serious or complex chronic condition requiring regular specialist visits
• A terminal illness
• A scheduled surgery that was authorized before the provider left the network

The exact duration of protection — typically 30 to 90 days — and the qualifying conditions vary by state. Call your insurer's member services line and ask specifically: "What is your continuity of care policy, and do I qualify given my current treatment?" Get the answer in writing, either by email or by asking for a written summary of the decision.

How to Request a Gap Exception (In-Network Exception)

Even if you don't qualify for continuity of care protections, you may be able to get your insurer to cover out-of-network care at in-network rates through a gap exception — also called a network exception or network adequacy exception. This applies when your insurer's network doesn't have an in-network provider who can reasonably meet your needs.

Insurers are legally required to maintain adequate networks — meaning enough in-network providers to serve their members without unreasonable travel or wait times. If the hospital that just left your network was the only facility within a reasonable distance that offers your specific procedure or specialty, your insurer may be required to cover your care there at in-network rates.

Step-by-step: how to request a gap exception

1. Call your insurer's member services line and ask to speak with someone about a "network adequacy" or "gap exception" request. Write down the name of the representative and the date.
2. Ask your doctor's office to submit a letter of medical necessity explaining why you need treatment at this specific facility — because of your diagnosis, treatment history, or the lack of comparable in-network alternatives.
3. Document the lack of alternatives. Use your insurer's online provider directory to search for in-network facilities that offer the same service. If none exist within a reasonable distance (insurers typically define this as 30–60 miles for specialist care), note that in your request.
4. Submit the request in writing — by fax, certified mail, or the insurer's member portal — so you have a paper trail.
5. Follow up within 5–7 business days if you haven't heard back. For urgent or time-sensitive care, ask for an expedited review, which insurers are generally required to complete within 72 hours.

If your gap exception is denied, you have the right to appeal. Our guide on how to appeal a denied insurance claim walks through the internal and external appeal process step by step.

Don't Panic — Watch the Timeline Before Making Changes

Hospital-insurer contract disputes are often resolved at the last minute. Negotiations can drag on past a public deadline, only to produce a new agreement — or a temporary extension — hours before or after contracts formally lapse. Both sides have strong financial incentives to reach a deal, and many high-profile disputes that alarmed patients were resolved before a single patient had to change providers.

Before you cancel a scheduled procedure or scramble to transfer your care to a different facility:

• Check the hospital system's website — they will typically post updates on the contract status, sometimes daily during active negotiations.
• Check your insurer's website or member portal for notices about the dispute.
• Call your insurer to ask whether a contract extension is in place.
• Ask your doctor's office — providers often know more about the real-time status of negotiations than their patients do.

If you transfer care unnecessarily and the dispute resolves, you've disrupted your treatment for nothing. Wait for confirmed information before making major changes — but don't wait to start the paperwork if your procedure is coming up in the next few weeks.

What to Do If Your Doctor — Not Just the Hospital — Is Out of Network

Sometimes the dispute affects an entire physician group that practices at the hospital, not just the facility itself. This means your surgeon, your oncologist, or your OB may also be out-of-network — even if the hospital eventually stays in-network, or vice versa. Check your insurer's directory to confirm the status of every provider involved in your care, not just the facility.

If your doctor is no longer in your network independent of this dispute, our guide on what to do when doctors won't accept your insurance covers your options for staying with that provider or finding an equivalent in-network alternative.

Also be aware that the No Surprises Act — a federal law that took effect in 2022 — protects you from surprise bills in certain situations, including emergency care at out-of-network facilities and care from out-of-network providers at in-network facilities. It does not protect you from all out-of-network costs in a planned-care situation, but it closes some important gaps. You can read more in our article on the No Surprises Act and your rights.

Your Action Plan: What to Do Right Now

If your hospital or health system is in a contract dispute with your insurer, here is what to do today — in order of priority:

1. Find out if the contract has actually lapsed or if negotiations are still active. Check both the hospital's and insurer's websites and call member services to confirm.
2. Review your plan type. HMO and EPO members face the biggest risk. PPO members have more flexibility but will still pay more out-of-network.
3. Contact your insurer and request continuity of care in writing if you are in active treatment for a serious condition, a pregnancy, or have a pending authorized procedure.
4. Ask your doctor's office to submit a gap exception request with a letter of medical necessity if there is no equivalent in-network alternative nearby.
5. Keep records of everything — every call, every letter, every portal message. If you end up needing to appeal, documentation is your most important asset.
6. Do not reschedule care unnecessarily until you have confirmed information about the contract status and your coverage.

Contract disputes are stressful and the stakes feel high — because they are. But you have legal protections, and you have options. Starting with a direct call to your insurer — and following it up in writing — puts you in a far stronger position than waiting to see what happens.

Sources: CMS Network Adequacy Guidance, NAIC Network Adequacy Model Act (MDL-74)