What is a tiered network?

A tiered network is indeed a health plan structure that categorizes providers into different cost tiers based on various criteria, such as cost, quality, or level of care offered. This structure allows consumers to choose between providers who offer varying levels of benefits and out-of-pocket costs. Typically, lower-cost tiers may include providers who are considered to have better quality care or lower pricing agreements with the insurance company. This system is designed to encourage patients to seek care from providers that are more cost-effective while still providing quality options.

In contrast, having a single provider for all services would not differentiate costs or choices among providers, thus lacking the tiered approach. A network that operates exclusively online does not pertain to the concept of tiering based on provider cost or quality. Finally, restricting a plan to urban areas does not relate to the tiered structure, as tiering is based on provider categorization regardless of geography. Furthermore, tiered networks can exist in both urban and rural settings, depending on the plan's design.