Usual, Customary, and Reasonable (UCR)
The standard for reimbursing providers based on the usual fee of the provider, customary fees in the area, and reasonableness for the service, capping insurer liability.
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Practice This Concept
A major medical policy pays covered charges based on the usual, customary, and reasonable (UCR) amount. A provider charges $500 for a service for which the UCR amount is $350. How is the $150 difference handled?
The insured is responsible for the $150 excess above the UCR amount, in addition to any deductible and coinsurance — A policy that reimburses on a UCR basis limits the amount payable to the usual, customary, and reasonable charge for the service in the geographic area. The insurer pays its share, such as 80%, of the UCR amount after the deductible, and the insured is responsible for the remainder of the actual charge. If the provider bills more than the UCR amount, the insured owes the difference above UCR, which is called an excess charge or balance billing by a non-participating provider. This is why using in-network or participating providers matters: they agree to accept the approved amount as payment in full, eliminating the excess charge.
National insurance concept
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