Usual, Customary & Reasonable [UCR] (adjective) — The amount an insurance company considers is within the range of what most providers in a geographic area charge for a given procedure or medical service.
Seems a little vague? Sometimes, healthcare can seem like a whole different language. In this series, we break down some common healthcare terms into definitions we can all understand.
Similar to varying rent costs for a one-bedroom apartment across the country, physicians charge different amounts for the same healthcare service depending on where you live. A provider in New York City can check your sore throat for $100 while one in Arizona could do it for just $50. As a result, insurance companies can’t set a universal rate for what percent of the medical bill they’ll cover for specific healthcare services like physicals and surgeries because prices vary too much.
Enter usual, customary and reasonable. Insurance companies evaluate what physicians normally charge for a specific medical service in a state or region. Based on their research, insurance companies then decide what they’ll set their reimbursement rate for that service.
For example, let’s imagine you broke your ankle during a game of soccer with your friends. The doctor applies a cast, and he charges $1,500 for the visit. Your insurance company considers the UCR rate for the treatment to be $1000 and will pay 80% of the UCR. You’ll have to pay 20% of $1,000 ($200), plus the $500 over the UCR, for a total of $700.
Moreover, most insurance plans don’t apply the amount exceeding the UCR towards your deductible or out-of-pocket maximum. In the previous example, the additional $500 over the UCR rate is another bill in your growing list of medical expenses.
However, you only really need to worry about your insurance plan’s UCR when you visit an out-of-network provider. In-network doctors have already pre-negotiated a rate for their services with your insurance company, which is usually below the UCR. Since out-of-network providers are not in a contract with your insurance company, they are not obligated to stay below the UCR rate threshold. So, you can easily end up with a $1,000 bill when you visit a specialist who’s not in your network.
At SingleCare, we believe people should get the care they need without having to worry about limits, networks and more. We’ve pre-negotiated rates for dental services, prescriptions, video doctor visits, and soon more! Since we’re not insurance, there are not UCRs, co-pays, or deductibles. The price you see for a teeth cleaning or x-ray is the price you pay. It’s that simple.