Hassle-Free Health Coverage: Usual, Customary and Reasonable Fees

Most of the limits and conditions we've considered so far merely trim at the edges of indemnity health coverage. There are bigger changes that have impacted-and usually limited-coverage.

Beginning in the 1970s, some indemnity insurance companies borrowed a few cost-saving tricks from the federal government's Medicare program and started using schedules of usual, customary and reasonable (UCR) fees that they would pay for specific kinds of medical treatments.

Approved providers (a group slightly less rigidly defined than network providers in a managed care plan) would agree to accept these fees as full payment for each service provided-within the policy's limits, of course.

This trend has caught on with indemnity companies to the point they are quite common. UCR fees don't get a lot of attention in the insurance industry-which is curious. They are a big reason that the distinctions between indemnity insurance and managed care are beginning to blur.

If your indemnity insurance company uses an UCR fee schedule-and if you don't use a participating provider-you may be responsible for the difference between the UCR fee and what the provider charges for a service.

Even if you adhere to the UCR fee schedule, you'll also be subject to any deductibles and co-insurance requirements.

As you can see, taken together, these coverage limitations begin to erode the impression of blanket coverage that indemnity plans have for most people. They are the tools that even indemnity plans use for denying or only partially paying claims.