Problems Related to The Usual and Customary Rate (UCR)
Part 2, Chapter 4: Traditional Individual and Group Plans, Doctors' Bills Page 6
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Problems Related to The UCR
If the procedure code is listed correctly, then the balance bill may be a result of the difference between the Usual and Customary Rate (the UCR -- as determined by the insurer -- and the provider's charge. Insurers generally determine the UCR through a statistical analysis of providers' charges in a specific geographic area. Some insurance companies develop their own UCR database, while other insurers may use a database provided by another company. Thus, the UCR for a particular procedure may not be identical from insurer to insurer, or from one geographic area to another.
The UCR represents the maximum amount of reimbursement an insurer will generally consider for a particular test or procedure. Medical providers are not obligated to limit their bills to an insurer's determination of the UCR, and patients are generally considered to be responsible for the entire bill, even if there's a large difference between the bill and the reimbursement provided by the insurance company.
For example, let's assume that you've met the deductible for the year but have not yet met the yearly co-payment maximum. Your health insurance policy provides for payment of major medical claims at the 80% rate (an 80/20 plan), and you have filed a claim for a $100 doctor's bill that was related to an office visit. If the UCR for the office visit is $100, you'll generally receive $80 (80% of the bill), leaving you responsible for paying the $20 balance (the co-payment or co-insurance).
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