Usual, Customary, and Reasonable

Customary

Customary for the community.

What is the difference between fee schedules and UCR fees?

-Fee schedules are set rates for services. -Usual, customary, and reasonable takes the set rate concept one step further.

How is UCR rates set?

-Usual, customary, and reasonable reimbursement rates are set by the third-party payer based on historical data for a given geographical area or a given medical specialty. -Third-party payers then pay claims at the "usual, customary, and reasonable" rate and not necessarily at the billed rate.

Will the patient be billed the balance with UCR fees?

-With usual, customary, and reasonable fee-for-service reimbursement, the balance may or may not be billed to the patient. -Usual, customary, and reasonable retrospective payment systems may be based on geographical areas, urban versus rural, medical specialty, or other factors. -Explanation of benefits often describes the difference between the amount billed by the provider and the amount paid as "over usual, customary, and reasonable (UCR) are excluded as defined by the plan." -Usual, customary, and reasonable reimbursement methodology is a common reimbursement model used by third-party insurers.

Usual, Customary, and Reasonable (UCR)

-the amount paid for a medical service in a geographic area based on what providers in the area usually charge for the same or similar medical service. -The UCR amount sometimes is used to determine the allowed amount. -UCR reimbursement methodology is an extension of the fee schedule retrospective reimbursement system.

Sample Third-Party Payer Usual, Customary, and Reasonable Fee Schedules Based on Costs by Geographic Area.

Code: 99213 Service/Northwest Area: Mid-level exam Charge: $85 UCR Northwest area: $61.21 Code: 99214 Service/Northwest Area: Detailed exam Charge: $100 UCR Northwest area: $92.07 Code: 99215 Service/Northwest Area: Comprehensive exam Charge: $135 UCR Northwest area: $124.16 Code: 58150 Service/Northwest Area: Total Abdominal Hysterectomy Charge: $1400 UCR Northwest area: $910.06

Reasonable

Reasonable for the situation.

Usual

Usual for the provider's practice.