Ask the Health Insurance Expert
QDo we have any recourse? How do I find out information on charges in neighboring markets?
You've run into a practice known as "usual, customary, and reasonable" (UCR), which is one way health insurers determine how much of a claim they will pay. As the name says, these charges are the "going rate" that health care providers in your area charge.
- Usual: A charge is considered "usual" if it is a physician's usual charge for a procedure.
- Customary: A charge is considered "customary" if it is within a range of fees that most physicians in the area charge for a given procedure.
- Reasonable: A charge is considered "reasonable" if it's usual and customary or if it's justified because of a special condition such as a difficult procedure.
Let's say, for instance, your doctor charges $1,500 for a procedure and your insurance company pays 80 percent of the UCR, which your health plan determines to be $1,000. You would be expected to pay 20 percent of $1,000 ($200) as well as $500 over the UCR, totaling $700. Once the health plan determines the UCR charge and reimburses your doctor, your doctor might bill you the difference. Also, most plans will not apply the portion of charges exceeding UCR toward your deductible or annual out-of-pocket maximum.
Some health care providers will accept your health plan's UCR charges before you have the treatment, according to CareCounsel. You can also ask your doctor if he is will to accept the UCR rate as payment for services. You may have to get this in writing.
If you receive a statement from your health plan stating a procedure was considered "unreasonable," it may be possible to appeal the ruling if your doctor can provide additional information to the health plan showing what was done and why the additional charge was required.
As for finding out what is considered UCR, you can try asking your health plan for a written explanation of how those rates are determined. In general, UCR information is not readily available to consumers.
Managed care plans, such as HMOs and preferred provider organizations (PPOs), do not follow UCR procedures because they have negotiated predetermined fees with health care providers. In this case, you won't have to worry about UCR charges.
But if you go out-of-network for services, health care providers aren't bound by the negotiated fee — and your insurer may not pay the full bill, making you responsible for the rest through the use of a controversial practice called "balance billing."
Bear in mind, 47 states prohibit doctors and other health care providers from balance billing patients.