Usual, Customary and Reasonable Charge (UCR) is the amount paid for a medical service based on what providers in a geographic area usually charge. Those are sometimes used to determine the “allowed amount” for payment of claims on health insurance plans from your employer, individual and family plans as well as Medicare, Medicare Advantage plans and Medicare supplement insurance. But what does that mean for you as a consumer? You should know that if insurance payment is based on UCR charges then any fees above that amount are considered “excess charges” and will not be paid. (Exception: some Medicare supplement policies have “excess charges” coverage.) That one fact can totally change the cost of your medical care. For illustration let’s say the UCR for a medical procedure is $2,000 and your policy will reimburse 80% of that – $1,600. However you selected a provider who charged $500 above the UCR. In that case you would be responsible for paying 20% of the UCR, $400, plus the $500 excess.
How can you avoid that? Only use preferred providers on the insurance company’s list because by contract they can only charge the allowed amount. Can you use out-of-network doctors? Maybe yes, maybe no. Some plans have a significantly higher co-insurance and deductible for non-network providers. A few plans will pay nothing at all for out-of-network care unless you had a bona fide emergency. If you wish to use a non-network provider, compare their fees to the UCR. Only then can you decide if the skills and reputation of the provider is such that you would want to pay more for the treatment. More questions about Medicare insurance? Call me at 800-464-4941!
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