What is UCR?
UCR is a reimbursement method whereby payment is determined by reviewing three fees:
U- The Usual fee. This is a fee that is usually charged by the provider of a service or item.
C- The Customary fee. This is a fee that providers of the same specialty, in the same geographic area, charge for a service or item. It falls within a price range that other doctors in the area charge
R- The Reasonable fee. This is for a service deemed necessary under the current conditions.
The terms “usual, customary, and reasonable” refer to charges made by a health insurance provider for a given medical service. A charge is considered usual, customary and reasonable if it matches the general prevailing cost of that service within a geographic area, which is calculated by the insurance company or health plan administrator. (To be deemed usual and customary, the charges must be in line with the average charge of the same medical procedures throughout a specific medical community. This community includes physicians, hospitals, laboratories and other providers involved in medical care.)
The insurance company or health plan administrator then uses this information to determine how much they are willing to pay for a given service in a particular geographic area.