How does your insurance decide what they will pay for treatment? Why are some procedures covered more than others? Well, it depends on where you live and which doctor you see.
Because many health plans have a large network, they want you to see a doctor in that network because they have already negotiated terms with those providers as to what they will charge for your care and how much the insurance company will reimburse them for, leaving you to pay the difference.
If you see a doctor outside of your network, that is where things get a little tricky. Typically, your insurance company will set a threshold on what they will pay for a procedure based on what the doctor usually charges and what other doctors in the area typically charge.
Read on below for more information on what UCR stands for.
What Does UCR Mean?
UCR is the abbreviation that stands for “Usual, Customary, Reasonable” and they are the three criteria health insurance companies use when they determine the value of medical treatment or service provided. The UCR rate is also used by medical billing specialists to figure out if treatment was billed correctly or not.
U – The “Usual Fee”
This is the usual amount that is charged by a medical practitioner for a device or a service. This is determined by whether they have previously charged other patients a similar rate for the same service, thus establishing regularity in their practice.
C – The “Customary Fee” is the fee for the service compared to the fee typically charged by other medical providers who practice the same type of medicine, and who are in the same region. This allows for the establishment of the “going rate” for a service, and there is usually a range of fees that practitioners will charge for a service in their area.
R – The “Reasonable Fee” charge is considered reasonable if it is BOTH usual and customary, or if it is a medically necessary procedure to save the patient’s life.
When used together, these are abbreviated to “UCR” for brevity and they refer to the charges that a health plan is willing to reimburse after the treatment is provided.
How Do you Know What You Have to Pay?
All insurance companies are different and there is no hard and fast rule for how they calculate a UCR rate. However, many insurance companies will set their UCR rate at a level that covers 80% of practitioners in a given area, or, the 80th percentile. This means that in that region, 80% of the doctors providing treatment are charging at or below the UCR rate.
If you have treatment provided by a doctor who is over the UCR rate for your insurance company, you will have to pay the difference in your treatment cost which is above what they are willing to reimburse.
Say that you suffer an injury that is neither life-threatening nor a workplace compensation claim: You twist your ankle while playing basketball with some friends and you need surgery to repair your Achilles tendon.
If you get the surgery to fix it through a provider that charges you $7500 for the surgery, but you have an insurance company that has a UCR rate for that surgery of $5000, then you are responsible for paying the difference of $2500, plus any remainder of the $5000 after your insurance pays their portion (typically 70-90% of the procedure cost). This $2500 is called the “UCR fee” because it is the fee you have to pay above the UCR rate set by your insurance because you went to an out-of-network doctor.
If you frequently use out-of-network doctors like this and you have to pay above the UCR rate, that is usually not counted toward the total deductible you pay, or the maximum your insurance will expect you to pay out of pocket for the year, therefore, you will never hit a cap on paying these high medical bills. Fortunately, most HMO and PPO plans have a wide network of providers, so you shouldn’t need a doctor outside your network very often.
This information is used by your health plan and insurance company to decide how much they are willing to reimburse for a medical service in a given geographical area.
What About Prescriptions?
It is very unlikely that you will have to pay a UCR fee for a prescription. The UCR rate for prescription drugs is what someone without insurance would pay, or, the “cash price” so even if it costs you $70 to fill your Cymbalta prescription, you still aren’t paying the full market value that would be charged to someone without insurance, so you will not be exceeding a prescription drug maximum.
Why You Need Medical Billing Analysts
It is highly recommended to hire a medical billing and reimbursement expert to determine and testify to the reasonable value of medical service. The provider’s location can affect these costs and reimbursements.
Whether you are a plaintiff or a defendant in a case, one of the most important items in Automobile, Personal Injury, and Medical Malpractice cases is the cost of medical bills. Figuring out medical costs can be complicated, and expert guidance is critical to ensuring you have a clear understanding of what is “fair and reasonable” with regard to the finances involved in your medical care.
Medical Billing Analysts offers litigation support services nationwide, with offices in New York, New Jersey, Connecticut, Pennsylvania, Georgia, Florida, Texas, Nevada & California. Medical Billing Analysts represent both defendants and plaintiffs with regard to improper medical billing and coding.
The team of MBA professionals will review the hospital, medical and therapy bills to determine the value of past medical expenses, and based on local CPT codes they can also perform a Cost Projection Analysis of future costs. Through meticulous analysis, we can justify the reasonable cost of services that assists in resolving the case.
Contact Medical Billing Analysts by phone or email at 800-292-1919 or firstname.lastname@example.org. We’re here for you, whether you need an evaluation of a single charge or a complex injury case.