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Usual, Customary or Reasonable?

Last Modified: November 1, 2001

Dear OncoLink "Ask the Experts,"
Hi and thanks for offering this most useful service. My husband has lung cancer, Stage IV adenocarcinoma. He was diagnosed in mid-September, largely by accident, and has since been treated with 3.5 weeks of radiation to the brain and spine and three rounds of cis-platinum chemotherapy. My insurance company has been fairly good, but some of the larger bills, they claim, are above the "usual and customary" for our region, Washington, D.C. Because they are bundling the expenses, I can't tell what is too much, so I can't negotiate with the doctors.

I asked the insurance company to appoint a case manager, which they did. I also automatically appealed the radiation billings, but they sent me a second form letter only saying it was above the average. I called them and demanded that they, not me, call the doctor for the notes and explanation of why his treatment was different and more expensive. How can I avoid problems like this in the future? It is now beginning to happen with some of the chemotherapy bills. Because we are switching to a new chemotherapy regimen, I am afraid we will have to pay more than our deductible.

HELP!

1. Find out if your physician has a contractual relationship with the insurer. In some cases, a relationship may exist in which the physician agrees to accept the payment made by the insurer as payment in full.

2. Seek the assistance of your physician's billing office to determine why the charges have been deemed above the usual and customary. It is in the physician's best interest to assure that their patients are receiving the maximum benefit. If this is a problem that you are encountering, then it is reasonable to assume that other patients covered by this insurer are having the same difficulty.

The physician's billing office should serve as your advocate in dealing with the insurer. They should determine why the claim has not been paid in full, and should be helpful in providing any information required by the insurer. They are also in a much better position to disagree with the insurer's contention that the charge is over and above the usual and customary charge for that service.

If the billing office is not helpful, then be sure to apprise your physician of the situation at your next visit. In many cases, physicians are unaware of problems that their patients encounter with their billing office and are grateful for the feedback. In addition, in some instances, if the patient shows that they have made a good faith effort to obtain the maximum benefit yet were unsuccessful in having the entire bill paid, the physician may agree to write off the balance and accept the insurance payment as payment in full. It should be noted that not all physicians are in a position to exert this much control over their practice. They may very well be employed by an entity that has defined policies and procedures related to when and how patient balances are written off.

Tip:

As in the question above, insurance companies will sometimes pay on a U.C.R. (Usual, Customary or Reasonable) basis. The following is a definition of U.C.R.:

Usual - A charge is considered "Usual" if it is the fee that most physicians in the area charge for this same service.

Customary - A charge is considered "Customary" if it is within the range (word italicized) of fees that most physicians who practice in the area charge.

Reasonable - A charge is considered "Reasonable" if it is both usual and customary or if it is justified because there is a complex problem involved.

Reference - Encyclopedia of Practice and Financial Management, Second Edition, Edited By Lawrence Farber, Medical Economics Books, 1988, Page 250, 7:2:1.