UCR Charges: UCR stands for usual, customary and reasonable. UCR may be called allowable charges by your health plan. Basically, health plans will consider benefits for charges that are usual, customary and reasonable. In other words, the provider’s usual fee should not be more than what is customary in the provider’s area and is reasonable for the service rendered. In those plans which have a network of providers, the providers contractually agree to accept payment of the UCR fee and will write off any amount over this fee.

For example, let’s say most of the primary care physicians in your area charge $100 for a simple, routine office visit. You decide to make an appointment with Dr. X who charges $200 for a simple, routine office visit. If Dr. X is in your health plans network, he will accept payment of $100 for his services; the remaining $100 will be written off. You will only be responsible for your copay or coinsurance as outlined in your policy. If your plan is an 80/20 plan, you will pay $20.

So, what if Dr. X is not in your health plan’s network? If your plan offers out of network benefits, it will only consider those charges which are usual, customary and reasonable. So, for your visit to Dr. X, the health plan will only consider a charge of $100. This leaves $100 unpaid. Dr. X can bill YOU directly for the remainder of his fee. You may also be subject to a higher copay or coinsurance amount.

If your health plan does not provide benefits for services rendered by out of network providers, you may be responsible for the entire $200 fee, even if the UCR is $100 in your area.