What does UCR mean in health insurance?
While it might logical to assume that all health insurance policies are created the same, that is simply not the case. A treatment or procedure covered by one may not be covered by another. Let us now explore the basis for this concept a bit further.
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UCR Charges Explained
The reason that this topic is so important is that many people become frustrated with the high out of pocket expense they often incur for medical services that they thought were fully covered under their health insurance plan. In an effort for medical insurance companies to reign in skyrocketing healthcare costs, the concept of UCR was born to standardize the pricing mechanism in place for the more commonly performed treatment and procedures.
While patients are welcome to go to another provider for any given medical service, it is more expensive than what is considered to be usual, customary, and reasonable then they will have to pay for the excess bill out of their own pocket.
The confusion with UCR often comes into play when the out-of-pocket bill for a hospital or doctor’s visit is much more than originally anticipated. As an example, consider a consolation with a specialist. The specialist might bill $300 for the visit, but the usual, customary and reasonable charge allowed by the insurance company is only $250. This is the most that the insurance company will be for the consult.
If this particular health insurance policy has an 80/20 copay, the patient will need to pay $50 for the visit. The patient will also then need to pay an additional $50 to make up for the difference between UCR and what the consultant actually bills to the insurance company.
Provider Networks and UCR
One way to overcome the often dramatic effects of UCR is to make use of provider networks. Most insurance companies today have an extensive network of providers nationwide. Staying within this network for most routine medical needs will help ensure that you avoid excess medical expenses kicking in.
In-network providers include that following types of medical personnel and organizations:
- Outpatient Diagnostic Facilities
- Radiation Therapy Centers
- Outpatient Infusion Centers
- Laboratory Services
- Medical Clinics
Virtually any location where a medical service is offered may be a part of a health insurance network.
As the insured person, it is your responsibility to make sure that the provider you choose is within the purview of your particular plan. This will help make sure that you do not have to worry about UCR, because all providers will have already agreed to a set fee schedule. This all takes place behind the scenes so you will not need to keep track of anything.
Do note that you are often permitted to use a provider that is out of the network, but that individual or office may charge more than is allowed under the UCR scheme for your particular health insurance plan.
Working With Out-of-Network Providers
As mentioned, patients are welcome to choose a provider that is outside of their existing insurance companies network. Before doing so, however, you will want to make sure that your policy offers benefit to out-of-network providers. If they do not, you would be responsible for the entire bill, and this is obviously not the idea.
If out-of-network benefits are included in your policy, then will want to examine your paperwork to determine the rates for UCR for each procedure or treatment that you seek. This will help you determine what your out of pocket expense will be.
You might be wondering why anyone would choose an out-of-network provider, especially given the reality that UCR will need to be taken into account.
Depending on a patient’s unique situation, there might be a specialist that is highly sought after, but that provider is out-of-network. There might be an occasion when work or personal reason take you outside the geographical region of your in-network providers.
If you need medical care, you do not always have the luxury of returning home first. In such situations, an out of network provider will be the only option available to you. Just be sure to compare costs and providers to get the best possible care at the most reasonable prices that you can.
If you have particular medical needs, it is important that you consider UCR before you enter into a health insurance contract. You will want to take a look at the in-network providers that are available to you and make sure that you have enough options available to you in your region.
It is also a good idea to check the UCR rates for the insurance policies that you are considering in order to determine if you see them to be realistic or not.
Rates can vary dramatically from one policy to another, so this is something that you definitely want to consider as you begin to compare policies in preparation for the next open enrollment period.
Gone are the days when insurance companies will just allow medical providers to charge whatever they want for certain services and procedures. UCR has been developed to standardize the pricing that takes place in the industry.
If you stick to the providers within your insurance companies network, you will not have to worry about UCR rates. If you need to go outside of the network for some reason, then you will need to be aware that you may be paying for a portion of the visit out of your own pocket.
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