What is the definition of UCR in medical billing?
In full, UCR stands for Usual, Customary and Reasonable. It is the amount that is paid for a medical service in a certain area based on what the providers in that area charge for that service or a similar one. The UCR may be used by the insurance to determine the allowed amount. The UCR is determined by the geographical region and the service provided. The UCR determines the amount that the insurance will pay for certain services. This means that the insurance may not pay the full amount as indicated in the medical bill given to them.
What UCR charges mean for the patient
For the member of the insurance, the UCR charges determine how much bill you will be left with. If for instance you have a bill of $100 but the UCR for that service is $80, then you have a balance of $20 to pay to the provider assuming that your insurance pays the complete UCR amount. If you have a co-pay plan where you pay 20% and the insurance provider 80%, the insurance calculates this on the UCR rate. In this instance for example the insurance will pay $64 and you will need to pay the remainder $16. In this scenario you end up paying a total of $36.
If you are in a Medicare plan, then it means that you will have to pay only the $16 since a provider accepting Medicare agrees that they will not charge you for the difference in the bill between their billed amount and the UCR. If you are subjected to the balance billing then the insurance company might inform you so that you are aware of how much you need to pay to the health provider.
This application of UCR leaves the patients with larger bills than they expected because they are not aware of the calculations as shown here.
Out-of-network charges
If you go to a facility that is out of the network of your health insurance provider then you need to ensure that you have out of network benefits. If not, then you will be required to pay for the entire bill yourself. if you have an out of network benefits in your policy, then the medical insurance will pay for the 80% of the UCR amount that they use even if the provider for your services was out of your geographical region. If for instance you go to a provider and they charge you $100 for a service that the insurance states $10 UCR, they will only pay 80% of the $10 and you will have to clear the rest yourself.
It is important therefore that you visit hospitals that accept your insurance provider to avoid very high charges.
What UCR charges mean for the patient
For the member of the insurance, the UCR charges determine how much bill you will be left with. If for instance you have a bill of $100 but the UCR for that service is $80, then you have a balance of $20 to pay to the provider assuming that your insurance pays the complete UCR amount. If you have a co-pay plan where you pay 20% and the insurance provider 80%, the insurance calculates this on the UCR rate. In this instance for example the insurance will pay $64 and you will need to pay the remainder $16. In this scenario you end up paying a total of $36.
If you are in a Medicare plan, then it means that you will have to pay only the $16 since a provider accepting Medicare agrees that they will not charge you for the difference in the bill between their billed amount and the UCR. If you are subjected to the balance billing then the insurance company might inform you so that you are aware of how much you need to pay to the health provider.
This application of UCR leaves the patients with larger bills than they expected because they are not aware of the calculations as shown here.
Out-of-network charges
If you go to a facility that is out of the network of your health insurance provider then you need to ensure that you have out of network benefits. If not, then you will be required to pay for the entire bill yourself. if you have an out of network benefits in your policy, then the medical insurance will pay for the 80% of the UCR amount that they use even if the provider for your services was out of your geographical region. If for instance you go to a provider and they charge you $100 for a service that the insurance states $10 UCR, they will only pay 80% of the $10 and you will have to clear the rest yourself.
It is important therefore that you visit hospitals that accept your insurance provider to avoid very high charges.