What Does Usual, Customary and Reasonable (UCR) Mean?
Usual, customary and reasonable (UCR) is a term used to describe fees associated with health care costs that health insurance companies cover. A fee is considered usual, customary and reasonable if it is comparable to fees other health care providers in the area charge for the same service and if it is for a health care service necessary based on the current circumstances.
Insuranceopedia Explains Usual, Customary and Reasonable (UCR)
Sometimes, one health care provider in an area may charge more for a service than other providers in the area. For example, a dermatologist might charge 20 percent more for mole removals than most other dermatologists in the area. In such a case, insurance companies would not likely consider the cost as usual, customary and reasonable; therefore, the policyholder would likely need to cover the difference between what is considered a UCR fee and the actual expense.
Furthermore, insurance companies often categorize doctors as "in network" or "out of network" based on valuations of the fees they charge. Thus, going to an out of network doctor may result in higher service costs and out-of-pocket expenses for the policyholder.