Usual, customary, and reasonable (UCR) is an American method of generating

health care prices The prices of health care in the United States are higher than in other countries. Compared to other OECD countries, U.S. healthcare costs are one-third higher or more relative to the size of the economy (GDP). According to the CDC, during 2015, ...

, described as "more or less whatever doctors decided to charge". According to Steven Schroeder, Wilbur Cohen inserted UCR into the

Social Security Act of 1965 The Social Security Amendments of 1965, , was legislation in the United States whose most important provisions resulted in creation of two programs: Medicare and Medicaid. The legislation initially provided federal health insurance for the elde ...

"in an unsuccessful attempt to placate the

American Medical Association The American Medical Association (AMA) is an American professional association and lobbying group of physicians and medical students. This medical association was founded in 1847 and is headquartered in Chicago, Illinois. Membership was 271,660 ...

". Health insurers determine what they deem to be "usual, customary and reasonable" and pay only a percentage of that. Under an early version of this system based on Resource-Based Relative Value Units, physician services were largely considered to be misvalued, with evaluation and management services being undervalued and procedures overvalued. Third-party payers (public and private health insurance) advocated for an improved model instead of the UCR fees that led to "some egregious distortions". In the mid-1980s, U.S. health care "payments for doing procedures had far outstripped payments for diagnosis". For example, "doctors who spent an hour making a complex and lifesaving diagnosis were paid forty dollars; for spending an hour doing a

colonoscopy Colonoscopy () or coloscopy () is a medical procedure involving the Endoscopy, endoscopic examination of the large bowel (colon) and the distal portion of the small bowel. This examination is performed using either a Charge-coupled device, CCD ...

and excising a polyp, they received more than six hundred dollars". Costs for cataract surgery, which could be as high as $6,000 in 1985, "grew to consume 4% of Medicare's budget". And despite technology that reduced the time required for the surgery by a factor of 4 to 6, costs did not decrease. The US government healthcare website defines usual, customary and reasonable as being "The amount paid for a medical service in a geographic area based on what providers in the area usually charge for the same or similar medical service. The UCR amount sometimes is used to determine the allowed amount." Often it is used by insurance companies and plan administrators when participants go out of network for services where typically the maximum the plan will pay for a claim is based on the prevailing rates in the area or UCR. These statistics are available from private and commercial sources. In the context of

prescription costs Medication costs, also known as drug costs are a common health care cost for many people and health care systems. Prescription costs are the costs to the end consumer. Medication costs are influenced by multiple factors such as patents, stakeholde ...

, the

Government Accountability Office The United States Government Accountability Office (GAO) is an independent, nonpartisan government agency within the legislative branch that provides auditing, evaluative, and investigative services for the United States Congress. It is the s ...

has stated that "The U&C price is the price an individual without

prescription drug A prescription drug (also prescription medication, prescription medicine or prescription-only medication) is a pharmaceutical drug that is permitted to be dispensed only to those with a medical prescription. In contrast, over-the-counter drugs c ...

coverage would pay at a retail pharmacy." For dentists, the

American Dental Association The American Dental Association (ADA) is an American professional dental association. Established in 1859 and with over 159,000 current members, ADA is the world's largest and oldest national dental association. The organization lobbies on behal ...

defines a usual and customary fee as "the fee an individual dentist most frequently charges for a specific dental procedure independent of any contractual agreement. It is always appropriate to modify the fee based on the nature and severity of the condition being treated and by any medical or dental complications or unusual circumstances."ADA News, January 17, 2011.

References

{{Reflist Health insurance in the United States

See also

References