What are Usual and Customary Fees?
Health care is one of the most important things to have. Just ask anyone who has ever gotten sick or been injured who didn’t have it – medical fees are absolutely astronomical, and a simple visit to the emergency room for, say, a sprained ankle can run into the hundreds if not thousands of dollars. So, you need to have health insurance. As part of your health care policy coverage, you will have to pay what the health insurance industry calls usual and customary fees.
Usual and customary fees are the actual prices for health care that health insurance providers will pay. They determine these usual and customary fees by examining all the relevant health care data from a geographical area, and identifying what is the average price. They set these usual and customary fees on a per-procedure basis.
As an example, health insurance providers will determine the average price for a mammogram in the Denver, Colorado area. They do this by examining all the available mammogram data for this area (and all areas of the country, or wherever the specific insurance agency provides coverage). With that average price in hand, they then pay for that average price. If you go and get a mammogram from a doctor or hospital that charges more than the average price of a mammogram, as determined by the insurance company’s research, you will probably have to pay the difference.
Usual and customary fees are a fundamental part of the health insurance industry. To learn more about how usual and customary fees are determined, be sure to call or meet with a health insurance agent or broker.