So What Does Reasonable and Customary Mean?
Many health insurance policies specify that they will pay claims based upon something called reasonable and customary charges. This means that insurers claim they will allow a normal charge for a specific service, by a specific type of medical provider, taking the geographic area into account. So we might expect a national insurance company to charge more in New York City than they would in a small midwestern town. However, this health insurer practice has come under scrutiny recently.
How Do Insurers Calculate Reasonable and Customary Charges?
Insurers won’t release any information on how these charges are calculated, and many critics (including doctors) believe that the payout limits are far too low. In fact, we are starting to hear a lot more about cases brought against insurers for this practice, especially in large metro areas where charges are higher.
Network providers in an HMO or PPO agree to follow the health insurance customer guidelines when the bill their patients. However, if a patient needs to seek out of network care, or if they do not have a network type health insurance company, then that patient is responsible.
For network health insurance policy members, it seems as if the reasonable solution would be to make sure that medical care comes from a network provider. However this is not always possible in an emergency.
Look for the best individual health insurance plans here!
Related posts:
Feedback