February 23, 2022
February 23, 2022
Life Care Plans use Usual, Customary, and Reasonable (UCR) fees to determine costs for medical procedures, prescriptions, laboratory work, and facility services, among others. Because a life care plan uses current dollars to make projections for future costs, UCR fees are the basis for cost projections of future care.
Usual, Customary, and Reasonable is a term to define a medical cost relevant to the context of the service provided and supported by the medical record. The three elements work in tandem to establish a fee for a medical service or product.
• Usual — a professional charge for a service or product performed by an appropriately licensed or credentialed professional, or a facility charge based on the licensing for the service or procedure.
• Customary — the charge is within the range of fees, quantity, volume, and/or coding that most professionals or facilities in the geographic area charge for a procedure.
• Reasonable — the fee is clinically relevant and justified.
It is important to understand that organizations have a collective message regarding the UCR process however the definition can vary among sources as noted below:
(b) a fee is ‘customary’ when it is within the range of usual fees currently charged by physicians of similar training and experience, for the same service within the same specific and limited geographical area; and
(c) a fee is ‘reasonable’ when it meets the above two criteria and is justifiable, considering the special circumstances of the particular case in question, without regard to payments that have been discounted under governmental or private plans.
Additionally the AMA, has a taken a position that there is no relationship between the Medicare fee schedule and Usual, Customary and Reasonable Fees.
Understanding the definition of UCR is important but it should not be confused with insurance defined or other uses of UCR. The life care planner must be careful when utilizing the medical codes and databases to not use Medicare rules for the development of the pricing in the plan. Although Medicare may set the precedence for billing, this is not the same for all carriers (Weed & Berens, 2018).
Life care planners may obtain cost information from databases or by conducting a market survey by contacting local providers for pricing information for medical/non-medical services.
Commonly utilized databases in the field of life care planning to determine costs of Facilities, Physician/other professional services, durable medical equipment (DME), Anesthesia cost, are:
Usual, customary, and reasonable fees are used in a life plan care to establish costs for future care an evaluee will need because of a catastrophic or non- catastrophic injury.
When obtaining pricing for services and items, it is important that the costs be usual, customary, and reasonable (UCR) and not discounted. Usual and customary typically fall within the 75th or 80th percentile (Weed & Berens, 2018) based on the location of which services are to be provided.
A life care plan can help quantify and determine cost on a line item basis for your client with a catastrophic of non-catastrophic injury.
The life care plan is essential to establishing the basis for lifetime costs of future care. Working with a life care planner will help you establish fee costs that are usual, customary, and reasonable to stand up under scrutiny.
Weed, R. O., & Berens, D. E. (2018). Life Care Planning and Case Management Handbook (4th ed.). Routledge.
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