UCR, Charges Above: HSA Eligibility

What are a plan's usual, customary and reasonable charges (UCR or R&C)?

Reasonable and Customary (R&C) is a term that was developed by insurance companies as a means of classifying the average amount a specific medical practitioner charges based on his/her geographic area. This is often the parameters that an insurance company will use to set pricing of specific medical services and procedures, and if a service offered by a physician exceeds the amount set by the insurance company for the area, the patient is responsible for paying the difference between the amount charged and the Reasonable and Customary expense limit set by the insurance company (HowStuffWorks).

R&C expenses may also be listed as UCR (Usual, Customary and Reasonable) expenses under some types of insurance policies, but this term is identical to R&C classification. In some cases, when a patient questions his/her doctor about the cost of a procedure, the provider may choose to reduce this amount to what the patient normally pays as a R&C expense, and the doctor may choose to lower the cost of the procedure. Obviously, this is completely left up to the medical provider and in most cases the patient will have to pay the difference in cost. However, if this excess amount is in fact charged, then it is considered eligible for reimbursement through consumer-directed healthcare accounts like FSAs, HSA and HRAs, but only if the underlying expense qualifies for reimbursement.