Every therapy service is billed using a specific procedure code. Each insurance company has a set fee for each service code that they determine as an reasonable amount based on what other insurance companies, such as medicare, agree is a reasonable fee. The tricky part is that each insurance company allows different fees for each service. Keeping up with them is hard.
The terms “reasonable, usual and customary” refer to charges made by your health insurance provider for a given medical service. A charge is considered reasonable, usual and customary if it matches the general prevailing cost of that service within your geographic area, which is calculated by your insurance company. The insurance company then uses this information to determine how much it’s willing to pay for a given service in your area. This means that if your doctor charges above the reasonable and customary charge, you may have to pay the remainder.
While insurance companies usually don’t divulge the amount they consider customary or reasonable, physicians may not either. Before you agree to a treatment or service from your health care provider be sure to ask how much it’s going to cost.