UCR (usual, customary, and reasonable)
A traditional method for pricing out-of-network charges based on typical rates for a service in a geographic area.
Updated
UCR, or usual, customary, and reasonable, is a traditional method insurers used to determine payment amounts for out-of-network services by referencing the typical charge for the same service among providers in a geographic area.
UCR-based payments are generally lower than billed charges and may leave a balance that an out-of-network provider can bill to the patient, subject to No Surprises Act restrictions in protected situations.
In practice
On an out-of-network claim, the payer's allowed amount may be derived from a UCR calculation rather than a contracted rate. Billing teams compare the allowed amount to billed charges and apply No Surprises Act or state law protections before billing any residual to the patient.
Commonly confused with
- Allowed amount: The allowed amount for an in-network provider is the negotiated contracted rate; UCR is a non-contracted pricing basis used for out-of-network services.