How do dental plans set the fees for your dental work? Well, insurers use a concept known as UCR. This stands for “usual, customary, and reasonable” fees. The concept helps insurers set fair, market based charges for dental work.
Insurers and dentists define these three terms as follows:
- Usual Fee: Dentists charge this fee most often for a given type of dental work.
- Customary Fee: This refers to the fee level that the administrator of a dental benefit plan sets. They base this amount on actual fees dentists have billed for a certain type of dental work. It is the most an insurer will pay under a plan for that type of work.
- Reasonable Fee: This is the fee a dentist charges for dental work that is more complex than usual. For instance, work that has been changed by the nature and severity of the problem that is being treated. It accounts for any medical or dental complications or unusual circumstances. Thus, it may differ from the dentist’s “usual” fee or the plan’s “customary” fee.
Types of dental insurance that use UCR
Dental insurance carriers base the fees for indemnity plan claims on UCR. Furthermore, this type of plan pays each claim based on the amount insurers determine to be usual, customary, and reasonable for each type of work and for each market area. That’s one reason why dental plans where you live may be priced differently than for other areas .
For instance, if insurers set the UCR for a cleaning in the Zip code area where you live at $60, but you visit a dentist who charges you $90, then you would pay $30. Insurers use the same rule when a patient with this type of plan sees a dentist who charges more than the local UCR set by the plan’s carrier.