Dental Insurance: Usual, Customary and Reasonable (UCR)

Update: Usual, Customary and Reasonable (UCR) Terminology
(first published in the ADA News – April 2000 and slightly modified in 2009)

In October 1997 the ADA unanimously adopted a resolution which requested that all third-party payers use the term “maximum plan allowance” in place of “usual, customary and reasonable (UCR)” terminology.

Why? Because there is no such thing as a “usual, customary and reasonable” fee.  Its use is misleading to the public and doctors resent it.  The fees used for the typical 100%, 80% and 50% calculations VARY within each insurance company based upon the PREMIUMS paid by the insured!  Two different people may have the same insurance company for dental insurance but may pay very different premiums; the person paying the higher premium will get, for example, 80% paid at a higher rate than the person paying the lower premium.

I have provided a few gems from the many insurance company letters I have collected.

“Any change to our current explanation of benefits language will be an internal decision. As a customer-focused Company, our business decisions will be based on the needs and priorities of our customers. If and when a determination is made to alter the language, it will relate to our customer relationships. As such, any communication of timing of changes will be between our Company and our clients.”

The General Manager
Wellpoint Dental Services

Wellpoint doesn’t seem to understand that doctors are necessary to deliver the health care they insure.

In September 1999 I asked the President and CEO of Aetna U.S. Healthcare about the UCR issue during Q&A in front of about 500 institutional investors at the Bear Stearn 12th Annual Health Care Conference in New York. I was asked to leave the conference in the afternoon. Aetna will soon insure close to 10% of the people in this country? Persistent letter writing and phone calls to Aetna paid off with the eloquent response below. I still don’t believe that Aetna’s Chief Medical Officer ever answered my question; will Aetna consider using the term ‘maximum plan allowance’ rather than ‘usual, customary and reasonable.’

“Actually, within the health benefits industry, ‘usual and customary’ is taken to mean a reference to a standard of reimbursement, typically the schedules produced by the Health Insurance Association of America (HIAA). The term is in common use and is well understood by consumers and plan sponsors. In addition, our contracts and certificates of coverage reference this term. Aetna U.S. Healthcare refers to our fee schedule as the ‘reasonable equitable fee’ or ‘REF’ to distinguish it from fees based on industry accepted usual and customary rates. We appreciate that the term ‘maximum plan allowance’ may well be less suggestive of a reference to the reasonableness of a dentist’s fee for a service, however, it is not synonymous with ‘usual and customary.”

The Chief Medical Officer
Aetna U.S. Healthcare

Aetna’s President need not look any further than the Chief Medical Officer’s letter to understand why Aetna’s stock price is so low; Aetna is out of touch.

Prudential is rare among the big insurers in using the preferred “maximum plan allowance” terminology and should be commended. Companies like Wellpoint and Aetna can either work with doctors as they should to improve healthcare delivery in this country or doctors may begin to legislate it and rally public opinion. Give a copy of this article to your patients who don’t understand UCR and to your stockbroker who asks for your medical opinion about why health care stock prices are in the toilet.

In December 1999 the CEO of Aetna was forced out of the company. A Wall Street Journal article at that time pointed to investor discontent that began in September 1999 that lead to his ouster.

*Dr. Dorfman was a member of the Council on Dental Practice of the Dental Society of the State of New York at the time of initial publication.

Categorised in: Dr. Dorfman Says

This post was written by Dr. Jeffrey Dorfman