Usual, Customary, Reasonable Charges Expert Witness

A Usual Customary and Reasonable charges expert witness is useful in personal injury and malpractice litigation.  The Federal Healthcare.gov web site defines Usual Customary and Reasonable charges (UCR).  It states,  “The amount paid for a medical service in a geographic area based on what providers in the area usually charge for the same or similar medical service…” However, note that the UCR amount is not the allowed amount.  UCR amounts may apply in certain types of medical billing fraud cases.

Finding a Usual Customary Reasonable Charges expert witness requires an understanding of the context of your case.

Usual Customary Reasonable Charges Expert Witness
Michael F. Arrigo Usual Customary Reasonable Charges expert witness Medicare Fraud Damages, Medical Coding Medical Billing, Medical Malpractice, Electronic Health Records.

Determining UCR

In personal injury, malpractice and sometimes in billing fraud cases, Usual, Customary, Reasonable charges are important.   The UCR methodology is a strategy to establish the value of medical care.  When there is a collateral source rule, medical charges are generally admissible when insurance payments are not. UCR charges analysis may help establish the value of care for an injured plaintiff.  The plaintiff may lack health insurance.  Or, the healthcare providers may not file claims with the plaintiff’s health plan.  In these circumstances, coding medical claims to standardize them may be useful.

According to the Healthcare Financial Management Association, the definition of the charged amount is, “The dollar amount a provider sets for services rendered before negotiating any discounts. The charge can be different from the amount paid.  A common mistake is to assume that medical care should be based on what Medicare pays.  Medicare only pays its rates for the care of those that it insures.

§ 405.503 Determining customary charges provides:

(a) Customary charge defined. The term “customary charges” will refer to the uniform amount which the individual physician or other person charges in the majority of cases for a specific medical procedure or service. …”

Usual, Customary and Reasonable Charges are not the “Allowed Amount” and is NOT based on Insurance

According to some, the “Usual, customary and reasonable” refers to the maximum usual and customary charge a payor considers reasonable, but this is NOT correct. Providers set UCR charges and may not always apply those charges uniformly.  In fact, in personal injury and medical malpractice cases, the collateral source rule may prohibit the introduction of any evidence of insurance.

Both public insurance such as Medicare and Medicaid and private insurers use a term called “allowed amount”. The allowed amount is as NOT necessarily the total amount a health plan determines the provider should be paid for a service.  The allowed amount is often used to calculate patient responsibility.  For example, if a provider charges $1,000 for a service and the allowed amount is $300, but the health plan pays $250, the patient’s responsibility may be $50.00  Again this only applies if evidence of insurance in valuing medical care is admissable.

UCR is often misunderstood by the layperson (fee vs. charge)

Take this erroneous example in Investopedia:

What are ‘Usual, Customary and Reasonable Fees’ (Note: “fees” are different from ‘charges’ which is the first error in this explanation).

1.     WRONG: Usual, customary, and reasonable (UCR) fees are out-of-pocket fees that a health insurance policyholder must pay for services.
2.     WRONG: UCR fees are based on the services provided to the policyholders, as well as the area of the country where the services are being provided.
3.     WRONG: A fee is considered usual, customary and reasonable if:
4.     INCOMPLETE HYPOTHETICAL: it is a fee usually charged for a doctor for a service, and (reason: this explanation does not include what hospitals, laboratories, diagnostic imaging, surgical centers and others may charge).
5.     PARTIALLY CORRECT, YES. it falls within a price range that other doctors in the area charge, and
6.     WRONG: “it is for a service deemed necessary under the current conditions.”  (reason: Medically necessary care is a separate issue from the amount that is charged
7.      WRONG: Usual, customary and reasonable (UCR) fees are out-of-pocket fees that a health insurance policyholder must pay for services. UCR fees are based on the services provided to the policyholders, as well as the area of the country where the services are being provided.

UCR Charges in the Community

A Usual Customary Reasonable Charges expert witness has specialized knowledge and data that is useful in presenting UCR charges in the marketplace where a patient resides. In jurisdictions such as Texas where affidavits from Usual Customary Reasonable Expert Witnesses are required we provide them for litigation ready opinions of UCR.

Fee-for-Service Charges vs. Risk Adjustment

In fee for service arrangements, charges and payments are made for the service(s) provided.  Medicare Advantage Organizations (“MAOs” or Medicare Part C plan sponsors) as well as Accountable Care Organizations (ACOs) use risk adjustment.  Risk adjustment considers the conditions of the patient and may pay a set ‘capitated’ amount to a primary care doctor to coordinate care.  The fee-for-service component of the care is considered, and the capitated payments may be considered also, depending on the scenario and context.

Usual Customary Reasonable Charges Expertise and Specialized Knowledge

Finding an expert in Reasonable Charges may be essential in cases where a defendant likely has liability. Our team of physicians, registered nurses (RNs), certified coders, economists, regulatory compliance, analytics, and healthcare administrators can analyze individual bills, payment policies and the entire payment process ranging from compliance with provider contracts to the definition of usual and customary fees.

Our experience includes determining UCR charges for:

Hospital inpatient stays, where we evaluate line-item charges and apply the appropriate charge model.  This includes Inpatient Prospective Payment Rule or IPPS and DRGs, when applicable.  Also, the Outpatient Prospective Payment System or OPPS for hospital-owned facilities.  In addition, Ambulatory Surgical Center (ASC) charges.  Pass through payments.  When relevant, physician charges.  Analysis of diagnostic imaging charges such as MRI, PET Scan, x-ray, CT Scans.  If needed, pain injections, ablations.  Furthermore, surgical procedures in orthopedics surgery, cardiology, neurosurgery, cosmetic surgery, wound care surgery, bariatric surgery.  Evaluation, and management or E&M procedures when relevant.