Frank Progl thinks an educated consumer is a smart consumer. So he can’t understand why his dental insurance carrier is so resistant to his efforts to educate himself. “Try as I may, I can’t get the insurance company to provide the information I request,” he explained.

Progl just wants a list of usual, customary and reasonable fees for dental services in his zip code. Most insurance plans base reimbursement on what they call UCR or reasonable and customary fees. That can significantly increase your out-of-pocket expenses for medical and dental services.

Here’s why. Say your insurance plan pays 80% of covered services. If your dentist bills you $500, you would expect the insurance company to pay $400. But it’s not that simple. The insurance company compares the prices your dentist charged with the average costs in your area.

If the average is only $400, it will only pay 80% of the average or $320. You’ll be responsible for $180, rather than the $100 you expected. “I’m looking for a new dentist, so I thought it would be helpful to know the reasonable and customary fees,” Progl said. “My idea was to take that information along when I visit a prospective new dentist to compare the dentist’s charges against the amount my plan will pay.”

The insurance carrier refused. “I was told all I can do is request a pre-determination of benefits from each dentist, which requires the dentist to submit a form to the insurance company. It would be much easier if I just had a list of reasonable charges,” he explained.

Usual, customary and reasonable charges are the mystery item in most health plans. They’re mentioned only in passing, but have a significant impact on out-of-pocket costs.

Critics complain insurance companies intentionally understate costs through questionable practices, including:

• Mixing procedures performed by non-doctors with procedures performed by doctors
• Eliminating high-cost complex cases from the calculation
• Using older data, which bases current allowances on lower costs that existed in prior years

Last February, NYS Attorney General Andrew M. Cuomo announced an industry-wide investigation into a scheme by health insurers to reduce reimbursements to consumers who use out-of-network services. Sixteen insurance companies were served with subpoenas as part of the investigation. The subpoenas request documents showing how the insurer computes reasonable and customary rates, copies of member complaints and appeals, and communications with members and between Ingenix and the insurer on the issue.

Cuomo is especially concerned about Ingenix Inc., a wholly owned subsidiary of the nation’s largest health insurer, UnitedHealth Group. Ingenix sets the “usual and customary” or “reasonable and customary” rates used to measure insurers’ promised reimbursements of consumers who use non-network providers. But he claims Ingenix manipulated the data by deleting valid high charges to skew reimbursement rates downward; incorrectly bundled charges from nurses, physicians assistants and physicians; and failed to verify the accuracy of the pricing data it received.

The investigation could ultimately lead to industry-wide change. But for now, consumers are on their own.

If you have time to plan, request a predetermination of benefits from your insurance company. The insurance company typically requests a written statement from the doctor with the industry CPT codes for the proposed procedures. Once it receives it, it can estimate what it would pay for the procedure.

If you’ve already received medical services, there are still a few things you can do.

• Appeal the determination. Fees providers charge are affected by the patient’s health and medical complications. So ask your medical provider to write a letter to the insurance company explaining any extenuating circumstances, along with supporting medical records and operative reports. Sometimes, the insurance company will adjust the benefit if information justifies the higher charge.
• Contact other medical providers in your area to find out what they charge for the procedure in question. If the fee your provider charged is equal to or less than what other area providers charge, then ask the insurance company to review the claim based on the new information.

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