Most health plans have a “network,” a group of doctors, hospitals and other healthcare providers who agree to take your insurer’s rate. Some plans may not cover any services you get from providers who are not in the network. Others cover part of your care when you get services from other providers. But, plans may differ in how they decide how much they will pay out-of-network providers. Many of them develop their own “usual, customary and reasonable” (UCR) charges to help work out what they will pay out-of-network providers. Others use Medicare’s payment (fee) schedule.

  • UCR charges. Most plans pay for out-of-network care based on a percentage of UCR charges. Those reflect what providers typically charge for a specific procedure in a given geographic area. Health plans make their own decisions about what is usual and customary. They may use resources such as FAIR Health, however, to help them make these decisions.
  • Medicare fee schedules. Medicare’s payments are usually lower than payments from commercial health insurers. Some insurance plans use Medicare fees as a basis for reimbursing service for out-of-network providers. They then multiply that fee by a certain percentage to set the maximum amount that they will pay for that procedure.

The rate is often less than what your doctor charges. If you go out of network, your insurer may pay for part of the bill. You will pay the rest.