Recovering the Usual and Customary Rate- What the Healthcare Provider Should Know

The settlements reached earlier this year between New York Attorney General Andrew Cuomo and a group comprised of the largest health insurers in the United States have prompted a series of lawsuits throughout the country against major health plans such as Wellpoint, AETNA, and Cigna. A summary of this litigation can be found on this website. Essentially, the lawsuits claim that companies utilizing the Ingenix database have inappropriately manipulated the level of reimbursement paid to providers for out of network medical care to the detriment of members and providers.

When a provider treats a patient needing emergency medical services who subscribes to a health plan that is not contracted with the provider, there is no set rate at which the provider should be paid. Many statutes provide that in this situation the provider is to be reimbursed at the “usual and customary rate.” In Florida, for example, according to Florida Statutes section 641.513(5), the plan must reimburse the provider at the lesser of the provider’s billed charges, the agreed upon rate, or the usual and customary rate. But few, if any, define what “usual and customary” means or how it should be calculated, and as a result, providers and plans often disagree as to the appropriate level of reimbursement.

The most recent lawsuits should demonstrate to providers of all sizes that they do have recourse when they are being underpaid by one or more Managed Care Organizations. The Healthcare Reimbursement and Latest News sections of our website have more information on how consulting an attorney can be of benefit.

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