Everyone gather ‘round, because it’s time for another episode of How Much Will We Pay?, the show that attempts to guess how much our insurance company is going to bill us for our healthcare services.
It’s always a bit of a mystery, isn’t it? Sure, we sometimes know whether certain things are covered or not, but the actual dollar amount that’s charged versus what our insurance will cover versus what we’ll get billed for? That’s anyone’s guess.
Or...is it? As it turns out, there is a method to the medical billing madness, and it’s called “usual, customary, and reasonable fees,” or “UCR fees,” if we’re the cool kids. Which we are. The UCR philosophy is applied to consultation fees, procedure fees, prescription costs, equipment costs...all of it. “UCR fees” are how much we’re going to be asked to pay after our insurance covers what it will cover, and they’re determined using this incredibly complex calculation that isn’t vague at all: “How much are other doctors in the area charging for this same service when it’s necessary for the patient?”
That’s it. That’s how UCR fees are determined. So if every oral surgeon in the Pittsburgh metro area is charging $1,200 for necessary root canals and we go to a dentist who’s charging $2,500 for the same procedure, there’s a good chance our insurance isn’t going to cover the whole $2,500. But they’ll probably cover $1,200, because $1,200 is usual (other dentists charge this amount every day all over town), it’s customary (very few dentists dare deviate from the accepted root canal cost), and it’s reasonable (it’s the going rate for a root canal, and it would be hard to find a decent dentist who would do one cheaper).
Related or Semi-related Video
Finance: What is a redemption charge?7 Views
Finance allah shmoop what is a redemption charge All right
well when you redeem shares of a mutual fund in
a deferred commission purchase structure there's a charge like you're
not paying your commission upfront you pay it later Remember
that most mutual funds are sold as a shares meaning
that the commission of the fund you're buying is paid
up front That is if you've invested ten grand on
a three percent up front commission structure while when you
step up on the swimming pool starting blocks and the
money is actively starting to be invested your actually starting
the race with ninety seven percent of that ten grand
or ninety seven hundred bucks with three hundred dollars having
gone to the broker for the pleasure of selling you
that fund but some mutual funds are sold as b
shares where there is essentially an exit fee or rather
where there is a charge when you redeem the fund
either because you just want to sell it or you
die in your estate liquidates it or martians kidnap you
and force you at martian gunpoint to call in a
sell order right Well in many cases redemption fees are
waived if you hold the mutual fund some extended period
of time like a year a few years five years
something like that If you hold the fund an extended
period the annual management fee paid to the people buying
and selling securities on your behalf can then cover the
broker's commission So the money managers aren't actually losing money
in the form of that three hundred dollar commission paid
you a broker who sold you ten grand of fund
only to have you three weeks later dump it and
move on to another funds Well there are other benefits
and having this system set up because it encourages mohr
careful selection of mutual funds and longer duration in holding
them And yes the obvious marriage and dating allegories apply
here But we just won't go So when you hop
in bed with a given mutual fund read the fine
print because well all kinds of hidden feed germs exist
in bedrooms airport bathrooms and glass elevators Well all around 00:02:02.98 --> [endTime] the world
Up Next
What is Compensation: Advisory Fee Limits? Advisory fees are paid to financial professionals for managing client funds. In general, the market dete...