Why Your Medical Bill Is Sometimes Not Paid In Full!
One of the most common questions I get asked is concerning shortfalls and it goes like this:
If the benefit section on my plan says that it will “pay out in full”, why have I got a shortfall on this claim?
Well there is a simple answer to this.
It’s because you’re missing the other part of the phrase.
The full phrase used by the majority of Private Medical Insurance companies goes something like this…
“Paid in Full Up To Reasonable & Customary.”
So now I hear you ask: “What is Reasonable & Customary?”
“Reasonable and Customary” means the average amount charged in respect of valid services or treatment costs, as determined by our (Insurers) experience in any particular country, area or region and substantiated by an independent third party, being a practising surgeon/medical practitioner/specialist or government health department.
i.e. these are the average costs service providers in the region usually charge for the same or similar service.
If Insurers were to pay any fee that a Service Provider charged, this would ultimately have a knock-on effect and your premiums would have to increase to cover the rise in claims.
We saw this happen a few years ago with BUPA in Zimbabwe. E.g. Doctors were charging something like $40 for a visit but for BUPA members, they would charge BUPA £60 because BUPA was not enforcing a Reasonable & Customary Rates rule.
Of course, this increased claims which ultimately pushed up premiums for members. Many people had to move off BUPA because the premiums became unaffordable.
So we look at the Reasonable & Customary Rates in the positive as it helps members by keeping their premiums affordable.
I hope this explains why Reasonable & Customary rates are used for all of our benefits.
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