It refers to a charge for health care that is consistent with the departing rate or charge in several geographical areas for identical or similar services. The reasonable and customary charges are also called as Usual Customary and Reasonable charges (UCR). Insurance companies pay claims only according to these charges.

This is because the cost of the medical care varies from one region to another, to one country to another, from one zip code to another, from one region to another etc. The reasonable and customary charges guidelines are updated regularly to reflect the most recent costs for medical services in each U.S zip code or country.

The insurance company will generally question the additional charges on several surgical procedures in that geographical area. If the doctor had over charged above the UCR guideline for no reason, the insurance company will generally refuse to pay the excess amount.

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