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What are reasonable and customary fees?

It is common practice for medical insurance plans to pay benefits for the services of non-participating providers based on usual and customary allowances. The usual and customary allowance is determined based on a review of the claim data for a particular health service provided by peer physicians within a specific community or geographical area. The collection and standardization of the information for usual and customary allowances is done by varying organizations such as CMS (Centers for Medicare and Medicaid Services) and Ingenix, both of which are widely used within the health care industry for all populations. The University of Missouri medical programs (Healthy Savings Plan, Custom Network Plan, PPO Plan, and myRetiree Plan) use the data provided by CMS for all claims that require a usual and customary determination – the CMS standard is used both for the active and retired employee population. If the CMS usual and customary is not available for a particular service or treatment, then the amount payable will be 65% of billed charges.