What does Usual Customary and Reasonable mean?

What do UCR rates mean for insurance policies.

When insurers allow you to use any hospital worldwide you will see the words "Usual, Customary, and Reasonable" in your policy conditions of coverage.  Usually abbreviated as UCR (or these three letters in a different order), insurers use this terminology to avoid getting forced to pay excessive fees of hospitals worldwide that may try to take advantage of the insurer.

How we view UCR rates is that the insurer is only going to pay out fees that are usual and customary for that procedure or treatment, meaning they will not pay fees that are not typical for a specific medical event, including experimental procedures. Reasonable is that they will only pay out rates that are reasonable for that region.

Here is the definition from two of our insurers as an example of their exact terminology. (If you are interested in a specific insurer's terminology, reference that insurer's current conditions of coverage for your specific policy. Definitions are generally found at the end of the document.)

BMI sample contract terms:

USUAL AND CUSTOMARY CHARGES:

Benefits payable under this Policy are limited to the medically necessary services and treatments certified by the Insurer as covered where appropriate. Amounts payable shall be limited to the Reasonable, Usual and Customary Charges for Hospital and medical services in the area where such services are provided.

RedBridge sample contract terms:

Reasonable, Customary and Usual Charges (RCU) means the rate or fee charged by the majority of the service providers within the same geographic area, for the same or similar treatment, service, supply and/or item(s) rendered to a patient for the same or similar injury or illness. Charges are subject to the Company’s Health Claims Administrator approval.

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Last reviewed May 2026. For help with your own policy, contact Expat Insurance through the help center so our team can review your situation.