Reasonable and customary

See: usual, customary, and reasonable (UCR) .

Reasonable and Customary Charges

The charge for medical services which refers to the amount approved by the TPA or Insurer for payment. Customary charges are those which are most often made by a provider for services rendered in that particular area.

Reasonable and customary charges (Health Insurance)

This term can refer to the amount usually charged by a provider in a certain area for a certain service. It can also refer to the cost approved by Medicare for a certain service.

Reasonable care

See: Due Care.

Reasonable care/precautions condition

Condition requiring an insured to take reasonable precautions to prevent accidents and safeguard property. The clause is not usually construed as a warranty, enabling the insurer to repudiate the liability irrespective of a causal connection between the breach and the loss (Lane v. Spratt (1970)). A liability policy is triggered by the insured’s negligence and so it would be repugnant to avoid liability because of the insured’s lack of care except, depending on the facts, where lack of care amounts to recklessness.

Reasonable charge

See: reasonable fee .

Reasonable construction rule

A rule of construction to the effect that where there is ambiguity the reasonable construction is to be preferred.

Reasonable cost

Actual dollar amount of providing medical services or hospital services including direct and indirect costs to Medicare patients. Fiscal intermediaries and insurance carriers use the Centers for Medicare and Medicaid Services (CMS) guidelines to determine reasonable costs incurred by individual providers in furnishing covered services to enrollees.

Reasonable cost basis

Calculation to determine the reasonable cost incurred by individual providers when furnishing covered services to beneficiaries. Reasonable cost is based on the actual cost of providing such services including direct and indirect costs of providers, excluding any costs that are unnecessary in the efficient delivery of services covered by a health insurance program.

Reasonable cost methodology

System used by Medicare fiscal intermediaries under established guidelines from the Centers for Medicare and Medicaid Services (CMS) to find the reasonable cost incurred by the provider when rendering services to a Medicare patient. These guidelines try to exclude unnecessary medical costs.