Reasonable & Customary
Reasonable and customary refers to the typical fee charged for a particular service in your geographic area. Insurers use this standard to determine how much they will reimburse for eligible expenses. If a provider charges more than the reasonable and customary rate, you must pay the difference.
How It Works
Reasonable and customary (R&C) charges are the established maximum amount an insurance carrier will reimburse for a specific service or product in the province or territory where the expense is incurred. These limits are typically based on what a person without private health care coverage would be charged for that product or service in their province. If a provider charges more than the established R&C amount, the plan member must pay the difference out of pocket. When a claim exceeds the R&C limit, the plan applies the member's coinsurance only to the capped R&C amount, not to the full amount the provider charged. Insurers determine R&C amounts independently, so the R&C for the same expense can differ from one carrier to another, and each carrier develops its own adjudication procedures. The applicable R&C limit is based on the location where the service is provided, not where the member resides, so a treatment received in another province uses that province's R&C. For dental care, R&C is generally based on the provincial Dental Fee Guide, which provincial dental associations set and review on an annual basis. R&C limits exist to keep claims from being excessive, control plan costs, protect plan sustainability, and reduce the likelihood of benefits fraud or abuse.
Example:
Under the federal Public Service Health Care Plan, when a claim is higher than the established R&C, reimbursement equals 80% of the R&C charge rather than the full cost of the claim. R&C limits most often apply to services with variable pricing, such as paramedical practitioners like chiropractors, physiotherapists, and massage therapists, as well as dental services, prescription drugs, and medical equipment or supplies.
What to Watch For:
When a claim exceeds the R&C limit, the plan applies your coinsurance only to the capped R&C amount, not to the full amount your provider charged, and you must pay the difference out of pocket. Because insurers determine R&C amounts independently, the R&C for the same expense can differ from one carrier to another, so the same service may be reimbursed differently depending on your plan. Since the applicable limit is based on where the service is provided rather than where you reside, a treatment received in another province uses that province's R&C.
