Adverse Benefit Determination: UCR Cap Explanation

This letter explains that a claim has been partially denied because the provider's charges exceed the plan's Allowed Amount based on Usual, Customary, and Reasonable (UCR) limits.

Letter Template

Date: {{current_date}}

Member Name: {{member_name}} Member ID: {{member_id}} Claim Number: {{claim_number}} Date of Service: {{date_of_service}} Provider: {{provider_name}}

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1. The Decision

We have completed the review of your claim for services provided by {{provider_name}}. We have made a Partial Denial of this claim, as the total amount billed was ${{charged_amount}}, but we have only allowed ${{allowed_amount}} for payment.

2. Clinical/Factual Basis

For the services provided, identified by CPT code {{cpt_code}}, your provider's charge of ${{charged_amount}} exceeds the rate we have determined to be reasonable for these services in your geographic area. The clinical review confirms the services were rendered, but the billing exceeds the plan's cap for this procedure.

3. Plan Provision / Clinical Guideline

Under your Summary Plan Description (SPD), Section {{ucr_section}}, the plan's benefit is limited to the Allowed Amount for non-participating providers. This is defined as the "Usual, Customary, and Reasonable" fee. We utilize the {{ucr_percentile}}th percentile of the FAIR Health database to determine this UCR amount for your zip code.

4. Rationale (The "Why")

Our data shows that 90% of providers in your area charge less than or equal to ${{allowed_amount}} for this specific procedure. Because your provider chose not to contract with our network, they are not bound by our negotiated rates. Therefore, any amount above the ${{allowed_amount}} (UCR cap) is your responsibility, unless you can provide evidence that the provider's higher charge is justified by unique clinical circumstances.

5. Appeal Rights

You have the right to appeal this partial denial. You may submit a written request for an internal appeal within 180 days of receiving this notice. Please include any additional information or justification from your provider regarding the billed amount that you would like us to consider.

Internal Appeal Address: Health Plan Appeals Department P.O. Box 12345 City, ST 12345

If the internal appeal is upheld, you may also be eligible for an External Review by an independent review organization (IRO). For more information, please contact the Member Services number on the back of your ID card.