What are reasonable and customary limits and how do they work?

Reasonable and customary (R&C) limits refer to the maximum allowable amount that an insurance carrier or claims payor (e.g. Manulife) will reimburse on a particular service or item. This amount reflects the average cost associated with this service or product in a specific geographical region.

R&C limits are most noticeable in paramedical services and medical equipment/services. Why? While physicians, dentists and hospital services adhere to a provincial fee guide (e.g. Ontario Dental Association (ODA) fee guide), fee guidelines are not in place for paramedical and medical equipment/service providers. As such, paramedical and medical equipment/service provider fees may vary.

For example, Sachin hurts his back, and seeks the services of a chiropractor. His chiropractor charges $200 for an initial consultation; however, the R&C limit for this service in Ontario is $180. When Sachin submits his claim, the claims payor, will use their R&C limit to determine his claim reimbursement. In this case, Sachin would not be reimbursed the full amount – only $180 of the $200 claim would be eligible/considered for reimbursement. The R&C limit for subsequent chiropractic visits is $68. If Sachin’s chiropractor charges $80 for a subsequent visit, Sachin would only be eligible/considered for a $68 reimbursement.

It’s important to find out how much is covered under your benefits plan and how much you may be responsible for paying ‘out-of-pocket’. This will help you to minimize expenses and avoid disappointment if your claim is not eligible for full or partial reimbursement.

NOTE: R&C limits may change over time without notice. It is important to find out what your R&C limits are. You can follow these steps to view your insurer's R&C limits.

The importance of R&C limits.

R&C limits are important to ensure the sustainability of your benefits plan.
 
As a plan member, smart shopping on your part for health-care services and products can help to reduce your out-of-pocket expenses, as well as benefit plan costs. Therefore, when you help to ensure that claim costs are not excessive, you are also helping to protect the long-term sustainability of your benefits plan.

Questions? We are here to help! Contact OTIP Benefits Services at 1‑866‑783‑6847.
 
Related articles:

• Find out if you’re covered before paying ‘out-of-pocket’
• Choosing the right paramedical provider for your health