An Analysis of Usual, Customary, and Reasonable Charges in Life Care Planning

November 23, 2022

We are very pleased to announce that our team at Vocational Diagnostics, Inc. has published a peer-reviewed paper in the Journal of Life Care Planning (Volume 20, Number 2, 2022). This paper discusses how usual, customary, and reasonble (UCR) charges should be established when using various databases to determine future care needs costs in a Life Care Plan.

An integral part of life care planning is researching and presenting accurate charges for recommended future care items and services. Traditionally this has been done by directly contacting several providers in an evaluee’s geographic area to inquire about charges, then calculating the average of those local options to determine the usual, reasonable, and customary (UCR) value of the service. More recently, databases are being utilized in Life Care Plan cost research, as these databases contain large sample sizes of geographically specific billed charge data. These databases often present charge data in percentiles, and there is little consistency among life care planners when choosing which percentile reflects the UCR charge. We propose that using median costs, or the 50^th percentile of a normal distribution, allows for the reduced risk of influence of outliers and best reflects market billed charges. This paper includes a discussion of UCR charges, a basic introduction of the use of statistical information in life care planning, an analysis of billed versus database charges, and an argument for the aforementioned use of the median when conducting database cost research.