How Medical Costs Are Determined In Life Care Planning
Caring for an aging or injured loved one who depends on you can be challenging. This is why many individuals leverage life care plans as they represent the best way to ensure a consistent quality of life and account for the future and current medical needs of their family members.
While these plans are certainly very advantageous, you should first be familiar with the ins and outs of the entire process if you’re considering hiring a life care planner.
Today, we’ll cover everything from what a life care plan contains to how much it's going to cost you.
Life Care Planning Defined
A life care plan can be described as a dynamic document (or a set of documents) created through comprehensive assessment and research that provides an organized plan of all the care needs of an individual. It addresses the following:
1. Costs of current and future medical services
2. Costs of medically related goods
Life care plans are usually created for individuals suffering from a disability caused by a traumatic injury or chronic disease. Creating such a plan requires a systematic approach and coordination of information from different sources. Life care planners leverage different kinds of data, ranging from vocational, medical, psychological, and rehabilitation to social data in order to cover all bases.
More importantly, the plan deals with the impact of aging, as well as the progression of the disease. As such, it tends to be the means of preventing or reducing known complications, including the associated costs (more on that later, when we cover UCR and U&C meaning).
Since it also deals with prices, it’s also valuable for those who have a fiduciary responsibility to the individual with a disability. That way, financial professionals can leverage this data when selecting the investment strategies required for funding the future care of disabled persons through the remainder of their life.
Methodology For Evaluating Future Medical Needs
The most challenging part of putting together a life care plan is estimating future medical needs and associated prices. Ask any life care planner and they’ll tell you what a complex exercise this is and how many gray areas it contains.
For instance, a treating physician may not be completely certain that the patient will require treatment. They may not be sure how long the treatment will last either. Life care planners also have to address the possibility of the treatment being unsuccessful, as well as any future complications that may arise.
In other words, there are a lot of things to consider.
Thankfully, life care planners follow a set of accepted guidelines that address all the possibilities and make navigating these difficult situations a lot easier. One of those guidelines deals with future medical costs and appropriate prices that should be incorporated into the plan.
Usual, Customary, and Reasonable Fees
The best way to determine the costs of medical procedures, facility services, medication, and others in the life care plans is by using Usual, Customary, and Reasonable (UCR) fees. Since the life care plan uses current dollar values for projections of future costs, UCR is used for these values too.
UCR is a simple term that describes costs relevant to the context of the provided service which is supported by the medical record. Let’s break down each of the words in the acronym since that will make understanding both the UCR meaning and U&C meaning (usual and customary) a bit easier.
1. Usual: represents a charge for a medical service or a product performed or offered by a licensed professional/facility. It’s based on the licensing for the procedure or service.
2. Customary: the charge for the service falls within the acceptable range of fees that professionals and facilities in the area charge for the same service or procedure.
3. Reasonable: the fee is clinically justified and relevant.
As you can see, the U&C meaning doesn’t account for if the fee is justified, which is why UCR is usually the preferable model for projecting future costs. Let’s look at the difference between the two in more detail.
U&C vs UCR
While both terms are sometimes used interchangeably, there are quite a few differences.
When it comes to U&C meaning, it refers to charges on a healthcare provider’s chargemaster. This would be problematic for a life care plan as a chargemaster presents standard fees for services that apply to all patients and don’t address the expected source of payment.
UCR, on the other hand, refers to the maximum amount of usual a customary charge considered reasonable by the payor. Providers set the U&C charges which are applied across the board and each payor will decide what they consider the proper UCR charge for a particular service in the current market.
How Life Care Planners Obtain The Information
There are different methods of obtaining information on UCR charges. One of the most common is conducting a comprehensive survey of medical providers, pharmacies, surgery centers, and equipment distributors, as well as inquiring about the billed price.
This price reflects the dollar amount a patient is expected to cover if they would seek those services without any discounts. Discounted prices are usually not included due to their limitations and variability.
Life care planners may then collect data points from a range of sources. Afterwards, these prices are presented as an average that accounts for differences in the market.
Many also leverage different databases to determine reasonable costs. Some of the most popular ones are:
1. Physicians Fee Reference (more commonly referred to as PFR)
2. American Hospital Directory
Give Your Loved One The Care They Deserve
Now that you’re more familiar with the intricacies of a life care plan, you should be more equipped to make the right decision for your loved one. By leveraging the services of a life care planner, this demanding experience will be significantly more straightforward.
You’ll make certain that each aspect of the care of your disabled family is standardized and that every penny is accounted for and goes into giving your loved one the care they deserve.
However, not every life care planner is the same. If you want an uncompromising standard of quality, choose
OAS, Inc. Our life care planners have a combined experience of multiple decades, and they have helped many individuals like yourself provide their loved ones with an unprecedented level of care.
Call us at
800-292-1919 or send us an email at
info@oasinc.org to book a free consultation today.
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