Page 316 - Ebook health insurance IC27

The Insurance Times

Definitions

Medical insurance contracts normally contain a list of precise definitions of terms such
as hospital, doctor, outpatient treatment, etc, in order to assist in claims control and
avoid benefit abuse.

Usual, reasonable and customary charges

These are charges for the same service in the same territory. Insurers compare cost of
services incurred by insured persons with the limit established, by the insurer as "normal
and reasonable" and if billings exceed the standard, the company pays based on usual,
reasonable and customary charges.

Medically necessary services

Medical insurance provides compensation for any medical, surgical or other medical
services that a member requires provided such services are reasonable for the condition
presented.

In other words, the proposed treatments should be in accordance with accepted
prevailing medical and surgical practices in the country where the treating doctor exist.

Section 5
Contract of Insurance

Introduction
The tangible representation to insured persons of all promises and protection together
with their qualifying provisions is a legal document that is binding on insurers and is

320 Guide for Health Insurance