Archive · 26 Oct 2025
Health Insurance Claims: The 'Reasonable and Customary' Clause
When you have health insurance, you expect the insurance company to pay your bills.
But sometimes, they only pay for what they think is a fair price.
This is because of something called the "reasonable and customary" clause.
This can cause problems when the insurance company disagrees with the doctor about whether a treatment was necessary or how much it should cost.
If the insurance company thinks a hospital stay or a treatment wasn't needed, they might not pay the bill, leaving patients with the costs.
To avoid this, it's a good idea to ask questions and get more information before having medical treatment.
Health insurance policies include a "reasonable and customary" clause, impacting claim approvals.
This clause allows insurers to assess the necessity and cost of treatments.
Claim rejections often stem from disputes over hospital stays and treatment costs.
Patients can reduce risk by doing due diligence, questioning costs, and seeking second opinions.
Clear medical justifications from doctors and transparent hospital pricing are needed.
- Who
- Health insurance policyholders, insurers, and medical professionals
- What
- The 'reasonable and customary' clause is leading to health insurance claim rejections.
- When
- Ongoing
- Where
- India
- Why
- Insurers assess the necessity and cost of treatments, sometimes leading to claim denials.
Patient perspective
Insurer Perspective
Treatment necessity and cost
Patient perspective
Patients often lack the ability to argue medical necessity when in acute pain and may face financial repercussions for treatment decisions.
Insurer Perspective
Insurers assess if a treatment and its costs are reasonable, which can lead to claim rejections if they disagree with the necessity or cost of the treatment.
- Key Clause
- Reasonable and Customary
- Main Reason for Rejection
- Unnecessary treatment/costs
- Ombudsman Ruling
- Surgeon's fees payable if skilled.
- Challenges
- Hospital stays, treatment costs, and medical necessity