Since different insurance companies have different ideas of what is “reasonable and customary,” it is evident that there is no consensus on what this term means.
Although the government and insurance companies often say they will pay some percentage of “reasonable and customary” fees, all the formulae for calculating these fees are secret. The Health Insurance Association of America (one source that insurance companies quote as a source of their data) has disclaimed, in court, the integrity of any of their data. Although the government and most insurance companies claim that these fees represent some kind of average fee charged by physicians in a region, the fact is that there is no credible evidence that “reasonable and customary” means anything other than “what we feel like paying.” I suspect that the term is nothing more than a marketing ploy to mislead patients into thinking that physicians are overcharging patients rather than that the government or the insurance companies are paying you less than they should.
The “reasonable and customary” idea has been exposed as fraudulent, and United Healthcare has entered into an agreement with the Attorney General of New York as part of which they have agreed to pay $50 million dollars in fines and $350 million dollars to some of their customers. The Attorney General's office indicates that “reasonable and customary” is in the neighborhood of 20% below any rational estimate of what they should be paying. Many other groups are also suing them and the damages are likely to be in the billions for their unethical behavior.