How to Read Your Medical Bill
The average American with medical insurance through an employer spends about $5,000 out-of-pocket in medical expenses—including health insurance premiums and medical care—every year, according to the health solutions business, Aon Hewitt. Uninsured and older people can pay even more. On top of these typical expenses, it’s not uncommon for medical bills, especially complex hospital bills, to have errors, such as duplicate medical services.
To avoid paying more than necessary for healthcare, start by carefully reading your medical bills. With a little practice, you’ll become a pro and be able to spot errors that could needlessly raise your costs.
Two Types of Medical Financial Documents
You may receive two documents that look like medical bills, but they serve a different purpose:
An explanation of benefits (EOB) can look like a medical bill—but it’s actually a report from your insurance provider. An EOB shows what services a medical provider charged your insurance company, and what part of that charge your insurance company paid. An EOB is not a bill—it is simply for your information. You can use it to check that your medical bill is accurate. If you have Medicare, an EOB is called a Medicare Summary Notice (MSN).
A medical bill (or statement) comes from the office that provided you a medical service. A doctor, group practice, hospital, therapy clinic, and rehabilitation center can send you a medical bill. A medical bill lists the service you received, the cost, and what you owe.
For a medical event or procedure (such as a birth or surgery), more than one office may send you a bill. For example, for a birth, your obstetrician, anesthesiologist (if you had an epidural or a C-section), and hospital may each send their own bill.
Anatomy of a Medical Bill
Medical bills look different from one another, depending on the company that sends them. But they all have the same general components. When you know what to expect, it’ll be easier to understand what you owe and when something is wrong. Here are the main components:
Medical provider. This is the name of the doctor, group practice, hospital, therapist, rehabilitation center or other organization that provided care to you or your family member.
Patient and person responsible for paying the bill. This is the name of the person in your family who received medical care. Sometimes it’s the primary person on the insurance plan. For instance, it may be the name of your spouse if you are listed as a dependent on your spouse’s insurance plan.
Date. This is typically the date the medical service was provided.
Code for procedure or treatment. Each healthcare service, procedure, test, drug, and piece of equipment has a code assigned by national healthcare organizations. This is a standard, consistent way of billing patients. A medical code may have its own column on a medical bill. Different types of codes you might see on a medical bill include: Current Procedural Terminology (CPT), Healthcare Common Procedure Coding System (HCPCS), and Code on Dental Procedures and Nomenclature (CDT).
Description. This may also appear as “Description of Services” or “Explanation of Activity.” This area of a medical bill can contain several different types of information about the service and the cost of service:
Information about medical services provided (with or without a code), such as “comprehensive physical exam,” and the original cost of a medical service or procedure.
“Insurance payment” or “plan payment” shows what portion of your medical bill your insurance plan paid. If no insurance payments appear here, your medical provider’s office may not yet have charged your insurance—or your insurance may not yet have paid what they owe.
“Contractual adjustment” or “insurance adjustment” shows the discount your insurance company has negotiated. Insurance companies work with providers to lower the costs of services for their clients.
What you owe for your medical care, after insurance has paid their portion. This may appear as “co-insurance,” “due from patient,” “balance,” “amount due,” or “pay now.” What you owe is a calculation of the total charges, minus any discounts your insurance company negotiated, minus any payments your insurance company made.
Payments. This bill area shows the different amounts paid by insurance and by you.
If you’re not seeing the detail you need on your medical bill, or if you received several services during a complicated procedure or inpatient stay, call your healthcare provider and ask for a detailed bill. A detailed bill will contain a list of all services provided to you, the billing codes and charges, and what insurance paid for each.
What to Look For
Use the following tips to make sure everything on your bill is correct:
Double-check you or your family member saw the provider listed on the bill.
Check your calendar to confirm you saw the provider on the date listed.
Make sure the name and policy number of the insurance (if provided) on the bill matches your insurance company and policy number. If the wrong insurance was billed, then correcting it may reduce your charges.
Cross-check with your EOB the amount your insurance paid. Also check that insurance paid what you expect. For example, if you are responsible for 20% of the discounted amount after meeting your deductible, make sure your insurer paid 80% of the discounted amount.
Double-check the math on the bill to ensure you’re being charged the proper amount. Sometimes insurance adjustments or payments (such as copays) aren’t subtracted from the amount you owe.
Who to Contact About Issues With Your Medical Bill
If something doesn’t look right on your medical bill, have confidence in your instincts and ask for more information. Correcting medical bill mistakes could save you hundreds or even thousands of dollars. Use these guidelines for whom to call first about problems with your medical bill.
For problems with medical services that you don’t understand or don’t think you received, with math discrepancies on the bill, or if you’re not able to pay what you owe, call your healthcare provider (using the phone number on the medical bill).
If you believe that insurance should have covered more of your bill, or that your healthcare provider didn’t receive the amount that insurance shows it paid on your explanation of benefits, contact your healthcare insurer.