How To Read Your Medical Bill

Understanding your medical bill is confusing, complicated, and can be overwhelming. Learning how a medical bill reads will help to ease some of the anxiety and is a crucial step toward being in control of your healthcare costs.

What is an ‘Explanation of Benefits’?

It’s important to keep in mind that an ‘Explanation of Benefits (EOB)’ that you may receive from your insurance company is not a medical bill. An EOB is simply a statement from your insurance company that states what will and will not be covered by your insurance plan.

A medical bill will consist of a multitude of key components. Some of these key components consist of the following:

  • Statement Date:  The date your healthcare provider printed the bill. 
  • Account Number: A unique number assigned to you by the healthcare provider that identifies you to them. This number is used when communicating with your healthcare provider about your bill.
  • Service Date: The date you received a medical service. There might be more than one date listed on the bill if you received multiple medical services.
  • Service Description: Usually, a brief phrase describing the services or medical supplies you received. 
  • Charges: The total cost/price associated with each service or supply you received before insurance has been considered. 
  • Billed Charges:  The actual amount billed to your insurance company (or you if you do not have insurance or choose not to use insurance). 
  • Adjustment: The reduced amount between the healthcare provider’s billed charges and the insurer’s payment based on contracted rates. This is often referred to as a ‘contractual adjustment.’   
  • Insurance Payments: Any amount that an insurance company has already paid toward the service or supply you received.    
  • Patient Payments: The amount you are responsible for after insurance has paid their portion or that you may have already paid to the healthcare provider.
  • Balance / Amount Due: The amount you still owe to the healthcare provider.
  • Payable to: If paying by check, this is the entity to which the check should be addressed. 
  • Service Code / Current Procedural Terminology (CPT) Code: An identifier code developed by the American Medical Association to standardize the identification of medical services across all healthcare entities. Each medical service has a unique CPT code in accordance with this system.

4 Ways to ensure your medical bill is correct

1. Review the itemized statement

First, review and ensure that all of the patient information and healthcare provider information listed on the bill is accurate. Additionally, you’ll want to confirm that the correct health insurance plan information is listed on the bill.  

Your bill should also include a detailed list of all charges. If it does not, call the healthcare provider’s billing office and ask for an itemized statement. It is important to note that you may receive more than one bill from different providers that were involved in your healthcare service, such as surgery. It is normal, for example, to receive one bill from the hospital, one from the anesthesiologist, and/or one from the surgeon, etc. In these cases, you should request an itemized bill from all providers involved.

2. Review the individual charges

The itemized charges should have CPT codes associated with them. You can learn more about these charges, CPT codes, and further descriptions of them through a number of free websites.  This will help to clarify medical terminology that is often confusing.

If your bill has a payment listed as “insurance payment” or “plan payment,” it is the amount your insurance company has already paid to the provider. If no payments are listed, it could mean that your insurance company has not yet paid the provider. Before making a payment, it may be a good idea to double-check with your healthcare provider or your insurance company to confirm that the amount listed as owed by the patient is the appropriate amount.

3. Compare the bill with your EOB

The explanation of benefits (EOB) letter you receive from your insurance company will also have a list of the CPT codes associated with the services or supplies you received. The CPT codes listed on the EOB should always match the CPT codes listed on your itemized bill from your healthcare provider. 

4. Check for errors

With thousands of medical billing codes, mistakes inevitably occur at times. Patients should always be diligent about reviewing their medical bills to ensure that all the information listed is accurate and up-to-date.

Understandably, medical terminology is complex and can be baffling and perplexing. It is important as a patient to do your research and if you have any concerns, always ask your provider for further clarification, and they will be happy to help you.

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