Unraveling The Complexities Of Medical Billing: Understanding Doctor's Discretion In Insurance Claims

Medical billing in the United States can be a complex process, with many patients reporting confusion over their medical bills. After a patient visits a doctor, the doctor's office submits a bill (also called a claim) to the patient's insurance company. This bill lists the services provided by the doctor, which the insurance company uses to determine how much to pay the doctor. The insurance company may then send the patient an Explanation of Benefits (EOB) report, detailing what they paid for and why. The doctor's office may then bill the patient for any remaining balance.

Doctors submit a claim to the insurance company, listing the services provided

After a patient visits their doctor, the doctor's office submits a bill, also known as a claim, to the patient's insurance company. This claim lists the services provided by the doctor. The insurance company then uses the information in the claim to pay the doctor for those services.

The claim is created by medical coders, who identify all services, prescriptions, and supplies received during the patient's appointment and update their records with the corresponding service codes. The doctor's office then creates an insurance claim using these codes and submits an 837 file to the insurance company. This is the standard file format set by the Health Insurance Portability and Accountability Act (HIPAA), allowing healthcare providers to communicate securely with insurance companies.

The insurance claim is reviewed by a claims processor, who works for the insurance provider. They verify that the treatments received by the patient fall under their coverage benefits. If additional information is required, the claims processor may contact the patient or healthcare provider. The claims processor then decides whether the claim is valid and accepts or rejects it.

If the claim is valid, the insurance company reimburses the healthcare provider by paying for some or all of the services. If the claim is rejected, the claims processor provides the billing office with a detailed description of why the services are not covered. The healthcare provider then bills the patient for the remaining balance.

It is important to note that the billing process can seem convoluted, and many patients may find their medical bills confusing or expensive. Understanding the negotiations that occur between insurance companies and healthcare providers can help patients navigate the insurance and billing processes more effectively.

Insurance companies use the claim to pay doctors for their services

After a patient receives medical services, the healthcare provider will send a bill (also known as a claim) to their insurance company. This bill lists the services the doctor provided to the patient, and the insurance company uses this information to pay the doctor for those services. The insurance company will then send the patient an Explanation of Benefits (EOB) report, which shows how the insurance company handled the claim submitted by the doctor's office. The EOB is not a bill, but it is important to read and understand it to know what the insurance company is paying for, what it is not paying for, and why.

The EOB will include the following information:

• Member Information: The health insurance member's full name and ID number.
• Patient Account Number: The unique identification number used by the healthcare provider to track the patient's account.
• Provider Name: The name of the hospital, physician's office, or healthcare professional visited by the patient.
• Claim Number: The unique identification number used by the insurance provider to track the patient's account.
• Date of Service: The date the patient received the medical services, procedures, or supplies.
• Service Code: This identifies the specific services, procedures, or supplies received by the patient.
• Total Amount: The full cost of the procedures, services, or supplies.
• Not Covered: The amount the health insurance does not cover, which the patient is responsible for paying.
• Reason Code Description: The reason why the insurer did not cover a charge.
• Covered by Plan: The total amount the health insurance provider has saved the patient.
• Deductibles and Copayments: Adjustments added based on the deductible and copay features of the insurance plan.
• Total Net Payment: The full dollar amount the insurance company has paid to the healthcare provider.
• Total Patient Responsibility: The total amount the patient owes the healthcare provider.
• Checks Issued: A detailed record of the payment transactions from the insurer to the healthcare provider.

Once the insurance company has paid the healthcare provider, the patient may still need to pay the doctor any remaining balance that is not covered by insurance.

Doctors' offices might send a statement to the patient, showing the amount billed to the insurance company

The statement will include details such as the date of service, a description of the services provided, and the corresponding charges. It is important to note that not all doctors' offices send statements, and patients may only receive an Explanation of Benefits (EOB) from their insurance company.

The EOB is a document sent by the insurance company to the insured individual after a claim has been submitted by the doctor's office. It explains how the insurance company handled the claim and what portion of the charges are covered by insurance and what portion the patient is responsible for paying. The EOB is not a bill, but it provides valuable information about the patient's financial responsibility.

It is essential for patients to understand their medical bills and the billing process. Fees for medical services can seem arbitrary, and it is beneficial to ask for cost estimates from insurers or doctors' offices before receiving treatment. By understanding the billing process, patients can navigate the complex world of medical billing and avoid unexpected charges.

Additionally, patients should carefully review their bills and statements to identify any errors or discrepancies. Mistakes can occur during the billing process, and it is the patient's responsibility to dispute any inaccurate charges. By staying informed and proactive, patients can better manage their medical expenses and avoid unnecessary financial burdens.

Insurance companies send an Explanation of Benefits (EOB) to the patient, detailing what they paid for and why

After a patient visits their doctor, the doctor's office submits a bill (also called a claim) to the patient's insurance company. The insurance company then uses the information in the claim to pay the doctor for those services. When the insurance company pays the doctor, they might send the patient a report called an Explanation of Benefits (EOB). This document is sent to the patient to inform them of the insurance company's payments and outline what medical treatments and services the insurance company agreed to pay for, and what treatments/services the patient is responsible for paying.

An EOB is not a bill. It is a statement of the medical services received and details on how the patient and their insurance plan will share costs. The patient will not use this to pay any outstanding bill. However, the EOB can be used to double-check that services are billed correctly. It is important to note that not all insurance companies send EOBs, and not all doctors' offices send statements.

The EOB outlines the following:

• The cost of the care received
• Any money saved by visiting in-network providers
• Any out-of-pocket medical expenses the patient will be responsible for

The EOB will also include the following information:

• Patient details
• The medical services received and from whom
• Amount billed – the cost of those services
• Discounts – any money saved by accessing care or medical products from within the insurance plan's network of providers
• Amount paid by the health insurance plan
• Amount not covered – costs the health plan did not cover
• Amount that may have been paid from spending accounts, such as a health reimbursement account (HRA), if applicable
• Any outstanding amount the patient is responsible for paying

The EOB is a valuable tool for patients to understand their healthcare costs and expenditures. It helps them gauge how much money they have left in their insurance plan and, for some plans, how close they are to meeting their annual deductible.

Patients may need to pay the doctor any remaining balance

Once the insurance company has paid the doctor for the services provided, the patient may need to pay the doctor any remaining balance. This is known as the "patient responsibility". The patient will receive a bill for this amount.

The patient's insurance company will send them a report called an Explanation of Benefits (EOB) which outlines what the insurance company has paid for, what it hasn't, and why. An EOB is not a bill. It is important to keep EOBs and any statements from the doctor's office organised so that they can be easily accessed if questions arise.

The doctor's office might also send the patient a statement, which shows how much the insurance company has paid and how much the patient owes. If the patient receives a statement before the insurance company has paid the doctor, they do not need to pay the amounts listed.

If the patient has any questions about why their insurance company did not cover something, or about the amount they have to pay, they should contact their insurance company. If more than 60 days have passed and the insurance company still hasn't paid the doctor, the patient should also contact their insurance company.

Frequently asked questions