Understanding Your Insurance Bill: Decoding The Exposure Column

Reading an insurance bill can be a challenging task, as they are often filled with specialised terminology, confusing acronyms, and indecipherable numerical codes. In fact, according to a survey, 60.5% of respondents rated medical bills as confusing or very confusing, and 72% of American consumers are confused by their medical bills. However, understanding your insurance bill is important to avoid overpaying or being underinsured. This article will provide a step-by-step guide on how to read an insurance bill, including understanding the different sections, identifying common errors, and knowing what to do if you have questions or concerns. By the end, you should be able to confidently navigate your insurance bill and ensure that you are properly informed about your coverage and financial responsibilities.

Understanding medical billing codes

Medical billing codes are an essential part of the healthcare system, used to streamline reporting, increase accuracy and efficiency, and facilitate reimbursement. The Current Procedural Terminology (CPT) codes are five-digit numeric or alphanumeric codes assigned to each task and service provided by a healthcare professional. CPT codes are used to track and bill medical, surgical, and diagnostic services, with insurers using them to determine reimbursement amounts.

CPT Code Categories

There are three main categories of CPT codes:

• Category I: These codes describe specific procedures and services and are the most commonly used by providers. They are arranged in numerical order and cover Evaluation and Management, Anesthesia, Surgery, Radiology, Pathology and Laboratory, and Medicine.
• Category II: Supplemental tracking codes used for performance measurement and patient health information. These are optional and not required for correct coding. They consist of four numbers and the letter "F".
• Category III: Temporary codes for new, developing, or experimental technologies, procedures, and services. They consist of four numbers and the letter "T".

Understanding Your Bill

When you receive a bill from your healthcare provider, it will include multiple components that may not be immediately clear. Here's a breakdown of the typical elements of a medical bill:

• Statement Date: The date the bill was printed.
• Account Number: Your unique account number, which you'll need when contacting the billing office with questions.
• Service Date: The dates you received each medical service.
• Description: A short phrase explaining the service or supplies provided.
• Charges: The full price of the services or supplies before insurance adjustments.
• Billed Charges: The total amount charged to you or your insurance provider.
• Adjustment: The amount the provider has agreed not to charge.
• Insurance Payments: The amount already paid by your insurance company.
• Patient Payments: The amount you are responsible for paying.
• Balance/Amount Due: The outstanding amount owed to the provider.
• Payable to: The organization to which you should address cheque payments.

In addition to these components, you may also see "service codes" listed on your bill. These are standardised CPT or Healthcare Common Procedure Coding System (HCPCS) codes that identify the exact services and supplies provided during your appointment.

Comparing with your Explanation of Benefits (EOB)

An Explanation of Benefits (EOB) is a document sent by an insurance company to the insured individual after a claim has been submitted by a healthcare provider. It is not a bill, but it does explain the costs of the medical services received, and how much the insurance company will pay. It is important to compare the EOB with the bill to ensure that you are being charged correctly.

The EOB will include the following:

• General information about the patient and their health plan, including their name and ID number, the name of the healthcare provider, the claim number, and the date of service.
• A description of the service provided, including any procedures, tests, screenings, or surgeries.
• The total charges for the visit, including the amount billed by the provider, the amount allowed by the insurer, and the amount paid by the insurer.
• Any discounts or adjustments applied to the bill.
• The amount the patient owes, also known as the patient balance. This amount should not be higher than what is listed on the bill.
• A remark code or reason code that explains any additional costs, charges, or payments.

When comparing the EOB with the bill, it is important to look for any discrepancies in the dates of service, descriptions of services, and corresponding charges. If there are any inconsistencies, contact the healthcare provider for clarification. Additionally, if there are any questions about why the insurance company did not cover certain charges or about the amount owed, it is recommended to contact the insurance company directly.

It is also important to keep in mind that not all insurance companies send EOBs, and not all healthcare providers send bills. Therefore, it is crucial to stay organised and keep track of any documents received to ensure accurate record-keeping.

Checking for common errors

• Incorrect patient information: Mistakes in the patient's name, policy number, group plan number, or other personal details can lead to claim denials.
• Incorrect codes: The billing specialist may enter the wrong number of digits for the code describing a symptom, diagnosis, or treatment. Codes are updated periodically, so an outdated code may be used.
• Wrong or switched numbers: A typo, such as adding an extra zero, or switching the order of numbers, can result in you being charged for more products or services than you received.
• Duplicate charges: The same test, procedure, or product may be charged twice.
• Service not received: A test or procedure that was not performed during your visit may still appear on the bill due to an error.
• Unbundled charges: Certain procedures that should be charged under a single code may be "unbundled" and charged individually, resulting in a higher bill.
• Upcoding: The use of incorrect codes that result in charging for a more expensive procedure or product than what was actually received. This can be done intentionally (upcoding), which is illegal, or by mistake.
• Incorrect balance billing: After your insurer pays for a procedure or product, you may still have an outstanding balance. If you disagree with this charge, double-check with your insurer to ensure it is not a mistake.
• Mismatched diagnosis/treatment codes: If the diagnosis and treatment codes do not match, your insurer will reject the claim. For example, you cannot be diagnosed with stomach flu and treated for a respiratory infection.
• Data entry mistakes: Simple clerical errors, such as mistakes in your insurance number or incorrect insurance company information, can result in your claim being denied.
• Date and length of stay errors: Ensure the dates and duration of any hospital visits are correct. Even a small mistake, such as billing for an overnight stay instead of a few hours, can significantly increase your charges.

To identify and resolve these errors, it is important to review your bill carefully, compare it with your records, and contact your insurance provider and healthcare provider for clarification and corrections.

Understanding the billing cycle

The billing cycle is the series of processes around healthcare payments, from the time a patient makes an appointment to the time a provider is paid. The billing cycle can be thought of as the life cycle of a medical bill. The length of a billing cycle is usually a month, but it can vary depending on the type of product or service rendered.

The billing cycle begins when a patient contacts a healthcare provider to set up an appointment. The patient provides basic information such as identification and insurance information. The healthcare provider then contacts the insurance company to verify pre-authorization and co-pay.

On the day of the appointment, the patient completes any additional registration paperwork and supplies their insurance card, a valid ID, policyholder name, and insurance group number. The patient may also be required to pay a co-pay at this stage.

After the patient has received treatment, medical coders identify all services, prescriptions, and supplies received and update the patient's records with the corresponding service codes. The healthcare provider then creates an insurance claim using these codes and submits it to the insurance company.

A claims processor from the insurance company reviews the claim and verifies that the treatments received by the patient fall under their coverage benefits. The insurance company then decides whether to accept or reject the claim. If the claim is accepted, the insurance company reimburses the healthcare provider, and the patient is billed for any remaining balance. If the claim is rejected, the insurance company provides a detailed description of why the services are not covered.

The patient then receives a bill from the healthcare provider, which includes a breakdown of the services received, the corresponding charges, and the amount owed. The patient may also receive an Explanation of Benefits (EOB) from the insurance company, which outlines the treatments covered and the amount paid by the insurance company.

It is important to note that the billing cycle can vary depending on the complexity of the case and the number of parties involved. There may be instances where additional steps are added or repeated, and the process may take several communications before a resolution is reached.

Dealing with billing errors

Billing errors are common, and it's important for patients to monitor their bills and Explanation of Benefits (EOB) forms to identify and dispute any errors. Here are some steps to deal with billing errors:

• Compare Estimates to Your Final Bill: Before your appointment, contact the healthcare provider and ask for the billing code and cost. Then, contact your insurance provider to confirm if the procedure is covered by your plan and obtain an estimate of the cost. If there is a significant difference between the estimated cost and your final bill, there may be a billing error.
• Create a List of Charges: Keep a record of all the medical services and supplies you received, along with their corresponding charges. This will help you identify any incorrect charges.
• Look Out for Duplicate Charges: If you notice the same charge listed twice, it is likely a data entry error.
• Beware of Upcoding: Upcoding is the illegal practice of fraudulently reporting an incorrect diagnosis to profit from a higher payment. If a procedure description or code seems to include services you did not receive or agree to, it could be upcoding.
• Check Identifying Information: Ensure your name, address, and identification numbers are correct on the bill. Mistakes in this information could lead to insurance coverage discrepancies or claim denials.
• Contact Your Healthcare Provider's Billing Office: Speak to your healthcare provider about any bill inaccuracies. If they made an error during the claims process, they should be able to correct it. Take note of the billing representative's name, the date, and the time of your phone call.
• Call Your Insurer: If you cannot resolve the error with your healthcare provider, contact your insurance company about the disputed charge. They can help you file a formal appeal to dispute the charge and examine your bill for signs of fraudulent activity.
• Contact a Credit-Reporting Agency: Disputed bills can impact your credit score. As you dispute a charge, your healthcare provider might mark the bill as overdue, affecting your credit score. Contact your credit agency to address any credit score issues during the dispute process.

Remember, it's important to ask questions and properly understand what is covered by your insurance plan. Keep a record of your medical bills and stay vigilant for errors and discrepancies to protect yourself from incorrect charges and excessive costs.

Frequently asked questions