Navigating Medical Billing: Understanding Doctor's Charges And Insurance Coverage

Understanding your medical bills can be confusing, but it is important to know what to expect financially when you need to go to the doctor. After you visit your doctor, their office submits a bill (also called a claim) to your insurance company. The insurance company uses the information in the claim to pay your doctor for those services. Once the insurance company pays your doctor, they might send you a report called an Explanation of Benefits (EOB). This will show you what the insurance company did when it received your doctor’s bill (claim). You need to be able to read and understand the EOB to know what your insurance company is paying for, what it’s not paying for, and why. An EOB is not a bill.

In the US, the No Surprises Act is a federal law that went into effect on January 1, 2022. It protects people from unexpected out-of-network medical bills for emergency room visits. State and federal laws also prevent people from getting a surprise medical bill when they receive emergency care from a hospital or certain behavioral health treatment facilities.

The No Surprises Act protects against unexpected bills

The No Surprises Act (NSA) is a federal law that came into effect on January 1, 2022, to protect people from unexpected medical bills. It applies to most types of health insurance and protects consumers from unexpected out-of-network medical bills from emergency room visits, non-emergency care related to a visit to an in-network facility, and air ambulance services.

Before the No Surprises Act, if a patient with health insurance received care from an out-of-network provider or facility, their health plan might not have covered the entire out-of-network cost. This could result in higher costs for the patient compared to receiving care from an in-network provider or facility. In addition to any out-of-network cost-sharing, the out-of-network provider or facility could bill the patient for the difference between the billed charge and the amount the health plan paid, unless banned by state law. This is called "balance billing".

The No Surprises Act establishes new federal protections against surprise medical bills, which occur when insured consumers inadvertently receive care from out-of-network hospitals, doctors, or other providers they did not choose. This happens in about one in five emergency room visits, and between 9% and 16% of in-network hospitalizations for non-emergency care include surprise bills from out-of-network providers. The federal government estimates that the NSA will apply to about 10 million out-of-network surprise medical bills per year.

The NSA protects consumers from surprise medical bills by requiring private health plans to cover out-of-network claims and apply in-network cost-sharing. The law applies to both job-based and non-group plans, including grandfathered plans. It also prohibits doctors, hospitals, and other covered providers from billing patients more than the in-network cost-sharing amount for surprise medical bills, with a penalty of up to $10,000 for each violation.

The NSA also establishes a process for determining the payment amount for surprise, out-of-network medical bills, starting with negotiations between plans and providers, and if negotiations don't succeed, an independent dispute resolution (IDR) process. The federal IDR process will be conducted by certified entities chosen by the Centers for Medicare and Medicaid Services (CMS) and will resemble baseball-style arbitration. The plan and provider will each submit their best offer for the out-of-network payment amount for a claim, and the IDR entity will choose the most appropriate offer, which becomes the out-of-network payment.

In addition to the federal No Surprises Act, some states have also enacted surprise billing protections for consumers in state-regulated plans. These state laws may provide greater protections than the NSA in certain respects, such as applying to ground ambulance services. In cases where a state's surprise billing law provides at least the same level of consumer protection as the NSA, the state law will generally apply.

What to do if you receive a surprise bill

Surprise medical bills are unexpected bills from out-of-network providers or facilities. They often occur when patients have little or no say in where they receive care or who provides it.

If you receive a surprise medical bill, here are some steps you can take:

• Review your bill carefully: Ask for an itemized bill to ensure you haven't been overcharged or double-billed. Common medical billing errors include duplicate charges or incorrect coding. Compare your bill to the explanation of benefits (EOB) sent by your insurer to check for any discrepancies. The EOB will show what services your insurance company paid for and what services are not covered.
• Contact your insurance company: If you have questions about why your insurance company did not cover certain services or about the amount you have to pay, reach out to your insurance provider for clarification. If your insurance company has not paid your doctor or hospital within the expected timeframe, follow up with them to resolve the issue.
• Dispute the charges, if applicable: If you believe you have been incorrectly billed, start by calling your insurer to discuss the issue. You can also contact the provider directly to ask for an explanation of the charges. If you still have concerns, you may be able to dispute the charges. The No Surprises Act, which came into effect on January 1, 2022, protects individuals with group or individual health plans from surprise medical bills in certain situations. It establishes an independent dispute resolution process for payment disputes between insurance plans and providers. If you are uninsured or self-pay, you may also have the option to dispute charges that are significantly higher than the good faith estimate you received from your provider.
• File a complaint: If you believe you have been wrongly billed or if your insurance company and healthcare provider cannot resolve the issue, you can file a complaint with the appropriate state or federal office. In the United States, you can contact the Centers for Medicare & Medicaid Services No Surprises Help Desk at 1-800-985-3059 or submit a complaint online.
• Understand your repayment options: If, after following the above steps, you find that you legitimately owe a large bill, explore your repayment options. Contact your hospital or healthcare provider to discuss payment plans or financial assistance programs, especially if you received care at a non-profit hospital. If you need to take on debt, shop around for the best interest rates on personal loans designed for medical bills.

It is important to stay organized and keep records of all your medical bills, EOBs, and correspondence with your insurance company and healthcare providers. This will help you effectively address any issues that may arise with surprise medical bills.

Understanding your insurance coverage

Insurance as a Contract

Insurance is a contract between you and your insurance company. When you purchase a plan, you become a member, agreeing to pay a premium or a monthly rate, and the company commits to covering a portion of your medical expenses. This contract outlines what is covered, your financial obligations, and the conditions under which coverage applies. Understanding this contract is crucial to avoid problems and disagreements with your insurer.

Common Insurance Terms

Understanding common insurance terms is vital to navigating your coverage:

• Deductible: The amount you pay for covered health services before your insurance company starts paying.
• Copayment (Copay): A fixed amount you pay as your share of the cost for each medical service, like a doctor's visit.
• Coinsurance: Your share of the cost for a covered health service, calculated as a percentage of the allowed amount.
• Premium: The amount you pay monthly or annually for your insurance coverage.
• In-Network: Providers or facilities with a contract and negotiated rates with your insurance company, resulting in lower costs for you.
• Out-of-Network: Providers or facilities without a contract with your insurance company, leading to higher costs for you.
• Explanation of Benefits (EOB): A statement sent by your insurance company, explaining what medical treatments and services were paid for, and outlining your financial responsibilities.

Understanding Your Plan

It's important to know how your specific plan shares costs with you. Some common ways include deductibles, copays, and coinsurance. Additionally, different plans have varying coverage options and restrictions. Less expensive plans often provide limited coverage and more restrictions, while you may have to pay a larger portion of your medical expenses. Understanding your plan's rules, coverage limits, and network of providers is essential.

Preventing Surprise Billing

State and federal laws, including the No Surprises Act, protect you from unexpected medical bills, especially in emergency situations or when receiving care from an in-network facility. These laws ensure that you are only responsible for your in-network cost-sharing obligations and safeguard you from having your credit affected or wages garnished due to surprise billing.

Taking Control of Your Bills

You have the right to know where your medical bills and EOBs are sent and should ensure they are sent to the address you prefer. Contact your insurance company to control where your EOBs are directed. Additionally, keep your EOBs and statements organized for easy access if questions or disputes arise.

Explanation of Benefits (EOB)

An Explanation of Benefits (EOB) is a statement from your health insurance provider that details the costs of medical care or products you've received. It is generated when your healthcare provider submits a claim for the services you received.

The EOB is not a bill, but it does show you how your bill will be broken down between the medical service provider(s), your insurance, and you. It will include a summary of your account information, including your name, the date(s) of service, and a claim number. It will also list the services provided, the charges for those services, and how much your insurance plan will cover.

The EOB will also show you any discounts you received by accessing care or medical products from within your plan's network of providers, as well as any out-of-pocket medical expenses you'll be responsible for paying. This amount is based on your insurance benefits and what the facility and provider charge.

It's important to save your EOB and compare it to your final bill when you receive it. If there are any discrepancies, you can call your doctor or insurance company to get clarification.

Coinsurance, copayments, and deductibles

Coinsurance

Coinsurance is the percentage of covered medical expenses you pay after you've met your deductible. Your health insurance plan pays the rest. For example, if you have an "80/20" plan, it means your plan covers 80% and you pay 20%—up until you reach your maximum out-of-pocket limit.

Copayments

Copayments (copays) are set rates you pay for prescriptions, doctor visits, and other types of care. Copays typically start at $10 and go up from there, depending on the type of care you receive. Different copays usually apply to office visits, specialist visits, urgent care, emergency room visits, and prescriptions.

Deductibles

A deductible is a set amount you pay each year for your healthcare before your plan starts to share the costs of covered services. For example, if you have a $3,000 deductible, you have to pay $3,000 before your insurance kicks in fully.

Frequently asked questions