Understanding Your Insurance Bill: The Vital Signs Of Your Coverage

Understanding medical billing in the United States can be a confusing process, with many Americans reporting feeling confused by their medical bills. After visiting a doctor, the doctor's office will submit a bill to your insurance company, listing the services provided. The insurance company will then pay your doctor for those services, and may send you an Explanation of Benefits (EOB) report. This will show what the insurance company did when it received your doctor's bill. It is important to understand the EOB to know what your insurance company is paying for, what it's not paying for, and why. You may then receive a bill from your doctor for any remaining balance.

Understanding medical bills

Medical billing in the United States can be a confusing process, with many people reporting that they are confused by their medical bills and that they receive bills that are too expensive. This is a guide to help you, as a patient, navigate the medical billing process and understand your medical bills.

What Medical Bills Cover

Fees for medical services can seem arbitrary, but there are several elements that factor into how hospitals, physicians’ offices, and other institutions calculate the cost of health services. These include facility capacity, supply and demand, hospital reputation, and Charge Description Master (CDM) lists. CDM lists are a master list of service costs and billing identifier codes that medical professionals use during the claims process to calculate how much to bill insurance companies and patients.

How the Billing Cycle Works

The billing cycle begins when you contact a healthcare provider and provide basic information such as identification and insurance information. You then schedule an appointment and ask the healthcare provider about the services and supplies you will receive, as well as what insurance will and will not cover. Next, you contact your insurance company to find out if these services are covered by your plan and to get an estimate of how much the services will cost with your insurance. If the cost is not manageable, you can ask your insurer if there are other healthcare providers in your area who can provide the same service for less.

The healthcare provider then contacts your insurance company to verify preauthorization and copay. On the day of the appointment, you complete any additional registration paperwork, supplying your insurance card, a valid ID, policyholder name, and insurance group number. After receiving services, medical coders identify all services, prescriptions, and supplies received during your appointment and update your records with the corresponding service codes. The healthcare provider then creates an insurance claim using these codes and submits an 837 file to your insurance, the standard file format set by the Health Insurance Portability and Accountability Act (HIPAA).

A claims processor, who works for your insurance provider, reviews the insurance claim and verifies that the treatments you received fall under your coverage benefits. The insurance claims processor then decides whether the claim is valid and accepts or rejects it. If the claim is valid, insurance reimburses your healthcare provider by paying for some or all of the services. If rejected, the claims processor provides the billing office with a detailed description of why the services are not covered. Your healthcare provider then bills you for the remaining balance.

How to Read Your Bill

Once you receive a medical bill, you will notice that it consists of multiple components that might not be clear to you. These typically include:

• Statement Date: The date your healthcare provider printed the bill.
• Account Number: Your unique account number.
• Service Date: The dates you received each medical service.
• Description: A short phrase explaining the service or supplies you received.
• Charges: The full price of the services or supplies before insurance has been factored in.
• Billed Charges: The total amount charged directly to either you or your insurance provider.
• Adjustment: The amount the healthcare provider has agreed not to charge.
• Insurance Payments: The amount your health insurance provider has already paid.
• Patient Payments: The amount you are responsible to pay.
• Balance/Amount Due: The amount currently owed to the healthcare provider.
• Payable to: The organization you should address check payments to.

You may also see a “service code” listed on your bill, which is a standardized code to identify the exact services and supplies you received.

Explanation of Benefits (EOB)

An EOB is a document sent to insured individuals after a claim has been submitted by a healthcare provider. It is not the same as a medical bill, although it may look similar and show a balance due. It explains what medical treatments and services the patient’s health insurance company agreed to pay for and what treatments/services the patient is responsible for paying. When the EOB indicates that money is still owed to the healthcare provider, patients can expect a separate bill from the healthcare provider. The purpose of EOBs is to keep consumers informed of their healthcare costs and expenditures and to give insured customers a chance to double-check that services are billed correctly.

Dealing with Billing Errors

Since medical billing involves several parties, mistakes can happen. It is important for patients to monitor their bills and EOB forms and not be afraid to ask questions. If you notice charges that look out of place, do not hesitate to contact your insurers and/or healthcare providers to dispute the error. Compare estimates to your final bill, create a list of charges to help you identify incorrect charges in the future, and check for duplicate charges or upcoding (the criminal act of fraudulently reporting an incorrect diagnosis to profit).

What insurance covers

Insurance can be confusing, but it's important to understand what your insurance covers and what you must pay for healthcare. Knowing what to expect financially when you need to go to the doctor is crucial. After visiting your doctor, their office will submit a bill, also called a claim, to your insurance company. This claim lists the services provided to you, and the insurance company uses this information to pay your doctor for those services.

The insurance company will then send you a document called an Explanation of Benefits (EOB). This will show what the insurance company did when it received your doctor's bill. The EOB is not a bill. It shows what your insurance company is paying for, what it's not paying for, and why. Your doctor's office might also send you a statement, which shows how much they billed your insurance company for the services you received. If you receive this before your insurance company pays your doctor, you do not need to pay the amounts listed. After your insurance company pays your doctor, you may need to pay your doctor any remaining balance.

It's important to note that not all insurance companies send EOBs, and not all doctors' offices send statements. You may receive one or the other, or both. It's a good idea to keep your EOBs and statements organized, for example, by filing them by date. This way, you can easily access them if any questions arise.

When it comes to emergency room visits, insurance coverage can vary. If you don't have insurance, you're less likely to have a primary care physician, so your only options may be urgent care centers or emergency rooms. Even with insurance, emergency room visits can be expensive. The average cost of an emergency room visit without insurance is $2,200, but this can vary by location and facility. ER costs also differ significantly by state, ranging from $623 in Maryland to over $3,000 in Florida.

Your ER bills will typically include triage fees, facility fees, professional fees, and supply fees. Triage fees cover the nurse taking your vitals and assessing the level of care you need. Facility fees include your hospital room, bed, radiology, and labs. Professional fees pay the physicians and nurses treating you, while supply fees cover items such as physician gloves, needles, sutures, and hospital gowns.

To better understand your insurance coverage, you can take several steps. First, contact your healthcare provider and ask about the services and supplies you'll receive. If you're unsure about upcoming charges or what insurance will cover, ask for the procedure codes. Next, get in touch with your insurance company to find out if these services are covered by your plan and to obtain a cost estimate. If the cost is high, ask if there are alternative providers in your area who offer the same service for less.

How to read your bill

Understanding your medical bill

According to a 2016 survey, 72% of American consumers are confused by their medical bills. The billing process can be convoluted, with many steps occurring behind the scenes between your healthcare provider and your insurance company. However, understanding your medical bill is vital to ensure you aren't missing any errors and losing money. Here is a step-by-step guide to help you read and understand your bill:

Step 1: Check your personal information

First, make sure your name, address, and other personal information on the bill are correct. Verify your health insurance information as well. Incorrect information can lead to claim denials.

Step 2: Understand the components of your bill

The bill will include several important items:

• Statement Date: The date your healthcare provider printed the bill.
• Account Number: A unique number assigned to you by your provider. You will need this when paying your bill or discussing billing questions with your provider.
• Service Date(s): The date(s) you received medical services.
• Description of Services: A short description or code explaining the services or supplies you received. If the description includes complex medical terms or billing codes, contact your provider for clarification.
• Total Charges: The full price of the services or supplies before insurance is applied.
• Adjustments: The amount your provider has agreed not to charge, often due to an agreement with your insurance company.
• Insurance Payment: The amount your insurance company has paid or is expected to pay.
• Patient Payment: Any amount you have already paid out-of-pocket, such as a copayment.
• Balance Due/Patient Responsibility: The remaining amount you owe to the provider after insurance and patient payments have been applied.

Step 3: Compare with Explanation of Benefits (EOB)

The EOB is a document sent by your insurance company that explains the costs of your care. It includes the services provided, the dates of service, the amount your insurance company agrees to pay, and the amount you owe. Compare the dates and codes on your EOB with your bill to ensure they match.

Step 4: Look for common errors

Billing errors are common, so it's important to scrutinize your bill carefully. Check for incorrect quantities, duplicate charges, charges for services you didn't receive, inflated surgery or recovery times, and charges for basic supplies or room fees. If you spot any errors, contact your healthcare provider's billing office to discuss and correct the issue.

Step 5: Understand the billing codes

Every medical procedure has a corresponding code. While you don't need to be an expert in these codes, you can look up specific codes online or contact your doctor's office or insurance company for clarification.

What to do if you're uninsured

Navigating the healthcare system can be challenging, especially if you're uninsured. Here are some steps and resources to help you access healthcare and manage costs when you don't have insurance:

• Understanding your options: If you don't have insurance, you may feel that your only options for medical care are urgent care centres or emergency rooms. However, there are other alternatives to consider. These include Community Health Clinics, Direct Primary Care (DCP), virtual care, and retail clinics. These options can provide primary healthcare services at a lower cost than urgent care centres or emergency rooms. Additionally, depending on your location, you may have access to local resources or nonprofit clinics that offer sliding-scale fees or financial assistance.
• Choosing a non-profit hospital: Non-profit hospitals and medical facilities are required by federal law to offer income-based financial assistance, discounts, or charity care. Even some for-profit facilities provide income-based discounts. Be sure to inquire about financial assistance options when seeking care at a hospital. You can also explore websites like Dollar For, which help you apply for hospital charity care at no cost.
• Understanding billing and insurance terms: Medical billing can be complex and confusing. Familiarise yourself with common billing and insurance terms to better understand your financial responsibilities. Resources like the Glossary of Medical Billing and Insurance Terms from UW Medicine can be a helpful starting point.
• Comparing costs and negotiating prices: Healthcare costs can vary significantly between providers. Contact multiple healthcare providers in your area to compare pricing for the same services. This can help you identify more affordable options. Additionally, don't be afraid to negotiate the price of your medical bill. Organisations like Crush Medical Debt offer resources and systems to help you lower your medical costs.
• Understanding your bill: Medical bills can be confusing, with codes, descriptions, and prices that may not be clear. Take the time to carefully review your bill and compare it with any estimates or quotes you received beforehand. Look for errors or discrepancies, such as duplicate charges or upcoding (fraudulently reporting an incorrect diagnosis to increase profits). If you identify any issues, don't hesitate to contact your healthcare provider and insurer to dispute the charges.
• Keeping records and staying organised: Maintain a record of your medical bills and keep them organised. This will help you identify any errors or discrepancies and enable you to address them effectively. It's also essential for managing your finances and ensuring you don't miss any payments.
• Exploring insurance options: While you may not have insurance currently, it's important to explore your options for obtaining coverage. Depending on your circumstances, you may be eligible for government-sponsored programmes like Medicaid or Medicare. Additionally, consider researching private insurance plans and comparing their costs and benefits.

How to negotiate the price of your bill

Medical bills can be confusing and costly, but there are ways to reduce the amount you have to pay. Here are some steps you can take to negotiate the price of your bill:

• Prepare for your medical visit: Check with your insurance provider to see if they will cover your visit and by how much. If the expense was previously covered by insurance, push to get it covered again. Verify whether your medical provider is in-network or out-of-network, as this can impact whether your insurance will cover the costs. Get any procedures preauthorized by your insurance provider to ensure coverage.
• Request an itemized bill: Ask for an itemized bill to better understand the charges. An itemized bill breaks down your charges line by line and explains the services and items you are being charged for. Look for common mistakes on your bill, such as being charged twice or being charged for services you did not receive.
• Ask for a lower bill: If there are no errors on your bill but you still cannot pay, contact the billing department and request a lower bill. Be patient and polite, as this process may take some time. Remember that amounts under $500 will not affect your credit report. Compare medical costs using resources such as Healthcare Bluebook and FAIR Health to get an idea of reasonable charges.
• Seek assistance programs and other options: Nonprofit hospitals are required by the Affordable Care Act to offer financial assistance programs. Ask your medical provider about payment plans, or look into other financing options such as medical loans or medical credit cards.
• Appeal your insurance claim: If you believe the amount you are being asked to pay is incorrect, you have the right to submit an internal appeal and request an external review. Contact your insurance provider to initiate the appeal process and seek guidance from your state's Consumer Assistance Program. If your internal appeal is denied, you can file an external review with the state or federal government.
• Enlist the help of a patient advocate: If you hit a roadblock, consider contacting a patient advocate or patient navigator for professional help. They can guide you through the complex healthcare system and may be able to contact your insurance company and medical provider on your behalf. Be sure to discuss fees in advance, as they are often based on hourly rates.

Frequently asked questions