Tips to Understand Your Medical Bill

Have you ever received a surprise medical bill that you did not even expect? The No Surprises Act, which went into effect in 2022, should protect you – whether you are insured or not – from surprise medical bills.

But what about those bills you do expect such as those after a hospital stay, emergency room visit, or general well-visit? Here we’ll review some medical bill basics and hopefully help you save money in the future.

Know the Basics of Your Health Insurance Coverage

Many Americans do not understand health insurance terms, concepts, and costs, including calculating out-of-pocket costs—you’re not alone. Furthermore, racial/ethnic minorities, lower-income households, and recently uninsured are less likely to understand health insurance terms, according to research in the American Journal of Men’s Health.

We won’t go into the specifics here about how to pick the best health insurance plan for you, but some important things to keep in mind – or check on – when reviewing your medical bill include:

• Your annual deductible. Your first few medical bills after going on a new healthcare plan or at the start of a new year may be higher than others. Why? Blame your deductible, which is the amount you need to pay before your health insurance plan kicks in. There are some exceptions to this, according to Healthcare.gov. For example:
  • Many plans pay for checkups or disease management programs before people have paid their deductible. Preventative care includes blood pressure tests, diabetes tests, routine vaccinations and flu shots.
  • Some plans have separate deductibles for certain services, like prescription drugs.
  • Family plans often have an individual deductible and a family deductible.
• Your provider’s In-network vs. out-of-network status. An in-network provider is a doctor or another healthcare professional that has a contract with your insurance company. Likewise, an out-of-network provider does not have a contract with your insurance company.
• Your copay or coinsurance. A co-pay or co-insurance is the amount a patient pays the hospital, in addition to what insurance pays. The Maryland Insurance Administration reports that “copay or coinsurance may be larger” for an out-of-network provider than an in-network provider. If you are a member of an HMO, keep in mind that the law may protect you from being billed beyond your applicable co-payments or deductible, a practice called balance billing. Medicare providers who accept assignments are also prohibited from balance billing.
• Your medical bill is not the same thing as an Explanation of Benefits. If you have health insurance, an Explanation of Benefits is a notice you get from your health plan that shows the costs of your care. It includes the services you got and the date you got them, the amount your health plan agrees to pay, and the amount you owe if anything. You should get an Explanation of Benefits from your health plan before you get a medical bill from your provider’s office (except for a co-payment or coinsurance, which the provider or facility might ask for at the time you get your health care service). If you don’t get an Explanation of Benefits, contact your health plan to make sure your provider’s office or facility has sent them a claim for your service or supply.

Billing Language Varies

Every medical procedure is assigned a number known as a CPT (Current Procedural Terminology). The CPT number identifying the procedure may appear on the bill your doctor sends you. The bill may also briefly describe the services provided or itemize every procedure separately.

There is no standard language all doctors are required to use on the bills they send. Therefore, two different doctors specializing in the same area could send bills that look different. Hospitals do not have standard billing language, either.

An Itemized Bill is Important

Having an itemized bill should make it easier to understand the related bills you receive from specialists – especially after a hospital stay when there may be many different providers involved. For example, you may never meet the radiologist who reads your X-rays and most of an anesthesiologist's services are performed during surgery while you are unconscious.

Make sure any services or supplies listed on the bill are the ones you received on those dates. Sometimes the descriptions are very general, have abbreviations, or include complex medical terms or billing codes. If you don’t understand the listed service or supply, contact your provider or facility.

Common Errors on Medical Bills

Itemized bills can help you spot mistakes such as:

• Duplicate billings If you received a service, such as a CT scan, only once but your bill said you received it twice, this could be an accidental duplicate billing.
• Unauthorized charges. If you were in the hospital, see how many daily room-and-board charges are included. Many plans do not allow hospitals to charge you for your discharge day, although hospitals frequently do.
• Incorrect data. If your name or insurer’s group number is wrong, the coverage amounts are also likely to be wrong. If you went to an emergency room but were not admitted until after midnight, you should not be charged for the previous day.
• Duplicate orders. This is particularly important for medications, lab work, or hospital room fees. Compare the charges with the doctors’ notes. Hospitals may bill a patient for a procedure even though a doctor canceled it.
• Up-coding. To spot it, compare the diagnosis on your doctors’ orders and nursing notes with the charges on your bill.
• Operating room times If the cost for operating room times is higher than you expected, the time it was marked that you were in the operating room and/or under anesthesia may be incorrect.
• Unbundled fees When things often happen at the same time, like a physician’s examination of a patient before an endoscopy, they are often bundled. Unbundled fees happen when bundled events are coded separately and not together.
• Coding errors There may be an error in how your condition or treatment is coded. For example, an error in coding for someone with kidney stones could be that they are in kidney failure, which is not the same thing.

If you feel that the hospital or doctor's bill contains a mistake, contact the billing office of the provider involved. Usually, the telephone number appears on the bill. Keep a record of the people you talk to, what they say, and the dates of the calls.

Look Into Prior Authorization

If your medical bill seems way too high, it’s a possibility that prior authorization (PA) has not gone through yet. A 2019 survey from the Regulatory Relief Coalition found that for 75% of PAs, it takes 2 to 14 days for them to go through. For 15% of PAs, it can take 15 days to over a month.

According to the American Medical Association, prior authorization is “the process by which physicians and other health care providers must obtain advance approval from a health plan before a specific service is delivered to the patient to qualify for payment coverage.”

It’s better to get prior authorization done before a referral to see a new specialist or receive treatment, but it can be retroactively applied in some situations. Depending on your insurance, common procedures like MRIs and CT scans may require prior authorization.

Prior authorizations may be required for some medications that are only approved to treat certain conditions (i.e. someone with vasculitis may be prescribed medication approved by the FDA for lupus) or medication, like stimulants for ADHD, that have the potential to be misused. 

Negotiate a Fair Price

If you had surgery or another procedure, it helps to know whether your hospital charged a fair price. There are some websites you can use to help you find this information. They use national databases of billed medical services. You enter the name of the procedure and your zip code to find an average or estimated price in your area.

• Healthcare Bluebook 
• FAIR Health

If the charge on your bill is higher than the fair price or higher than what other hospitals charge, you can use the information to ask for a lower fee.

Ask for Help: Payment Plans and Financial Assistance for Medical Bills

Most medical bills have a date that the bill is due. However, you can request a payment plan, where you submit reoccurring payments over a longer period.

• If you are interested in pursuing a payment plan for a medical bill, contact your hospital or clinic to try and work out an agreement that would guarantee payment without forcing you into possible medical debt.
• If you received a medical bill that you cannot afford, ask if your hospital or healthcare provider has any financial assistance programs that could reduce the costs. For example, Mass General offers 70% to 100% discounts on bills for an emergency or other medically necessary services for low-income patients that qualify.
• Do not transfer your medical debt to a credit card. Most experts warn that this is a poor choice because the interest rates on your credit card will add significantly to your debt and transferring medical debt to a credit card may affect your eligibility for Medicaid. Some medical costs can be deducted from gross income to determine your Medicaid eligibility. Medical debt on a credit card may no longer qualify as medical debt.

Some organizations like DollarFor have been created to help patients better understand their medical bills and pursue debt forgiveness. You don’t need to go through it alone!

Additional Information:

• HHS Kicks Off New Year with New Protections from Surprise Medical Bills (HHS.gov)
• New Protections from Surprise Medical Bills (Missouri Department of Commerce and Insurance)
• No Surprises: How Do I Read My Medical Bill? (CMS.gov)
• Know Your Rights and Protections When it Comes to Medical Bills and Collections (Consumer Finance Protection Bureau)
• Learn How to Read Your Medical Bill (AARP)
• 6 Ways to Fix Mistakes on Your Medical Bills (Consumer Reports)