How To Understand Your Medical Bills
Have you ever received a medical billing statement in the mail and weren’t sure what all those codes and charges meant? Knowing how to read your medical statements is the first step towards checking them for errors and saving money - and it’s easier than you may think.
In this article we’ll introduce you to the various parts of a healthcare bill and cover some of the most important information you’ll find on it. Let’s start with some important basics.
Check Your Bill Itemization
If you open the hospital envelope and find yourself looking at a short column of items with a total at the bottom, you’ve probably been sent a summary of your medical expenses.
While this type of statement will tell you what you owe and - broadly speaking - what services were rendered at the hospital, it won’t give you the information you need to check your bill for accuracy.
- You’re entitled to receive a comprehensive statement with itemized billing - and if you’ve only received a summary, you’ll want to contact your healthcare provider and ask for one
- Once you receive a full listing of every procedure, test, and medical supply that you’ve been billed for, you’ll be able to check your bill for accuracy
Pay Attention To The "Explanation Of Benefits"
If you receive this type of document, there’s one important thing to know: it’s not a complete medical bill. An EOB is a statement from your health insurance company that lists the expenses they’ve paid (and what percentage of the full charges they were willing to cover).
- The EOB provides a full listing of all medical expenses associated with your hospital visit
- Once you receive a detailed bill from your healthcare provider you’ll want to make sure that every item on it corresponds to the same item on your EOB. If not, you may have been charged for something that your medical insurer would have covered.
Know Your Codes
Medical providers use a system of codes to represent the services they render on every bill. This system is standardized and is used by every medical facility in the United States.
Knowing what these hospital billing codes mean will help you check your bill for accuracy and alert you to charges that have found their way onto your account due to clerical errors. Here’s how the system works.
- HCPCS Level 1 (CPT) codes are made up of five digits which represent lab tests and medical procedures. For example, 99284 corresponds to an emergency room visit
- HCPCS Level 3 symbols are also made up of five digits but often start with a letter followed by four numbers. They’re used to list medical supplies used during your hospital visit
- The ICD-10 system is a database of all medical conditions. You’ll see all the charges involved in treating a given condition associated with its ICD-10 symbol on your bill. If you only have one illness, you may only see one symbol repeated on your bill.
- Revenue codes aren’t standardized like medical service codes - each medical facility has its own set and you’ll need to query this with your provider if you don’t understand what each billing entry refers to.
When you read through your medical statement, you’ll need to know exactly what each code refers to - and there are thousands of them. Fortunately, there are reference books and online resources that list every single code along with an explanation.
You’ll need two main references at hand when you go through your bill.
- A Medical Dictionary - This helpful book will give you a clue as to what type of test or procedure each item on your bill refers to
- A Code Reference - You can use the Medicare Code Lookup or a similar online resource to check the meaning of each symbol on your bill. It’s important to note that Medicare prices shouldn’t be used as a reference because they’re significantly lower than the rates most insured patients pay.
Your Medical Bill Checklist
When you read through your next healthcare statement and search for errors and irregular charges, you’ll want to keep an eye out for the following:
- Duplicate Charges - If you see the same item billed twice - especially twice in a row - highlight it and make a note to discuss it with your hospital or healthcare provider
- All Charges Should Be Clear - If there are any items on the account that you don’t understand, remember that you have the right to an explanation. Contact the hospital’s billing department and have them explain it to you
- Individual Charges Should Add Up To The Total - It’s worth checking that no calculation errors were made when your bill was sent out. If you find any mistakes of this type, you’ll want to have them rectified by the hospital
- Watch Out For Excessive Charges - If any amounts seem too high or unnecessary, it’s always worth following up with your health insurer and provider
Knowing what every section and code on your medical bill means will empower you to check your statement for errors and unnecessary charges - and that could save you from paying for services you didn’t receive.
Once you’re familiar with the various codes and symbols on your bill - and what they mean - you can use a variety of reference materials to look for errors and follow up with your provider.