Millions of Americans deal with medical debt every day, and the U.S. healthcare industry’s medical billing practice is complex, having been created when insurance companies paid the majority of healthcare expenses.. Bills are confusing to read and even harder to understand, say nearly 40% of patients surveyed.
Insurance coverage complexities exacerbate the problem since Explanation of Benefits statements look like bills and contain coding and medical language that patients struggle to connect to their healthcare services.
Billing errors play a big role as well. Nearly 80% of U.S. medical bills contain some form of mistake, according to Becker’s Hospital Review data.
Rather than sift through mounds of paperwork to determine the real cost or avoid overpayment, most Americans simply accept the total and pay the bill or end up in a collections process for amounts that they don’t actually owe.
There are ways to avoid the stress of translating medical bills, however. It starts by understanding where all the confusion lies.
Why does understanding medical billing seem so hard?
Blame the difficulty on our sprawling U.S. healthcare system. Employer-sponsored healthcare began nearly a century ago, in the 1930s, and acted as a catalyst for standardized healthcare billing processes. The establishment of Medicare and Medicaid in the 1960s and expansion of managed care in the 1980s made billing a much more complex process.
Today, minor surgery often requires multiple professionals, sometimes from different practices, on multiple dates of service, who use varied billing systems to calculate costs. To get paid, providers must navigate multiple insurance plans with varied requirements and reimbursement rates.
For you, that translates into separate bills from each provider sprinkled with medical terminology and mysterious codes. Add to that your health insurance company’s Explanation of Benefits (EOB) statement, which reads like a medical bill, confusing the situation even more.
How will you identify coding errors, duplicate charges and other inaccuracies? What if your bill is incomplete or you can’t find the correct pricing information? How will you mount a successful dispute and come to an acceptable resolution?
Don’t worry. We’ll help you avoid the most common mistakes.
What mistakes do most people make when reviewing their medical bill?
All that confusion fuels patient error. Common mistakes include:
- Not requesting an itemized bill to ensure the details of charges match the services received..
- Neglecting to ask for clarification when something is confusing
- Missing deadlines for appeals or disputes, which could nullify an opportunity to lower medical costs
Thoroughly reviewing medical bills will help you avoid costly mistakes and ensure charges are fair and accurate. Setting aside time to learn how to interpret your medical bills is well worth the investment.
What’s the difference between a medical bill and an EOB statement?
It’s likely you’ve received an Explanation of Benefits (EOB) statement from your insurer and thought it might be a medical bill. The two documents include much of the same information, after all, from patient and provider information to coding identifying whether a medical claim is valid or denied.
Your EOB will also tell you whether your healthcare provider was “in-network” or “out-of-network” and how that affects what you are responsible to pay. In-network providers have contracted with your insurance company to provide services at negotiated rates. Out-of-network providers have not.
Because prices are negotiated, your insurer typically pays more of an in-network provider’s services, leaving you with a smaller monetary responsibility. Your EOB will disclose that adjustment amount.
The good news? You can cross-reference your EOB with the corresponding medical bill to ensure both are accurate. Compare service dates and details, line items, and how the total amount due is divided between you and your insurer. If the information doesn’t match, reach out to both parties to determine who has made the error.
One side note. You may notice a service or code that shows as denied on your EOB, though indicates you may be billed for that service. There is a chance your healthcare provider billed that code on the off chance that the insurer would pay them but has no intention of billing you if denied. If you notice this discrepancy, contact your provider for more information.
How do I review my medical bills for errors?
While every provider might format billing differently, most contain the same core components. Familiarize yourself with these items and regularly review each:
- Diagnosis and procedure codes. Once a medical diagnosis is made and procedures performed, each is assigned an alphanumeric code, based on standardized systems like the International Classification of Diseases and Healthcare Common Procedure Coding System Medical billers use the codes to submit medical claims to insurers.
Reviewing codes for accuracy can be tricky if you’re not familiar with what they are. Coding errors are common, especially upcoding (billing for a higher level of service than provided) or unbundling (billing for individual components of a bundled service separately).
Luckily, an online search for medical billing codes will reveal resources that can provide answers. Some professional organizations, like the Centers for Medicare & Medicaid Services, provide a thorough coding list. There are even medical billing databases available for research and review.
- Dates of service. This is a list of when the medical services were performed. Make sure these match your records. Common medical errors include charges for office visits or procedures that were not performed.
- Itemized charges. The cost for specific procedures, tests, medications and other services are collected and displayed here. Look for duplicate charges and ensure the services listed are the same services you received.
- Total charges. The total amount charged for healthcare services before insurance or patient payments are applied. Make sure the total matches the sum of all itemized charges.
- Insurance payments and adjustments. Displays payments made to your provider by your insurance company. You might also see adjustments or discounts to certain procedures, which were likely negotiated between your insurer and provider. Cross-reference with your Explanation of Benefits. Is your insurer paying for what it agreed to? Does the coverage applied to the bill match your insurance benefits?
- Patient payments. Here you’ll find the dollar amount you are responsible for. It should include totals for co-pays, deductibles, or co-insurance Again, based on what is covered by insurance, has the provider charged you with the correct co-pay? Does it align with your deductible?
If, at any point, you believe you’ve discovered an error, have a question about a particular charge, or do not understand the meaning of a medical code, don’t hesitate to reach out to your healthcare provider, hospital, or insurance company for clarification. Your bill should include relevant contact information for inquiries or disputes regarding your medical bill.
What if I find a mistake?
If you discover an error, let your provider know. Start by reaching out to the provider’s billing department. Walk through the possible errors and ask for an explanation. Contact your insurer if you think they made the error. Supplying both with any supporting material you can, such as EOB statements or receipts, will help expedite the process.
If you are working from a summary bill, which only includes key information related to overall healthcare expenses, request an itemized bill so you can search for the error on your own. In fact, asking for an itemized bill whenever you want to review to ensure what insurers, providers, or hospitals charge makes sense.
Depending on the discrepancy, the dispute process can be slow. Be persistent. If you keep records of each communication, that’s even better, as it can help the billing office find details about your case and can also keep them honest about the work they’re doing to resolve your problem.
And don’t forget that there are deadlines associated with any medical billing dispute. When you receive a bill, make sure you conduct your review as soon as possible. Neglecting to act during the appeal window means you will owe the billed amount, regardless of errors. The appeal window is typically 60 to 90 days after receiving your bill, corresponding to the time usually provided to pay the bill.
What if I can’t pay the amount due?
You should reach out to your healthcare provider if you are struggling to pay your medical bills. Use the knowledge you have gained reviewing your medical bills to conduct a similar conversation. Let them know you are committed to paying off your debt, would like to discuss available payment options, and want to agree on a payment solution you can afford.
Tools like the BuoyFi Calculator can help. Easy and intuitive, the calculator can determine if you are eligible for debt reduction, for example, and will recommend affordable settlement and payment plans based on your income.
Simply having a plan that works for you will boost your confidence and make negotiating with your provider or collections agency more comfortable.
If you still need help understanding medical bills, BuoyFi is here for you
If you need help, BuoyFi is here for you. We offer a suite of tools, educational content, and access to medical bill advocates who can help you avoid future financial challenges while simultaneously taking control of your finances and planning for future unexpected medical expenses.
We’re happy to help you figure out how to pay your medical debt affordably, recommend personalized plans to help you take the first step toward financial freedom, and provide you with the financial tools to maintain that freedom.
Download the BuoyFi app or set up an online account today to calculate a personalized and affordable settlement and payment plan to rise above medical debt.