Understanding your medical bill is often no simple matter. Most are filled with specialized terminology, confusing acronyms and indecipherable numerical codes. In one survey, 60.5 percent of respondents rated their medical bills as confusing or very confusing.
The nonprofit Patient Advocate Foundation estimates that about half of all medical bills contain incorrect charges, wrongly denied claims or surprise fees. “They may charge you for the wrong service or charge you twice for the same service or say you had an ibuprofen when you didn’t,” says Caitlin Donovan, spokesperson for the organization. Spotting an error can save you thousands of dollars, she adds. “That’s why it’s so important to scrutinize your bill.”
In addition, many medical providers don’t include an itemized list of charges when they first bill you, especially for a hospital visit. Instead they lump all the charges together in what's called a “summary” bill, with a “total due” at the bottom. And some initial statements don’t factor in payments from Medicare or your insurance company, which could give you the impression that you owe more than you do.
Take these steps to understand your medical bill, spot costly errors and avoid paying too much.
Get an itemized statement
If your bill does not include a detailed list of charges, call the doctor’s or hospital’s billing office and ask for an itemized invoice. That’s the only way to make sure you’re being charged just for services you received, explains Pat Palmer, cofounder and chief executive officer of Beacon HCI, which helps employers and other health care payers identify billing errors and reduce costs.
Remember that you may receive additional statements from physicians, surgeons or specialists such as anesthesiologists, radiologists and pathologists who are not employees of the hospital or facility where you were treated. Request itemized bills from those providers, as well.
Check the basics
Make sure your name, address and other personal information on the bill are correct, and verify your health insurance information. If this information is wrong, it can lead to a claim denial.
If your bill includes an “adjustment” or a “plan discount,” that’s the difference between the full fee a doctor or facility charges for a service and the rate negotiated by your insurance company.
The “insurance payment” or “plan payment” shows what portion of the charges your insurance company has paid. If no payments appear here, your plan may not yet have paid what it owes — check with your insurer before paying the amount listed as due.
Understand the codes
Every medical procedure has a corresponding five-digit code. These numerical systems, called Current Procedural Terminology (CPT) for insurance and the Healthcare Common Procedure Coding System (HCPCS) for Medicare, determine how much your provider will be paid.
There are “thousands upon thousands of billing codes, and they’re very complicated, too,” says Teresa Brown, senior director of hospital accounts at Medliminal, a company that reviews medical bills to help employers, insurers and other clients reduce health care costs. Mistakes range from simple typos to billing offices misreading or misinterpreting doctors' notes or hospital discharge summaries.
“If the description of something is unclear or a charge seems excessive, you can type the code into Google to get a good idea of what it is,” Palmer says. Online cost-comparison tools from FAIR Health and Healthcare Bluebook will give you an estimate of typical charges in your area for specific codes.
Compare with your EOB or MSN
Every medical procedure or visit will show up on an explanation of benefits (EOB) from your insurance company or a Medicare Summary Notice (MSN). These list the services performed, what the doctor or hospital charged, what your insurance company or Medicare paid, and what you owe. Make sure the dates and codes on that statement match the bills you receive from medical providers.
Check for common errors
Here are some of the most frequent billing mistakes.
- Incorrect quantities or duplicate charges. If a coder mistakenly adds a 0 to a number, you could be charged for 100 pills instead of 10, potentially adding hundreds of dollars to your invoice. Also, make sure a service or procedure isn’t listed more times than it was performed. Duplicate charges are surprisingly common, Palmer says.
- A treatment, medication or procedure you didn’t receive. If you were scheduled for a test or procedure but it was canceled, it could still end up on your bill because no one struck it from your chart.
- Inflated surgery and recovery times. Hospitals charge by the minute for operating-room time, so it's a good idea to check that they are billing you only for how long you were there. “You can always ask for your medical record to see what time the surgery actually started and stopped,” Palmer says. The same goes for the time you spent in recovery.
- Charges for basic supplies. Patients sometimes discover fees for gloves, gowns or other routine items listed separately on their bill. Brown says one claim Medliminal reviewed “charged for a mucus-recovery system, which ended up being a box of tissues.”
- Room fees. If the bill includes a hospital stay, check that you were charged for the right kind of room (shared or private) and the right number of days. If you were formally admitted after midnight, make sure your charges start on that day. Also, most insurance companies don’t allow hospitals to charge room fees for the day you’re discharged.
Be on the lookout, too, for billing irregularities that could be signs of fraud. These can include upcoding (listing the CPT code for a more expensive procedure or service than was performed) and unbundling (charging individually for related services typically billed under a single code — for example, incision and stitching for a surgery). If you suspect billing fraud, contact your insurer's anti-fraud office.