As a patient in today’s complex healthcare system, reviewing and understanding billing statements and insurance explanations can be an extremely frustrating and confusing process. Charges often seem inexplicably high or services unrecognizable from a patient’s perspective. This leaves many with questions about what exactly they are being charged for, how charges relate to care received, and how to navigate disputes or conversations with providers. Arm yourself with some background knowledge to feel more empowered wading through medical bills.
Itemized Bills
The first step to demystifying billing documents is requesting an itemized bill directly from your provider. This will contain line items for every consumable, treatment, service, consultation, and room fee that feeds into your charges. Going through the itemized bill can help correlate charges to the events and care during your visit. For major procedures like surgery, the itemization may span many pages encompassing not just the procedure itself but any ancillary services like anesthesiology, assays and specialized equipment use that all contribute to total costs billed.
Terminology and Codes
Adding to confusion is the fact that billing documents use complex medical terminology and codes to classify diagnoses, procedures performed, and medications provided. Diagnoses are typically represented by ICD-10 diagnosis codes, which provide alphanumeric shorthand for often lengthy medical diagnosis names. Similarly, CPT codes define specific procedures, services, and tests, while NDC medication codes identify administered pharmaceuticals. Understanding billing requires either becoming well versed in this coding lexicon or using online search databases like Find-A-Code.com to translate between codes and their meanings.
Service Charges
Peeling another layer, the set dollar charge associated with each item or service on a bill generally stems from negotiated insurer deals with the provider. For out-of-network services, charges are even higher based on the provider’s own rate card rather than insurer-negotiated rates. So the dollar charge beside a treatment or test on your bill can vary widely from hospital to hospital and bear little resemblance to actual resource costs incurred by the facility. They may charge you $30 for an aspirin because of this arbitrary charge master system.
Insurance Adjustments
Bills represent the initial charge pillar. After charge establishment, insurance enters the equation with networks, plans, out-of-pocket liabilities all shaping your final patient financial responsibility tied to the services rendered. On an explanation of benefits (EOB), you’ll see line items from your original bill along with hefty deductions and adjustments by your insurer yielding a much reduced “allowable reimbursement” total actually paid to your provider based on pre-negotiated rates. Your amount owing stems from plan policies on deductibles and co-insurance.
Appealing Charges
For exceptionally high charges, billing errors or disputes regarding services actually delivered, patients can initiate conversations with hospital financial assistance departments or submit written appeals contesting specific charges or whole claims. Facilities also have charity care and income-based assistance programs with broader eligibility than most realize to substantially reduce out-of-pocket costs for low-income patients unable to afford care critical for their health and well-being.
Patient Advocacy
For overwhelming medical bills, consider consulting patient advocates who, for a fixed fee or percentage of what they save you, can pore through complex medical charges and insurance explanations to spot excessive or duplicate billing to negotiate reductions. Relying on patient advocate services early on can mean thousands in savings and peace of mind.
Conclusion
Learning to parse through medical bills, EOBs and assorted insurance documents enables patients to cut through the confusion such paperwork breeds. Asking questions, digging into itemizations and codes, differentiating charges from reimbursements, and availing financial assistance programs help position savvy patients to lower out-of-pocket costs while emerging better educated to navigate the billing complexities accompanying necessary care.
