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Navigating the Maze of Medical Bills

by Kurt Ullman, RN

If you do get a summary bill, there are a few things to look at when you get it. Most bills will include your insurance information. Make sure your name is spelled correctly and that the policy number and other numbers match those on your insurance card. If not, call the provider’s billing office right away and have them submit a revised claim.

“The most common problem when a claim is rejected is that the policy numbers and names don’t match up,” says Nicholas Newsad, a senior analyst with Health Inventures, Inc., in Broomfield, Colorado, and author of The Medical Bill Survival Guide. Whenever you receive any type of bill or statement, Mr. Newsad recommends making sure the name, policy number, and other information about you are correct.

The information included in the summary bill changes from provider to provider. Many give a detailed accounting of everything that was done, others give just the basic outline, and some don’t send an early bill at all. If you do get a summary bill, look at the information that it includes and ask the provider about anything you don’t understand.

If your summary bill doesn’t include an itemized list of services, should you ask for one? There is no consensus among the experts interviewed for this article about the usefulness of asking each provider for an itemized bill at this point in the process. Some say it can be useful to weed out mistakes or overcharges, but others point out that it may just duplicate actions that the insurance company will take anyway — and it’s the insurer that has greater experience in this area.

Keep in mind that you may get a summary from more than one provider, even for something as routine as an office visit. For example, if you see your arthritis specialist for a checkup, he or she might want you to get a joint x-ray. Depending on your insurance company’s agreement with the doctor, you may be sent to a hospital or an imaging center. If that happens, you may get as many as three different summary bills: one from your arthritis specialist for the office visit, one from the hospital or imaging center for the use of the x-ray machine and the technician’s time, and one from the radiologist who actually read the x-ray.

The explanation of benefits. About 30–60 days after a service is provided, you should get an explanation of benefits (EOB) from your insurance company. It may come in the mail, although many insurance companies also make it available online. (Your insurance company may not send a paper copy at all if you have elected to receive all correspondence via e-mail.) You should look at this form closely and make sure you understand it completely.

Although EOBs issued by different insurance companies may not look alike, all have basically the same information:

• The name of the policy holder and his or her insurance information
• The name of the patient if it is different from the policy holder’s
• The name of the provider
• Date of service
• Total amount charged
• Negotiated savings or contractual discount
• Charges not covered
• Deductible and copayment or coinsurance
• Total amount payable
• Member responsibility

The first four of these are self-explanatory, but the others may need explanation.

The total amount charged is like the manufacturer’s suggested price of an automobile. This is the high price that the provider would like to get. In most instances it is of no interest to you because, as is the case when buying a car, few people actually pay this price. But you may have to concern yourself with the total amount charged if the doctor is out-of-network or your insurance doesn’t cover the billed-for procedure. In such cases, you may be responsible for the full amount.

Providers use this “list” price as a starting point in their negotiations with insurance companies for the cost of various procedures. The negotiated savings or contractual discount is the result of this negotiation. “Think of it as a quantity discount to the insurance company for bringing their policy holders to the provider,” Mr. Newsad explains.

You will want to look closely at the charges not covered section (sometimes labeled “not payable by plan” or a similar phrase). This usually is the amount that the insurance company has decided is not covered by its contract with you. This amount may become your responsibility to pay.

Near the “charges not covered” should be an area for remarks. These explain why the insurance company refused to cover certain charges. In many cases, there will be a one or two character code that is explained in more detail at the bottom or on the back of the EOB form.

The column or columns for deductibles, copayments, and coinsurance is another area that should interest you. This area outlines the amount that the insurance company says you should pay for the treatment or procedure. For example, say your policy has a $500 yearly deductible that you have to pay before any other benefits start. If your doctor visit occurred before your deductible was used, you would have to pay the entire bill up to $500. If you have already paid down your deductible, you may still be expected to pay a copayment (a set amount, such as $50) or coinsurance (a percentage) to offset the cost of the service.

Last Reviewed on January 11, 2012

Kurt Ullman has been a medical writer for more than 25 years. He is based in Indiana.

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