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Understanding Your Medical Bills

Understanding Your Medical Bills » Medical Debt » Understanding Your Medical Bills



Around 72% of Americans have received a medical bill they didn’t understand, according to a survey by Copatient, a medical billing advocacy company. The same survey found that 94% of consumers have received a medical bill they thought was too expensive.

That’s not surprising, since most people don’t know how to make sense of a medical bill, and many pay a bill received from a doctor’s office or hospital without questioning what’s owed. However, paying a medical bill without first performing a thorough examination of charges is a bad idea, since around up to 80% of medical bills contain at least one mistake.

How to read medical bills

Explanation of benefits

Most insurance companies send an Explanation of Benefits (EOB) once they receive your claim from a hospital or healthcare provider. The EOB is not a bill – even though it may look like one and show a balance due – so don’t send payment yet.

The EOB is crucial to understanding the medical bill you will receive later from your healthcare provider. Information on the EOB includes the service description, the amount your healthcare provider bills, the amount your insurance company reimburses, and what you will owe.

Billing statement

Your medical bill arrives in the form of a billing statement. On the statement is the statement date that your doctor or hospital printed the bill and your patient account number, which you’ll typically need to pay the bill online. The statement also includes your full name, health insurance ID number and the claim number used by your insurance provider.

The billing statement may have only a summary of services and a total. If so, ask the healthcare provider or hospital for an itemized bill so you can review each charge.

Find out: 8 Strategies for Negotiating with a Hospital Billing Department

Dates of services

Your medical bill shows the dates of services received or procedures performed. Always check to make sure dates of services on your medical bill match the dates of services and descriptions on your EOB.

If dates and services on the EOB and medical bill don’t match, contact your doctor’s office or the hospital billing office for clarification or to correct mistakes.

Description of services

Medical bills are difficult for a layperson to decipher since services, procedures and treatments are identified by codes used for health insurance and medical billing. You don’t have to simply accept that the billing department used the right codes, however.

Even though you probably won’t know what those codes mean, you can look them up online to make sure you’re not being billed for a service you didn’t receive.

Find out: What Happens When You Can’t Pay Medical Bills

Billed charges

The billed charges amount is what your healthcare provider bills for services or procedures performed. However, this may not be the amount owed after your insurance processes and/or pays the claim, so don’t pay a medical bill until you receive the final bill – one that shows the total amount due after the insurance company paid or declined to pay the claim.

It’s also a good idea to look up the average cost of medical procedures for your city or region on sites such as Healthcare Bluebook or FAIR Health to make sure you’re being billed fairly.


Sometimes a doctor’s office or hospital adjusts the bill by subtracting a portion of the amount for services. Such an adjustment is reflected in the bill. Don’t confuse this adjustment with the amount your health insurance paid since that adjustment appears in a different place on your medical bill.

Find out: Do Medical Bills Affect Your Credit?

Insurance payments

The “insurance payments” line of your bill shows how much your insurance company paid on the claim. For instance, let’s say a hospital bills $2,000 for a service and sent the claim to your health insurance provider, which paid the hospital $1,500 on the claim. You would owe the remaining $500 balance, and the insurance payment will be reflected on the bill.

Balance due

The balance due is the total amount you owe the hospital or healthcare provider for services or procedures performed once your health insurance provider has processed the claim and any adjustments by the hospital or health care provider are reflected in the bill.

Keep in mind, however, that you may still receive additional, separate bills for specialty care such as a bill from the surgeon who operated or a radiologist that read your x-ray.

Check for medical bill errors

Did you know that up to 80% of medical bills contain at least one error? Overbilling patients is likely unintentional on the part of your doctor’s billing office, the hospital where you received care or another health care provider. It’s just that billing mistakes happen easily when dealing with large numbers of  patients, everchanging medical codes, payments crossed in the mail and health insurance companies.

So, how can you make sure you’re not billed for a service you never received or for a procedure that should be covered by your health insurance? Fortunately, with a little time and effort, it’s easier to check your medical bills for accuracy than you might think. And that time is well spent, potentially saving you hundreds, maybe even thousands, of dollars due to medical billing errors.

Below are five steps to take to make sure that you really owe the amount due on medical bills…

Review the itemized bill

Never pay a medical bill that doesn’t itemize each charge. For example, the bill might show a charge of $160 for an office visit, another $160 for a biopsy and a separate $160 for a visit to the same doctor on a different date. Also keep in mind that a payment you made for a previously billed charge may not have been recorded until after the new bill with additional charges was sent. Make sure that each item on the itemized bill is one that you actually owe, since medical billing errors are common. If the doctor or hospital sends a bill that isn’t itemized, request that they send you an itemized bill for your review.

Find out: 7 Reasons You May Want to Hire a Medical Billing Advocate

Compare the Explanation of Benefits

Most insurance companies send an explanation of benefits (EOB) after receiving your claim from a hospital, doctor or other healthcare provider. The EOB  may look like a bill and even show an amount owed under “patient responsibility” or a similar term. But don’t pull out your credit or debit card yet,  since the EOB isn’t a bill. The insurance company sends the EOB so that you can understand the bill you’ll receive from your healthcare provider.

The EOB may look intimidating (and boring) at first glance, but it’s actually a simple document to read and understand. Information to verify on the EOB includes the service description, the amount your healthcare provider bills, the medical billing code, the amount your insurance company reimburses and how much you will owe. Wait until you receive the medical bill and compare it to the EOB for accuracy before sending payment. Also, if you receive a medical bill before your health insurance provider sends the EOB, hold off on paying that bill until you receive the EOB to avoid overpayment.

Ensure accuracy of medical codes

Make sure that the coding, the numerical and/or alphabetical code used to specify the visit, procedure or other service received, is correct on your EOB and/or the medical bill from the doctor, hospital or other health care provider, since that code tells the billing office how much to bill. Chances are, you won’t know what those codes mean, but you can look them up online to make sure you’re not being billed for a service you didn’t receive.

Find out: 5 Things That can Cause You to Overpay on Medical Bills – and How to Avoid Them

Keep an eye out for duplicate bills

Depending on the nature of the doctor’s visit, hospital stay or procedure, you could have medical bills rolling in for months afterward from multiple doctors, pathology labs and other health care providers. With so many different bills, it’s easy to just want to pay them all right away to ease your medical bill headache. However, rushing to pay every medical bill that arrives in the mail could mean paying duplicate bills if you’re not careful.

Keep all medical bills for doctors’ visits, hospital stays and services and related physicians and health care providers in one place, preferably a hardcopy file that you can access easily. Then sort the bills, making you haven’t received duplicate bills for specific dates and services.

Find out: 5 Tips to Help You Start Paying Down Your Medical Bills

Watch out for canceled work

Doctors’ offices are busy places, and if your doctor ordered a shot, vaccine or other procedure and then canceled it for some reason, you could still be billed for the canceled work if the order wasn’t changed in your records. If you see a charge for work that never occurred, call the billing office and explain. Once the billing office person checks with the doctor, they should remove the charge, adjusting the amount owed.

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