Taking time to examine the boring details on your hospital bill can help slash medical debt.

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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.

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1. Explanation of benefits

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.

2. Billing statement

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

3. Dates of services

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.

4. Description of services

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

5. Billed charges

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.

6. Adjustments

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?

7. Insurance payments

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.

8. Balance due

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.

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About the Author

Deb Hipp

Deb Hipp

Deb Hipp is a full-time freelance writer based in Kansas City, Mo. Deb went from being unable to get approved for a credit card or loan 20 years ago to having excellent credit today and becoming a homeowner. Deb learned her lessons about money the hard way. Now she wants to share them to help you pay down debt, fix your credit and quit being broke all the time. Deb's personal finance and credit articles have been published at Credit Karma and The Huffington Post.

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