How to Read Your Medical Bill

You may not think much about medical bills until you’re holding one and wondering what the heck costs so much.

And if you recently spent time in the hospital, the bill might contain multiple pages of codes, charges and unfamiliar terms. It’s almost enough to make you dizzy. But you have good reason to scrutinize that bill: It could contain costly errors, or worse, intentional overcharges.

Many hospitals “know it’s unethical, but it’s not against the law … to charge these outrageous fees, or even bill you for something they didn’t even provide,” says Adria Goldman Gross, owner of MedWise Insurance Advocacy and co-author of “Solved! Curing Your Medical Insurance Problems.”

If you find that’s the case, you can take steps to negotiate your medical bill — but you have to come to the table prepared. Start by learning how to read your itemized medical bill.

First, make sure you have the right bill

You might not even receive an itemized bill. And if you have insurance, you might receive a bill for just your portion of charges. The only way to know if the charges are correct is by scrutinizing your initial itemized medical bill.

Your bill will probably come in the mail as a paper document, but like the rest of the world, health care providers are moving toward electronic billing. If you’re unsure whether to expect a bill in the mail or where to find one online, call your provider and ask. You should also receive a document from your health insurer showing what they paid for your care, called the explanation of benefits. That statement will say “not a bill,” and you can learn how to read one here.

Clerical errors are more likely than you might think, says Gross, who has seen small mistakes in names and addresses result in huge billing complications. Before you move on, make sure your name, address, insurance information and dates of care are correct on the top of the bill.

When you receive inpatient or outpatient care, the first statement you’ll receive is most likely a summary bill. Often, but not always, health care providers will send only a summary of charges with a final charge at the end. The body of the bill has a few generic categories and no codes, looking something like this:

That is not the bill you want. To know what you’re actually being charged for, you’ll want to call the clinic or hospital and ask for the complete, itemized bill for all services you received, with codes. It is your right to know what you’re being charged for, but you will probably have to call and request the detailed charges. The body of that bill should look more like this:

Once you have the itemized medical bill for your care, you’re ready to analyze it for mistakes and overcharges.

Next, know what the codes are for

Before we get into the nuts and bolts of reading your medical bill, it’s worth noting that there’s more than one type of code that may be listed on your bill.

HCPCS Level I, or CPT Codes, are universal, used by all providers in the U.S. and consist of five digits that identify procedures or tests. Often, they are listed as service codes.

 

 

HCPCS Level II Codes identify supplies or products used during your visit. These codes often start with a letter, rather than a number, but are also referred to as service codes.

 

ICD-10 Codes are a system to identify every possible diagnosis. ICD codes are from the International Classification of Diseases, and in the U.S., every billed service with a CPT code must also be linked to an ICD code to assure the treatment fits the diagnosis. If you only have one condition being treated at the visit, all of the diagnosis codes should be the same, or start the same.

 

Revenue codes identify the dollar amount associated with the procedure and are specific to each facility, so there aren’t universal revenue codes.

Any of these codes could also show up on your explanation of benefits, or your health insurer’s summary of coverage for the same visit.

Open a few browser windows

Your medical bill is going to be chock-full of codes and words you may not understand, so the first step is gathering resources that will translate them into plain English.

Here are some references you can pull up in separate browser windows on your computer that will help you understand your bill.

• A medical dictionary to help you understand any medical terms.
• An HCPCS or CPT Code reference. The easiest and most reliable tool may be the Medicare code lookup, but be sure to ignore the pricing information at the bottom unless you are an actual Medicare beneficiary, since Medicare’s set prices are generally well below what everyone else pays. Once you accept the user agreement, you’ll be taken to a page with several options; don’t adjust any except the drop-down “Modifier” menu at the bottom, where you’ll select “All Modifiers.” Right above that is where you can enter your codes.
• An ICD code reference will also help, just to make sure you’re being billed for the correct diagnosis. Sometimes, providers will alter diagnosis codes so they can bill for a more expensive procedure, Gross says.

Finally, put it all together

Once you have your reference windows open, you can begin poring over your itemized bill to make sure it’s correct. In particular, you’ll want to verify:

• You received all services you’re being billed for, including any medications. Sometimes doctors order medication in a hospital setting, but the patient doesn’t take it — yet gets billed for the drug anyway.
• There are no duplicate charges for services you only received once. This is a very easy mistake for medical coding professionals to make, Gross says.
• If you had surgery, there should be a timed operating room charge, in minutes. Make sure that time lines up with how long the doctor told you your surgery took. If your bill also lists anesthesia sleep and wake times, they should approximately reflect the amount of time spent in the operating room.
• You are able to understand all charges on the bill, and nothing is confusing. “You are within your rights to have every single charge explained to you,” says Gross.
• The individual charges add up to the total at the bottom, and match the summary bill’s total.

You may find that you received all the services and the bill is correct, but the charges themselves still seem excessive. Hospitals and doctors may charge whatever they want for your care, unless you are a Medicare or Medicaid beneficiary, but all medical bills are negotiable.

If you think the cost of your care is too much, you may be able to use a cost lookup tool to find out what a reasonable price might be for some of the services you received. FAIR Health is likely the most comprehensive tool like this available for free, but your health insurer’s portal may have a similar tool tailored to your health plan. You should be able to look up some of the charges by code or service to verify your charges are similar.

If you see charges that are higher than the normal and reasonable charges in your area, “it’s time to sit down and negotiate or call an advocate,” says Gross.

Lacie Glover is a staff writer at NerdWallet, a personal finance website. Email: lacie@nerdwallet.com. Twitter:@LacieWrites.