The arrival of a medical bill often brings confusion and stress, especially when the total amount is unexpected or appears incorrect. Healthcare billing systems are complex, making it difficult for patients to determine exactly what they are being charged for and why. Since many medical bills contain errors, verifying the legitimacy of a charge is a necessary step to protect your finances. Learning how to read the documents and identify common mistakes provides the foundation for challenging inaccurate charges. This systematic approach ensures you only pay the amount you genuinely owe.
Understanding the Components of a Medical Bill
A provider’s bill is not the only document needed to understand the charges; you must also look at the Explanation of Benefits (EOB) from your insurance company. The provider bill lists the total amount charged for services before any insurance adjustments are applied. This statement serves as the initial invoice from the hospital or physician’s office, outlining the full, unadjusted cost of care.
The EOB is a separate document sent by your insurer detailing how much the company will cover and what portion remains your patient responsibility. The EOB is not a bill, but a statement showing the billed amount, the amount the insurer allowed, the amount the insurer paid, and any remaining deductible, copay, or coinsurance you must cover. Comparing these two documents is the first step in verifying the accuracy of any bill you receive.
Look for Current Procedural Terminology (CPT) codes on your itemized bill. These five-digit codes are the standardized language used to describe every service you received, from an office visit to a surgical procedure. Charges are often split into two categories: professional fees and facility fees.
Professional fees cover the physician’s work, medical decision-making, and expertise. Facility fees account for the overhead costs of the location where you received care, such as the use of the operating room, equipment, supplies, and nursing staff. Understanding this division helps determine if you are being charged for the provider’s time, the physical resources used, or both.
Spotting Common Billing Errors and Red Flags
Medical bills often contain errors that inflate the final amount owed. One frequent error is upcoding, where a provider bills for a more expensive service or procedure than the one actually performed. For instance, a routine office visit might be coded as a complex consultation, significantly increasing the charge.
Another common issue is duplicate billing, which occurs when the same service or supply is billed multiple times. This can happen due to human error or system glitches, resulting in two charges for the same lab test or medication dose. You should also watch for unbundling, where a provider bills separately for individual components of a procedure that should have been covered under a single, comprehensive CPT code.
A red flag is balance billing, which occurs when an out-of-network provider bills a patient for the difference between their total charge and the amount the insurer pays. Federal legislation, specifically the No Surprises Act, generally prohibits balance billing for emergency services and certain non-emergency services at in-network facilities. If you received a surprise bill for out-of-network services in these protected settings, the charge may be illegitimate.
Navigating the Verification and Dispute Process
Once you receive a bill, request a fully itemized statement from the provider that lists every charge, CPT code, and date of service. Cross-reference this detailed document with the EOB from your insurance company to identify any discrepancies in services rendered, dates, or the applied patient responsibility. If you notice a charge for a service you did not receive or an incorrect CPT code, document it immediately.
The first step in a formal dispute is to contact the provider’s billing department to explain your concerns and ask for a correction. During this and any subsequent calls, record the date, time, the name of the person you spoke with, and a summary of the conversation. If the error is with the provider’s charge, they can typically adjust the bill internally.
If the issue is related to your insurance coverage—such as a service denial—you need to initiate an internal appeal with the insurance company. Your EOB will provide instructions and deadlines for filing an appeal, typically within 60 to 120 days from the date of denial. You will need to submit a formal letter and copies of all supporting documentation, including the itemized bill and relevant medical records.
For bills that remain unresolved, inquire about the provider’s financial assistance programs, as many hospitals are required to offer them based on income. You can also attempt to negotiate the bill directly, sometimes by offering a lower, lump-sum payment. It is important to address all bills promptly, as most providers have a 60- to 90-day window before an unpaid bill may be sent to a collection agency, which can negatively affect your credit.