There’s no other country in the world where you would have to face financial ruin from medical bills while you’re recovering from an illness or injury. Yet, this is exactly what many Americans have to deal with every day. In fact, medical debt is the number one reason for bankruptcy in the United States.
I find this utterly disgusting and shameful.
To make matters worse, medical bills are really difficult to decipher. I’m a nurse with a degree in health information management (which is medical billing, coding, and informatics) and I still have trouble figuring out mine!
Even though it takes time and effort, it’s really important to learn how to read your medical bills. An estimated 90% of them contain errors. Chances are yours do, too. If you’re able to pick up on these mistakes, you can probably save yourself a lot of money.
Ready to learn how to quickly read a medical bill? Let’s get started.
- The first bill you receive from a provider or hospital is probably going to have a summary of your charges with vague descriptions of the services. Never pay a summary statement. Call the billing department and tell them you want an itemized bill that includes service and diagnosis codes. You are legally entitled to get a detailed statement.
- Once you have your itemized bill, go through each charge to see if it makes sense. They probably won’t. Mark ones that you have questions about and any that seem downright suspicious.
- If any of the services or diagnoses on your bill don’t seem right, look up the codes and their descriptions on the internet (more on that below).
- Compare your bill to the explanation of benefits (EOB) you receive from your insurance company and to your medical record. Make sure they are all consistent.
As a side note, if your bill is from a hospital you can go to their website and access a list of standard prices (called a chargemaster) for medical services. But just be aware that these lists can be thousands of pages long and will be next to impossible to interpret.
But if you’re curious and want to have a look at posted price lists, check out this article to access direct links to the chargemasters of 115 top U.S. hospitals.
Now, if you’re ready to dig a little deeper into how to read your medical bills, let’s keep going.
Diagnosis and Service Codes (In a Nutshell)
To understand your medical bills, it helps to know a little about diagnosis and service codes.
Let’s say you break your arm and have to go to the ER to get it fixed. You get a cast and go home about 18 hours later (if you’re lucky).
Once you leave, your medical record goes to the billing department. Medical coders go through your chart to see what your diagnosis was (why you came to the hospital) and what services you had. Each diagnosis and service gets assigned a code. Some services may be ‘bundled’ into one code.
Your insurance company (or Medicare) decides what to pay hospitals and providers based on the diagnosis and service codes they receive. There is a cost associated with each service code.
Here are the codes your insurance company may get after your visit to the ER for a broken arm:
- International Classification of Diseases 10 (ICD 10) code: S52.201A. This is your diagnostic code. It represents a fracture of your ulna bone (your arm).
- Common Procedural Terminology (CPT) code: 99284. This is your service code. It represents your evaluation in the ER. You may also see 25535 for your cast.
If you are a Medicare patient, service codes are called Healthcare Common Procedure Coding System (HCPCS) codes. There may be multiple CPT or HCPCS codes on your bill depending on how many services you received.
It’s important for you to understand what these codes mean so you’ll know if there are any errors in your medical bills.
How to Look Up Codes on the Internet
- To look up ICD 10 codes click on this link.
- To look up CPT codes and HCPCS codes you can use Medicare’s search tool. You can enter either a CPT code or HCPCS code and get the same results. At the bottom of the tool, under ‘Modifier’, choose ‘All Modifiers’ from the dropdown menu.
Example of an Itemized Bill
Now let’s take a look at this itemized bill that I completely made up. It contains all the right things-dates of service, service codes, diagnostic codes, service descriptions, and charges.
You’ll likely get pushback from the billing department when you request a detailed bill. But it’s your right so don’t give up.
Never pay a bill unless it’s itemized and includes codes.
- Always request an itemized bill with diagnosis and service codes.
- You can look up service codes (CPT/HCPCS) using Medicare’s search tool.
- You can look up ICD 10 codes here.
- If your bill is from a hospital, you can compare the charges on your statement to the hospital’s online chargemaster. Just keep in mind these lists can be thousands of pages long and will be very confusing (this is intentional!).
- Always compare your medical bills to your insurance’s explanation of benefits (EOB) and to your medical record. Make sure everything is consistent.
- If something doesn’t seem right, call the billing department and ask for an explanation. Warning: this will quite possibly be the most frustrating and infuriating thing you ever have to do.
- If you believe there’s an issue with your insurance company (such as denied claims), you’ll need to speak with them. Warning: this will quite possibly be the second most frustrating and infuriating thing you ever have to do.
Have a question for me? Or just want to share your experience with the healthcare system?
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