Understanding Medical Bills and How to Pay Them

Compare Your Medical Bill to Other Documents

There are three pieces of paperwork you’ll need to compare.

1. The list of services performed. This may be handed to you when you leave the healthcare provider’s office or testing site.
2. The bill the healthcare provider or health facility sends you. It is a list of the services from #1 above, and the charges for each service. That bill is addressed in this article.
3. The explanation of benefits (EOB) that comes from your payer (insurer, Medicare, or other payer).

Among the three pieces of paper, you’ll find terminology and codes that will help you be sure you are being billed only for the services that were performed. For example, a “lipid panel” is a blood test to check your cholesterol level.

The key here will be to line up these services with the paperwork you were given when you left the healthcare provider’s office and to be sure you actually received these services.

Your medical bill may or may not look like this sample bill, but it will have similar pieces of information. You’ll see everything from dates of service to the services provided to costs on your bill.

Know What's on Your Medical Bill

Your healthcare provider’s bill will list the services provided to you. It also will provide other information, including:

• Name and address. This will include the specific person receiving care when insurance covers more than one person.
• Account number. This number is a useful tool for tracking charges and payments to your account, and to identify you when talking with a provider’s billing office.
• Statement date
• Provider information. This includes the name of your healthcare provider and the facility where services were received. Sometimes, these can result in more than one bill (for example, charges for a procedure, but also for the facility where it was done).
• Date or dates for when services were performed 
• Current procedural terminology (CPT) codes, a standardized system for healthcare services and billing
• Diagnostic codes and service descriptions (what your healthcare provider did)
• Costs of services. There may be several numbers that reflect total cost, adjusted charges, what your insurance paid, and amounts still due or that you already paid.
• How to pay the bill. The bill includes instructions on how to pay by mail, phone, or online. There may be information about what to do if you cannot pay what’s due.

If any services seem unusual to you, or if you question whether you received them, then contact the phone number provided on the bill. You don’t want to pay (or you don’t want your insurance to pay) for any services you did not receive.

Mistakes on bills cost money, whether the mistakes are intentional or not. The Department of Justice reported more than $2.68 billion in settlements and judgments under the False Claims Act in the 2023 fiscal year. Of that, $1.8 billion involved the health care industry and money billed to federal programs, including Medicare, for hospital charges, lab tests, and more.

Understand the Description of Services on Your Medical Bill

Your medical bill will include a description of services, but it isn’t always easy to understand. You can ask for help understanding what the terms mean, or look them up online if you feel able to do the research yourself.

These services will describe lab tests (as above) and more. Keep in mind that while you may have experienced a simple procedure in a healthcare provider’s office, there may be a number of factors to consider when reading the bill. They can include the location, any equipment used, any sedation or anesthesia needed, and lab work.

Check the CPT Codes

On your healthcare provider’s bill, you’ll see a five-digit code that represents the Current Procedural Terminology code (CPT) code. CPT codes represent all the services that medical providers may have completed.

On your medical bill, you’ll find the CPT codes aligned with the services. Whatever the service title is will be similar, if not exactly the same, as the American Medical Association’s (AMA) designation for that service.

What Is a CPT Code Search?

If you want to look up the CPT codes to make sure they are the same as the service listing, you can do so with a CPT code search. There are a number of resources for doing so, including the AMA site as well as updated lists from the Centers for Medicare & Medicaid Services.

Check the ICD Diagnostic Codes

Diagnostic Codes, also called ICD-11 codes (previous versions include ICD-10 and ICD-9), typically will be listed on your medical bill. The diagnostic code is needed to ensure accuracy as well as payment by your insurance company.

In some cases, there will be several diagnostic codes used, as there are in this example. That indicates the healthcare provider is ruling out causes to arrive at a diagnosis and usually represents the reasons for any tests.

Why would you want to look up the ICD codes? If you have visited your healthcare provider with symptoms and are unsure about your diagnosis, you might get some clues from these codes.

If the codes don’t make any sense to you or if you know you don’t have the problems listed, then it could indicate you have received the wrong bill or that fraud is involved in some way, including the possibility of medical identity theft. Contact your provider’s office immediately for clarification.

Understand How Much You Owe

Your medical bills will list the amount your healthcare provider charges for a service, often on an adjusted basis in agreement with your insurance company’s contract.

It lists the amount the insurance company pays, and the balance that remains due to your deductible, a co-pay, or other reason for your responsibility.

Most people can check to see what an insurance company has paid fairly easily. You can typically go online, where claims processing is listed, to check the status of any bill. You also can speak to the insurance provider and/or the healthcare provider.

A CPT search typically will show you the Medicare reimbursement for a service, and insurance company payments are comparable in terms of what a reasonable cost is. But they’re not exact, so get the information from your provider if possible.

Options for Paying Your Bill

When you receive your bill from a medical provider, it includes options for paying the bill. In most cases, you can pay online using a credit card or (less often) a direct debit from one of your accounts. You also can pay by telephone.

Most people won’t need to go to the provider’s office for bill payment, but it usually is something you can do (for example, if you have an upcoming appointment and prefer to pay in person). And you can typically still pay by mailing a check, too.

Be sure to check for credits already paid; it’s common for a co-pay to be covered at the time service was provided, and your bill should reflect that payment. Printouts of your prescription costs can help you keep track of pharmacy expenditures as well.

Many people find they need a payment plan or other arrangements for a bill they can’t pay in full. Talk to your practitioner, hospital, or other provider about options for paying your bill or, in some cases, even having some of the costs lowered.

Get Help Paying Medical Bill Costs

You may need help paying medical bills, or even determining that the bills are correct and a Medicare or insurance provider’s denial is appropriate. You want to be clear about your rights for a review and an appeal, if needed.

Keep in mind that certain legal protections, like those found in the 2022 No Surprises Act, mean you can’t be billed for higher out-of-network charges in an emergency. Check and see if any of the act’s protections will apply.

Don’t hesitate to ask for help. The Affordable Care Act requires certain nonprofit hospitals to have mechanisms in place to lower costs or provide them for free when people need help and charity care is appropriate.

You also can look for assistance from drug companies, veteran assistance programs, and other sources. The provider may be willing to negotiate with you, too, to lower the overall cost or provide an interest-free loan for the care expenses.

Summary

Most people will see a medical bill eventually, and it helps to understand the information found in the bills from your provider. This can include basic data, like your name and the date of service, as well as more complicated codes assigned on the basis of the services you received and the reasons for them.

Learning to read your bills can help to ensure you are charged fairly for medical care. It also can help you to understand when a charge needs to be challenged, an appeal filed with your insurance company, or why you may need to negotiate the costs with your provider.