Pain-Free Living

Navigating the Maze of Medical Bills

by Kurt Ullman, RN

Let’s say you see your doctor for a check-up. That’s simple enough. You are examined and sent on for blood work or an x-ray. So far, so good. But when the paperwork starts rolling in, the fun begins — you have to sort out what, and whom, you really owe.

Medical bills can be among the more frustrating features of modern life. But you don’t have to be a certified accountant to figure them out and make sure that you are being charged fairly and accurately. The following tips can help you find your way through the maze of medical bills.

Before your appointment

Most of the time, the route to saving money and avoiding problems with medical bills begins before you even see your health-care provider. To keep costs down, most insurance companies have a list of preferred doctors, laboratories, pharmacies, and other providers. Generally, if you go to these “in-network” providers, you save money by paying lower copayments and deductibles.

You also need to keep in mind that just because the doctor you see for your arthritis is in your insurance network, it does not mean that the other providers that doctor sends you to are as well. As a courtesy, some offices will find out which needed providers are in-network for their patients. However, some practices do not check, so you should call your insurer’s customer service telephone number or go to its Web site to determine the status of other providers. It is ultimately your responsibility to make sure the providers you see are in your insurance network.

Whether you are sent to another office for tests may depend on your insurance plan. “What needs to be done outside the office is related to the insurance company’s contract with a practice,” says Annabell Rodriguez, office manager for Arthritis Associates in San Antonio, Texas. “Some [insurance companies] let us do all of the x-ray or laboratory work in-house. For others, our agreement says we have to send patients elsewhere.”

Still, you will want to make absolutely sure that everything is covered. “Always check with your insurance company about anything that is done outside the doctor’s office,” says Candice Butcher, chief executive officer of Medical Billing Advocates of America in Salem, Virginia. That’s true even if the other provider is only a few doors down. “The laboratory or other service being in the same office building as your physician is not a guarantee that they are in your network,” says Ms. Butcher.

Preauthorization. Another potentially costly landmine is the need for preauthorization. Certain kinds of treatments and procedures often require authorization from the insurance company before they are covered. If you don’t get this approval, the company may not have to pay for the treatment, depending on your specific insurance contract and state law. Preauthorization is often required for procedures such as joint replacement and other nonemergency surgeries. People with rheumatoid arthritis (RA) and other rheumatic conditions may need to get approval from their insurance company before their insurance will cover expensive biologic treatments such as adalimumab (Humira) and etanercept (Enbrel), which are not available in generic formulations.

In addition, insurance companies may cover only low-cost generic versions of brand-name drugs. “The insurance company often has a generic or cheaper form of a medication that they will pay for,” says Rudy Molina, MD, chair of the Insurance Subcommittee of the American College of Rheumatology and a physician in private practice with Arthritis Associates. “If I want to make sure my patient gets a certain [brand-name] medication, I need to justify it to the insurance company. Even then, preauthorization is not a guarantee that it will be covered indefinitely.”

Most of the time, the doctor’s office or the hospital will do the paperwork and make phone calls necessary to get preauthorization. However, both Dr. Molina and Ms. Rodriguez suggested contacting both the provider and the insurance company to make sure there have been no communication problems. You should also get a letter from your insurance company confirming its decision.

The avalanche of paper

All of the preliminaries are now completed. You have seen only in-network health-care providers, and all seems right with the world. But soon begins the paperwork avalanche. You will probably receive three types of paperwork in connection with a medical treatment or procedure:

• A summary bill from the provider
• An explanation of benefits (EOB) from your insurance company
• A final bill from the provider

The final bill is pretty straightforward, but you may find the summary bill and explanation of benefits difficult to decipher.

The summary bill. “Normally the first thing you see is a summary bill,” says Ms. Butcher. “This lists in general terms what was done during the visit.” The summary bill is usually just to let you know that a claim has been filed with your insurance company. Most of the time it does not indicate how much money you actually owe.

If you do get a summary bill, there are a few things to look at when you get it. Most bills will include your insurance information. Make sure your name is spelled correctly and that the policy number and other numbers match those on your insurance card. If not, call the provider’s billing office right away and have them submit a revised claim.

“The most common problem when a claim is rejected is that the policy numbers and names don’t match up,” says Nicholas Newsad, a senior analyst with Health Inventures, Inc., in Broomfield, Colorado, and author of The Medical Bill Survival Guide. Whenever you receive any type of bill or statement, Mr. Newsad recommends making sure the name, policy number, and other information about you are correct.

The information included in the summary bill changes from provider to provider. Many give a detailed accounting of everything that was done, others give just the basic outline, and some don’t send an early bill at all. If you do get a summary bill, look at the information that it includes and ask the provider about anything you don’t understand.

If your summary bill doesn’t include an itemized list of services, should you ask for one? There is no consensus among the experts interviewed for this article about the usefulness of asking each provider for an itemized bill at this point in the process. Some say it can be useful to weed out mistakes or overcharges, but others point out that it may just duplicate actions that the insurance company will take anyway — and it’s the insurer that has greater experience in this area.

Keep in mind that you may get a summary from more than one provider, even for something as routine as an office visit. For example, if you see your arthritis specialist for a checkup, he or she might want you to get a joint x-ray. Depending on your insurance company’s agreement with the doctor, you may be sent to a hospital or an imaging center. If that happens, you may get as many as three different summary bills: one from your arthritis specialist for the office visit, one from the hospital or imaging center for the use of the x-ray machine and the technician’s time, and one from the radiologist who actually read the x-ray.

The explanation of benefits. About 30–60 days after a service is provided, you should get an explanation of benefits (EOB) from your insurance company. It may come in the mail, although many insurance companies also make it available online. (Your insurance company may not send a paper copy at all if you have elected to receive all correspondence via e-mail.) You should look at this form closely and make sure you understand it completely.

Although EOBs issued by different insurance companies may not look alike, all have basically the same information:

• The name of the policy holder and his or her insurance information
• The name of the patient if it is different from the policy holder’s
• The name of the provider
• Date of service
• Total amount charged
• Negotiated savings or contractual discount
• Charges not covered
• Deductible and copayment or coinsurance
• Total amount payable
• Member responsibility

The first four of these are self-explanatory, but the others may need explanation.

The total amount charged is like the manufacturer’s suggested price of an automobile. This is the high price that the provider would like to get. In most instances it is of no interest to you because, as is the case when buying a car, few people actually pay this price. But you may have to concern yourself with the total amount charged if the doctor is out-of-network or your insurance doesn’t cover the billed-for procedure. In such cases, you may be responsible for the full amount.

Providers use this “list” price as a starting point in their negotiations with insurance companies for the cost of various procedures. The negotiated savings or contractual discount is the result of this negotiation. “Think of it as a quantity discount to the insurance company for bringing their policy holders to the provider,” Mr. Newsad explains.

You will want to look closely at the charges not covered section (sometimes labeled “not payable by plan” or a similar phrase). This usually is the amount that the insurance company has decided is not covered by its contract with you. This amount may become your responsibility to pay.

Near the “charges not covered” should be an area for remarks. These explain why the insurance company refused to cover certain charges. In many cases, there will be a one or two character code that is explained in more detail at the bottom or on the back of the EOB form.

The column or columns for deductibles, copayments, and coinsurance is another area that should interest you. This area outlines the amount that the insurance company says you should pay for the treatment or procedure. For example, say your policy has a $500 yearly deductible that you have to pay before any other benefits start. If your doctor visit occurred before your deductible was used, you would have to pay the entire bill up to $500. If you have already paid down your deductible, you may still be expected to pay a copayment (a set amount, such as $50) or coinsurance (a percentage) to offset the cost of the service.

The total amount payable is what the insurance company has agreed to pay the provider. This amount should equal the charges minus any negotiated savings, deductibles, and copayments or coinsurance. Because this is what the insurance company has said it will pay for these services, the provider usually has to accept the insurer’s discounted price — that is, the provider won’t charge you the difference between what the insurance pays and what he or she charged.

Finally, the EOB gets to what you really want to know. The column for member responsibility is the amount you owe the provider. This amount will include the deductible and copayments or coinsurance, as well as the charges not covered.

As with the summary bills, you may get EOBs from several providers for each visit or procedure. Because of differences in billing schedules, you may not get all EOBs for a visit at the same time.

Check your policy

According to Mr. Newsad, when you receive an EOB, you should review your insurance policy’s summary of benefits. The summary of benefits will outline your deductibles and copayments or coinsurance, as well as other important features of your policy. Compare your policy’s benefits with what’s on the EOB. Also, double-check any increased or unexpected charges for a provider, especially if you had confirmed the provider’s in-network status before the visit. If you have any questions, call the toll-free number on your insurance card and talk to a customer service representative.

The system works the same way for inpatient hospital stays as for outpatient procedures. The main difference is that for inpatient stays there will probably be more providers involved and longer summary bills and EOBs to wade through.

Medicare

Note that Medicare works in a similar way to private insurance, although in the case of Medicare the EOB is referred to as a Medicare summary notice. The major difference is if you also have a supplemental insurance policy, such as a Medigap plan or a private plan, that helps pay for Medicare co-payments and deductibles. Each of these plans has its own way of receiving claims and reimbursing health-care providers, so you should check with your particular plan for details. Customer service phone numbers for both Medicare and your supplemental plan should be listed on your benefits card.

The final bill

Soon after the EOB arrives, the final bill from the provider will show up. You should compare the amount it says you owe with the amount in the member responsibility section of the EOB. Both amounts should be the same.

If you have questions after receiving your final bill, you should first talk to the billing office of the health-care provider. “The provider is the person you owe the money to,” says Ms. Butcher. “Even if it is really an insurance problem, the provider needs to know what is going on. They will make a note on your file that there is a problem, which stops the clock on more aggressive collection activities.”

If you call the billing office and still do not get satisfaction, continue up the ladder. Ask to talk to the provider’s billing department supervisor or the practice manager. At a hospital, start with the billing representative, going on to the manager of patient financial services if need be, and then to the director of revenue cycle management.

There are some other options if you have worked your way through a provider’s billing department and still think there is something wrong. Mr. Newsad suggests the following resources:

• The attorney general’s office or consumer protection agency in your state. These agencies can investigate and prosecute fraud in billing. For contact information for the relevant agency in your state, visit this directory.
• The United States Postal Service (USPS) mail fraud division. Sending fraudulent bills through the US mail carries a very stiff penalty. You can find report mail fraud using this USPS form.
• Local television stations. They often have a “consumer watchdog” or similar person who might be able to help.

Dealing with the insurance company

If your concern is with your insurance policy rather than your health-care provider, call the insurance company. If you don’t get your questions answered by a customer service representative on the telephone, ask first to talk to a customer service supervisor. Then ask for information on the company’s appeal process.

If, after following all avenues with your insurance company, you still are not satisfied with the outcome, you have one more option left. “All states have an insurance commission that regulates health insurance companies,” says Dr. Molina. “If you are having problems with your insurance, you can usually call the commission office to make an official complaint. Call information for your state capital, look on the state’s Web site, or go to the government section of the phone book.”

What’s the bottom line? Because there are so many players involved in the medical billing process, it is essential to keep careful score. Errors can occur, and it is to your benefit to check every form when you get it. Making sure you understand your medical bills will, in the end, save you both time and money.

Last Reviewed January 11, 2012

Kurt Ullman has been a medical writer for more than 25 years. He is based in Indiana.

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