Easy money: How to read a hospital bill

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Easy money: How to read a hospital bill

Welcome to Easy Money, where we make super complicated financial stuff simple(r) to help you do it better.

Whether it was a planned procedure or an unplanned emergency, a hospital visit is often a disorienting and stressful experience — and that’s before you receive the bill. Hospital bills are notoriously difficult to understand, especially when they involve extended stays or complex treatments.

Financially, it’s in your best interest to read and understand your bill, as it could contain errors that lead you to pay more than you should. Unfortunately, the burden to identify those errors falls on you. But don’t get overcharged because you don’t understand the charges, codes or medical lingo. Here’s how to read a hospital bill.

Make sure you have the right bill

After your hospital stay, you may receive several documents from the medical providers and health insurance company. These documents might include:

  • A summary bill from the hospital with the amount you owe, but no details on the services you received.
  • An explanation of benefits (EOB) from your insurance provider, detailing what services and supplies were covered by your health care plan.
  • An itemized bill from the hospital, with a line for every service and medical supply you received along with the price of each.

If you only received a summary bill, do not blindly pay it. You must verify the bill is coming from a legitimate source and request an itemized bill from the hospital so you know exactly what you’re being charged for. You will also need a detailed EOB from your insurance provider.

“The first thing to do is call the number on that bill,” Debbie Bain, founder and managing director at Prism Health Advocates, a health advocacy company that helps clients navigate the healthcare system, said. “Find out if it is coming from the right place … it needs to be completely transparent, line item by line item.”

Remember, you may receive multiple bills for a single hospital visit. For example, if you were in the hospital for surgery, you might get a separate bill from the hospital, the anesthesiologist and the physician for their services.

Check for basic errors

Before you dive into individual line items, you should make sure that the hospital gets basic information correct.

Check your name, address and other personal information for errors. You should also verify your health insurance information, including your provider, policy number and group number. Check the dates of your hospital visit as listed on the bill, as an extra day added in error could result in a higher price tag.

Understand the codes

Once you’ve verified the basic personal information, it’s time to dive into the itemized section of the bill, which should contain a list of all services and medical supplies you received. Each line item should contain the date of service, service codes, a brief description and the cost.

Verifying the dates should be fairly easy. But unless you’re a medical billing professional, understanding the codes and the services will be more difficult. There are several types of codes that will appear for each line item, including:

  • Universal HCPCS codes: These codes are standardized across the medical community, and each code has a corresponding service or product associated with it. HCPCS Level I codes apply to services and procedures, while HCPCS Level II codes apply to non-physician services such as ambulance rides or medical supplies.
  • ICD-10 Codes: ICD-10 codes are standardized across the medical community, and each code has a corresponding diagnosis associated with it. Ever line item should have a ICD-10 code so you know what condition is being treated. If you were in the hospital for a single condition, each line item should have the same ICD-10 code. If you had several diagnoses, there may be multiple ICD-10 codes.
  • Revenue codes: Revenue codes identify the amount of money the hospital charges for each service or product. These codes are not universal and will differ between medical providers.

The line item should also contain a brief explanation of the service, although you may need more information. You can look up the universal codes online to identify the procedures and diagnoses (See our Recommended Reading section at the bottom of this article for links to websites where you can look up codes).

Review for accuracy

Now that you understand the purpose of the codes on your bill, you can start reviewing the line items for accuracy. You should be able to identify at least some of the items that are legitimate, and highlight the ones that need clarification. As you read, use the following tips to spot potential errors:

  • Make sure you actually received the services and products listed. If there is something you’re not sure about, you will need to follow up with the health care provider.
  • Look for duplicate charges for services you only received once.
  • Make sure the ICD-10 codes refer to the reason you were in the hospital. If you see an ICD-10 code that doesn’t match the right condition, this could be a major error.
  • Make sure you weren’t billed for any medications you brought from home or picked up later from an outside pharmacy.
  • If you received the same service or product twice, check that the revenue codes match and you were charged the same amount.
  • Make sure the services add up to the total at the bottom, minus insurance coverage.

In the end, the goal is to familiarize yourself with each charge, said Bain. You should understand every single item on your bill so you know what you’re paying for.

Check against insurance

If you have health insurance, make sure they paid their share of the bill before it was submitted to you. If your insurance company hasn’t sent you an EOB, you should request one. Verify that the hospital bill matches up with the EOB. If there is a discrepancy, it should be cleared up before you pay.

Health insurance plans cover in-network and out-of-network services differently. You should verify whether the hospital/doctor was in-network or out-of-network and whether the insurance company treated your bill accordingly.

  • In-network means the health insurance company has negotiated a price with the health care provider or facility. Doctors and facilities within the network charge less to patients with a plan from that health insurance provider.
  • Out-of-network means the health insurance company does not have a contract with the health care provider or facility. Some health care plans won’t cover out-of-network care at all, while others will charge a higher rate for the outside services than they would have you received care in-network.

Learn more health insurance basics.

Genius tip: Just because the hospital is in-network doesn’t mean all services provided at the hospital are also in-network. For example, the anesthesiologist may be out-of-network, even if they are providing services at an in-network hospital. You can call your insurance company to review your benefits and find out whether services were in-network or not, said Bain.

Contact the hospital

Whether you identified errors or you just need to understand the charges, you can use the hospital’s billing department as a resource. You have the right to have your medical bills explained to you by the medical providers themselves.

“If you don’t understand what it’s saying you need to pick up the phone, call the provider and ask them what it means. Go right to the billing department and they’ll explain it to you,” said Bain. “Tell them you’re checking the veracity of some of the items on your bill.”

She recommends staying assertive, but not giving into frustration when dealing with the hospital. Hospital representatives won’t be as helpful in the face of aggression or anger.

You generally have 180 days to pay a medical bill before it is reported to the credit bureaus and starts affecting your credit. That means you have time to resolve billing issues, so don’t feel pressure to pay until you’re confident its the right amount.

Curbing medical bill costs

If it looks like you’re saddled with a pricey bill, there are some avenues to explore to curb current and future out-of-pocket medical expenses.

1. Negotiate

Contrary to popular belief, you can negotiate with the hospital if you can’t afford your bill. Many medical providers are willing to work out a payment plan or lump sum settlement if you can’t afford the full amount.

2. Consider consulting a professional

If your hospital visit was for a straightforward procedure, you can probably interpret the bill on your own. But if you find yourself overwhelmed, you may want to enlist help from a professional medical billing advocate. For a fee, they can help you review your bill and work with the hospital to dispute errors or negotiate. If you think you are being overcharged, it may be worth the time and cost. Just be sure to properly vet any company you’re considering and verify what their total fees are.

3. Upgrade to a better health care plan

Health care needs change as you age. If you find yourself repeatedly facing big bills you can’t quite afford, consider switching from a high-deductible health care plan (HDHP) or low-tier standard plan for more robust coverage. You’ll pay a higher monthly premium for that plan, but the move is sometimes worthwhile. Keep in mind, you can’t change health care plans at any point in time. You need to wait for open or special enrollment at your workplace or on the federal and state health care exchanges.

Learn about Obamacare open enrollment.

4. Open an Health Savings Account

If you can’t afford a higher premium or prefer to stick with your HDHP, consider open an health savings account. HSAs are tax-advantaged savings accounts that allow you to save for future medical expenses. They also serve as a de facto supplemental retirement account, given the funds roll over from year to year and you can make penalty-free withdrawals from your HSA for any reason once you turn 65.

Learn how to open an HSA.

Save your records

Lastly, you should save all records related to your hospital visit for future reference, even if you think the issue has been resolved. Save your bills, your EOB and any other paperwork. If you have to sort out any issues in the future, keeping good records will prove valuable.

Recommended Reading

  • You can search HCPCS codes from your hospital bill here.
  • You can lookup ICD-10 codes to find your diagnosis here.
  • For a database of what you should expect to pay for health care services in your area, check out Healthcare Bluebook.

If you’re on Medicare and wondering what it covers and how much services generally cost, visit our Medicare Learn Center.

Image: Evgenij Yulkin