How to Read Your Medical Bills

When you decide to take steps to control your health costs, knowing how to read your medical bills will come in handy.


All Medical Bills Have the Same Basics

A look at a basic medical bill.
All medical bills have the same basic information on them. Trisha Torrey

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

  1. The list of services performed. This is 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) which 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.

We'll begin by looking at a basic medical bill, one you might receive from your healthcare provider.

Your medical bill may or may not look like this one, but will have similar pieces of information.

You'll see everything from dates of service to the services provided to costs on your bill.

In this bill, the column for "Pat#" means which of the patients on my account received the service. Since I was the one with the insurance, the 1 refers to me.

"Prv#" is used by my healthcare provider's office to mean which of the practitioners I saw. #51 is my practitioner.

And the Bs under "Msg" refer to the fact that they billed my insurer.


Find the List of Services on Your Medical Bill

Check the services provided on your doctor's bill.
Services are listed on your doctor's bill. You can look them up. Trisha Torrey

Your healthcare provider's bill will list the services provided to you. What can you learn about them?

So many of these words are unfamiliar. To learn what the terminology means, use a medical dictionary or a list of medical tests.

In the example above, I can look up words like "Lipid Panel," which looks to be a test for my cholesterol levels.

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. That's often easier said than done.

If any services seem unusual to you, or if you question whether you received them, then contact the phone number provided on the bill.

There are two reasons to do this:

  1. First, you don't want to pay (or you don't want your insurance to pay) for any services you did not receive.
  2. Secondly, because mistakes on bills cost all of us money. Granted, you might have had services posted to your account by mistake. It could be very innocent. But billions of dollars are fraudulently billed to Medicare and insurance companies each year. It's up to each of us to be sure our providers are not billing us fraudulently.

Double Check the CPT Codes

The CPT codes on your bill should be identical to the service listed.
The CPT codes on your bill should be identical to the service listed. Trisha Torrey

On your healthcare provider's bill, you'll see a five-digit code that represents the current procedural terminology code (CPT) code.

You'll remember that CPT codes represent all the services a medical provider can possibly provide to us. If you are unsure about their use, you can read more about CPT codes, where they come from and why they are important.

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 designation for that service.

A reminder, too, that Healthcare Common Procedure Coding System (HCPCS) codes, Level I, are identical to CPT codes.

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.


Check the ICD Diagnostic Codes

You'll get some clues about what the doctor is thinking.
Diagnostic codes (ICD-9 or ICD-10 codes) will give you clues about what you have been tested for. Trisha Torrey

Diagnostic Codes, also called ICD-9 or ICD-10 codes, will also be listed on your medical bill.

Your healthcare provider won't get paid by your insurance company or other healthcare payer unless he or she provides a diagnostic code to go along with the services. The reason is that only certain services can be performed for specific diagnoses. For example, your healthcare provider could not run a heart test if your problem was a rash on your leg.

Those diagnoses are represented by ICD codes (International Classification of Diseases), either version 9 or version 10. Most current billing reflects ICD-9 codes but during the next few years, all medical providers will transition to ICD-10. You may want to learn more about these diagnostic codes and the shift to the new ones.

In some cases, there will be several diagnostic codes used, as there are in this example. That indicates the healthcare provider is unsure of what is causing a symptom and usually represents the reasons for tests that are given.

You may be interested in looking up the ICD codes. This bill contains an ICD-9 code 785.1, which represents heart palpitations, and 272.0 which is the code for pure hypercholesterolemia.

Why would you want to look up the ICD codes? If you have visited your healthcare provider with symptoms and are unsure about what he or she was looking for, you might get some clues from these codes.

If the codes don't make any sense to you, 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.


Learn How Much the Medical Service Costs

Pricing is also found on a medical bill, no matter who is responsible for paying it.
Pricing is also available on the bill, whether you will be paying it or your insurer or other payer will. Trisha Torrey

Your medical bills will have the amount your healthcare provider charges for his or her services on the bill.

Of course, the entire reason a bill was sent to you was so you would know how much your healthcare provider visit cost, right?

Many of us only glance at the pricing because we know the cost will be covered by our insurer or other payer. As fewer people find themselves with insurance, or as more of us move to high-deductible health insurance plans, that cost will become more important.

There is one thing we can do with these numbers, even if we aren't expected to write a check for them. We can look up the service to see if the pricing is reasonable. That can be done by using the CPT code and the AMA website.

By doing a search for each CPT code listed, you can learn what Medicare reimburses for that service. Most insurance companies follow Medicare pricing pretty closely. If you have a private insurer, don't expect the numbers to be exact, but they'll be close.

While you are at it, you may also want to learn why there are differences between what healthcare providers bill and what they actually get paid by the companies that reimburse them.

Now that you understand how to read a medical bill, you may want to take a look at the other pieces you can match it with: the receipt/list of services your healthcare provider gives you, and the EOB (explanation of benefits) you later receive from your payer.