Decode and Save on Your Medical Bills

A Simplified Guide to Understanding Healthcare Costs

I cannot emphasize this enough. Review your medical bills!

I can’t even tell you how many times I’ve gotten a bill and found out I’ve been charged for something that never happens. I’ve even been on the opposite end, having charged for things I never did.

This is an unfortunate reality of healthcare in 2023. We rely heavily, if not entirely, on electronic records. Let me give you a simplified explanation of how this process works:

1. Patient schedules a visit for a reason - routine physical, sick visit, etc. The doctor’s office codes the visit according to the patient’s complaint.

2. Doctor writes their note. Depending on how many different issues they cover, they determine the complexity of the visit. For example, an appointment that only covers one body region (lungs, for example) will be coded as a simple visit. If you cover multiple body regions, you can raise the complexity.

3. Doctor lists the relevant CPT codes (more on these later) to describe what they discussed.

4. Electronic medical record AI scrubs the note and pulls out relevant CPT codes and tries to capture all relevant diagnoses.

5. Medical coder verifies the information from the AI and either approves it, assigns other CPT codes, or kicks it back to the doctor to clarify or add necessary documentation.

6. Billing department prepares the bill and sends it to the insurance company.

7. Insurance laughs at about half of what was billed and tells the office what they’re willing to cover.

8. The office accepts their offer and sends the remaining balance to the patient.

9. Patient gets a ridiculous bill with $40,000 billed, $35,000 covered by insurance, $4,000 canceled by the doctor, and a $1,000 remaining balance.

This entire process plays out over the course of multiple weeks to months. It is extremely confusing. You only have limited control over certain aspects of this situation.

In this article, I’ll give you all the information you need to at least be informed when it comes to your bills. You’ll know how to interpret your medical bill, or at least know what questions to ask.

Why it matters

It’s pretty obvious, right? Nobody wants to pay more money than they need to for healthcare. Your doctor and insurance company both make plenty of money. Don’t give them more than you need to.

But that’s not the only reason. Reviewing your medical bills can also help you catch mistakes and other issues that can cost you in the long run.

For example, if your doctor says you discussed blood sugar regulation at your visit and that is somehow coded as diabetes coaching, your insurance company will take note. You’ve now been labeled and may end up with higher premiums in the future. Sure, you can request an addendum to your medical record. But that takes time and may not help.

It’s best to catch these issues as early as possible. Trust me.

Gathering bills

This can be a challenging process. Every office does this differently and some are difficult to work with.

Long story short, you need to get access to the full report from your visit. Somewhere in there, it will list the CPT codes they used for your visit. These correspond to whatever you discussed with the doctor, or whatever you are diagnosed with.

If this isn’t in your office visit paperwork, you need to ask the doctor’s office. They have it somewhere.

Alternatively, you can wait for your insurance company to send you a bill or explanation of benefits. This will usually list all the codes they billed for, what they paid, etc. You can then cross-check that bill with the note from your appointment. I don’t recommend doing it this way. It’s way harder.

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Understanding your medical bills

Let’s get some basic terminology out of the way.

• CPT Code = Current Procedural Terminology code - this is a way to standardize and describe the services your doctor provides to you, and accurately communicate them to your insurance company. They are used for billing purposes, predominantly. For example, a complex visit may classify as a 99214 or a “Level 4 visit,” which will bill insurance at higher rates due to the complexity. You must meet certain thresholds to meet these criteria.

• ICD-10 Code = International Statistical Classification of Diseases and Related Health Problems - this is a code your doctor assigns your disease in order to classify it. These codes are standardized globally, as the name suggests. They range from absurdly vague (M25.569 - pain in unspecified knee) to remarkable specific (W61.43 - pecked by turkey)

• Explanation of Benefits - This is a document the insurance company sends you in the interest of transparency. It will show what was covered, what is owed, which doctor billed you, when it was billed, if they are in or out of network, etc. This is a very useful document.

With these three definitions in mind, you can review your bills with some confidence.

Verifying Medical Treatments

Here’s where the fun starts.