How Medical Billing Works

How Medical Billing Works

Medical Billing, to say the least, is extremely confusing. It is conceivable to receive 4, 5, or more bills from healthcare providers if you are treated in a hospital or emergency room.  You ask yourself:  Where are they coming from?  The healthcare industry has no standards for billing consumers.  The bills consumers receive are all different.  This section is an introduction to medical billing.  The following grid will start the education process.

Step 1:  Where are the bills coming from?

The idea for the grids is to identify the source of medical bills by the type of service you may be  receiving.

If you are admitted to a hospital

If you are treated in a hospital emergency room

If you are admitted to have outpatient surgery

If you are having outpatient test and based on the location of the service

If you go to your physician for an office visit some doctors are affiliated with a hospital and you could receive two bills

Step 2:  Are you covered through your health plan for services you are going to receive

This is a question that should be easy to answer, but isn’t.

The following is step by step process to determine if you are covered through your health plan for services.

1. Is the hospital, doctor or out patient service company in your insurance company network?
   1. If yes, in network benefits will apply which are paid at a greater amount, leaving you to pay less out of pocket.
   2. If no, your insurance will pay less and you will pay more out of pocket.
2. RISK: There are hidden services that you cannot control. One example is an Anesthesiologist service.  You have no idea the Anesthesiologist accepts your health plan until it is too late.  To avoid out of pocket financial surprises, if you are having surgery, ask the surgeon what Anesthesia group they are using and call the group to determine if they are in network.  Many Anesthesiologists are not.
3. RISK: Insurance companies have very narrow networks.  This means, as consumers, our insurance plan may include the primary healthcare provider but secondary providers may not be in the network.  This could cause significant financial out of pocket cost for the consumer.  In section A above, Anesthesiologists are identified as a hidden service.  Other hidden services are: the doctor or medical group in the emergency room, while in the hospital, a specialty doctor your attending refers you to.  These scenarios go on and on.  Consumers need to ask questions to make sure they are fully informed.

2. To insure the healthcare provider has the correct information to bill your insurance company, ask them to verify your insurance with your insurance company and have them copy your insurance card. This will eliminate nay questions or billing issues.

Step 3:  The billing process, payment process and your Explanation of Benefits (EOB)

1. Billing: Healthcare providers use special forms to bill your insurance company.  Most billing today is sent electrically to your insurance company.  This process is very simple and is controlled by the healthcare provider.  They can make mistakes, delay billing or have computers issues.  Generally, these are human errors.
2. Payments: Insurance companies process the bills usually within 45-60 days upon receipt from the healthcare provider.  Healthcare providers receive payments from your insurance company and post the payments to your account.  In addition to posting payments Healthcare providers will post allowances or adjustments.  For example; The total bill sent to the insurance company is $300 and per your insurance plan, you are required to pay $50.  On your statement from your healthcare provider, you will see two-line item posted; one for the payment and one for the adjustment.  The adjustment is the amount your healthcare provider has agreed to discount your bill.  What should remain is the $50 you owe out of pocket.  If not, call the healthcare provider to ask why.
3. Your Explanation of Benefit(EOB) should be exactly what is posted to your account. If not, call the healthcare provider and ask why.

The healthcare billing and payment process is complex and can be confusing.  The following are suggestions to insure your insurance company and healthcare provider have not made any mistakes:

Know your insurance benefits by service, especially the amount you are required to pay.

Make sure your EOB and statement from your healthcare provider match.

If on your EOB you notice an out of network provider has been paid and your out of pocket is large, call the provider for an explanation.  If necessary, negotiate a discount and pay the bill.

Always review all statements from healthcare providers to insure they are correct.  If you have any questions, call them for an explanation before you pay any bill.

Be aggressive and proactive.  Healthcare providers make mistakes.