Even as responsible adults, we still have a tendency to neglect things. Procrastination is second nature for many of us. Various things take up our time and attention, like raising a family and going to work, and if we’re lucky, we have a little free time to spare. Though we all buy health insurance for protection in case something happens and it’s part of our monthly bills, it can be nerve racking when the medical bills start showing up in the mail. Instead of putting them aside, maybe hoping someone else can handle them, you need a plan to manage them efficiently. Doing so could free up time and put keep more money in your pocket, and all of us could use a little more of both.
There is a lot to manage when it comes to our healthcare and it can be a little overwhelming at times. The insurance company sends you statements (called Explanation of Benefits or EOBs) to match up with the invoices coming from the provider, yet somehow, they never seem to match.
Aside from understanding how your policy actually works, understanding medical billing is probably the biggest headache in healthcare. There is somewhat of a system to the madness, however. Having the ability to cut through it with a basic understanding helps eliminate much of the anxiety that accompanies medical bills.
How Medical Billing Works
The medical provider sends charges to the insurance company using medical codes. Assuming the codes make sense to the insurance company, they will process and pay the bill under a contracted, negotiated discount. Once this is done, the balance is applied to your account as possibly a co-pay or towards your annual medical deductible. The insurance company will send you an EOB. The EOB shows how they processed the claim and any notes regarding the charges that were approved or denied (i.e. wrong medical code, charge occurred prior to coverage, etc.). The most important things to note, assuming the claim was processed correctly, is the date of service and the charges remaining after the benefits were applied.
Paying Your Medical Bills
The medical provider will also get a copy of the EOB from the insurance company. After they receive it, they will send you an invoice for the balance. It is important to match the charges on the invoice with the payouts shown on the EOB. We’ll discuss why in a moment, but, if the EOB matches the invoice then you are responsible for paying the charges and should do so promptly. Paying promptly will allow you to avoid any collection issues, which will just cause more headaches and be much more time consuming.
So, why bother matching the EOB to the invoice? Well, there are many cases in which bills are sent to patients from the medical provider that are incorrect. Much of the time patients are overcharged but pay the bill thinking they owe the money. The overcharges can be substantial! Whether this is an intentional act by the provider to collect extra money or an accidental oversight, you wind up paying more than your part of the bill.
Resolving Medical Billing Discrepancies
If there is any difference between your remaining balance on the EOB and the medical providers invoice, you must call both the insurance company’s claims department as well as the provider to find out why. Frustrating as it is, some medical providers routinely send out invoices without applying insurance adjustments and payments. Even if the overcharge was unintentional, you may have to be diligent and call back multiple times to ensure the adjustment is applied. Once you have resolved any billing discrepancies you should go ahead and pay the bill.
Saving time by paying promptly and avoiding collection issues, and saving money by doing your due diligence should help you feel more in control of your healthcare.