How to Understand Medical Bills and EOBs

A bill from a doctor, clinic, hospital, laboratory, imaging center, or other medical provider may contain unfamiliar medical codes, insurance adjustments, deductibles, copayments, coinsurance, denied charges, and amounts that do not seem to match what you expected to pay.

Sometimes the bill is correct, but sometimes there may be a mistake. A medical provider may enter the wrong billing code, submit incorrect information to your health insurance company, bill your insurance for the wrong type of visit, charge for a service that you did not receive, charge the same service more than once, or fail to correctly apply an insurance payment. Your insurance company may also process a claim incorrectly, deny a claim for a reason that does not appear to match your situation, or show an amount that you do not understand.

AgeHelper provides practical, non-medical help for seniors and their families in Austin who need help understanding medical bills, insurance statements, Explanation of Benefits documents, claim denials, and possible billing errors. We can help you organize the paperwork, understand what the documents are saying in plain English, identify questions you should ask the medical provider or insurance company, and help you keep track of the steps you have taken.

Why medical bills can be confusing

A medical bill is not always the same thing as an insurance statement. If you have health insurance, you may receive an Explanation of Benefits, often called an EOB, from your insurance company. An EOB is generally not a bill. It explains how your insurance company processed a medical claim, what the provider charged, what amount the insurance company allowed, what the insurance company paid, what was not covered, and what the insurance company says you may owe.

Your medical provider may send you a separate bill. The amount on the provider's bill should generally be consistent with the amount your insurance statement says you owe, although there can be timing differences and other legitimate reasons for differences. The Centers for Medicare & Medicaid Services explains that an EOB shows information such as the provider charge, allowed charge, amount paid by the insurer, and patient responsibility. CMS also says that if the provider's bill is higher than the patient balance shown on the EOB, you should contact the provider.

This means that one of the first things to do when you receive a confusing medical bill is not simply to pay it immediately. First, compare the bill with your insurance EOB or claim information.

A medical bill that looks frightening or complicated does not necessarily mean that you owe the entire amount printed on the bill.

For example, a medical provider may charge $300 for an office visit, but your insurance company may have an allowed amount of $180. The insurance company may pay part of that amount, and you may owe only a copayment, deductible, or coinsurance amount. The provider's original charge is not necessarily the amount you have to pay.

What is an Explanation of Benefits?

An Explanation of Benefits, or EOB, is one of the most important documents to understand when you are trying to determine whether a medical bill is correct.

Your insurance company may send an EOB by mail or make it available through your online insurance account. UnitedHealthcare, for example, explains that an EOB describes the costs involved in a visit and shows information such as the claim status, date of service, total cost, amount paid by the health plan, costs not covered, and what the patient may owe. UnitedHealthcare also specifically explains that an EOB is different from a bill.

An EOB can be confusing because it contains insurance terminology that most people do not use in everyday life. You may see terms such as provider charges, allowed amount, negotiated rate, deductible, copayment, coinsurance, patient responsibility, non-covered amount, adjustment, claim number, remark code, denial code, and other abbreviations.

You do not need to understand every medical billing term before you can start investigating a possible error. Start with the basic question:

Then compare the answer with what actually happened during your medical visit.

Example: the wrong patient type or wrong procedure code

One common type of billing problem can happen when a medical office submits a claim using information or a billing code that does not accurately describe the patient's situation.

For example, imagine that you have been seeing the same doctor for several years. You go to the clinic for another appointment. The medical center submits the claim to your insurance company as a "new patient" visit even though you are an established patient and have already been treated by that provider.

Your insurance company processes the claim and denies it or pays it differently because the submitted code does not match your patient status or the insurance plan's rules. You receive an Explanation of Benefits from UnitedHealthcare showing that the claim was denied, perhaps with an error or denial code such as S9. The EOB may explain that the visit was billed using a new-patient procedure code even though you are an established patient.

In a situation like this, the first question should be: "Did the medical provider submit the claim with the correct code and information?"

If you have actually been treated by that provider within the relevant period, the medical office may need to review the claim and correct or resubmit it. This is an important distinction. The problem may not be that your insurance company simply refuses to pay for your medical care. The problem may be that the medical provider submitted the wrong information to the insurance company.

In that situation, calling the medical provider's billing department may be more useful than immediately trying to argue with the insurance company. You can explain the problem in simple language:

When speaking to the billing office:

• Ask the billing office to tell you what they submitted to the insurance company.
• Ask whether the claim can be corrected and resubmitted.
• Ask whether you will receive a new EOB after the corrected claim is processed.
• Ask whether the medical bill will be placed on hold while the claim is being corrected.

Write down the date and time of your call, the name or identification of the person you spoke with, and what they told you. Keep copies of the EOB, medical bill, letters, emails, and other documents.

Why a denied claim does not always mean that you must pay the bill

A denied claim can be frightening, especially when the medical bill is large. You may receive a statement saying that the insurance company did not pay anything and that you owe hundreds or thousands of dollars.

Do not automatically assume that the denial means you must immediately pay the entire amount.

A claim can be denied for many different reasons. Sometimes the insurance company believes that the service is not covered. Sometimes there is a problem with authorization. Sometimes the claim contains incorrect information. Sometimes a medical code was entered incorrectly. Sometimes the insurance company needs additional information. Sometimes the provider submitted the claim incorrectly. Sometimes the patient information is wrong. Sometimes the claim was submitted to the wrong insurance company.

The reason for the denial matters.

Read the EOB carefully and find the explanation for the denial. Look for a denial reason, remark code, explanation, or instructions about what to do next. CMS explains that an EOB includes claim information and remark codes that can help explain the costs, charges, and payment decisions.

Write down the answers. Do not rely only on your memory after a long telephone conversation with an insurance company.

Medical billing errors can involve incorrect codes

Medical billing uses standardized codes to describe medical services. These codes are used by providers and insurance companies to process claims.

Patients normally do not need to become medical billing experts. However, understanding that medical providers use codes is important because a wrong code can affect how an insurance company processes a claim.

For example, a provider might submit a claim using a code for a new patient when the patient is actually an established patient. A provider could submit a code for a service that was not performed. A claim could contain an incorrect date of service. A service could be entered twice. A provider could submit the wrong diagnosis or procedure information. The provider's information could be incorrect.

CMS reports that incorrect coding is a significant source of improper payments for certain evaluation and management services. In its 2024 reporting data, CMS identified incorrect coding as accounting for 49.1% of improper payments for the E/M services category it analyzed. This does not mean that every large medical bill contains an error, but it demonstrates why checking the information on a medical claim can be worthwhile.

Common medical bill problems to look for

• Look for services you do not recognize.
• Check whether the date of service is correct.
• Check whether the provider's name is correct.
• Check whether you actually received the service.
• Check whether the same service appears more than once.
• Check whether the amount charged seems different from the amount shown on your EOB.
• Check whether your insurance payment appears on the bill.
• Check whether a previous balance has been added.
• Check whether the bill includes a service that your insurance company says was denied.
• Check whether the bill says you owe an amount that is different from the patient responsibility shown on your EOB.
• Check whether the claim was processed as in-network or out-of-network.
• Check whether your deductible, copayment, or coinsurance has been applied correctly according to your insurance documents.
• Check whether the medical provider submitted the claim to the correct insurance company.
• Check whether the insurance company has the correct member information.
• Check whether the claim was denied because the provider submitted incorrect or incomplete information.

Ask for an itemized medical bill

If a medical bill is confusing, ask the medical provider for an itemized bill. An itemized bill lists the individual services or charges instead of showing only one large balance. An itemized bill can help you understand what you are being charged for.

You can then compare the itemized bill with your EOB.

• If you see something you do not recognize, ask the billing department to explain it.
• If you see a duplicate charge, ask why it appears twice.
• If you see a service that you did not receive, ask the provider to investigate.
• If you see a procedure code or description that appears inconsistent with what happened during your visit, ask the provider's billing department to review the claim.

You do not have to accuse the medical provider of intentionally overcharging you. A simple question is often the best starting point: "I do not understand this charge. Could you please explain what it is for?"

Mistakes can happen

It is important to distinguish between an error and intentional fraud. A medical billing error does not necessarily mean that someone tried to cheat you.

Medical offices process large numbers of claims. Information can be entered incorrectly. A code can be selected incorrectly. A claim can be submitted before an error is noticed. Insurance information can change. A provider can use incorrect patient information. An insurance company can process information incorrectly.

The goal of reviewing a bill is not necessarily to accuse anyone. The goal is to make sure that the medical record, insurance claim, EOB, and patient bill are consistent with what actually happened.

What to do if the medical provider made the mistake

If you believe the medical provider submitted incorrect information, contact the provider's billing department.

• Explain exactly what appears to be wrong.
• Ask the provider to review the claim.
• Ask whether they can submit a corrected claim to the insurance company.
• Ask whether they can place the balance on hold while the claim is being corrected.
• Ask how long the corrected claim is expected to take.
• Ask whether you should wait for a new EOB before paying the current bill.
• Ask for written confirmation when appropriate.

If the provider corrects the claim, wait for the insurance company to process the corrected claim and issue updated information. Do not assume that the first EOB is the final answer.

What to do if the insurance company made the mistake

Sometimes the provider may tell you that the claim was submitted correctly but the insurance company processed it incorrectly. In that situation, contact your insurance company.

Have your EOB, claim number, medical bill, and provider information available. Ask the insurance company to explain the denial or payment decision. Ask whether the claim can be reconsidered or corrected. If you disagree with the insurance company's decision, ask about the appeal process.

UnitedHealthcare explains that when a claim or coverage is denied, members have the right to receive details about the reason for the denial and may have internal and external appeal rights depending on the situation and plan.

The exact appeal rules depend on your health plan and the type of coverage you have, so read the instructions in your denial notice and insurance documents carefully.

Appealing a denied claim

If you believe your insurance company incorrectly denied a claim, you may have the right to appeal. An appeal is a formal request asking the insurance company to reconsider its decision.

The process depends on the type of insurance you have. If you have private health insurance, Medicare Advantage, Medicaid, or another type of coverage, the rules and deadlines can be different.

Do not ignore an appeal deadline. Read the denial letter or EOB and look for information about how to appeal. UnitedHealthcare states that its denial notices include information about why a claim or coverage was denied and directions for internal and external appeals.

If you have Original Medicare, there is a specific Medicare appeals process. CMS explains that Original Medicare has multiple levels of appeal, beginning with redetermination and potentially progressing to reconsideration, a hearing, Medicare Appeals Council review, and judicial review.

Because insurance rules can be complicated, you may want help understanding the paperwork before deciding what action to take. AgeHelper can help you organize the information and understand what the documents appear to say in plain English, but we cannot provide legal advice or guarantee the outcome of an appeal.

Keep a medical billing folder

One of the easiest ways to make medical billing problems less stressful is to keep your documents organized. Create a folder for each major medical event or provider.

• Keep the original medical bill.
• Keep the EOB.
• Keep letters from the insurance company.
• Keep letters from the medical provider.
• Keep receipts for payments you have made.
• Keep notes from telephone calls.
• Keep claim numbers and appeal information.
• Keep copies of corrected bills and EOBs.

If you use an online insurance portal, download important documents rather than assuming they will remain available forever.

Do not pay the wrong amount simply because you are afraid of a medical bill

Many seniors are uncomfortable questioning a medical bill. They may think, "The hospital sent me this bill, so I must owe it."

That is understandable, but a medical bill should be reviewed when something does not make sense. CMS advises patients to compare the provider bill with the EOB and notes that the provider bill should not be higher than the patient responsibility shown on the EOB in the ordinary situation described by CMS.

At the same time, do not assume that every difference between a bill and an EOB is an error. The timing of payments and billing can cause temporary differences. UnitedHealthcare, for example, notes that a bill may have been generated before an insurance payment was processed or that a previous balance may have been carried forward.

That is why the correct approach is to compare the documents and ask questions before reaching a conclusion.

What if the bill has already gone to collections?

If you receive a collection notice for a medical bill that you believe is incorrect, do not ignore it. Gather the medical bill, EOB, insurance correspondence, payment records, and any notes about your conversations with the provider and insurance company.

If you believe the debt is incorrect, seek appropriate consumer, legal, insurance, or patient-advocacy assistance depending on the circumstances.

Some federal protections may apply to certain medical billing disputes. For example, CMS describes specific protections and dispute processes under the No Surprises Act, but eligibility depends on the circumstances. Do not assume that every medical bill qualifies for the same dispute process. The rules can depend on whether you used insurance, whether the provider was in-network, what type of service you received, whether you received a good faith estimate, and other factors.

Medical bills, Medicare, and Medicare Advantage

Many older Americans have Medicare, Medicare Advantage, or Medicare-related coverage. Medical billing can be particularly confusing when more than one insurance program or plan is involved.

If you have Original Medicare, Medicare generally processes claims through your provider or supplier. Medicare explains that patients usually should not have to file their own claims except in limited situations.

If you have Medicare Advantage, your claims are generally handled through your Medicare Advantage plan when you use participating providers.

If you receive a bill that does not make sense, first identify which insurance plan processed the claim. Do not assume that a bill from a doctor's office is automatically a Medicare bill. Read the EOB or Medicare Summary Notice carefully and identify the provider, date of service, claim, amount charged, amount paid, and amount that Medicare or the plan says you owe.

If you are unsure which document you have, AgeHelper can help you identify the basic purpose of the document and organize it for further discussion with your insurance company or provider.

Why seniors may need help with medical bills

Medical billing is difficult even for younger people.

For older adults who may have multiple doctors, multiple medications, Medicare, Medicare Advantage, supplemental insurance, laboratory services, specialists, hospital visits, imaging centers, and recurring medical appointments, it can become especially difficult to determine which company sent which bill and why.

A senior may receive a bill from a hospital, a separate bill from a physician, another bill from a radiology group, another bill from a laboratory, and several insurance documents. The names on these documents may not be familiar. The amounts may be different. The claims may have different numbers. Some services may have been processed while others are still pending.

A senior may simply want someone to sit down with the paperwork and help make sense of it. That is one of the situations AgeHelper is designed to help with.

What AgeHelper can help you do

• AgeHelper can help you organize medical bills and insurance documents.
• We can help you understand the basic difference between a medical bill and an Explanation of Benefits.
• We can help you identify the provider, date of service, claim number, billed amount, insurance payment, adjustment, and patient responsibility shown on a document.
• We can help you compare a provider bill with an EOB.
• We can help you identify questions about charges that you do not recognize.
• We can help you create a timeline of what happened.
• We can help you organize your correspondence with the provider and insurance company.
• We can help you prepare a list of questions before you call the billing department.
• We can help you keep track of telephone calls and reference numbers.
• We can help you understand the general meaning of billing terminology in plain English.
• We can help you organize documents before you contact an insurance company, Medicare, a medical provider, a patient advocate, or another appropriate organization.
• We can help you understand what information appears to be missing from your paperwork.
• We can help you identify when a bill and an EOB do not appear to match and suggest what questions to ask.
• We can help you prepare for a conversation with a medical billing office or insurance representative.

What AgeHelper does not do

AgeHelper is not a doctor, hospital, insurance company, attorney, or government agency.

• We do not provide medical advice.
• We do not determine whether a medical treatment was medically necessary.
• We do not provide legal advice.
• We do not guarantee that a medical bill is wrong.
• We do not guarantee that an insurance claim will be paid.
• We do not make insurance coverage decisions.
• We do not represent you in court.
• We do not promise that a provider or insurance company will change a bill.

Our role is practical assistance: helping seniors and their families understand, organize, and navigate confusing technology and administrative information.

If the situation involves a legal dispute, suspected fraud, a major financial loss, a collection account, or a complex insurance appeal, you may need a qualified attorney, insurance professional, patient advocate, government agency, or other specialized professional.

Do not be embarrassed to ask for help

Medical billing terminology is not something that most people learn in school. You can be intelligent, experienced, and completely capable of managing your own life and still find a medical bill difficult to understand.

If you look at an EOB and think, "I have no idea what any of this means," that does not mean that you did something wrong.

Medical billing documents were designed primarily for a complicated healthcare and insurance system. They can contain codes, abbreviations, adjustments, claim numbers, and insurance terminology that is unfamiliar to an ordinary patient. You are allowed to ask questions. And you can ask someone you trust to help you organize the information.

If you live in Austin and have a confusing medical bill

If you are a senior in Austin, Texas, and you have received a medical bill, insurance statement, EOB, denied claim, or confusing healthcare charge that you do not understand, AgeHelper can provide practical assistance with organizing and understanding the paperwork.

The goal is not to assume that every medical bill is wrong. The goal is to make sure you understand what you are being charged for, what your insurance company says happened to the claim, what your provider says you owe, and what questions you need to ask before you decide what to do next.

AgeHelper can help make the paperwork less overwhelming by turning a confusing collection of medical bills, EOBs, claim documents, and letters into an organized list of questions and next steps.