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Why Did I Get a Big Surprise Medical Bill? What Should I Do?


First, DON'T PANIC!  Make sure what you got was really a medical bill, not an Explanation of Benefits (EOB).  When you went to the hospital or doctor, they kept track of what was done for you.  They usually don’t charge you immediately (other than perhaps collecting deductible) right? That’s because they actually don’t know how much it will cost.  Later on, someone from their billing office will turn what was done for you into BILLING CODES and create a CLAIM.  The system of codes and claims allow providers and payers to talk to each other in a common language regarding complex clinical procedures and services.


If you are uninsured, the hospital or doctor will send you the bill directly.  If you are insured, they must first send the CLAIM to the insurance company for it to be ADJUDICATED.  This basically means the insurance company will verify for accuracy of the claim, apply any discounts that they negotiated, and pay for the part of the claim that they are responsible for.  To summarize all this, your insurance company will send you an EXPLANATION OF BENEFITS (EOB).


The Explanation of Benefits is NOT a bill.  If you look closely, it will actually say “THIS IS NOT A BILL” or something similar.  It’s merely an explanation from your insurance company that they have received a bill from the hospital or doctor, and they are looking into your benefits and sorting out the payments.  For example, let’s say you went to the Emergency Room and it cost $10,000.  You have a deductible of $1000 and copay of 10%.  Your explanation of benefit will probably look something like a $10,000 charge, minus a plan payment of $8,100, and you owe of $1,000.  The patient responsibility is your deductible of $1,000, and 10% of the remaining $9,000.  


So why do I sometimes get these staggering amounts in these things that look like bills? Shouldn’t they have figured out what I owe before sending this to me?  The answer is that in an ideal world they should have figured out what you owe and only send you that, instead of possibly giving you sticker shock in an explanation of benefits.  But the U.S. healthcare system is extremely complex, and sometimes issues can occur. In the example above, maybe the hospital made a mistake in their claim to the insurance company, leading to them thinking you have no insurance.  Maybe the insurance company made a mistake in processing the claim.  Maybe several different insurance companies will pay for your claim and they are still sorting it out.  Most of the first EOBs are automatically generated.  If they haven’t figured out who should pay for your bills before the automated system send out the notice, then the system might think you have no insurance.  In that case you might see an explanation of benefits where you owe $10,000, or the hospital may send you a $10,000 bill. 


DON’T PANIC.  Figure out whether it’s really a bill or just an explanation of benefits.  If the letter you received state “THIS IS NOT A BILL”, then it’s not a bill, and they are still sorting it out.  If you have insurance at the time of service, these mistakes will be fixed.  


Ok, it’s a real medical bill.  What do I do now?


Follow these links depending on whether you are uninsured or insured.


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