Medical bill decoder: terms and a bill-checking routine

Medical bills and EOBs use words most people never learn. Here's what they mean, and an eight-step routine for checking any bill before you pay it.

The routine

1
Wait for the EOB from your insurer before paying.
2
Ask the provider for an itemized bill, with service dates and codes.
3
Check every line: right dates, services you received, no duplicates.
4
Compare what the bill says you owe with "your responsibility" on the EOB.
5
If they don't match, call the provider's billing office first, then your insurer.
6
Write down every call: date, name, what was said, reference number.
7
If the bill is correct but unaffordable, ask about financial assistance and payment plans.
8
If a claim was denied, read the reason and consider an appeal before the deadline.

The terms

Amount billed: What the provider charged before any insurance discounts.
Allowed amount: The price your plan agreed to pay for a covered service. Often far less than the amount billed.
Adjustment or discount: The difference between the billed and allowed amounts. In network, you usually don't owe it.
Deductible: What you pay for covered care before your plan starts sharing costs.
Copay: A fixed amount you pay for a service, like $30 for a visit.
Coinsurance: Your percentage share of the allowed amount after the deductible.
Out-of-pocket maximum: The most you pay for covered in-network care in a plan year.
EOB (Explanation of Benefits): Your insurer's statement of what was billed, allowed, paid and what you owe. Not a bill.
CPT or procedure code: A code describing the service. Wrong codes can mean wrong charges.
Facility fee: A charge for using a hospital or hospital-owned clinic, separate from the doctor's fee.
Balance billing: When an out-of-network provider bills you for the difference between their charge and what the plan paid. Limited in many cases by the No Surprises Act.
Prior authorization: Approval from your plan before certain care. Without it, a claim may be denied.
Good faith estimate: A cost estimate you can request before care if you're uninsured or paying yourself.
Financial assistance (charity care): A hospital program that reduces or forgives bills based on income.

General information, not medical, insurance or legal advice. Plans differ; check your plan documents. For surprise billing help, see CMS.gov/nosurprises.