UNDERSTANDING THE FOUNDATION OF MEDICAL BILLS

CMS 1500 CLAIM FORM

This form is the form used by “Professional” provider such as Doctors, Therapists, Labs, Supply sources, etc. Essentially, it is used to file claims for any “non-facility” medical services. (See the UB-04 for “facility” bills)

More often than not, a patient does not see nor is provided this form, although it contains the very specific information that is used by insurance to make payment to medical providers.

UB-04 Claim Form

The UB-04 (Uniform Billing Form and also known as the CMS Form 1450) is a billing form used by “facilities” to submit claims. Facilities may be Inpatient Hosptials, Nursing or Rehabilitation Facilities, and other “institutions”. A rule of thumb is that if the patient is confined, services will be billed with this form. Some institutional services that are “Outpatient” in ature such as Emergency Department, Hospital Clinic, and others may also be billed using this form.

BILLING STATEMENT

Shown below, this is the “bill” a patient typically receives. Unlike the standard forms (1500 and UB-04) these may have infinite designs and appearance and the details provided will vary from service provider to service provider. Information present on a statement may vary even with each statement generated by the same provider. For example, if “itemized” information for a particular service is provided, it may only be provided once on the first statement with subsequent statements simply providing a “Balance Forward” or “Previous Balance” entry as well as any payments or adjustments.

It is a very rare exception for these “Statements” to provide to the patient the information that insurance carriers truly use to make payment. And, this information may vary widely depending on a number of factors including the type of service (Inpatient or Outpatient as well as “Professional Provider” or “Facility”)

You will note in the statement above there are lines of “itemized” descriptions and charges. Some may be recognizable or easily inferred while others may not be decipherable by someone not familiar with medical service terminology. It is important to note that insurance carriers do not reference these written descriptions to make payment. Insurance carriers make payment for specific “codes” that represent the the associated descriptions. For example, the first 5 lines of charges on the above statement are for lab tests and the associated code would start with an 8 (8XXXX as most, if not all, Laboratory Services fall in a code category that begins with 8 ). The written description for the code is may also be uniquely phrased on a statement. For example, the item listed as “1 CT ABO PELVIS W/CON” is for a “CtT Scan” and the formal description for that particular exam/service item is “Computed tomography, abdomen and pelvis; without contrast material in one or both body regions, followed by contrast material(s) and further sections in one or both body regions” (The codes for Radiological related services begin with a 7 or 7XXXX and it should be noted that this is not provided to the patient in the billing)

The hospital where these services were rendered provides access to their “Price Guide” and for illustration purposes this may viewed for this particular hospital at PRICE GUIDE

In addition, this particluar hospital also provides a link to an informational guide by an industry organization at

Understanding Healthcare Prices: A Consumer Guide

On a third party web site, the same hospital is listed with a cost estimation for a categorically similar CT Scan at a fee from $12,000 to $33,000 less than billed on the statement above. See HERE

CONFUSING?

Does It Seem Like Trickery or Deceit?

The processes in the “business” of healthcare are many and complex. And to a consumer it is not only overwhelming but may appear ….well …. unscrupulous.

It is important to understand the processes before reaching a conclusion on the fairness of the industry.

Plese feel free to take advantage of the additional in depth resources to gain more comprehensive understanding to better navigate the healthcare industry.

It is important to underscore some essential realities before reaching a condemnation of medical provider as a whole.

1) A great deal of time, effort, accomplishment, and yes money is required for Medical Practitioners to become practitioners such as Medical Doctors, Therapists, Nurses, etc. And also carry great responsibility

2) Certain healthcare resources such as Hospitals including Emergency Departments must remain fully staffed, equipeed, and operational 24 hours a day – 7 days a week – 365 days a year ….. with adequate resources to meet an infinite realm of possible medical scenarios

3) Medical Equipment, Maintenance, Calibration, Technicians, and more to be readily available and effective is a significant investment

4) In some cases, Federal Law requires that medical facilities treat patients without regard to ability to pay and these costs must be recovered in the charges for services

 

In addtion, healthcare is not intrinsically different than so many other businesses. If one has the craving for a cheeseburger, there are nearly limitless options to purchase a cheeseburger. There is no universal price for a cheeseburger, and a wide range of factors may explain why a cheeseburger may be available for less than a dollar from some sources and may cost as much as fity dollares or more from other sources. From size and quality to sales volume and overhead there are very few products and services that have a single pricing standard or forumula. Healthcare is no different.

That being said, navigating the healthcare industry and the costs associated with it can be overwhelming and even devastating. The best defense is for consumers (patients) to be well informed and understand how to meet the challenges.

This is just the tip of this iceberg

Before moving on a bit of humor to keep things in perspective

Viewer Discretion Is Advised

This video contains language that may not be suited for all audiences