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MintLife Blog > Financial IQ > Medical Bills 101: Understanding Your Medical Bills

Medical Bills 101: Understanding Your Medical Bills

Financial IQ

When you look at a medical bill, it’s very tempting to skip straight to the bold number that tells you what you owe and— if it’s not too outrageous—just write the check.

Well, there’s no need to become an expert at interpreting your bills, but it’s been estimated that 80% of medical bills have errors, and knowing the basics can help you spot them. Every bill looks a bit different, but here is a crash course on the most common medical bill lingo (and why it matters to you).

Date of Service (or sometimes, the Date of Admission)

This is the date your medical appointment took place. You might see this date listed repeatedly for different parts of the service, broken out by billing codes (for example, the anesthesiology and the surgeon), or you may also see dates following the first day you had the service.  This may happen if some related work was done following your visit, such as a lab test or having a radiologist read your images. Neither of these are necessarily errors, but you should check to make sure the correct date is actually listed.

CPT Codes

Current Procedural Terminology (CPT) codes are five-digit numbers that correspond to every medical procedure a physician might provide during your visit. They are used by insurers to determine the rate of reimbursement for your care. Medicare has a similar set of codes (HCPCS codes) that work the same way but correspond to rates specific to Medicare. Reviewing CPT codes can help you determine whether you were billed correctly.

ICD Codes

International Statistical Classifications of Diseases (ICD) codes are more complex, alpha-numeric codes that correspond to diagnoses and conditions. Unlike CPT codes, they are not used for billing, so it’s less likely you’ll see them on a bill.


What is the best way to think about this number? Consider it the sticker price for the service you received and hardly anyone ever pays the full sticker price. Various discounts and adjustment are applied to the charge in order to arrive at the amount that you owe.

Adjustment (or Contractual Adjustment)

This is the discounted price that your insurance plan and your provider have agreed upon. Any amount of the deductible or coinsurance that you’ve already paid is also factored in. So, if you paid your $20 co-pay at the counter before you left the doctor’s office, this should be adjusted for. Adjustments might also show the discount you get for going to a network provider.

Balance (or Patient Responsibility)

This is the final amount that you owe. The balance should include any credits you have from over-payments, as well as late fees and previous bills that get carried over.

Finally, don’t mix bills up with Explanation of Benefits (EoBs). These statements look similar, but don’t require payment (which is why they are usually labeled NOT A BILL). They serve as a heads-up from your insurance company to inform you that a claim has been filed and how much you can expect them to pay.

Reviewing your medical bills may not be the most fun you’ve had in a day, but it is definitely worth it. Finding and fixing errors can save you hundreds, if not thousands, of dollars.  Don’t worry if manual reviews aren’t your thing, try out a service like Simplee, which does the interpretation for you.

Tomer Shoval is the CEO and Co-Founder of Simplee, a free online personal health care expense management tool. Connect with him on twitterfacebook or email.


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