Among the more than 600 new laws that took effect in Texas Sept. 1, at least two related specifically to price transparency for medical services.
One new law requires some freestanding emergency medical facilities to disclose the price of a test or vaccine to patients. The requirement came after complaints that some people received “exorbitant medical bills after obtaining a COVID-19 test,” according to the House Research Organization’s analysis for the bill.
The other codified into state law a national price transparency rule that took effect in January. According to the rule, hospitals across the country are required to provide pricing information about their services online. The information must be “publicly available, free of charge and presented in a consumer-friendly display,” according to the U.S. Centers for Medicare and Medicaid Services.
The state version of the rule ensures that transparency will continue in Texas if the national rule shifts or is repealed, according to the statement of intent for the bill.
But whether prices for medical services are transparent or not, a final bill can be complex and hefty. Here’s what we know about medical billing — how bills come to be, and how a person can navigate them once they arrive.
Where do bills come from?
The coding and billing process begins and ends with paperwork.
When a person interacts with the medical system, be it through the emergency room, a doctor’s office or some other care setting, the provider documents the visit. Those documents become part of the patient’s medical record and include information like the person’s name, address and diagnosis; medical history; and, depending on the service the person receives, pages detailing that service — labs, surgeries, pathology reports, etc.
These days, most medical records are electronic, so they’re sent to an online queue for a person called a medical coder to review. Medical coding is an act of translation — of converting diagnoses and services rendered into strings of numbers and, sometimes, letters.
Decoding medical codes
As medicine becomes more specialized, the number of codes required to explain services expands. Here are three types of codes:
Coders convert a patient’s diagnosis into an International Classification of Diseases – 10th revision – Clinical Modification, or ICD-10-CM, code: an alphanumeric string up to seven characters long. In 2015, the U.S. transitioned from ICD-9-CM to ICD-10-CM, which comprises nearly 70,000 codes.
If the patient received inpatient services, like a surgery that required them to stay in a hospital overnight, coders convert those services into ICD-10-PCS, or Procedure Coding System, codes. The ICD-10-PCS coding system comprises close to 90,000 codes.
If a patient receives an outpatient service like lab work or day surgery, coders will document those services as five-digit CPT, or Current Procedural Terminology, codes. The American Medical Association created this coding system, which contains more than 10,000 codes.
“I tell my students every time I start a class that, just as they’ve learned Spanish, French, whatever they learned in high school, medical terminology is a language in itself,” said Jean Thompson, who coordinates the medical coder program at Tarrant County College.
After the coders code, if patients have insurance, their insurance providers — be it Medicaid, Aetna, etc. — will receive the codes and assign a dollar amount to them, she said.
Those codes may or may not show up on a patient’s final bill. The average person doesn’t need to worry about them, according to Tamika Chambers, a financial navigator at Cancer Care Services in Fort Worth.
If someone is especially curious, however, they can search for a specific code through Codify, a project from AAPC, formerly known as the American Academy of Professional Coders. The codes may also come in handy if a person wants to compare the price of a service they received with the hospital’s listed price for that service.
Local hospital systems like Texas Health Resources, Cook Children’s and JPS Health Network offer similar cost-estimate tools for people who want to understand possible prices before scheduling certain procedures. People can search by CPT, or Current Procedural Terminology, codes or keywords.
These tools provide estimates only — actual costs may shift because of a person’s insurance, unforeseen complications in the procedure, etc., according to Texas Health Resources’ website.
“Most doctors should also give you a heads up (about what something costs),” Thompson said, “or their billing person in their office should.”
How do I navigate my bill?
When Chambers, with Cancer Care Services, first meets with someone to discuss their medical bills, she asks about their insurance — if they have it and what they know about it.
She wants them to understand the basics: terms like ‘deductible,’ whether their plan is a Health Maintenance Organization, or HMO, or Preferred Provider Organization, or PPO, if they’ve received care from an in-network provider or not.
If they don’t know the answers to these questions, she helps them set up an account with their insurance company online or, if they don’t have access to a computer or the internet, call the number on their insurance card and ask the company to send them their “summary of benefits,” the handbook for the plan and any other documents to help the person navigate.
When a person knows their own plan, they’re better able to self-advocate, she said.
After discussing insurance, Chambers moves on to the medical bill or bills. She first asks the patient to check the dates of service listed on the bill. Because the coding process can involve “human error,” she said, it’s important to verify the dates listed match the dates the patient received the services.
Next, she tells the patient to look for adjustments, or discounts, to the bill — either because the provider or hospital agreed not to charge something, or because the insurance company took care of it. If the bill lists no adjustments, she encourages the patient to call the provider or hospital and negotiate.
“This is where you’re going to make a lot of phone calls and you need to be very patient,” she said.
A hospital’s billing department is the first place to start, she said. A hospital bill usually includes the relevant number. She tells people to ask for the “billing supervisor” and, once that person answers the phone, ask them about the hospital’s payment options.
If a person doesn’t have insurance, or if the insurance won’t cover the full bill, they can ask the billing supervisor if the hospital offers “self-pay adjustments,” or discounts to people paying on their own.
Next, Chambers recommends people call the claims department at their insurance company. This department can help explain the codes and service descriptions listed on a bill, as well as why the company did or didn’t cover a specific service.
She doesn’t encourage her clients to try to understand the medical jargon on the bill themselves — “it’ll send you down a rabbit hole,” she said. But the insurance company can investigate to verify whether a person actually received the services listed on the bill.
If the insurance company has chosen not to cover a service, people can appeal the decision through the company’s internal review process or through an external party, according to healthcare.gov. Depending on the problem, people can also file a complaint with the Texas Department of Insurance, Chambers said.
Understanding and negotiating medical bills takes time, and Chambers has often seen her clients feel overwhelmed. To alleviate the burden, people can request a case manager from their insurance company or a financial counselor from a hospital to help them navigate.
People can also designate someone else — a spouse, parent, friend — to serve as their authorized representative, a person who can interact with the insurance company on their behalf.
“So if you’re sick and you’re in the hospital or anything, somebody else can handle this information for you,” she said.
Alexis Allison is the health reporter at the Fort Worth Report. Her position is supported by a grant from Texas Health Resources. Contact her by email or via Twitter. At the Fort Worth Report, news decisions are made independently of our board members and financial supporters. Read more about our editorial independence policy here.