Advertising
Advertising

How to Make Sense of Your Medical Bills in 5 Steps

How to Make Sense of Your Medical Bills in 5 Steps

According to a U.S. News and World Report article, about eight in 10 medical bills contain some sort of error. That’s crazy high, which also makes it pretty scary, especially since every error on your medical bill results in you dishing out more dough.

With unfamiliar medical codes and terms, however, it’s difficult for you to know exactly what you’re paying for. But, you’re not only the patient, you are also the customer. Therefore, you have the right to scrutinize every medical bill that you receive and demand an explanation on any charge that looks unfamiliar, too high, or downright suspicious.

In this article, we will give you an overview on what to look for on your bill(s) and who to call if you have issues regarding anything. Get out your highlighter and get ready to mark anything that you have a question about. Keep a notebook handy to write down your questions and notes.

Advertising

The Basics

When you begin your medical bill breakdown, it’s best if you begin with what you know: your name, address, insurance information, and admittance and discharge dates.[1] If your insurance information is incorrectly inputted, then you will, for sure, be charged more than you should.

Units

If you are given Tylenol in the hospital to help with your pain, you better believe that you will be charged per capsule. These per-item charges can be found under the “Units” section on your bill.[2] If you are being charged for 500 capsules of Tylenol, then highlight this as an item. There’s no way you took that many capsules during your stay. Double check the number of units per line item to make sure you are not being overcharged for items used during your stay.

Medical Codes

Hospitals and doctor’s offices use codes to identify services rendered.[3] You are charged based on the codes assigned. There are many different types of codes, but Current Procedural Terminology (CPT) Codes and International Classification of Diseases (ICD) codes are the most well-known.[4]

Advertising

CPT codes are ubiquitous in every U.S. doctor’s office and hospital. These are usually listed as service charges. ICD codes accompany CPT codes to assure that the diagnoses fit the billed procedure, prescription, etc.

We’re not saying that you should complete medical billing and coding training online, but you do have the right to contact the billing office of your healthcare provider and have every single code explained to you. Don’t be embarrassed, you’re not the only one requesting this service.

Service Description

Read. Every. Single. Thing. Yes, the service description section should be plentifully packed with each service and item you are being charged for, even for something like Basic Life Support (BLS). In this section, there will be a lot of abbreviations. If you don’t own a medical dictionary, then we suggest using good ole Google.

Advertising

Once you have made sense of the abbreviations, get out that highlighter and pad of paper and jot down anything that you don’t remember receiving, or any charges that seem bogus.

Charges

There may come a time where you receive a medical bill with just a summary of charges and the amount owed.[5] This is unacceptable and you need to call into your doctor’s office or the hospital billing department and request a full itemized bill, complete with all codes, units, service descriptions, and individual charges. Once you receive an itemized bill, you should go down the list and look at all of the charges. If some of the charges seem too high, highlight them.

Never ever think that if your hospital or doctor bill says that it is, then it must be so. Remember, it doesn’t matter if your bill is 10 pages long (heaven forbid) — you need to go through each page, line by line, highlighter in hand, and check that everything is correct. You will pay for any error that you don’t catch. So, it’s up to you to be vigilant.

Advertising

If you have any questions at all, make sure that you contact the health provider who sent you the bill. You can also contact your insurance company as well. They will be able to help with medical coding, as well as help you understand your patient pay portion of the bill.

Featured photo credit: Pixabay via pixabay.com

Reference

[1] https://www.nerdwallet.com/blog/health/how-to-read-your-medical-bill/
[2] http://www.medicalbillingandcoding.org/health-insurance-guide/understanding-medical-bills/
[3] http://vitals.lifehacker.com/how-to-navigate-the-confusing-and-expensive-world-of-me-1765507579
[4] http://www.aarp.org/health/health-care-reform/info-03-2011/how_to_read_your_medical_bill_cpt_codes.html
[5] http://health.usnews.com/health-news/patient-advice/articles/2014/07/15/infographic-how-to-read-your-hospital-bill

More by this author

smartphone apps 15 Apps Everyone Should Have In the Phone How to Make Sense of Your Medical Bills in 5 Steps 6 Career Opportunities that Don’t Require a College Degree 4 Ways Hospitals Can Attract and Retain Talent in a Competitive Industry How Millennials Are Doing College Wrong

Trending in Money

1 The Average Retirement Savings and How to Save Wisely 2 How to Invest for Retirement (The Smart and Stress-Free Way) 3 How to Nix Your Credit Card Debt in Less Than 3 Years 4 Top 5 Spending Tracker Apps to Manage Your Budget Smart in 2019 5 How to Use Credit Cards While Staying Out of Debt

Read Next

Advertising
Advertising
Advertising

Last Updated on June 6, 2019

The Average Retirement Savings and How to Save Wisely

The Average Retirement Savings and How to Save Wisely

Are you on track for retirement?

If not, don’t worry, I’m not sure either. I save each month and hope for the best.

Fortunately, I’m at an age where most people don’t save so I’m ahead of the curve.

But, what if you aren’t in your 20s? What if you’re near retirement and are looking to gauge where you stand?

If so, keep reading. Here’s how to prepare for retirement and save wisely during the process.

What Does the Average American Have Saved for Retirement?

Saving for retirement is tricky.

Tell someone straight out of college to save $10k a year for retirement and it’ll be next to impossible.

Make the same request to someone decades older and they’d be more likely to be able to save this amount. But, a 20-year old college student can be “financially ahead” of someone saving more than them. Why?

Age matters in your financial journey. The younger you are, the more time you have to save and put compound interest to work. As you get older and have more saving power, you’d have less time to put compound interest to work.

Here are the average savings Americans hold by age bracket:

20’s – $16,000

During this stage, most people are paying loans and moving up the corporate ladder. Your best bet during this stage is to focus on eliminating debt and increasing your income. Don’t focus only on getting a high-paying job neither.

Advertising

Instead, focus on learning via Podcasts, reading books, and taking specialized courses. Doing this will make you more valuable and give you more career options.

30’s – $45,000

At this stage, you’ve hopefully escaped your entry-level salary and work at a career you enjoy. Your earning power has increased but you now have more obligations. For example, marriage, kids, and a mortgage.

Set a plan to pay off all your debt and focus on eliminating unnecessary expenses. Leverage financial tools like Personal Capital to ensure you’re on track for retirement.

40’s – $63,000

This is the stage where you’re at the prime of your career. Top financial institutions recommend you have at least 2 to 4 times your salary saved up. If you’re falling behind, start maxing out your 401K and Roth IRA accounts.

50’s – $115,000

During your fifties, you’re close to retirement but still, have time to save. You may be helping your kids pay college tuition and other expenses. Since you’re at the peak of your earning power, max out all your retirement accounts.

60’s – $172,000

By this point, you should have about eight times your salary saved up. If not, you’ll depend primarily on social security benefits averaging $1400 per month. Max out all your retirement options as much as possible before retiring.

Ways to Save Money on a Tight Budget

The sad reality is that most Americans aren’t saving enough for retirement.

Even high-earning power isn’t enough to secure one’s financial future. You need to have the discipline to save for retirement while time is in your favor. Don’t wait for you to have a high salary to save, start with having a small budget.

First, get a clear picture of where you stand. Write down a list of “needs” and “wants.” For example, Netflix and Amazon Prime are “wants” and a “cell-phone” is a need.

Use tools like Personal Capital to analyze your spending patterns. Personal Capital allows you to add all your financial data in one place–making it a powerful option to gauge where you stand.

Once you know all your expenses, organize them from highest to lowest expense. When you can’t cut more expenses, call your service providers to negotiate a lower price. If you’re not good at negotiating, use services like Trimm to lower your monthly expenses.

Advertising

How to Save Money Each Month

By this point, you know the average amount of money you should have saved for retirement based on your age.

But, breaking this down into monthly goals can be challenging. Here are some rule of thumbs to follow:

Aim to contribute 10%–15% of your salary each paycheck. Review your progress each week.

Why so often? The reality is that life gets in our way and you will have many financial setbacks. Your goal isn’t to be perfect but to get back on track instead.

Reviewing your finances weekly lets you know where you stand with your retirement. This doesn’t have to be a long process either. All it takes is login in Personal Capital to view your net worth and check how much you have saved for retirement.

Turn saving into a game and aim to save more each month. It will get challenging but you’ll get creative and find more ways to save.

Top Money Saving Challenge Tips

To prepare for your financial future and not be another statistic you need to be different.

How?

By adopting new habits that’ll help you become a saving machine. Here are some ways you can save more:

Automatically Contribute Towards Retirement

If you’re working for a company, you can automatically contribute towards your 401k. If you’re not currently contributing more than 10%, make this your goal. Contribute 1% more today and automatically increase this amount a year from now.

Odds are that you’re not going to be negatively affected by contributing 1% more. Many times we spend our money on things we don’t need. Contributing more towards retirement is a great way to secure your financial future.

Advertising

Use the Right Tools to Know Where You Stand

Once you’re contributing more towards your retirement accounts, gauge your progress. Make use of finance tracking apps to help you view the big picture of your retirement.

When I’d first signed up for the app Personal Capital, I didn’t know I had a negative net worth. Despite saving thousands of dollars, my debt brought my net worth to the negative. Knowing this motivated me to save more and spend less.

Now, I have a positive net worth. But, it was because I was able to view the big picture using the app. Find out what your net worth is using a finance tracking app and you may surprise yourself.

Bring in Experts to View Your Blind Spots

If you have too little or too much money saved, you should consider hiring financial experts.

Why?

You may need someone to hold you accountable to help you reach your financial goals. Or, you may need help managing your money as effective as possible.

Regardless of the reason, getting help may help improve your financial situation.

Before you hire an expert, find out which areas you need help the most. For example, if you’re constantly overspending, find a debt counselor. If you’re struggling with choosing the best investment options, hire a financial advisor.

Speed up Your Retirement Contribution

After learning how to manage your money well, the next best thing is to earn a higher income.

You’re capped at how much you can save but not much you can earn. Even if your employer isn’t giving you a promotion, you can still take charge of your financial future. How?

By starting a side-business.

Advertising

This will be something you’d work on after you’ve finished your day job. Once you start earning income from your side-business, you’ll be financially better off.

The best part is the more work you put into your side-business,[1] the more potential it has to earn more money.

So start a side-business in an area you’re familiar with. For example, if you enjoy writing, do freelance writing for small e-commerce businesses.

Once you’re earning a higher income, you can contribute more towards your retirement. Don’t wait for the right opportunity to secure your financial future, create one.

Reach Financial Freedom with Confidence

What if you were able to retire tomorrow with no problem, all because you’d have enough money saved up and little to no debt left to pay off? How would you feel?

My guess is that you’d feel happy and relieved.

Most Americans are falling behind their retirement goals for many reasons. They’re not prepared, they carry bad money-habits and are thinking short-term.

For you to retire successfully, you need to work backward and adopt better habits. Contribute more towards your 401K and focus on growing your income.

If you do, you’ll save money and pay debt faster.

Don’t beat yourself up if you’re behind your retirement goals. Take the first step today towards a brighter financial future. Isn’t retirement worth the hard work and sacrifice to be at peace?

Featured photo credit: Huy Phan via unsplash.com

Reference

Read Next