Billing 101
Four lessons that decode the entire medical billing system — from the CPT codes that describe your care, to the insurance forms that determine what you owe. Start here, save money.
Basics of Coding
CPT codes (Current Procedural Terminology) describe exactly what service or procedure was performed during your visit. Every code represents a specific dollar amount to your insurance company — and the wrong code means the wrong bill.
Labs and clinics choose the CPT codes they submit — your doctor may not be directly involved in this process. That's where errors creep in.
Even when a doctor is directly involved in selecting CPT codes, they may not know which code is most accurate. Many clinicians are focused on patient care and have minimal billing experience. In most practices, it is the billing department — not the clinician — that assigns codes to a claim.
The people who work in billing departments typically do not have a medical background like a doctor or a nurse, which means they are making coding decisions without firsthand knowledge of what occurred during your visit. This disconnect between clinical care and billing is one of the most common sources of errors on medical claims.
ICD-10 codes work alongside CPT codes — they describe your diagnosis. If the ICD-10 diagnosis code doesn't support medical necessity for the CPT procedure code, your insurance may deny the entire claim.
Tip: Compare the CPT codes listed on your bill to the codes on your Explanation of Benefits (EOB). If they don't match, the interactive tool can help you figure out who to contact.
Tip: Insurance companies publish their coverage policies online. Look up your insurer's policy to see which CPT codes they cover — and which ones require prior authorization.
Be aware of fraud, waste, and abuse. Not all billing errors are accidental. As you review your bills and EOBs, it helps to know that billing problems can fall into three categories: fraud (intentional false billing — such as charging for a service never provided), waste (unnecessary services or inefficient practices that inflate costs), and abuse (improper billing practices that result in excess charges, even without intent to deceive). Upcoding — billing for a more complex service than was performed — is one example that can cross into any of these categories. If something on your bill doesn't look right, it is always worth investigating. See the Glossary for full definitions, and the Helpful Links section for where to report suspected fraud.
Example
If 99214 was billed instead of 99213, the charge can be significantly higher. This is called "upcoding" — one of the most common billing errors.
Clinic & Lab Billing
When you visit a clinic or get lab work done, the provider submits a claim to your insurance using CPT and ICD-10 codes. Those codes are paired with clinical notes that explain why the service was necessary.
If those notes are missing, vague, or don't support the codes submitted, insurance has a reason to deny the claim — and you get the bill instead.
Some services require a prior authorization before they can be performed. A prior authorization — sometimes called a prior auth or pre-auth — is an approval from your insurance company confirming that it considers the service medically necessary and agrees to cover it under your plan.
It is important to understand that a prior authorization is not the same as a claim. A prior auth happens before the service takes place; a claim is submitted after. Getting a prior authorization approved does not guarantee payment — insurance can still review and deny the actual claim once it is submitted. However, not getting a required prior auth almost always results in a denial.
If your doctor recommends a procedure, test, or specialist referral, always ask whether a prior authorization is required by your plan before the service is performed.
Tip: If insurance requests documentation and your claim is on hold, contact your doctor's office immediately. They need to submit the supporting notes — you usually can't do this yourself.
Watch out: Lab and imaging facilities are often separate billing entities. Always verify that your lab is in-network — being in the same building doesn't make it in-network.
Tip: Always wait for your EOB from insurance before paying a clinic or lab bill. The EOB will show exactly what you actually owe — it may be different from the amount on the bill.
Insurance Claims
When your provider submits a claim, insurance runs it through a multi-step review process. Each step is a gate — and a potential point of error that can result in a denial or underpayment.
Understanding what insurance is checking at each step helps you know exactly where to look when something goes wrong.
Tip: If information is missing, you might get a hold letter before a formal denial. Don't wait — act immediately on a hold letter to prevent it from becoming a denial.
Tip — The Three-Way Call: If you find yourself going back and forth between your insurance company and the clinic's billing department without resolution, you can ask the insurance customer service representative to call the billing department at the clinic with you still on the line. This puts both parties in direct communication with each other — and with you as a witness — which can cut through miscommunication and move things toward a resolution much faster than relaying information between them yourself.
What Is an Insurance Network?
An insurance network is a list of providers who have a contract with your insurance company. In-network providers have agreed on set rates — which usually means lower costs for you. Out-of-network providers can bill you at much higher rates, and insurance may pay little or nothing.
Your provider's claim is received and logged. Insurance assigns a claim number — save this if you need to follow up.
Insurance verifies your plan was active on the date of service and confirms the provider is in your network.
Insurance checks whether the service was medically necessary based on their published clinical policies.
CPT and ICD-10 codes are checked for accuracy and compatibility — mismatches trigger denials.
Approved, denied, or placed on hold pending more information. You receive an EOB either way.
Understanding Forms
The paper trail of medical billing can feel overwhelming — but each document has a specific role. Once you know what you're looking at, you know exactly what to do next.
The most important rule: an EOB is not a bill. It's a statement from your insurer showing what they processed. Never pay a bill before receiving and reviewing your EOB.
Tip: Think of your EOB as a treasure map — it shows you exactly what insurance paid, what adjustments were made, and what you actually owe. Use it to verify every bill you receive.
Critical: Never pay a balance due on a provider bill before your EOB arrives and you've verified the amounts match.
Explanation of Benefits — from your insurer, not a bill
From your clinic or provider — compare to EOB first
Separate from doctor's bill — verify network status
You have the right to appeal — many are reversed
Act immediately — a hold can become a denial
Still verify amounts — approvals can contain errors
Ready to Navigate
The interactive navigator will walk you through exactly what to do based on the document you received.