When you visit your doctor, their billing department determines which CPT (Current Procedural Terminology) code to list your services under. Your bill is then electronically filed with your medical insurance carrier.

Your carrier’s claims software determines if your CPT code is a covered benefit under your plan.

Your carrier will then discount or determine the amount to pay based on:

• The average price doctors in your area charge for services, called the Usual and Customary (U&C) price.
• The Medicare pay rate

The insurance company pays their portion of the bill directly to your health care provider.

You’ll receive an Explanation of Benefits (EOB) in the mail, which lists how much of the bill your insurance company paid on your behalf, and how much you still owe. This is not a bill. Wait until you receive a bill from your provider and be sure it corresponds with the amount your EOB says you owe your doctor.

Depending upon your deductible level, you may need to make a copay and out-of-pocket payment. Click here to understand how a bill becomes a claim

What this means for YOU:

Since CPT (Current Procedural Terminology) codes are the basis of all insurance billing, it would be wise to become familiar with these. The codes are created by the The American Medical Association and information about them is at www.ama-assn.org. At the very least, contact your insurance company if you have any questions about CPT codes when you receive your EOB or the bill from your doctor.