Plain-English definitions

Medical bills, in plain English

Medical bills use codes and legal terms that can be hard to follow — sometimes on purpose. Here are the words you'll see on a bill, explained in plain English.

CPT code

The five-digit code that tells insurance what was done.

Current Procedural Terminology — a five-digit number assigned to each medical service. Every line item on a proper itemized bill should have one. If your bill just says "ER visit — $4,200" with no code, ask for the codes: you have the legal right to them under HIPAA.

HCPCS code

Like CPT, but for supplies, drugs, and ambulance rides.

Healthcare Common Procedure Coding System. Used for anything that isn't a doctor's procedure — a wheelchair, a specific medication, an ambulance trip. You should see these on itemized bills alongside CPT codes.

Upcoding

Charging for a more expensive service than you received.

One of the most common medical-bill issues — and the costliest when it happens. ER visits are a frequent example: Level 1 is a simple cut, Level 5 is a life-threatening emergency. A Level 5 charge on a documented Level 3 visit inflates the bill by thousands. Auditors compare the complexity of what was documented to the code billed.

Unbundling

Splitting one treatment into many small charges.

Some treatments are supposed to be billed as one bundled code. "Unbundling" breaks them apart — charging separately for things that were already included. Surgery is the most common target. If you see what looks like a long list of tiny steps that should have been one procedure, suspect unbundling.

Phantom charge

A charge for something you didn't actually receive.

An outright billing error: a medication you were never given, a supply that stayed sealed, a test the doctor mentioned but never ordered. These are often caught when patients read their itemized bill carefully.

Chargemaster

The hospital's official "list price" — almost nobody pays it.

Hospitals keep a master list of prices for every service. These prices are typically much higher than what insurance actually pays — often 5–10× the negotiated commercial rate and 10–100× the Medicare rate. Uninsured patients who ask are often offered a 40–60% prompt-pay discount, though policies vary by hospital.

Medicare rate

The price the government sets for what a service really costs.

What Medicare pays hospitals for a given CPT code. Widely used in billing-dispute research as the fair-market anchor. Commercial insurance typically pays 1.5 to 2.5 times the Medicare rate. Chargemaster prices can be 10 times the Medicare rate or more — and that gap is where most dispute leverage lives.

EOB

The "Explanation of Benefits" your insurance mails you.

Explanation of Benefits. A document your insurance company sends after a claim that shows: what was billed, what they paid, what they denied, and what they say you owe. The EOB is different from the hospital's bill — if the numbers don't match, that's often a sign of a billing error or coding discrepancy worth disputing.

Itemized bill

The full line-by-line list of every charge.

Most hospitals send a summary bill by default — "Emergency Department services: $8,400." You are entitled to request the itemized version under HIPAA (45 CFR §164.524), which must include every CPT/HCPCS code, the quantity, and the price. It's good practice to request the itemized bill before paying, since many issues only become visible in the itemized version.

No Surprises Act

The federal law that limits surprise out-of-network bills.

Effective 2022. Limits what you can be charged for emergency services, or for out-of-network providers working at an in-network facility (anesthesiologists, radiologists, etc.) — you can only be billed in-network cost-sharing amounts. If you received a surprise bill, the No Surprises Act is your primary legal protection.

§501(r) / Charity care

Nonprofit hospitals must help if you can't pay.

The Affordable Care Act (26 CFR §1.501(r)-4) requires every §501(c)(3) nonprofit hospital to publish a Financial Assistance Policy (FAP) and apply it to any patient who qualifies. Most hospitals in the U.S. are nonprofits. Very few advertise this. If you have a large bill from a nonprofit hospital and modest income, apply — hospitals regularly write off 50–100% of bills for qualifying patients.

FDCPA

The federal law that sets rules for debt collectors.

Fair Debt Collection Practices Act (15 USC §1692). Applies once a bill has been turned over to a third-party collection agency. You have 30 days from first contact to demand "debt validation" in writing — until the collector validates, they cannot continue collection activity. This is separate from disputing the original bill with the hospital.

EMTALA

Emergency rooms must treat you even if you can't pay.

Emergency Medical Treatment and Labor Act (42 USC §1395dd). Any hospital that accepts Medicare must screen and stabilize anyone with an emergency — regardless of insurance or ability to pay. Useful as context when reviewing ER bills, since EMTALA-protected encounters are a common subject of patient negotiation and assistance applications.

Dispute letter

A formal letter asking the hospital to review specific charges.

A written, numbered request that names each disputed charge, cites the CPT code, the Medicare benchmark, the fair-market amount, and a specific requested adjustment. Best practice is certified mail with return receipt — that creates a record of delivery. Many hospitals are obligated by their own policies or by HIPAA §164.524 to respond in around 30 days, though outcomes vary case by case.

Don't see a word on your bill? Email support@medibillsaver.com and we'll add it.