top of page

Decoding the Doctor’s Bill

Before I get into today’s post, I would like say a huge THANK YOU to the Plutus Foundation and to YOU for nominating this blog and supporting it.  When I found out that The Frugal Physician was a Finalist for The Best New Personal Finance Blog Award at the 10th Annual Plutus Awards, I was dumbfounded.  I am floored by this honor when I know there are so many well deserving blogs out there.  So, thank you.  I hope I can continue to provide you value here on The Frugal Physician. 

Now, back to our regularly scheduled programming…

Decoding the Doctor's Bill

You’re hurting and scared.  Something is wrong with your body but you don’t know what.  You googled it and the internet says it’s probably cancer (but it’s probably not!).  Frantically, you go to your doctor to get treatment. There, hopefully, you find a knowledgeable answer and an effective remedy to your ailment.  

Then, you go home… and wait for your mailbox to explode with bills. 

We all know that America has a mind-blowingly convoluted and frustrating medical system.  Healthcare expenses remain the scariest blackbox in any budget. What catastrophe will come?  How much will it cost? How will you navigate the system?

So, here I am, the Frugal Physician and a primary care doc, and I feel beholden to lend some insight into this crazy system.  Believe me, I have as much trouble getting care as the next person, even though I am a doctor. But, being that I’m behind the scenes, I can at least provide some basic facts about what is happening with your medical bills.

Today, I’ll cover what happens when you have private health insurance (not Medicare, Medicaid, Tricare, direct care, concierge care or a health sharing plan- those work a little differently). 

Medical Billing with Private Health Insurance

When you go to see your doctor, first, you present your insurance card.  Your commercial health insurance was built as a risk mitigation strategy.  Instead of paying for healthcare out of pocket, insurance was built to collect your money monthly and then pay money when you need it for healthcare.  

Unfortunately, insurance has found many, many ways to “share costs” with you as well. So, you pay them monthly. And then you pay a “co-pay” every time you go to the doctor.  And then, finally, they pay… after you’ve met your deductible. 

Why You Show Your Insurance Card

Anyway, so your insurance card is presented.  Now, if your doctor is in the insurance’s network, your doctor’s office has a negotiated rate with your insurance company for the services they provide.  Just to keep it nice and complex, the office has a different negotiated rate with each company for each particular service. 

I’m going to let you in on a secret- there is a good chance your doctor has no idea how much you are being billed. After you are seen, your doctor bills a generic 5 digit billing code that is based on the complexity of the visit and the services provided.  After that, a medical billing professional matches up the code with the negotiated price the office agreed upon with your particular insurance company.

Now, your insurance company may or may not pay that price.  If you haven’t met your deductible, then the bill will be sent to you to pay.  If you have met your deductible, the insurance will pay the cost.  Your insurance will break their calculations down for you in an “Explanation of Benefits.”  

Then, you’ll get the actual bill from your doctor’s office that you will have to pay.  

Now, once you’ve settled your bill with your doctor’s office, you may still get bills from the lab, radiology, the radiologist reading the study, specialist fees, pharmacy fees… the list goes on and on.  It is no wonder so many people do not seek care. I will be the first to admit I put off my care as much as possible because of the headache of medical bills (and I’m not proud of it.)

But, stay tuned… next week, I’ll show you some ways you can get the most out of your doctor’s visit and private health insurance.  

Much Love,

Dr. D

Standard Disclaimer: Not meant as individualized financial or health advice.  Photoes from            



bottom of page