Is a Denied Claim Your Financial Responsibility?

What this article covers

• What a denied claim means and what an explanation of benefits really is
• When you may owe money versus when you likely do not
• Special protections for Medicare and other plans that restrict balance billing
• A clear checklist to fix billing errors and appeal denials
• How an advocate helps, using the plain language and steps from the video script you provided

Quick answer

A denial notice or explanation of benefits is not a bill. You do not pay based on that notice. You only consider payment after you receive an actual bill from the provider and you verify that the amount matches your plan benefits and legal protections. Many denials are the result of coding mistakes, missing authorizations, out of network routing errors, or other fixable issues. When a denial is wrong, you can ask the insurer to correct or appeal it and you can ask the provider to correct the bill. Advocates do this work every day so you do not pay charges that are not your responsibility.

First things first

Explanation of benefits versus a bill

An explanation of benefits is a summary from your plan that shows the services submitted, the amount the plan allowed, what the plan paid, and what the provider may bill you. It is not a bill. A provider bill is a request for payment from the doctor, facility, lab, imaging center, or supplier. Your action starts only when there is a real bill.

What to do when both arrive

• Compare the explanation of benefits to the provider bill line by line
• Confirm service dates, service descriptions, codes, and amounts match
• If they do not match, call the provider first to correct the bill, then call the plan if needed

When you may be responsible

You may owe money if all the following are true

• The service is covered by your plan and was billed correctly
• The provider is in network or accepted your coverage, or you knowingly agreed to pay more
• Any required steps, such as prior authorization or referral, were completed
• The amount due is your standard cost sharing such as deductible, copay, or coinsurance
• The item or service is not excluded by your plan and is not limited by a frequency rule

Examples

• You used a covered service and your plan shows you owe your standard coinsurance
• Your plan applied part of the charge to an annual deductible and the rest to coinsurance
• You chose an out of network provider and your plan told you what your cost would be

When you are likely not responsible

You should pause and ask for help when any of the following apply

• The charge is higher than your plan’s allowed amount for in network care
• The provider is billing you for a difference between their charge and the plan’s allowed amount and you did not knowingly agree to this
• The plan denied the claim due to a fixable error such as a wrong patient name, wrong date, wrong code, or missing documentation
• The plan denied a covered service because prior authorization or a referral was not attached, but your medical record shows it was required and appropriate
• The provider failed to give a required advance notice for a service that might not be covered
• The provider sent a bill before the plan finished processing the claim
• The bill includes services you did not receive

Special protections for Medicare

Original Medicare and providers who accept assignment

If your doctor or supplier accepts assignment, they accept the Medicare approved amount as full payment for covered services. You owe only your deductible and coinsurance. They cannot charge beyond that. For doctors who do not accept assignment, there is a strict limiting charge above the approved amount in certain settings. If a covered service is denied because Medicare finds it not reasonable or not necessary in your case, the provider generally must give an Advance Beneficiary Notice before the service if they expect a denial. If that notice is required and not given, you are usually not responsible for the denied amount.

Medicare Advantage and Part D

Medicare Advantage and drug plans follow plan rules such as prior authorization, step therapy, and quantity limits. If the plan denies payment, you have a defined appeal path with several levels of review. For inpatient status or other urgent issues, fast appeal options exist. For drug plan denials, your prescriber can include clinical reasons that show medical necessity.

Coordination with other coverage

If you have other coverage such as an employer plan, retiree plan, or Medicaid, there is a coordination of benefits order that decides which pays first. If the primary plan denies in error or the provider billed the wrong plan, that can produce a denial that is not your fault. Correct the order and ask for reprocessing.

Surprise bills and balance billing

If you have an employer plan or individual market plan, federal surprise billing protections generally stop certain out of network charges in emergencies, at in network hospitals when you did not choose the out of network clinician, and for out of network air ambulance services. These laws limit what you can be charged and remove you from price disputes between the plan and provider. Programs such as Original Medicare and Medicaid have their own long standing rules that already restrict balance billing in different ways. If you receive a surprise bill, do not pay until you check whether these protections apply in your situation.

Step by step checklist to fix a denied claim or unexpected bill

1. Gather the paperwork
   • The provider bill or itemized statement
   • The explanation of benefits or Medicare Summary Notice
   • Your plan card and your plan summary such as Evidence of Coverage or Summary of Benefits
2. Confirm basics
   • Patient name, date of birth, insurance ID, and claim number
   • Dates of service, place of service, and provider
   • Codes for services or supplies
3. Check network and authorizations
   • Confirm the provider was in network or accepted assignment
   • Look for required prior authorization or referral and attach proof if it exists
4. Match amounts
   • Compare allowed amount, plan payment, and your share
   • Question any balance billing that exceeds your plan’s rules
5. Ask for corrections
   • Call the provider billing office to fix wrong codes or missing documents
   • Ask the plan to reprocess if the provider submits a corrected claim
6. Appeal if needed
   • Follow the appeal steps on your denial letter or Medicare notice
   • Ask your clinician for a supporting letter and relevant records
   • Keep copies of everything and note who you spoke with and when
7. Ask about financial help
   • If you still owe a valid balance, request a no interest payment plan or charity care if available

How an advocate helps you, based on the video script

• Your explanation of benefits or Medicare Summary Notice is not a bill. We say that clearly because that is where many people feel pressure. We slow things down so you do not pay before the facts are checked.
• When you get a bill from a provider, lab, hospital, imaging center, or equipment supplier, that is where we step in.
• We review your plan benefits, the provider bill, and the explanation of benefits side by side. We determine whether you truly owe anything under your benefits.
• If the charges are not your responsibility, we contact the provider, explain your benefits, and request a corrected bill or a zero balance.
• Sometimes computers send out balance bills by mistake when the system does not have the right rules. We compare the bill to your benefits, fix the routing, and make sure you are not paying something you do not owe.
• We do this calmly and persistently so you can focus on your health.

If you want a partner for calls, paperwork, and appeals, our team is glad to help: https://understoodcare.com/care-types/appointments

Frequently asked questions

The explanation of benefits says denied. Do I owe the amount listed as patient responsibility

No. An explanation of benefits is not a bill. Wait for the provider bill and verify the details. Then decide next steps.

The provider billed me the difference between their charge and my plan’s allowed amount

In many situations that difference is not allowed. Ask if surprise billing protections or Medicare rules apply. Ask the provider to rebill correctly.

The provider says I owe because authorization was missing

Ask the provider and plan to check whether authorization was actually required for that service and whether a referral or order is on file. If the service was urgent or emergent, different rules may apply. If the denial stands and your plan allows appeals, you can appeal and ask your clinician to submit medical necessity support.

I have Original Medicare and the provider says Medicare denied my service as not reasonable or not necessary

Ask whether you received an Advance Beneficiary Notice before the service. If the notice was required and not provided or it was filled out incorrectly, the provider usually cannot bill you for the denied amount. You can also appeal a Medicare denial.

I have a Medicare Advantage plan and my plan denied payment for a hospital stay

Plans have clear steps for appeals and time limits for fast reviews. Start with the plan’s reconsideration level and include your doctor’s letter.

Practical documentation tips

• Keep a simple folder with bills, explanations of benefits, notes of calls, and letters
• When you call, write down date, time, the person’s name, and what they said
• Ask for itemized bills and keep them with your records
• Save proof of delivery or fax confirmations for anything you send

When to call for help right away

• You received a large emergency room bill from an out of network clinician after a visit to an in network hospital
• You received a denial for a service your doctor says is medically necessary
• You have Medicare and a provider is trying to bill more than the allowed amount
• You cannot tell whether the bill or the explanation of benefits is correct

Schedule time with an advocate who can review your paperwork and make the calls with you: https://understoodcare.com/care-types/appointments

References

• Medicare Summary Notice is not a bill and shows what Medicare paid and the maximum you may owe. Medicare
• CMS guide to explanations of benefits explains that an explanation of benefits is not a bill and describes what it includes. CMS
• Sample explanation of benefits from CMS shows the not a bill language and layout. CMS
• CMS guide to reading a medical bill explains the difference between a bill and an explanation of benefits. CMS
• No Surprises Act pages describe protections against surprise bills for many employer and individual plans. CMS+1
• Overview of key protections clarifies where surprise billing protections apply and where they do not. CMS
• Training materials note that No Surprises Act requirements do not apply to beneficiaries in Medicare and certain other federal programs because those programs have their own protections. CMS+1
• Medicare page on providers that accept Medicare explains assignment and the limiting charge rules. Medicare
• Medicare benefits booklet explains limiting charge details and where it applies. Medicare
• Durable medical equipment page explains that participating suppliers must accept assignment and you owe only deductible and coinsurance for the approved amount. Medicare
• Medicare Advance Beneficiary Notice resources explain when notice is required and that failure to issue a proper notice generally shifts liability away from the patient. CMS+2CMS+2
• Coordination of benefits page explains primary and secondary payer rules. Medicare
• Appeals overview pages describe how to appeal Medicare and other plan denials and the steps involved, including internal and external review. MedicareCMSHealthCare.gov
• Original Medicare appeals page describes how to appeal using your Medicare notice and where to send forms. Medicare

This content is educational and is not a substitute for medical advice. Always consult your healthcare provider for personalized care.