"In healthcare, clarity is not optional—it is the
very foundation of trust." — Dr. Atul Gawande
Last year, a friend of mine received a hospital bill after
what seemed like a routine outpatient visit. He expected a copay of $40.
Instead, the bill showed charges of over $1,200. He stared at the EOB
(Explanation of Benefits) and called me in a panic.
The problem wasn’t the number itself—it was the language.
Terms like deductible, coinsurance, out-of-pocket maximum, and prior
authorization read like a foreign language. He asked the same question so
many patients ask: “Why can’t they just say what this means in plain
English?”
This story isn’t unique. Studies show 56% of Americans
struggle to understand their medical bills (KFF Health Tracking Poll,
2025). And it’s not just patients. New staff in medical offices often need
months of training to confidently explain billing terminology.
So let’s break the cycle. This article is about demystifying
medical billing terms, but also about questioning why the system has
allowed jargon to block clarity for so long. Along the way, I’ll share expert
opinions, practical tips, and even failures from real practices that
struggled until they changed how they communicated.
Why This Matters Right Now
Medical billing isn’t just about reimbursement—it’s about trust,
transparency, and compliance. With the rollout of ICD-11 updates in 2025
and CMS tightening claim adjudication standards, misunderstandings in
billing terminology can lead to denials, delayed payments, or even
compliance penalties.
For providers and patients, the stakes are higher than ever.
Key Statistics: Why Billing Clarity Matters in 2025
- 56%
of U.S. adults report difficulty understanding their medical bills.
- Source:
KFF Health Tracking Poll, July 2025
- 42%
of patients admit they have delayed or avoided paying a medical bill
because they did not understand the charges.
- Source:
AMA Report on Patient Communication, 2025
- 1
in 3 denied claims are tied to prior authorization or documentation
issues—both of which stem from poor clarity in billing communication.
- Source:
CMS Claims Compliance Update, 2025
- $140
billion in medical debt continues to affect U.S. households, with billing
confusion cited as a major contributor.
- Source:
Urban Institute, 2025
- 70%
of new medical staff say billing terminology was their steepest
learning curve during the first year of employment.
- Source:
MGMA Workforce Survey, 2025
- 92%
of patients state that they would trust their provider more if bills
were presented in plain language.
- Source:
HFMA Patient Financial Experience Study, 2025
These Numbers Matter Because…….
- The
statistics show that confusion isn’t an isolated problem—it’s
systemic.
- Patient
trust, compliance, and timely payments are directly tied to billing
clarity.
- Staff
training and terminology simplification aren’t “nice extras”—they’re financial
and ethical imperatives.
Expert Voices: Insights from the Field
I asked three experts to weigh in:
1. Dr. Sarah Kim – Healthcare Policy Analyst
"The biggest barrier in billing today isn’t
technology—it’s communication. Patients think they’re being deceived when
really, they’re being drowned in terminology. Simplifying the message builds
trust and compliance."
2. James Ortega, CPC – Certified Professional Coder
"Too often, staff focus on codes and forget the
patient on the other side. If new coders learned to explain terms like deductible
in everyday language, denials and patient complaints would fall
dramatically."
3. Lisa Grant, MBA – Revenue Cycle Manager
"Practices that invest in staff training around
terminology see faster payments and happier patients. It’s not just
education—it’s strategy."
Tactical Advice: Making Billing Clear and Human
Here’s how providers and practices can make billing terms
understandable without dumbing them down:
- Translate
Jargon into Plain Words
- Example:
Instead of “Your deductible hasn’t been met”, say “You pay the
first $1,500 of your medical costs each year before insurance starts
paying.”
- Use
Visual Aids in Patient Portals
- Short
videos or hover-over definitions can explain terms like EOB, copay, or
prior authorization.
- Role-Play
in Staff Training
- Have
staff practice explaining bills as if speaking to a teenager. If it
sounds complicated, it needs reworking.
- Collect
Real Stories of Confusion
- Use
past misunderstandings as teaching moments to rewrite patient-facing
scripts.
- Question
Industry Best Practices
- Many
clinics copy generic billing explanations from insurance carriers.
Instead, create customized explanations tailored to your patients.
Recent News: Trends and Developments in Billing
Transparency & Regulation
- Stricter
Enforcement on Price Transparency
The Centers for Medicare & Medicaid Services (CMS) has released a Request for Information (RFI) seeking public input on how to improve hospital price transparency—specifically the accuracy and completeness of machine-readable files that hospitals are required to publish. Enforcement actions have increased, with thousands of audits since 2021, many hospitals brought into compliance only after CMS intervention. American Hospital Association+2CMS+2 - New
“Patients Deserve Price Tags Act” Introduced
A bipartisan Senate bill has been introduced (co-sponsored by Sen. Roger Marshall) that would require providers to deliver itemized bills clearly outlining the costs of each service. The act would also require both the hospital and the patient’s insurer to sign off on the accuracy and completeness of the disclosed prices. Healthcare Brew+1 - Executive
Order on Empowering Patients with Clear Pricing Information
In February 2025, the White House issued an executive order titled “Making America Healthy Again by Empowering Patients with Clear, Accurate and Actionable Healthcare Pricing Information”. It pushes agencies like HHS, Treasury, and Labor to enforce stricter price disclosure rules and standardize how pricing data is reported to the public. The White House+2Union+2 - Ongoing
Issues Under the No Surprises Act
Although the No Surprises Act (2022) protects patients from many surprise charges, compliance is inconsistent. Reports indicate that many health plans are missing required deadlines or improperly paying out after independent-dispute resolutions. Increasing enforcement pressure is expected. American Medical Association+1 - Transparency
in Coverage & Hospital Price Data Reform
Besides hospitals, insurers are under pressure to make their negotiated rates and coverage information clearer under Transparency in Coverage rules. New standards for insurer machine-readable files will take effect, reducing duplicative or misleading entries. All this is shifting the burden toward providers and payers to make billing more understandable. American Hospital Association+1
Myth Buster: Setting the Record Straight
- Myth
1: Patients don’t care about billing terms—they just want the bottom
line.
- Truth:
Patients who understand bills are less likely to delay payments or file
complaints.
- Myth
2: Staff training on billing terms wastes time.
- Truth:
Practices lose thousands annually in denied claims due to
miscommunication. Training pays for itself.
- Myth
3: Insurance carriers should handle all explanations.
- Truth:
Patients trust their providers more than insurers. If you don’t explain,
they assume the worst.
Legal, Practical, and Ethical Considerations
Legal Implications
- Regulatory
Compliance
- Misuse
or misrepresentation of terms like deductible, coinsurance, or prior
authorization can lead to CMS audits, HIPAA violations, or even
legal disputes.
- Providers
must ensure explanations align with state and federal regulations.
- Transparency
Requirements
- The
No Surprises Act (2022 onward) requires clear estimates and
billing transparency. Failing to explain terms accurately could put
providers at risk of penalties.
- Documentation
Standards
- Billing
explanations must match coded documentation. A plain-language
translation is acceptable, but it cannot contradict official coding
definitions.
Practical Considerations
- Staff
Training
- Regular
workshops are necessary to keep pace with ICD-11, CPT, and payer
updates. Without ongoing training, explanations can quickly become
outdated.
- Technology
Costs
- Patient
portals and EHR systems may need customization to embed plain-language
glossaries or hover-over definitions, which can involve vendor costs.
- Time
Management
- Explaining
terms in detail during visits may lengthen encounters. Practices must
balance education with efficiency to avoid bottlenecks.
- Scalability
- A
small clinic can adopt changes more quickly, while large health systems
must coordinate across multiple departments and providers.
Ethical Considerations
- Patient
Autonomy
- Patients
deserve to make informed financial and medical decisions. Using plain
language supports their right to autonomy.
- Equity
in Access
- Complex
terminology disproportionately affects vulnerable populations—those with low
health literacy, limited English proficiency, or high financial stress.
Clear communication is an ethical equalizer.
- Avoiding
Manipulation
- Explanations
must be neutral, not biased toward encouraging patients to accept
unnecessary services. Clarity should empower, not persuade.
- Trust
and Integrity
- Honest
communication strengthens the provider-patient relationship.
Ethical billing practices go beyond compliance—they reflect professional
integrity.
Legal compliance keeps you safe. Practical planning keeps
you operational. Ethical clarity keeps you trusted.
When all three align, practices can achieve smoother
revenue cycles, fewer disputes, and stronger patient loyalty.
FAQs: Common Questions About Billing Terms
Q1: What is an EOB?
An Explanation of Benefits (EOB) is a document from your insurer showing
what was billed, what was covered, and what you owe. It’s not a bill, but it
explains one.
Q2: What’s the difference between a copay and
coinsurance?
A copay is a fixed dollar amount you pay for a service. Coinsurance
is a percentage of the bill you owe after meeting your deductible.
Q3: Why does prior authorization matter?
Prior authorization is insurer approval required before some procedures.
Without it, claims may be denied, leaving patients with full responsibility.
Pros and Cons of Demystifying Medical Billing Terms
Like every shift in healthcare, making medical billing
clearer for patients and staff has both advantages and challenges.
Understanding both sides helps practices prepare for real-world impact.
Pros
- Improved
Patient Trust
- Patients
who understand EOBs, deductibles, and copays are less likely to
feel blindsided and more likely to view providers as transparent.
- Faster
Payments
- Clear
explanations reduce disputes and billing delays, improving cash flow
for providers.
- Reduced
Denials
- Staff
trained to explain and document billing terms properly are less likely to
submit incomplete or incorrect claims.
- Higher
Staff Confidence
- New
employees who master common billing terminology feel more prepared and
stay longer, reducing turnover costs.
- Better
Compliance
- Clarity
reduces the risk of HIPAA violations and billing errors, aligning
with CMS and AMA expectations for patient communication.
Cons
- Training
Costs
- Developing
a plain-language glossary and running staff workshops requires
upfront time and money.
- Technology
Integration
- Updating
patient portals or billing systems to include hover-over definitions or
educational tools may require software upgrades.
- Consistency
Challenges
- Even
with scripts, staff may drift back into jargon, creating uneven
experiences for patients.
- Patient
Overload
- Some
patients want simplicity only. Too much explanation can feel overwhelming
or unnecessary.
- Regulatory
Complexity
- Terms
evolve with ICD, CPT, and CMS updates. Staying current requires
ongoing monitoring and updates to materials.
The benefits outweigh the challenges, but success
depends on implementation discipline. Practices that plan for training,
consistency, and updates will see the strongest gains in patient
satisfaction, financial performance, and compliance.
Real-Life Failures and Lessons
One practice in California lost over $250,000 in denied
claims in 2024 because front desk staff didn’t understand coordination
of benefits rules. Another clinic faced online backlash after patients
accused them of “hidden charges”—when in reality, the deductible hadn’t
been met.
Both practices recovered after rewriting their patient
education materials and investing in staff workshops.
Tools, Metrics, and Resources for Smarter Medical Billing
Improving billing communication and revenue cycle
performance isn’t only about theory—it requires the right tools, measurable
metrics, and reliable resources. Here’s a practical breakdown:
Essential Tools
- Practice
Management Systems (PMS): Software like Athenahealth, AdvancedMD,
or Kareo helps track claims, generate patient statements, and
integrate billing codes.
- Revenue
Cycle Dashboards: Many PMS platforms offer dashboards to monitor days
in A/R, denial rates, and collection trends in real time.
- Patient
Communication Platforms: Tools like Solutionreach, Relatient, or
Artera add plain-language messaging into portals and statements.
- Coding
Resources: AAPC’s Codify or Find-A-Code for up-to-date
CPT/ICD/HCPCS definitions with crosswalks and payer policies.
- Training
Modules: Short e-learning courses through AAPC, HFMA, or MGMA
that provide billing staff with terminology refreshers.
Key Metrics to Track
- Denial
Rate: Percentage of claims denied on first submission. Target: <5%.
- Days
in A/R (Accounts Receivable): Average time to collect payments.
Target: <40 days.
- Clean
Claim Rate: Claims paid without resubmission. Target: >95%.
- Patient
Collection Rate: Percentage of billed patient responsibility actually
collected. Target: >85%.
- Patient
Billing Calls: Calls per 100 statements issued. Target: steady
decrease over time.
- Net
Collection Rate: Payments received vs. expected reimbursement. Target:
>96%.
- Patient
Billing Satisfaction Score: Use post-bill surveys to measure trust and
understanding.
Trusted Resources
- Centers
for Medicare & Medicaid Services (CMS): Official coding updates,
billing compliance rules, and ICD resources.
CMS Coding & Billing Guidance - American
Medical Association (AMA): CPT code updates and best practices for
patient communication.
AMA CPT & Patient Resources - Healthcare
Financial Management Association (HFMA): Training, certifications, and
benchmarking reports on billing and collections.
HFMA Resources - KFF
Health Tracking Poll: Regular reports on public perceptions of
healthcare costs and billing clarity.
KFF Health Tracking Poll Series - AAPC
(American Academy of Professional Coders): Coding certification,
compliance training, and glossaries.
AAPC Training & Resources
How to Use This Section
- Pick
one metric to start tracking immediately (e.g., denial rate).
- Layer
tools gradually—don’t overhaul everything at once.
- Use
resources for staff training at least quarterly to stay ahead of
coding and compliance shifts.
Step-by-Step: Demystify Medical Billing in Your Practice
1. Convene a small cross-functional team
- Goal:
Align clinical, front-desk, billing, and IT perspectives.
- Who:
Practice manager, lead coder, front-desk supervisor, clinician rep, and an
IT/portal lead.
- Deliverable:
One shared document that lists the top 10 billing terms patients ask about
and current explanations used.
2. Audit existing patient communications
- Action:
Collect sample EOBs, patient statements, portal messages, and phone
scripts.
- Deliverable:
A single folder of examples and a short note listing confusing phrases.
- Tip:
Highlight any sentence that uses jargon without a plain-language
explanation.
3. Create plain-language definitions
- Action:
Rewrite each confusing term into a one-sentence definition that a
non-medical friend would understand.
- Format:
Term → Simple definition → One example.
- Example:
Deductible → “The amount you pay first each year before
insurance pays.” → “If your deductible is $1,500, you pay the first
$1,500 of covered care.”
4. Build short, patient-facing templates
- Action:
Produce 3–4 templates for common touchpoints: appointment confirmation,
in-visit script, billing statement header, and an EOB explainer.
- Deliverable:
Template library saved in your practice management system or shared drive.
- Sample
header line: “What this means for you:” followed by the
one-sentence definition.
5. Train staff using role-play
- Action:
Run scripted role-play sessions where staff explain a bill to a colleague
playing a patient.
- Who
leads: Billing lead or practice manager.
- Deliverable:
Two short scripts for front desk and billing calls. Use plain words and
practice the same phrasing every time.
6. Add plain definitions into patient portals and
statements
- Action:
Insert hover-over definitions, short videos, or clickable “what this
means” links next to each billing line item and on the EOB page.
- Deliverable:
Portal content updates and a one-page PDF explainer attached to emailed
statements.
- Bold
point: Make clarity visible where money is shown.
7. Fix first-contact confusion with scripts
- Action:
Replace canned phrases with short scripts for common questions (see
examples below).
- Deliverable:
Front-desk scripting card and a billing phone script.
Example scripts (use verbatim):
- EOB:
“An Explanation of Benefits (EOB) shows what insurance processed.
It is not a bill. Your bill will tell you what to pay.”
- Deductible:
“Your deductible is the amount you pay before insurance starts
sharing costs. This visit counts toward that amount.”
- Prior
authorization: “A prior authorization is pre-approval from the
insurer. If we don’t get it, they can deny the claim and you may be
responsible.”
8. Run a small pilot and collect feedback
- Action:
Use the new scripts and templates with a small set of patients and staff.
Log questions and confusion points.
- Deliverable:
One feedback sheet that records issues and suggested edits.
- Bold
point: Iterate based on real patient reactions — not assumptions.
9. Measure impact with simple KPIs
- What
to track:
- Denial
rate for common services.
- Patient-billing
support calls per 100 statements.
- Average
days in A/R (accounts receivable).
- Patient
satisfaction specific to billing clarity (short 1–2 question pulse).
- Deliverable:
Simple dashboard (spreadsheet) showing before/after trends and notes from
staff.
10. Institutionalize and update
- Action:
Make the plain-language glossary and scripts part of onboarding. Schedule
periodic reviews tied to code or policy changes.
- Deliverable:
Onboarding checklist item and a change log for definitions.
- Bold
point: Treat communication as a living document.
Implementation Checklist
- Cross-functional
team formed
- Audit
folder created
- Plain-language
glossary completed
- 4
patient templates written and stored
- Role-play
training scheduled and executed
- Portal
and statement updates deployed
- Pilot
completed and feedback logged
- KPI
dashboard started
- Onboarding
updated with new scripts
Quick KPIs to Watch
- Denial
rate (claims denied due to documentation or prior auth issues).
- Billing
support calls / 100 statements.
- Patient
billing satisfaction score.
- Net
collect rate (what you collect vs. what’s billed).
Final micro-tools
- Plain
EOB line: “This EOB shows what your insurer processed and why. It is
not a bill; your statement is the bill.”
- Deductible
line: “Your deductible is the amount you pay before insurance pays.”
- Prior
authorization line: “This service needs approval from your insurer
first. If approval is denied, the insurer may not pay.”
Final Thoughts: Why This Glossary Matters
Medical billing doesn’t have to be a black hole of
confusion. The key is education, transparency, and storytelling.
Patients who understand their bills pay faster, trust more, and stay loyal.
Future Outlook: Where Medical Billing Is Headed
The landscape of medical billing is far from static.
Over the next few years, several trends will shape how providers, patients, and
payers interact:
- Transition
Toward ICD-11
- Although
the U.S. still relies on ICD-10, planning for ICD-11 adoption is
underway. Its broader diagnostic categories and digital readiness will
demand new workflows, staff training, and technology upgrades.
- AI-Powered
Billing Tools
- Artificial
intelligence is expected to automate coding, claim scrubbing, and
error detection. The key challenge will be balancing efficiency
with transparency so patients don’t feel distanced from the process.
- Patient-Centric
Billing
- Expect
more insurers and health systems to embrace plain-language billing
statements and interactive patient portals. Clarity will
become a competitive differentiator for practices.
- Regulatory
Tightening
- With
CMS focusing on billing compliance and consumer protections,
providers will face stricter audits. Staying compliant will mean staff
training on terminology and documentation will become non-negotiable.
- Value-Based
Care Integration
- As
more organizations move toward value-based models, billing will
shift from fee-for-service codes toward bundled payments and
outcome-based reimbursements. Terminology will evolve alongside these
structures.
The future is clear: complexity isn’t going away, but
clarity can win. The practices that thrive will be those that translate
the language of billing into language patients can trust.
Call to Action
Get Involved. Join the movement. Step into the conversation.
Start your journey. Be part of something bigger. Engage with the community.
Share your ideas. Lend your voice. Help shape the future. Take the first step
today.
About the Author
Dr. Daniel Cham is a physician and medical
consultant with expertise in medical tech consulting, healthcare
management, and medical billing. He focuses on delivering practical insights
that help professionals navigate complex challenges at the intersection of
healthcare and medical practice. Connect with Dr. Cham on LinkedIn:
linkedin.com/in/daniel-cham-md-669036285
Disclaimer / Note: This article is intended to provide an
overview of the topic and does not constitute legal or medical advice. Readers
are encouraged to consult with professionals in the relevant fields for
specific guidance.
#MedicalBilling #HealthcareFinance #RevenueCycleManagement
#MedicalCompliance #HealthcareInnovation #PatientExperience #HealthTech
#MedicalCoding #HealthcareManagement
References (September 2025 – Current & Relevant)
- KFF
Health Tracking Poll (2025): 56% of adults report difficulty
understanding medical bills.
Explore the full Health Tracking Poll series on KFF.org - CMS
Policy Update (2025): New ICD-11 billing compliance requirements.
Visit CMS’s official ICD coding page
DocVilla’s ICD-11 guide - AMA
Report (2025): Patient confusion over medical terminology linked to
delayed care.
Review AMA’s CPT updates and patient communication insights
No comments:
Post a Comment