What Is an Itemized Statement in Medical Billing?

An itemized statement in medical billing provides a comprehensive breakdown of services, procedures, and supplies received during healthcare treatment. Unlike a summary bill, which only shows a total amount due, an itemized statement offers a line-by-line explanation of all charges. Healthcare providers issue these detailed statements to both patients and their insurance companies after care has been rendered.

Key Components of an Itemized Medical Statement

An itemized medical statement includes specific information to clarify medical expenses. It lists patient details, such as name, address, and date of birth, alongside provider information, including their name, address, and contact details. The statement also specifies the dates when medical services were provided.

A detailed description of each service rendered, like an office visit, lab test, or procedure, appears on the statement. Each service is accompanied by procedure codes, such as Current Procedural Terminology (CPT) codes, which are five-digit alphanumeric codes describing medical, surgical, and diagnostic services. Healthcare Common Procedure Coding System (HCPCS) codes identify products, supplies, and services not included in CPT codes, like durable medical equipment or ambulance services.

Diagnosis codes, such as ICD-10 codes (International Classification of Diseases, 10th Revision), are also present, providing detailed information about the patient’s condition. The statement lists individual charges for each service, along with any payments received from the patient or insurance, and adjustments or discounts applied. The balance due is clearly presented.

Why an Itemized Statement is Important

An itemized medical statement offers several benefits for patients managing healthcare expenses. It allows for verification of charges, enabling patients to ensure accuracy and identify potential billing errors, such as duplicate charges or services not received. This helps prevent unexpected charges and provides a clear understanding of expenses.

The statement serves as supporting documentation for insurance claims, particularly for out-of-network services or denied claims, as insurance providers require detailed information to process claims accurately. It helps ensure that the insurance company covers applicable costs and that patients are not overcharged for self-funded expenses.

An itemized statement is useful for substantiating eligible medical expenses for Flexible Spending Accounts (FSAs) and Health Savings Accounts (HSAs). For FSAs, the Internal Revenue Service (IRS) requires proper documentation, including the provider’s name, the person who received the service, date of service, description, and amount. Account holders must maintain HSA records for potential IRS audits for up to seven years.

Patients can also use itemized statements for documenting medical expenses that may be tax-deductible. The IRS allows taxpayers to deduct qualified medical expenses exceeding 7.5% of their Adjusted Gross Income (AGI) if they itemize deductions on Schedule A (Form 1040). This documentation is important when disputing charges with a provider or insurer, as it provides clear evidence for resolution.

How to Request and Review Your Statement

To obtain an itemized medical statement, patients contact the healthcare provider’s billing department. This contact information is found on a summary billing statement or the provider’s website. When making the request, provide your full name, date of birth, contact information, and patient identification number to help the billing department locate your records.

Once the statement is received, a systematic review is important to ensure accuracy. Cross-reference the dates of service listed on the statement with the actual dates you received care. Verify that the descriptions of services match the care you remember receiving and check for any duplicate charges or services that were not provided.

Compare the charges on the itemized statement against your Explanation of Benefits (EOB) from your insurer to identify discrepancies between what the provider billed and what your insurance covered. If any discrepancies are found, contact the provider’s billing department to inquire about the charges and seek clarification or correction. Retain all receipts and documentation for at least three years for tax purposes, or up to seven years for HSA records, in case of an IRS audit.