What Is an EOB (Explanation of Benefits)?

An Explanation of Benefits (EOB) is a statement sent by your health insurance company after you receive medical services. It summarizes how a medical claim was processed and details the costs involved. An EOB informs you about the services received, the amount your provider billed, and how your insurance plan contributed to the payment. It is an informational record, not a bill.

What an EOB Contains

An EOB typically includes specific details about the healthcare services you received. It lists patient information, such as your name and policy ID, and details about the healthcare provider, including their name and service dates.

The document describes the services provided, often including procedure codes (CPT) and diagnosis codes (ICD). These codes standardize communication between providers and insurers, ensuring accurate claim processing.

The EOB shows the billed amount, which is the total charge the provider submitted. It then indicates the allowed amount, the maximum your insurance company will pay for a covered service. This allowed amount is often lower than the billed amount due to negotiated rates.

Several financial components determine your responsibility. The deductible is the amount you must pay out-of-pocket for covered services before your plan begins to pay. A copayment, or copay, is a fixed amount you pay for a covered healthcare service, typically paid at the time of service. Coinsurance represents your percentage share of the costs after you satisfy your deductible. The EOB clearly distinguishes the amount paid by your insurance plan and the remaining portion identified as your patient responsibility. EOBs may also include reason or remark codes, which offer brief explanations for claim adjustments or denials.

Understanding Your EOB’s Financial Details

The financial details on an EOB explain how your patient responsibility is determined based on your insurance plan’s terms. Your insurance company applies its negotiated rates, reducing the billed amount to the allowed amount. This allowed amount forms the basis for calculating what your plan will cover and what you will owe.

After the allowed amount is established, your insurance plan applies your deductible. If you have not yet met your annual deductible, a portion or all of the allowed amount may be allocated towards it. Once the deductible is satisfied, copayments or coinsurance percentages come into play. A fixed copay for a specific service is applied, or a coinsurance percentage of the remaining allowed amount is calculated as your share.

The sum of any remaining deductible, copayment, or coinsurance constitutes your total patient responsibility. The EOB illustrates this calculation, showing precisely how each component contributes to the final amount you are expected to pay. This detailed financial summary helps you track your progress toward meeting your annual deductible and out-of-pocket maximums.

EOB Versus Medical Bill

An Explanation of Benefits (EOB) is a document sent to you by your insurance company detailing how a medical claim was processed. It outlines what the insurance paid and what amount you may be responsible for. An EOB is an informational statement and does not require immediate payment.

A medical bill is a direct request for payment sent to you by the healthcare provider or facility. This document outlines the specific amount you owe for services rendered.

The EOB typically arrives before the medical bill, providing an early overview of your financial obligation. It is important to compare the patient responsibility amount on your EOB with the amount requested on the medical bill to ensure accuracy.

What to Do After Receiving Your EOB

Upon receiving your EOB, review it to ensure accuracy. Check that all personal information, dates of service, and descriptions of services rendered are correct. Verify that every service listed on the EOB was indeed received by you.

Compare your EOB with the medical bill you receive from the healthcare provider. The patient responsibility amount indicated on your EOB should match the amount requested on the medical bill. If there is a mismatch, collect all relevant paperwork, including any itemized bills, and contact the provider’s billing department to clarify the discrepancy. Common reasons for differences can include a prior balance, a payment made between statement dates, or the bill being sent before insurance processing was complete.

If questions arise regarding claim processing, allowed amounts, or discrepancies on the EOB, contact your insurance company directly. For inquiries about services rendered or errors on the medical bill itself, reach out to your healthcare provider’s office. Once the EOB and medical bill have been reconciled and confirmed accurate, you should promptly pay the provider the amount indicated as your patient responsibility.