What Is an Explanation of Benefits (EOB)?
Decode your Explanation of Benefits (EOB). Discover how this health insurance document clarifies processed medical claims and your payment obligations.
An Explanation of Benefits (EOB) is a statement provided by your health insurance company that details how a medical claim was processed. It outlines the healthcare services you received, the amount billed by the provider, the portion your insurance plan covered, and the remaining amount you may be responsible for. It is important to understand that an EOB is strictly an informational document and not a bill for services.
Understanding the Key Sections
An EOB organizes claim information into several distinct sections, each offering specific details about your medical service. The document begins with Patient Information, which includes your name, the policy number, and a unique claim number assigned by the insurer. This section helps identify the individual who received the services and links the document to a specific claim.
Following this, you will find Provider Information, listing the name of the healthcare professional or facility that rendered the services, along with the dates of service. This allows you to verify that the EOB corresponds to the care you received. The EOB then details the Service Details, often using Current Procedural Terminology (CPT) codes and brief descriptions of the medical services performed. These codes standardize communication between providers and insurers regarding procedures and treatments.
The Billed Amount represents the total charge submitted by the healthcare provider for the services, before any insurance adjustments or payments. Next, the Allowed Amount, also known as the negotiated rate, indicates the maximum amount your insurance company will pay for a specific service. If you used an in-network provider, this amount is often a pre-negotiated rate, and the provider agrees to accept it as full payment, writing off any difference between the billed and allowed amount.
Your financial responsibility begins with amounts applied towards your Deductible, which is the sum you must pay for covered services before your insurance starts contributing significantly. Once the deductible is met, Copayment (Copay) and Coinsurance come into play. A copay is a fixed amount you pay for a specific service, such as a doctor’s visit, typically paid at the time of service. Coinsurance is a percentage of the allowed amount that you are responsible for after your deductible has been satisfied, for instance, 20% of the cost.
The Insurance Payment section clearly states the amount your health insurance company paid directly to the provider or to you for the services. Finally, the Patient Responsibility or Amount You Owe indicates the portion of the cost that remains your obligation after the insurance has processed the claim, including any applied deductible, copay, or coinsurance. This figure should align with the bill you receive from your provider. EOBs also include Remarks or Reason Codes, which are alphanumeric indicators explaining specific decisions made on your claim, such as why a service was denied or adjusted.
Actions After Receiving an EOB
Upon receiving an EOB, it is important to carefully review its contents to ensure accuracy and understand your financial obligations. Begin by comparing the EOB with any medical bill you receive from your healthcare provider for the same dates of service. The amounts you are responsible for on both documents should match.
Check for any discrepancies, such as incorrect dates of service, services you did not receive, or inaccurate patient information. Sometimes, errors can occur in billing or coding, leading to unexpected charges. If you identify an unfamiliar service or a potential error, first contact your healthcare provider’s billing department for clarification. They can often explain the charges or correct any mistakes.
If questions or discrepancies persist after speaking with the provider, contact your insurance company directly using the customer service number on your EOB or insurance card. Be prepared to provide the claim number from your EOB for efficient assistance.
It is also advisable to keep organized records of all EOBs and corresponding medical bills. This practice helps you track your healthcare expenses, monitor progress toward your deductible and out-of-pocket maximum, and can be useful for tax purposes or in case of future billing inquiries.