What Is an Explanation of Benefits (EOB)?

An Explanation of Benefits (EOB) is a document from your health insurance company that details how a medical claim was processed after you receive care. It provides a breakdown of services received and how your health plan applied its benefits. An EOB is an informational summary, not a bill from the healthcare provider.

Understanding Your Explanation of Benefits (EOB)

An EOB is sent after your health insurance company processes a healthcare claim. It details the financial aspects of your medical care, showing how much the insurer paid and your remaining financial responsibility.

The EOB breaks down medical service costs, outlining charges, discounts, and the portion the insurance company paid to the provider. It is an informational statement to help you understand your claim’s disposition. It is not a request for payment, and you should not send money based solely on an EOB.

Key Components of an EOB

A standard EOB contains several distinct sections, each providing important information about your medical claim. While the exact layout may vary by insurance company, the core data points remain consistent across most EOBs.

The EOB begins with Patient and Provider Information, which includes your name, policy number, and identification details for both the patient and the healthcare provider. This section helps confirm that the EOB pertains to the correct individual and the specific services received. It also lists the unique Claim Number assigned to that particular claim, which is useful for future inquiries.

Next, the EOB details Service Details, including the date(s) of service and a description of the medical service or procedure performed. This section may include Current Procedural Terminology (CPT) codes.

The EOB then presents the Billed Amount, which is the original total cost of the service as charged by the healthcare provider. This is distinct from the Allowed Amount, also known as the approved amount, which is the maximum amount your insurance company has agreed to pay for that service. The allowed amount often reflects a negotiated rate between the insurer and the healthcare provider, and it may be less than the billed amount.

Next, the EOB specifies the Amount Paid by Plan, indicating the exact portion of the allowed amount that your health insurance covered and paid directly to the provider. This figure shows the financial contribution made by your insurance plan toward the cost of your care. It provides clarity on the benefits your plan rendered for the service.

A significant section of the EOB is Patient Responsibility, which itemizes the amount you are financially responsible for. This can include several categories, such as your deductible, the amount you must pay out-of-pocket before your insurance begins to cover costs. It also shows any copayment, a fixed amount you pay for a service at the time of care, and coinsurance, which is a percentage of the cost of a service you pay after meeting your deductible. This section also details any charges for non-covered services, which are medical services or treatments not included in your health plan’s benefits.

EOBs often include Reason Codes, which are short codes or brief explanations provided by the insurer to clarify adjustments, denials, or how specific amounts were determined. These codes offer insight into why certain amounts were paid, adjusted, or deemed patient responsibility. Many EOBs will provide a legend or glossary to help you understand these codes.

Comparing Your EOB to Your Medical Bill

After receiving an Explanation of Benefits, a crucial step involves comparing it to the actual medical bill you receive directly from your healthcare provider. This comparison helps ensure accuracy and prevents potential overpayments or billing errors. It is important to remember that the EOB is not a bill, and the official payment request will come from your provider.

Carefully cross-reference specific details between the two documents, such as the dates of service, the names of the healthcare providers, and the descriptions of services rendered. Pay close attention to the billed amounts and, most importantly, the final patient responsibility amount listed on both the EOB and the medical bill. These figures should align closely.

If discrepancies are found between your EOB and the medical bill, it is important to take action. First, contact your health insurance company to clarify any differences or ask questions about how the claim was processed. If the issue remains unresolved, or if the discrepancy is with the services or charges, then contact the healthcare provider’s billing department.

Maintaining organized records of both your EOBs and corresponding medical bills is a prudent practice. This documentation can be invaluable for future reference, for tracking your annual out-of-pocket expenses, or for resolving any billing disputes that may arise. Reviewing these documents helps ensure that you are only paying what you legitimately owe for healthcare services.