What Is an Explanation of Benefits (EOB) in Insurance?
Gain clarity and control over your healthcare expenses by understanding your Explanation of Benefits (EOB) from your insurer.
An Explanation of Benefits (EOB) is a document your health insurance company sends you after you receive medical care. Its main purpose is to provide a detailed summary of the services you received and how your insurance plan processed the associated costs. This document is purely for informational purposes and clearly outlines your financial responsibility for the medical services rendered.
Understanding the EOB
An EOB serves as a comprehensive statement from your health insurance provider, issued after a medical claim is processed. It details the healthcare services you received, the amount charged by the provider, and how much your insurance plan is contributing towards those costs. This document is not a bill from your healthcare provider; instead, it offers a transparent look into your insurance coverage and how it applies to specific medical events.
Components of an EOB
A typical EOB contains several distinct sections that provide a clear breakdown of your medical visit and its associated costs. It generally begins with patient and provider information, including names, addresses, and identification numbers, along with the specific dates services were rendered. The document will then detail the type of service received, often identified by a procedure code, and the total amount the healthcare provider initially billed for these services. Following this, the EOB lists the “allowed amount,” which is the maximum amount your insurance company will pay for a covered service.
The EOB also specifies the amount paid by your insurance company, indicating their financial contribution. It will then itemize your deductible, the sum you must pay for covered services before your insurance begins to pay. It also shows any copayment (a fixed amount you pay) and coinsurance (a percentage of the cost you pay after your deductible is met). Finally, the EOB clearly states the amount you may owe, representing your total patient responsibility after all insurance adjustments.
Interpreting Your EOB
Understanding your EOB involves carefully reviewing the relationship between the various financial figures presented. You should compare the billed amount from your provider to the allowed amount determined by your insurer; the allowed amount is the basis for your financial responsibility. Your financial obligation, the “amount you may owe,” is derived from the allowed amount, after accounting for any applied deductibles, copayments, or coinsurance percentages. For instance, if your deductible has not been met, you will be responsible for a larger portion of the allowed amount.
The EOB may also include various codes, such as procedure codes (CPT codes) or diagnosis codes (ICD-10 codes), which specify the medical services performed and the reason for them. Denial codes or remarks might also appear, explaining why certain services were not covered or were only partially covered. Familiarizing yourself with these codes, even generally, can help you understand the insurer’s decision-making process. Ensure the services listed match what you received and that the financial calculations align with your understanding of your policy.
Next Steps After Receiving an EOB
Upon receiving your EOB, compare it carefully with the bill from your healthcare provider. Ensure that the dates of service, the type of services rendered, and the amounts you are responsible for match on both documents. This comparison helps verify the accuracy of the charges and your financial obligation. Always keep your EOBs for your records, as they provide a clear history of your medical claims and payments.
If you identify any discrepancies between your EOB and the provider’s bill, or if you have questions about the coverage decisions, contact your insurance company first for clarification. If the issue remains unresolved, you may then need to contact your healthcare provider’s billing department to reconcile the differences. Wait until you have reviewed and understood your EOB, and confirmed its consistency with the provider’s bill, before making any payments.