What Is Included in an Explanation of Benefits (EOB)?
Learn to interpret your Explanation of Benefits (EOB). Understand how this document from your health insurer details processed medical claims and financial obligations.
An Explanation of Benefits (EOB) is a document provided by your health insurance company that details how a medical claim was processed. It serves as a summary of the services you received, their costs, and how your insurance plan contributed to payment. This document is not a bill, but a record designed to help you understand the financial breakdown of your healthcare services and payments. It outlines what your insurance has covered and any remaining amount you might be responsible for.
Patient and Provider Identification
An EOB displays identifying information for both the patient and the healthcare provider. The patient’s section typically includes their name, policy number, group number, and a unique identification number. Confirming this information’s accuracy helps ensure the claim pertains to the correct individual and policy.
The EOB also lists the healthcare provider’s details, such as their name, address, and National Provider Identifier (NPI) number. The NPI is a standard, unique identification number for healthcare providers. Verifying the correct provider is listed helps confirm the services documented align with the care received.
Service Details and Billed Amounts
The EOB includes a detailed section outlining the specific medical services provided. Each service is itemized by the date it was rendered, along with a brief description, such as an “office visit” or “lab test.” Often, a Current Procedural Terminology (CPT) code is also listed, which is a standardized code used to describe medical procedures and services.
This section also includes the “billed amount” or “charges” column. This figure represents the total amount the healthcare provider initially charged for each service before any adjustments or contributions from your insurance plan. It is the full price for the service as submitted by the provider to your insurance company.
Your Financial Responsibility Breakdown
This section provides a detailed calculation of your financial responsibility for the services received. It begins with the “allowed amount,” which is the negotiated rate between your insurance company and the healthcare provider for a specific service. This allowed amount is often less than the initial billed amount.
From this allowed amount, your insurance plan applies various cost-sharing elements. A deductible is the amount you must pay for covered healthcare services before your insurance plan begins to pay. A copayment is a fixed amount you pay for a covered service, typically at the time of service, while coinsurance is a percentage of the allowed amount you are responsible for after your deductible has been met.
The EOB then specifies the “amount paid by insurance,” which is the portion of the allowed amount your insurance company covered. Finally, it states the “amount you owe,” also known as patient responsibility. This final figure is derived from the application of deductibles, copayments, coinsurance, and any non-covered charges, representing your out-of-pocket obligation to the provider.
Claim Status and Explanation Codes
An EOB also provides information regarding the status of your claim and includes codes that explain processing decisions. This section details whether a claim was paid, denied, or adjusted. Reason codes, also known as remark codes, are alphanumeric identifiers that correspond to specific explanations for how a service was processed.
These codes clarify why a service might have been denied, paid at a reduced rate, or adjusted. Common reasons include “service not covered,” “information missing,” or “exceeds policy limits.” EOBs usually include a legend or a separate section that deciphers these codes, helping you understand the specific actions taken on your claim.