Understanding EOB’s

What is an Explanation of Benefits or EOB?

An Explanation of Benefits, also called EOB, provides important information about your insurance claim that was processed by your insurance company.  You should receive an EOB whenever you or your provider files a claim for your healthcare benefits.

Your EOB is not a bill.  It is a document that you should use to determine how much you must pay your provider.  You should review your EOB prior to paying your provider.

Understanding EOB’s is easy to do, even if you are not used to reading documents from insurance companies.  The main thing for you to know is that each insurer creates EOB’s differently.  The design differences are obvious, but the information is the same. 

EOB’s usually include the following information:

• Date of Service
• Your Name
• Provider’s Name
• Amount Billed or Charged
• Amount Approved
• Amount not covered
• Amount applied to deductible
• Amount to be paid by the insurer
• Amount to be paid by the patient.

What to look for when reviewing your EOB.

All patients should carefully look at their EOB’s.  They are not bills that require a payment to be made.  An EOB provide’s information about your healthcare visit.  They can prevent you paying money that you don’t owe if you regularly review and compare the informatoin found on an EOB to the information found on your provider’s bills.

Pay attention to the following when reviewing an EOB:

• Your Name.  Sometimes errors are made and you may have received an EOB in error.  It isn’t common, but does happen.  Make sure the name one the EOB is yours.
• Your ID Number.  This can be important too.  There are more than one John Smiths in the world.  You’ll want to ensure that your ID number is being used on your claims.
• Date of Service.  Did you access the healthcare system on that date?  This includes going to the doctor, a lab, a therapist, etc.  Basically, make sure you had something medically done on the Date of Service listed on the EOB.  There are very times the dates won’t match actual dates that you sought medical attention.  So, call your provider when the dates don’t match.
• Provider’s Name.  Did you seek medical attention from the provider listed?  Always verify the provider.  Contact the provider if you do not recognize the name. 
• Service Description.  This can be a tricky part of the EOB.  Especially if you try and match it to your provider’s bill.  A complex set of codes are used by providers when sending claims to your insurer.  Some insurer’s will use these codes on their EOB’s, and some won’t.  Some provider’s will use these codes on their EOB’s and some won’t.  Just ensure everything showing on your EOB was performed by your provider.  Keep in mind, there may be somethings on the EOB that you didn’t realize was a separate billable charge.  Always ask your provider if the procedure is a separate billable charge or if it is included in the visit.
• Provider’s Charge.  Sometimes called the “Submitted Charge” or the “Billed Charged”.  This is the amount your provider charged for the medical service that was provided to you.  There can be more than one charge per date of service.  Verify this amount matches the amount billed by your provider.
• Allowed Amount.  Physicians contract with insurance companies and must accept the insurance company’s allowed charge.  If applicable, your coinsurance is calculated using the allowed amount.
• Adjustment.  The adjustment, sometimes called a discount, is the difference between the provider’s charge and the allowed amount.  It is important to know that you are not responsible for paying this amount.  Providers agree to subtract (or adjust) this portion of the bill from your charge.
• Deductible Amount.  This is the amount that you will pay prior to your insurance carrier begins paying their portion.  Most EOB’s will provide how much of the deductible is left for you to pay.
• Co-Payment Amount.  This is the amount you must pay your provider at the time of service.
• Coinsurance Amount. The percentage of the Allowed Amount you pay to the provider for covered services for which the member is responsible. The Allowed Amount includes amounts withheld from provider payment, which are subject to the terms and conditions of the contractual agreement with the provider.

Save your EOB’s

It’s a good idea to keep your EOB’s so you can refer to them at a later date.  This is helpful to determine your annual health care expenses. You can use your EOB’s to ensure you don’t pay an unnecessary charges and to help predict future costs when it’s time to enroll again in your benefits.

Below is an example of an EOB.