A Beginner’s Guide To Explanation Of Benefits(EOB)

An explanation of benefits (EOB) statement provides details about a health insurance claim that has been processed. Medical bills can be confusing. An explanation of benefits (EOB) statement can help break down the various components.

What is an explanation of benefits?

An Explanation of Benefits, commonly referred to as an EOB is a statement from your health insurance company providing details on payment for a medical billing service you received. It explains what portion of services were paid by your insurance plan and what part you’re responsible for paying.

Your insurance company sends it to you when your health care provider submits a claim on your behalf. When you read your EOB, make sure you understand every line. Use it to track your expenses and make sure there are no billing errors.

When you visit a doctor, dentist, or other health care provider, you will generally be asked whether you want the service to be billed to your insurance. If you do, the medical office should fill out a health insurance claim and submit it to your health insurance company. This is essentially a request for payment to your insurance company to cover the cost of the visit, treatment, or equipment.

When the insurance company gets the claim, they will evaluate the claim, create an Explanation of Benefits (sometimes referred to as an EOB) and send it to you in the mail. They might also make a digital copy available through their website.

You should receive an EOB whether you have private insurance, insurance through your employer, or Medicare.

You should receive an EOB for every service you received, whether you owe anything for the service or not. You will get a separate EOB for each service you received, or a separate EOB for the same service provided on different days.

If your health insurance plan is an HMO, you might not receive an EOB, because many HMOs pay a monthly fee for patient care rather than paying for each service separately.

What is included in your EOB?

The EOB contains the following information:

• Your name, or the name of your dependent (whoever received the service)
• Your (or your dependent’s) health insurance ID or policy number, and the claim number
• The name of the health care provider who administered care – doctor, dentist, specialist, laboratory, hospital, or clinic
• The type of service or equipment you received and the date on which you received it; for service that lasted more than one day, the date range will be given
• The cost of the service (what your provider billed the insurance company)
• How much of the billed amount your insurance company paid
• The remaining amount to be paid, which is usually your responsibility
• The EOB might contain information about whether the amount you need to pay will be applied to your deductible. Sometimes an EOB also lists how much is left of your deductible for the year.

Other items that might be included in your EOB include a glossary of terms and definitions, information on how to appeal a claim, further details about the services reflected on the EOB, and language instructions.

How to read an EOB?

It’s important to read your EOBs as they arrive. Your EOBs help you understand several important aspects of your health care costs.

The EOB helps you find errors. When health insurance claims are completed and filed, errors are sometimes made by humans and computers, and these might be reflected on your EOB. Here are some of the mistakes you might find:

• Being billed for services you didn’t receive
• Double billing, such as being billed twice for lab tests
• The provider billed the wrong amount for a service
• Your insurance company didn’t cover a service they should have, according to your plan
• Incorrect dates of service
• An error with your deductible

The EOB helps Identify potential medical fraud. If your EOB lists services you didn’t receive, it’s possible your provider is billing fraudulently. This might point to medical identity theft, medical fraud, or Medicare fraud. 7

The EOB tells you how much you owe. Your EOB includes how much you owe. It is not a bill, which you will get separately from your provider. The amount you owe that’s listed on your bill should match the amount you owe listed on your EOB. If you haven’t received your bill or paid your provider yet, you can plan for making your future payment when you get your EOB.

The EOB helps track medical care and costs. Your EOBs list all the medical services and equipment you received throughout the year and how much they cost. The only exception to this is medical service that is not billed to your insurance company. Keep your EOBs so that you’ll have a record of what care you received, how much you were charged for that care, and what your health plan covered of those charges.

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How an Explanation of Benefits Works

An EOB can help you avoid paying more than you should for health care. Look over an EOB when it arrives in the mail; then, compare it to your bills to ensure that you pay the correct amount. If you find an error on a bill from a doctor or other provider, call your insurance company. They will help you address the discrepancy.

What if you don’t understand why you owe money or simply are having trouble reading the EOB? You can also call your insurance company or your health care provider to explain the details.

If you owe money, ask the insurance company if this payment will be put toward your out-of-pocket deductible. Or, you may need clarification on charges for certain services, you can ask the provider to explain the services and charges for each. If you think you have been charged in error, ask the provider to go over the entire EOB, line by line. This can help you see whether a mistake occurred.

Just as health care providers can make billing errors, coding errors can occur when insurance companies process EOBs. If you do not understand something on your EOB or you think your insurance policy covers an expense that was not paid, call your insurance company for an explanation.

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