EOB means Explanation of Benefits. An Explanation of Benefits (EOB) is NOT a bill. It is a summary sent by a health insurance company every time a patient receives treatment from a medical professional. It outlines the dates and types of treatment received, and the costs the insurance company will pay.
Insurance companies send information to both the patient and provider on exactly what they paid and allowed. Allowed amount means the maximum amount the insurance company would consider for payment. Any difference above the allowed amount is written off if the provider participates with the insurance company.
Common errors in EOB
- Double billing: Being charged twice for the same services, drugs, or supplies.
- Typos: Incorrect billing codes or dollar amounts.
- Canceled work: Charging for a test your doctor ordered, then canceled.
- Phantom services: Being charged for services, test or treatments that were never received.
- Up-coding: Inflated charges for medications and supplies.
Importance of EOB
The EOB can help you track your health care spending or medical claims history. Your EOB also helps you verify that the services and charges listed are correct. It explains how your benefits were applied to that particular claim. It includes the date you received the service, the amount billed, the amount covered, the amount we paid and any balance you’re responsible for paying the provider. It also tells you how much has been credited toward any required deductible.
Other terms used along with EOB
- Service/Product – The type of services or products you received from your provider.
- Dates of Service – The date(s) you received service.
- Amount Billed – The full amount billed by your provider to your health plan.
- Your Plan Discounts & Payments – This section details the amounts that you do not need to pay.
- Premera Network Discount – The amount you save by using a provider that belongs to a Premera network. Premera negotiates lower rates with its in-network providers to help you save money. This amount may not be itemized and may only show in the Totals row of the Claim Detail.
- Amount Paid By Your Health Plan – The portion of the charges eligible for benefits minus your copay, deductible, coinsurance, network discount and amount paid by another source up to the billed amount.
- Amount Paid By Another Source – Examples of other sources include: a health funding account, other health insurance, automobile insurance, homeowners’ insurance, disability insurance, etc. This amount may not be itemized and may only show in the Totals row of the Claim Detail.
- Copay – A set amount you pay for certain covered services such as office visits or prescriptions. Copays are usually paid at the time of service.
- Deductible – Your deductible is the amount you need to pay each year for covered services before your plan starts paying benefits.
- Coinsurance – A percentage of covered expenses that you pay after you meet your deductible.
A Hunch makes a very good point. Many times, you will receive a bill before your insurance has paid. Then you should receive a second bill, which is the balance that you really owe.
Take a breath and match up your bills to your EOBs by date. Only look at the bills you receive AFTER the insurance has paid out. Also, on your EOB, there should be some sort of code explaining why something is not paid, or why it is paid at a lessor rate.
Your next call should be to your insurance company, once you have figured out exactly what the discrepancy is. They should be able to tell you what you owe, and why you owe it.
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This article concerning the aspects of medical billing was very informative and ensured a complete understanding within me. As I work at a specialized medical billing company, this article was very much essential for the development of my perspective of medical billing.
Thanks for such good commen Brandon…medical billing is a very important part of revenue cycle management and it each part like EOB has importance in medical billing..!!
My sister is planning to incorporate medical billing in her physical therapy clinic because she heard that this is beneficial in terms of proving convenience to her customers. Since I am not an expert in this, I never knew that EOB is useful in terms of helping my sister verify the services and charges. It’s also great to know that it can help with determining the amount of credit that has been used.
thank you for your valuable comment Rachel.
This article of medical billing will be something that I’ll read again in the coming days. As I currently work on a website that deals with medical billing, this concept is very much an essential part of it. This article will make it easier for me to understand the diversity and how it gets implemented.
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