What Is an Explanation of Benefits?
An Explanation of Benefits (EOB) is a form or document that may be sent to you by your insurance company several months after you had a healthcare service that was paid by the insurance company. You should get an EOB if you have private health insurance, a health plan from your employer, or Medicare.
A tip from Dr. Mike: If you are a member of a health maintenance organization (HMO) that pays your doctor through capitation (a set amount of money each month to care for you), you may not receive an EOB because your doctor is not billing the insurance company. This type of arrangement is not common.
Your EOB gives you information about how an insurance claim from a health provider (such as a doctor or hospital) was paid on your behalf.
What Information Is in My Explanation of Benefits?
Your EOB has a lot of useful information that may help you track your healthcare expenditures and serve as a reminder of the medical services you received during the past several years.
A typical EOB has the following information:
Patient: The name of the person who received the service. This may be you or one of your dependents.
Insured ID Number: The identification number assigned to you by your insurance company. This should match the number on your insurance card.
Claim Number: The number that identifies, or refers to the claim that either you or your health provider submitted to the insurance company. Along with your insurance ID number, you will need this claim number if you have any questions for your health plan.
Provider: The name of the provider who performed the services for you or your dependent. This may be the name of a doctor, a laboratory, a hospital, or other healthcare provider.
Type of Service: A code and brief description of the health-related service you received from the provider.
Date of Service: The beginning and end dates of the health-related service you received from the provider. If the claim is for a doctor visit, the beginning and end dates will be the same.
Charge (also known as Billed Charges): The amount your provider billed your insurance company for the service.
Not Covered Amount: The amount of money that your insurance company did not pay your provider. Next to this amount you may see a code that gives the reason the doctor was not paid a certain amount. A description of these codes are usually found at the bottom of the EOB, on the back of your EOB or in a note attached to your EOB.
Total Patient Cost: The amount of money you owe as your share of the bill. This amount depends on your health plan’s out-of-pocket requirements, such as an annual deductible, copayments, and coinsurance. Also, you may have received a service that is not covered by your health plan in which case you are responsible to pay the full amount.
Additional information may include the amount of payment actually made to your provider and how much of your annual deductible has been met.
Depending on your insurance company’s EOB, the order of the information may differ.
An example of an EOB:
Frank F. is a 67 year old man with type 2 diabetes and high blood pressure. He is enrolled in a Medicare Advantage Plan and sees his doctor every three months for a follow-up of his diabetes. Six weeks after his last visit, Frank received an EOB with the following information:
Patient: Frank F.
Insured ID Number: 82921-804042125-00 – Frank’s Medicare Advantage Plan Identification Number
Claim Number: 64611989 – the number assigned to this claim by Frank’s Medicare Advantage Plan
Provider: David T. MD – the name of Frank’s primary care physician
Type of Service: Follow-Up Office Visit
Date of Service: 11/21/09 – the day that Frank had on office visit with Dr. David T.
Charge: $135.00 – the amount that Dr. David T. billed Frank’s Medicare Advantage Plan
Not Covered Amount: $70.00 – the amount of Dr. David T’s bill that Frank’s plan will not pay. The code next to this was 264, which was described on the back of Frank’s EOB as “Over What Medicare Allows”
Total Patient Cost: $15.00 – Frank’s office visit copayment
Amount paid to provider: $50.00 – the amount of money that Frank’s Medicare Advantage Plan sent to Dr. David T.
Some math: Dr. David T. is allowed $65 (his charge of $135 – the not covered amount $70.00 = $65.00). He gets $15.00 from Frank and $50.00 from Medicare.
Why Is Your Explanation of Benefits Important?
Many doctors’ offices, hospitals, and medical billing companies make billing errors. Such mistakes can have annoying and potentially serious, long-term financial consequences.
Your EOB is a window into your medical billing history. Review it carefully to make sure you actually received the service being billed, the amount your doctor received and your share are correct, and that your diagnosis and procedure are correctly listed and coded.
To learn more about why your EOB is important and how to find and avoid EOB mistakes, read:
To learn about how doctors, hospitals, and insurance companies use codes on EOBs and claim forms, read:
A tip from Dr. Mike: Your EOB should have a customer service phone number. Do not hesitate to call that number if you have any questions or concerns about the information on the EOB.