A Greater Understanding
This publication will help you better navigate the increasingly complicated world of health care by starting with the understanding of the most commonly received insurance form. Known formally as an Explanation of Benefits or an EOB, this paperwork is sent out from your insurance company following every healthcare service you receive as a means to document what occurred and who will pay for the service. This publication will explain the purpose of this form, what information it contains, and how it plays a critical role in your interaction with your health insurance company.
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I just received a “Explanation of Benefits” or EOB in the mail, what is it and what information does it contain?
Shortly after you visit a doctor, clinic, or hospital, you will receive a copy of documentation from your insurance company called the Explanation of Benefits (EOB). While this form contains an itemized price listing for the services you received, it is not a bill, and frequently confuses patients as to its purpose.
The Explanation of Benefits summary is from your insurance company and its main purpose is to alert you AND your providers of what portion of the charges are eligible for benefits under your insurance plan. The EOB allows you to see the impact of your insurance benefits – and specifically what was paid on your behalf. Technically, the EOB is the result of the claims process, initiated by your doctor’s office , facility or provider following your services.
To better understand how the EOB is initiated, let’s look at the steps behind the scenes in the claims process.
If your doctor or facility where you received your care is part of the provider network associated with your insurance plan, the provider will first process the specific services you received within the network agreement and record the in-network discount you are entitled to. This process works to calculate and document your care specifically as it relates to the benefits in your plan language, while also processing any necessary payment to the provider. At the end, this will generate a statement which is sent to you as the patient and policy holder for your records. If another insurance company is involved, (for example if you have a supplemental policy) the insurance companies will communicate between each other details about your benefits in order to determine which plan is responsible for the charges. Your copy of the EOB will document the results of this interaction.
If your provider is out of network, they will send documentation of your visit directly to your insurance company. In these cases, you will still receive an EOB, however you will most likely notice the rate of reimbursement is different as it will be specific to your out of network coverage in your plan.
Your Explanation of Benefits document will identify:
- The patient name, date of service and a listing of the service provided.
- The amount charged and requested by the provider for the care received.
- The portion of the charges that are covered and not covered under your specific plan.
- The amount paid to your provider by your insurance company under your policy.
- The amount within the charges that you are responsible for, if any, including copayment, co-insurance or amount towards deductible.
- Many EOB statements will also include an update on your total to-date deductible and out-of-pocket costs for the plan year.
Remember that the EOB is not a bill, but instead a statement of the current situation as documented by your insurance company. It is based on the information available to your insurance company as of the date listed on the EOB. As updated information becomes available to your insurance company the EOB may be revised and resent. You will receive a separate EOB for every claim that has been submitted to your insurance company related to services provided to you by a medical provider.
If there is an amount on the EOB that is identified as the patient responsibility, then your provider will be expecting payment directly from you and will most likely bill you separately for that amount. For out of network services, this amount is likely to be significantly higher than in-network.
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It is very important that you keep your explanation of benefits in an organized system, usually by date of service, to reference as you progress through the insurance and payment portions following your care and medical treatment.
The EOB can be your first clue that an error has occurred.
It is important to review the services that are documented on the EOB and the providers that are listed as part of your care. Sometimes a portion of the services you received are not noted on the EOB, because a specific provider is delayed in submitting the information to the insurance company on your behalf. Sometimes, the patient responsibility does not match with what you expected to pay and may be a result of a miscoding situation by the provider office, or missing documentation to support full payment. If the date of service is incorrect, this can create an inconsistent medical record creating confusion on the billing side.
It will help you match up bills from your provider when they arrive.
By alerting you to your patient responsibility amount associated with your care, you will know to expect a bill with that exact amount from your provider. At the same time, if you anticipate this amount will be difficult for you to pay, it gives you a chance to contact your doctors office and request a payment plan or investigate alternate payment options. When the bill does arrive from your doctor’s office if there is an inconsistency with the EOB, these documents will be necessary to clear up the difference and ensure accurate records. In addition, if your bill does not arrive in a timely manner, you will be able to contact your provider to follow-up so that you are not placed in collections resulting from your non-payment.
It is important for long term tax records, financial budgeting and disputes.
In addition to the near term aspect of billing, keeping a copy of your explanation of benefits may be important for end of year tax documentation, as well as managing your total out-of-pocket expenses throughout your insurance plan year. If you are applying for any type of financial aid, whether through your provider, a state or local resource or even through a charity, they will most likely request copies of the EOB in their application process. Should you find yourself needing to appeal an insurance decision or dispute a charge or service, whether related to this specific date of service or a future incident, you will need to include EOBs as documentation within that process.
If you do not get an EOB following your service, it’s in your best interest to follow-up.
EOBs generally are received fairly quickly after following a medical service, and most insurance policies will send you a copy of the EOB for your records even if you do not have an immediate patient responsibility portion of the bill.
If you are expecting an EOB and have not received one yet, check to see if you have selected to receive your EOBs electronically substituting for a paper copy in the mail. In this case, the electronic version may be available for your review online associated with your insurance account.
Your provider may not have yet submitted information related to your care to your insurance company and thus they have not yet processed a claim for reimbursement of those services. You may contact your provider or the insurance company at any point if you are concerned about the delay.
If your EOB is incomplete or missing a provider or service associated with the care your received, start with the provider to inquire if their submission was received by the insurance company to ensure they submitted to the correct company, with the correct date of service, and with accurate reference to you as the patient.
Your EOB contains your insurer’s contact information, your rights associated with your insurance plan and relevant policies regarding appeals.
The ‘fine print’ following the financial summary related to your specific medical service can contain important information regarding the policies and procedures related to future interaction, grievances, appeals and your rights governed by your insurance plan. This section also contains the best contact information for addressing your questions and concerns to your insurance provider, should you have any.
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EOB formatting will vary from insurance company; however all EOBs should contain the following information. Each section of this sample EOB corresponds to the following explanations.
- Enrollee Name & Policy Number: Identifies the policyholder. This is usually the name of the person who carries the insurance. For children, this would most likely reference the adult associated with the plan.
- Enrollee Address: Indicates the address of the enrollee; this should be verified with each claim. A wrong address can cause problems in claims payment.
- Patient Name and Patient ID #: Identifies the patient who was treated or received care and the identification number for the patient. This may be a member number or other unique identification number
- Claim # and Date Processed: A number assigned by the insurance company to identify the claim in their computer system. The date indicates the time in which the claim (or revision) was processed by the insurance company and serves as a log of information that was available at this point in time.
- Provider Name: Identifies the name of the doctor or hospital that is billing for the services. The reviewer should always verify this matches the care received, keeping in mind that some services are performed without face-to-face interaction with the patient (including lab work, radiology, in facility pharmacy, etc).
- Service Details, including date and place of service: Indicates the date of when the service was rendered to the patient and the location the service was administered. The location can be important when reviewing as some services are only covered in specific locations.
- Billing Code: This number represents and identifies the service performed specific to your diagnosis, the equipment used and even the type of facility where care was received. This code is universal within the healthcare and insurance industry but is very specific to the services you received. This will play an important role in the payment allowances. Note: Some insurance companies may only supply this information by request, however it is your right to this detailed summary with codes.
- Charge Amount: Amount charged by the provider related to your care. This represents the fee that the provider has designated as appropriate for the services provided.
- Allowed Amount: This is the amount pre-negotiated by your insurance company and its network of providers for the services you received. This amount also takes in to account what is referred to as “usual and customary” (UCR) charges and is impacted by geographic location of provider.
- Not Covered: Amount that the insurance company has designated as not covered within your plan and therefore not eligible for payment. This may be an out of network provider, or a specific service that is outside of your plan benefits.
- Reason Code & Description: Any adjustments made to the amounts listed in the bill will be reference here. If a service was denied, this provides explanation of why it was not covered within the plan specifics. Frequently more detail of these codes are within the footnotes or additional documentation of the EOB, if not described next to the code.
- Deductible: This reflects the amount the patient must pay prior to having the benefits paid. Generally, each patient will have his or own deductible to meet according to the details in the plan. Some plans have different levels for in-network deductibles and out-of-network deductibles, and additional for pharmacy deductibles. Amounts that are not covered at all by your insurance plan are not applied to the deductible.
- Co-Pay: This is the amount required from the patient when seeking services from a provider, and is described in the insurance plan language.
- Benefit Amount / Payment Amount: This is the percentage or amount which the insurance company will pay the providers on your behalf. The amount paid will be determined by the schedule of benefits in your plan. Generally, participating and in-network providers will be paid higher percentage; non-participating providers will be paid a lower percentage of the entire bill.
- Due from Patient / Patient Responsibility: This is the amount the patient is responsible for paying to the provider. This includes the copay amount, amount towards deductible, as well as any non-covered charges associated with your care.
- Customer Service Contact information: This is the phone number and mailing address used to contact the customer service department of your insurance, should you have any questions or concerns related to this statement.
- Relevant policies and procedures: This is an important section that outlines the procedures for additional follow-up related to your medical care and treatment and insurance reimbursement. Information regarding appeals is listed within this section, and are frequently time sensitive. The process for resubmitting claims is also identified.