Understanding Explanation of Benefits (EOB) Statements

You know that Explanation of Benefits (EOB) statement your health insurance company sends out after you visit a doctor, clinic, or hospital? Here's how you can make sense of all the information included on it.

couple looking at eob statement

Having--and using--health insurance often means reading through reams of paperwork. Insurers regularly send forms and other documents to review and sometimes sign.

The "Summary of Benefits and Coverage," which provides an overview of your plan, is a good example. Another is the "Medical Schedule of Benefits," which details the medical services your plan covers.

And then there is the "Explanation of Benefits," or EOB, statement.

If you've had health insurance for any length of time, you're likely more familiar with the EOB. That's because insurers send EOB statements to policyholders or customers whenever they receive medical care.

Unfortunately, the fact that most Americans receive a lot of EOB statements doesn't mean they understand or even read them.

In a way, that makes sense. These documents are filled with names, numbers, and other information. It's not easy to figure out which details are important and relevant, and which details are less so.

This article will help you with both of those challenges. Keep reading to learn how to read and understand your health insurance company's EOB statements.

What is an EOB Statement?

Let's cover some of the basics regarding the explanation of benefits documents.

First, an EOB statement isn't a bill--even though it kind of looks like one. It does tell you how much money a health care provider may bill you for a particular service or treatment. But it doesn't require you to respond with a check or any other form of payment.

So what is its purpose? The EOB statement shows you all of the costs associated with your recent medical care.

Specifically, it lists:

  • the services your health care provider performed
  • when they performed them
  • what it charged your insurance company for those services
  • any discounts the provider applied to that amount
  • the portion your insurer paid
  • what you owe

n other words, the EOBs point out and explain how your health insurance benefits are applied toward a specific claim.

If you're thinking, why should I care?-- well, learning how to read these statements helps you:

  • better understand your health insurance coverage and benefits
  • track expenses related to your medical care
  • avoid overpaying for treatments and services

How an EOB Statement Gets to Your Mailbox

The EOBs journey to your doorstep is longer and more convoluted than you may imagine. First, you see a doctor, surgeon, or other health care provider. After they treat you, they send a claim to your insurance company.

That claim highlights the services the doctor or surgeon provided you and also bills your insurer for them. Your insurance company then reviews that information to figure out how much to pay the provider for your care.

Once it pays your healthcare provider, your insurer sends you an EOB document that details all of the above. It also explains which services the insurance company paid for, which ones it didn't pay for, and why.

Keep in mind that the surgeon or physician may send you a statement, too. That document is different from the one discussed here. In general, the statement from your doctor's office tells you how much it charged your insurance company for your treatment.

If the statement from your health care provider arrives in your mailbox before your insurer's EOB statement, sit tight. Wait for your insurance company to pay its portion of the claim and send its statement.

Should a balance remain once all of the above is out of the way, that amount is what you'll pay.

One last note related to these statements: not all insurance companies send EOBs to policyholders. Likewise, not all physicians or surgeons send statements. So don't be surprised if you receive one, both, or neither.

Breaking Down the EOB

Now you know why health insurance companies send these statements and what kinds of information they generally include. Let's talk about some of the specific terms and phrases they usually contain.

All EOBs are not the same, by the way. Yours may use words that are slightly different from the ones discussed in this article. If you have questions about information found in your EOB but not mentioned here, contact your insurer.

Thankfully, the EOB statement your insurance provider sends you should include most, if not all, of the following:

Information about you

You'll find most of this near the top of your statement. A few examples:

  • your name
  • your address
  • the name of the person who received care (if not you, most likely a family member)
  • your plan, policy, or group number

Your name may be listed under "member," "subscriber," or "employee," depending the type of plan you have.

Insurers use "patient" to identify the person who received treatment or services. That person could be you, or it could be a family member your plan also covers.

You might see "Member ID" and "Patient ID" on your EOB, too. They're just other ways your insurance company uses to identify you and whoever received medical care.

Later, EOB should show you:

  • how much you may owe the health care provider (usually under "member responsibility")
  • how close you are to meeting your policy's deductible
  • where you are in terms of your coinsurance and out-of-pocket maximums for the benefit period

Information about the services you received

Included here are details like

  • the date of your doctor or hospital visit
  • a description of the service provided
  • a claim number

Note: your EOB might include a "procedure code" rather than a description of the service provided. Or it may use words like "office visit" or "lab" to describe what was done.

Also, your insurance company may or may not include a claim number on your EOB document. If it does, make note of it. You'll need it--or your policy number--if you contact your insurer about any issues, questions, or concerns.

Information about the health care provider

Some of the information about your care provider that is found on most EOBs:

  • the name of the person (physician, surgeon, or other specialist) who provided treatment or care
  • the address of the provider
  • the amount that person or place charged your insurer for the service

A few things to keep in mind regarding the above:

Your EOB may list your doctor's name. Or it may list the name of the clinic or hospital, or even a group practice name, instead. Regardless, look for your statement to mention this under "provider name."

The address shown here may be where you received treatment or care. Or it may be the location of the provider's billing office.

Information about your insurance company

Finally, expect to see some or all of the following while looking over your next EOB:

  • the portions of the claim your insurance company covered and didn't cover
  • the date it sent payment to the care provider
  • reasons for any adjustments
  • adjustment codes associated with the above
  • the amount you saved due to being a policyholder

A few of the terms and phrases to keep an eye out for here are "charges not covered," "remark code," "total payable amount," and "negotiated savings."

Remark codes explain why your insurer won't cover certain services. The total payable amount is what it agreed to pay the care provider. This figure should equal what the provider charged your insurance company minus negotiated savings and copays and deductibles.

You'll also find phone numbers plus physical and email addresses if you have questions about your EOB. Use these, too, if you find any errors or inaccuracies on your statement.

Once You Get Your EOB, Don't Forget...

Every health insurance company's EOB is a little different from that of its competitors.

If you're unsure about something included--or not included--on yours, contact the care provider or your insurer. Check your insurance company's website, too. Many feature tutorials that walk policyholders through these statements.

Whenever you receive an EOB, give it a close look. Make sure your insurer wasn't charged for a service that wasn't done. Also check that it wasn't charged more than once for a service.

Make sure all of the dates and codes listed on your statement are accurate. Compare them to the dates and codes on any statements or bills your care provider sent you.

Don't panic if you see charges from other companies. They may be for medical equipment or supplies related to the services or treatment you received. Check with your care provider if you come across a charge that seems incorrect.

Many insurers recommend you keep all EOBs for at least a year. Some suggest two years. If you'd rather not, see if your health plan provider offers paperless statements to store electronically.

Frequently Asked Questions

Q: What is an explanation of benefits statement?

A: Health insurance companies send explanation of benefits, or EOB, statements to policyholders after they receive medical care or treatment.

The EOB summarizes all of the costs and other relevant details associated with those services. And it shows what portion of those services your insurer covered, and what portion you have to cover, too.

Q: Is an EOB statement a bill?

A: No. An EOB is a summary of the medical services you or a family member received. It's also a summary of what the care provider charged your health insurance company for those services.

An EOB does tell you how much you do--or do not--owe for the care or treatment you received, but it's not a bill.

Q: What are the differences between an EOB and a medical bill?

A: Your health insurance company prepares and sends you an EOB. Your health care provider prepares and sends a bill.

The EOB basically tells you what the health care provider charged your insurer. The medical bill, on the other hand, tells you how much you owe the provider.

Q: Why do I get statements from my insurance company and my health care provider after receiving treatment?

A: The statements your insurer and care provider send serve different purposes. One lets you know well (or not) your insurance covers you. The other lets you know how much you owe for certain medical services.

Q: What should I do if my EOB includes services I didn't receive?

A: If you see a service or treatment mentioned on your EOB that you didn't receive, contact your health care provider. Although it's possible someone made a mistake, it's also possible something fraudulent happened.

Q: Should I keep EOB statements? And if so, how long should I keep them?

A: Yes, most experts suggest you keep your EOBs for at least a year. Some say you should keep them for at least two years. Keep statements, invoices, bills, and other documents related to medical care and treatment, too. Use them to make sure your EOB doesn't contain any errors.

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