What Is an Explanation of Benefits?

An Explanation of Benefits (EOB) statement provides details about a health insurance claim that has been processed. Explain what fee was paid to the healthcare provider; it also tells you how much of the payment, if any, is your responsibility.

Medical bills can be confusing. An Explanation of Benefits (EOB) statement can help break down the various components. By learning to read this important document, you can understand why you owe the charges.

Definition and examples of explanation of benefits

An explanation of the statement of benefits is sent to you after an application for health insurance. It describes the details of the service, the provider's charges, the amount covered by the insurance, and the amount of money still owed. Every time they provide services to you, doctors, dentists, and other medical professionals will file claims against your insurance. This is how they get paid. In turn, the insurer will send you an EOB. This is to inform you of the claims submitted, how much is covered by insurance, and how much you owe.

The provider will collect any portion of medical expenses not covered by the insurer, such as deductibles or copayments. These fees must be paid directly to the provider.

The precise design and shape of the EOB varies by insurer. But a simple EOB will include:

A summary of your account with important identifying information and claim number.
Claim details, including date and specific services provided.
The accounting, which includes the price of the service, the amount your insurance covers, and the difference between the two. (This is sometimes referred to as "Adjustment", "Allowable Value" or "Contracted Agreement").
An optional summary of copays, deductibles, and coinsurance.

Many insurers, like Blue Cross Blue Shield, will have EOB samples available on their websites. You can review them to become familiar with what EOBs look like and how the information is presented.

How an explanation of benefits works

An EOB can help you avoid paying more than you should for health care. Review an EOB when it arrives in the mail; then check it against your bills to make sure 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 resolve the discrepancy.

What if you don't understand why you owe money or just have trouble reading the EOB? You can also call your insurer or healthcare provider to explain the details.

If you owe money, ask the insurance company if this payment will be made towards your deductible. Or you may need clarification on the fees for certain services. You can ask the provider to explain the services and fees for each. If you think you were billed in error, ask the provider to review the entire EOB, line by line. This can help you see if an error has occurred.

Just as healthcare providers can make billing errors, coding errors can occur when insurers sue EOBs. If you don't understand something about your EOB or think your insurance policy covers an unpaid expense, call your insurer for an explanation.

What if you find a mistake in your EOB and the insurer can't correct it right away or there is a disagreement? You may need to review the benefit in a longer process or open a formal dispute.

How to get an explanation of benefits

The explanation of the statement of benefits usually arrives in the mail. In most cases, it looks a lot like a medical bill.

Most insurers now provide online access to your account. This may include digital access to the EOB. If you still do not have online access to your account, check with your insurance company to obtain it.

Once you've set up an account online, check what digital access options your insurance company offers. Most will allow you to sign up for email alerts when EOBs are available. This can allow you to see them right away. That way, you won't have to wait for them to arrive in your mailbox.

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Source: HAP Michigan

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