The Life Transition Blog

If you have medical insurance, you’ve probably received a paper titled “Explanation of Benefits” or EOB. Typically, just below the title, it reads, “This is not a bill.” That said, there are dollar figures all over it. So if this is not a bill, what exactly is it? The EOB is exactly what it says it is: an explanation of the benefits provided by your insurance plan for a particular service on a particular date. Its purpose is to report to you (the subscriber) and your doctor or hospital (the provider) exactly how the claim was processed. It is critical that you review each and every EOB you receive for accuracy and the need to take action. Not doing so may cause you to become financially responsible for charges that otherwise would have been covered by your plan. However, most people are intimidated by the EOB and have no idea what to look at or what to do about what they see. Here then is your guide to your EOB.

While every EOB uses slightly different terms and formats, the key items you need to review are:

Patient Name: is this you or your dependent? If not, call the insurance company immediately and report the error.

Date of Service: refers to the date that the visit or procedure or other service happened. Is it accurate? If not, report it immediately.

Provider’s Name: this is the doctor, hospital, or other entity that provided the service. Often, you will know that Dr. Jones was your surgeon, but the provider on the EOB will be Everytown Surgical Associates. This is okay, as long as Dr. Jones is indeed part of that group. If you’re not sure, call the surgeon’s office and ask. Likewise, sometimes you will receive a bill for a provider you don’t recognize. If you had surgery, it’s very possible that this is an anesthesiologist, radiologist, emergency room physician, or pathologist who participated in your care and who bills separately. When in doubt, ask.

Procedure code or type of service: this is the shorthand where the provider communicates the service for which payment is being requested and is often a five digit number or an abbreviation. You may see several codes for one date of service as when, for example, you visit the orthopaedic surgeon and have an office visit, x-rays, and a cast applied. Likewise, when you have surgery there are often multiple procedure codes reported. One common question occurs when a service is reported as “surgery” but when you don’t believe you had surgery, as when you had a skin lesion removed in the office. This doesn’t mean that your provider is doing anything wrong or trying to get away with something; rather, it is simply the language of insurer-provider communications.

Total charge or billed amount: this is your provider’s standard charge for the service.

Allowed amount: this is the amount your insurance plan will pay under its contract with your provider.

PPO discount: this is the amount that is “adjusted” off of the bill due to your insurance plan’s contract with the provider.

Not covered amount: this is the amount your plan does not cover. Sometimes, this refers to any charge that is above the allowed amount or the “reasonable and customary” charge, and other times this refers to services that are not covered under your plan.

Copay, coinsurance, deductible: these are the amounts that are the subscriber’s responsibility under the terms of your insurance plan.

Patient/subscriber responsibility: This is the total dollar amount that you may be billed directly for the date and services reviewed on the EOB and may include amounts that you have already paid at the time of service. Typically, you will pay this directly to the provider.

Remarks/remark code/message code: This is the method by which the insurance company communicates with both you and your provider to explain how the claim was processed. Most often, the codes will be several letters or numbers next to the particular service. Elsewhere on the EOB you will find the “key” to these codes, which might read something like, “Duplicate charge” or “Not covered on the same date of service as the related charge” or “Not covered due to lack of timely filing”. There are many, many codes and they vary by insurance company, but this is where you will learn what you or your provider might need to do to have the claim processed and paid correctly. You MUST review this and take the appropriate action in a timely fashion.

Payment assigned to provider: This means that whatever payment is being made by the insurance plan is going directly to the provider because he or she is a participating provider in your plan and you signed authorization with the physician to submit the claim on your behalf and receive direct payment. Where this is not the case, as when you use an out-of-network provider, the check may come directly to you and you are responsible for paying the provider.

If you are confused or overwhelmed by your medical paperwork, a medical billing advocate might be helpful to you. These professionals are well versed in the ins and outs of medical billing and can help you get problems with your claims resolved quickly and efficiently.

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