Definition:
The Explanation of Benefits (EOB) provides details about a processed health insurance claim.
Definition and Examples of Explanation of Benefits
An Explanation of Benefits is sent to you after a health insurance claim. It outlines the details of the service and charges from the provider, the amount covered by insurance, and the amount you owe afterwards. Each time they provide services to you, doctors, dentists, and other healthcare professionals will submit claims to your insurance. This is how they receive payment. In turn, your insurance company will send you an Explanation of Benefits to inform you of the claims filed, the amount covered by insurance, and the amount you owe.
Any portion of healthcare expenses not covered by insurance, such as a deductible or coinsurance, will be billed by the provider. These charges should be paid directly to the provider.
Tip:
The Explanation of Benefits may look like a bill, but it is not. It can also be difficult to understand. You may need to contact your insurance company with any questions regarding the Explanation of Benefits.
The exact design and layout of an Explanation of Benefits may vary by insurance company, but a simple Explanation of Benefits typically includes:
- A summary of your account with important identifying information and the claim number.
- Claim details, including the date and specific services rendered.
- Accounting, which includes the price of the service, the amount covered by insurance, and the difference between the two. (This is sometimes referred to as “adjustment” or “allowed amount” or “negotiated rate.”)
- An optional summary of copays, deductibles, and coinsurance.
Many insurance companies, like Blue Cross Blue Shield, will provide EOB forms on their website. You can review these to see what an Explanation of Benefits looks like and how the information is presented.
How the Explanation of Benefits Works
An Explanation of Benefits can help you avoid paying more than you should for healthcare. Review your Explanation of Benefits when it arrives in the mail; then compare it to your bills to ensure you are being billed the correct amount. If you find an error in a bill from a doctor or another healthcare provider, contact your insurance company for assistance in resolving the discrepancy.
What if you don’t understand why you owe money or have trouble reading the Explanation of Benefits? You can also contact your insurance company or your healthcare provider to explain the details.
If you owe an amount, ask the insurance company whether this amount will count towards your out-of-pocket maximum. If you need clarification on the charges for certain services, you can ask the provider to explain the services and fees for each. If you believe you were charged incorrectly, ask the provider to review the Explanation of Benefits thoroughly, line by line, to help you see if an error occurred.
Just as healthcare providers can make billing mistakes, coding errors can happen when insurance companies process Explanations of Benefits. If you do not understand something in your Explanation of Benefits, or if you believe your insurance policy covers an expense that hasn’t been paid, contact your insurance company for clarification.
Important:
What if you find an error in your Explanation of Benefits, and the insurance company cannot fix it quickly, or if there is a dispute? You may need to review the benefit in a longer process or file a formal dispute.
How to
Getting an Explanation of Benefits
An explanation of benefits statement usually arrives by mail. In most cases, it closely resembles a medical bill.
Most insurance companies now provide you access to your account online, which can include digital access to explanation of benefits data. If you do not already have online access to your account, check with your insurance company on how to obtain it.
Once your online account is set up, check the digital options offered by your insurance provider. Most will allow you to sign up for email alerts when explanation of benefits statements are available. This way, you can view them immediately rather than waiting for them to arrive in your mailbox.
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Sources:
- Blue Cross Blue Shield of Michigan. “How Do I Read My Blue Cross Blue Shield of Michigan Explanation of Benefits?” Accessed July 2, 2021.
- Texas Department of Insurance. “Understanding an Explanation of Benefits.” Accessed July 2, 2021.
- University of Utah. “Explanation of Benefits.” Accessed July 2, 2021.
Source: https://www.thebalancemoney.com/what-is-an-explanation-of-benefits-1293685
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