How To Make Sense Of Your Explanation of Benefits (EOB)

Woman On Laptop Tries To Understand Her Explanation of Benefits (EOB)

Say you visit your doctor for an annual check-up, or you head to urgent care for a neck strain. Every time you visit your doctor, hospital, urgent care, or other healthcare provider, you’ll receive an “Explanation of Benefits” in the mail.

But don’t grab your check or credit card yet — this Explanation of Benefits (EOB) is not a bill. Rather, the EOB is an itemized record of the total costs incurred for any medical service or procedure that you receive from a healthcare provider.

Parts Of The EOB

An EOB typically contains three sections:

  1. The amount your provider bills for your visit
  2. The amount of the bill that your insurance company will pay
  3. The amount of the bill that you will pay

All EOBs provide the same basic information around these three sections. However, their exact layout and wording will vary by provider. Read on for an explanation of the most common terms on your EOB.

Subscriber Information

At the top of the EOB, you’ll find identifying information concerning you and your insurance plan. Info may include your name, address, insurance ID number, claim number, type of insurance plan, service provider, and statement date.

Service Date(s)

This is the day (or days) that you received the medical service.

Type Of Service / Service Description

This column includes a brief description of the medical service(s) received, such as “Immunization,” “Radiology,” or “Office Visit.”

Billing Code / Procedure Number

Each item on your EOB has a corresponding code or “procedure number.” This billing code is how your provider decides how much to bill for each procedure, service, equipment, or medication listed on your EOB. If you don’t see a procedure number listed, you can call your healthcare provider for the code.

Amount Billed / Provider Charges

The “Amount Billed” is how much your provider charges for each EOB item. This charge does not go directly to you. First, it gets billed to your insurer, and then your insurer agrees to pay for a portion of those costs. So, don’t panic if you see an alarming price tag under “Amount Billed!” Just focus on how much you need to pay (which we’ll cover below).

Allowed Amount / Negotiated Amount / Amount Paid

Based on your plan, your insurer agrees to cover certain medical services. This section lists the exact dollar amount that your insurer agrees to pay for service charges on your EOB.

Note, however, that your insurer negotiates lower rates with in-network providers. If you receive a service from a provider outside of your plan’s network, your insurer will cover much less — if any — of the cost.

Patient Responsibility

This is the most important section of the EOB because it shows the final amount that you have to pay.

The “Patient Responsibility” section may include multiple categories, such as the deductible, copay, coinsurance, non-covered charges, and other out-of-pocket costs. (Click here for an explanation of these health insurance terms.)

To calculate your final bill, your provider will add up these costs. Look for the total amount under a category labeled something like, “Claim Total” or “Amount You Owe.”

What To Do With Your EOB

Every time you receive an EOB in the mail, take a few minutes to look over it. Then put it in a safe spot — because, as we said earlier, the EOB is not a bill. Your medical bill will be sent separately by your provider.

When the actual medical bill (or bills) arrive, pull out your EOB. Make sure the amount you owe is the same on both the bill and the EOB. Then pay your bill!

Issues With Your EOB?

If you see a charge for a service you didn’t receive, or for a service you thought was covered by your insurer, call your insurance provider! They will walk you through your EOB or follow up with the provider. If your healthcare provider made a billing error, or if there is any suspicion of healthcare fraud, your insurer will want to fix the problem — and adjust your bill — as soon as possible!

The EOB is a way for you and your family get the maximum value out of your health benefits. If you have questions about services that your insurance plan will cover, call your insurance company. And if you’re interested in switching to a new plan, call Regency West. A licensed health insurance professional is ready to help you find a plan with the optimal coverage — so you don’t have any surprises on your EOB!