If you ever have to make a health insurance claim, you will receive an Explanation of Benefits (EOB). This EOB will come from your insurance provider. It may seem overwhelming at first — it has a lot of numbers, jargon, and details.
It may even seem more complicated since EOBs vary depending on insurance providers. But, an Explanation of Benefits is an immensely important document. It allows you and your insurance provider to have transparency between each other.
Here is a short video so you can better understand what EOB is.
Defining an Explanation of Benefits
An Explanation of Benefits is your insurance provider’s written documentation about their claim. They are required to send you an explanation of how they computed your benefits. This may include the amount billed, the allowed amount, and a breakdown of the amount your insurer paid. If any, the amount you need to pay.
What Does an Explanation of Benefits Do?
The Explanation of Benefits shows you the value of your insurance plan. With an EOB, you can see the cost of the services you will receive. And then, you can compare it to the savings that your insurance plan helped you get.
EOBs can also help you work out how much funding you have left in your insurance plan. In some cases, an EOB can also show you how near you are to hitting your annual deductible. At this point, your insurance plan starts to help finance the health services you had.
How To Get An Explanation of Benefits?
As a general rule, healthcare providers will ask if they will bill your insurance. If yes, the healthcare personnel will accomplish a health insurance claim. They will then give it to your health insurance provider.
This claim is a request to your insurance provider to cover the cost of your treatment or equipment used. When your provider receives the request, they check the claim. Then they will send you an Explanation of Benefits through the mail. Sometimes, they also prepare a digital copy for your convenience.
What is in an Explanation of Benefits?
The EOB that you will receive from your provider may contain the following details:
- The name of whoever received the service, either your name or your dependent’s
- Your or your dependent’s policy or health insurance ID Number
- A claim number
- The healthcare provider’s name that administered your care. It can be a clinic, hospital, laboratory, dentist, doctor, or specialist.
- The list of service/s or equipment/s used and/or received
- The date on which you received the said service/s or equipment/s. If they lasted more than a day, the date range would also be indicated.
- The cost of service that your provider billed your insurance provider
- How much of the billed cost your insurance provider actually paid
- The remaining amount you need to pay
The EOB issued might also tell you if the amount you need to pay will be applied to your deductible. An EOB can also state how much of your deductible is left for the year.
Your EOB may include a word list of terms — and their definitions — and information if you want to appeal a claim. It may also include additional details about the services indicated on the form.
Why Is Reading an Explanation of Benefits Important?
It’s quite important to read your EOBs. They are designed to help you understand important details of your health care costs.
1. Your EOB can help you find errors in your insurance claim.
When claims are filed, sometimes human and machine errors can occur. These errors will inevitably affect your EOB. Some of the common mistakes you might find in your EOB are:
- Billing for services that you didn’t receive
- Double billing, or being billed twice for tests or procedures only done once
- Your insurance provider billing the wrong amount for a service
- Your insurance provider failing to cover a service that’s included in your plan
- Incorrect dates
- Errors with your deductibles
2. Your EOB can help you determine potential medical fraud
If your EOB includes some services that you didn’t receive, this may be a sign of fraud by your provider. Ask for clarifications from both your healthcare and insurance provider.
3. Your EOB tells you how much you owe
Do note that it is not a bill; you will get that from your provider separately. The amount indicated on your bill should be the same amount reflected on your EOB.
If you haven’t received your bill or paid your doctor yet, you can properly prepare when you receive your EOB.
4. The EOB helps you keep tabs on medical care and costs
Your EOBs detail all the medical services and equipment you got during the year, as well as how much they cost. The sole exception is a medical service that is not invoiced to your insurance company.
So keep your EOBs as a record of what care you got, how much you paid for, and what your qualified health plan covered.
What if There’s An Error in Your Explanation of Benefits
EOB errors may have serious long-term consequences on your financial well-being. Your Explanation of Benefits can function as a snapshot of your medical history. Reviewing it is needed in ensuring:
- You are receiving the services billed to you
- The amount your doctor got and your share of the costs are correct
- Your diagnosis and procedures are correctly listed and coded
If there are any errors and consistencies, call the customer service line found in your EOB. Go through it line by line with them and make sure every single line is justified and correct. Even something as simple as a misspelled name can be a problem in processing your claim.
Request for a Review
There are cases where even if you find no errors in your Explanation of Benefits, parts of your claim are not paid. If this happens, it is within your rights to request your insurance provider to review your claim. This process is what’s known as a claims appeal.
The process for claims appeal can differ for each provider. Details on how to do this appeal are in your EOB or insurance plan documents.
What to Do if Your Claim Is Rejected
If your claim gets rejected, here are some steps to appeal this decision and possibly reverse it.
1. Review Your Policy Paperwork
Take a look at the summary of benefits in your insurance paperwork. It will show what’s covered and the limitations and exclusions.
Next, go over the letter from your insurance provider telling you why they denied your claim. Then, cross-check them from each other.
2. Call For Support
You can call your insurance provider for questions about why your claim was rejected. Be sure to inquire whether the claim was denied due to a billing error or a lack of information.
If you wish to appeal the decision, ask your provider to walk you through the procedure. Keep track of everything. Take note of the name of the person you spoke with, the date, and what was done or agreed. Do this for each phone call.
If your provider claims your doctor’s error, contact your doctor’s office. Request they correct the error and resubmit the paperwork to your insurance.
If you have insurance from your job, contact your employer’s HR Department. They might be able to assist. You can also request them to contact your insurance provider and help justify the claim. It may persuade the insurance company to reconsider and pay the claim.
Difference Between Explanation of Benefits and a Bill
The Explanation of Benefits only tells you how much of the cost you are responsible for. But in no way it is your final bill. The EOB is to be used as your reference only.
The final medical bill will come separately. It will be given to you by your healthcare provider, not your insurance company.
Some healthcare providers need you to pay up-front, but your insurance company will likely reimburse you. It is best to wait for the EOB before paying, even if you get the bill first.
Waiting for your EOB will give you the chance to cross-reference it with a bill. This will allow you to find discrepancies between the two documents (if any). And you can ask your healthcare and insurance provider about it.
Final Thoughts
An Explanation of Benefits is a statement your health insurance provides. This piece of document is important to keep track of your medical spendings and history. It also allows you to reconsider your plan and see if it still fits your needs.
Do not hesitate to go over it line by line until you are sure it is free of errors or discrepancies to prevent further financial issues and stress.
Want to learn more about the world of health insurance? Read on:
- All You Need To Know About “Medicare for All” 2021
- What Is Coinsurance & How Is It Different From Copay?
- Is It Illegal To Not Have Health Insurance? State Requirements And Penalties
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