Interpreting Your Explanation of Benefits (EOB)

Posted by Matt Schwartz on Mon, Sep 28, 2020 @ 09:09 AM

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After you see a doctor and receive your insurance statement, also called an Explanation of Benefits (EOB), trying to decipher the money you spent, the money you are due, and the money you owe can be very confusing.

Instead of tossing those EOBs in the trash each time they arrive, here are a few tips that can help you become more informed and more aware as a healthcare consumer: 

  1. The first section, from left to right, usually provides some basic information about what type of service was provided. 
  2. The billed charge is what your provider billed the insurance company. Think of this as the "retail price.”
  3. A provider discount, also known as a contractual or negotiated amount, is an agreement the insurance company has with the network, provider or hospital. Think of it as a volume deal that one business gives to another. It lowers the price to the actual level to be paid by you or your insurance.
  4. Some EOBs will have other sections (some show up as footnotes only) to detail non-covered amounts - such as a procedure that wasn't covered under your benefit plan. In addition, there may be a notation saying a patient has already met their deductible for the year.
  5. The balance eligible (also can be called "amount remaining" or "payable charges”) is what remains for the insurance company to consider paying after other reductions have been applied. On some EOBs, this will come right after #2, with the other sections showing up merely as text footnotes.
  6. Then, the total amount the insurance company will pay the provider is listed, followed by the patient balance (your share). This amount should match the charge that you see on the bill from your provider.
  7. There are usually notes or comments on the form. This is where your plan may share reasons why charges were denied. There should be a corresponding legend to explain what the comments mean. 

This is a basic explanation of the various lines on a sample EOB in practical terms. Clearly, learning how your insurance works will benefit you greatly in the long run, perhaps helping you catch errors to save yourself money.

If Schwartz Insurance Group can provide assistance with this or any other benefits-related issue, feel free to contact us.  Many of our clients rely on us to help them navigate their EOBs.

Topics: Employee Benefits, Personal Insurance