Healthcare 101: Explanation of Benefits (EOB)
An Explanation of Benefits (EOB) is a document sent by an insurance provider to an enrollee and the enrollee’s healthcare provider. An EOB is produced in response to a claim for healthcare service. It contains important information regarding the payment responsibilities of both the insurance company and the patient. Unless they cover the entire cost, an insurance company is required to send an EOB to both the patient and the provider.
An EOB usually includes:
- Identification of service rendered*
- Date of service (DOS)
- Name and address of subscriber
- Name of patient
- Name of healthcare provider who rendered service
- Provider’s tax identification number
- Provider’s charge/ total billed services
- Allowed amount
- Total patient responsibility amount
- Total payment made and to whom
- The amount payable (in dollars or percentage of total) after deductibles, co-payment, and any other reduction have been made
- An explanation of for any reason for not providing full reimbursement for the amount claimed
- Point of contact (telephone number or address) by which an enrollee may inquire regarding payment
- Information on the appeal process of a denial of benefits and timeline of the process
The first item, identification of service provided (marked with *) is the most important item on an EOB. It is the reason for receiving healthcare and should be communicated via ICD (diagnosis) or CPT (procedure) codes. If you receive an EOB that is missing this, call your insurance company and ask for this information. Keep track of the code – it represents what you received and why you received it. Imagine that your EOB is a receipt from a store and that the ICD and CPT codes are the items you purchased. Wouldn’t you want to know what you bought?
Unfortunately, EOBs are not standardized and can be difficult to read, especially after switching insurance providers. In addition, an EOB is sent to both the provider and the patient, and it attempts to convey different information to each recipient. This often produces a very confusing document.
When reading an EOB, don’t be hesitant to look for guidance. Your insurance company may have an example EOB and accompanying information on their website. And, of course, be sure to look at our Healthcare How To: Read an Explanation of Benefits (EOB).