Table of ContentsView AllTable of ContentsOverviewInformation in an EOBWhy It’s ImportantConfidentiality
Table of ContentsView All
View All
Table of Contents
Overview
Information in an EOB
Why It’s Important
Confidentiality
It’s important to understand the information you’ll find on an EOB, how it’s useful in terms of your financial planning for the year, and why you should make sure that all of the details are correct.
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Explanation of Benefits Overview
Your EOB gives you information about how an insurance claim from a medicalprovider(such as a doctor, hospital, or lab) was paid on your behalf—if applicable—and how much you’re responsible for paying yourself.
But in other circumstances, the EOB will indicate that the insurer has paid some or all of the bill. That would leave you with either a portion of the charges or no out-of-pocket costs at all.
You should get an EOB if you have insurance you purchased on your own, a health plan from your employer, or Medicare.
(Note that if you have Original Medicare, this will be called a Medicare Summary Notice and it will arrive every four months, assuming you received Medicare-covered care in the last four months.If you have a Medicare Advantage or a Medicare Part D plan, the document will generally be called an Explanation of Benefits, and will arrive after each medical service you receive).
And depending on where you live, you might get an EOB if you’re enrolled in Medicaid and receive healthcare services.
If you are a member of a health maintenance organization (HMO) that pays your healthcare provider through capitation (a set amount of money each month to care for you), you may not receive an EOB because your practitioner is not billing the insurance company. This type of arrangement is not common, but it’s possible that you could just receive a receipt for your copay instead of an itemized EOB.
Information in an Explanation of Benefits
Your EOB has a lot of useful information that may help you track your healthcare expenditures and serve as a reminder of the medical services you received during the past several years.
A typical EOB has the following information, although the way it’s displayed may vary from one insurance plan to another:
Patient name:The name of the person who received the service. This may be you or one of your dependents.
Claim Number:The number that identifies, or refers to the claim that either you or your health provider submitted to the insurance company. Along with your insurance ID number, you will need this claim number if you have any questions about your health plan.
Provider:The name of the provider who performed the services for you or your dependent. This may be the name of a doctor, a laboratory, a hospital, or other healthcare providers.
Date of Service:The beginning and end dates of the health-related service you received from the provider. If the claim is for a healthcare provider visit, the beginning and end dates will be the same.
Charge (Also Known as Billed Charges):The amount your provider billed your insurance company for the service.
Allowed Amount (or conversely, Not Covered Amount):As long as you saw a provider who is in-network with your health plan, they have signed a contract with the plan under which they agree to accept a discounted negotiated rate as payment in full. This means that although they bill their full amount, they understand that their contract with the health plan only allows for a smaller amount. So the EOB will indicate either the allowed amount, or, conversely, the amount that’s not covered because it’s more than the allowed amount. (If the EOB shows the amount not covered, you can subtract that from the billed amount to determine the allowed amount under the plan’s contract with the provider).
The details should be clear on the EOB, but one way or another it should indicate the amount—which is generally less than the billed amount—that their contract with the health plan allows as payment in full. A description of these codes is usually found at the bottom of the EOB, on the back of your EOB, or in a note attached to your EOB.
Amount the Health Plan Paid:This is the amount that your health insurance plan actually paid for the services you received. Even if you’ve met your out-of-pocket requirements for the year already and don’t have to pay a portion of the bill, the amount the health plan pays is likely a smaller amount than the medical provider billed.
This is due to network-negotiated agreements between insurers and medical providers (or in the case ofout-of-networkproviders, thereasonable and customary amountsthat are paid if your insurance plan includes coverage for out-of-network care and you’ve met your out-of-network deductible already).
Your EOB will generally also indicate how much of your annual deductible andout-of-pocket maximumhave been met. If you’re receiving ongoing medical treatment, this can help you plan ahead and determine when you’re likely to hit your out-of-pocket maximum. At that point, your health plan will pay for any covered in-network services you need for the remainder of the plan year.
An example of an EOB:Frank F. is a 67-year-old man with type 2 diabetes and high blood pressure. He is enrolled in a Medicare Advantage Plan and sees his doctor every three months for a follow-up of his diabetes. Six weeks after his last visit, Frank received an EOB with the following information:
Dr. David T. is allowed $65 (his charge of $135 minus the amount not covered of $70). He gets $15 from Frank and $50 from Medicare.
Why Is Your Explanation of Benefits Important?
Healthcare providers’ offices, hospitals, and medical billing companies sometimes makebilling errors. Such mistakes can have annoying as well as potentially serious, long-term financial consequences.
Your EOB should have a customer service phone number. Don’t hesitate to call that number if you have any questions or concerns about the information on the EOB.
Your EOB is a window into your medical billing history. Review it carefully to make sure you actually received the service being billed, that the amount your healthcare provider received and your share is correct, and that your diagnosis and procedure are correctly listed and coded.
It may be tempting to just ignore EOBs, especially if you have substantial claims and numerous EOBs arriving in your mailbox. But it’s important to at least scan each EOB to make sure that the details make sense. This will give you a good idea of what to expect in terms of medical bills from providers, since they use their own version of that same EOB in order to process billing statements. And it will also help you know what to expect in terms of your potential future medical bills for the remainder of the year.
Once you’ve met your deductible, your health plan will start paying for more of your care. And once you’ve met your out-of-pocket maximum, the plan will start paying 100% of your covered, in-network costs for the rest of the year. (Note that Medicare Part A operates with benefit periods rather than annual coverage and neither Part A nor Part B has a cap on out-of-pocket costs.)So it’s important to make sure that these amounts are accurately reflected on each EOB.
EOBs and Confidentiality
Insurers generally send EOBs to the primary insured, even if the medical services are for a spouse or dependent.This can result in confidentiality problems, especially in situations where young adults are covered under a parent’s health plan, which can be the caseuntil they turn 26.
To address this, some states have taken action to protect the medical privacy of people who are covered as dependents on someone else’s health plan.But it’s important to understand that as a general rule, states cannot regulateself-insured health plans, and these account for the majority of employer-sponsored health plans.
Summary
An explanation of benefits (EOB) is a document that a health plan sends to a member after a medical claim is processed. The EOB will show a variety of information, including details about the medical treatment, the amount that was billed, the amount that the health plan allows for that service, the amount the health plan paid (if any), and the amount that the patient owes. The EOB will also generally show how much the member has accumulated toward their deductible and out-of-pocket maximum so far that year.
8 SourcesVerywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read oureditorial processto learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.Medicare.gov.Medicare Summary Notice (MSN).Centers for Medicare and Medicaid Services.Reading Your Explanation of Benefits.Centers for Medicare and Medicaid Services.Helping people with Medicare Part C & Part D understand their “Explanation of Benefits” (EOB).Centers for Medicare & Medicaid Services.Medicare & Your Hospital Benefits.Health Partners.Does Medicare have an out-of-pocket maximum?Harvard Law School, Center for Health Law and Policy Innovation.Confidentiality and Explanation of Benefits: Protecting Patient Information in Third-Party Billing.Guttmacher Institute.Protecting Confidentiality for Individuals Insured as Dependents.Kaiser Family Foundation.2022 Employer Health Benefits Survey.
8 Sources
Verywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read oureditorial processto learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.Medicare.gov.Medicare Summary Notice (MSN).Centers for Medicare and Medicaid Services.Reading Your Explanation of Benefits.Centers for Medicare and Medicaid Services.Helping people with Medicare Part C & Part D understand their “Explanation of Benefits” (EOB).Centers for Medicare & Medicaid Services.Medicare & Your Hospital Benefits.Health Partners.Does Medicare have an out-of-pocket maximum?Harvard Law School, Center for Health Law and Policy Innovation.Confidentiality and Explanation of Benefits: Protecting Patient Information in Third-Party Billing.Guttmacher Institute.Protecting Confidentiality for Individuals Insured as Dependents.Kaiser Family Foundation.2022 Employer Health Benefits Survey.
Verywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read oureditorial processto learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
Medicare.gov.Medicare Summary Notice (MSN).Centers for Medicare and Medicaid Services.Reading Your Explanation of Benefits.Centers for Medicare and Medicaid Services.Helping people with Medicare Part C & Part D understand their “Explanation of Benefits” (EOB).Centers for Medicare & Medicaid Services.Medicare & Your Hospital Benefits.Health Partners.Does Medicare have an out-of-pocket maximum?Harvard Law School, Center for Health Law and Policy Innovation.Confidentiality and Explanation of Benefits: Protecting Patient Information in Third-Party Billing.Guttmacher Institute.Protecting Confidentiality for Individuals Insured as Dependents.Kaiser Family Foundation.2022 Employer Health Benefits Survey.
Medicare.gov.Medicare Summary Notice (MSN).
Centers for Medicare and Medicaid Services.Reading Your Explanation of Benefits.
Centers for Medicare and Medicaid Services.Helping people with Medicare Part C & Part D understand their “Explanation of Benefits” (EOB).
Centers for Medicare & Medicaid Services.Medicare & Your Hospital Benefits.
Health Partners.Does Medicare have an out-of-pocket maximum?
Harvard Law School, Center for Health Law and Policy Innovation.Confidentiality and Explanation of Benefits: Protecting Patient Information in Third-Party Billing.
Guttmacher Institute.Protecting Confidentiality for Individuals Insured as Dependents.
Kaiser Family Foundation.2022 Employer Health Benefits Survey.
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