Why do I get an Explanation of Benefits (EOB)?

 Have you just gone to the doctor and now have lots of mail coming from various places?  You probably noticed that one of those is titled ‘Explanation of Benefits (EOB)’ and comes from your insurance carrier or health plan.  But, what is the purpose of an EOB.

An EOB lists the medical claims your plan has received from your provider.  It will show you the billed amount along with a discount, paid amount, and any amounts you owe to the provider.  It can be dizzying reading all these numbers and determining how they were calculated.  So, here is a step-by-step list:

1. You go to Provider ABC for an office visit
2. Provider ABC will take your insurance information from your ID Card and record that information in their system.
3. After the visit, your doctor or clinician will make notes on what happened during the visit.  Those notes are typically sent to a medical coder working for Provider ABC to add medical billing codes (most commonly CPT codes) that are sent on to your health plan.
4. Your health plan receives the claim with the codes and pays Provider ABC if all the criteria needed to pay the claim are verified.
5. Your health plan then sends an EOB to you explaining exactly what they paid and what you should owe.
6. You receive a bill from Provider ABC and that bill should match the amount the EOB says you should owe Provider ABC.

As you can see, an EOB is meant to be a sort of verification that you actually did receive the medical services your provider says you received and that you are charged properly.  

It’s always a good idea to hold onto these EOB’s in the event your claim has issues.  This way, you can quickly locate the EOB and reference it if needed.