Explanation of Benefits – How You Save Money

The Explanation of Benefits is form that you receive – usually via mail – and it looks a lot like a medical bill. Most of the time, we tend to trash this piece of paper since it looks so complicated, full of codes, abbreviations and numbers. However, that is a very bad idea. It would be better to take the time to understand what is written in your explanation of benefits – you could end up saving money.

What Does an Explanation of Benefits Do?

An Explanation of Benefits – EOB – provides you with details about a medical insurance claim that was processed. It tells you what portion of the bill was paid by your insurance provider and what portion is to be paid by you.

Understanding the EOB

The Explanation of Benefits can be quite confusing until you learn to read it, so don’t hesitate to call your insurance company for help if you need to. here is a brief explanation about the EOB to help you understand it a little more clearly.

• The top of the EOB

The top of your EOB has the address and customer service phone number of your insurance company. You name, the name of the primary policy holder as well as your patient identification number will also be near the top of the EOB. If you are also the primary policy holder, then you could see your name twice at the top of the EOB. Other information at the top of the EOB will be your healthcare giver’s details.

• The body of the EOB

Insurers will usually include a table after the initial information, which is a table that summarizes your claim. The following are the components of that table:

1. Date of Service

This is the day you visited your doctor or had a procedure performed. More than one date could be listed if your case was complicated and required multiple procedures/visits.

1. Medical Billing Codes

This is a list of codes used to identify what kind of a procedure you went through. You will usually see HCPCS, CPT, ICD-9 and revenue codes in you Explanation of Benefits.

1. Place of Service: The facility you visited.
2. Charge Amount: This is the amount your healthcare giver charged your insurance company.
3. Amount Allowed: This is the amount your insurance company has agreed to pay for your procedures. If it is blank, it means the procedure was not covered by your insurer.
4. Amount Not Covered: This is how much your insurance company will not pay.
5. Reason Code: This will tell you why the insurance company did not cover the service.
6. Copay or Copayment: This is the amount you need to pay upfront for any medical service.
7. Deductible: This is the amount you need to pay before your insurance will cover the rest.
8. Amount Due from Patient: This is the amount you need to pay your healthcare provider.

This just gives you a very brief overview of what the Explanation of Benefits is and does. Please contact your insurer to ensure that you get all necessary details.