Healthcare Business DEMYSTIFIED

de mys ti fy - to make less mysterious, clarify

How do I read this EOB?

The Explanation of Benefits (EOB) is one of the most important pieces of paper that you will receive from your insurance company.  When all is said and done, the EOB will provide you with all the practical information you need about the insurance policy that you have.  Many of us agree that it is often difficult to fully understand what benefits are included in the insurance policy that you have purchased until you actually use the insurance and submit a claim.  Then the real story emerges and you will begin to have a better understanding of exactly what is covered and how much is coming out of your own pocket.  Use the EOB the next time you have an enrollment period to evaluate your current plan.  Is really covering the things that you thought it would?  Study the EOB for insights about your plan and if it really is a good value for you and your family.

Most insurance companies now have an internet presence and have a sample EOB posted on their website.  Review this example as it is specific to your insurance company and will look like the document that you receive in the mail.  All the insurance companies have different formats, but they all should provide the same basic information.

Some items that should be included on your EOB:

Who provided the service and the location of the service.  This area should list your physician's name or Practice name and their address.

The date of the service and what service was provided.  These 2 pieces of information will be especially important if you have had multiple office visits and need to focus in on a certain date.

The billed amount for each service listed.  The service is often depicted using a CPT code (see the Topic "what is a CPT code?" for additional information).  I prefer the CPT code as it is the most specific way of identifying the service.  Insurance companies who just list "Office Visit" or "Lab" do not provide enough detail to suit me.

After the billed amount, you should see a column for the contracted amount.  This is the amount the physician has agreed to take as payment in full for this particular CPT code.  Other columns of information include the deductible, the co-pay, and the co-insurance amount.  (see the Topic "What are my out of pocket costs?" for more information on each of these terms).  Another column you will see is the contractual write off.  This is the difference between what the doctor's office charges for a particular CPT code and what the insurance company has contracted to pay.  This is exactly what it says - it is an amount that the physician's office has agreed to write off per their contract with the insurance company.  It is different for each company that they contract with and is specific to your particular plan.  You can have different contractual write offs with different plans for the same insurance company.  As a consumer, please note this amount.  No doctor's office should ever charge you for this amount.  This is an amount that they have agreed to write off.  If you get charged for it, politely point out to them that it is a contractual write off that you are not obligated to pay.  They will understand what you are saying and should make the corrections to your account.

The final column you will see is the patient portion.  This is the amount that you are required to pay directly to your physician's office.  It will include the applicable deductible, co-pays, co-insurance and any other patient portions required by your insurance policy.  If you do not understand certain aspects of your benefits, call your insurance company for additional information.  They should be happy to explain your benefits to you as they pertain to the specific situation.

Review your EOBs and your bills that you receive from your doctor's office.  Make sure that they list the same CPT codes and dollar amounts.  Insurance companies and doctor's offices alike have humans working in them and humans can make mistakes.  Contrary to what some agencies will lead you to believe, most humans are not trying to fraud the system.  They simply made a mistake and most of the time they will see their error and will fix it for you.  Just remember to be diplomatic and friendly when pointing the error out.  We are all human and need to be treated that way.