EOBs, what they mean & why they matter.
Are you getting a number of detailed bills labeled EOB in the mail? EOB means explanation of benefits. It tells you all the information on medical billing charges and what the insurance company will pay. When reviewed, it highlights accuracy of billing and is useful to understand patient responsibility (key payments) and required when billing questions or concerns arise.
Key Takeaways
What Your EOB means, how you can them to make sure your medical bills are accurate and ensure you are paying the right amount
How to read and organize your medical bills
Pro Tip to organizing your Explanation Of Benefits – Sort the EOBs into each patient/person and staple those insurance claim reviews together; when provider bills arrive, attach them to the EOB so all information is together.
In today’s market of more information, the EOB has evolved from a single one page document easy to read, to multiple pages and a lot of information that is not necessarily related to the billing and payments. We are going to review a demo of EOBs and dissect the information, making it easier for you to understand the billing payment information.
Unfortunately, there is no standard “look” for an EOB. Commercial insurance companies can create whatever the look is they want, add information like appeal process, phone numbers for calling them about your claim etc. They may even have a document for appealing the claim as a separate page to the EOB. This means, six unique claims equals six appeal letters completed individually based on the unique identifier for the claim..
Get Started: What to do with the Explanation of Benefits
Separate all the EOB pages by provider (Doctor/Hospital). Insurance companies pay batches based on a 30 day time frame.
Here’s our story;
Both children went to the pediatrician for their sports physicals and their updated vaccinations. What information will the EOBs tell us.
*Child 1- Pediatrician sports physical and 2 vaccinations (One bill for the visit multiple line items for the visit)
*Child 2- Pediatrician sports physical and 2 vaccinations (One bill for the visit multiple line items for the visit)
There should be 2 different EOBs
*Child 1&2 -Pediatrician sports physical and 2 vaccinations. Each child will be billed separately to the insurance company. *The EOB’s should have a unique encounter number from their visits. The information you should look for is:
Date of service
Physician name
What the service was
Charge billed to the insurance company
Amount allowed/contractual allowance for that item by the insurance company for payment
Reason code if any on the payment or lack of payment
Amount paid by the insurance company
Amount that is patient responsibility, what does mom have to pay
Let’s go through the items information.
#1 and #2 are self-explanatory. What date was the encounter and who was the Doctor seen.
#3 What the service was, this could be one or two columns of information depending on the insurance company’s EOB. They could give you a brief description, sports physical or office visit and then a code 99211. Or Sports physical 99211, in a single comment. Pharmacy items include quantity/dosage depending on the drug. For example a vaccine “tetanus .02mg” or injection SC x2 for 2 injections given subcutaneous.
#4 Physician office charge. The charge is $50. Vaccinations listed separately. Giving the injections listed separately/.
#5 Allowable amount or the contractual adjustment: Amount is based on the Insurance plans contracted payable amount. Provider charge is $50, the insurance pays $20, adjustment $30. Vaccinations are covered and administration. Each medication was $100 x2 and administration $50 x2 per child. Vaccine paid $30 x2 and administration $15 x2
#6 Reason Codes, 2 or 3 digit code defining what is paid or not paid. Reason codes are unique to the line item billed . Common ones, contractual adjustment, non-allowable service patient responsibility, patient has not met deductible.
#7 Amount paid by insurance. Sports physicals are not a sick visit or a well child visit therefore insurance denies payment for service. The amount listed is $0 with a reason code non covered service. Each vaccine is paid at $30 x2 and the administration is $15 x2
#8 Patient responsibility amount, this is easy, what do you have to pay based on what the insurance “did not” pay. In this case there is $20 x2 for the sports physical. The guarantor will have to pay out of pocket. The vaccine and administration was paid in full as this is a well child benefit of the plan.
Why bill for a service we know is not covered. That’s easy, we want the insurance company to put the patient paid amount towards the individual or family deductible. This will help reduce the deductible to pay before insurance pays at 100%.
How to Manage and Organize your EOBs
Attach the provider’s bill to the explanation of benefits statements from your insurance so that you have all information together.
Review the date of service, provider, and charge to make sure that a provider billed correctly
Look at all line items on the EOB to make sure you understand why patient pay at the end has an amount if any.
If your EOB is correct, put it into a folder with a note “reviewed and date”. If a payment is required then include in your note that the bill was paid, the date of payment, with a copy of the check or a printed screenshot of the online payment. Rinse and repeat with remaining EOBs received. Using a folder is important. When tax season comes these files will be your proof of medical deductions
If you feel the EOB is incorrect, you can reach out to your healthcare insurance provider, or you learn more about medical billing audits here.
*The folders also help with proof of payment when a collection agency contacts you saying you owe money, on paid medical bills Doctors and hospitals make mistakes when accounts are sent to collections.
*Know what you have paid towards your deductible, the insurance company makes errors. Know how to check when reason code “has not met deductible”, and your deductible has been met.
My last piece of advice, keep all doctor and hospital bills in the same folder. Attach the bills to the EOB to keep all information together for that single encounter. We need to be more organized to defend ourselves concerning our healthcare medical bills and medical payments.
Common Procedural Terminology (CPT) is owned and maintained by the AMA (American Medical Association) and is copyrighted.
