An “Explanation of Benefits” (EOB) is a document provided by health insurance companies to policyholders after they receive healthcare services. The EOB is not a bill but a statement that explains what medical treatments and services were paid for on behalf of the policyholder, what portion of the costs the insurance company covered, and what portion, if any, the policyholder is responsible for paying out-of-pocket. It serves as a breakdown of how a medical claim was processed by the insurance company and provides detailed information regarding the costs associated with healthcare services received.
Who Writes It?
The EOB is generated and sent by the insurance company, not by healthcare facilities. Healthcare providers submit claims to the insurance company for the services provided, and the insurance company processes these claims according to the policy’s coverage details.
Frequency of Receipt
You should receive an EOB after each claim is processed by your insurance company, which typically follows a visit to a healthcare facility or after receiving a healthcare service. The timing can vary based on how quickly the healthcare provider submits the claim and how long it takes the insurance company to process it.
Is It a Bill?
No, the EOB is not a bill. It’s important to distinguish between an EOB and actual healthcare bills. An EOB details the costs covered by insurance and what you may owe to the provider, but it is not a request for payment. The healthcare provider will send a separate bill for any amount you are responsible for paying out-of-pocket.
Common Items on EOBs
An EOB typically includes the following items:
- Patient Information: The name and policy number of the insured individual.
- Provider Information: The name of the healthcare provider or facility that delivered the services.
- Date of Service: When the healthcare service was provided.
- Claim Number: A unique identifier for the insurance claim.
- Service Description: A brief description of the medical services received.
- Charges: The total amount charged by the healthcare provider for the services.
- Allowed Amount: The amount approved by the insurance plan for the particular service, which may be less than the amount originally charged.
- Deductible: Information on how much of the deductible has been met.
- Coinsurance: Your share of the costs of a covered healthcare service, calculated as a percent (for example, 20%) of the allowed amount for the service.
- Copayment: A fixed amount ($20, for example) you pay for a covered healthcare service, usually when you receive the service.
- Insurance Paid: The amount the insurance company paid to the healthcare provider.
- What You Owe: The amount you are responsible for paying out-of-pocket, including deductibles, copayments, and coinsurance.
Reading EOBs
To read an EOB, start by verifying your personal information and the date of service to ensure accuracy. Then, review each service listed to understand the charges, what the insurance company allowed versus what was charged, and how much was paid by insurance. Finally, focus on the “What You Owe” section to see if there are any amounts you are responsible for paying directly to the provider. If something is unclear or seems incorrect, you should contact your insurance company for clarification.
Understanding your EOB is crucial for managing your healthcare expenses and ensuring that you are only paying what you truly owe, as well as spotting any potential billing errors or discrepancies.
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