Understanding Your Explanation of Benefits
This is a third in the series of brochures developed by the Patient Advocate Foundation, Inc. The information contained herein is in response to frequently asked questions (FAQ’s) by patients. The brochure is intended to provide general but informative response to these inquires. Any incident, inquiry or issue may vary according to these specific facts and circumstances relating to the individual.
Explanation of Benefits
Most of us have seen an explanation of benefits or EOB, but what does it mean?
After you've visited a doctor, clinic, or hospital, an EOB from the insurance administrator tells you and your provider what portion of the provider's charges are eligible for benefits under your insurance plan.
The EOB is the result of the claims process. To better understand your EOB, let's look at the steps in the claims process.
If your provider is part of a provider network, and you have an insurance plan using this network, the provider usually sends your bill to the network to have the network discount calculated. The network sends the claim to your insurance administrator.
If your provider is not in a network, the provider may send the bill to you or your insurance company. If you're sent the bill, you'll submit the claim to your insurance administrator.
Your insurance administrator reviews the claim to determine your benefits. If another insurance company is involved, the insurance companies coordinate benefits to determine which plan is responsible for the charges. Your health insurance administrator sends you and your provider an EOB, and, when appropriate, your provider also receives a check.
Your EOB may identify:
- The patient and the service provided.
- The amount charged by the provider.
- The amount of the charges that are covered and not covered under your plan.
- The amount paid to your provider.
- The amount you're responsible for.
Remember that the EOB is not a bill, but it explains what was covered by insurance. The provider may bill you separately for any charges you're still responsible for.
1. Enrollee Name: Identifies the policyholder. This is usually the name of the person who carries the insurance.
2. Patient: Identifies the patient.
3. Patient #: This serves as an identification number for the patient.
4. Provider Name: Identifies the name of the doctor or hospital that is billing for the services. Verify services were actually rendered by the provider listed.
5. Claim #: This is a number assigned to the claim by the insurance company to identify the claim in their computer system.
6. Date Processed: Indicates the date on which the claim is processed.
7. Enrollee Address: Indicates the address of the enrollee; this should be verified with each claim. Wrong addresses can cause problems in claims payment.
8. Dates of Service: Indicates the dates of service on which the service was rendered.
9. Place of Service: Indicates the location the service was rendered. This is important as some services are only covered in specific locations.
10. CPT Code: This identifies the service performed. This code is universal and dictates the payment allowances.
11. Charge Amount: Amount charged by provider of service.
12. Allowed Amount: Amount determined by a preset schedule of "usual and customary" (UCR) charges. Amount is usually determined by geographic location of provider.
13. Not Covered: Amount not included in the allowed amount; usually this is the amount deemed over the usual and customary allowance. In most incidences, the patient is responsible for the overage.
14. Reason Code: This is an explanation of why a service has been has denied, or why an amount is not covered.
15. Deductible: This reflects the amount the patient must pay prior to having benefits paid. Amounts that are not covered are not applied to the deductible. Generally, each patient will have his or her own deductible to meet. Deductibles may be required for both participating and not participating services; refer to the schedule of benefits.
16. Co-Pay: A minimal amount required from the patient when seeking services from a provider. Usually the patient is only responsible for copayments at a participating provider.
17. Benefit Amount: This is the percentage at which the amount covered will be paid. The percentage paid will be determined by the schedule of benefits. Generally, participating providers will be paid at a higher level; non-participating providers will be paid a lower level.
18. Due from Patient: This is the amount the patient is responsible for paying to the provider. This generally includes the co-insurance amount, deductible and may or may not include the amount over the UCR. If the amount over the UCR is not included, the patient needs to verify if the provider of service will write the amount off. If the provider of service will not write the amount off, the patient is responsible.
19. Payment Amount: The amount paid to the provider.
20. Customer Service: This is the number used to contact customer service.
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Patient Advocate Foundation Mission Statement
The Patient Advocate Foundation is a national,non-profit organization that serves as an active liaison between the patient and their insurer, employer, and/or creditors to resolve insurance, job retention, and/or debt crisis matters relative to their diagnosis through case managers and attorneys. Patient Advocate Foundation seeks to safeguard patients through effective mediation assuring access to care, maintenance of employment and preservation of their financial stability.
Patient Advocate Foundation Publications
- The Managed Care Answer Guide (available in English & Spanish)
- The Patient Pal (available in English & Spanish)
- Your Guide to the Appeals Process
- First My Illness…Now Job Discrimination: Steps to Resolution
- The National Financial Resource Guide for Patients: A State-by-State Directory
- Chelsey’s Story: One Patient’s Search to Solve Insurance Problems Including a Legislative Visit to Washington
If you would like further information about any of these publications, please contact our office.