Explanation of Benefits (EOB) is the document you receive from your insurance provider for each medical visit. It explains what services and procedures were performed, and details the dollars paid by your health insurance company towards your medical claim vs. how much you, the patient must pay.
An EOB is not a bill but it shows information that could save you money (more on this when we go over an EOB).
When you visit a medical provider, the office staff uses standard CPT medical codes which are codes updated and distributed by the American Medical Association, to note every service you receive. Then the doctor’s office staff sends your insurance carrier an itemized bill containing service codes and the charges for the service. At that point your medical bill becomes a request for payment based on your insurance policy benefits.
Your insurance provider assigns a unique number to the claim and sends it to their service center for processing. The majority of claims are processed automatically also known as "auto-adjudicated". If there is something unusual about the claim, like a missing code or charge, the claim is “pended” and a processing specialist takes a closer look. The major carriers (UHC, Humana, BCBS) each process over 22 million claims a year.
Definitions
Standard Medical Codes are the procedural and diagnosis codes published by the American Medical Association Deductions. The purpose of the coding system is to provide uniform language that describes medical, surgical and diagnostic services.
CPT code (current procedural terminology) is a five digit numeric code that is used to describe medical, surgical, radiology, laboratory, anesthesiology etc. There are approximately 7800 CPT codes.
ICD-9 code (International Classification of Disease, 9th revision)is a coding system used to code signs, symptoms, injuries, diseases and conditions.
ICD -9 codes are diagnostic, CPT codes are procedural. The relationship between the two is critical. The ICD-9 code is the diagnosis that supports the medical necessity of the procedure/CPT code. .
Learn to read your EOB
Charge: Amount the provider billed for the service
Excluded amount: The amount not eligible for benefits under your plan. (Refer to excluded amount remarks for details)
Provider Discount: If your provider is a participating provider, your insurance company has an agreement with your provider to pay a certain amount for a service, this column shows the reduced amount based on that agreement.
Deductible: the dollar amount you are responsible for paying before your insurance starts to pay
Copay: the amount you are expected to pay at the time of service
Coinsurance: The percentage of costs you pay after you’ve met the deductible. The plan always pays a higher percentage when you use in-network providers.
Benefit Amount: Amount insurance company will pay to your provider (within 7-10 days of issuing the EOB)
Estimated Member Responsibility: The amount you owe the provider. This amount includes copayments, deductible and coinsurance and excluded charges if applicable. (ie. OON provider, experimental procedures)
Amount paid by Health Insurance Company: the benefit amount minus what other insurance paid (if applicable)
The second page of your EOB generally contains a section showing notes & explanations. Such as:
Service codes/descriptions—short description of the service you received
Remark codes/descriptions—if part of your providers charge was excluded, this section explains why. If this section says “letter to follow”, your insurance company sent an Explanation to your provider and you may not receive a copy
Benefit Information—this section provides your accumulation information for your plan.
Special Messages: general information
Why do I need my EOB? You should use the information on your EOB to coordinate your payments to your providers. If a provider charged you more than your EOB states you owe....a flag should go up telling you something is not correct. If the provider is in the network for the insurance company you use; your EOB tells you the maximum amount you are liable for with the provider. If they are charging you more, or you paid more than your EOB shows you should have, call the billing office to see if you can get additional information regarding what is going on. If you are not successful in resolving the issue, or do not feel the issue was handled correctly, you may want to obtain the services of a billing advocate.
Here's a link to another very detailed look at reading an EOB from BlueCross BlueShield http://www.bcbst.com/members/eob/eob.pdf
8 out of 10 medical bills contain errors not in the patient's favor. Do not simply pay what the providers bill says you owe. Make sure to review, or have someone review them for you; comparing your bills with the corresponding EOB first..........it just may save you money.
Next
Blog: Embedded vs. Non-embedded deductible
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