Check your health coverage with an explanation of benefits, or EOB
After a hospital stay or outpatient visit, you may get several bills and at least one statement that says 鈥渘ot a bill.鈥� This is your explanation of benefits, or EOB.
At first sight, it might look like a bunch of numbers and nonsense to you, and you may even be tempted to throw it away. Don鈥檛. For each medical bill you receive, you should receive an explanation from your insurer, though sometimes more than one medical bill is reflected on an EOB. Your EOB is the only way to know which medical services your health insurance plan covered, and you鈥檒l need it聽聽or want to negotiate your bill.
Here鈥檚 how to make sure your insurance coverage was applied correctly. It will help if you鈥檝e already read the itemized medical bill for your services, but you can check certain parts of the EOB without the bill.
First steps
In addition to the medical bill, you鈥檒l want to have some other paperwork handy, starting with your insurance plan summary of benefits. The summary outlines聽, including which services you must pay of out-of-pocket, and your portion of costs for covered treatments and exams. For more on how health insurers cover medical costs,聽.
If you don鈥檛 have the plan summary, you can download it from your insurer鈥檚 customer portal or call the customer service line to have it sent to you.
Your health plan鈥檚 online customer portal also may have a sample explanation of benefits available; most major insurers do. Take a look at your plan鈥檚 sample before you start to read your own. Since EOB styles differ among聽companies, the sample your insurer provides is the best way to understand any confusing sections on your EOB.
What to compare with your medical bill
First, make sure your identifying information is correct on both your medical bill and EOB, along with your policy number. Clerical errors are easy to make, and a small mistake can result in rejection of the entire claim by your health insurer.
While medical bills are full of codes you鈥檒l want to look up to ensure correct charges, you probably won鈥檛 have to worry much about them while reading your EOB. 鈥淚鈥檇 start by matching up the dollar amounts and the medical terms,鈥� says聽, president of聽. The dollar amounts on your bill should match the 鈥渁mount billed鈥� or 鈥渁mount charged鈥� section of your EOB, typically the first dollar figure listed.
Charge amount, or billed amount:聽a price for each medical service or treatment, or what you would have been charged if you didn鈥檛 have health insurance.
Place of service:聽This may or may not be listed on your EOB, along with a 鈥渓ocation鈥� code. These codes are often in place because your plan may only cover certain procedures if they鈥檙e performed in a specific setting, such as a hospital or urgent care facility.
What to compare with your plan summary
The point of reading your EOB is to make sure the insurance claim was processed correctly for your visit. Compare your summary of benefits with what your insurance actually paid.
Copayment and coinsurance:聽the amount you pay for each service, whether as a set fee (copay) or percentage (coinsurance). In some cases, this may be the only amount you鈥檙e responsible for, and for outpatient care, you probably paid it at the visit. Your set copays and coinsurance rates should be clearly listed for each covered service on your plan summary.
Deductible:聽the amount that you pay聽. Especially if you were hospitalized, you may have to pay your entire deductible for this visit, plus any coinsurance as outlined in your policy summary. Any services that aren鈥檛 covered by your health plan, as outlined in your plan summary, don鈥檛 count toward your deductible.
Details in the numbers
In addition to the information above, there will be other numbers, terms and codes on the EOB that may be unfamiliar. Mainly, these will reflect dollar amounts charged and paid for your medical services.
Allowed or 鈥渄iscounted鈥� amount:聽If the provider is in your insurance network, this is the amount agreed to by your insurance company and health care provider. If a line is blank for this column, your insurance probably doesn鈥檛 cover this service.
Charges not covered:聽This is the difference between the charge and allowed amount. If it is equal to the charge, you aren鈥檛 covered for this service, and the EOB should have a remark or reason code.
Remark or reason code:聽When a charge isn鈥檛 paid by your insurer, the explanation of benefits should state a reason, such as an out-of-network physician, a noncovered service or an unmet deductible. Any codes or shorthand should be explained in an index or key.
Payment amount:聽the dollar amount that your insurance company agrees to pay for the visit. In most cases, it has made the payment before you receive your EOB.
Due from patient:聽the amount that you are responsible for paying to the provider. This should be your copay, coinsurance, deductible and noncovered charges all added together.聽If your provider tries to charge you for any聽difference between the allowed amount and the covered amount, that鈥檚 considered balance billing and聽does not count toward your deductible. Some states protect consumers from balance billing with 鈥渟urprise medical bill鈥� laws; to see if you鈥檙e protected, call聽.
Putting it all together
In an ideal world, your provider submits a claim, the visit is billed correctly,聽, and you are only billed for the amount your EOB says is 鈥渄ue from patient.鈥�
But a lot can go wrong. You could be balance billed, or there may be an error in either the billing department of your hospital or the claims department of your insurer.
Take the time to go through each charge separately to ensure your coverage was correct. If you don鈥檛 think it was, or you鈥檙e simply聽confused about the details, write down every question you have and call your insurer鈥檚 customer support line to ask.
On the other hand, if you think your insurance was billed incorrectly, call your hospital or provider first and request a copy of your medical records, which should detail all services you鈥檙e being billed for. Then, use a tool like聽聽to find out what reasonable charges are for the services you received.
If you still think you鈥檝e been billed unfairly, you may want to try to negotiate charges or聽聽like Welch to audit the medical bill and EOB for errors. 鈥淢ost offer a free audit and only charge if we can save you money,鈥� says Welch, who charges a percentage of savings, as聽many advocates do.
In extreme overbilling situations,聽聽may be your best chance to save money.
Lacie Glover is a staff writer at NerdWallet, a personal finance website. Email:聽lacie@nerdwallet.com. Twitter:聽.
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