What Does EOB Means In Medical Billing?

EOB means Explanation of Benefits. An Explanation of Benefits (EOB) is NOT a bill. It is a summary sent by a health insurance company every time a patient receives treatment from a medical professional. It outlines the dates and types of treatment received, and the costs the insurance company will pay. 

Insurance companies send information to both the patient and provider on exactly what they paid and allowed. Allowed amount means the maximum amount the insurance company would consider for payment. Any difference above the allowed amount is written off if the provider participates with the insurance company.

Table of Contents

• Common errors in EOB
• Importance of EOB
• Related

• Double billing: Being charged twice for the same services, drugs, or supplies.
• Typos: Incorrect billing codes or dollar amounts.
• Canceled work: Charging for a test your doctor ordered, then canceled.
• Phantom services: Being charged for services, test or treatments that were never received.
• Up-coding: Inflated charges for medications and supplies.

Importance of EOB

The EOB can help you track your health care spending or medical claims history. Your EOB also helps you verify that the services and charges listed are correct. It explains how your benefits were applied to that particular claim. It includes the date you received the service, the amount billed, the amount covered, the amount we paid and any balance you’re responsible for paying the provider. It also tells you how much has been credited toward any required deductible. 

Other terms used along with EOB

1. Service/Product – The type of services or products you received from your provider.
2. Dates of Service – The date(s) you received service.
3. Amount Billed – The full amount billed by your provider to your health plan.
4. Your Plan Discounts & Payments – This section details the amounts that you do not need to pay.
5. Premera Network Discount – The amount you save by using a provider that belongs to a Premera network. Premera negotiates lower rates with its in-network providers to help you save money. This amount may not be itemized and may only show in the Totals row of the Claim Detail.
6. Amount Paid By Your Health Plan – The portion of the charges eligible for benefits minus your copay, deductible, coinsurance, network discount and amount paid by another source up to the billed amount.
7. Amount Paid By Another Source – Examples of other sources include: a health funding account, other health insurance, automobile insurance, homeowners’ insurance, disability insurance, etc. This amount may not be itemized and may only show in the Totals row of the Claim Detail.
8. Copay – A set amount you pay for certain covered services such as office visits or prescriptions. Copays are usually paid at the time of service.
9. Deductible – Your deductible is the amount you need to pay each year for covered services before your plan starts paying benefits.
10. Coinsurance – A percentage of covered expenses that you pay after you meet your deductible.

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