Reading an Explanation of Benefits (EOB)
Reading a Health Insurance Explanation of Benefits (EOB), also known as a Remittance Advice or Remit, can be like trying to interpret a foreign language. For the savvy patient, however, knowing how to understand your EOB can solve mysteries surrounding how your doctor is billing you and if your insurance is covering all that it should.
While the look and feel of every health insurance company's EOB will vary, the general information supplied in them has become pretty uniform. If you are covered by a typical plan, the EOB you receive from your insurer will probably have a section loosely looking something like this:
This is an actual EOB, in this case from a Blue Cross payer. Let's walk through the different sections, with the numbers below corresponding to the numbers above:
- The first section, from left to right, usually provides some basic information about the service. In this case, it was a diagnostic xray performed on 9/11/07.
- The billed charge is what your provider billed the insurance. Think of this as the "retail price". This price gets whittled down in a hurry, as you will see in the next line.
- A provider discount, also known as a contractual or negotiated amount, is an agreement that the insurance company has with the provider, network, or hospital. Think of it as a volume deal that one business gives to another. This gets the price down to the one that is actually going to be paid by somebody, you or the insurance.
- You may see other sections on your EOB (on some EOBs, these will show up as footnotes only). In this case, there was no non-covered amount -- that would be if a procedure wasn't covered under your particular plan, for example. In addition, it appears this patient has met their deductible for the year, so there is no remaining deductible to be applied to.
- The balance eligible, which may also be called something like an "amount remaining" or "payable charges", is what is left for the insurance to consider paying after the other reductions have been applied. On some EOBs, this will come right after number 2, with the other sections showing up merely as text footnotes.
- The insurance then shows the total amount they will pay the provider, followed by the patient balance or your share. This amount, in this case $22.29, should match exactly to the charge that you see on the bill from your
- There will usually be a notes or comments field somewhere on the form. This is where your plan may communicate reasons why charges were not allowed or denials. There should be a corresponding legend to determine what the comment means.
Next, let's look at a couple other EOBs that didn't process as smoothly as this one, and a summary of what those nasty denial codes really mean and what to do about them. Click here to view Sample EOB.