Reclaim your health with us! This article helps you understand your Explanation of Benefits, referred to as “EOB”, and covers:
What is an explanation of benefits (EOB)?
How is an EOB different from a medical bill?
Medical terms you will see on an EOB
What to do with an Explanation of Benefits
An example of an EOB
If you’ve ever had health coverage, you’ve probably gotten an EOB in the mail. It looks eerily similar to a medical bill, but--as it’ll tell you itself (usually in ALL CAPS all over it)--it’s not a bill.
An EOB, or Explanation of Benefits, is a statement that comes from your insurance company and gives you a breakdown of what portion of your services were paid by them to your doctor or healthcare provider and what portion is your responsibility. While an EOB is not a bill, it is a summary of medical expenses you can expect to receive a bill for from your doctor in the near future, if you haven’t already. If you have Medicare, you’ll receive a Medicare Summary Notice instead of an Explanation of Benefits, which is very similar to an EOB.
An EOB has many of the same elements as a medical bill (Understanding Your Medical Bill), such as account number, service date, balance, and allowed charges. Here are some additional terms you’ll see on an EOB:
1. Payee: Vendor/Physician that is receiving payment for the service provided to the member
2. Remark Code and Reason Codes: Referred to as Remittance Advice Remark Codes. These are one of the most confusing parts of an EOB. Remark codes, like billing codes, are maintained by Medicare and Insurance companies. Different insurance companies use different codes, so be sure to check out the key at the bottom or on the back of the statement to guide you through what each code means. (You can find a list of all remark codes here.)
If your bill is not paid by your insurance company, or part of it is not paid, the remark code or reason code can reveal why. We’d recommend writing out the meaning of each code on your statement once you’ve looked them up in the key usually at the bottom of the bill or online with the link provided above. That way, you can reference them more easily in the future.
Examples of common remark codes (note: these always begin with a letter):
M2: Not paid separately when the patient is an inpatient N188: The approved level of care does not match the procedure code submitted.
N345: Date range not valid with units submitted
Examples of reason codes (note: these only contain numbers and never have letters):
158: Service/procedure was provided outside of the United States 173: Service/equipment was not prescribed by a physician 261: The procedure or service is inconsistent with the patient’s history. Note that in the examples above, claims can be denied because of incomplete medical records, typos, or mismatches in records. If you think there is a potential error in your EOB or medical bill, you may be able to appeal your medical bill.
3. Customer Service Number: This is a great place to start if you have any questions about your EOB. Note that this is not the number for the hospital or clinic; it’s for your insurance carrier. The representative will be able to discuss with you what the insurance paid and why it covered the portion of the medical service that it did. Note: It is wise to write down the name and direct extension of the person you end up speaking to, as you may be transferred a number of times after calling the main number--in case you are disconnected, want to follow with them again at a later date, or need to reference your conversation with them with someone else.
4. Group Number: This should correspond to the group number on your insurance card. You will always need this number when calling customer service. Make sure this number matches!
5. Subscriber Number: This is your individual number for your insurance policy. Double check this number as well.
6. Claim Number: Like an invoice number, this is the number for this individual insurance claim. The claim may have multiple dates of service, or it may only cover one date of service.
7. Line Number: This can be super helpful to reference when discussing your EOB with customer service.
8. Date Paid: Pay special attention to this. If you need to refile the claim with more information, or you have multiple claims, you will need to reference this to ensure whoever you’re speaking with is referring to the correct one.
We hope this article helped provide insight on how to break down your EOB.