Explanation of benefits

Explanation of Benefits (often abbreviated as EOB) is a statement sent by a health insurance company to covered individuals explaining what medical treatments and/or services were paid for on their behalf. The EOB is sent after the insurance company receives and processes a claim submitted by a healthcare provider.

Overview

The Explanation of Benefits typically includes the date of service, the code used to bill a particular medical service, the fee charged by the healthcare provider, the allowed amount under the policy, the amount paid by the insurer, and the balance that the patient is responsible for paying. It may also include a summary of the amounts accumulated toward deductibles and out-of-pocket maximums.

Components of an EOB

Date of Service

The date of service is the date the medical service was provided.

Service Code

The service code is a unique identifier used to bill a particular medical service. This code is typically based on the Current Procedural Terminology (CPT) or Healthcare Common Procedure Coding System (HCPCS).

Provider Charge

The provider charge is the fee charged by the healthcare provider for the medical service.

Allowed Amount

The allowed amount is the maximum amount that the insurance policy will cover for the medical service.

Paid Amount

The paid amount is the amount that the insurance company has paid to the healthcare provider.

Patient Responsibility

The patient responsibility is the balance that the patient is responsible for paying. This may include deductibles, co-pays, and coinsurance.

Understanding an EOB

Understanding an Explanation of Benefits can be challenging due to the use of medical billing codes and insurance terminology. However, it is important for patients to review their EOBs to ensure that they are being billed correctly and that their insurance company is paying the correct amount.

See Also

• Health insurance
• Medical billing
• Current Procedural Terminology
• Healthcare Common Procedure Coding System

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