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How to Read A Health Insurance EOB

After visiting a doctor or hospital, you receive an Explanation of Benefits, also known as an EOB, before receiving the medical bill. It’s the administrative paperwork from the claims department of your health insurance company processing the expense of your medical care. They look to see if your visit was in-network, which discounts you receive for using an in-network doctor or hospital, and then deduct any co-payment, place the dollar amount against your annual deductible, and total any coinsurance you may owe. While you might be tempted to skim the document and throw it away, but it’s an important piece of hard evidence you need to verify that your medical treatment was coded accurately, and your financial responsibility is correct.

Let’s review the most important factors of an EOB.

Explanation of Benefits

Explanation of Benefits

  1. Your Doctor’s Name – When you receive your EOB, make sure the doctor listed on your EOB is correct, and your claim was not mis-coded. This can happen when doctors in the same system have similar names, like “Franz” and “Franze.” If one doctor is a general practitioner, and the other is a specialist, you could accidentally get charged for a more expensive service just because the doctor was coded incorrectly. If you see multiple doctors, make sure the doctor listed on the EOB matches the date of service you actually saw that doctor.
  2. Date of Service – If you receive an EOB and the date of service listed is not the date you received care, contact customer service at your health insurance company and ask for an additional explanation. They typically have more details descriptions of service on file. Sometimes you receive an EOB after a doctor has read a lab result, which isn’t necessarily on the date you had lab work done, but you wouldn’t know the reasoning unless you called for further detail.
  3. Charges for the Service – This is the total amount the service you received costs. The figure gives you a base to calculate the rest of your discounts and responsibilities. The “Allowed Amount” is what you actually have to pay after your preferred provider discount, if your claim is for an in­-network service.
  4. Member Responsibility
    • Copay ­- You may have paid a flat rate for a service, which is indicated in this section.
    • Deductible -­ This is how much of the bill you are responsible for before hitting your deductible.
    • Coinsurance ­- Coinsurance requires you to pay a certain percentage of your medical bill. The percentage is typically 20% or 30%, depending on your health insurance coverage. In this example, the patient has hit their medical deductible with this bill, so the remaining amount they owe is based on 20% coinsurance.

In this example, the math breaks out:
Doctor visit ­— $330
Insurance discount ­— $113.08
Actual cost of visit ­— $216.92

Co-payment ­— $0 since copay didn’t apply in this instance
Deductible ­— Patient has to pay the remaining $43.76 to hit her deductible for the year

After subtracting the deductible, the patient’s bill is $173.16. Since the patient has hit her deductible for the year, 20% coinsurance is applied to $173.16. The health insurance company will pay 80% of the bill, but the patient is responsible for for the remaining 20%, which is $34.63.

A total of $138.53 has been paid on the claim by both the patient and the insurance company. The remaining $78.39 is the patient final responsibility.

The insurance company has paid $60.14 of the bill.
The patient ultimately pays $156.78 of the original $216.92 bill.

And that is how you read an EOB!

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