What is an Explanation of Benefits (EOB)? - #MedicalBillerExplains Ep. 3

What is an Explanation of Benefits (EOB)? - #MedicalBillerExplains Ep. 3
Photo by Towfiqu barbhuiya / Unsplash


Frederick McNulty, Finestra: Hey everyone. Welcome to our channel. I'm Frederick McNulty, Director of Content at Finestra. In this series, we're going to be asking the most common questions about healthcare in the United States and hearing answers from certified experts.

Amethyst Storey: Hi, I'm Amethyst Storey. I'm a certified professional biller through the AAPC. I've been in healthcare for 19 years and a medical biller for 16 years. Great to be here with you.

FM: If you go in for routine medical care, you'll probably receive something in the mail about a month later, but it probably won't be a medical bill. Instead, it will be an explanation of benefits from your health insurance company. In this video, we're going to break down what you need to know about explanations of benefits.

In layman's terms, what is an explanation of benefits?

AS: An explanation of benefits is what the insurance company will send the patient and the doctor.  It's a breakdown of exactly what was the, how much was billed for it, what the insurance company allows,  exactly how much the patient is responsible for, and how much the insurance company paid. It does also have comments on the bottom. It will tell you whether the patient payment is applied to the deductible, co-insurance, or the copay; it will let the doctor know if something was denied and exactly why it was denied. It will do the same for the patient. If there's any discrepancies with it, it's not a final bill. So if there's any questions at all, I would recommend calling the financial department at your doctor's office so that they can discuss with you in detail exactly what was billed and what you're responsible for and why.

FM: I think when I first learned about EOBs (explanation of benefits) my question was, why does this exist? Why not just send me the bill? Why give me this preview?

AS: An explanation of benefits exists for the reason of checks and balances. If you just get a bill from your doctor's office, you're going to pay it and you're probably not even going to question it. An explanation of benefits is a detailed breakdown of what was done on each date of service and exactly how much the insurance company paid and how much the patient is responsible for. Oftentimes the bill that you receive from a provider does not match the EOB, and you want to be sure that you're only paying for the things that you're actually responsible for, and that the billing was done correctly. If the billing was done incorrectly, the claim needs to be reprocessed before you receive a bill from your provider,

FM: Let's say, I go to the doctor for a standard checkup, all goes well. When can I expect to receive the explanation of benefits and where do I find it?

AS: Depending on the insurance company, you should receive an explanation of benefits within 30 business days. Some insurance companies do it in less time, but it's most common to get one within 30 business days. They generally will mail them to the patient and the provider. If for some reason they do not mail it to your house, you're able to go on to the patient portal for your insurance company, and you can find your explanation of benefits on your patient portal.

FM: What happens if you don't receive it within 30 days?

AS: If you don't receive an explanation of benefits within 30 days, I would recommend calling the financial department of your doctor's office. It could be that the claim hasn't been processed yet, it could be that the EOBs were not sent out yet. Your biller at your doctor's office would have that information for you. And if they don't, they can find out the information for you.

FM: You still have to pay though, eventually, right?

AS: You do have to pay what you owe eventually, but you just want to make sure that the amount that you're paying is the correct amount and that you're not over or underpaying.

FM: After you receive the EOB, you're looking at it. How should you interpret it?

AS: The best way to interpret it is by the description for patients, you guys aren't going to know what the different procedure code means. They generally have a description next to them to explain it. But my best recommendation is if you can talk to the doctor's office or, you know somebody that works in the medical field that can explain it to you, because oftentimes those descriptions – people that don't work in the medical field wouldn't really understand what some of these descriptions mean.

FM: It sounds like it could be pretty complicated for folks at home receiving an EOB, unless they have a loved one or someone they know who works in the medical field, or they themselves have that knowledge.

AS: Yes, it does get pretty complicated unless you have that knowledge or know somebody that has that knowledge.

FM: In our example, I went to the doctor, waited 30 business days, and received the EOB. When I get it, what do I do?

AS: When you get the explanation of benefits, you want to look it over and match up the amount that it says that the patient owes to the bill that you receive from the provider's office. If there's any kind of discrepancy, you want to talk to your provider's office and find out where that discrepancy lies so that it can be corrected.

FM: After you receive it, you read it over. Is it final? Is this set in stone?

AS: An explanation of benefits is set in stone for that claim, but if something was billed wrong or it wasn't done correctly, the provider's office can submit what's called a “corrected claim.” No EOB is actually ever final until that last claim is put in that's correct.

FM: How often would you say that there are sort of issues with EOBs?

AS: I would say maybe 20% of the time there's issues with EOBs. Most of the time, the financial department or the billers in the providers offices are excellent at what they do and things go out as clean claims, which essentially means everything that's supposed to be on the claim is on it correctly, and that's done and they get paid. 20% of the time , there might be coding issues or billing issues, and it has to be corrected, but I don't find that that's commonplace.

FM: In this example, let's say I've got the explanation of benefits, I'm reviewing it, I receive the bill. I see that there's a discrepancy. What do I do in that instance?

AS: When you receive your explanation of benefits, if you find out that there is a discrepancy between that and the bill that you received from the doctor's office, you can ask the doctor's office for what's called a “super bill.” It's a detailed statement of everything that was done, what the charge amount was for it, and then you can compare that to what the insurance company paid for each thing. If there are any discrepancies, your billers should be able to call the insurance company and find out exactly why things were not paid as they were on the EOB. This actually happened to me recently, I was looking at an EOB for somebody and they were telling me that they owed 900 and some odd dollars. And the EOB, it had multiple claims on there that they applied the same CPT code, which is the procedure code to the person's deductible multiple times. And it turns out that they had a different EOB on the insurance company side than what they actually sent the patient. A lot of times it just requires a phone call to be able to straighten things out.

FM: You referenced a CPT code. What is that?

AS: Your CPT codes are your procedure codes for what's done. For example, you go into a doctor's office, you're a new patient, and you're going in there to have your annual physical. The CPT code that they usually use for that is 99215. The CPT codes tell the insurance company exactly what was done. At the doctor's office, when they make notes, their notes have to back up the procedure codes that were billed. That also determines how much is paid for each claim because each CPT code has an allowed amount with the insurance company.

FM: Just to be totally clear, an explanation of benefits should be a reflection of what your final bill will be.

AS: Correct. An explanation of benefits should be a reflection of what the final bill that you get from the doctor's office is. If it's not, you definitely want to call and find out why.

FM: Thank you for watching. Please let us know what questions you have in the comments below. If you found this video helpful, please subscribe to the channel and like this video. Thank you again for watching, and we'll see you next time.