How to Notice and Avoid Errors on Your EOB

An Explanation of Benefits (EOB) is a form or document that may be sent to you by your insurance company after you had a healthcare service and a claim was submitted to your insurer.

(Note that if you're enrolled in Original Medicare, you'll receive a Medicare Summary Notice instead, which is similar but not the same thing as an EOB. However, if you have a Medicare Part D plan or Medicare Advantage coverage, they will send EOBs.)

Depending on the circumstances, your insurer may or may not have paid some or all of the charges—after the network-negotiated discount—and you may or may not be receiving a bill for a portion of the charges. (Note that the EOB is sent by your insurer, and is not a bill; if you're receiving a bill, it will come from the healthcare provider or hospital that treated you, but the amount that will be billed should be communicated on the EOB.)

Your EOB should clearly communicate all of this, but sometimes the information can feel overwhelming and it's tempting to just stuff EOBs in a drawer without looking at them, especially if you're dealing with a complex medical situation in which you're receiving numerous EOBs.

But your EOB is a window into your medical billing history. Review it carefully to make sure you actually received the services for which a claim was submitted, the amount your healthcare provider received and your share of the bill are correct, and that your diagnosis and procedure are correctly listed and coded.

Practitioners’ offices, hospitals, and medical billing companies sometimes make billing errors. Such mistakes can have annoying and potentially serious, long-term financial consequences. An EOB can also be a clue to medical billing fraud. Your insurance company may be paying for services billed on your behalf that you did not receive.

Senior African American woman paying bills
 Terry Vine / Getty Images


Double Billing

Mary J. visited her primary care physician (PCP) and had a chest X-ray because of a chronic cough. Her PCP sent the X-ray to a radiologist to be read.

The following month Mary got her EOB and a bill from the radiologist. When she looked at her EOB she noticed that both her PCP and the radiologist billed her insurance company to read the X-ray. The insurance company rejected this claim from the PCP—although they paid the PCP for the office visit—and only paid the radiologist for reading the X-ray.

In this case, Mary's PCP's office might catch the mistake and delete the billed amount. But it's also important for Mary to pay attention to the bill she receives from the PCP's office, to ensure that they haven't passed on the charges to her after the insurer rejected the bill.

In some cases, patients are responsible for charges that the insurer doesn't cover. But in a situation like this, where the bill was sent in error, the patient is not responsible for paying it. This should be clearly communicated on the EOB, but again, patients can protect themselves by being aware of situations like this.

Miscalculating Your Coinsurance Amount

Robert M. had outpatient surgery on his hand. He is in a PPO and he pays a coinsurance of 20% for outpatient procedures (we'll assume he's already met his deductible for the year).

Following the surgery, he was sent a bill from the surgeon’s billing company for $1000, which is 20% of the surgeon’s $5000 bill. However, when Robert received his EOB, he noted that although the surgeon billed $5000, Robert's health plan had a negotiated rate of $3,000 for this surgery, and the EOB reflected that the other $2,000 was to be written off as part of the surgeon's network agreement with Robert's insurer.

Robert did the math and figured that he should be paying $600 instead of $1,000, since he should only have to pay 20% of $3000, not 20% of $5000. His health plan confirmed that was correct and Robert was able to pay out $600 instead of $1000.

Situations like this can sometimes arise if the medical office bills the patient before having the claim processed by the insurance company. This can happen if the office asks the patient to pay at the time of service rather than waiting for a bill to arrive. In general, you should expect to have to pay at the time of service if you're responsible for a flat copay amount, and possibly if you're responsible for a flat deductible amount.

But coinsurance should be processed by the insurer before the patient is asked to pay, since it will end up being a percentage of the network-negotiated rate, rather than a percentage of the billed amount.

As long as patients use in-network facilities and healthcare providers, their coinsurance amount is always calculated based on the cost that's allowed under the health plan's agreement with the provider, NOT the amount that the provider initially bills.

Wrong Diagnosis or Procedure

Zahara D. went to her PCP for a sore throat. When she received her EOB she noticed that instead of billing for a throat culture, her practitioner’s office had mistakenly billed for a diabetes blood test. The computer program used by her healthcare provider’s billing company automatically put down a diagnosis of diabetes, which Zahara does not have.

Zahara very wisely called her health plan and practitioner’s office to correct the diagnosis error to ensure that all parts of her medical history were accurately recorded.

Her healthcare provider resubmitted the claim with the correct code and the insurer reprocessed it. Since a throat culture and a diabetes test might have very different pricing, Zahara waited until the second claim had been processed before sending any money to her practitioner's office for her coinsurance.

Insurance Fraud and Medical Identity Theft

Aside from having well-controlled high blood pressure, Jerry R. is in excellent health and enjoys playing golf in his Florida retirement community. He is enrolled in Original Medicare and visits his healthcare provider two to three times a year.

Jerry received a Medicare Summary Notice indicating that he had received a wheelchair, hospital bed for home use, and a portable machine to help him breathe.

Jerry called his healthcare provider’s office to confirm that his practitioner had not wrongly billed for another patient. The nurse in his practitioner’s office told Jerry this was most likely Medicare fraud and she gave him a fraud alert number to call. Jerry shared his paperwork with the local Medicare office.

Switching Health Plans

Martha S. recently changed jobs and had to change health plans. A week after her new health plan took effect, she had a practitioner’s visit for a follow-up of her high cholesterol. Along with her office visit, Martha also had some blood tests. She was surprised when she received an EOB indicating that the healthcare provider’s and the lab’s claims for her services were denied. Martha noticed that the EOB was not from her new health plan.

Martha called her healthcare provider’s office and found that the billing office had not updated her information and had billed her previous health plan. Once they sorted out the details, the medical office was able to resubmit the claim to Martha's new insurer.

Look Over Every EOB and Medical Bill

First, make sure you receive an EOB after every visit to your practitioner or another healthcare provider. Every time a provider submits a claim on your behalf, your insurance company must send you an EOB. Call your health plan if you do not get an EOB within six to eight weeks of a health-related service.

(Original Medicare sends out Medicare Summary Notices every three months, for enrollees who had claims during that three-month period. Unlike EOBs from private insurers, MSNs are not sent after every claim.)

When You Get Your EOB

Check to make sure the dates and services you received are correct. If you find a mistake or you are not sure about a code, call your healthcare provider’s office and ask the billing clerk to explain things you don’t understand.

Watch out for possible billing fraud or medical identity theft. If you did not receive the services or equipment listed on the EOB, contact your health plan (outright fraud—as opposed to mistakes—is rare, but it does sometimes happen).

Read the remarks or code descriptions at the bottom or the back of your EOB. These remarks will explain why your health plan is not paying for a certain service or procedure or paying less. Some common remarks are:

  • out-of-network provider—you have used a provider who is not in your health plan’s network and the service may not be covered or may be subject to a higher deductible and/or coinsurance
  • service is not a covered benefit—your insurance does not cover this service, such as a cosmetic procedure
  • service is not medically necessary—your healthcare provider has not documented that a service or procedure was necessary for your health or well-being (depending on the circumstances, a successful appeal might result in the claim being paid)
  • invalid code—indicates that your healthcare provider made a coding error, either in your diagnosis or a procedure

If your claim is being denied due to any of these reasons, understand that you can submit an appeal if you don't think the denial is justified. As long as your health plan isn't grandfathered, the Affordable Care Act guarantees your right to an internal appeal, and if that is unsuccessful, an external appeal. That doesn't mean you'll win your appeal, but it does mean that the insurer has to consider your appeal and also allow for the external review.

A Word From Verywell

There are several steps in the process of filling out and submitting a medical claim. Along the way, the humans and computers involved in the process can make mistakes. If your claim has been denied, don’t be shy about calling both your healthcare provider’s office and your health plan.

Verywell Health uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.

By Michael Bihari, MD
Michael Bihari, MD, is a board-certified pediatrician, health educator, and medical writer, and president emeritus of the Community Health Center of Cape Cod.