How to Notice and Avoid Errors on Your EOB

Mistakes in Your EOB Can Cause You Trouble With Your Insurance

Senior African American woman paying bills
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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. [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 be receiving a bill for a portion of the charges. 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 doctor received and your share of the bill are correct, and that your diagnosis and procedure are correctly listed and coded.

Doctors’ 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.

Examples of Mistakes in Your EOB

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.

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, 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 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.

As long as patients use in-network facilities and doctors, 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
Betsy 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 doctor’s office had mistakenly billed for a diabetes blood test. The computer program used by her doctor’s billing company automatically put down a diagnosis of diabetes, which Betsy does not have.

Betsy very wisely called her health plan and doctor’s office to correct the diagnosis error to ensure that all parts of her medical history were accurately recorded. Her doctor 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, Betsy waited until the second claim had been processed before sending any money to her doctor'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 doctor 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 doctor’s office to confirm that his doctor had not wrongly billed for another patient. The nurse in his doctor’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 doctor’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 doctor’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 doctor’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 doctor 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 doctor’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 doctor has not documented that a service or procedure was necessary for your health or well-being
  • 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.

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 doctor’s office and your health plan.

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