Reading Your Payer's EOB - Explanation of Benefits

When you decide to take steps to control your healthcare costs, knowing how to read your health insurer's paperwork, called an Explanation of Benefits (EOB), can be helpful.


The Basics of an EOB - Explanation of Benefits

A basic EOB statement will have similar pieces of information.
Not all EOBs will look the same as this one, but they will contain the same information. Trisha Torrey

To understand and verify your EOB, there are three pieces of paperwork you'll need to compare.

  1. The list of services performed. This is handed to you when you leave the healthcare provider's office or testing site.
  2. The bill the healthcare provider or health facility sends you. This is a list of the services from #1 above, and includes the charges for each service.
  3. The explanation of benefits (EOB) that comes from your payer (insurer, Medicare or other payer).

Among the three pieces of paperwork, you'll find terminology and codes that will help you be sure you are accurately being billed for the services that were performed.

First: We'll look at the services listed on the EOB.

While your insurer's EOB won't look exactly like this one, the pieces of information will be similar.

First, you'll notice plenty of personal information like your claim numbers, group numbers and more. (They've been removed in the example above.)

You'll also notice the name of the provider. That's your first usable piece of information because it tells you which of your healthcare provider's bills to associate it with. Sometimes you'll receive more than one EOB for each of your medical bills.

The list of services, current procedural terminology (CPT) codes, and amount billed and approved will all be there. We'll discuss what these are and how to use them in the next few steps.

Other information you'll find will be the math - how much was billed, how much the insurer actually paid in total, and how much of your deductible was applied.

"Paid to Provider" means the amount of money that was already paid to the healthcare provider.

"Paid to Beneficiary" means they sent a check to you, and it's up to you to pay the healthcare provider.

Next, let's break down the EOB into its parts. 


Finding and Aligning Services on Your Explanation of Benefits (EOB)

Find a list of services acknowledged by your payer on your EOB.
Find a list of services acknowledged by your payer on your EOB. Trisha Torrey

You'll find a list of services, just like on your healthcare provider's bill.

The list of services provided may be a mystery because those terms for the services can be confusing.

Just like you can look them up for your healthcare provider's bill, you can look them up from the EOB, too. Here's how:

To learn what the terminology means, use an online medical dictionary, such as MegaLexia or refer to an online resource for an explanation of medical tests.

In the example above, you can look up words like:

"Lipid Panel" which is a blood test to determine cholesterol levels

"Routine Venipuncture" which just means blood collection

You may find that you receive more than one EOB for the same healthcare provider visit. You'll want to be sure that no services are listed twice for the same visit. For example, you might have blood drawn at two different visits, but you wouldn't have it drawn and charged twice on the same date.

If you have trouble lining up the services, you can use the CPT codes.


Aligning CPT Codes Between Your Medical Bills and EOBs

CPT codes on the EOB should sync with the codes on your medical bill.
CPT codes on the EOB should sync with the codes on your medical bill. Trisha Torrey

When you compare your medical bills to your EOB, the CPT codes should be identical.

When we looked at your healthcare provider's bill, we identified the CPT codes as the five digit codes that describe each service provided to you in a numeric identifier.

Link here if you'd like to identify CPT codes to find out what services are represented by what codes.

You'll be using this same exercise for the service receipt you received from your healthcare provider, and the healthcare provider's bill you received, too. You should be able to line up all the services among them.

Finally, the last piece of information on the EOB is pricing.


Taking a Look at the Cost of Service and the Provider's Reimbursement

The EOB reflects both the amount charged and the amount reimbursed.
You'll find the amount the provider charged, and the amount the payer reimbursed on the EOB. Trisha Torrey

What your healthcare provider bills, and what your insurance pays, will rarely be the same amount. You can compare those amounts using your EOB.

The amount of money paid to your healthcare provider by your insurer/payer is called a reimbursement. You'll see what your healthcare provider was reimbursed by your payer in the "Approved" category, as outlined above.

Typically, the amount your healthcare provider charges for her services, as seen on her bill and on the EOB, and the amount your payer reimburses for that service, as seen on the EOB only, are two different things. The reimbursement is usually less than the healthcare provider's charge.

You can use the EOB to compare those two amounts. You'll learn two things from this:

  • What your insurance has paid to your healthcare provider (reimbursed) on your behalf. (Don't forget, by paying insurance premiums, you have paid the insurer to do this.)
  • The amount that is unpaid will be the difference between the Amount Billed and the Approved amount. In most cases, unless you've been told differently by your provider ahead of time, that means the difference will also be forgiven (you won't owe the difference) because she can't come back to you to charge you the rest. There are exceptions - see balance billing.

Some EOBs, but not all, will show you the balances on your account. For example, if you have already paid part of the deductible for your coverage year, that may appear on your EOB.

By Trisha Torrey
 Trisha Torrey is a patient empowerment and advocacy consultant. She has written several books about patient advocacy and how to best navigate the healthcare system.