Understanding Your Explanation of Benefits

It can be confusing to understand your Explanation of Benefits (EOB) paperwork when it comes from your health insurer after a medical visit. I know it took me a while to understand mine, especially after this year, when I received a LOT of them in response to my numerous doctor’s visits. An EOB is not a bill — that will come later if you owe money.

Health insurers are required to provide an explanation of benefits to the patient or insured party in response to a claim being filed, particularly when the medical service isn’t being paid entirely by the insurance company. I received EOBs because I was required to give a $20 or $40 co-pay for each visit as my expected contribution.

An EOB routinely shows the name of the service provider, the name and date of the service, how much the provider is charging for said service, and how much of the amount will be paid by the insurer after deductibles and co-pays. There are also codes associated with each service, and the key on the back of the EOB paperwork explains what each code stands for. They’re usually an explanation of why a certain service isn’t being covered or fully reimbursed, or notes some sort of error on the part of the medical provider submitting the bill to the insurance company. And this happens a lot.

My Recent Experience

It’s a good idea to ALWAYS look at your explanation of benefits paperwork when it comes in the mail (or online, if you receive it that way). You’ll be more likely to catch errors, as I did recently.

When my latest EOB came, I saw that our health insurer wasn’t covering any of my recent bloodwork. My ob-gyn ordered routine tests — checking for vitamin D levels, and a full thyroid panel that looks at TSH, T4, free T4, T3 and thyroid antibodies. I’ve had the thyroid panel done numerous times over the years, and I’d definitely had thyroid bloodwork done this year, my first being covered under my husband’s health insurance. The EOB codes were telling me that I wasn’t covered by insurance at the time the service (bloodwork) was provided. And I definitely had coverage.

So I realize that something was amiss — and that I was only a week or two away from getting a bill for the total of $433 — a bill I sure as heck wasn’t paying. Conveniently, this explanation of benefits showed up on a Friday, and by the time I saw it after work, it was too late to reach anyone at the lab that billed the insurer for the bloodwork. I hopped on the lab’s website and was able to resubmit my insurance information, thinking that it was probably a simple human error in inputting the information.

I followed that up with a phone call to the billing department on Monday, and lo and behold, the customer service rep told me the claim went through — properly.

Looking at the updated EOB online, while I would have had to pay the full total of $433, the laboratory only received $67.79, a small portion of the amount charged for each test. Some of the tests garnered the lab no payment at all!

What I find interesting is that while the medical provider or laboratory bills the insurer one amount, the insurance company most often only pays a portion of that charge. Why is that? If I were responsible for the service, I would be expected to pay the entire cost — not just a portion of it. If anyone has the answer, I’d be interested to hear it.

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