Explanation of Benefits (EOB)

from wikipedia - It is actually pretty good - dmj

Explanation of Benefits (insurance)

An explanation of benefits (commonly referred to as an EOB form) is a statement sent by a health insurance company to covered individuals explaining what medical treatment and/or services were paid for on their behalf.

An EOB typically describes:

• the service performed—the date of the service, the description and/or insurer's code for the service, the name of the person or place that provided the service, and the name of the patient
• the doctor's fee, and what the insurer allows—the amount initially claimed by the doctor or hospital, minus any reductions applied by the insurer
• the amount the patient is responsible for.

There normally also will be at least a brief explanation of any claims that were denied, along with a point to start an appeal.

Potential for confusion

Some of the reasons that EOBs are confusing for many patients include: there are several parties involved; the insurer issuing the EOB is trying to achieve multiple agendas in a single document; there is little overall standardization. Furthermore, the EOB a patient receives for a hospital visit may look different than the EOB received for physician charges, dental, or medication services.

There are a minimum of three parties involved in a covered service (the health insurance company or "payer", the doctor or hospital or "provider", and the patient), and they may refer to things differently. For example, the payer may provide an EOB for one service that's provided by multiple doctors who bill separately, resulting in amounts that don't seem to correlate.

Insurers are trying to achieve many goals in EOBs. There is the intent to clarify and confirm which service was performed. There is the intent to convey both what the provider charged for the service, and how much the insurer "allowed" to be charged under the terms of its agreement with the provider (one part of the coverage benefit for the insured patient). There is the legal requirement for the insurer to indicate why it is denying part or all of a claim, and how to appeal. There is the intent to explain how much the insurer is paying toward the allowed cost (the other part of the coverage benefit). There is the intent to inform the patient how much they are responsible for.

Moreover, EOB forms and terminology are not standardized, so different insurers may use the same words to mean different things.

Original URL http://en.wikipedia.org/wiki/Explanation_of_benefits_%28insurance%29

• < Prev
• Next >