Getting your EOB in the mail can be confusing. There are a lot of different numbers, columns, and terms that are unorganized and hard to understand. The goal of this article is to help you understand your EOB and your insurance coverage a little better.
So what does EOB even stand for? It stands for explanation of benefits (EOB). The EOB is designed to explain what your insurance paid (or covered) on a medical expense such as a visit to the chiropractor. They are supposed to help you understand your benefits, but most people end up more confused. Sometimes this can lead to paying for a billing error. Knowing your responsibility helps eliminate those errors and will likely save you money.
To properly understand an EOB, the details of your insurance plan you need to know are the plan’s co-pay, deductible, and co-insurance. Here is what each of these means:
Co-pay – the amount you are required to pay for each office visit or date of service. This amount does not go towards your deductible and does not go away after your deductible is reached. The co-pay is required to be collected on the date of service.
Deductible – is the amount of the allowed charges that the patient pays before the insurance pays. For example, a plan with a $1000 deductible must accumulate $1000 of allowed charges before the insurance company pays for any services. The deductible is paid by the patient out of pocket or by a health savings account (HSA), health reimbursement account (HRA), or flex spending account. This amount is typically billed to the patient after the doctors office gets the EOB back (typically 30-60 days).
Co-insurance – is the percentage of the covered services the patient is responsible for. This is only relevant after the deductible has been reached. For example, if the plan has a 20% co-insurance (often referred to as 80/20) and the covered charges are $100 the patient would be responsible for 20% or $20. Co-insurance stacks with a co-pay so if the co-pay was $30 then the $20 is added making the patient’s total responsibility $50 of the $100.
So what do I do when I receive my EOB? The best practice is to look over it and see if you have any responsibility for the charges. Also it is a good idea to see if any charges were denied, if so check with your doctor’s office or insurance company. If you have responsibility such as deductible or co-insurance you will be getting a bill in the mail from the doctor’s office in the next few weeks. If you don’t receive a bill you should contact your doctor’s office.
If you have questions you have two options, call your doctors office or call your insurance company. Often you may have to call both. If you don’t understand a charge the doctor’s office is the best place to call first. If you have a question regarding your plan details, such as your co-insurance or deductible, then the insurance company is the best to call. The number for your insurance company is listed on the back of your insurance card.
Here are the explanations of the different columns you may see on your EOB. Each insurance company is different so things may be listed slightly differently, but the definition should help you figure out each column. Some of these are pretty obvious but I will cover many of the terms.
“Service Date” or “Date of Service (DOS)” – simply the date you visited the doctor.
“Procedure code” – a code the doctor’s office enters in that fits procedure(s) done in the office. These are also known as CPT or E/M codes.
“Charges” – simply the amount for each procedure code billed to the insurance company. This would be the amount you would have to pay without insurance.
Here is where things start to get a little tricky.
“Amount allowed” – the amount that your insurance pays for the specified procedure code. This is the same for all providers based on their specialty. For example all chiropractors in the Cincinnati area will get paid the same amount if in network from a specific insurance company. Each insurance company has a different allowed amount for the specific procedure codes.
“Subscriber Liability” – this translates to patient responsibility, so the amount you owe to the doctor after all discounts and insurance payments have been applied.
“Discount or Provider Discount” – is the difference between the billed charged to the insurance company and what the contracted rate is for the procedure code. Insurance companies set the contracted or allowed amounts. The doctor can bill how ever much he wants but the insurance company sets the amount they will pay. For example, the doctor bills $100 for an adjustment but the contracted amount is $60, the insurance company will only pay $60 and the doctors office is required to write off the other $40, this is the discount amount. So the doctor could even bill $500 but the insurance will still only pay $60.
“Not Covered” – is the amount the insurance company has denied to pay for. In many cases you are not responsible for this amount and this will be indicated in the
“subscriber responsibility” column. If you see this you should read the “reason code” for that procedure and then call either the doctor’s office or insurance company. In some cases you can be responsible for this amount.
“Reason code” – this has a different name on each insurance company’s EOB. It is normally a 2-3 character code that corresponds to a list at the end of the EOB. This explains why charges are denied or put towards deductible. There are many different codes.
As you may have now realized, insurance and billing is complicated. Hopefully you have a better understanding of how things work and if you still have questions reach out to your doctor’s office and they should be happy to walk you through your EOB.