How to read an explanation of benefits (EOB)

An explanation of benefits, or EOB, is the document your health insurer sends after it processes a claim. It looks like a bill and it is not one. Learning to read it is the single most useful paperwork skill for a patient, because the EOB is what you check every bill against.

Insurers lay out EOBs differently, and the labels below vary. The idea behind each line stays the same. For the exact meaning of any word on your own EOB, rely on your plan’s documents and your insurer, who have the final word.

What is on an EOB

Most EOBs list the same items.

• Date of service. The day you received care.
• Provider. The doctor, hospital, lab or other business that billed the plan.
• Service description or code. What was billed, often with a procedure code.
• Amount billed. The provider’s full charge. It is often much higher than what anyone pays.
• Allowed amount. The most the plan will recognize for that service. For an in-network provider, this is generally the rate the provider agreed to with the plan. Some EOBs call it the eligible expense or the negotiated rate.
• Plan paid. What the insurer paid the provider.
• Your share. Sometimes labeled patient responsibility. It is usually broken out into a deductible amount, a copay, coinsurance, and any amount not covered.
• Notes or remark codes. Short reasons for a reduced payment or a denial. Look these up in the key printed on the EOB, or ask the insurer.

The math from billed to owed

The calculation runs in the same order each time:

1. The provider bills its full charge.
2. The plan applies its allowed amount.
3. Part of the allowed amount goes toward your deductible if you have not met it yet.
4. Your coinsurance or copay applies to what remains.
5. The plan pays the rest, up to the limits of your coverage.

The difference between the billed amount and the allowed amount is often shown as an adjustment or discount. With an in-network provider, that difference is generally not yours to pay. The out-of-pocket estimator walks through steps 3 and 4 with your own numbers, and its answer is only an estimate.

An example with made-up numbers

These figures are invented to show the order of the math. Yours will differ, and your EOB shows the real ones.

Suppose a provider bills 1,200 for a visit. The plan’s allowed amount is 400, and the other 800 is written off as an adjustment. You have 100 left on your deductible, and your plan has 20 percent coinsurance. The first 100 of the allowed amount goes to your deductible. The remaining 300 is subject to coinsurance, so your share of it is 60. You owe 160 in total, and the plan pays the other 240.

If the bill in this example asked for 1,200, or for 400, something is off, and it is worth a call.

Check the bill against the EOB

When the provider’s bill arrives, put the two side by side and check:

• Names and dates. Is it your name, and do the date and provider match?
• The service. Does the bill describe care you actually received? Look for services you did not have and for the same service listed twice.
• The amount you owe. Does the bill match your share on the EOB? If you never received an EOB for this claim, the bill may have come first. Ask the insurer whether the claim has been processed.
• Payments already made. Did you pay a copay at the visit? That payment should show on the bill.
• Billing codes. If you ask for an itemized bill, the codes should line up with the EOB’s description.

If everything matches, pay by the due date, or ask about a payment plan. If anything does not, do not ignore the bill, and do not pay an amount you cannot explain. Move to the next section.

When the two do not match

Start by calling the provider’s billing office. Have the bill, the EOB and the claim number in front of you.

1. Ask for an itemized bill that lists each service with its code and date.
2. Say which line differs and quote the EOB: “My EOB shows my share as this amount. The bill shows a different one. Can you explain the difference?”
3. Ask whether the claim was submitted correctly. A wrong code or a wrong date can change what the plan pays.
4. If the billing office says the insurer got it wrong, call the insurer and request a review or a reprocessing of the claim.
5. Ask whether the account can be put on hold while the question is open, and ask for the due date in writing.
6. Write down every call: the date, the person’s name, what they said and any reference number.

If the insurer denied the claim, see appealing a denied claim.

Out-of-network and surprise bills

If the provider is out of network, the provider may bill you for the difference between its charge and the plan’s allowed amount. That is called balance billing. Federal law, through the No Surprises Act, limits it in some situations, including emergency care and certain care from out-of-network providers at in-network facilities. The Centers for Medicare & Medicaid Services explains the protections at cms.gov/nosurprises. The details depend on the type of care and your plan, so read that page before you pay a bill that surprises you.

Reading the notes and remark codes

When a payment is lower than you expected, the EOB usually says why in a short note or a code. The key to those codes is often printed on the back or at the bottom of the statement. Typical reasons include the deductible not being met, a service the plan lists as not covered, a claim that needs more information, and a benefit limit being reached. If a code is unclear, call the insurer, read the note aloud and ask what it means for you and what, if anything, you can do about it.

Keep a paper trail

Keep EOBs, bills, receipts and your call notes together, by date of service. Check them against each other at the end of the plan year. If a problem surfaces months later, the notes will let you answer questions without relying on memory.

Where to get more help

If a dispute is stuck, your state’s insurance department can often take complaints about an insurer. If your coverage comes through an employer, the HR or benefits team may be able to escalate a claim with the insurer. For definitions of common coverage words, see healthcare.gov/glossary and the medical billing terms page.

Quick answers

Is an explanation of benefits a bill?

No. It is a statement from your insurer describing how a claim was processed. It tells you what was billed, what the plan allowed and paid, and what the plan says is your share. The provider sends the actual bill.

Why is my bill higher than the amount my EOB says I owe?

The bill may have been sent before the claim was processed, may include a service the EOB lists separately, or may reflect a billing error. If the provider is out of network, it may also bill the difference between its charge and the allowed amount. Ask the billing office to explain each line.

What if I never received an EOB?

Many insurers post EOBs in the member portal as well as mailing them. If you cannot find one, call the number on your insurance card and ask for a copy of the EOB for that date of service.