Explanation Of Benefits Versus A Medical Bill

This article is general information, not insurance, medical, legal or financial advice. Document names, layouts and timing differ among insurers, providers and countries.

After a doctor visit or hospital stay, people often receive two pieces of mail, or two online notices, that seem to be about the same thing. One comes from the insurer and one from the provider. They have different jobs, and confusing them is a common reason people either overpay or panic over a document that does not ask for money.

What an explanation of benefits is

An explanation of benefits, often shortened to EOB, is a statement from your health plan describing how it handled a claim. It is typically labeled something like “This is not a bill.” It tells you what the provider submitted and what the plan did with it.

Typical contents include:

• the provider and date of service
• the amount the provider billed
• the amount the plan recognized as eligible, often called the allowed amount
• what the plan paid
• what you may owe, broken out by deductible, copay, coinsurance or non-covered amounts
• notes or codes explaining any reductions or denials
• instructions for questions or appeals

The EOB is a record of the insurer’s decision. It does not collect payment.

What a medical bill is

A bill, or statement, comes from the provider or facility. It requests payment and generally shows the services provided, charges, any payments or adjustments received, and a balance due. A detailed walkthrough of reading one is under medical bill review.

The bill is the provider’s request. It is the document that usually has a due date and a way to pay.

Why they can disagree, and why that is normal

Timing is the main reason. A common sequence is:

1. You receive care.
2. The provider submits a claim to your insurer.
3. The insurer processes it and sends you an EOB.
4. The provider receives the insurer’s payment and its own explanation, and then sends you a bill for the remaining amount.

A provider may send a bill before the insurer has finished, showing a higher balance than what you will end up owing. Or you may get an EOB that shows an amount owed before the provider’s statement catches up. Neither is automatically wrong, but they should agree once everything is settled.

Another reason is that one visit can lead to several claims. A hospital stay may produce separate claims from the facility, the surgeon, an anesthesia group, a lab and a radiologist. You could receive an EOB for each, and a matching bill from each provider, all at different times.

A hypothetical comparison

The figures here are invented to show how the documents relate.

• Provider’s billed amount: $500
• Plan’s allowed amount: $300
• Plan pays: $240
• Your coinsurance: $60

The EOB would show the $500 billed, the $300 allowed, the $240 paid and $60 as your responsibility, and the $200 difference between billed and allowed would be shown as a provider write-off if the provider is in network. The bill from the provider should end up showing a balance of $60.

Check: $240 plus $60 equals $300, and $500 minus $300 equals $200.

If the provider instead billed you $260, that would be a prompt to ask whether the provider is billing the $200 gap, a practice discussed under balance billing, or whether there is an error.

How to compare them

1. Match the date of service and provider name on both.
2. Compare the “amount you owe” or “patient responsibility” on the EOB with the balance on the bill.
3. Look at what has already counted toward your deductible. Your deductible and other out-of-pocket costs are explained separately, and the EOB often shows running totals.
4. Check that payments you made, such as a copay at the visit, are reflected.
5. If a service shows as denied, read the reason. A denial may relate to a coding problem, missing information or a coverage rule, and the reasons are discussed under claim denial reasons.

What to do if they do not match

• If the provider’s balance is higher than the EOB says you owe, ask the provider to explain the difference and whether the claim was fully processed.
• If the EOB looks wrong, such as a service you did not receive or an incorrect provider, contact your insurer. Reporting a mistaken claim is often worthwhile.
• If the plan denied something you think should be covered, a claim appeal may be possible, and the denial letter generally explains the deadlines and steps.
• Hold off on paying a large bill until you have the EOB, unless you have been told otherwise. If a bill is overdue, ask the billing office to note the account as pending insurance.

Keep both

Store EOBs with your bills and receipts. If a dispute arises later, having both documents, along with notes of calls, is the basis of good dispute documentation. Many insurers also post EOBs online, which can be quicker than waiting for mail.

An EOB tells you what the plan decided, and the bill tells you what the provider is asking for. Reading them side by side usually clarifies which is which.