After every visit to a hospital or your doctor's office, your health insurance company mails a document called an "EOB" or explanation of benefits to your home. The explanation of benefits can be very difficult to understand. If you have ever asked yourself, "What do I owe; Who do I pay; Why was this denied; What is the next step"? This article is for you.
Instructions
1. A standard (EOB) Explanation of Benefits will have the following terms with this key statement:
Explanation of Benefits for Services Provided By: XYZ MAIN HOSPITAL
(DOS) Date of Service - indicates the day or range of days the physician or hospital provided the service.
Service Code - An internal code assigned by the health insurance plan classifying the type of service you received, i.e office visit, immunization, etc.
At this point verify if you were provided these services on the date indicated by the physician or hospital listed. If not, immediately contact your health insurance plan. During registration there could be a mix-up between you and another patient. Many names are common and often busy front desk staff do not pay attention to fine details such as date of birth or medical record number which further distinguish one patient from the next.
2. The next terms that appear on the EOB detail the amount you and your health insurance plan have been charged by your physician or hospital and the amount that is due after all contracted discounts and rules have been applied.
Total Charge - This is the amount of money your physician or hospital charged the health insurance plan for providing services to you.
Ineligible Amount - The amount of the physician or hospital charge that is NOT covered by your health insurance plan. This usually indicates the amount of money you will have to pay.
Reason Code - This is an internal code used by your health insurance plan to explain the reason for the ineligible amount. This is also called a denial reason.
There are many denials reasons including; cosmetic services (these are not covered by most plans), bundling (when physicians itemize bill for services that are part of a package), no pre-certification or authorization, not a plan benefit, etc.
All denial reasons are not the patient's responsibility. Often when the physician or hospital are in breach of contract the services are denied but it is not the financial responsibility of the patient. Beware!!! Many physicians and hospitals will try to pass the bill on to you. Contact your health insurance plan if you suspect this.
Discount Amount - Insurance companies have contracts with physicians and hospitals for a discount off of the total charge amount of the service provided. This amount does NOT have to be paid by your or your health insurance plan.
3. The last set of terms detail the amount of money that is actually paid to the health provider by your insurance company or the amount you are responsible for paying.
Covered by Plan - The amount of money actually PAID to the physician or hospital by your health insurance plan on your behalf.
Deductible Amount - The amount of money you owe the physician or hospital that is applied towards your yearly deductible. The amount of your deductible depends on the plan in which you are enrolled.
Most insurance plans have in-network and out-of-network physicians. A deductible is usually not owed for in-network physicians. Before enrollment in any insurance plan you should verify that your physician is an in-network provider.
Co-Pay Amount - The amount of money that is due and paid by you at the time the health service is rendered.
Many physicians require co-pay payment before the service is rendered. If the EOB shows the co-pay amount and you have already paid your physician you can disregard it. If you have not paid the exact co-pay amount you may owe an additional amount or you may be due a refund from your physician. Keep all of your health related receipts in a designated area to check them against the EOB.
Balance - This is the amount that is due after all discounts, deductibles, and co-pay have been subtracted.
Paid at - This is usually a percentage and it shows what percentage of charge your insurance company paid your health service provider. This is dependent on your health plan contract. Many HMOs pay at 100%, while PPOs pay at 80%.
Payment Amount - The amount of money that was paid by your health insurance plan to the health provider.
4. The EOBs also indicate who the payment was sent to and the actual check number for reference.
Each Explanation of Benefits ends with an ERISA Statement. This simply informs you that by federal law you are entitled to appeal all health insurance denials. Most plans allow for two appeals. Each insurance plan will provide you with a full description of these rights upon request.
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