When your health plan processes the claim received by your medical provider (doctor, hospital, ambulance, etc.) they will let you know of their decision whether or not to pay the claim. This notice will come either electronically or in the mail and is called an Explanation of Benefits (EOB).
In the EOB document, you will see a summary of the claim that was submitted by your medical provider and how your health plan processed that claim. The summary will indicate how much your provider billed for, how much your health plan is going to pay your medical provider, and how much you owe to your medical provider.
Further down on the EOB will be the details and this is the section that you should be sure to review. Here you will see what type of medical service your provider billed. Make sure it is the service that you received and that the charge seems appropriate. I recently had a physician bill $13,500 for an office consultation – that was not appropriate.
Also detailed out for you will be your financial responsibility – how much is applied to your deductible, whether there was a copay and whether there were charges not covered by your health plan that you will have to pay for. Make sure this information matches what your health plan Summary of Benefits and Coverage said your cost-sharing amounts would be for this particular type of provider or service.
Finally, you will notice the health plan uses codes for each of the lines processed and then at the bottom of the page or on the last page they explain what those codes mean. Review these carefully as well. Here they will give reasons for a denial of a claim, or information as to a possible error made by your provider. This detail may indicate that you need to call your health plan or your provider in order to resolve an issue so that your health plan can pay the claim. Pay careful attention to this section.
At first glance, the EOB may seem confusing and you may want to ignore it. But don’t. It is an important piece of the puzzle to know when to pay and when to say NO WAY!