How to read an Explanation of Benefits (EOB), and catch billing errors

An Explanation of Benefits (EOB) is not a bill. It is the statement your insurer sends after processing a claim, showing what was billed, what the plan paid, what was discounted, and what is left for you.

It arrives looking like a bill, which is why it often goes straight in the recycling. Reading it is how a billing error gets caught before the actual bill arrives.

What an EOB is

After you receive a covered medical service, your insurance company processes the claim and sends you an EOB. It summarizes:

• What service was provided
• What was billed (the provider's charge)
• What your insurer allowed (the negotiated rate)
• What your insurer paid
• What you owe (your share: deductible, copay, coinsurance)

You'll typically receive an EOB before the provider sends you an actual bill. Your out-of-pocket responsibility should match on both documents.

The key sections of an EOB

What was billed: The provider's full charge. This is often much higher than the negotiated rate and not what you'll actually pay.

Negotiated discount: The discount your insurer has with in-network providers. This is the benefit of using in-network care. The "allowed amount" is significantly lower than the billed amount.

What the plan paid: The amount your insurer paid after applying the negotiated rate, your deductible, and any applicable copays or coinsurance.

Your responsibility: What you owe the provider. This should be the total you pay: the combination of whatever deductible amount remained plus your coinsurance or copay.

Your deductible status: Most EOBs show how much of your deductible you've met and how much remains. This is useful for planning purposes.

Your out-of-pocket status: Many EOBs also show your progress toward your out-of-pocket maximum.

Common billing errors to look for

Medical billing errors are common enough that checking is worth the few minutes it takes. The most frequent issues:

Wrong person billed. Verify your name and insurance information match what's on file.

Duplicate billing. A service appears on the EOB twice, a common coding error.

Upcoding. The provider billed for a more expensive service than was actually provided (e.g., a complex office visit when a basic visit occurred).

Services marked as not covered. Sometimes a covered service is coded incorrectly and processed as non-covered. This may be worth appealing, and your EOB includes the appeals process.

Out-of-network provider surprise. If a provider you thought was in-network is processed as out-of-network, verify the claim was coded correctly and check whether surprise billing protections apply.

Pre-authorization issues. Some services require prior authorization. If it wasn't obtained and the claim is denied, responsibility may fall to the provider's office rather than you, depending on your plan's rules, so it is worth asking both the provider and your insurer.

What to do when something looks wrong

• Compare the EOB to the bill you receive from the provider. They should match. If they don't, call the provider's billing department.
• If the EOB shows a service was processed incorrectly (wrong coverage tier, out-of-network when in-network), call your insurer and ask them to reprocess the claim.
• If your insurer denies a claim, you have the right to appeal. Your EOB should include information about the appeals process.
• Keep your EOBs until you've verified the corresponding bill and confirmed the amount was correct. For major procedures, keep them longer, since they're important records.

LifQ organizes your healthcare documents so an EOB and the bill it belongs to sit side by side, and you can compare the two before you pay.

Your policy documents are the authority on what you have, and your carrier, plan administrator, or a licensed agent is the authority on what to change. LifQ's job is making sure you walk into that conversation knowing exactly what you already own.