On my first day at Southwest Orthopaedic Physical Therapy, I was introduced to the behind the scenes of billing the insurance world. I will admit it was a little intimitating, but the hardest part was understanding the strange concept of an EOB. They are referred to by many other terms most commonly, an explanation of benefits (EOB), an explanation of review (EOR), and an explanation of remittance adivce (ERA). For our purposes, let's stick with an EOB. An EOB is simply a piece of paper from an insurance company, but that paper does so much for providers and patients. All of them describe in sometimes confusing detail how much the insurance company paid, why they paid that amount, and most importantly what the patient responsibility is. I'd like to take the time and break down what these papers mean to the providers and to the patients.

The easiest way to understand your EOB is to break the EOB up into sections. We have broken them into three sections; insurance company and patient information, provider of service information, and reimbursement section, find those sections on your EOB and read those thoroughly.Different insurance companies break down their EOBs in different ways so it is important to remember that your EOB may or may not have everything that is explained below.

The first section includes your insurance company name, your name, your policy or id number, addresses and phone numbers. The important thing to pay attention to is making sure all information is correct for the service you received. For example, if you received the treatment but the EOB is paid under your spouse, it could mean that it was processed incorrectly.

The second section includes the provider name and adress, the date of service, and the type of service. Make sure all of these are accurate and that the provider you received treatment from is the provider that is billed. If something appears to be incorrect make sure you call your insurance company to inquire about it more.

The third section includes the services that were performed listed by a special code called a CPT code, the amount that was billed to the insurance company, the amount that was approved by the insurance company, the amount paid by the insurance company, and the patient's responsibility. An important note is that some EOBs do not list the amount of the patient responsibility, in that case the amount is the approved amount minus what the insurance company paid. This section is what is most important to pay attention to for both patients and providers. If it seems like the insurance company paid something incorrectly, the most important thing to do is to speak up. Not doing so may result in more money being owed by you.

Finally, it is important to look for any reason codes that may be listed at the bottom of the EOB. These codes sometimes give more information as the why the insurance company paid or did not pay a certain amount. Reading these codes can help you determine what any extra amounts are for.

Spending just a few extra minutes reading that special piece of paper could save a lot of headaches and even extra money being owed. As always, these are just guidelines and knowing your individual plan is the best way to navigate this changing insurance world. Ask any questions you have below and check out this sample EOB to compare to your own.