What is an Explanation of Benefits?

[x_blockquote cite=”Louis (Cape Elizabeth, ME)” type=”left”]Dear Marci,
My Medicare Advantage Plan sent me a notice called an Explanation of Benefits. What is this notice, and how do I make sense of it?[/x_blockquote]Dear Louis,

An Explanation of Benefits (EOB) is a notice that your Medicare Advantage Plan typically sends you after you receive health care services or items. EOBs are usually mailed once per month and may be available online. An EOB is not a bill; it is a summary of services or items you received.

Each plan formats its EOB differently, but in general your EOB should tell you:

1. How much your provider billed the plan.
2. How much your plan will pay. This amount may be different from the amount your provider billed. This is because plans have negotiated rates with providers that work with the plan, and the plan will only pay up to its approved amount for services.
3. How much you may owe. This column may be called “patient responsibility.” As noted, the EOB is not a bill. It is simply informing you of the amount you may owe. Your provider will send you a bill for the services you received. You may be responsible for a bill if you owe a copayment or coinsurance, have not yet reached your deductible, or if your service was denied coverage.

In addition to the information it provides, an EOB is important because it is the notice that allows you to begin an appeal. An appeal is when you ask your health insurance plan to reconsider its decision to deny coverage of a service or item you received. If your EOB shows that your plan did not approve payment or coverage for a service you received, you can appeal. Look for footnotes on the EOB that explain why the service was denied. This will be useful in writing your appeal.

There should be instructions about how to appeal included on the last page of your EOB, and you will need to start your appeal within 60 days of the date of  the notice. If possible, it is a good idea to ask your provider to help with the appeal by including relevant medical records and a letter of support.

EOBs contain important information about your appeal rights and the services you received. You should read these notices carefully and contact your plan and provider if you have any questions, or if you see services listed that you don’t recognize.

– Marci