A few weeks after a doctor's visit, you'll often get a document from your health plan with columns of numbers. That's an explanation of benefits, and learning to read it is one of the best ways to avoid paying medical bills you don't owe.
An EOB is not a bill
The EOB explains how your plan processed a claim. The bill comes separately from the doctor, lab or hospital. Your job is to make sure the two match.
What each column means
| Column | What it means |
|---|---|
| Amount billed | The provider's full price before any discounts |
| Allowed amount | The price your plan negotiated with an in-network provider |
| Plan discount | The difference the provider writes off |
| Plan paid | What your insurer paid the provider |
| Deductible / copay / coinsurance | Your share, broken down by type |
| You may owe | The total you're responsible for |
A worked example
You see an in-network specialist and have already met your deductible. Your plan has 20% coinsurance.
| Amount | |
|---|---|
| Amount billed | $400 |
| Allowed amount | $250 |
| Plan paid (80%) | $200 |
| You may owe (20%) | $50 |
If the specialist's office later bills you $150, something's wrong: in-network providers can't bill you for the $150 difference between their charge and the allowed amount.
Red flags to look for
- Services you don't recognize or dates you weren't there.
- A provider listed as out-of-network when you thought it was in-network (see how plan networks work).
- A claim denied for a reason like "missing information" or "not medically necessary."
- A bill that's higher than the "you may owe" amount.
What to do when something looks wrong
- Call the provider's billing office and ask them to check the claim against your EOB.
- Call your health plan using the number on your ID card and ask what the reason code means.
- If a claim is denied, ask whether it can be resubmitted with corrected codes or more information.
- If not, file an appeal by the deadline listed on the EOB. You can ask your plan for a full review of its decision, and if it still says no, you have the right to an independent external review (HealthCare.gov: appealing a health plan decision).
If the surprise is an out-of-network bill for emergency care, or for care at an in-network hospital, the No Surprises Act may protect you (CMS: your rights against surprise medical bills).
Most plans also show EOBs in their app or website, so you can check claims as soon as they're processed. Once a bill checks out, you can usually pay your share with money from an HSA or FSA.
For the cost terms, see how health insurance works.
