How to Read an explanation of Benefits

Understanding your Explanation of Benefits can keep your from paying too much for your doctor and hospital visits.

Instruction

1. Find the column with the date of service. Circle any date that doesn't match up to your visits.

2. Find the column of charge amounts. These are the amounts that you and your health insurance plan have been charged by your physician or hospital and the amount that is due after all contracted discounts and rules have been applied.
   
   Total Charge - This is the amount of money your physician or hospital charged the health insurance plan for providing services to you.
   
   Ineligible Amount - The amount of the physician or hospital charge that is NOT covered by your health insurance plan. This usually indicates the amount of money you will have to pay.
   
   Reason Code - This is an internal code used by your health insurance plan to explain the reason for the ineligible amount. This is also called a denial reason.
   
   There are many denials reasons including; cosmetic services (these are not covered by most plans), bundling (when physicians itemize bill for services that are part of a package), no pre-certification or authorization, not a plan benefit, etc.
   
   All denial reasons are not the patient's responsibility. Often when the physician or hospital are in breach of contract the services are denied but it is not the financial responsibility of the patient. Beware!!! Many physicians and hospitals will try to pass the bill on to you. Contact your health insurance plan if you suspect this.
   
   Discount Amount - Insurance companies have contracts with physicians and hospitals for a discount off of the total charge amount of the service provided. This amount does NOT have to be paid by your or your health insurance plan.

3. Find the column labeled "Amount Allowed." This column is the price that your insurance company has negotiate with the doctor. If your co-pay is 20%, you will pay 20% of this amount instead of the amount charged.

4. Find the column labeled "Amount Paid." This is what your insurance paid the doctor.

5. If the amount in Step 4 is 0.00, find the column labeled "Reason Code." There will be an alphanumeric code. Make a note of the code and look at the bottom of the EOB. There will be code definitions. Common reasons for non-payment are non-covered charge, duplicate charges and improper documentation. Step 6

6. Find the column labeled "Patient Responsibility." This is the amount that the insurance company believes you owe. Using your calculator, make sure that all covered charges equal your co-pay.

Each Explanation of Benefits ends with an ERISA Statement. This simply informs you that by federal law you are entitled to appeal all health insurance denials. Most plans allow for two appeals. Each insurance plan will provide you with a full description of these rights upon reques