Whether you have Medicare, private health insurance or some other type of coverage, learning to read an explanation of benefits (EOB) is one of the best things you can do. An EOB tells you how much a health care provider charged, how much your insurance paid and how much you have to pay out of your own pocket. Bethesda Gardens Arlington created this guide to help you better understand how your insurance works.

What Is an EOB?

An explanation of benefits is a statement designed to help you understand how an insurer applies your benefits. The statement usually includes information about your health plan, the services provided, who provided those services and how much your insurance company paid for your care. It also shows the "member responsibility" or "patient responsibility," which is the amount you have to pay out of pocket.

Why Should You Learn How to Read an EOB?

Arlington, Texas, has many health care facilities, including Texas Health Arlington Memorial Hospital, USMD Hospital at Arlington and Medical City Arlington Hospital. Knowing how to read an EOB can make it easier to anticipate your out-of-pocket expenses for upcoming medical appointments. It can also help you spot errors or potential signs of fraud.

Reading Your EOB in 5 Simple Steps

Here's how to read each EOB.

1. Check the Date of Service

The date of service is just what it sounds like -- the date you received some type of care from a health care organization or an individual provider. If you don't recall receiving a service on that date, contact the billing department.

In some cases, services are billed after you leave the health care organization. For example, if you have a biopsy on June 12, but the pathologist doesn't examine the sample until June 15, you might receive an EOB with a June 15 date of service. Talking to the billing department can help determine if it's an error or a legitimate charge.

2. Verify the Provider and Service

Next, check the name of the provider and the service(s) listed on the original claim. If you visited your primary care doctor, you might see something like "Established patient office visit." When something seems off, don't be afraid to contact the billing department. Insurance and medical jargon can be confusing, so it's best to verify that you're only being billed for services you actually received.

3. Compare the Billed Amount with the Allowed Amount

The billed amount is the amount a provider charged for a service. In contrast, the allowed amount is the maximum amount your insurance company is willing to pay. For instance, you might have a service with a billed amount of $450 and an allowed amount of $179.

4. Confirm Your Out-of-Pocket Costs

Now it's time to find out what you owe. Your insurance company may label this line or column with one of the following:

What you owe

Patient responsibility

Member responsibility

Patient balance

An insurer determines what you owe by reviewing your plan and applying your benefits accordingly. Therefore, two people can owe vastly different amounts for the same service. Here's an example.

Person A has a copay of $25 for primary care office visits, and office visits aren't subject to their plan's deductible. Person B has a copay of $25 for primary care office visits, but their plan doesn't pay anything until they've reached a $2,500 annual deductible.

Assuming they hadn't met their out-of-pocket maximum, Person A would owe $25 for a PCP visit. If Person B hadn't met their deductible, they'd have to pay the full difference between the billed amount and the allowed amount. For instance, they'd have to pay $150 if the billed amount was $250 and the allowed amount was $100.

5. Review Special Codes or Remarks

Finally, look at the bottom of the EOB for any remark codes. Insurance companies use these codes to explain more about how your benefits were applied. For example, you may see a remark code if a service isn't covered by your plan or if your health care provider submitted an incomplete claim.