Understanding an EOB (Explanation of Benefits): What It Means, What It Shows and What to Do With It

An EOB (explanation of benefits) is the statement your health plan sends after it processes a claim from a doctor, hospital or other provider. It lists what the provider charged, what the plan allowed under your benefits, what the plan paid, and what you may still owe. It is not a bill, and you do not pay anything from it; the bill, if there is one, comes from the provider.

This causes most of the confusion, so it is worth repeating: the EOB explains how the claim was processed, and the provider sends the bill.

Why you get one

Every time a claim is processed, the plan is required to tell you how. For most commercial plans that is an EOB by mail or in the member portal. For Original Medicare it is the Medicare Summary Notice, mailed every six months for any period with a processed claim (or available electronically any time through a Medicare.gov account). For Medicare Advantage and Part D plans it is an EOB from the plan itself. The provider receives its own statement of the same decision, called a remittance advice (an ERA when it arrives electronically), which is why the numbers on your EOB and on the provider’s remittance always agree even though the two documents look different.

What is on it

Layouts vary by plan, but every EOB has the same pieces. The sample below is the provider’s copy of a Medicare decision for a radiation oncology visit; the patient’s EOB for the same claim shows the same amounts with plainer labels.

What the EOB calls it	What it means	On the sample
Claim number or ICN	The plan’s identifier for this claim. Quote it in any call or appeal.	callout 2
Provider, date of service, service or procedure code	Who treated you, when, and the CPT or HCPCS code for what was done	the 77370 and 77014 lines
Amount billed or charges	What the provider charged	callout 3, 467.00
Allowed amount, approved amount, or plan discount	What the plan agreed to pay for that service under its contract or fee schedule. The difference from the billed amount is written off by in-network providers and is not your responsibility.	callout 4, 128.76; the write-off is the CO-45 at callout 5
Deductible	The part of the allowed amount you pay before the plan starts paying, if you have not met it yet	0.00 on the sample
Coinsurance or copay	Your share of the allowed amount after the deductible. Medicare Part B is 20 percent.	callout 7, 25.75
Plan paid, amount paid, or benefit	What the plan sent the provider	callout 8, 101.49
Patient responsibility, you may owe, or amount you owe	Deductible plus coinsurance plus copay plus any non-covered service. This is the only number a bill should ask you for.	PT RESP, 46.84 for the whole claim
Remark or reason codes	Short codes explaining adjustments. CO-45 is the contractual write-off; PR-1, PR-2, PR-3 are deductible, coinsurance and copay; MA18 means the claim was sent on to your secondary insurance.	callouts 5, 6, 9, 10

A worked example

Take the first line on the sample, a physics consultation billed at 467.00.

1. The plan’s allowed amount is 128.76. The remaining 338.24 is the provider’s contractual write-off; nobody pays it.
2. The deductible was already met this year, so 0.00 goes there.
3. Coinsurance is 20 percent of 128.76, which is 25.75. That is the patient’s share.
4. Medicare pays its 80 percent, minus a 2 percent federal sequestration reduction that comes out of the plan’s share, not the patient’s. With a small quality incentive added back, the plan paid 101.49.
5. Because the patient has a supplemental plan, Medicare forwarded the claim (remark MA18). The supplement will pay the 25.75, and the patient should receive a second EOB from it before any bill arrives.

The whole claim, both lines together: 792.00 billed, 234.22 allowed, 46.84 patient responsibility, 184.61 paid.

What to do when an EOB arrives

• Check the basics. Right patient, right provider, right date, services you actually received. Mistakes here are rare but they happen, and an EOB for a visit that never occurred is worth a phone call to the plan.
• Find the patient responsibility line. That is the most you should be billed. Keep the EOB until the matching bill comes.
• Compare the bill to the EOB. If the bill is higher, do not pay the difference yet. The provider may have billed before the claim was processed, or may not have posted the EOB. Call the billing office with both documents in front of you; practices that post remittances automatically, as Iridium Suite does, can usually answer this on the call.
• Look for denials. A service with 0.00 allowed and a reason code other than 45 was denied. The EOB will say whether you can appeal and by when. Medicare’s appeal rights are printed on every MSN; the plan’s are on the back page of a commercial EOB.
• Watch for secondary insurance. If a remark says the claim was forwarded, wait for the second EOB before paying anything; the second plan often covers the whole remaining balance.

For billers: the same document from the other side

The provider’s version is the remittance advice. It carries the same amounts with the plan’s full adjustment detail, and it is the document you post payments from. Our companion article on GRP/RC-AMT and the group and reason codes explains every column, and EOB versus ERA explains why one patient visit produces two documents that look different.

Related terms

• EOB vs ERA vs EOMB vs EOP
• Allowed amount, billed amount and write-off
• PR-1, PR-2 and PR-3: deductible, coinsurance and copay
• Medicare crossover claims
• GRP/RC-AMT: group codes, reason codes and amounts

Further reading: Medicare Summary Notice at Medicare.gov; CMS: How to read an explanation of benefits; Sample Part B Medicare Summary Notice (PDF).