Understanding Bill Insurance: Protecting Your Finances From Unforeseen Costs

Bill insurance is a cost-sharing agreement between an individual and their insurance company. After receiving medical services, the individual's doctor's office submits a bill to their insurance company. This bill, also known as a claim, lists the services provided by the doctor. The insurance company then uses this information to pay the doctor for those services. The insurance company may not cover all of the services, and the individual may have to pay the remaining balance. This is known as a co-payment or co-pay. It is important to understand the breakdown of costs and benefits provided by insurance companies to ensure that individuals are not paying more than they owe.

What is an Explanation of Benefits (EOB)

An Explanation of Benefits (EOB) is a statement from your health insurance provider that details the costs of medical care or products you've received. It is generated when your healthcare provider submits a claim for the services you received. It is not a bill, but it will explain any charges that you still owe or may have already paid.

The EOB breaks down the following information:

• The services provided, including dates and a description of each service.
• What the doctor or hospital charged for the services.
• What your insurance covered and did not cover.
• What your insurance agreed to pay.
• The amount you must pay (the amount you are responsible for).
• The person who will receive reimbursement for over-paying the claim.
• Any money you saved by visiting in-network providers.
• Any out-of-pocket medical expenses you'll be responsible for.
• Any additional payments made from spending accounts, such as a health reimbursement account (HRA).

The EOB is an important tool that shows you how your bill is broken down between the medical service provider(s), your insurance, and you. It can help ensure you are receiving the full benefit or discount that you are entitled to under your insurance plan.

How to read an EOB

An Explanation of Benefits (EOB) is a statement sent by an insurance company that summarises the costs of healthcare services received. It is not a bill. An EOB is generated when a healthcare provider submits a claim for the services provided. It is important to read an EOB carefully to make sure that you actually received the service being billed, that the amount your healthcare provider received and your share are correct, and that your diagnosis and procedure are correctly listed and coded. Here is a step-by-step guide on how to read an EOB:

• Service Description: This section provides a description of the healthcare services received, such as a medical visit, lab tests, screenings, surgery, etc. It will also include the date(s) of service, which is the beginning and end dates of the health-related service received.
• Provider Charges: This is the amount the healthcare provider bills for the visit.
• Allowed Charges: This is the amount that the provider will be reimbursed, negotiated between the insurance carrier and the provider. This may be different from the Provider Charges.
• Paid by Insurer: This is the amount the insurance plan will pay to the provider.
• Payee: This is the person who will receive reimbursement for overpaying the claim.
• What You Owe: This is the amount the patient or insurance plan member owes after the insurer has paid. You may have already paid part of this amount, and any payments made directly to the provider may not be subtracted. Wait to receive a bill from the provider before making any payments.
• Remark Code: This is a note from the insurance plan that provides more information about the costs, charges, and paid amounts for the visit. The code is usually a combination of letters and numbers, and a description of each code can be found at the bottom of the EOB or on the back of the document.

It is important to note that not all EOBs will look the same, but they will contain the same information. Additionally, EOBs are not bills, and you will receive a separate bill from your healthcare provider if you owe any money.

What to do if your EOB and bill don't match

An Explanation of Benefits (EOB) is not a bill, but it's important to keep a hold of it. Billing errors can occur when your EOB doesn't match your bill, so it's a good idea to compare the two documents. Here are the steps you can take if your EOB and bill don't match:

• Collect all the paperwork: Sometimes, more than one EOB can apply to a single bill, so make sure you have all the relevant documents.
• Compare codes and descriptions of services: Check that the codes and descriptions of services on your EOB and medical bill match, and look out for duplicate charges.
• Review the services received: Ensure that only the services you received are listed and that the amount you owe is consistent with your health insurance benefits.
• Check your personal information: Verify that your name and policy number are correct to avoid being billed for someone else's healthcare services.
• Contact your healthcare provider: Ask them to review the bill with you and confirm that it includes only the services ordered and received. If there is an error, inquire about the process to correct the billing.
• Request an itemized bill: Obtain an itemized bill from your healthcare provider or facility and review it for possible errors or discrepancies with your EOB.
• Contact your insurance company: Discuss the differences between the bill and EOB with your insurance provider. You may be able to visit their customer service department in person with your paperwork for assistance.
• Keep notes: Make sure to take down the names of the people you speak with and the dates of your conversations. Note any actions they plan to take and follow up if a corrected bill is not received.

Additional Tips:

• Always save your EOB until you receive the final bill from your healthcare provider.
• Compare the amount you owe on the EOB to the amount on the bill. If they match, that's the amount you need to pay.
• If you have multiple EOBs for the same visit, compare them to your bill to ensure all charges are accurate.
• If you don't receive an EOB, your doctor's office may not have submitted the insurance claim. Contact your insurance provider to check if they processed the claim.

What if you don't get an EOB?

An Explanation of Benefits (EOB) is a statement sent by your insurance company that details the costs of the healthcare services you received. It is not a bill, but it shows how much your healthcare provider is charging your insurance company and how much you may need to pay. If you are a member of a health plan, your doctor's office will usually submit the insurance claim for you. However, if they don't have that capability, or you go to an out-of-network provider, you may have to submit the claim yourself. In this case, you may receive a bill from your doctor or healthcare provider before you get an EOB.

There are also situations where you may not receive an EOB. For example, many health plans don't send an EOB if the member doesn't need to pay anything. However, if you don't receive an EOB, don't pay your clinic or hospital bill until you receive one. That way, you can be confident that you're not paying more than you owe. If you have questions about a bill or an EOB, you can always call your insurance company for answers.

If you receive a bill and your EOB hasn't arrived, something may have gone wrong in the billing process. There's a chance that the provider never billed the insurer, and you're receiving a bill you don't have to pay. If this happens, call your insurance provider to ask if they processed the claim from your provider. If they didn't get a claim, call your provider and ask them to submit one.

How much insurance companies pay for each procedure

The amount an insurance company pays for a procedure depends on several factors, including the type of insurance plan, whether the healthcare provider is in-network or out-of-network, and the specific procedure performed. Here are some key points to understand how insurance companies determine their payment for each procedure:

In-Network vs Out-of-Network Providers:

• In-network providers have agreed to charge lower fees for customers of a particular insurer, expecting more patients due to their inclusion in the network. The insurance company negotiates a maximum fee for each procedure with in-network providers, and the provider cannot charge the patient more than this agreed-upon amount.
• Out-of-network providers, on the other hand, are not bound by any rules or fee structures set by the insurance company. They can charge the patient the full amount for the procedure, which is often higher than what an in-network provider would charge.

Insurance Plan Coverage:

• Different insurance plans have varying levels of coverage. Some common types of plans include Exclusive Provider Organization (EPO), Health Maintenance Organization (HMO), Point of Service (POS), Preferred Provider Organization (PPO), and government-run programs like Medicare and Medicaid.
• EPOs typically cover services only if you use in-network doctors, specialists, or hospitals, except in emergencies. HMOs usually limit coverage to care from doctors contracted with the HMO and may require you to live or work in their service area. POS plans offer lower costs for using in-network providers, while PPOs allow the use of out-of-network providers for an additional cost.
• Medicare is a federal program for US citizens over 65 and younger disabled people, while Medicaid is a state-managed program for low-income Americans.

Deductibles, Co-insurance, and Co-pays:

• Deductibles refer to the amount a patient must pay out-of-pocket before their insurance company starts contributing to the medical bills. Once the deductible is met, the insurance company will cover a portion of the costs, as specified by the plan.
• Co-insurance is the percentage of charges that the patient must pay to the medical provider after meeting the deductible. For example, if the insurance company covers 80% of the cost, the patient is responsible for paying the remaining 20%.
• A co-pay, or co-payment, is a fixed fee that the patient pays each time they receive a specific type of medical care, usually after meeting the deductible. Co-pays may vary depending on the type of service and whether the provider is in-network or out-of-network.

Procedure Costs and Billing:

• The cost of a procedure can vary depending on the specific treatment and the healthcare provider. It is essential to understand what your insurance plan covers and what your financial responsibility will be.
• After receiving treatment, your healthcare provider will typically file a claim with your insurance company. The insurance company will then process the claim and determine the amount they will pay to the provider and the amount the patient is responsible for.
• You may receive an Explanation of Benefits (EOB) from your insurance company, which details the amount paid, any adjustments, and the remaining amount due from the patient. The EOB is not a bill but provides important information about your coverage and costs.
• The healthcare provider will send you a bill for any remaining balance after the insurance company has paid their portion. This bill should reflect the negotiated rates and discounts agreed upon between the provider and the insurance company.

In summary, the amount an insurance company pays for each procedure depends on a combination of factors, including the patient's insurance plan, the type of procedure, and whether the healthcare provider is in-network or out-of-network. It is essential to understand the terms of your insurance plan, verify the coverage of your healthcare providers, and carefully review any bills and explanations of benefits to ensure accurate and fair payment for medical services.

Frequently asked questions