Wednesday, 1 January 2014

EOB - An explanation of benefits


Here is the workflow on How does the EOB Statement comes to the Provider Office .

1) Patient visits the Clinic or Provider office.
2) Doctor sees the patient and render the Medical Service.
3) The Bill(Claim) is prepared to the Insurance Company via Clearing House.
4) Insurance Company Process the Claim and Send the Check Payment to the Provider.
5) Along with the Check, a statement (EOB) will also send to the Provider office. The Statement tells the details of the Payment.

An explanation of benefits (commonly referred to as an EOB form) is a statement sent by a health insurance company to covered individuals explaining what medical treatments and/or services were paid for on their behalf.

EOBs, or explanation of benefits, are the forms that are sent out by the insurance carriers in response to the claims that were filed. If the payment is being made, the EOB is either attached to or included in with the check. If no payment is made the EOB should contain information explaining why no payment was made.

Electronic Remittance Advice – ERAs
Sometimes EOBs are received as an electronic file called an ERA or electronic remittance advice. The ERA would replace the paper EOB. Usually a provider has to sign up to receive ERAs. In order to receive ERAs the provider must be set up to receive their payments through EFT or electronic funds transfer. This is when the insurance carrier transfers any payments due to a provider directly into a specified bank account through electronic funds transfer.

The insurance companies like ERAs because it saves them in printing, paper and postage. They no longer have to print out the checks and eobs and have them stuffed into envelopes and mailed to the provider. With ERAs they just create the eob as an electronic file usually in a format called an 835. The provider downloads the ERA  835 file from h the clearing house.

The advantage of receiving ERAs for the provider is that it eliminates the mail time and can cut down on paper. If the provider stores the file on their computer they don’t have to file the paper copy of the eob. The other advantage is that most practice management systems will use the ERA to automatically post the payments. This saves a lot of time in manually entering the payments.


What action needed at the Provider Office when they receive EOB ?
Once the provider downloads the ERA the payments must be applied to the appropriate patients and any secondary claims should be submitted or patient balances should be billed. Sometimes ERAs contain rejections and those should be handled as well.  This Process called Insurance Payment Posting


Patient also get a Copy of EOB as shown here.





Sometime,  EOB Used to send communicate their decisions to members regarding payment for services.


You can also download some Sample EOBs

Simple EOB 1
2. Simple EOB 2
3. Co-pay Example
4. EOB With Multiple Claims
5. EOB With Multiple Check (More than one Posting or Batch)
6. EOB With Multiple Check (More than one Posting or Batch)

Sample EOB





Sample EOB With Copay Amount


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