EOB - An explanation of benefits

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

  1. The patient visits the Clinic or Provider office.
  2. The 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 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 clearinghouse.

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 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

EOB includes following details which is necessary during payment posting process in order to post the payments to the respective patient account:

  • Payer Name: Name of the Insurance company
  • Payer Address: Address of the Insurance company
  • Patient Name: Name of the patient
  • Provider Name and address
  • Member ID#: It is also known as policy identification number
  • Claim received Date: It is the date the claim received by payer from provider (Billing office).
  • Payment or denial date: It is the date the claim processed or denied by payer.
  • DOS – Date of Service: It is the date service provided from healthcare provider to patient.
  • CPT Code – Procedure code
  • Billed Amount – It is also called as charge amount for each service performed by healthcare providers.
  • Claim Number – It is also called as Document control number or Transaction control Number, which will be assigned by the payer for each claim as soon as they receive in their system.

If claim paid then following details:

  • Allowed Amount: It is an amount, payer deems fair for a specific service or procedure. AA = PA+ PR.
  • Paid amount: Paid Amount = Allowed Amount – Patient responsibility.
  • Patient Responsibility: This is the balance percentage of reimbursement that the patient has to pay according to his policy with the insurance company. This is paid either by the patient or his secondary insurance if they have one.
  • Write off Amount: It is an amount that is waived off by the provider. Write off Amount = Billed Amount – Allowed Amount.
  • Check#
  • Check date
  • Electronic Fund Transfer# (EFT#)
  • EFT date

If claim denied, then it will have the following details.

  • Denial Code
  • Denial Reason

You can also download some Sample EOBs

1. 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) 




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