Explanation of Benefits (EOB)

An Explanation of Benefits (EOB) is a document your health plan sends after a claim is processed. It is not a bill — it's a summary of what was charged, what the plan paid, what was applied to your deductible, and what you owe the provider. Most people ignore EOBs because they look complicated and arrive after the fact, but they're one of the most useful documents in healthcare billing for catching errors and understanding what you're actually being charged.

Every EOB shows the billed amount (chargemaster price), the allowed amount (negotiated rate between your plan and the provider), the plan's payment, and your patient responsibility. If the provider is in-network, you should never be billed more than your EOB shows as your patient responsibility — the provider has contractually agreed to write off the difference between their billed amount and the plan's allowed amount. If you receive a provider bill that's higher than your EOB's patient responsibility line, that's a billing error or a potential balance-billing violation. EOBs also show how claims are applied to your deductible and out-of-pocket maximum, which helps you track where you are in the cost-sharing cycle. For self-funded employers, the equivalent document on the employer side is the remittance advice — the TPA's detailed claims report showing exactly what was paid to each provider for each claim. Employers who pull and review their remittance data regularly find billing errors and upcoding at rates that surprise them.

The takeaway: compare every provider bill to your EOB before paying. If the provider bill exceeds your EOB patient responsibility, call the plan and ask for an explanation before paying the difference. EOBs are also your running scoreboard for deductible and out-of-pocket maximum tracking — use them.