“Healthcare Insanity”: What is an “EOB”?

by | Mar 18, 2014 | Healthcare, Reflection

Aahh. The EOB. That relentless, hounding, health insurance company document that hits your mailbox (streetside or “e”) with implacable repetition. Its message? “We, the benevolent Health Insurance Company, are looking out for you, the helpless patient and victim of the price-gouging of the ravenous and greedy healthcare providers.”

What is an “EOB”?

You get one of these “EOB’s” every time you incur medical charges that are submitted to your insurance company.

“EOB” stands for “Explanation of Benefits” and, with a few editorial variations, it contains the following categories:

First are the “Charges” of the healthcare pirate (that would be the doctor or facility). These charges are unreasonably high, especially if they come from a hospital facility (the reason for the exorbitant fees are the topic of another blog).

Second, is the “Allowed Amount”. This is what the insurance company, in its unselfish appraisal of what is “fair and equitable”, deems an “appropriate” fee for the delivered goods or services.

Third is the “Excluded Amount” that consists of what the insurance company won’t pay on your behalf of the “Allowed Amount” because of your deductibles, co-insurance responsibilities, etc.

Fourth, is the “Amount Paid by Insurer”.

Finally comes the “Amount You Owe”, which, ostensibly is the difference between the “Allowed Amount” minus the sum of the “Excluded Amount” plus the “Amount Paid” by the insurer.

I forgot to mention all the codes that are attached to the above categories referring to a key on the back side of the EOB explaining why certain charges are “excluded” or not covered. These explanations can be creative, ranging from: code A: “charges excluded due to superstitious nature of services provided; to code” Z: “this service is deemed to be investigational in nature except when rendered by the light of the full moon.”

Is this perfectly clear to you now?

I thought not.

I have another name for the “EOB”…. It’s “OOB”

Obfuscation of Benefits.