How to read an Explanation of Benefits

Before your loved one pays a medical bill, wait for the insurance’s Explanation of Benefits (from Medicare, this is called a “Medicare Summary Notice”). This document indicates what services were billed by which providers for what days. It is an important summary to help you catch errors, duplicates or, sadly, even identity theft or fraud.

These are NOT bills! But they do indicate how much your relative may need to pay beyond what their insurance covers.

These documents outline

  • the services and/or supplies billed by healthcare providers. Each service or supply will have a five-digit code.
  • the “approved” fee for each service/supply
  • what the insurance has paid for each service/supply
  • the amount your relative may owe

Note: If your loved one has a supplemental policy, wait until you receive that EOB and the final bill from the provider before making any payments.

Compare the documents carefully. Ensure your relative pays only what they owe!

  • Keep a record and receipts for medical expenses with each visit. This includes doctor’s appointments, lab tests, prescriptions, and other supplies.
  • Verify that the names are correct (your relative, the doctor, clinic, hospital, etc.).
  • Check that dates, codes, and service descriptions match your records.
  • Look for the difference between the amount billed and the Medicare “approved” fee. The service provider must accept the approved fee. Providers are required to tell patients in advance if patients are expected to pay the difference.
  • Compare the amount each document says is due from your loved one. This could be for deductibles, copayments, out-of-network fees, or uncovered procedures.
  • If you see errors or if coverage was denied, contact the healthcare provider or the customer service department of the insurance. If it’s a billing error, a correction can be filed.