A Conversation with Carla Pasquali: Making Sense of Your Explanation of Benefits (EOB)
Each year, most of us pay a visit to a doctor. Whether for a routine check-up, to see a specialist, or for an unexpected emergency, healthcare is a necessary part of life. Following any appointment, an Explanation of Benefits (EOB) is sent to you by your health insurance provider. This form details the medical treatments and services that have been paid on our behalf and what your responsibility may be to your provider.
Because these statements can be difficult to understand, Inside Einstein spoke with Carla Pasquali, director of benefits, to learn how to make better sense of an EOB. Using a sample claim for Mr. Art Rytus—who sought services from a healthcare provider that was part of the Empire PPO network, but not part of the Montefiore Integrated Provider Association (MIPA) network—Carla defines some of the terminology often seen and describes what we can learn from each component of the EOB.
Inside Einstein: There are terms used in an EOB, like deductible, co-insurance, and co-payment, which can stop you before you start. Can you define this healthcare jargon for us?
Carla: Sure, who knew health insurance could be so complicated! That’s why understanding all the terminology will help you make sense of your health insurance claims. I’ll start with deductible. A deductible is the amount you pay for covered healthcare services before your insurance plans begins its coverage. Each January 1, you must meet your plan’s annual deductible. A few facts about Art; he is enrolled in the MonteCare EPO Plan, which has a $500 individual deductible and $1,000 family deductible. If we take a look at Art’s EOB, because he sought services from a non-Montefiore provider, he must first meet his deductible before his plan will pay anything.
In this EOB, he has reached $311.15 toward his $500 individual deductible. While it’s easy to understand an individual deductible, if you have family coverage, your family must meet the family deductible, and this can be more complicated. The way this work is, once one individual within a family meets their individual deductible, the other family member’s costs are aggregated toward the remainder of the family deductible. In this case, if Art had other family members enrolled on his plan, once he meets his $500 individual deductible, his other family members enrolled on the plan must meet the additional $500 to satisfy the family deductible of $1,000. Remember, it may only take one additional family member’s healthcare costs to meet the remaining deductible, or it can involve the aggregate of all the other family members’ costs.
Inside Einstein: What happens after Art has met the amount of his deductible?
Carla: That’s where co-insurance comes into play. Co-insurance is the percentage of costs for any healthcare services that you pay after you’ve met your deductible. In this way, both you and the health insurer pay the appropriate share of the cost. For instance, let’s assume the amount allowed by your insurance plan for an office visit is $100 and your co-insurance is 20 percent. If you have already met your deductible, you must only pay 20 percent of the $100 it will cost for your next visit to the doctor, which would be $20. Your health insurer will pay the balance of $80 to the provider, so that between the two of you, the provider receives $100.
Inside Einstein: How does that differ from co-payment?
Carla: A co-payment is a fixed amount that you pay for covered healthcare services. In the Einstein health plans, co-payments apply if you use a provider in the MIPA (Montefiore Integrated Provider Association) network or for certain other services, as defined under the plan. For example, if you use a MIPA provider for any service other than a preventive care service, (which is provided at no cost to you), your co-payment will be $15. This means that you must pay that exact amount to your provider before you can receive that healthcare service from him or her. It can also apply to other covered services as mentioned. This is why you need to review your plan’s provisions carefully when you seek medical care and services.
Inside Einstein: What is out-of-pocket maximum?
Carla: The out-of-pocket maximum is probably among the most important provisions in health insurance plans to keep in mind. You’ll find this figure at the end of your EOB, under “As of the Claim, You Have Satisfied.” It represents a cap on the amount of money you are required to pay for covered healthcare services in a plan year. Once you meet this limit, the health plan will pay 100 percent of all covered healthcare costs for the rest of the plan year. If you cover any family members, you will see it noted as family out-of-pocket maximum, like on Art’s EOB.
In this section of the EOB, you can find details about how much of the out-of-pocket maximum, either individual or family, has been satisfied, along with how much of the annual individual deductible and annual family deductible have been met.
Inside Einstein: Okay, now we understand the different ways we might be charged. What about the other aspects of reading the EOB? Where should we begin?
Carla: I suggest starting with dates of service. These dates, which are noted in the far-left column, indicate the dates that healthcare services were provided to you. These dates will be important to note if you need to contact Empire with any questions regarding how your claim was processed.
Inside Einstein: What do procedure codes tell us?
Carla: These numerals, which appear next to dates of service, relate which of the specific medical, surgical, and/or diagnostic procedures and services the doctor’s office has claimed it provided to you. Physicians, health insurance providers, and accreditation organizations use this information to determine costs and coverage.
Inside Einstein: Can you explain amount charged by provider?
Carla: Amount charged by provider indicates the monetary charges submitted by your provider for the service(s) he or she performed during your visit.
Inside Einstein: How does that relate to discount amount?
Carla: Discount amount refers to any discount from the amount charged, and it appears whenever the provider is part of the Empire PPO network and has agreed to reduced or negotiated fees for their services. If we look at Art’s EOB, even though the provider’s charge for his office visit was $385, a discount of $159.20 was applied. So, the only amount Art would be responsible for would be the difference of those two amounts, which comes to $232.50.
Inside Einstein: What do the different parts of your responsibility tell us?
Carla: Your responsibility breaks down the individual amounts you owe for health services provided to you. These include any charges not covered by your insurance plan or that have already been applied as your deductible, co-insurance, or co-payment.
Inside Einstein: And how does that add up to your total responsibility to your provider?
Carla: Your total responsibility to your provider is the sum of the individual charges within your responsibility that you are required to pay your provider. This amount must equal the exact amount your provider is billing you. If not, you should contact your provider directly.
Inside Einstein: Can I see how much my health insurance plan has paid on my behalf?
Carla: Yes, by looking at what was payable by Empire. This will show the amounts your plan has paid for the healthcare services you’ve received from your provider.
Inside Einstein: There’s a column on the right that says notes, but it lists numbers. What do these numerals indicate?
Carla: Those are footnotes that reference information about an individual claim. If you look below the grid, it says “Notes for This Claim,” and the notes correspond with the information provided.
Inside Einstein: Now that we’re familiar with the important terminology and how to read an EOB, we can review Art’s claim and understand it. It shows that the provider charged $385 for Art’s office visit on February 8, 2019. Empire applied a discount amount of $152.20, so only $232.50 would be considered for payment by either Art or Empire. In Art’s case, his $500 deductible had not been met, so Empire paid $0 on his claim. Art is responsible for the entire $232.50 charge.
The other services performed during Art’s visit were handled similarly. All three charges were applied against his deductible, leaving his total responsibility at $311.15. When Art’s provider bills him for these charges, the total must equal $311.15. If not, he should contact his provider directly. Also, since Art hasn’t met his deductible of $500 yet, he must pay the full amount indicated. Is that right?
Carla: Yes, it is. Unless Art has had previous charges that go toward his deductible amount. If he’s closer to $500 or has met that amount, he would only be responsible for the difference.
Remember, you should never pay any amount that exceeds what your total responsibility to your provider indicates on your EOB. If you think you’ve met your deductible, call and ask. And then only pay what you owe.
You now know everything you need to know when it comes to understanding your own EOBs!
Posted on: Wednesday, October 23, 2019