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A quick and simple guide to reading your medical bills and Explanation of Benefits

Katie Walsh,Karen Vogel   

A quick and simple guide to reading your medical bills and Explanation of Benefits
  • Before paying a medical bill, make sure you have the Explanation of Benefits (EOB).
  • The EOB shows what your insurance covers and may help you spot errors like duplicate charges.
  • Your balance and/or amount due on your EOB is how much you have to pay.

Medical bills can be hard to read. It isn't always obvious what to pay and what your insurance covered.

Related Article Module: How to spot expensive errors on your medical bill, and when you should ask for an itemized bill

That's why it's important to wait to pay your bill until you've received your Explanation of Benefits (EOB), which is a document indicating how much of the expenses your insurance has covered and how much you owe out-of-pocket.

Here are tips on how to read your medical bill and EOB to make sure you're paying what's owed and not a penny more.

How to read a medical bill

You should receive two main documents: A medical bill and an EOB.

You may receive more than one medical bill over the course of a few weeks or months, which is another good reason why you shouldn't jump to pay the first bill you receive.

Important: Sometimes the bill is sent right away before the insurance company has processed the claim, which will make it look like you owe more than you do. If you have online access to your health plan (often called a "member portal"), you can see how the claim was handled and look at your EOB even before it's mailed out.

According to Medical Billing and here are a few key terms you should be able to identify on your bill:

  • Account Number: This is your identification number and what you need to pay your bill/access your bill online. Keep a record of this on hand.
  • Service Date: These basically are the dates that you received care or particular medical services. If you see dates on this that are not reflective of when you received care, there may be a mistake regarding your billing amount.
  • Charges: This is the total amount that your medical stay or appointment costs. NOT what you owe.
  • Adjustment: This is how much of the total charges your healthcare provider has agreed not to charge you. The amount may have been adjusted by your insurance company.
  • Patient Payments: Essentially this is what you owe and are expected to pay. (This might be subject to change if you find an error and can negotiate a lower cost.)
  • Balance/Amount Due: If you paid an initial out-of-pocket cost/co-pay when you were at the hospital, this might not be the same as your patient payment, but it still is how much you have to pay.

How to read your Explanation of Benefits

The EOB is a document you will receive once your insurance processes your medical bill. It details what the total cost of services was, what your insurance covers and doesn't cover, what you have to pay out of pocket, and any discounts applied to the bill.

Hover over the dots on this sample of an EOB below for more information on how to read one:

Here are some terms that may show up on your EOB and you should be able to identify:

  • Patient Account Number: Basically your ID number that you'll need when calling your insurance company. This is usually the same as your health plan member number listed on the back of your insurance card.
  • Claim Number: The number attached to the medical services you received. Basically like a case number.
  • Service code: This code is a way of identifying what the hospital or doctor's office is reporting they charged you for. Every procedure, medication, or visit/consultation you may have received has a code assigned to it.
  • Not covered: This is the amount you owe, that your insurance won't pay for, of the total amount the hospital or doctor's office charges.
  • Reason Code: If there's a procedure that your insurance won't cover, they will list their reasoning for not covering it here.
  • Covered: What your individual plan covered. You will also see a "deductible and copayment section" that shows how the bill was adjusted in line with your health insurance plan benefits.
  • Patient Responsibility: The dollar amount that you owe the hospital or doctor, as adjusted by insurance.

Insider's takeaway

If you find yourself further confused by your medical bill and EOB, call your insurance agent if you have health insurance. They are a free resource that can walk through the bill with you charbe by charge.

You can also call the member services number listed on your health plan card and ask for more information. Just make sure to have your ID number and account number on hand.

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