What Is an EOB (Explanation of Benefits) in Medical Billing?

what is eob in medical billing

Numerous parties are involved in the medical billing process. That includes the hospital, the insurance companies, and the patients, especially if they have to pay fully or partially out of pocket. Since this can be confusing, patients receive an Explanation of Benefits alongside their bill, but what is an EOB in medical billing?

Below, our PracticeForces Florida team, which provides top medical billing solutions, explains the reason for having EOBs and what these statements include.


Why Are EOB Statements Necessary? 

Alongside each billing statement, patients should receive EOB statements that break down the bill and what parties cover what expenses. It should explain what claim the healthcare provider submitted, what services and equipment the hospital provided, how much the patient’s chosen insurance company will cover, and what the patient is left paying for out of pocket. 

EOBs also help hospitals with the medical billing process. With thousands of patients counting on establishments like yours daily, you don’t want to mix up insurance plans, which could cost the insurance company and your hospital money. 

EOBs clearly outline all benefits and provide transparency during claim submissions so no party is overpaying or underpaying, which would otherwise lead to up-coding or under-coding fraud. Therefore, it makes it easy for patients to verify all factors and parties involved in their medical care and pay their fees without diminishing your establishment’s reputation. 


What Does an EOB Statement Include?

EOB statements vary slightly but usually boil down to four major information blocks, which include account summary, claim details, amounts, and patient responsibility. 


Account Summary

The account summary includes patient details, from the patient’s name, ID number, and policy number to the service location. 


Claim Details 

Claim details explain important dates, such as when the patient received certain services and what those services were. It also relays the physician’s name, modifiers in medical billing, and any equipment that healthcare professionals deem necessary for the patient. 



Amounts include all charges and which parties are responsible for paying what. For instance, the EOB outlines what the facility charged for the services and equipment they provided and how much of that total a patient’s insurance company offers to pay for. The EOB then subtracts what the insurance claim pays from the total, providing the “Allowed Amount” the patient must pay.

If a patient’s insurance plan includes co-payments, deductibles, or coinsurances, a separate section may outline them. 


Patient Responsibility 

After subtracting all insurance benefits from the total amount the patient owes the hospital, patient responsibility states the patient has to pay what remains of the amount to make up the difference. 


Strengthen Your Practice With PracticeForces!

Understanding “What is an EOB in medical billing?” is crucial for any medical establishment since it improves revenue cycle management, reduces claim denials, and outlines everything clearly for all parties involved in the payment process. 

Whether you want to learn more about capitation in medical billing, the parts of an EOB, or how to improve claim approval rates, call Florida’s PracticeForces at (727) 202-5429. We’ll provide a quote today!

Parul Garg, CEO and co-founder of PracticeForces, has significantly contributed to the growth of over 1,000 U.S. medical practices through her expertise in medical billing and coding since the company’s inception in 2003. With a background in Computer Science and an MBA in Human Resources, her leadership and AAPC-certified coding skills have been pivotal in managing the company’s operations effectively.

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