One I Can Answer

For about three years I worked for a temp agency.  It was a great job; I was able to work a whole bunch of different places, meet a lot of interesting people, and learn about many different industries – and then go somewhere else without having to play company politics.  There are people who interpret this to mean that I get bored easily.

I’ve worked in the office of construction companies, a movie-rental company’s corporate office, a software developer, the highway department, the power company, a medical equipment designer, an attorney, and a bunch of other fascinating places.  But my resume’ shows all those as a single three-year job, with my employer being the temp agency.

One of my assignments during that time was in a company’s personnel department.  We had one person on the phone all day, every day, helping people sort out their health insurance.  I learned a ton about dealing with insurance companies.

Which leads me to the search engine terms that have led people to my blog (just in case you were wondering where I’m headed with this). Sometimes I’m not sure how a certain search term had anything to do with anything I’ve written here, but this one I can answer.  Recently someone googled,

What do all the terms on an EOB mean?

Every time the insurance company receives a claim for you, they will send you an Explanation of Benefits.  This sounds much more positive than Explanation of Limitations, Exclusions and Denials.

There’s always the basic information:

  • Group/Policy number – just to make sure they put this on the right insurance policy
    If a claim is denied because they say you don’t have coverage, they might not have the policy number right
  • Name of claimant/patient (person who saw a doctor or had tests done)
  • That person’s date of birth – sometimes there are other people with a similar names – mistakes can happen
  • Dates of service – what day did you see the doctor, have the test done, etc.
  • Provider – which medical professional did you see (sometimes the practice name is listed instead of the specific doctor; sometimes one doctor’s patients are billed under another doctor’s name)

The rest of the information is usually presented in a little table:

Nature/Description of Service – this tells the insurer what the doctor billed the visit as.  My dental insurance lists things like “periodic oral eval” and “bw-four films” and “prophy-adult” and has a separate column for the procedure code.  My medical insurance lists the code and an abbreviated description of what took place all together – things like “90470 adult imunizat” or “99214 doctor outpat” or “82565 xray & lab.”

Charge – how much is being billed?  If you didn’t have insurance, this is the amount you would pay.*  Some insurers list this as submitted amount.

Negotiated Adjustment – whether or not there’s much negotiation involved is open to debate, but this dollar amount tells how much money the insurance knocks off of what the doctor gets to charge people who have your specific insurance plan.  Sometimes this is called the provider write-off.  If your doctor charges $100, but insurance says that the specific procedure is only worth $80, then the doctor has to write-off $20 (so the negotiated adjustment is $20).

Savings – same as negotiated adjustment

Ineligible – the amount that is not covered by your insurance plan (which is different from what’s left for you to pay after insurance has paid their portion).  The insurance company is saying, you’re not eligible for benefits, so it’s really nice to see this column blank.  When my insurer said that orthotics aren’t covered on my plan, the entire cost was listed in the ineligible column.  When the eye doctor mistakenly billed my medical insurance instead of my vision insurance, all of the costs showed up in the ineligible column.  My insurance allows $300 in coverage of preventive medicine, so a physical and vaccines are usually fully covered.  One year, however, they added up to $307.52; $300 was covered and the other $7.52 showed in the ineligible column.

Deductible – (charge) minus (adjustment) minus (ineligible) leaves you the amount that your insurance will actually consider paying.  Then there’s the deductible to consider.  You pay a certain amount of money out of your pocket (the deductible) before insurance will start paying for anything.  This column on the EOB tells how much of this particular medical claim is applied toward your annual deductible.

Some insurance policies waive your deductible for routine office visits.  This is a good deal if you rarely see the doctor.

Some insurance policies have a pretty nice clause that says IF all of the money you spend on medical care during the entire calendar year doesn’t add up to enough to meet your deductible, then any money you spend toward your deductible during the final quarter of the year will be applied to the following year’s deductible.  If you have one of these policies and haven’t met your deductible before summer is over, don’t go to the doctor in September; wait until October, carefully consider the ramifications of the timing on any appointments you make during autumn.

Co-Pay – many insurance policies require you to pay a set amount of money every time you have an office visit.  You pay this amount, then insurance will look at the remaining cost.  Usually, the higher the co-pay, the more prudent people are in determining whether or not they really need to see a doctor.  If it only costs you $5 to see the doctor, you might go quite frequently (and be very expensive for the insurer).  If it costs you $30, you might think twice before making that appointment.

If you have a condition that requires frequent monitoring by a doctor, a policy that does not have a co-pay (and does not waive the deductible on office visits) might provide better coverage.

Payment Level % – After the insurer has the doctor write-off part of the fee, declares part of the charges ineligible, requires you to make a co-pay, and applies your deductible, the insurer will pay a percentage of the remaining amount.  Some policies cover office visits at 100%.  Some things are covered at 80% or 70% or 60%.   Whatever the amount, this column will tell you the percentage that insurance is covering.

Plan Payment - aka Paid – Based on all the calculations, this column shows how much the insurer paid to the doctor/hospital/lab/etc.

Co-Insurance – subtract the payment level percentage from 100% to get the co-insurance percent.  If your insurance covers 70%, then your co-insurance is 30% of the amount that’s owed after all the adjustments, ineligible fees, deductibles, and co-pays are taken into consideration.  This column typically displays a dollar amount, not the percentage.

Patient Responsibility – Everything that’s owed that the insurance company isn’t paying.  This is the amount you should expect to see on the bill your doctor sends you.  Add up the co-pay, the deductible, the co-insurance, and the ineligible amounts for the total amount that is the patient’s responsibility.

Message Code – Either the footnote or the back of the form will have a list of codes and what they mean.  Things like:

  • The PPO discount amount is reflected in the savings or negotiated adjustment column on this explanation of benefits
  • Charges are in excess of plan maximums
  • These services are not covered under your policy.  Refer to the limitations and exclusions portion of your benefit booklet
  • Injury/accident information requested from insured
  • Please submit claims to auto insurance carrier
  • Dental benefits are not processed through this office
  • Please verify whether or not the vaccine was state supplied
  • State-supplied vaccines are not eligible for reimbursement

As always, nothing in on this site is to be construed as medical advice.
Or legal advice.
Or financial advice.
Or parenting advice.

Just one person’s observations.

___________
*One last note.  Medicare has very strict rules that make it nearly impossible for providers to offer discounts to people who don’t have insurance.  One way around this is to ask (before you see the doctor) if a discount is available for paying cash in advance.  Technically, this discount would be available to everybody, but only those without insurance would ever think to ask about it.  The obvious difficulty with this plan is that if you’re short of cash, it’s hard to pay up-front.

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