What is the purpose of an Explanation of Benefits (EOB)?

The purpose of an Explanation of Benefits (EOB) is to explain the payments made by the insurance company. When a patient receives medical care, the healthcare provider submits a claim to the insurance company for the services rendered. Once the claim is processed, the insurance company sends the EOB to the patient, detailing what the claim covered, how much the insurance paid, the amount charged by the provider, and what the patient’s financial responsibilities are, such as co-pays or any remaining balances. This document ensures transparency and helps patients understand their coverage and any charges they may be liable for after the insurance has processed the claim.

While options related to collecting co-payments, serving as billing statements, and notifying patients of deductible status may touch on aspects of the billing and insurance process, they do not specifically capture the primary function of the EOB, which is to clarify the insurance company's decisions regarding payment for medical services.