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Health Insurance: Reading and Understanding Your Explanation of Benefits Statement

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Health insurance coverage can be very tricky. Having a great understanding of what is and what is not covered by your health insurance can save you a lot of time and money. In this presentation, we take you through everything you need to know about your Explanation of Benefits Statement. Become familiar with the vocabulary and areas you should pay specific attention to so you aren't being overcharged for care.

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Health Insurance: Reading and Understanding Your Explanation of Benefits Statement

  1. 1. Everything you need to know about your Explanation Of Benefits
  2. 2. 2 •An EOB is a statement sent by a health insurance company to covered individuals explaining what medical treatments and/or services were paid for on their behalf. **AN EOB IS NOT A BILL** WHAT IS AN EOB?
  3. 3. 3 WHY IS AN EOB IMPORTANT? ✕ 1. An EOB verifies that a claim was received and documents payment and/or reason(s) for denial and patient responsibility. ✕ 2. An EOB provides the correct “contract allowance” that an in-network provider has agreed to accept as plan payment and clearly specifies your patient responsibility. ✕ 3. Secondary (i.e., spouse) insurance requires a primary EOB before releasing payment to your provider.
  4. 4. 4 WHAT IS ON AN EOB? ✕ 1. Claim Information. ✕ 2. Member Name. ✕ 3. Identification Number. ✕ 4. Group Number. ✕ 5. Summary of Total billed charges. ✕ 6.Service Information (service Description- XRAY, Office Visit). ✕ 7. Date(s) of Service. ✕ 8. Amount billed for individual services. ✕ 9. Coverage Information/Deductions. + Coinsurance Amount/ Total benefits approved. ✕ 10. Amount You MAY Owe Provider.
  5. 5. 5 DEFINITIONS ✕ Claim- A request for compensation under the terms of an insurance policy. ✕ Co-Insurance- A type of insurance in which the insured pays a share of the payment made against a claim. ✕ Remark Code: It communicates why a claim or service line was paid differently than it was billed. ✕ In Network Benefits VS Out of network: In Network- Providers have agreed to accept a plan’s contracted rate as a payment in full services. Out of Network – Providers have not agreed to any set rate with insurer, and may charge more. Which may include but not limited to Higher Co- Pays, Higher Co-Insurance, and Higher Deductible. ✕ Current Procedural Terminology Code(CPT)- medical code that is used to bill medical, surgical and diagnostic procedures to physicians, health insurance companies, and accreditation organizations. In the Next Two slides is a Sample EOB from an insurance company that lists information creating an EOB.
  6. 6. BREAKING DOWN AN EOB. •Making sure the provider billing the insurance has the proper Demographic and Insurance information is very important in determining whether or not the insurance company will pay the claims submitted. Incorrect clerical mistakes may cause you to receive another person’s EOB or vies versa.
  7. 7. Summary: total billed by the provider for the services. The summary will also show the benefits approved and paid by the health insurer. Service information will include Date of Service, Type of services rendered/billed, covered/non covered charges. Coverage Information: Type of plan(PPO,POS,HMO,EPO), Deductions, Co-Ins, If claim was approved or denied, amount approved, and an estimate of what provider is owed. The splitting of insurance and patient responsibility. (90/10)
  8. 8. 8 WHAT IS A CLAIM DENIAL? ✕ The Healthcare industry does not have a universal definition of a claim denial: “Any intentional reduction of payment resulting from the failure to provide medically necessary services in an appropriate setting, failure to follow the payers’ technical guidelines, or failure to consistently document for the services provided.” (HFMA) – ✕ Why are Denials Difficult? + Complex situations of third party billing and denials + Constantly changing information + Challenging appeals process + Denial information is not standardized through out the health care system.
  9. 9. 9 TOP ERRORS ON AN EOB ✕ Double billing: Being charged twice for the same services, drugs, or supplies. ✕ Typos: Incorrect billing codes or dollar amounts. ✕ Canceled work: Charging for a test your doctor ordered, then canceled. ✕ Phantom services: Being charged for services, test or treatments that were never received. ✕ Up-coding: Inflated charges for medications and supplies. + If you had to go to the hospital for treatment or had surgery, also watch for these errors: ✕ Incorrect length of stay: Most hospitals will charge for the admission day, but not for day of discharge. Be sure you’re not paying for both. ✕ Incorrect room charges: Being charged for a private room, even if you stayed in a semi-private room. ✕ Inflated operating room fees: Being billed for more time than was actually used.
  10. 10. 10 COMMON REASONS FOR CLAIM DENIALS ✕ Out of network provider. ✕ Termination of coverage. ✕ Failure to obtain correct authorization. ✕ Non covered service. ✕ Untimely filing. ✕ Services not medically necessary. ✕ Additional information needed(Progress notes, Test results). The next slide shows an EOB with denial reasons.
  11. 11. Remittance Advice Remark Codes (RARCs) are used to provide additional explanation for an adjustment already described by a Claim Adjustment Reason Code (CARC) or to convey information about remittance processing.
  12. 12. 12 REFERENCES www.bcbs/eobexplanation.com http://www.kern.courts.ca.gov/ http://www.insuranceclaimdenialappeal.com/ https://www.premera.com Denial Management And how to Interpret an EOB Webinar Presented by Jesse Snyder.
  13. 13. 13 We hope you now have a better understanding of your EOB Visit us at Disputebills.com to learn how we can help you save money. Our mission is to save you 20% to 30% per year on healthcare expenses.

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