EOB (Explanation of Benefits)

An EOB is the statement your health plan sends after a claim is processed. It shows what the provider billed, what the plan allowed, what the plan paid, and what you owe. It is not a bill. It's the plan's accounting record — a translation of a medical event into dollars.

Reading one takes practice. A typical EOB has five columns worth watching: Billed (the chargemaster or provider's asking price), Allowed (the negotiated rate), Plan Paid, Patient Responsibility (deductible + coinsurance + copay), and Denied or Non-Covered. The gap between Billed and Allowed is the write-off that came from the network contract. If you see a denial code, it's usually one of three things: coding error, missing prior authorization, or a service the plan doesn't cover. On self-funded plans, the EOB is generated by the TPA on behalf of the employer, which is technically the plan sponsor and payer.

The takeaway: match every EOB to a provider bill before paying anything. About one in seven medical bills contains an error, and the EOB is the document that lets you catch it before you write the check.