What Is EOB In Medical Billing Services?

Have you ever wondered why does an insurance company provide an EOB statement whenever you visit your health mentor?


Life Insurance

EOB stands for “Explanation of Benefits” __ it is a statement that is sent by a health insurance company to covered individuals that describes the information about the medical treatments and services provided by the health mentors to the patients.

Actually, the EOB statement is provided to the patient so he/she can compare the statement with the medical bill by medical billers and coders.

The EOB statement provides the following information to the patient;

  1. The health care service provided by the physician.
  2. The date of the service, the description and medical code for the service
  3. The name of the person or place that provided the service.
  4. The name of the patient who received the relevant health care service by the physician.
  5. The amount a provider charged for an appointment and health care procedures.
  6. The amount an insurance plan paid for the health care services.
  7. The amount you owe to the provider.
  8. Adjustment reasons and adjustment codes.

Health Information:


EOB is protected health information that is provided to the patient and they are usually referred to as EDI 835 5010 files. EOB is not a bill, it is just a statement that describes the information of execution of your claim. A member with secondary insurance gives such information to the provider for the transaction of the next bill to that insurance company. Generally, secondary insurance pays only the amount that is described in an EOB statement. Secondary EOBs represents if the patient still has any responsibility to the provider. After the patient’s insurances have processed the claim, the provider bills the patient for the remaining balance if any.

Patients do not receive medical bills for health care services from their insurers. Only healthcare providers send out medical bills for services rendered.

Like most medical billing transactions, EOBs consist of Healthcare Common Procedure Coding System (HCPCS Level I and Level II) codes and explanation codes that have been established by the Healthcare Portability and Accountability Act of 1996 (HIPAA).

These explanation codes are easily comprehended by professional medical billers who are schooled in the language of healthcare reimbursement, although they are a mystery to the population who only encounter them in EOBs. While each EOB defines the adjustment and adjudication codes, they are often in the fine print and their definitions are not always apparent to a person who is unfamiliar with these codes.

Adjudication Codes:


Certified medical billers are not usually familiar with the code sets that third-party payers use to communicate payment or denial information to medical billers who post payments and make financial adjustments to patient accounts. This code set is used exclusively by third-party payers, and certified medical coders do not allocate these codes. Insurance adjusters assign them, as they process healthcare claims.

Clean Claims:

Medical Bill

Professional medical billing and coding specialists co-operate to make sure that accurate claims are submitted to third-party payers that clearly describe the services contained in the patient’s medical record.

An EOB informs the patient about the processing of their healthcare claims, and how it was executed according to the terms of their coverage. In an efficient health care service or an impatient medical facility, the information has already been applied to a patient’s account before the patient calls with a query.

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