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

• A. It is a consumer bill for medical services.
• B. It is a document sent by the insurance company to the patient explaining the claim status.
• C. It is a request for preauthorization.
• D. It is a summary of the provider's charges.

Answer: (B)

The purpose of an Explanation of Benefits is to tell you how your insurer processed a submitted claim and what benefits were applied to your services. It comes from the insurance company and shows the claim status, what was billed, what the insurer considers the allowed amount, what the insurer paid, any adjustments, and what portion you’re responsible for (such as deductible, coinsurance, or copayment). It also explains if a service wasn’t covered or if a denial or reduction occurred, often with codes and a reason. It’s not the bill you receive from a provider for services, nor a request for preauthorization, nor a summary of the provider’s charges; it’s a breakdown of how the coverage applied to that claim, helping you understand your financial responsibility and whether you need to pay anything or follow up with the insurer.