How to Decipher Insurance Claims and Understand What You Owe | Ep. 20

Getting a statement from your insurance company can feel like trying to read a foreign language. What is an EOB? Why does it say, "This is not a bill?" And most importantly, what do you actually owe?

Melody Mulaik demystifies the Explanation of Benefits (EOB). She walks you through, step-by-step, how to find your EOBs on your insurer's website and how to read them line by line. You'll learn the difference between the "amount billed" and the "member rate," how to track your deductible, and what co-insurance really means for your wallet.

Stop guessing and feeling anxious about medical bills. This episode gives you the tools to confidently validate every bill you receive from a provider and ensure you're only paying what you truly owe.

Featured Topics:

• What an Explanation of Benefits (EOB) is and how to find it on your insurance company's website.
• Understanding the key terms on your EOB, like deductible, copay, and co-insurance.
• A line-by-line guide to reading your EOB, including the "amount billed," "member rate," and "your responsibility".
• How to find "remark codes" to understand why a claim might not have been paid and what your next steps should be.

What You’ll Hear:

• [00:00:00] Introduction: Why you must validate what you owe for a service.
• [00:01:00] How to find your "Explanation of Benefits" (EOB) on your insurer's website.
• [00:02:00] Understanding the EOB summary: "This is not a bill" and tracking your deductible.
• [00:03:00] Defining key terms: Co-insurance vs. Copay.
• [00:04:00] Breaking down the EOB columns: Service descriptions, CPT codes, and Amount Billed.
• [00:05:00] Finding your true cost: Understanding the "Member Rate," what's applied to your deductible, and your co-insurance.
• [00:06:00] A real-world example of how co-insurance is calculated.
• [00:07:00] What to do if a claim isn't paid: Finding and reading "remark codes".
• [00:08:00] How to use the EOB to validate any bill you receive from a provider.

Want to Ask Melody? Visit: https://melodymulaik.com/ASK Don’t forget to subscribe so you won’t miss an episode. If you've ever stared at a medical bill and an "Explanation of Benefits" (EOB) and had no idea if you actually owe that amount, this episode is a must-listen.

Transcript

Melody: 0:13

Hi everyone and welcome back to Take Care with Melody Mulaik. In today's episode, we are going to talk about how do we look at the information from an insurance company and understand exactly what we owe. For a particular claim or for a particular service. I know in many of my previous episodes, I've talked about making sure that you log on to your insurance company's website, making sure that you validate what you owe for a service. And we're going to break that down a little bit more today'cause I've received some follow up questions, as we've talked through that in some other sessions to say, well, what exactly do you mean by that? And what specifically should I be looking for? So, it's a great question and let's take a step back and let's look at that. So, if you log on to your insurance company's website, and I'll also say separately, if you do receive paper statements or paper information from your insurance company, it's going to be on that information as well. But every time a provider, a hospital, or a physician's office, or anyone even at the pharmacy submits something to your insurance company to be paid or adjusted with that, then they will send you information back to let you know what they've done on your behalf. And it lets you know, what do you specifically owe for a particular service? So, if you log on to your insurance company's website, and every insurance company's a little bit different. But if you look at the headers across the top, you may see something that says claims. That's probably the most common thing that you'll see on an insurance company. That's what my insurance company has on mine. I have one of the national carriers. And if I click on that as a tab, a lot of times right underneath that it will say explanation of benefits statements, EOB. So, EOB is a short abbreviation for explanation of benefits. And there may be some other things that are under that tab as well, but that's where you can go and pull up all the claims that have been submitted on your behalf to your insurance company from any of your particular providers. Now, when you pull it up, if they were to mail it to you, a lot of times this is exactly what it's going to look like and an explanation of benefits. Usually, we'll have verbiage with it also that says, this is not a bill. And that's because they're just letting you know what it is that you specifically owe, related to that encounter. So, a lot of times on the very front of it, and hopefully they do. They'll track what your healthcare costs are at that point, how much you've been billed throughout the year, how much they've paid. They'll even kind of tell you, Hey, we got you this kind of discount. How much money you saved and really have you met your deductible or not'cause that's a big key factor in driving. What is your out of pocket going to be? So, we know we have deductible that could be anywhere as low as$500. That could be as high as any number, right?$10,000. A lot of times people are in between. And you have that deductible amount, that's the money you're going to have to pay out of pocket. Not counting copays, but the money you're going to pay out of pocket for the services that you received. And once you've met that deductible, then the amount that you're going to pay may be a little different. Up until the point you haven't met that deductible, you're going to be paying all of your responsible items for that. So, usually they'll put a summary at the front of that explanation of benefits. They'll say, who the patient is, is it you? Is it a family member that you're covering? Who the provider was that they paid? What the amount was? What the date of that was? And then, what your responsibility is? And that's what you want to go down and look at a little bit more detail to say, well, how did they come up with that number to tell me what's my responsibility? And sometimes they'll even on the explanation of benefits, explain terms such as co-insurance. For example, if I pull up and I'm looking at one of my EOBs as I'm talking to you, it says co-insurance. When you pay part of the bill and we pay part of the bill, it's a cost share of out-of-pocket amount versus a copay. Which is a fixed cost that you pay when you visit a doctor or healthcare provider. So, we know our copays are a flat rate for that visit, be it an urgent care, be it an emergency room, be it the visit to our doctor or to a specialist. So, then it'll kind of get into more detail and it'll show me for each one of these line items, more detail in my explanation of benefits, right? Now, we can see where they came up with that name. So, usually in the first column, it's going to give a description of the services that you received. And it might say, it was an office visit. It might say, it was a particular procedure, it might even just say medical services. There's different things that might be listed and it'll have a brief description. And then, you'll see a five digit code. And that five digit code is called a CPT code. And we don't have to get into the details of that, but that's a nomenclature or a coding system of how information gets submitted to the insurance company from your provider's office to clearly identify the services that were provided to you. Then, they'll also have the data service that was on there. So, it's important to look at that and look and see, did I have those services? Now, sometimes that description may not be very clear. Like I can pull up one right here and it just says medical services. It also has a five digit code on there, and I don't recognize any of it. I know from digging into details, that's a lab code. That's okay. The services above there, it gives me specifically what was done. I look at it, go, yep. I had that service. The next column, column A typically is the amount that they bill. Your insurance company don't have the amount they bill. And then, the next column gives you the member rate, meaning they've negotiated, they be in your insurance company has negotiated with your provider to say, we're going to pay X dollars for that particular five digit code that we were just talking about. There's a lot of different things that go into it, all that's not relevant for this conversation. But basically that member rate is what they have negotiated. So, it's always going to be different. And hopefully, you're going to see it be a lot lower than what they actually charged. Then, you get into the next column says, pending or not payable. And you may see some notations there. And those are important because if they didn't pay or there's something pending, you want to read the instructions as to why. So, they'll have a little notation with that. And then, you should be able to scroll down a little bit further and see the definition with it. The next column will say, what was applied to your deductible? If any of it was. So, if you still have a deductible that's still outstanding, they may say, well, gee, you owe$191, but you haven't met your deductible. So, we're applying that to your deductible, or if there's a copay. Now, if it's related to procedures outside of a copay visit, that may be blank as well, and then it'll say, amount remaining. What is the plan paying for that versus what's your co-insurance? So, I've got an example where had a procedure done. I've met my deductible at this point. They tell me that my member rate for that one particular exam was$191. So, the plan share of that is 80%. The insurance company is going to cover 153.12. My co-insurance amount is 20% of that allowable rate. So, I owe$38 and 28 cents, so I'm able to confirm on that explanation of benefits when I get a bill from my doctor. Yes, I owe them$38 and 28 cents with that. And same thing goes for each individual line item with it. So, go through each individual one. That's going to give you the amount that you owe. Now, back to that, well, what if they didn't pay? How do I know? Do I understand why? Well, anytime that something is not paid, they're going to have what they call a remark code. And if you scroll down on that explanation of benefit, it's going to give you information as to why it's not being paid. It might tell you that they have requested additional diagnosis information from your provider, your doctor. They might tell you they've requested medical records. They might tell you something is not covered in your plan. This is the information then that's going to cause you to take additional next steps with that. So, again, this gives us an overall basis of how do we interpret that explanation of benefits again. Do we agree with the data service? Do we agree with the services that we provided? We see what they charged, we see what our obligation is for that. And then walk on through the process so that we can validate anytime we get a bill from a hospital, from a physician office, from any type of medical service, whether or not we actually owe that particular amount. So, I hope that's been helpful for you today as you go and tackle and review those EOBs, if you have any questions for me or any other things that you'd like for me to tackle. Please reach out through the website. We'd love to hear from you at takecarepod.com. Until next time, take care.