Months after receiving emergency medical treatment, you are welcomed with an unassuming letter from your healthcare provider. Nothing to worry about, you receive mail from them all the time. But this one looks different. When you open it up you see a line by line breakdown of your recent treatment. And while at first it appears there is no responsibility for you to pay, you flip the page over and are met with a worrying statement “Your Patient Responsibility Could Be…” This is an Explanation of Benefits (EOB) and a real situation that happened to Elyssa and her husband Alberto earlier this year. He had received treatment for excruciating abdominal pain in the middle of the night and thankfully his final diagnosis was kidney stones and nothing immediately life-threatening. Months later, they received one of these intimidating documents. Here is their story:
So, what exactly is an Explanation of Benefits, why are they used, and are they really a bill? All of these questions and more will be revealed…
Before diving deeper into revealing how EOBs work, it should be explicitly stated, EOBs are not bills. If you receive one you should know that you are not immediately responsible for any payments. An EOB is a document sent from your insurer that describes “what costs it will cover for medical care or products you’ve received”.1Your insurer will insist that your EOB is not a bill. But these documents are often drawn up with a striking resemblance to them. As was the case with Elyssa and her husband above, the nature of a line by line document with a statement in the nature of “You may owe” or “You could be responsible for” doesn’t really clarify anything. On top of that, EOBs will also list out “Any out-of-pocket medical expenses you’ll be responsible for” or “The amount you owe, including deductibles, copays or coinsurance.” So while the document itself isn’t a bill, insurers leave it vague enough for you to worry a bill may be coming. 1,2
Now that you are anxiously awaiting the possibility of a future bill you think to yourself, why would I receive this? Good question. Insurers would like you to believe that they are simply outlining all of the charges incurred from your treatment. But these documents are really used as a scare tactic by the insurance companies to make patients believe they will receive a bill in the future. Or even more nefariously, make patients second guess seeking out emergency care in the future. On top of the lack of value this information presents to the patient, these documents are confusing. So confusing that most major insurers have pages and documents outlining what these documents are for and how to read them.
Plainly put, if you receive an EOB, don’t let it scare you away from needed emergency care in the future and don’t pay these possible future fees outlined in the EOB until you receive an official bill. These documents are not bills and should not influence the medical decisions that you make – especially when you believe you are having an emergency. You, a prudent layperson, have the right to seek care when you believe you are having an emergency. Join us next week when we help reveal and explain the Prudent Layperson Standard.