Explanation of Benefits (EOB)
Definition
An Explanation of Benefits (EOB) is a document the insurance payer sends to the patient and provider after processing a medical claim. The EOB shows: the service provided, the amount billed, the allowed amount, what the payer paid, and what the patient owes. The EOB is not a bill — it is an explanation of how the claim was processed. The provider's remittance advice (RA/ERA) contains the same information in a format designed for billing teams.
Why EOBs Matter
The EOB is the source of truth for patient balance collection. It shows exactly how much the patient owes (copay, coinsurance, deductible) and why. Patients often call with questions about their EOB — billing staff must be able to read and explain each line. Discrepancies between the EOB and the provider's expected payment indicate a claim processing issue that needs investigation.
How to Read an EOB
Key fields: Date of Service, CPT/procedure code, billed amount (what the provider charged), allowed amount (the contracted rate), payer payment (what insurance paid), CARC/adjustment codes (why any amount was adjusted), and patient responsibility (copay + coinsurance + deductible). The difference between billed and allowed amounts is the contractual write-off for in-network providers. See remittance advice for the provider-facing equivalent.
Related Terms
Remittance advice — the provider-facing version of the EOB. CARC code — adjustment codes on the EOB. Copay/coinsurance — patient responsibility shown on the EOB. Claim adjustment — any modification to the billed amount.
Common Questions
Is an EOB the same as a bill?
No. The EOB explains how the insurance processed the claim. The bill comes from the provider's office and shows the amount the patient owes after insurance processing. Patients sometimes confuse the two — clarify that the EOB is informational and the provider bill is the payment request.
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This glossary is for informational purposes. Consult official billing guidelines and payer policies for definitive definitions. Last updated: 2026-04-06.