EOB forms have some explaining to do

Doctor holds out stethoscope

TEXT OF STORY

TESS VIGELAND: It's open enrollment season for many employees across the country. Time to sort out your HSAs from your 401(k)s and FSAs. Health care is always the big headache: How much do you need, what kind, what format. And that's part of why we're having this big national debate over health-care reform. But if there's one complaint common to all of us lucky enough to have health insurance, it's another element of alphabet soup -- the EOB. The explanation of benefits form that you get after visits to the doctor.

As Tamara Keith reports, it needs a whole lot of explaining itself.


Tamara Keith: I got an Explanation of Benefits in the mail the other day. Opened it up and had no idea what it was trying to tell me.

An EOB is the statement insurance companies send you after your doctor sends them a bill. It tells you what the claim was for, what was covered, what you owe and why. So, I took my EOB right to the source.

Michael Sullivan: I'm Michael Sullivan, director of communications for CareFirst BlueCross BlueShield.

That's my insurance company. The explanation of benefits I show him is related to a biopsy of a bump on my head. Don't worry, I'm fine. At the bottom of the page it says in all caps: THIS IS NOT A BILL. But it also lists a bunch of dollar figures. One line is for the total charges, $259. The next line says "less non-allowed amount" and that's $189. This is where it gets confusing

Sullivan: I don't think that it's uncommon for people to take a look at it and say "Wow, is this a bill? There's $189 that it says wasn't paid by the insurance company." What you want to look for is, what are you responsible for.

In this case, the total patient responsibility is listed as zero dollars. Phew. But why all those different numbers? The total charges are what the doctor, or in this case, the lab charges. That's their list price. But the insurance company doesn't pay that. Sullivan says they've negotiated a lower payment in advance.

Sullivan: The non-allowed amount is the difference between what the doctor charges and what the health insurance company pays.

My bump on the head wasn't very complicated and neither was my EOB. Most EOBs are much more confusing, with lines for co-payments and co-insurance and unmet deductibles. If the patient sees a doctor out of network, it gets really messy. Forget it if you have a hospital stay.

Karen Pollitz: I don't know. It makes doing your taxes look kind of easy. Dealing with your insurance forms when you're sick is... it's really hard.

Karen Pollitz is a health policy researcher at Georgetown. Years ago, she needed surgery. Her insurance company pre-approved it. Then she got an EOB saying the operation wasn't covered

Pollitz: It took me several weeks to figure out that the reason the service wasn't paid was that the hospital had put the wrong code on it and well that's not what had been pre-authorized and so it kicked out.

Pollitz says a lot of people toss their EOBs when they should use them to track their deductibles and bills.

Pollitz: What I've said to my mom, my friends is keep everything, pay nothing. Keep all of your statements, keep all of the bills, match them up and go back and check the work.

Pollitz says, the forms can be nearly impossible to decipher. If a claim is denied, you have to wade through an alphabet soup of codes to figure out why.

Pollitz: There should be sort of a very clear trail of bread crumbs. About what you asked for, what was covered what was paid, what was not paid and why. And in English would be nice.

Susan Pisano: I think that there's a clear understanding among our members that the EOB needs to be improved.

Susan Pisano is with America's Health Insurance Plans, the major trade group for insurance companies.

Pisano: We would like to see there be a standard. We certainly want that standard to be done in a way that is clear, useful, easy to act on for consumers.

But when it comes to health care these days, nothing seems easy.

In Washington, I'm Tamara Keith for Marketplace Money.

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