If you have Medicare prescription drug (Part D) coverage, either from a stand-alone policy, or as additional coverage with your Medicare Advantage plan, you have probably received Explanation of Benefits notices after you receive medical services or supplies that are covered by your plan.
An Explanation of Benefits (EOB) is not a bill that you have to pay. Rather, it is a report that gives you details about charges and savings you have when you use your Part D insurance for your prescription drug coverage. Many people are not sure what to do with EOBs that they get in the mail. Here is what you need to know.
What is an Explanation of Benefits?
Whenever your Part D policy provider submits a claim for services or supplies you have received, an EOB is created. Your insurance provider then sends you a copy of this EOB to let you know what the cost of your care was, if you saved any money by using in-network providers, and if there are any out-of-pocket expenses you are responsible for.
Because of this type of information, the EOB may look like a bill, and many find this confusing. It is not a bill. Here is the information you should see on your EOB in more detail:
• All the detailed information of the payee, the payer, and your personal information as the patient or the person receiving the services or supplies.
• Your name and the medical services you received, the date, description of services, and the name of the service or supply provider.
• The amount of money that was billed for the services or supplies you received.
• Any discounts that were applied, and any amount of savings incurred by using providers included in the plan’s network.
• The amount of money that was paid by your prescription drug policy provider.
• Any amount of money that was not covered by your prescription drug policy provider.
• Any amount of money covered by spending accounts such as an HRA account if this applies to you.
• Any amount of money that is outstanding for which you are responsible. (This is an amount for which you will be billed separately.)
Additional information found on the EOB includes a glossary of terms and definitions used on the EOB, instructions on how to appeal a claim, and additional details about the costs for services or supplies you have received.
What should you do with your Explanation of Benefits reports?
When you receive an EOB from your prescription drug plan provider, they are providing you with a tool that shows you the value of your coverage with them. You can use it to keep an account of your annual deductible amount, to see whether you have reached it, or how much is left to go.
You should look over your EOBs carefully to ensure that everything is correct. Because you should have kept all of your pharmacy receipts, you can use them to check against the claims detailed on the EOBs. If you find errors, or have questions, call your plan provider right away. If you believe that Medicare fraud is involved, call the Medicare Drug Integrity Contractor.
The EOBs you receive provide monthly and annual summaries of your prescription drug plan costs. Keep these EOBs in your files to have clear records of your coverage and so you know how much you have paid towards your allowance for each of your drug payment stages.
If your Part D plan provider makes changes to its formulary, this information will also be on the EOB. This will inform you if drugs you use have a change in coverage or cost. In some cases, these changes become effective 60 days after your notification, otherwise the changes do not go into effect until the end of the current year.
By keeping your Explanation of Benefit reports on file in your home, you can keep track of your prescription drug benefits, changes, and charges on a monthly basis.