What To Know About Your Explanation Of Benefits

Question; I got a hospital bill from my admission & the Rehab stay after. I didn’t think it would cost that much? How do I know what to pay?

Answer; This is the second half of a two week answer. The answer is different depending on your insurance.

The key to maximizing your medical insurance coverage is first being sure the providers (Doctor, Hospital, Pharmacy, & Lab, etc.) have your correct insurance on file.

Last week I covered how to read and understand a Medicare Summary Notice (MSN).

This week I will cover the Explanation of Benefits (EOB) from your Secondary Insurance (Medicare Supplement Plan) or if you have a Medicare Advantage Plan.

After Medicare makes a determination on your medical claims, and you have a Medicare Supplement Plan (Medigap), Medicare sends the claim over to that company electronically. Sometimes Medicare doesn’t realize you have that coverage and then the provider needs to bill the secondary insurance directly.

That secondary insurance company will also send you an EOB to review the claim and the coverage it provided. Each company has a slightly different way of communicating this information.

United Healthcare (UHC) Options (AARP affiliated) for many years was the most popular, and when they send the EOB’s, they list the payments a certain way. The EOB’s indicate the amount billed to Medicare, the approved Medicare amount, then the amount that UHC paid on the claim. Using the previous illustration from last week’s article, The doctor bills $200, Medicare approves $132.40. If the deductible is met, Medicare pays $105.92 ($132.40 X 80%). Then your Medicare Supplement (Medigap) will pay $26.48 ($132.40 X 20%). You pay zero.

If the charge went to your Part B Deductible, Medicare would still reduce the charges to $132.40 but Medicare would pay none of it and your Medigap Plan would pay it if you have Plan F or Plan C. All other Medigap plans require YOU to pay the Part B deductible, so you would pay the $132.40 and would have met that much of your Part B deductible.

In both these situations, the UHC EOB has a column that is labeled ‘Plan Cost Share”. Now this phrase is not as clear as I would like.

Many individuals have switched to an alternative carrier lately due to the premium increases of their old carrier. One popular company has become Transamerica, for Medicare Supplements in our region. With this company their EOB’s look very different. If a claim goes to the deductible with this company, on the top of the EOB in bold letters is the phrase “Denial of Claim”. This can look pretty scary. But if you read further, you will see that the claim was not ‘paid’ by the insurance company because it was your Part B deductible, and your plan requires you to pay the Part B deductible. Once the deductible has been met the insurance will kick in and pay the 20%, or the amount your medigap plan defines.

When you have a Medicare Advantage Plan your notice would come from your insurance carrier. In this case, you would NOT receive a Medicare Summary Notice (MSN) because your claims are NOT processed through the Medicare insurance system.

If a claim got to Medicare by mistake, Medicare will deny the claim, so you would get an MSN, but it would show no payment. This indicates the coverage was denied because you have other insurance (the Medicare Advantage plan).

Your Medicare Advantage plan will send you an Explanation of Benefits (EOB) for all your medical claims. The EOB’s you receive would come on your insurance carrier’s letterhead and their explanation of coverage. The information provided will be very similar but may have a different layout. When you have a Medicare Advantage Plan, and you have questions you should call your insurance company directly, or use their website to review claims and payments.

Many Medicare Advantage Plans have predetermined amounts you would pay for care, so may know already what your cost share should be. Always match provider bills to your EOB’s to be sure you are paying the correct amount. If the amounts don’t match, call and ask why.

Never pay a bill without an MSN, or EOB to match it too. Sometimes providers send bills before your insurance has had a chance to pay the bill on your behalf. Before you pay any medical bills check your documents to see if you really owe that amount!

Janell Sluga is a Geriatric Care Manager helping seniors in our community access services and insurance. To reach her, please email editorial@post-journal.com.


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