What is an EOB? How to read your Explanation of Benefits

What is an EOB?

EOB stands for “Explanation of Benefits.” Your health insurer sends one after processing each medical claim from a provider. The EOB tells you whether the claim was paid, partially paid, or denied — and breaks down the financial details. It is not a bill. Most EOBs say “This is not a bill” in large type for exactly this reason.

The fields that matter

• Member information — your name, member ID, and group number.
• Provider — the doctor, hospital, or facility that submitted the claim.
• Service date — when the service was performed.
• Service description and code — usually a CPT code (5 digits) or HCPCS code (1 letter + 4 digits). For drugs, an NDC code.
• Billed amount — what the provider charged.
• Allowed amount — what your insurer says the service is worth under its network contract. Almost always less than the billed amount.
• Insurer paid — what your insurer actually paid the provider.
• Patient responsibility — the portion you owe, broken into deductible, copay, and coinsurance.
• Reason codes — CARC and RARC codes explaining adjustments or denials.
• Appeal rights notice — usually on the back or last page, with the deadline and where to send appeals.

Reading a denial on the EOB

When something is denied, the EOB will show:

• A denied amount (could be the whole charge or a partial).
• A CARC code such as 50 (not medically necessary), 197 (prior auth absent), or 204 (not covered).
• Sometimes a RARC code with additional narrative.
• A short text explanation.

The CARC code is the single most useful field for figuring out what to do next. Our guide to how to appeal a denied claim maps common codes to appeal strategies.

Common things people miss

• The appeal deadline is on the EOB. Usually 180 days under federal rules. Calendar it the day you receive the EOB.
• Multiple service lines can be denied differently. One claim can have several lines — some paid, some denied. Read each.
• “Not covered” is not the same as “not allowed.” Not covered means the plan excludes the service (you may be able to appeal); not allowed often means a discount under the network contract (no appeal needed).
• Surprise-billing protections. The No Surprises Act limits what some out-of-network providers can charge in emergencies. The EOB may show a different patient responsibility than your bill.

What to do if your EOB shows a denial

Read the denial code, calendar the appeal deadline, and decide whether the issue is something your provider’s billing office can resolve (often the case for administrative denials) or whether it needs a substantive appeal. InsureDefense can read your EOB and tell you for free which category you’re in and what an effective appeal would need.

Upload your EOB for a free triage