Last Updated: March 24, 2026
Typical service transactions are straightforward. When you walk into your usual barber shop or hair salon, you typically have a good idea of what the bill will be once the service is complete. You receive the service and pay the bill before heading out the door. All done! This familiar process also applies to an oil change, car wash, pet grooming, and many other services we use regularly.
Where this transaction process differs significantly is in healthcare.
The Healthcare Transaction Process
It is important that you, as a healthcare consumer, feel confident about the accuracy of the payment you make to your provider after a healthcare visit. Healthcare reimbursement is a multi-step, often lengthy and complex process that might go something like this:
1. A patient visits their healthcare provider for a specific service, checks in, presents their insurance ID card, and pays a copay if applicable.
2. The patient receives care from the provider, who documents the visit in an electronic file. These notes will later be used to generate medical codes that the insurance company uses to determine payment.
3. The visit is concludes, and the patient leaves with no additional bill or charge at the time, aside from the possible copay.
4. The medical codes, derived from the provider’s notes, are sent electronically to the insurance company, where the claim is typically automatically reviewed and processed.
5. The patient receives an Explanation of Benefits (EOB) from the insurance company and may receive an invoice from the provider if additional payment is required.
The Explanation of Benefits
An Explanation of Benefits, or EOB, is a summary of how your insurance benefits were applied to a specific medical claim. It's important to understand that an EOB is not a bill and should not be treated as one.
A crucial section of the EOB is "Member’s Responsibility". The amount shown here should match exactly what is listed on the invoice you receive from your doctor’s office. If the two amounts do not match, it's a good idea to contact your company’s Benefit Broker or HR department for help resolving the discrepancy.
EOBs should be saved and stored for future reference in case billing questions arise.
Explanation of Benefits (EOB) Definitions
| TERM | DEFINITION |
|---|---|
| Allowed Amount | The maximum amount your health plan will pay for a covered healthcare service. |
| Coinsurance | The percentage of the cost of a covered healthcare that you pay after meeting your deductible. |
| Copayment | A fixed amount you pay for a covered healthcare service after meeting your deductible. |
| Deductible | The amount you must pay for covered healthcare services before your insurance plan begins to pay. |
| Discount | The portion of charges an in-network provider writes off based on a contract with your insurance carrier. |
| Healthcare Provider | An individual or institution that delivers preventive, curative, promotional, or rehabilitative healthcare services. |
| Member Savings | The amount you save by receiving care from an in-network provider or facility. |
| Other Liability | Costs associated with out-of-network services, services that required prior authorization, or services excluded from your coverage. |
| Your Plan Paid | The amount your insurance plan paid toward the service, based on the allowed amount. |
| Your Provider Bill | The total amount your healthcare provider submitted to your insurance for the services you received. |
Making a Payment:
When a claim has been finalized, either the insurance company will pay the invoice in full, or an outstanding payment will be requested of the patient. When a patient receives the invoice from their doctor’s office and has confirmed that the amount due matches the Explanation of Benefits (EOB), a few pieces of information are needed to complete the payment:
1. Date of service(s) received.
2. Patient ID number and billing account number.
3. Total amount owed by the patient that was not covered by the insurance provider.
Keep in mind that if you have a high-deductible or other qualifying plan, your Health Savings Account (HSA) is an acceptable method of payment.
Asking for Help
When in doubt, contact your employer’s benefits broker for assistance in resolving billing or claims discrepancies, understanding your Explanation of Benefits, or with other insurance and billing-related questions. If your EOB does not match the doctor’s invoice, contact the provider's office to request an itemized list of services and verify that the billing codes were submitted correctly before making a payment.
Readers are also enjoying:
Preventive Care
Prevention is not only about making sure an ailment doesn’t occur. It is also about early detection, which is often a key ingredient to favorable outcomes. Despite knowing these benefits, today’s complex healthcare system can leave some of us wondering or even worrying, "Will my preventive visit result in a surprise bill in the mail that I cannot afford?"