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What is insurance explanation-of-benefits (EOBs) readability?

A number of insurance companies are giving their explanation-of-benefits statements, or EOBs, an extreme makeover. EOBs, which are a required part of the health care claims process, are delivered to patients after services are rendered to explain what was covered by insurance. Some insurers are now making these statements more reader-friendly by steering clear of medical codes and industry jargon and listing ways the consumer could have saved money.

These statements historically have been cryptic at best, because there are no state or federal standards on EOB design.

"We knew that people threw them away. They were conceptually confusing," says Ingrid Lindberg, customer experience officer for CIGNA, which issues 42 million EOBs annually.

This year, CIGNA, Arkansas Blue Cross Blue Shield, Humana and Blue Cross Blue Shield of Vermont received "excellent" designations in EOB clarity, content and design from Dalbar Inc., a Boston-based market research firm that annually grades EOB statements.

explanation of benefits readability

Getting personal

Christopher Nicholson, director of strategic communications for Humana, says personalization was key to the improved EOB it began sending in 2010.

For example, if someone visits the emergency room for a non-emergency reason, theEOB notifies the consumer that he or she could have saved money by going to an urgent care clinic. When it comes to prescriptions, the EOB not only suggests using a generic brand, but lists specific alternative brands. The EOB also reminds consumers of the date of their last preventative exams and when the next one is due.

Lastly, Humana's EOBs list claims information for every family member on one statement, recognizing that families plan for health care expenses at a household level, Nicholson says.

Although insurance carriers are required to provide basic claims information only, Humana wanted to take it further.

"Let's just not send the bare bones and say we met the requirements," Nicholson says.

Keeping it simple

Lindberg remembers receiving her first CIGNA EOB statement, which was formatted in tiny typeface and filled with medical codes. "It was so horrible," she says.

Times have changed. CIGNA simplified and redesigned its statement after polling its members to find out what information they most wanted to know, namely, "What do I owe?" and "What do I have to do now?"

Also, the insurance company took a cue from grocery stores and added to the bottom of their EOBs a "You Saved" line item that lists the money saved due to insurance reimbursement.

Arkansas Blue Cross Blue Shield's revised statements, which debuted in March 2010, make it easier to see how much the health plan paid, if member discounts were issued and if the member is responsible for any payment, company spokeman Max Heuer says.

Also, because the Arkansas insurer determined that its consumers weren't remembering their health insurance plans' benefits, EOBs now include a summary of plan deductibles, coinsurance responsibilities, co-pays and maximum out-of-pocket costs. Other changes include the addition of a "health matters" section with customized information about preventative services.

"We hope this friendly reminder increases the likelihood that our members get the care they need to maintain optimal health," Heuer says.

What to look for on an EOB statement

According to the Patient Advocate Foundation, key components of the EOB statement include:

  • The patient's name and policyholder's name.
  • The service provided and date and place of the service.
  • The amount charged by the provider.
  • The amount of the charges that are and aren't covered under your plan.
  • The amount paid to your provider.
  • The amount for which you're responsible.
  • The claim number and a phone number for customer service.

The foundation recommends reviewing yourEOB to make sure that:

  • There are no mistakes.
  • You aren't using a more costly out-of-network provider.
  • You aren't billed more than you need to pay.
  • If you have reached your out-of-pocket cap, that the insurer is paying 100 percent of your health care costs.

"I'm hopeful that (the EOB redesigns) will help consumers look at what's coming to them and make sure they understand what they're liable for," Patient Advocate Foundation spokeswoman Erin Moaratty says.

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