In one line: An Explanation of Benefits (EOB) explains how the insurer processed a claim. It is not a bill — it tells the biller what to post, what to write off, and what to collect from the patient.
EOB vs. ERA vs. the patient’s bill
Three documents get confused constantly:
- EOB — the paper/PDF statement sent to the provider (and a version to the patient) explaining the claim decision.
- ERA — Electronic Remittance Advice, the electronic version of the EOB (HIPAA 835 format) that posts automatically into billing software.
- Patient statement / bill — what the provider sends the patient afterward, based on the “patient responsibility” figure from the EOB.
Every term here is in the glossary.
The fields on an EOB, decoded
| Field | What it means |
|---|---|
| Billed / Charged amount | What the provider charged for the service. |
| Allowed amount | The maximum the plan recognizes for that service under its fee schedule or contract. |
| Contractual adjustment / write-off | The difference between billed and allowed that an in-network provider agrees not to charge the patient. |
| Paid amount | What the insurer actually paid the provider. |
| Deductible / Copay / Coinsurance | The portions applied to patient cost-sharing. |
| Patient responsibility | The total the patient owes — this becomes their bill. |
| Remark / reason codes (CARC/RARC) | Codes explaining any reduction or denial. |
How a biller actually uses it
- Post the payment — record what the insurer paid against the claim.
- Post the adjustment — write off the contractual difference (in-network).
- Bill the patient — for the deductible, copay, or coinsurance shown.
- Work the denials — if a line was reduced or denied, read the reason code and decide whether to correct and resubmit or appeal.
The math, with a quick example
Provider bills $200. Plan’s allowed amount is $120. The patient has met their deductible and has 20% coinsurance.
- Contractual write-off: $200 − $120 = $80 (in-network, not billed to patient)
- Patient coinsurance: 20% of $120 = $24
- Insurer pays: $120 − $24 = $96
So the biller posts $96 paid, writes off $80, and bills the patient $24. Getting this right is the difference between a clean book and lost revenue.
Frequently asked questions
Is an EOB a bill?
No. An EOB explains how the insurer processed a claim. The actual bill comes from the provider afterward, based on the patient-responsibility amount on the EOB.
What is the difference between an EOB and an ERA?
They contain the same information. The EOB is the human-readable statement; the ERA is its electronic version (HIPAA 835) that posts automatically into billing software.
What is the allowed amount on an EOB?
The maximum the insurance plan recognizes for a service under its fee schedule or contract. The provider writes off the difference between the billed and allowed amounts when in-network.
What are CARC and RARC codes?
Claim Adjustment Reason Codes and Remittance Advice Remark Codes — standardized codes on the EOB/ERA that explain why a charge was reduced, adjusted, or denied.