People around you may be using ERA and EOB interchangeably. However, we are here to tell you that both EOB and ERA are different documents that serve distinct purposes in medical billing.
What is ERA in Medical Billing?
Electronic Remittance Advice (ERA) is the electronic version of traditional paper-based Explanation of Benefits (EOB). An insurance payer sends it to the healthcare provider after reviewing the claim.
ERA contains vital information, like whether or not the claim was reimbursed, the amount paid to the provider, adjustments made to the final amount (in case of copayments or coinsurance), patient’s financial liability (if any), the reason for denial (if the claim was denied), and the method of payment (example, check or bank transaction).
ERAs reduce printing and mailing costs and eliminate errors during manual payment posting.
Example: ERA
As can be seen from the above sample, an ERA contains details like the healthcare provider’s and insurance payer’s name and address, the date of service, the beneficiaries’ names, the billed and allowed amounts, patient responsibility, adjustment reasons and codes, the provider’s NPI, and the payment method and transaction number.
To Be Exact:
- Healthcare Provider = ACME Physicians Inc.
- Insurance Payer = Medicare
- Date of Service = September 7, 2021
- Provider’s National Provider Identifier (NPI) number = 1223344XXX
- Beneficiaries’ Names = Ronaldo M. Benson, Zoe Compton, Florian Murtaugh, Lafe Zebrinski, and Buford Caldwell
- Billed Amount (Example) = $180.00 for Ronaldo M. Benson, procedure 99213
- Allowed Amount (Example) = $44.16 for Ronaldo M. Benson, procedure 99213
- Supplemental Insurer for Ronaldo M. Benson = BCMNX/BC/BS Minnesota
- Patient Responsibility for Ronaldo M. Benson = $8.83
- Total No. of Claims Processed = 4
- Total Billed Amount = $574.00
- Total Allowed Amount = $89.95
- Total Coinsurance Amount = $17.99
- Total Adjusted Amount = $240.05
- Total Amount Paid to the Provider = $71.98
- Adjustment Reason and Code = WO – indicates that the provider was previously overpaid, and now the insurer will recover/adjust the overpayment in this claim.
- Payment Method and Number = Check/electronic funds transfer – 100123XXX
What is EOB in Medical Billing?
Explanation of Benefits (EOB) is a summary of the processed medical claims that were filed for the billable services rendered to the insured patient by a healthcare provider. Unlike the ERAs, the insurance payer sends the EOBs to the patient, helping them understand the costs of services received, how they were reimbursed, and what amount they must pay to the medical practitioner.
Moreover, the EOBs are paper-based documents sent to the patients via mail. Patients can study the EOBs to understand their insurance plan coverage, cost savings, and financial responsibility.
Example: EOB
So, an EOB tells the patient details like the date they received the service, the name of the provider they received the service from, the billed and allowed amount for each service, what amount was covered by the insurance payer, and what amount must they pay out of pocket to the healthcare provider.
To Be Exact:
- Healthcare Provider = Anytown Medical Center
- Insurance Payer = Horizon Blue Cross Blue Shield of New Jersey
- Patient or Beneficiary = Jane Doe
- Date of Service = March 8, 2021
- Services Rendered = Admission to specialty room and lab tests
- Total Amount Billed = $4,000.00
- Total Allowed Amount = $4,000.00
- Total Reimbursed Amount = $2,160.00
- Total Patient Financial Responsibility = $1,840.00
- Total Copay = $100.00
- Total Coinsurance = $240.00
- Total Deductible = $1,500.00
Please note that the total patient financial responsibility is a sum of total copay, coinsurance, and deductible.
Difference Between ERA & EOB in Medical Billing
ERA and EOB are both essential documents in medical billing. An insurance payer creates and issues ERAs and EOBs once the claims have been reviewed and they have decided to either reimburse or deny the medical claim. However, the key differences between ERAs and EOBs must be understood to make the medical billing process more efficient.
Intent
While the primary intent of an ERA or EOB is to inform the recipient about the insurance payer’s decision regarding the medical claim, their purpose varies when the provider and the patient analyze it under their separate lenses.
An ERA informs the healthcare provider whether or not the insurance payer will reimburse their claim and, if yes, what amount they can expect in their accounts. On the other hand, an EOB tells the patient the amount that was covered by the insurance plan and the sum they must pay from their pockets to the healthcare provider.
Recipient
The sender of ERAs and EOBs is the same – the insurance payer. However, the recipients of these documents are different. An ERA is sent to the healthcare provider and is a summary of the reviewed claims, the amount that will be paid, and any adjustments or denials that may affect the final payment.
In contrast, an EOB is sent to the patient who visited the healthcare provider and utilized his/her insurance benefits to pay for the rendered services.
Format
The format of an ERA and EOB vary greatly. As the name suggests, an ERA is a HIPAA-compliant e-document or file 835. It is sent electronically to the healthcare provider via email or another secure digital platform.
However, the patients receive their EOBs as a hardcopy. The insurance payer prints the document and mails it to the patients for record keeping.
Delivery
As mentioned above, the delivery method of an ERA and EOB is also different. The ERA is issued and sent electronically, whereas the EOB is mailed to the patient’s given postal address.
Another difference between EOB and ERA is that the patients receive their explanation of benefits after the claim has been processed, and most likely, the provider has been paid. So, it can take up to 90 days to receive the EOB in the mail.
In comparison, the ERAs are issued within 2 to 3 weeks of claim filing. It informs the healthcare provider in real time regarding the payer’s decision. Moreover, it ensures enough time for payment reconciliation if the provider finds a discrepancy in the expected reimbursement amount.
Content
Since the audience and intent of an ERA and EOB are different, their content is also distinct. An ERA usually contains information the healthcare provider needs for accurate payment posting, denial management, AR recovery, and even clean claim filing.
For example, if several services were rendered on the same day to patients who are all insurance policyholders of the same payer and their claims were filed in a single day, the insurer will send a combined ERA (as shown in the sample above). It will help the provider comprehend which services will be reimbursed, which will remain unpaid, and what adjustments the payer will make to the billed amount. Hence, the content of an ERA is provider-oriented.
Contrarily, an EOB is patient-oriented, less detailed, and easier to read. It includes components like the date of service, services received, the billed amount for each service, the total amount being billed by the provider, the allowable amount that the payer has set for each service, and the patient’s financial responsibility, like copays, coinsurance, deductibles, etc.
Actions Taken
So, what must a healthcare provider or patient do after receiving an ERA or EOB? Well, the most suitable actions for a healthcare provider are to thoroughly review the electronic statement, identify discrepancies, consult the billing team, and see if the payments can be reconciled or maximized. However, the digital data can be used for error-free payment posting if the ERA is accurate.
Similarly, patients must also study the EOB to understand how their insurance benefits were applied. They must also speak to the payer if they do not agree with the amount they owe the provider.
Efficiently Process ERA & EOB with MediBill MD
Understanding the difference between ERA and EOB is the first step toward error-free and streamlined medical billing. You must remember that to collect accurate and timely payments for your services and procedures, you, the insurance payers, and your patients must be in sync and agree on the reimbursement amounts. ERAs and EOBs ensure that.
If you don’t receive ERAs from the insurance payers, we can help you with that. We will enroll you in the insurance payers’ electronic systems and ensure you receive ERAs within 2 to 3 weeks of claim filing. After receiving ERAs, you can copy and paste the digital data into patient accounts for accurate and hassle-free payment posting.
However, if you and your staff struggle to read and comprehend the ERAs, we are here to assist you. At MediBill MD, we employ a team of certified medical billers who are proficient in decoding ERAs and EOBs. They can extract the appropriate data and post the payments under the correct patient account within 48 hours. So, try our payment posting services for a flat 1% promo rate and make your life easy.
