Differences between explanation benefit and remittance advice


Differencesbetween explanation benefit and remittance advice

Anexplanation of benefit is a document sent by Health Insurance Companyto its members that are covered by insurance explaining the medicaland other services that were payed on their behalf. The EOB hascommonly referred gives the clientdetailed information on howaninsurance claim from thedoctor was payed on his behalf.Remmitanceadvice can be defined as note sent from the customer to supplier,informing the supplier they have paid their invoice. The remittanceadvice has the following features: the invoice amount, invoice numberand a text note.

Therecipient of the two documents is different, though both of thestatements give s an explanation of benefits. The remittance adviceis provided by the healthy care while the explanation of benefits issent a person already covered by insurance company. In spite of thisbeing the norm on rare occasion the health insurance cansend theexplanation of benefit to the doctor in charge (Green &amp Rowell,2006). The subject matter contained in the two documents is almostsimilar with few exceptions. Theadjustment and claims made by thepatient are found in both statements together with any benefits thatare accorded to the patients. Thestatement provided to the patient onthe explanation of benefits that is not a bill.

Thecreationof sending the remittanceadvices is generated by the submission ofthe insurance claim. Theprocess starts with health provider handingin the claim on the behalf of the patient to the insurance company.The eligibility of the claim and benefit of the patient aredetermined by the healthyinsurance, theadjustment of the paymentisdone together with the statement. From the statementthe two documentsare printed and send to the involved party. The remittance advice andexplanation benefit have set period of time beforeexpiry. Themailingand printing the document to the owners take time and this may delaythe medical claim payments. With the advance in technology manyhealth care and insurance providers are migrating to use ofelectronic filing whichwill render the traditional remittance adviceuseless. An explanation to patient will be needed to make themunderstand how theclaims are being handled.

Theexplanation benefit can be used to track down past medical bills andservices because the following features help in past medical billanalysis: denials, allowable, patient financial responsibility,payment details and submitted charges. The payor in this case canhave different name and format while in remittance advice the notehas very different features from the explanation benefit for exampleit has the invoice amount, invoice number and a text note.

Cleanclaims can be said to be a claim that has no incomplete information,no defect that delays its payments. When a provider hand in acomplete data elements on the claim forms together with the attachments the claims is referred to us clean claim .The payment ofclean claim takes les time, dirty claim is rejected by the insurancecompany in the ground that it has incomplete information, noattachment of prove and has a lot s of defects. In filling claimsforms any incomplete claim form is not considered for payment vitalinformation missing in the forms leads to automatic disqualification.The beneficiaries of healthy insurance and other insurance coversshould provide complete information to back up their claim in orderto get full benefit from the covers (Green &amp Rowell, 2006).


Green,M. A., &amp Rowell, J. A. C. (2006). Understanding health insurance:A guide to billing and

Reimbursement.Clifton Park, NY: Thomson Delmar Learning.