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Dental Claims

Understanding EOBs vs ERAs

Posted by Jason Penrod on Feb 12, 2019

What is an Explanation of Benefits?

Every time your practice submits a claim, your patient’s insurance company will provide an Explanation of Benefits (EOB) to disclose how insurance will be applied to the patient’s treatment. EOBs are sent to both your practice and the patient to inform what portion is covered by the insurance company.

Unlike the ADA Dental Claim Form, every insurer’s Explanation of Benefits is different. Though the information contained within an Explanation of Benefits is standard, the layout and verbiage will likely be different if you deal with multiple insurance companies.

While primarily used by the patient to keep track of their coverage, an Explanation of Benefits can be a useful tool for your practice. For example, if you submit a claim for predetermination of benefits, the Explanation of Benefits will allow you to provide the patient an estimate for their care plan.

What does a typical EOB look like?

1. The patient’s dental insurer or payer.

2. The policyholder or subscriber whose insurance is covering treatment.

3. The patient receiving treatment.

4. The name of the billing dentist or dental entity.

5. Depending on the insurance company, your practice may be provided with a unique identification number.

6. The number that was assigned to the dental claim.

7. The date that the EOB was issued.

8. Description of treatments performed along with their procedure codes.

9. The dates when each treatment was performed.

10. The amount your practice billed for each treatment.

11. The amount allowed by the insurance company for coverage of each type of treatment.

12. The amount paid by the insurance company.

13. The remaining amount for treatment not covered by the insurance company.

14. The remarks section will include any additional information needed to explain what was covered.

15. The policyholder’s name and mailing address.

16. A summary of the patient’s benefit for the year, including what amount has been applied to the patient’s maximum.

What is Electronic Remittance Advice?

Electronic Remittance Advice (ERA) provides the same information that you receive within an Explanation of Benefits. Unlike a digital Explanation of Benefits which will typically be an image of the unprinted document, Electronic Remittance Advice is just the information contained within the Explanation of Benefits (ex. coinsurance, allowance, deductible, etc) in data form.

One major benefit of Electronic Remittance Advice over a mailed Explanation of Benefits is speed. Instead of waiting on an Explanation of Benefits to be mailed and delivered, your practice can use services like RPractice with Remote Lite to receive remittance within a day of the claim being processed.

Another benefit of Electronic Remittance Advice is your practice will save on storage. As they replace printed Explanation of Benefits, you won’t have to dedicate a physical space to house years of patient EOBs.

What is an 835?

Depending on the source, Electronic Remittance Advice may be referred to as an 835. The EDI 835 (Electronic Data Interchange) refers to the file format that contains the Electronic Remittance Advice that conforms to a set of HIPAA 5010 requirements. Unlike an Explanation of Benefits which can differ in format between insurance companies, EDI 835 is a standard format that is used globally for the dental (and medical) industry.

How can my practice receive digital remittance?

Some insurance companies offer digital copies of EOBs and ERA through provider portals on their respective websites. However, for many practices, having to go through multiple websites can be time-consuming and cumbersome. Alternatively, you can receive digital remittance from multiple insurance companies through services like RPractice with Remote Lite.