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What is EOR in Medical Billing?

Healthcare providers prefer to get reimbursements right in their first attempts. To ensure you get paid in the first instance – your practice must eliminate the repetitive errors, if any. It can be easier if the providers themselves or their staff can read ERA or EOB in medical billing. However, reading it isn’t enough; medical providers must also correctly interpret it. Further, it is essential to recognize that there always remains a chance percentage of getting claim denials. It is where third-party medical billing services companies can help you boost your practice revenue.

What is EOR in Medical Billing?

EOR is a vital tool for healthcare providers – helping providers understand medical billing. In medical terminology, the EOR means Explanation of Reimbursement. It is also known as EOB – Explanation of Benefits, or EOP – Explanation of Payment.
In medical billing, EOR is a document that insurance providers send out to patients and healthcare providers. EOR in medical billing outlines and elaborates how insurance companies process medical claims and how much they will reimburse for the provided services.
Moreover, the EOR document lists the payment that a patient handles and the reason for claim denials. It also helps healthcare providers understand the payment processes and how much patients owe.


Electronic Remittance Advice or ERA is a digital version of the Explanation of Benefits or Explanation of Review (EOR). It offers information about the adjudication of claims submitted by healthcare providers to insurance companies.

Type of Information inside an EOR

An EOR usually includes the following information:
Patient Information – here, the EOR in medical billing includes patients’ name, insurance policy number, and address

Claim Details
– the details include the date of service, the amount billed, and the type of medical service provided
Healthcare Provider Information includes the name, NPI (National Provider Identifier) number, and provider address.
Insurance Payment Details include the amount paid by the insurance, the reason for denials, if any, and the patient’s responsibility.

5 Key Steps of EOR in Medical Billing

The EOR in medical billing consists of 5 key steps. Healthcare providers must know and understand these basic steps of EOR. Let’s explore all of the EOR steps to have a comprehensive understanding:

Registration and Verification of Patients

Patient registration and verification are The initial steps in the EOR process in medical billing. The process involves collecting accurate patient information, including their names, addresses, contact information, and insurance policy information. Further, the healthcare providers must also ensure that a patient’s insurance coverage plan is active and valid. Moreover, this confirms that the insurance provider will reimburse for the medical services/treatment given to patients. Furthermore, medical practices also check patient coverage under health insurance plans. Insurance companies also check up on deductibles, copayments, and coinsurance. The process is called VOB in medical billing.

Claim Submission and Coding Process

After verifying patient information, the medical providers or their billing teams assign specific medical codes to describe the services provided. Such codes include the CPT and ICD codes. Both of these describe the diagnosis and treatment procedures. After assigning the appropriate codes – the medical claims are submitted electronically or via the paper-based process to the patient’s insurance provider. The medical claim contains thorough and detailed information regarding the services provided, which includes dates, procedures, and associated codes.

Claim Adjudication Processing

Here, the insurance company gets the medical claim and starts the adjudication process. The process here involves reviewing the claim to determine its accuracy and eligibility for reimbursement. The insurance provider verifies a patient’s coverage and checks up on the pre-existing conditions or the policy limitations. Furthermore, the process also determines if the medical services provided are medically necessary.
For the claim adjudication process, the insurance provider compares the codes submitted with their fee structures and internal reimbursement policies. They also evaluate claims for any potential errors, duplication of services, or billing discrepancies. The entire process is time-consuming, and the claims will go through a few rounds of review before finalizing any decision.

Generating an EOB

After claim adjudication, the insurance providers compile an EOB –an explanation of benefits. EOB is a comprehensive statement outlining the insurance provider’s decision for the particular medical claim. The statement details the following:

  • Services covered
  • Actual amount covered by the insurance company
  • Details of patient responsibility
  • Reasons for claim denials or reductions in reimbursement

Moreover, the EOB is sent to the patient and healthcare providers. It is an important document to understand the payment process to identify any discrepancies or issues. Moreover, EOB also helps keep track of the amount that patients owe.

Billing and Payment Collection Process

The last step for EOR in medical billing is payment collection and patient billing. After getting the EOB – the healthcare practitioner prepares an invoice for patients. This invoice details the remaining balance based on the insurance providers’ payments and patient responsibility. The invoice is usually sent alongside a copy of the EOB.
Next, in the EOR process, patients pay the remaining balance to healthcare practitioners. Further, it can be done through various payment modes, including cash, debit/credit cards, or the online portals of insurance companies. Finally, it is important to note that insurance companies must communicate the payment options and terms to patients, ensuring a transparent billing process.

Reading an EOR in Medical Billing

EORs can be difficult to read; however, understanding their data and information is essential to medical providers and patients. Moreover, reading and understanding EOR in medical billing helps verify/ensure that the insurance company has paid the right amount for the services. Further, it helps identify any errors or issues inside the payment process.

Tips to Effectively Read and Understand EOR in Medical Billing

  • Regularly check up on service provider and patient information for accuracy.
  • Review claim details thoroughly to ensure services offered are accurate and billed correctly.
  • Verify that patient responsibility (if any) is accurate and that the insurance payment is correct.
  • Identifying claim denials and reviewing the reasons for denials.
  • *if there are any errors or discrepancies in EOR, healthcare providers and patients must contact the insurance company for its resolution and clarification.

Understanding the Role of EOR in Medical Billing

EOR has a vital role in the medical billing process. It serves as a communication tool for healthcare providers and insurance companies. The EOR process ensures accuracy and transparency in the payment process.
Below are some of the key reasons which explain why EOR is vital in medical billing:

Ensuring Payment Accuracy

EOR in medical billing serves as a mechanism for verifying the accuracy of payments from insurance companies. Furthermore, it facilitates healthcare providers to compare the billed amount with the reimbursements received, ensuring that the correct payment is received. In case of errors, medical providers can begin taking steps to solve disputes and errors.

Identifying Billing Errors

The information provider in the EORs lets healthcare providers identify billing errors or discrepancies. By thoroughly reviewing EORs, healthcare providers can instantly identify errors in coding, incorrect modifiers, or missing documentation – all of these can cause payment delays and denials. Moreover, timely detection of such errors helps streamline the billing process and reduce revenue loss.

Tracking the Claim Status

EORs in medical billing help healthcare professionals track the status of their claims with a unique ICN. EORs offer information on whether the insurance providers may accept or reject claims or delay them for further review. It also allows providers to take necessary actions, including resubmitting the rejected claims or providing additional documentation to ensure timely payments.

What is an ICN - Invoice Control Number?

The Invoice Control Number or ICN is a unique identifier assigned to each invoice or bill in the medical billing process. It helps in tracking and managing invoices throughout the review and payment cycle. The ICN references and locate specific invoices, facilitating communication and reconciliation between healthcare providers and payers.

Patient Education

The EORs also serve as a valuable resource for educating patients. EOR in medical billing provides a comprehensive breakdown of the services and a patient’s financial responsibility. These also include copayments and deductibles. This helps patients understand the costs of their care and promotes transparency in the billing process.

Decision-Making and Data Analysis

Healthcare providers can also use the information captured in EOR documents for decision-making and data analysis. By analyzing the EOR data, providers can identify trends and assess the financial performance of varying procedures and services to optimize billing processes.


EOR in medical billing provides valuable and essential information for the payment process, including the amount owed by patients and any discrepancies or errors inside the payment process. Efficient EOR management is necessary to maintain a healthy revenue cycle. Moreover, efficient handling of EOR ensures the financial well-being of healthcare providers and patients. Further, a thorough understanding of EOR is necessary for healthcare professionals to ensure that the insurance provider has paid the correct amount for healthcare services. Plus, it also helps identify issues or errors inside the payment process. Thus, it is vital to review the EORs and then contact the insurance company for timely clarification and resolutions in an instance of susceptibility to discrepancies.