EOB

An EOB (Explanation of Benefits) is the document a payer sends after adjudicating a claim, explaining what was billed, what the contracted allowed amount is, what was actually paid, what was adjusted (contractual write-offs), and what the patient owes. Every EOB is structured around CARC (Claim Adjustment Reason Codes) and RARC (Remittance Advice Remark Codes) that explain every adjustment line by line. CARC says the category — CO-45 contractual adjustment, CO-97 bundling, CO-50 medical necessity. RARC pinpoints the specific issue — N4 missing prior authorization, N56 invalid procedure code, MA13 missing signature. Reading both is non-negotiable on every denial; CARC alone is unactionable. EOBs come in paper form for some smaller payers and patients, but the vast majority of provider-side EOBs are now delivered as ERAs (Electronic Remittance Advice) — the 835 transaction — which feed automated payment posting and denial routing. The patient receives a separate version of the EOB explaining the patient-responsibility portion (deductible, coinsurance, copay, balance for non-covered services). EOB review is the trigger point for the entire denial management workflow: every EOB line that returns less than 100% allowed-amount or shows a denial code routes into the appropriate downstream queue — appeal, corrected claim, patient billing, or write-off.