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22/03/2025

What is EOR in Medical Billing?

Healthcare providers often receive an explanation of review (EOR) document. The EOR in medical billing is an abbreviation for an explanation of review or reimbursements. The payer sends EOR to healthcare providers. An explanation of reimbursements is crucial for providers to learn about their revenue cycle. Providers alone cannot handle the reimbursement process. So, outsourcing medical billing and coding services can positively impact overall revenue. In this blog, we will explore an explanation of reimbursements, how they differ from ERA and ABN, and their overall effect on the revenue cycle.

Understanding of EOR

EOR is a detailed report of the service payments sent to the provider by the payer. The document explains the services rendered, payments, and claim denials. It also explains the reason behind claim denials. Further, it includes information like patient responsibility and pending payments. EOR aims to ensure transparency in payments so that no extra charges and cuts occur.

Difference Between EOR, ERA, and ABN in Medical Billing

ERA in medical billing is the electronic delivery of payment details. It is similar to the explanation of benefits but reaches the patient’s account faster than EOB. Next comes ABN in medical billing, an Advance Beneficiary Notice issued to beneficiaries of Medicare or Medicaid by the healthcare providers. Through ABN, the provider informs the beneficiary that a specific treatment is not eligible for insurance. On the contrary, EOR is a document the payer sends to the provider to explain the reason for reimbursements and denied claims.

Components of EOR in Medical Billing

EOR in medical billing has these key components:

Patient and Provider Information

The patient’s name, services received, health card, and insurance ID are present on the EOR document. Similarly, the provider’s name, contact details, and services rendered are present.

Claim Details

Every claim has its number, which is on the EOR document, and the service date. Likewise, codes like CPT and HCPCS are also on the EOR.

Charges and Payment Information

The EOR briefly explains charge information, the details of the billed amount, the allowed amount, the aid amount, and adjustments.

Descriptions and Explanation Codes

The clarification of payment adjustments, acceptance, denials, or partial is termed explanation codes. Likewise, descriptions explain the reasons behind all the adjustments.

Patient Responsibility

Patients need to pay copayments, deductibles, and coinsurance. These payments are also presented in the explanation in the review document.

Pending Balance

The pending payments from patients and payers are also present in the EOR. It separately defines the money owed by patients and payers.

Procedure of EOR in Medical Billing

Claim Adjudication

It is the process by which the payer applies adjustments, policies, and specific (paid, allowed, and adjusted) amounts to the claim.

EOR Generation

The payer completes the EOR generation by compiling all the information as per the payer guidelines.

EOR Distribution

After EOR is generated, it is successfully sent to the healthcare provider. Likewise, the EOB is sent to the patient.

Common Challenges and Solutions in EOR in Medical Billing

Denied Claims

Claim denials are one of the biggest reasons behind all the payment delays. Therefore, timely and accurate claims submission is necessary.

Underpayments

The errors and incorrect fee schedules result in underpayments. It also occurs due to incorrect adjustments. Providers need to review and correct all claims to avoid underpayments.

Delayed Payments

The pending and delayed payments negatively impact the RCM process. It may happen due to billing errors or the payer’s slow payment process. Regular follow-ups with payers can solve this issue.

Conclusion

EOR in medical billing helps providers to understand the details of the reimbursements from payers. In the same way, it provides physicians with a detailed explanation of the service rendered. It ensures that the provider gets timely reimbursements by fixing the claim denial issues. Further, outsource billing to a third-party vendor for more efficient revenue cycle management.

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Frequently Asked Questions

What is EOR in medical billing?

The EOR in medical billing stands for an explanation of review or reimbursements. It provides a detailed account of payments physicians receive for rendered services.

How does EOR in medical billing contribute to revenue cycle management?

EOR in medical billing provides detailed information about the revenue cycle, showcasing the reimbursements.

What is the importance of EOR in medical billing?

EOR provides clarity about all the treatment coverage for the services rendered. It helps in timely and accurate reimbursements, ensuring compliance with payer and state guidelines.