Billing & ClaimsUpdated Dec 20, 2025

Understanding Explanation of Benefits (EOB)

Learn how to read and interpret EOBs, understand adjustment codes, and identify underpayments in your physical therapy claims.

1

What is an EOB?

An Explanation of Benefits is a document from the insurance company detailing how a claim was processed. It shows the billed amount, allowed amount, payer payment, patient responsibility (copay, coinsurance, deductible), and any adjustments or denials with reason codes.

2

Key sections to review

Focus on four critical areas: (1) Allowed Amount — is it consistent with your contracted rate? (2) Adjustment Codes — do they match expected contractual adjustments? (3) Patient Responsibility — is the copay/coinsurance calculated correctly? (4) Remark Codes — do they indicate any issues requiring follow-up?

3

Identifying underpayments

PRACTIS automatically compares EOB payments against your fee schedule and payer contracts. When a payment falls below the contracted rate, Riley flags it as a potential underpayment with the specific variance amount and recommended action.

4

Taking action on discrepancies

For identified underpayments or incorrect adjustments, use PRACTIS to generate a payment dispute letter. Include the EOB, your contract terms, and the calculated variance. Most payers resolve payment disputes within 30-45 days.

Frequently Asked Questions

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