Insurance & medical bills guide

How to Read Your EOB: Billed vs Allowed, Patient Responsibility & Denial Codes

An EOB (explanation of benefits) is a report of how your insurer processed a claim — it is not a bill. Read four numbers on each line: Billed (what the provider charged), Allowed (the max your plan considers), Paid (the insurer's share), and Patient Responsibility (what you owe, capped at the allowed amount minus what was paid). The codes in the adjustment column say why money moved — CO usually means a provider write-off you don't owe; PR means you actually owe it. The single most common EOB error is people paying the Billed amount when they only owe Patient Responsibility.

An EOB is a form letter your insurer sends after every claim, written in a language of its own: 'allowed amount', 'CO-45', 'patient responsibility'. It looks like a bill, sounds like a bill, but legally it is not a bill — the bill comes separately from your provider. Learning to read your EOB is the single highest-leverage money skill in American healthcare: it's how you catch a line you don't owe and a denial with a clock already running.

This guide decodes the EOB line by line, with the exact numbers to compare before paying anything.

The four money columns (and the one that matters)

Every EOB line has four numbers. Three are noise; one is what you owe.

Billed amount — what the provider charged. Almost always the highest number, and almost never what you pay. It's the sticker price.
Allowed amount — what your plan's contract says the service is worth. This caps everything: your deductible, coinsurance, and copay are percentages of the ALLOWED amount, not the billed amount.
Paid by insurer — what your plan paid the provider (or will pay, if it went to you).
Patient responsibility — THE number you actually owe (deductible + coinsurance + copay, minus anything already paid). If the EOB says 'Patient owes $0' and the provider bills you anyway, that's a billing error or a balance-bill attempt.

Adjustment codes: why the money moved

The adjustment column carries the reason codes. The first two characters are a group code and change everything about who pays.

CO (contractual obligation) — the provider agreed to write this off. In-network: you do NOT owe it. CO-45 (exceeds fee schedule) is the most common.
PR (patient responsibility) — you owe this: PR-1 deductible, PR-2 coinsurance, PR-3 copay, PR-16 non-covered service.
OA (other adjustment) — usually coordination of benefits: another plan should pay first. Almost never something you owe right now.
Full denial codes (CO-16, CO-50, CO-197...) — the claim wasn't processed, it was rejected. Look those up in our denial guide.

The single most common EOB mistake

People pay the BILLED amount because the provider's separate bill shows it. Do the math first: your bill should equal the EOB's patient responsibility, not the billed amount. A provider bill that's higher than your EOB's patient responsibility is either an error or a balance bill — and you have protections.

Compare the provider's bill to the EOB's 'patient responsibility' line
If the bill is higher, call the provider's billing office and read them the EOB number
If the EOB says $0 patient responsibility and the provider still bills you, cite it in writing
Out-of-network emergency bills over your in-network share are prohibited by the No Surprises Act

Look up your denial code

If your EOB shows one of these, jump straight to the specific fix:

CO-45CO-45 CO-16CO-16 CO-50CO-50 PR-1PR-1 PR-2PR-2 PR-3PR-3 OA-23OA-23 CO-197CO-197

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Is an EOB a bill?

No. An EOB reports how your claim was processed. The actual bill comes separately from your provider, and it should match the 'patient responsibility' amount on the EOB — not the billed amount.

What does 'allowed amount' mean?

It's the maximum your insurance plan's contract considers fair for that service. You pay deductibles and coinsurance as a percentage of the allowed amount, so the allowed amount (not the billed amount) determines what you owe.

What if my EOB says I owe $0 but the provider bills me?

That's usually an error or a bill the provider shouldn't send. Call the provider with your EOB claim number and ask them to reconcile. If it's an out-of-network emergency balance bill above your in-network cost share, the No Surprises Act protects you.

Where do I find the denial code?

Denial and adjustment codes appear on the EOB line itself and in the claims summary. The two-character group (CO/PR/OA) comes first, then the reason number. Look up the code in our EOB denial-code directory to see who pays and what to do.