Advanced EOB: No Surprises Act Requirements

You may be curious about the recent developments surrounding the advanced explanation of benefits and how this will affect you and your organization. Currently, the regulations are open to change.

Much depends on the comments to the HHS's recently issued RFI. While enforcement of the advanced explanation of benefits under the No Surprises Act has been temporarily deferred, it is prudent to take the current opportunity to gain a deeper understanding of the situation.

Knowing how it may affect your organization, its complications, and the potential timeline of the likely enforcement of the advanced explanation of benefits will keep you prepared.

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What is an advanced EOB?

The advanced EOB is an explanation of benefits statement that lets patients know how much their care is likely to cost – in advance. Hence the name. It is similar to a good faith estimate in providing an itemized list of expected costs. Unlike the good faith estimate, the advanced EOB is given to insured patients rather than the uninsured.

The No Surprises Act requires providers to send patient cost estimates to the health plan or issuer and the health plan or issuer sends the advanced EOB to the patient.

Advanced EOB requirements mandated by the No Surprises Act

The No Surprises Act mandates the advanced EOB requirements, which are enacted as part of the Consolidated Appropriations Act, 2021 (CAA).

Advanced EOB Timeline:

• On January 3, 2019, the Consolidated Appropriations Act was introduced.
• On December 27, 2020, The Consolidated Appropriations Act, 2021, was enacted as Public Law No: 116-260.
• On August 11, 2021, the CEO and Executive Vice President of the American Medical Association (AMA) issued a Comment Letter to CMS on implementing the advanced EOB No Surprises Act.
• The HHS issued regulations published in the Federal Register on October 7, 2021. It deferred enforcement of the Act related to GFEs and the requirement that issuers and plans provide an advanced EOB.
• The No Surprises Act entered into effect on January 1, 2022.
• On August 19, 2022, the Departments of Health and Human Services (HHS), Labor (DOL), and the Treasury (the Departments) issued Final Rules addressing several provisions of the No Surprises Act, including the advanced EOB.
• The following departments issued an RFI on September 16, 2022, to address the complex issues involved in implementing the GFE and advanced EOB: HHS, CMS, DOL, Department of the Treasury, IRS, and Office of Personnel Management (OPM).
• On November 15, 2022, the comment period for the RFI expires.
• Pertinent regulations based on the RFI's responses are unlikely to be issued until 2023 at the earliest.

Content requirements

Under the No Surprises Act, an advanced explanation of benefits must contain specific content. The payer is required to provide the patient with the following information upon member request and for every scheduled service:

• Whether the facility or provider is an in-network (INN) provider
• The contracted rate for the service or item
• If the facility is an out-of-network (OON) provider, an explanation of how to find details on INN providers must be included.
• Good faith estimates (GFEs) for the following:

• Provider-billed charges
• The member's cost-share responsibility
• The amount the payer must pay
• The amount the member incurred toward meeting deductibles and out-of-pocket maximums

• A disclaimer that, if applicable, coverage is subject to medical management
• Depending on each unique situation, any other applicable details or disclaimers

The information required depends on whether the patient is using their group health plan or paying out of pocket. If the patient uses a group health plan, the provider must estimate the anticipated charges to the insurer.

Once the estimate is received, plans must provide the plan participant with an advanced EOB informing them whether the facility/provider is INN/OON and the other requisite details.  

Who must receive an advanced explanation of benefits?

Depending on whether the patient is using a group health plan or uninsured or self-paying, the recipients of the advanced EOB can vary. If the patient is using their group health plan, both the patient and the insurer must receive an advanced explanation of benefits. However, if the patient is paying out-of-pocket, the patient is currently issued a good faith estimate (GFE).

Who sends the advanced EOB?

Upon the medical service request, the providers must ask the patient if they plan to use their group health plan. If the patient uses their plan, the provider will send a good faith estimate (GFE) of the expected charges to their insurer. Plans must then provide an advanced EOB to the patient/plan participant that informs them of the requisite information.

If the patient is not using a plan and is uninsured or opts to self-pay, the No Surprises Act requires providers and facilities to provide GFEs at the time of scheduling and upon the patient's request. Plans and issuers are required by the Act to include the GFE in an advanced EOB provided to participants, enrollees, beneficiaries, and FEHB-covered individuals.

However, until the rulemaking is provided that supports full implementation of this requirement to provide a GFE, HHS will defer enforcing the requirement. Until similar support is offered, the Departments will defer enforcement of the requirement for plans and issuers to provide an advanced EOB.

Timeline for processing and sending AEOBs

Plans, issuers, and carriers required to send an advanced EOB will not have unlimited time to do so. They must provide the advanced explanation of benefits to the covered patient no later than one business day after the plan, issuer, or carrier receives the GFE.

However, if the service is scheduled for at least 10 business days in advance, or if the covered patient requests the information, the plans, issuers, and carriers must provide the advanced EOB within three business days after receiving the GFE or the patient's request.

Perceived problems with AEOBs

While the mandated advanced EOB is not currently being enforced, an RFI was recently issued to gather feedback from industry stakeholders on the complex issues of health plans delivering an advanced EOB to patients before they receive care.

The AHA responded to the RFI on behalf of the AHA, AMA, and MGMA. The AHA noted that as it currently stands, the advanced EOB is to be created by insurers using GFEs created by providers. However, the AHA argued that the current solution would place a substantial additional administrative requirement on providers via three issues:

1. A difference in the information to be collected for the GFE between insured and uninsured patients; additionally, the information required to produce an advanced EOB would require the additional information that payers require for the pricing edits, collection of which would be expensive and burdensome for providers. It would require additional professional coders and technology upgrades.
2. Existing infrastructure and processes would not be used optimally. However, with changes, some form of the current processes and infrastructure could be maintained. Applying existing infrastructure would minimize the developmental costs of implementing an advanced EOB process.
3. A high volume of comprehensive GFEs must be created. This administrative burden upon providers would add significant costs to the healthcare system.

GFE standards for insured are incompatible with those for the uninsured

The information collected for the good faith estimate differs depending on whether the patient is categorized as insured or uninsured. The required information gathered from uninsured patients would not sufficiently meet the needs of the advanced EOB process.

To issue an advanced EOB, the payer would require all of the essential information gathered from an uninsured patient plus additional information that payers need to apply their pricing edits accurately.

Higher administrative burden

As currently set forward, the advanced EOB would create a significantly higher administrative burden on providers via the sheer volume of advanced EOBs they would have to calculate and distribute.

Approximately 8.6% of Americans are uninsured and must be processed differently than the 61% covered under commercial health insurance and whose care would be subject to the advanced EOB requirements.

The sheer volume of administrative work under the convening provider/co-provider program currently set will make it all the more important for providers to adopt software that can automate the calculation, generation, and distribution of GFEs and advanced EOBs.

Advanced explanation of benefits effective date is delayed

Due to the concerns regarding implementing the advanced EOB, the effective date has been delayed to address these issues. This delay will allow more time to provide new standards for the necessary data transfer between providers and payers and for the providers to build the technical infrastructure necessary to support such data transfers.

The RFI issued on September 16 has a comment period that runs through November 15, 2022 for interested parties to voice their opinions and concerns. HHS is formally seeking feedback on the program through mid-November.

Given these dates and the level of infrastructure that must be strategized and implemented before enforcement, it is improbable that the HHS will enforce the relevant regulations regarding the advanced explanation of benefits before 2023. However, an updated deadline will likely be released in 2023 after the HHS has had sufficient time to analyze the feedback it receives on the AEOB through November 15.

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