Amid all the rules stemming from the No Surprises Act, a looming mandate for providers to send cost estimates to health plans looks like the biggest stress inducer.
Various regulations under the No Surprises Act have created strain for healthcare finance professionals since the initial rules were published in mid-2021, but one pending requirement is the consensus choice as the heaviest lift.
The obligation to provide an advanced explanation of benefits (AEoB) to insured patients will necessitate a level of interoperability between providers and health plans that doesn’t exist. How to make it happen is a vexing question for industry stakeholders.
It’s uncertain “how anybody’s going to do that, because nobody has the tools yet to make it successful,” said Sandy Lood, vice president of revenue cycle with Cottage Health in Santa Barbara, California.
The U.S. Departments of Health and Human Services, Labor and Treasury, which together oversee implementation of the No Surprises Act, seem to be sympathetic to such apprehensions.
Initially set to take effect at the beginning of this year, the AEoB requirement was tabled indefinitely in August 2021. As hfm went to press, the departments had given no further indication on when enforcement would begin.
Among providers, “There’s a hope — if not an expectation — that there will still be some more time to come before they have to comply with those requirements,” said Jeff Davis, JD, an attorney with Nashville-based Bass, Berry & Sims who advises healthcare organizations on regulatory issues.
Update: After the print edition of this article was published, the departments issued a request for information from industry stakeholders on implementing the AEoB-related requirements. Comments are due Nov. 15, meaning pertinent regulations wouldn’t be issued until sometime in 2023 at the earliest. Enforcement will continue to be deferred until publication of additional rulemaking that spells out the appropriate data-transfer standards and the specific requirements for both providers and health plans.
A ‘sea change’ for the industry
For all patients with verified coverage, the provider will have to send the health plan a good-faith estimate of expected charges, including billing and diagnostic codes, for scheduled services — or, at the request of the patient, for prospective services. The health plan will use the estimate to generate the AEoB for delivery to the patient.
According to the original legislation, the AEoB must be a plain-language summary that conveys:
- The network status of the provider or providers
- The contracted rate (if applicable) for the service
- The provider’s estimated charges
- The patient’s cost-sharing responsibility
- Guidance on the option to find an in-network provider if the original provider is out-of-network
“From a patient-experience perspective, it will be incredible — very, very helpful for patients in planning their healthcare,” said Amber Thomas, JD, vice president for regulatory compliance and audit at Murray, Utah-based R1 RCM. “But this is a sea change for how providers and health plans operate today.”
Issues with the technical apparatus
In August 2021 guidance, the departments said they would not enforce the legislation’s AEoB provisions before establishing data-transfer standards for the good-faith estimates.
The departments seemed to be saying, “We’re going to find, if possible, a file format that providers and health plans already have in use and are operating with, versus creating some de novo file format just for the good-faith estimate,” suggested Lori Fox Ward, regional president with Arlington, Virginia-based Evolent Health. “That would reduce the burden somewhat.”
A standards coalition, the CAQH Committee on Operating Rules for Information Exchange (officially known as CAQH CORE), formed an advisory group of more than 60 industry stakeholders to determine guidelines for establishing AEoB processes. The group released a report in late 2021 that called for use of the following messaging standards:
- X12 837 Professional Pre-Determination X291
- X12 837 Institutional Pre-Determination X292
- HL7 FHIR (Fast Healthcare Interoperability Resources)
R1’s Thomas said it’s unclear whether the 837 transaction-sets “really cover or contemplate the type of communication exchange that’s going to be required.” She thinks a pending HIPAA rule update could lay the groundwork for the FHIR application programming interface to become more widely used.
Mike Simms, vice president of revenue cycle with Cone Health, headquartered in Greensboro, North Carolina, hopes a new payer platform being offered by the organization’s electronic health record vendor will make cost estimates easier to transmit. Cone Health is using the platform to improve its flow of information to Humana and soon will move on to other payers.
“We’re able to send the clinical information electronically for authorizations,” he said. “That pathway is going to be better, and that might help with the estimates.”
If there’s a comment period before implementation, providers should push for “a more defined set of services that would require the AEoB,” Ward said.
They should be “providing feedback on having more specificity around what types of services, or maybe it’s dollar thresholds, or maybe it is just upon member request,” she added.
There’s conceivably enough crossover between the new health plan price transparency rules, which went into effect July 1, and the AEoB requirement that the latter could be diluted or set aside.
“If I had a wish list, I would hope that they recognize there’s a lot of duplication,” Ward said. “And so maybe the advanced EOB is not necessary, or it is an upon-request situation.”
Even with all the concerns, most everyone says the goals are laudable.
“We want patients to be informed,” Lood said. “I think we agree that what [the departments] are trying to do is the right thing. It’s the execution that everybody struggles with, and the timelines.”
Why good-faith estimates for the uninsured could become more complicated
Broadly speaking, healthcare providers seem to have mastered the processes needed to generate cost estimates for uninsured and self-pay patients as required this year under the No Surprises Act. But the compliance challenges likely will intensify.
As soon as Jan. 1, the U.S. Departments of Health and Human Services, Labor and Treasury are set to begin enforcing a provision for convening providers to incorporate estimates from co-providers that are involved in furnishing care. The convening provider is defined as the facility (or physician) responsible for scheduling the primary items or services.
“That is something that I’m starting to get a lot of questions about,” said Jeff Davis, JD, an attorney at Bass, Berry & Sims. “There’s a technology issue in terms of flow of data, but also the facility is relying on co-providers to share information with them, and that’s out of their control.”
If the gap between the estimate and the final out-of-pocket charge exceeds $400, the patient can take the case to arbitration. Industry execs say the mandate to loop in co-providers, such as physicians and labs, will raise the odds of missing that mark.
“We’ve got to get our systems basically lined up to do something they’ve never done before,” said Allison White, assistant director of revenue integrity with Cone Health in Greensboro, North Carolina. “How do I get a private surgery group’s charges on my estimate?”
Tackling the challenge
For Sandy Lood, vice president of revenue cycle with Cottage Health in Santa Barbara, California, the task may be even greater. Because California prohibits hospitals from employing physicians, many more care episodes technically involve co-providers.
One of the first things Lood set out to do in preparation was to apprise
her C-suite of what was in store. Executive support is needed because co-providers may see the estimates as little more than an added burden.
Said Amber Thomas, JD, vice president for regulatory compliance and audit at R1 RCM, “A really good way to get charge information from co-providers is to put in your medical staff bylaws: ‘In order to have privileges at this facility, you have to respond to requests on charges and pricing, estimates, codes, etc., when we request it. You need to respond during this time frame.’”
There may be “no other way to get co-providers on the hook to participate in the total-cost-of-care [estimate],” she added.
Lood plans to explain to her system’s medical executive committee that the system isn’t trying to make physicians’ lives more difficult.
“This is a federal law that we have to comply with,” she said.
Establishing standards and workflows
Lood and her team also are planning outreach to community physicians. When physicians schedule a service, the organization previously has asked them to fill out a form with fields for the CPT code, diagnostic code, patient demographics and insurance.
Once enforcement of the co-provider requirement kicks in, physicians will need to include a cost estimate. If none is attached, the system will make three attempts to contact the physician, and if the estimate still is not forthcoming, the procedure can be removed from the schedule until the physician complies.
Cone Health has begun to discuss ways to automate how physician price information is received, White said. The system also is mulling the appropriate cadence for receiving the information.
Once the data are in hand, billing staff must gauge the number and type of providers that will be involved in a given procedure and who needs to be on the estimate, White said. “We’re going to have to get the right people at the table to build templates and workflows.”
Even with the appropriate emphasis on communication processes, physician buy-in can’t be taken for granted.
“They’re in the same boat as everybody else in that we’re all understaffed, we’re all burnt out,” Lood said. “This is just one more thing that they have to do.”
Highlights: No Surprises Act implementation steps to date
December 2020: Congress passes the No Surprises Act as part of a larger appropriations bill.
July 2021: The U.S. Departments of Health and Human Services, Labor and Treasury release an interim final rule that protects patients from out-of-network charges for emergency services and certain post-stabilization services, and for scheduled services delivered by an out-of-network provider at an in-network facility, effective Jan. 1, 2022. The rule generally prohibits balance billing for such services and limits patient cost-sharing to the qualifying payment amount (QPA), which is based on the insurer’s median contracted rate.
September 2021: The departments issue a second interim final rule, also effective Jan. 1, 2022, that requires providers to deliver a good-faith estimate of costs to uninsured and self-pay patients before scheduled services. The rule also sets up a new process called independent dispute resolution (IDR), a baseball-style arbitration system for determining out-of-network payments when patients can’t be balance-billed and the provider and health plan can’t agree on an amount.
February 2022: A Texas federal judge rules in favor of providers in litigation that was filed over the IDR process. The court agrees that the September 2021 rule deviated from legislative intent by placing too much emphasis on the QPA as the benchmark in IDR cases.
April 2022: After a delay caused in part by the litigation, the IDR portal opens but is beset by a logjam of cases. Arbitrators receive interim guidance instructing them to give appropriate weight to specified factors in addition to the QPA when deciding cases.
August 2022: The departments issue a final rule codifying the interim IDR guidance from April and offering providers additional transparency on the QPA by requiring health plans to supply specific information when down-coding billed claims.
Update: After the print edition of this article was published, the Texas Medical Association went to court for a second time in less than a year, saying even with the changes from the interim rule, the final rule still overemphasizes the QPA relative to what was intended in the legislation.