Baby, What a Big Surprise! Right Before My Very Eyes…

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by Becky Achten

The No Surprises Act (part of the Consolidated Appropriations Act introduced earlier this year) is poised to eliminate some of the surprises that group health plan participants encounter from unexpected charges.  One way the new legislation intends to accomplish this is with Advanced Explanation of Benefits (EOBs).

Beginning in plan years that start on or after January 1, 2022 group health plans are required to provide, upon request, what the No Surprises Act refers to as an Advanced EOB.  This new form is required to provide information on the estimated costs of procedures and services, especially the additional costs of non-participating providers.  The request for an Advanced EOB may be made by the participant or their representative and must include the billing and diagnostic codes for the anticipated services.  The Advanced EOB must then be provided within one business day of request for scheduled procedures (three business days if the request is made at least 10 business days before the scheduled procedure).  The Advanced EOB must include:

  • Whether or not the provider or facility is in-network, and if so, the contracted rate under the plan for the provider or service. If the provider/facility is not in-network, the Advanced EOB must include a description on how the participant can obtain information on in-network providers/facilities.
  • A good faith estimate of the cost of the services to be provided, based on the billing and diagnostic codes provided, that must include:
    • the total cost for the services;
    • the amount of participant cost-sharing;
    • the accrued amounts already met by the participant towards deductibles and out-of-pocket maximums (as of the date of the notice); and
    • the amount the plan is responsible for paying.
  • A disclaimer regarding the requirement to obtain any medical management techniques for services subject to medical management techniques (such as prior authorization);
  • A disclaimer that the information is only an estimate and subject to change and any other information or disclaimer the plan determines is appropriate.

Plan Sponsors will be relying on insurers and TPAs to meet this new responsibility.  But, in the meantime, what should Plan Sponsors be doing so that they’re not surprised come January 1st?

  • Amend Summary Plan Descriptions to include a description of the right to request an Advanced EOB and the steps needed to do so;
  • Ask insurers/TPAs what steps they are taking to get ready for Advanced EOB requirements; and
  • Review service provider agreements and revise as necessary to include responsibility for providing Advanced EOBs (and responsibility for any penalties and/or costs that may be associated with missing deadlines or providing egregiously incorrect information).