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Advance EOB, Patient/Consumer Protections, and Reporting

On December 27, 2020, former President Trump signed the Consolidated Appropriations Act, 2021  (Appropriations Act). The Appropriations Act amends Title XXVII of the Public Health Service Act (PHSA),  Part 7 of Title I of the Employee Retirement Income Security Act of 1974 (ERISA), and Chapter 100 of the Internal Revenue Code of 1986 (IRC). This Advisor summarizes additional requirements that plans should be aware of and will generally be effective for plan years beginning on or after January 1, 2022,  unless otherwise noted.

Advance Explanation of Benefits

Under the Appropriations Act, a group health plan or health insurance issuer offering group or individual health coverage that receives a required notice from a provider or health care facility that contains a good faith estimate of the expected charges for furnishing an item or service to a plan participant, beneficiary, or enrollee, must provide an advance Explanation of Benefits (EOB) to the participant, beneficiary, or enrollee no later than one business day after the plan or coverage receives the required notice from the provider or health care facility. However, if the item or service is scheduled at least 10 business days before such item or service is to be furnished, the plan or issuer must provide the advance EOB within three business days of receiving the required notice from the provider or health care facility. Also, if a plan participant, beneficiary, or enrollee requests the advance EOB, the plan or issuer must provide the advance EOB within three business days of receiving the request.

The advance EOB must contain the following information:

  • Whether or not the provider or facility is a participating provider or a participating facility under the plan or coverage with respect to the item or service.
    • If the provider or facility is a participating provider or facility under the plan or coverage with respect to the item or service, the advance EOB must include the contracted rate.
    • under the plan or coverage for the item or service based on the billing and diagnostic codes provided by the provider or facility.
    • If the provider or facility is a nonparticipating provider or facility under the plan or coverage, the advance EOB must include a description of how the individual may obtain information on providers and facilities that are participating providers and facilities under the plan, if any.
  • The good faith estimate included in the notification received from the provider or facility (if applicable) based on such codes.
  • A good faith estimate of the amount the plan or coverage is responsible for paying for items and services included in the estimate.
  • A good faith estimate of the amount of any cost-sharing for which the participant, beneficiary, or enrollee would be responsible for the item or service (as of the date the advance EOB is being provided).
  • A good faith estimate of the amount that the participant, beneficiary, or enrollee has incurred toward meeting the limit of the financial responsibility (including with respect to deductibles and out-of-pocket maximums) under the plan or coverage (as of the date the advance EOB is being provided).
  • If the item or service is subject to a medical management technique (including concurrent review,  prior authorization, and step-therapy or fail-protocols) for coverage under the plan or coverage,  the advance EOB must include a disclaimer that coverage for such item or service is subject to such medical management technique.
  • A disclaimer that the information provided in the advance EOB is only an estimate based on the items and services reasonably expected, at the time of scheduling (or requesting) the item or service, to be furnished and is subject to change.
  • Any other information or disclaimer the plan or coverage determines appropriate that is consistent with information and disclaimers required as noted above.

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