Advanced Explanation of Benefits: An Update on the Legislative Milestone in Healthcare Price Transparency

At careviso, we believe that transparency is the cornerstone of a more efficient and patient-centric healthcare system. On December 13^th, 2024, the Centers for Medicare & Medicaid Services (CMS) released an update, detailing the progress towards the implementation of the Advanced Explanation of Benefits (AEOB). This initiative, a critical component of the No Surprises Act passed back in 2020, aims to empower patients and healthcare providers with detailed cost information prior to receiving healthcare services, ultimately enhancing consumer protection against unexpected medical bills, and fostering informed decision making.

The AEOB: An Overview

Healthcare has long been plagued by a lack of clarity when it comes to cost. The AEOB represents a groundbreaking shift in how patients access and understand healthcare costs. Under the NSA, healthcare providers are required to supply uninsured or self-pay individuals with a personalized Good Faith Estimate (GFE) of expected charges upon scheduling a service or upon request. For insured individuals, this GFE must be sent to their health plan, which then generates an AEOB. The AEOB document outlines the provider’s expected charges, the insurer’s coverage, and the patient’s expected out-of-pocket costs. This ultimately allows patients to make informed, cost-conscious decisions before receiving healthcare services, and can help them shop around and compare prices ahead of time.

Progress

Since the initial regulations for GFEs for uninsured individuals were issued in 2021, enforcement has been deferred. This phased approach allows time for the development of essential technology and business processes. Extensive stakeholder engagement, including a Request for Information (RFI) in September 2022, has provided insights from providers, payers, and patient advocates. Feedback emphasized the necessity of standardized data exchange to streamline AEOB implementation and highlighted the importance of real-world testing.

The development of technical standards, particularly those based on Health Level 7 (HL7) Fast Healthcare Interoperability Resources (FHIR), is crucial for the seamless exchange of GFE and AEOB information. CMS’s collaboration with the HL7 Da Vinci Patient Cost Transparency Workgroup underscores the commitment to leveraging open standards that allow broad accessibility and adaptability.

December 2024

Since 2020, there has been progress made on the legislative front to bring the AEOB to life. Because careviso advocates for greater price transparency in healthcare, we had hoped that the AEOB would be implemented and enforced at this stage, now 4 years later. However, we understand the complexity of the application and we appreciate the Centers for Medicare & Medicaid Services (CMS) for releasing the December 2024 update. Below are the main pieces of the update:

1. Clarified Guidelines: The latest CMS update has provided clearer guidelines on the implementation of AEOBs, outlining the responsibilities of payers and providers. This clarity is expected to accelerate the adoption of AEOBs across the healthcare industry.
2. Enhanced Patient Protections: The update emphasizes patient protections, ensuring that AEOBs are not only accurate but also comprehensible. This focus on patient-friendly language and accessible formats is crucial for empowering individuals to make informed healthcare decisions.
3. Increased Accountability: With these new guidelines, there is a stronger emphasis on accountability for healthcare providers and payers. The update reinforces the importance of timely and accurate information, holding all stakeholders to a higher standard.

December 2024

The AEOB initiative marks a pivotal advancement in patient-centered healthcare, fostering transparency and empowering patients with actionable cost information. As CMS and its partners continue to refine and implement these requirements, the healthcare industry moves closer to a future where patients are fully informed and financially prepared for their healthcare decisions.

At careviso, one of the industry’s leading healthcare technology companies, we are deeply committed to supporting price transparency in healthcare. Our complete technology solution, seeQer, is designed to integrate seamlessly with these new regulations, ensuring that providers and payers can meet their obligations efficiently while delivering clear, comprehensive cost information to patients.