New surprise billing regulations: How providers should be preparing to fulfill the pending requirement about good-faith estimates

• Providers have had a mere three months to implement the processes needed to comply with a new requirement to furnish uninsured patients with good-faith price estimates ahead of services.
• A key early step for any provider is to determine whether it generally will be the entity responsible for providing estimates, i.e., the convening provider.
• Data management issues loom as a potential pitfall in efforts to fulfill the requirement.

Regulations to protect patients from surprise medical bills take effect Jan. 1, ushering in a slew of new procedures and requirements that providers are working to understand and implement. Probably the biggest source of anxiety is the obligation to provide good-faith estimates to self-pay and uninsured patients ahead of scheduled services.

The pertinent regulation was issued at the end of September, giving providers little time to understand their obligations and incorporate compliance protocols.

“It left them with about three months to try to devise a plan,” said Heather Kawamoto, vice president of product strategy with Waystar.

Key initial considerations

When Kawamoto speaks with clients about delivering good-faith estimates, she starts by advising them to consider how they will define convening provider. That determines which party will be responsible for issuing the estimate.

“For hospitals and health systems, most of them are coming to the determination that that’s them,” Kawamoto said. “Not to say that that is [necessarily] the right decision, because CMS left it a little ambiguous in terms of exactly who that is.”

Convening providers should be reaching out to co-providers for the pricing data needed to produce a global estimate that includes both charges and self-pay discounts for a service. For major health systems that work with any number of external providers, the task is daunting.

In a nod to the scope of the challenge, the U.S. Department of Health and Human Services (HHS) has stated that it will exercise “enforcement discretion” in 2022 for estimates that involve multiple providers. Over the next year, including a set of all expected charges surrounding a service merely is encouraged.

“All providers are taking some relief in knowing that’s the case,” Kawamoto said. “For the majority of providers I’ve talked to, devising a plan and beginning the execution against that plan is what they’re hoping buys them some goodwill. I haven’t talked to anybody that will actually have this in full force on Jan. 1.”

However, patients have the right to also expect a good-faith estimate — upon request — from any co-provider or co-facility that’s involved in a care episode, HHS stated. Therefore, all providers should be developing the capability to provide such estimates for any care that takes place on-site.

Another concern is that HHS intends for states to be the initial line of enforcement for most provisions in the No Surprises Act, at least for aspects where they have the requisite legislative or regulatory authority. About a third of states have comprehensive surprise-billing regulations on the books, according to the Commonwealth Fund.

“As much as the federal agencies would like to say, ‘We’ll [use] discretion here and not necessarily go to enforce this,’ if it’s the states that are enforcing it, they have every right to assume that it is in effect and go after folks who don’t get it done,” said Kathryn Beard, regulatory compliance manager with R1 RCM.

Questions about specificity

Uninsured and self-pay patients will be able to dispute their bill if the final charges end up exceeding the good-faith estimate by at least $400. Arbitrators will consider whether the additional charges could have been anticipated at the time of the estimate.

Beard said the unpredictability of many healthcare scenarios poses a dilemma: “At what point have you done your good-faith efforts to get that estimate to the patient without scaring them about all of the possible costs that could come up, while still kind of covering yourself in case those situations do happen?”

Providers have been trying to get clarification on whether they can provide a cost range that accounts for potential complications.

“Even just with a routine procedure,” Beard said, “there could always be very reasonable complications that make things more expensive or more involved — and making sure that you prepare patients for that without having them think, ‘Oh my gosh, this is going to be obscenely expensive because this is going to take so many steps,’ [and] they’re afraid or they delay care, is really a challenge.”

Concerns about data management

When seeking to aggregate pricing data from co-providers, convening providers need to consider where it will be stored.

“That is a piece that they’re grappling with because there isn’t necessarily a place in your EMR or your patient-accounting system to house contracts that aren’t really relevant to that particular provider,” Kawamoto said.

If co-providers are hesitant to share pricing information, she said, convening providers can look at using external price-estimation technology to gather the required data.

More broadly, it would help if the healthcare industry had a better communications infrastructure.

“There aren’t necessarily great solutions out there to help everything be done electronically or securely yet,” Beard said.

The federal government could offer a way forward by developing a system that would allow for secure, HIPAA-compliant transactions to be transmitted among stakeholders, she said. Then vendors would have a template to follow in building out systems.

Without such guidance, Beard said, vendors will have to figure things out for themselves, “and that could be another patchwork going forward.”

Action steps

Kawamoto said the engagement of compliance experts is vital for organizations to ensure they understand the definition of convening provider. Any organization that has not taken that step should do so immediately.

“I do advise that they have either somebody from their legal department or their compliance department — ideally both — on the call so that they’re making a collective decision because that then determines their role in adhering to the legislation.”

Another key undertaking is a risk analysis that accounts for factors such as an organization’s case mix and payer mix, Beard said.

“Then you can anticipate the financial impact,” she said. “If you have a lot of scheduled services and your patients tend to be self-pay, for example, the good-faith-estimate portion is going to have an outsized impact on your practice.”