A CMS Update on Advanced Explanation of Benefits (AEOB) Rulemaking

Is your practice ready to provide good faith estimates for the costs of the procedures you perform?


Despite being signed into law in 2020, part of the No Surprises Act — which protects patients from unexpected medical bills — has not been implemented. Under the No Surprises Act, hospitals and physicians are required to give patients an estimate of the cost of a scheduled service before it is provided, and payers are supposed to take this estimate to determine how much patients will owe out-of-pocket according to their health plan coverage. Physicians and hospitals are responsible for their so-called Good Faith Estimate and payers are responsible for their Advanced Explanation of Benefits. Since January 1, 2022, hospitals and physicians have been required to prepare a cost estimate for uninsured patients. But for insured individuals, a physician’s estimate of costs for scheduled services and a health plan’s explanation of coverage requirements and patient’s out-of-pocket expenses for those services were delayed until CMS could provide more guidance about the complexity of data exchange required between payers and providers. CMS just released a report to explain its plan for implementing this part of the No Surprises Act.


CMS published its report on its plan to implement the cost estimate and coverage explanation requirements on April 23, 2024. In 2022, the agency issued a Request for Information (RFI) to gather information about how to operationalize the health plan coverage explanation requirement. Currently, there are no regulations implementing the data sharing required of a good faith estimate and explanation of a health plan’s coverage of a patient/plan member. CMS is conducting research on how to best implement these measures.

Key Highlights