WEDI explores issue of diagnosis codes in good faith estimates

Background

The No Surprises Act, which was signed into law in December 2020 as part of the Consolidated Appropriations Act of 2021, requires providers to safeguard individuals from surprise medical bills.

The legislation included a provision requiring providers to provide a good faith estimate of charges for care to uninsured or self-pay individuals upon scheduling care. For individuals with certain types of coverage, the act also required providers to submit a good faith estimate to the individual's plan or issuer.

Upon the passage of the No Surprises Act, WEDI convened a task group to discuss the legislation, educate the industry and develop best practices. WEDI's latest letter to HHS focused on whether diagnosis codes should be required for GFEs sent to health plans by providers and facilities on behalf of insured patients.

When it comes to uninsured or self-pay individuals, CMS guidance states that a provider is only required to provide diagnosis codes when one is necessary for the calculation of the good faith estimate. For example, it is okay to omit the diagnosis code if the provider is simply providing an estimate for an initial screening or evaluation, and there would be no relevant diagnosis code in the first place.

With this in mind, WEDI set out to evaluate if diagnosis codes should be required for GFEs sent to health plans by providers on behalf of insured patients.

WEDI's recommendations

The task group discussed the intricacies of the GRE and AEOB system and raised concerns about the prospect of creating GFEs and AEOBs with placeholder diagnosis codes that might not be accurate.

Multiple health plans that participated in the task group said they expected to implement the AEOB by updating their claims adjudication systems to create an AEOB that stops short of producing an actual payment and remittance advice.

"These systems require diagnosis codes, among other elements, to calculate proper claim payment and, similarly, will be needed to accurately develop the price estimation," WEDI noted.

"Without inclusion of diagnosis codes, it is anticipated that health plan adjudication systems will need significant modifications, with some plans being required to implement entirely new systems to calculate the AEOB. Health plans have consistently indicated that without the diagnosis codes, AEOBs may be wildly inaccurate and mislead the patient."

WEDI also raised concerns about a "shopping scenario" in which a patient requests an estimate from multiple providers without meeting with them first. In this case, it would be difficult to produce a GFE without knowledge of the exact diagnosis.

With these considerations in mind, WEDI recommended that diagnosis codes for the suspected or known diagnoses be included on GFEs for patients who are shopping around to ensure a higher chance of accuracy on the finalized AEOB. However, WEDI acknowledged that it might be difficult to establish an accurate diagnosis before the patient's visit and within a tight timeframe. Therefore, WEDI concluded that diagnosis codes for shopping scenarios should be strongly encouraged but not mandatory.

For insured patients, WEDI recommended that providers include GFEs when services are scheduled, as it is reasonable to expect that providers know the diagnosis code by that point. However, if the provider cannot determine the diagnosis code, they can still provide the GFE along with a note to the patient that the AEOB may not be entirely accurate without a diagnosis.

WEDI encouraged HHS to continue working with key stakeholders to establish a system that reduces administrative burden while still providing patients with the pricing information they deserve.

Jill McKeon has covered healthcare cybersecurity and privacy news since 2021.