No Surprises Act Q&A: What Good Faith Estimates Mean for Your Practice

What is the No Surprises Act?

The No Surprises Act was designed to protect consumers from receiving unexpected medical bills. These bills have become a major problem in the healthcare system. Consumers may go to a facility that is in-network with their insurance company, but receive services at that facility from an out-of-network provider. The consumer is then surprised by medical bills that their insurance doesn’t cover, in some cases totaling thousands of dollars.

A few studies estimated that “surprise medical bills” happen about 1 in every 5 emergency room visits, in addition to 9-16% of in-network hospitalizations for non-emergency care. The Good Faith Estimate provision of the No Surprises Act is designed to give consumers predictability in how much they will be charged for the healthcare services they will be receiving, prior to their appointment. 

What do I need to know about Good Faith Estimates as a provider?

As of January 1, 2022, state-licensed or certified health care providers need to give a Good Faith Estimate of healthcare charges to every new and continuing client who is either uninsured or is not planning to submit a claim to their insurance for the healthcare services they seek. There are specific rules for what information has to be in that estimate and when it has to be provided. You can find a ready-to-use, built-in template if you have a SimplePractice account, or find other examples from the Centers for Medicare and Medicaid Services. You also need to inform every uninsured or self-pay client of their right to receive a Good Faith Estimate. 

In other words, you need to ask each client whether they have insurance and whether they intend to use it to cover your services. If the answer to either question is no, they need a Good Faith Estimate.

While many providers have expressed concern or confusion over the new rules, the goal is to protect clients from surprise billing by providing cost transparency. Once you’re familiar with the requirements and templates, compliance is fully achievable, and will likely become as routine as the other disclosure paperwork in your practice, such as the Notice of Privacy Practices required for covered entities under HIPAA.

Do I need to abide by the No Surprises Act and the Good Faith Estimate provisions?

The Act applies to all healthcare providers and facilities operating under the scope of a state-issued license or certification. So, if you are a licensed or registered provider in your state, you likely need to abide by the Act. No specific specialties, types of service, or facilities are exempt.

As it relates to the specific provision of Good Faith Estimates, you do not need to provide these in all instances, as described in the next section.

Which clients need to be given a Good Faith Estimate?

Any client who is uninsured—or who is insured but does not plan to use their insurance benefits to pay for the health care services you provide—should be provided a Good Faith Estimate. A Good Faith Estimate is not necessary at this time for a client or patient who is planning to use their insurance benefits to cover your services. (“At this time” is a key phrase there, as HHS has said that future rulemaking will address Good Faith Estimate obligations to this group.)

The Good Faith Estimate provisions do not apply if the client is a participant in Medicare, Medicaid, or other federal healthcare programs. Good Faith Estimates are also not generally required for emergency services, which by their nature cannot be scheduled in advance. 

What information needs to be included in a Good Faith Estimate?

The Good Faith Estimate must include all of the following:

  • Client name 
  • Client date of birth
  • Description of the services that will be provided, in understandable language
  • Itemized list of goods or services reasonably expected to be provided in connection with the scheduled services
  • Diagnostic codes, service codes, and expected charges associated with each of those goods or services
  • Provider name, NPI, and tax ID number
  • Office location where services will be provided

Some disclaimers to note: 

  • The provider may recommend additional items or services as part of the treatment that are not reflected in the estimate. These would need to be scheduled separately. 
  • The information provided in the Good Faith Estimate is only an estimate, as actual items, services, or charges may differ. 
  • The client has the right to engage in a dispute resolution process if the actual costs of services significantly exceed those listed in the Good Faith Estimate. 
  • The Good Faith Estimate does not obligate or require the client to obtain any of the listed services from the provider.

The list of services to be provided should differentiate between those services that the provider will be offering, and those offered through what the law defines as co-providers and co-facilities: Others who will be providing services related to the treatment being sought. 

In addition to the estimate itself, clients who are not using their insurance benefits to pay for services must also be given notice of their right to receive a Good Faith Estimate upon request. The Department of Health and Human Services has a sample notice you can customize and include in your practice.

When do clients need to be given the Good Faith Estimate?

The law puts forth specific guidelines for when a client must be given a Good Faith Estimate. 

  • If a service is scheduled at least 10 business days in advance, the Good Faith Estimate must be provided within 3 business days. (This is within 3 business days of the scheduling, not of the appointment itself.)
  • If a service is scheduled at least 3 business days in advance, the Good Faith Estimate must be provided within 1 business day of scheduling.
  • If a service is scheduled less than 3 business days in advance, a Good Faith Estimate is not required.
  • If an individual requests a Good Faith Estimate, it must be provided within 3 business days.

The Good Faith Estimate must be provided in writing, and if delivered electronically, must be provided in a format that the client can save and print if they wish. The estimate should also be provided verbally if the client inquires about costs, but verbal delivery must be followed up with a written Good Faith Estimate. Providing the information only in verbal form would not be considered compliant.

These timing provisions do not appear to be either-or. A Good Faith Estimate should be provided in connection with the scheduling of a service as described above, and also upon request. For clients receiving long-term or ongoing services, a Good Faith Estimate should be completed every 12 months, to cover the next 12 months of planned or potential services.

Can clients waive their right to a Good Faith Estimate?

While some clients will either be unaware of their right to a Good Faith Estimate or feel comfortable not receiving such an estimate, there are no provisions in the federal regulation allowing clients waiving their right to a Good Faith Estimate. The regulation allows clients to waive some of the protections related to balance billing, but does not allow providers to bypass the Good Faith Estimate through a client waiver.

How specific does a client request for a Good Faith Estimate need to be?

The regulation stipulates that any discussion or inquiry about the costs of treatment should be considered a request for a Good Faith Estimate. Clients do not need to use the exact phrase.

Can I include the Good Faith Estimate with my usual client intake paperwork?

Yes. Depending on the nature and scope of the services you provide, it may make sense to include the Good Faith Estimate as part of your standard intake paperwork. If you do so, bear in mind that the estimate must relate to the specific services to be provided to that client, and the estimate must be made available to new clients in a specific time frame once services are scheduled, as listed above. 

Specifically including the Good Faith Estimate in a treatment contract may confuse consumers, as the Good Faith Estimate requires a disclaimer specifically telling consumers that the estimate is not a contract and does not create an obligation to receive services from that provider. So the Good Faith Estimate may make more sense to consumers when put into a separate document. However, the required notice about the client’s right to receive a Good Faith Estimate may fit well into a treatment contract. 

When estimating costs, particularly for new clients, can I use a range?

In many cases—including mental health care—it can be difficult for a provider to know how much treatment will be needed when a new client schedules services for the first time. In these instances, it may make sense to offer a range of potential costs. CAMFT, for example, provides example language to psychotherapists that includes a potential range of sessions that may be needed, estimated costs at each end of the range, and the factors that may influence whether costs ultimately land toward the lower or higher end of the range. We’ve made some slight adjustments to that CAMFT language here:

Depending on [list applicable factors], you may need between 12 and 30 psychotherapy sessions of 50 minutes each this year. At [rate per session] the estimated total costs are between [12 x rate per session and 30 x rate per session]

How can I estimate costs or services for clients I haven’t met?

The Good Faith Estimate is just that: An estimate. You may revise the estimate based on information gathered from the client at an initial meeting. For example, prior to meeting a client, you may not have enough information to include diagnostic codes on the Good Faith Estimate, or to provide anything more than a broad range of potential costs. Once you have met with the client and have a better sense of their symptoms, likely diagnoses, and severity, you may be able to offer more specific guidance. 

The spirit of the law is to provide clients with transparency in pricing. Revising a Good Faith Estimate, especially when you can make it more specific on the basis of newly gathered information, would appear to be in keeping with that spirit.

What if my estimate turns out to be wrong?

As noted in the rulemaking itself, the Good Faith Estimate rules “do not require the good faith estimate to include charges for unanticipated items or services that are not reasonably expected and that could occur due to unforeseen events.” If a clients’ needs are ultimately different from what was expected, a provider can update the Good Faith Estimate to address the new information or events.

How should I document delivery of the Good Faith Estimate?

The estimate itself must be included in the client’s medical record, including the date and method of delivery. It should be secured and retained in accordance with standards for other medical records. A copy of the estimate must be made available upon request for at least six years after it was initially provided.

Other than the Good Faith Estimate rules, what else is included in the No Surprises Act?

The No Surprises Act also includes new restrictions on balance billing, which most commonly apply to services provided by out-of-network healthcare providers at in-network facilities. The Act prohibits balance billing (that is, billing consumers for the difference between the insurance payment and the out-of-network provider’s rate) for emergency care. For non-emergency care, balance billing is only allowed if the consumer has been given notice and provided specific consent. 

These provisions typically will not be relevant to outpatient, private-practice care providers, but for those who work in group practice, hospital, clinic, or other institutional settings. They may want to consult with their employers as to whether the balance billing provisions are relevant to their specific setting.

One less-discussed provision has to do with provider directories that are maintained by insurance companies. These directories have often been criticized for including outdated and inaccurate information, making it harder for consumers to find a provider who is actually in-network. Under the No Surprises Act, as of 2022 insurers must update their directories every 90 days. Providers must inform any insurances that they are in-network with, of any meaningful changes to their directory listing, and any time the provider terminates an agreement. HHS can also set forth other notification requirements.

Along similar lines, insurers are required to notify patients when the in-network status of a treating provider changes. The patient will have the option to continue with that treating provider for up to 90 days under the same payment terms that existed under the provider’s in-network contract, with some exceptions.

What’s the risk if I don’t follow this new requirement?

HHS has said it is deferring enforcement and doing some additional rulemaking for in-network services, but that it is not deferring enforcement of the requirement to provide Good Faith Estimates for uninsured or cash-pay clients. As with HIPAA, providers found to be violating the regulations can be fined.

My state already has a law requiring estimates of healthcare costs. Can I continue to follow that process?

No. If the state process does not meet the entirety of the standards applied in this federal rulemaking, simply following the state requirement would not be considered compliant with the federal rule. If your state already has a law requiring similar cost estimates, you should provide qualifying clients with a Good Faith Estimate that meets both state and the new federal standards.

Is there a chance the law will be blocked or suspended?

While many provider groups have expressed dissatisfaction with both the law and its implementation, and the American Hospital Association has sued the federal government over the law’s dispute resolution process, it does not appear likely at this time that either the broader law or its Good Faith Estimate provisions specifically will be blocked or suspended. Providers should plan to abide by the law’s requirements starting on January 1, 2022.

Where can I find additional information, sample language, and Good Faith Estimate templates?

SimplePractice offers a Good Faith Estimate template that can be customized to each client. The federal Centers for Medicare and Medicaid Services (CMS) has a detailed fact sheet and list of frequently asked questions on the law, as well as a whole website focused on No Surprises Act implementation. APA Services has released the CMS template for a Good Faith Estimate, though this particular template may be most useful in hospital settings. There have been useful articles on the topic put forward by a number of professional groups, including APA Services, AAMFT, CAMFT, the Clinical Social Work Association, and others.

Of course, as this is ultimately an issue of legal compliance for providers, it’s a good idea to consult with an attorney or your professional liability insurance provider for guidance on how to apply the law within your specific practice.

Disclaimer: This guide is for informational purposes only, is based on plain-language reading of the regulation and related documentation, and is not intended to provide legal advice. This article and the related federal requirements may change. For guidance specific to your practice, consult an attorney.

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