Another Surprise! You May Be Subject to Good Faith Estimate Requirements Under the No Surprises Act

On January 1, 2022, a new law, the No Surprises Act (“NSA” or “the Act”), went into effect. The NSA touches virtually every licensed health care provider, facility, insurer, and health plan aiming to protect consumers from unanticipated and high-cost payments for out-of-network treatment by requiring health care providers to provide mandatory cost estimates to self-pay patients prior to the rendering of medical services. These services include items or services such as dental health, vision, substance use disorders, and mental health, but do not include emergency items or services. In extending its protection, the Act seeks to prevent consumers from facing high, unanticipated or “surprise” costs in regards to their medical treatments. A reading of the full Act can be found here, and a CMS notice can be found here.

The NSA’s Good Faith Estimate Requirement is Broadly Applicable

The NSA defines its application broadly, stating it requires “health care providers” and “health care facilities” to publicly share written disclosures and furnish “good faith estimate[s] of expected charges to uninsured (or self-pay) individuals for scheduled items and services and upon request.” Who the Act considers to fall within this definition has been met with little guidance. However, the CMS regulations and guidance can provide some direction. In addition to licensed health care providers (including physicians, psychiatrists, chiropractors, and physical therapists) covered by the NSA good faith estimate notice provision, the CMS regulations specifically include clinical social workers, nurse practitioners, nurse-midwives, and physician assistants under its definition of a health care provider. Thus, these groups also appear intended to be included in the NSA’s definition of health care providers.[1] 

In theory, the NSA seeks to protect consumers from surprise costs. One of the primary requirements of the NSA is to require self-pay patients to be notified ahead of time if one of their providers at a facility covered by the insurance is out-of-network and if so, provide the patient with a good faith estimate for their visit. These estimates must be presented to the patient 1-3 days before a scheduled service, or when a patient requests the information.[2] Many clinician groups have questioned the NSA’s applicability to behavioral health, given the difficulty of determining the length of treatment or even a diagnosis.[3] The best advice to such clinicians may be to offer a good faith estimated price for a certain number of sessions at the beginning of the clinician-client relationship. For more information on the NSA, see Mellette PC advisory “Surprise, Surprise!: CMS Issues the “No Surprises Act” in its Final Interim Rule Parts I and II,” here.

Steps to Assure Compliance with the NSA

To ensure compliance with the NSA’s good faith estimate provision, healthcare providers should take the following steps with both new and existing patients:

1. Ask the patient if they have insurance and whether the patient intends to use their insurance for their medical services.
2. If the patient is not using insurance, or does not have insurance, share the anticipated costs of services with the patient and tell the patient that a good faith estimate is available and will be provided in writing.
3. Create a written document for all uninsured and self-pay patients that provides the required notice that a good faith estimate is available and can be provided on request.

See a CMS example here.

If you or your organization have questions about the new requirements, please contact Peter Mellette, Harrison Gibbs, Elizabeth Coleman, or Trace Hall at Goodman Allen Donnelly.

This client advisory is for general educational purposes only and does not cover every provision of the NSA. It is not intended to provide legal advice specific to any situation you may have. Individuals desiring legal advice should consult legal counsel for up-to-date and fact-specific advice.

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[1] Note that under CMS guidance, the assessment of provider impact costs refers only to physicians and does not estimate the compliance cost to other clinicians in its estimate.

[2] The Act also prohibits balance billing for out-of-network emergency services, non-emergency services by nonparticipating providers at certain participating health care facilities, and air ambulance services by nonparticipating air ambulance providers. This means that patients cannot be charged more than in-network cost-sharing for these out-of-network services. Thus, the NSA requires health plans to cover emergency services as if they were in-network. Health plans must either pay or send notice of a payment denial within 30 days of receiving the bill for services and must reimburse the provider directly. There are also state law surprise billing requirements listed HERE.

[3] Julie Appleby, Mental Health Therapists Seek Exemption from Part of Law to Ban Surprise Billing, Fierce Healthcare (Feb. 7, 2022, 11:31 AM), https://www.fiercehealthcare.com/providers/mental-health-therapists-seek-exemption-part-law-ban-surprise-billing