The No Surprises Act: A Primer for Independent Healthcare Practices

Are you wondering how the new No Surprises Act affects your practice? We explain the basics, with particular focus on the requirements for “good faith estimates” for uninsured and self-pay patients.

Consumer advocates cheered when the federal No Surprises Act became effective on January 1, 2022. Meanwhile, independent medical practices — particularly those with a large cash-based patient population — scrambled to understand the new rules. Here, we break down the basics as it applies to the kinds of independent practices that we serve at Jackson LLP Healthcare Lawyers.

What Is the No Surprises Act?

Fundamentally, the No Surprises Act seeks to protect patients from receiving surprise medical bills for certain types of out-of-network or uninsured care. However, mainstream media outlets have focused mainly on the aspects of the No Surprises Act that apply to hospitals and emergency providers. 

For example, the most well-known part of the act bans surprise billing for emergency services and ancillary care at in-network facilities. Say, for instance, an out-of-network anesthesiologist performs services at a surgery center within the patient’s network. The anesthesiologist can only collect the in-network cost-sharing unless the patient gives written consent to be balance-billed. The No Surprises Act also limits high out-of-network cost-sharing for emergency and non-emergency services.

But here’s where independent healthcare practices need to pay attention. The rule also requires that licensed providers furnish good faith estimates (GFEs) to patients who are uninsured or self-pay for their services.  The GFE requirement applies to all providers who treat uninsured or self-pay patients. Thus, many small and solo practitioners such as psychiatrists, psychotherapists, physical therapists, and dermatologists are affected. 

How Do Independent Healthcare Practices Comply With the No Surpises Act?

Healthcare providers will need to incorporate new activities into their everyday practices. First, providers need to ask each patient upfront whether the patient has insurance and wants to submit an insurance claim for the services scheduled. If the patient is uninsured or is electing to self-pay for services, a GFE is required when the patient schedules services or asks about costs.

The GFE must clearly identify the patient and provider by including the patient’s name and date of birth, as well as the provider’s National Provider Identifier (NPI), Tax Identification Number (TIN), and the location(s) where services are expected to be rendered. 

In the GFE, the provider must list all of the expected services that will be given to the patient, with diagnosis and service codes. The GFE must also list the expected charges for each service.

In addition, the GFE must include disclaimers to notify the patient that:

• there may be additional items or services that may be scheduled or requested separately and are not reflected in the good faith estimate;
• the good faith estimate is not a contract and does not obligate the patient to obtain the items or services;
• the information provided in the good faith estimate is only an estimate. Therefore, the actual items, services, or charges may differ from the good faith estimate; and
•  the patient has the right to initiate a patient-provider dispute resolution process if the actual billed charges substantially exceed the expected charges included in the good faith estimate.

When Do I Need to Provide a Good Faith Estimate?

The deadline for the provision of GFEs depends on the interval between the scheduling and the delivery of the service, as well as the timing of the patient’s request. 

• If the service is scheduled at least ten business days in advance, the GFE must be provided within three business days.
• If the service is scheduled at least three (but fewer than ten) business days in advance, the GFE must be provided within one business day.
• The act does not require any particular timeframe for providing the GFE when services are scheduled less than three business days in advance.
• If the individual requests a good faith estimate even though a service has not yet been scheduled, the good faith estimate must be provided within three business days of the request.

What Are the Consequences If a Good Faith Estimate Is Inaccurate?

Keep in mind that the GFE is considered an estimate of reasonably expected services. Sometimes, reality starts to deviate from your carefully considered expectations. If this happens, and a patient’s treatment plan or fees change, you will need to provide a new good faith estimate.

Remember how we said that you need to notify patients of their right to dispute billed charges that substantially exceed the quoted amount? The US Department of Health and Human Services (HHS) defines “substantially exceeding” as at least $400 more than listed in the GFE. 

When the difference between your estimate and the actual bill exceeds $400, the patient can initiate HHS’s dispute resolution process. If HHS agrees with the patient’s claim, the patient only has to pay the amount listed on the good faith estimate. Thus, you will lose out on collecting the difference. 

Navigating the Changes

We’ve only touched on the basics — this is not an exhaustive list of the requirements!  Moreover, as with any new law, it fails to address some of the situation-specific questions that many providers have. We expect that future updates by the federal government (or the lessons learned from real-life legal cases) will answer these questions. 

Many of our clients have reached out to us for guidance on implementing the No Surprises Act within their particular specialty or patient population. If you operate in any state where we practice and would like help navigating the new law, schedule a consultation to learn how our attorneys can support you.

This blog is made for educational purposes and is not intended to be specific legal advice to any particular person. It does not create an attorney-client relationship between our firm and the reader. It should not be used as a substitute for competent legal advice from a licensed attorney in your jurisdiction.