Health Care Providers Take Note: New Surprise Billing Regulations Mandate Provision of “Good Faith Estimates” Uninsured and Self-pay Patients

As part of the recent interim rules implementing the federal No Surprises Act, the Departments of Health and Human Services, Labor, and Treasury, and the Office of Personnel Management implemented regulations requiring health care facilities and providers to provide a “good faith estimate” of expected charges to uninsured and self-pay patients (the “Regulations”). The Regulations establish detailed requirements health care facilities and providers must meet when providing a “good faith estimate,” including coordinating estimates among multiple providers or facilities providing services during the same care episode.   

Passed by Congress late last year, the main provisions of the Act, which applies to many health care facilities and providers, as well as most payers, requires out-of-network facilities/providers and health insurers to agree on a fair price for medical care, rather than leaving patients to face unexpected out-of-pocket medical expenses. 

The provisions of the Act governing “surprise bills” apply to:

1. emergency services provided at an out-of-network facility or by an out-of-network provider at an in-network facility; and
2. non-emergency services provided at certain types of in-network facilities (hospitals, hospital outpatient departments, critical access hospitals, and ambulatory surgical centers) by out-of-network providers.  

Thus, many types of health care facilities that do not provide emergency services are not subject to the “surprise billing” portion of the regulations. However, the Regulations governing the requirement that health care providers and facilities provide a “good faith estimate” of costs to uninsured and self-pay patients use a broader definition of “health care facility” tied to facility licensure. As a result, the Regulations impact nearly all types of providers and facilities.   

The “Who”

Under the Regulations, a “health care facility” is “any institution” licensed under any state law, including rural health centers, federally qualified health centers, laboratories, and imaging centers. The Regulations also apply to any health care provider licensed under state law, including air ambulance service providers. Thus, all state licensed facilities and providers (collectively, “Providers”) are required to comply with the “good faith estimate” requirements in the Regulations.

The “What”

Providers must:

1. Determine if an individual is uninsured or self-pay by (a) inquiring if an individual is enrolled in a group health plan, group or individual health coverage offered by a health insurer, Federal health care program, or a health benefits plan; (b) inquiring whether an individual who is enrolled in a group health plan or other insurance plan is seeking to have a claim submitted for the item or service with the plan/coverage, and (c) informing the individual of the availability of a good faith estimate of the expected charges upon scheduling an item or service or on request. 
2. Ensure that the information regarding the availability of a good faith estimate for uninsured or self-pay individuals is: (a) “written in a clear and understandable manner and prominently displayed (and easily searchable from a public search engine)” on the Provider’s website, in the office, and on-site where scheduling or questions about the cost of items or services occur; (b) provided orally when scheduling an item or service or when questions about the cost of items or services occur; and (c) made available in “accessible formats, and in the language(s) spoken by individual(s) considering or scheduling items or services” with the Provider. Notably, the Regulations instruct Providers to “​consider any discussion or inquiry regarding the potential costs of items or services under consideration as a request for a good faith estimate.”
3. Upon receiving a request for a good faith estimate from an uninsured/self-pay individual or upon scheduling an item or service to be provided to such individual, contact any “co-providers” or “co-facilities” (providers or facilities that may provide items or services in conjunction with the item/service the patient is receiving from the Provider) within one business day and request that the co-providers or co-facilities also submit good faith estimates to the Provider meeting the regulatory requirements.

The “When”

The good-faith estimate must be provided:

• Within one business day of scheduling an item or service that will be provided within the next three business days; 
• Within three business days of scheduling an item or service that will be provided within the next ten business days; or 
• No later than three business days after an uninsured/self-pay patient requests the good faith estimate. 

Providers also have an obligation to update the estimate at least one business day before the items or services are to be provided if there is a change in the scope of the items/services from the initial estimate. Additionally, if a Provider previously provided an estimate at the request of the uninsured/self-pay patient and the patient later schedules the item or service, the Provider must provide a new estimate in accordance with the timeframes described above. For recurring items or services, the estimate must include information such as timeframes, frequency, etc., of the recurring service, and the estimate is valid for a period no longer than 12 months. 

The Content of the Estimate

The Regulations specify the estimates must include: (1) the patient’s name and date of birth; (2) a description of the primary item or service to be provided in clear/understandable language, as well as the date the services are to be provided (if they have been scheduled); (3) an itemized list, grouped by each Provider or facility, reasonably expected to be furnished for the primary item or service, as well as those expected to be furnished in conjunction with the primary item/service; (4) applicable diagnosis codes, service codes, and expected charges for each item or service; (5) the name, NPI, and TIN of each Provider and facility included in the estimate and the state and office or facility locations where the items/services are expected to be furnished; (6) a list of items or services the Provider anticipates will require separate scheduling and are expected to occur before or after the expected period of care for the primary items/services; and (7) required disclaimer statements. 

What Else Providers Need to Know

The estimate must be provided in the format requested by the patient (paper, electronic, or other), is considered part of the patient’s medical record, and must be retained and made available to the patient on request for a period of at least six years. 

Providers must meet these requirements for estimates requested on or after January 1, 2022, or for estimates provided in connection with items or services scheduled on or after January 1, 2022.

Finally, to the extent there is a dispute between the Provider and an uninsured or self-pay patient due to the total billed charges being “substantially in excess” of the expected charges provided as part of the good-faith estimate, the Regulations establish a dispute resolution process to resolve the dispute.  

Looking Ahead: Provider Preparation for Compliance

Because the Regulations were issued as part of an interim, rather than final, rulemaking process, it is possible that the Regulations could be modified when the agencies issue the final rules. Nevertheless, because the January 1, 2022 compliance date is already here, Providers should be taking steps to ensure they are prepared to provide the required “good faith estimates,” including by training frontline staff to make the relevant inquiries regarding whether a patient is self-pay or uninsured and to inform such patients of their rights to receive a “good faith estimate” of the cost of items or services being provided by the Provider.