Regulation of Medicine
Understanding Part II of the No Surprises Act (Dispute Resolution and Good Faith Estimates)
The No Surprises Act (NSA) imposes restrictions on surprise medical billing for certain healthcare services. Healthcare organizations and physicians should be aware of the new requirements of the NSA and should adjust their practices to comply with the act.
On January 1, 2022, portions of the NSA went into effect by way of two interim final rules, titled Requirements Related to Surprise Billing Part I and Part II. The NSA aims to protect patients with health insurance from what is known as “surprise billing” or “balance billing.”
Surprise or balance billing occurs when patients are treated for an emergency at an out-of-network (OON) facility or by an OON provider at an in-network facility for non-emergencies without being made aware that the provider is OON. Afterwards, the patient is unexpectedly billed directly for the balance not covered by their health plan. Part I prohibits OON emergency service providers, hospitals, and ambulatory surgical centers from balance billing in certain scenarios and requires such OON providers and health plans to settle the charges without involving the patient. See MagMutual’s Part I article.
Part II establishes an Independent Dispute Resolution (IDR), which OON providers covered under Part I and health insurers may use when they are unable to reach an agreement on the rate for applicable items or services. Additionally, Part II requires every state licensed or certified healthcare provider to furnish a good faith estimate for services or items when requested by both uninsured and self-pay patients.
This article explores the impact Part II will have on healthcare organizations and how healthcare organizations can come into compliance.
Independent Dispute Resolution (IDR)
OON healthcare providers subject to Part I (i.e., emergency services, hospitals, and ambulatory surgical centers) and insurers may use the IDR process when they are unable reach a price agreement for services for which balance billing was prohibited under Part I.
Prior to initiating the IDR process, healthcare providers and insurers must first engage in a 30-day open negotiation period. If the provider and insurer cannot agree to a price, either party may initiate the IDR process within four business days after the date the open-negotiating period concluded. The IDR entity chosen to arbitrate the dispute will issue a binding decision after reviewing the documents submitted by both parties.
There are a number of important deadlines for parties participating in the IDR process set forth in Part II that healthcare providers should be aware of. A helpful chart of these deadlines for the IDR process can be found in CMS’s fact sheet on Part II.
Good Faith Estimates for Uninsured or Self-Pay Patients
The good faith estimate (GFE) portion of Part II has much broader definitions of healthcare “providers” and "facilities” than the balance billing provisions of Part I.
Under Part II, virtually every healthcare provider (including private physician practices) or facility operating under a state-issued certification or license will be obligated to provide GFEs to uninsured or self-pay patients upon request or when the service or item is scheduled. Healthcare providers must inquire about a patient’s insurance status when scheduling the service. If the patient is uninsured or intends to pay for the services despite being insured (self-pay), the healthcare provider is required to notify the patient of the availability of a GFE at the time of scheduling.
GFEs must include all items and services that are reasonably expected to be provided in relation to the primary item or service. This includes any co-providers or co-facilities that are reasonably expected to provide items or services in conjunction with the healthcare service or procedure (such as anesthesia needed during surgery). Co-providers or co-facilities are required to submit their GFEs to the primary healthcare provider within one business day of the provider’s request.
GFEs must be provided to the patient in writing and must be written in clear and understandable language. If the GFE is provided electronically, it must be provided in a format that the patient can save and print. Additionally, providers must post a notice informing uninsured and self-pay patients of their right to a good faith estimate in two prominent locations on-site in addition to displaying the notice on their website. A model notice, a GFE template, and many other useful forms and information are located at CMS’s webpage.
Providers must furnish patients with a GFE within specified timeframes ranging from one to three business days. HHS has published a summary of patients’ rights to a GFE which has an explanation of how quickly a GFE is due along with additional helpful information.
Unlike Part I, which provides a notice and consent process that allows patients to waive their protections from balance billing in certain scenarios, Part II does not provide a mechanism for patients to waive their right to a GFE. Therefore, providers must provide a GFE to uninsured and self-pay patients at the time of scheduling even if the patient states they do not want one to remain compliant with the NSA.
Part II: Select Dispute Resolution (SDR) for Uninsured and Self-Pay Patients
Part II also establishes the SDR process, which allows uninsured and self-pay patients to dispute charges that are “substantially in excess” of the good faith estimate. “Substantially in excess” is defined by HHS as being $400 or more than the good faith estimate. Uninsured and self-pay patients may initiate the SDR process within 120 calendar days of receiving a bill. Healthcare providers must submit the following documentation within 10 business days of receipt of the SDR notice:
- A copy of the good faith estimate provided to the uninsured or self-pay patient
- A copy of the billed charges provided to the uninsured or self-pay patient
- Documentation demonstrating that the difference between the billed charges and the good faith estimate reflects the costs of a medically necessary item or service and is based on unforeseen circumstances that could not have been reasonably anticipated at the time the good faith estimate was provided.
While the SDR process is ongoing, the provider must cease all collection efforts and pause the accumulation of late fees. As in the IDR process, the chosen SDR entity will review the disputed charges and issue a binding determination within 30 business days of receiving the necessary documentation. Only charges that the provider could not have reasonably anticipated at the time the good faith estimate was provided will be considered.
If you have any further questions regarding compliance with the NSA, CMS has developed a No Surprises Act Help Desk with the following telephone number: 1-800-985-3059.
The Department of Health and Human Services (HHS) may impose civil monetary penalties of up to $10,000 per violation.
Healthcare providers and facilities can use the following checklist when assessing compliance with Part II.
- If your services are subject to the balance billing provisions in Part I, familiarize your staff with the submission and response requirements for the IDR process.
- For healthcare providers and facilities:
- Create training for employees who schedule appointments to ensure that all uninsured and self-pay patients are identified and notified of their right to request a good faith estimate.
- Create a good faith estimate template (or use the HHS model good faith estimate template) and begin providing it to all uninsured and self-pay customers when requested or at the time a service or item is scheduled.
- Familiarize employees on how to update good faith estimates when the expected charge changes and how and when to provide the revised good faith estimate to the patient.
- Prominently post notices informing uninsured and self-pay patients of their right to a good faith estimate on-site and online.
- Be aware of the requirements and deadlines for the SDR process when patients challenge a good faith estimate.
Answers are provided below
True or false?
- When a healthcare provider charges an uninsured or self-pay patients $400 or more than the good faith estimate amount, the patient can utilize the Independent Dispute Resolution (IDR) process to dispute the charge.
- Uninsured and self-pay patients may waive their protections under Part II
- Both uninsured and self-pay patients are required to be provided with a good faith estimate upon request or when seeking to schedule an item or service.
Question 1: False. The IDR is only for healthcare providers and health insurers who are disputing a charge covered under the balance billing provision under Part I. Patients challenging a charge that is $400 or greater than the good faith estimate can utilize the Select Dispute Resolution (SDR) process.
Question 2: False. There is no provision in Part II that allows a patient to waive their right to a good faith estimate.
Question 3: True. Both uninsured and self-pay patients are entitled to a good faith estimate upon request or when seeking to schedule an item or service.
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The information provided in this resource does not constitute legal, medical or any other professional advice, nor does it establish a standard of care. This resource has been created as an aid to you in your practice. The ultimate decision on how to use the information provided rests solely with you, the PolicyOwner.