Good Faith Estimate Software for No Surprises Act Compliance

We’re now a year into the enforcement of the No Surprises Act. While no healthcare organizations have had to pay penalties for NoSA violations yet, the Centers for Medicare and Medicaid Services (CMS) have started investigating consumer complaints. 

Indication of these investigations comes from law firms reporting that CMS has been sending letters to some hospitals requesting documentation on procedures and pricing.  

Lawyers are advising their hospital clients to prepare for more of these letters from CMS, which has erected a robust “Help Desk” that steps consumers through submitting complaints. It also offers a phone number. This Help Desk asks patients to submit documentation (good faith estimates, bills, and more),  processes complaints, and keeps consumers up to date on the progress of their complaints. 

These documents requests could signal the leading edge of a wave of complaints. Americans are not shy to dispute charges they feel are inaccurate or unfair, after all. Here, you’ll learn just how providers are putting good faith estimate software to work to remain compliant with the No Surprises Act without bringing on additional staff.

The first organizations forced to comply with NoSA

With the passage of the No Surprises Act, certain healthcare organizations that serve a large population of uninsured and self-pay patients faced the prospect of compiling thousands of good-faith estimates. This shift would require the hiring of several new revenue cycle FTEs. Given a widespread staffing shortage, new hires are not only hard to come by, they are expensive. Many healthcare organizations – even those dealing with insured patients –  have turned to software to handle this aspect of their revenue cycle. 

One of these, a women’s healthcare group with 35 clinics in six Midwest states, faced having to hire four to eight additional FTEs  to research, compile, and generate 445 GFEs daily.  After a long vetting process, they selected a good faith estimate software solution that – in addition to those three tasks – could also automatically send the estimates to the vast majority of their patients upon scheduling. They also prioritized estimate accuracy, as any medical costs amounting to $400 over the initial estimate can be disputed. Once the program was up and running, 99 percent of their estimates reached patients without any staff intervention. Best of all, this organization has remained compliant with the No Surprises Act legislation for two years. Hiring those additional FTEs would have cost them an additional $172,000 to $344,000 per year. 

Curious about how good faith estimate software keeps healthcare organizations compliant with NoSA and increases their upfront collections? Walk through a demo of how this powerful software tool automates that process here: 

What is good faith estimate software? 

Good faith estimate software is a tool that uses automation to research payer policies, conduct eligibility verifications, generate accurate patient estimates, and (depending on the vendor) send texts or emails to patients detailing their financial responsibility. The good faith estimate includes a clear breakdown of deductibles, copays, and coinsurance. Depending on the vendor, it may or may not include a link to the provider’s portal where the patient can make a deposit. 

Healthcare providers and practitioners employ good faith or (a.k.a patient cost estimation) software to boost upfront collections and enhance the patient experience.

On January 1, 2022, the No Surprises Act began requiring healthcare providers and insurance companies to issue good faith estimates (GFEs) to uninsured and self-paying patients. GFEs ensure that consumers won't be caught off-guard by unexpected medical expenses, typically incurred when they use providers outside of their health insurance plans..

However, creating, managing, and sending good faith estimates is easier said than done. The No Surprises Act has many requirements for what a good faith estimate should contain. For one, it should include primary items and services as well as items reasonably expected to be provided. It must also include several disclaimers and notifications. Additionally, there are several time frames for providing GFEs to uninsured and self-paying patients.

These complications mean intense work for your revenue cycle staff. The CMS itself estimates that an estimate researched, generated and sent manually will take the average employee 1.3 hours to complete. Just sending 5 per day means an additional 6.5 hours of work, nearly an additional employee. 

Fortunately, GFE software provides a quick and reliable way to generate, send, and manage fully NoSA-compliant GFEs. Read on to learn more about good faith estimate tools, what they are, and how they can help you comply with the No Surprises Act. We'll also show you how GFE software can improve your revenue cycle.

How good faith estimate software helps you comply with the No Surprises Act

GFE software ensures you: 

Create compliant GFEs:

First, GFE software can help you create compliant GFEs containing all of the required information, disclaimers, and notifications. These include:

• Patient name and date of birth
• Description of the main item or service
• The scheduled date of the primary item or service
• A detailed list of the following, grouped by provider and facility:

• Items and services reasonably expected to be provided for the primary item or service, including supplies, medical tests, prescription drugs, encounters, facility fees, and medical equipment
• Items and services reasonably expected to be provided along with the primary item or service for the care period
• Items and services reasonably expected to be offered by co-providers and co-facilities

• Expected changes, expected service codes, and applicable diagnosis codes associated with each listed item or service

• Expected changes are the cash pay rates established by a provider or facility for an uninsured or self-paying individual.
• Service codes describe an item or service using National Drug Codes (NDC), Healthcare Common Procedure Coding System (HCPCS), Diagnosis-Related Group (DRG), and Current Procedural Terminology (CPT) code sets.
• Diagnosis codes describe a patient's disorder, injury, disease, or other health conditions using the International Classification of Diseases (ICD) code set.

• State(s) and office or facility location(s) where the items or services will be provided
• Name, National Provider Identifier, and Tax Identification Number of each provider or facility in the GFE
• A list of items or services that may require separate scheduling and are expected to happen before or after the care period for the primary item or service. You must include a disclaimer directly before this that includes:

• A notification that information like expected changes, diagnosis codes, service codes, and provider and facility identifiers don't need to be included for services and items in the list. You will provide this information in separate GFEs after the patient schedules or requests the listed services and items.
• An explanation that separate GFEs will be sent to a self-paying or uninsured patient after requesting or scheduling the listed items or services
• Instructions for how a self-paying or uninsured individual can obtain GFEs for such items or services

• A disclaimer that tells the uninsured or self-paying individual that the information in the GFE is only an estimate and that actual services, charges, and items may differ
• A disclaimer telling the uninsured or self-paying individual that there may be additional recommended items or services that they must schedule or request separately. The disclaimer must state that these additional items or services aren't reflected in the GFE.
• A disclaimer that the GFE isn't a contract and does not require the uninsured or self-paying individual to get the items or services from any of the providers or facilities in the GFE
• A disclaimer informing the self-paying or uninsured individual of their right to start the patient-provider dispute resolution (PPDR) process if the actual charges are more than $400 higher than the expected GFE charges

Streamline Eligibility Verification for Estimates

While it’s mostly uninsured and self-paying patients entitled to GFEs, the legislation can get complicated. A meticulous GFE automation solution will streamline the identification of patients who need these estimates so you don't miss anyone.

Automatically Send Good Faith Estimates in Digital and Physical Formats

Good faith estimate software can also automatically send GFEs in several ways, including text, email, and postal mail. This helps you comply with the No Surprises Act, which gives uninsured and self-paying patients the right to request GFEs on paper, electronically, or in another form, such as through the phone or orally.

The auto-send functionalities of good faith estimate tools also help you meet No Surprises Act's stringent time frames for providing GFEs to individuals. Under the No Surprises Act, you must give a self-paying or uninsured individual a GFE within one business day after receiving their GFE request or scheduling a primary item or service for them. You must also provide GFEs to self-paying or uninsured patients within the following time frames:

• When a main item or service is scheduled at least three days before the item or service's furnishment, you must send the GFE no later than one business day after the scheduling date.
• When a main item or service is scheduled at least 10 days before the item or service's furnishment, you must send the GFE no later than three days after the scheduling date.
• When a self-paying or uninsured individual requests a GFE, you must provide the GFE no later than three business days after the request date.

Not all good faith software is the same — moving past simple averages and napkin calculations

As with all things, not all GFE software is the same. Free good faith estimate solutions, in particular usually generate basic templates and use simple calculations like averages for procedures. They also gloss over the subtleties of medical billing. This can have many adverse consequences, including inaccurate estimates and billing discrepancies. Ballpark estimates put you at risk for being out of compliance and angering patients. 

Inaccurate estimates and billing discrepancies can be costly due to disputes

Inaccurate estimates and billing discrepancies aren't just irritating to deal with — they can also be costly due to disputes.

As mentioned above, patients can dispute charges if they are more than $400 above figures listed in their GFEs. Specifically, they can request a determination from the No Surprises Act's patient-provider dispute resolution (PPDR) process for the amount they should pay.

The PPDR process can apply to any item or service provided by a convening provider, facility, co-provider, or co-facility to an uninsured or self-paying patient when the total charges are $400 or more than the GFE amounts.

How good faith estimate solutions improve your revenue cycle

Besides using them to avoid inaccurate estimates, compliance issues, and billing discrepancies, providers use automated GFE solutions to improve the revenue cycle. Specifically, leading-edge GFE software facilitates upfront and point-of-service collections.

This statistic has a way of shocking older providers: patients are now responsible for 30 percent of provider income.

Seven to 10 years ago when patient responsibilities were more in the 10 percent range, many healthcare organizations sent a few bills and then dropped the issue. The advent of high deductible health plans (HDHPs) and medical consumerism changed that apathy. 

Given deductibles have climbed 53 percent over the last 10 years (to $1,735 - $2,445 for single coverage in 2023), patients’ outstanding accounts are multiplying. A study on hospital collection rates from consulting firm Crowe LLP’s views this recent surge view the lens of days in provider A/R. Transactions from 1,600 hospitals and 100,000+ physicians nationally from 2018 to 2021 reveal: 

• patients who owe more than $7,500 tripled from 5.2 percent in 2018 to 17.7 percent in 2021

• patient balances over $14,000 almost quadrupled from 4.4 percent in 2018 to 16.8 percent in 2021

Providers are paying attention. Forty-eight percent of the 176 healthcare professionals in a 2024 Salucro survey say patient collections are their biggest concern. Considering that denials have reigned as healthcare’s primary challenge for years, patient non-payment has become urgent. 

Providers are just collecting less. A 2024 Kodiak study shows patient collections fell from 54.8% in 2021 to 47.8 percent in 2022 and 2023. They analyzed data from over 1,850 hospitals and 350,000 physicians nationwide to arrive at this conclusion. 

How will healthcare organizations stay viable when they can’t collect from what’s now a significant payer: the patient? Given that research shows that

Finally, high-deductible healthcare plans (HdHps), inflation, and other factors have tossed American consumers into the most medical debt in history. KFF polling finds that 41 percent of adults have health care debt, the highest level in the history of the United States.

Two upfront collections case studies

Case studies reveal how healthcare organizations can increase their collections when they insist on upfront payments. 

Health First Hospital in Florida intensified its efforts in upfront collections by ensuring all its patients received cost estimates before services were rendered. This strategy led to a 27% increase in their upfront collections and they achieved a 2.7% percent net revenue from point-of-service collections, significantly outperforming the industry standard of 0.7 percent, marking a substantial improvement.

Following these changes, Health First achieved a record high in the percentage of revenue collected upfront, with a notable $2 million increase in upfront collections for the year. This approach not only enhanced their collection rates but also led to higher customer satisfaction.

In a similar vein, a small hospital in Illinois saw a 300 percent increase in point-of-service collections by insisting on upfront payment of patient dues. This initiative allowed the hospital to surpass its monthly collection target of $7,000 for all point-of-service payments, including those from walk-in visits.

If you trust your GFEs, you will be more comfortable taking payment upfront. You know the final billing charges will be equivalent or very close to what's on the GFEs.

Similarly, patients — especially returning patients — are more comfortable paying upfront when they see thorough GFEs.  Recent research by InstaMed indicates that 80 percent of patients prefer knowing their financial responsibility before undergoing medical treatment. As patients cover larger shares of their healthcare expenses, they increasingly value transparent pre-service financial information to effectively manage and plan their expenditures. Healthcare providers are becoming more adept at initiating upfront collections as they realize that these interactions can be conducted without being confrontational.

Upfront and point-of-service collection + precise estimates = happy patients + improved revenue

When automated GFE software captures more upfront revenue, secondary benefits also result. These include: 

Reduced accounts receivable days and bad debt

Every dollar collected upfront stays out of accounts receivable and write-offs. 

Increased patient loyalty in a world of healthcare consumerism

More and more, patients are comparing reviews of physicians, clinicians, and healthcare facilities. They want the best care at the best price.  One online survey of 990 individuals had 90 percent using online reviews to evaluate physicians and 71 percent using them as the very first step to finding a new doctor. Increasingly, financial factors come into these reviews. As mentioned above, these consumers want to know how much their procedures will cost up front. Without that information, they don’t feel they’re doing their due diligence. Review all the ways you can make providing the costs for your services a positive, flexible, and reassuring experience in our recent blog post. 

Cost of good faith estimate automation software

Good faith estimate software typically has a variable pricing structure that is most heavily influenced by overall patient volume. The more patients an organization sees, the higher their costs will be. Smaller practices will pay less than larger practices - this allows the software to scale up or down in cost to meet a practice's needs. No matter the size of the organization, software is almost always far less expensive than hiring new FTEs. 

Keep in mind, too, that by keeping you compliant, automated good faith estimate software helps you avoid No Surprises Act violations that stipulate fines of up to $10,000 per violation.

Automate good faith estimates and collect upfront with MD Clarity

Good faith estimate software offers many benefits, including the ability to create, manage, and send No Surprises Act-compliant GFEs to uninsured and self-paying customers. You can also use the platform to streamline eligibility verification for GFEs, automatically send GFEs in digital and physical formats, and improve your revenue cycle.

Intuitive, reliable, and streamlined, our Clarity Flow good faith estimate software can help organizations comply with the No Surprises Act and provide accurate GFE to patients. With Clarity Flow, healthcare providers can create, automate, and deliver estimates via mail, email, and text. They can also collect upfront deposits from patients from online estimates.

Book a demo today to experience the Clarity Flow difference.

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