Good Faith Estimates for Insured Patients: What We Know So Far

Effective January 1, 2022, the No Surprises Act established rules to protect patients from surprise medical billing, which is common when patients receive care from out-of-network providers and facilities.

Among other provisions, the act introduced Good Faith Estimates (GFEs), which mandate health care providers and facilities to provide price estimates to the uninsured or self-pay patients that decide not to submit claims to their insurers when they schedule care.

Under the interim final rule released by the Department of Health and Human Services (HHS), complying with the good faith estimate provision places an obligation on providers and facilities to inform patients of the likely cost of treatment. This is required even if the provider or facility won’t be the one to provide some of the services.

GFEs for insured patients are not currently required. Final rules that will make them required in the future are still pending.

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Are good faith estimates required for insured patients?

The HHS hasn’t yet released the rules that will govern GFEs for insured consumers. For now, providers and facilities are only obligated to provide good faith estimates for uninsured and self-pay patients.

Good faith estimates for insured patients have been deferred

Although the No Surprises Act provides for good faith estimates, the provision is not yet effective for insured individuals. The HHS has deferred the final rulemaking for good faith estimates for insured patients.

But the required surprise billing notice form for out-of-network charges has a good faith estimate?

The No Surprises Act protects patients from surprise billing from out-of-network providers and facilities. The law prohibits outright balance billings for out-of-network emergency services or non-emergency services provided by out-of-network providers at in-network facilities. In any of these cases, out-of-network providers and facilities cannot bill an individual for any medical cost not covered by their insurance

The No Surprises Act also bans balance billing for out-of-network charges for supplemental care, such as anesthesiology or radiology, by out-of-network providers who work in specific in-network facilities like hospitals or ambulatory surgical centers.

When insured patients schedule certain non-emergency services with out-of-network providers and facilities, they may be asked to sign a notice and consent form. Out-of-network providers and facilities must provide the notice to consumers in an easy-to-understand and clear language. They will also include a statement letting patients know that getting care out-of-network could be more costly and their options to avoid balance bills.

The notice and consent form must explain in clear detail the patient’s protection from surprise billing and give them the option to give up the protections. If a patient elects not to give up their protection, the out-of-care provider and facility may, in appropriate circumstances, refuse to provide care.

The notice will also provide an estimate of the likely cost of the out-of-network care. However, this is not the same thing as the GFE.  A good faith estimate is not yet available for insured patients, so there’s also no patient-provider dispute resolution (PPDR).

Advanced Explanation of Benefits (AEOB) will also be required for insured patients and are similar to GFEs

The advanced EOB is another provision of the No Surprises Act that is intended to help prevent surprise billing. The Advanced EOB is a document that explains ahead of time the likely cost of health care. This is very similar to the GFE in providing a detailed list of expected costs, but unlike good faith estimates, Advanced EOB is sent to insured patients.

The No Surprises Act mandates providers to send health plans or issuers an estimated cost of caring for a patient under their network. The plan or issuer will then forward the advanced EOB to the patient.

Provider requirements in advanced EOB

The No Surprises Act has detailed advanced EOB requirements for providers and facilities. When patients schedule a visit with a provider or facility, they are required to ask the patient if they have a group health plan. If the patient has such coverage and intends to submit a claim to their plan, the provider or facility is then required to furnish the plan or insurer with a good faith estimate notice.

The notice will contain the estimated cost of the services that will probably be provided in connection with the visit. If the patient is uninsured or decides to self-pay, the provider or facility will forward the good faith estimates to the patient directly.

Payer obligations to send advanced EOB

When plans or insurers receive the GFEs from the provider or facility, they will then provide the patient with the advanced EOB. Under the No Surprises Act, the advanced EOB must contain specific information, including:

• Whether the provider or facility is under the network
• If the provider or facility is in-network, the contracted rate for the service or item
• If the provider or facility is out-of-network, the plan will provide information on how to find details on in-network providers
• Good faith estimate for the following:

• Provider billed charges
• The amount the plan will pay
• The patient’s cost-share responsibility
• The amount the patient is responsible for to meet deductibles and out-of-pocket maximums
• A disclaimer stating that coverage is subject to medical management, whenever it’s applicable
• Any other information that needs to be included based on the unique situation

Plans or issuers must send the advanced EOB within specified timelines. Generally, they must send the advanced EOB to the patient within one business day after they receive the good faith estimate.

However, if the service anticipated under the advanced EOB is scheduled for at least 10 business days ahead, or when the patient requests for an advanced EOB, the plan or issuer has more time. In that case, they will have three business days after receiving the GFE or the patient’s request to provide the advanced EOB.

The HHS hasn't issued the final rulemaking for advanced EOB. So, as it stands now, implementing advanced explanations of benefits has also been deferred, just like the good faith estimates for uninsured and self-pay patients.  

Health plan price transparency: additional protections for insured patients

The Center for Medicare and Medicaid Services (CMS) rolled out price transparency requirements for plans and issuers. Most plans and issuers of group or individual health plans are now mandated to disclose their pricing model to the public to enable consumers to make informed decisions while choosing insurance. The disclosure will be in three definite stages:

• Stage one: Stage one, which became applicable in July 2022, is the requirement for plans or issuers to provide machine-readable files containing the following sets of costs for items and services:

• In-network file rates: The contracted rate for all items and services between plans or issuers and providers and facilities under their network.
• Allowed amount file: Amounts that out-of-network providers can bill.

• Stage two: For the second stage, plans or issuers will provide an internet-based price comparison tool (or disclose on paper) that can provide an estimate of an individual’s cost-sharing responsibilities from providers, for up to 500 items and services. This stage will go into effect in 2023.
• Stage three: By the third stage, plans or issuers must provide an internet-based price comparison tool (or disclose on paper) that can provide an estimate of an individual’s cost-sharing responsibilities from providers for all items and services. Stage three will go into effect in 2024.

Enforcement of this rule has already begun. The CMS may fine plans or issuers who fail to comply with this rule up to $100 per day, for each violation, and for each affected individual.

With the application of the No Surprises Act, your healthcare organization has a responsibility to provide transparent price estimates to patients. Providing a fair price estimate apart from being a regulatory requirement, can also give you a competitive advantage. Consumers today seek health providers that offer transparent pricing.

However, providing all patients with an accurate price estimate can be a hassle. The No Surprises Act good faith estimate requires you to provide uninsured and self-pay patients a fair estimate of their health cost when they schedule a visit. The penalty for violations can be up to $10,000.

Get in compliance now and provide cost estimates for all patients with MD Clarity

Without an accurate software solution, you risk giving an estimate that is far less than the actual cost of the services. Dispute process applies if the total expected charges are at least $400 more than what was estimated in the GFE. Inaccuracy in providing price estimates could cost you money and patients.

MD Clarity’s comprehensive price transparency solution can help you provide transparent pricing with ease. Our robust software provides accurate price estimates that can help your practice save money and attract patients. Schedule a demo to see the difference we can make.

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