Unbeknownst to many therapists, a new bill went into effect at the beginning of 2022. The “No Surprises Act” is currently the law of the land, causing many health professionals to scramble to comply with the new bill. As with any new legislation, many questions need to be answered. Primarily, therapists want to know how it will affect their practice and what they need to do to ensure compliance. Fortunately, we have the answers you require. Read on for everything you need to know about the No Surprises Act. If you want to read through the details for yourself, you can find everything you need right here.
What is the No Surprises Act?
The No Surprises Act aims to make sure that people do not receive surprise medical costs after they undergo health procedures. It seeks to increase the transparency of the pricing of medical services before the person agrees to undertake them. It was created due to patients receiving unexpected bills that could number into the thousands of dollars. Although this mostly happens with crisis and inpatient situations (e.g., emergency room visits, and hospital stays), the law applies to outpatient services as well.
Who Needs to Comply with the No Surprises Act?
If you are a state-licensed or certified health professional (or a state-licensed facility), you need to obey the provisions outlined in the No Surprises Act. Although the law was seemingly created to focus more on medical personnel, it applies to all licensed mental health providers, including psychologists, counselors, social workers, etc. So, unless you just hang a shingle on your door and pretend to be a therapist, it almost certainly applies to you.
What Do I Need to Do?
Therapists need to do the following to ensure compliance with the No Surprises Act:
Find Out if They are Using Insurance
The first thing all therapists need to do is find out if their client has insurance they are going to use to cover the cost of treatment. If the answer is yes, then you don’t need to do a thing. If the answer is no, you need to provide two things: first is the notice of the right to receive a good faith estimate and the second is the good faith estimate itself.
Give Clients Notice of the Right To Receive a Good Faith Estimate
Providers are obligated to give their clients notice, both orally and in writing, that they have the right to a good faith estimate of their treatment costs with that provider. This notice should be displayed on the practitioner’s website as well as prominently in their office. It should also be explained to the client (or prospective client) whenever they ask about the costs of treatment. Here is a link to a notice that you can use with your clients.
Provide the Good Faith Estimate
Therapists will need to provide their clients with a good faith estimate before providing services. This is a form that tells the client the costs they should expect from the treatment you will give them. The following are the requirements for the estimate:
- Name
- Date of birth
- Description of the services that will be provided, in easy-to-understand language.
- A time range for expected services. This is especially important for therapists, as the service is rarely provided in one session.
- Diagnostic codes, service codes, and expected charges associated with each of those services
- Provider name, National Provider Indicator (NPI), and tax ID number
- Office location where services will be provided
- A disclaimer that states that the good faith estimate is only an estimate and that charges may be different from the estimate
- A disclaimer that informs the patient of their right to initiate a Patient-Provider Dispute Resolution (PDDR) process if the billed charges substantially exceed the expected charges in the good faith estimate.
- A disclaimer that the good faith estimate is not a contract and does not require the individual to obtain the services from any of the providers or facilities identified in the good faith estimate.
Here are two links that include sample good faith estimates. One is on the American Psychological Association website and the other is provided by the Center for Medicare and Medicaid Services. Both of these websites contain numerous resources to inform you about the No Surprises Act.
The Good Faith Estimate must be provided in writing. If it is delivered electronically (e.g., e-mail or text), it must be provided in a format that the client can save and print. It can be provided as part of your intake paperwork but also needs to be reviewed verbally with your client. Verbal notice alone is considered non-compliant.
If you do decide to make the estimate part of your intake paperwork, just make sure that the client does not confuse it with your therapeutic contract. While a treatment contract asks a client to accept your services, a good faith estimate does not obligate an individual to receive services from that provider.
The good faith estimate is an official document and is required to become part of the client record. The date and the method of delivery also need to be noted. A copy of the estimate must be made available upon request for at least six years after it is given.
Which Clients Need to be Provided with a Good Faith Estimate?
People who do not have insurance or pay out-of-pocket need to be provided with a good-faith estimate. If the client is in-network and using insurance, they do not need to be given an estimate. This includes clients with Medicare, Medicaid, or any other federally funded insurance.
It should be noted that many therapists—especially those in private practice—do not take any insurance at all. In those cases, all of their clients would need to be given an estimate. But what about clients that you have been seeing for months or even years? You might be surprised to find that this bill applies to all established clients as well as new intakes. And what about clients that are out-of-network but still apply for some reimbursement from insurance? They too will need to be given a good-faith estimate.
When Do I Provide the Good Faith Estimate?
The law is very specific as to when a client must be given a good-faith estimate:
- If a client makes an appointment more than 10 days in advance, the good faith estimate must be provided within three business days of scheduling.
- If a client schedules an appointment within three business days of the appointment, the good faith estimate must be provided within one business day of scheduling.
- If a client requests an appointment on the day that they schedule, a good faith estimate is not required but is still good practice.
- If a client or potential client requests a good faith estimate, it must be provided within three business days. This is true for whether or not a client schedules an appointment. You might be wondering, what is considered a request. A request for an estimate does not need to be formal or put into writing. Any discussion or question about prices qualifies as a request for a good-faith estimate.
The bill also requires that all clients receive a new notice every year or if the fees significantly change. For example, say that a client originally begins once-a-week individual therapy but then increases to twice a week and adds a group. The therapist should provide a new estimate that includes the additional services. If it is a long-term client, you may wish to give an estimate that covers a full year of services.
How Does One Provide a Good Faith Estimate for Psychotherapy?
This is one of the most difficult aspects of the No Surprises Act for therapists. Until you see a client, it is difficult to know exactly what services they may require. Additionally, you often find out information during therapy that may change their need for services part of the way through. For example, a client may initially present at intake with a low level of depression. But as the therapy progresses, you may find that they have a much more severe issue, such as bipolar disorder or a deep-seated characterological problem (e.g., borderline or paranoid personality disorder). Suddenly, the good faith estimate appears to be in bad faith.
Therapy is not like a preplanned surgery, where you can be reasonably certain what materials and services will be needed. People are complicated and you don’t start to know a client until you have a handful of sessions under your belt. Here are some tips for providing an accurate good-faith estimate for psychotherapy clients:
- Provide a range of potential costs. Because psychotherapy can be quite unpredictable, it is helpful to not lock yourself into an exact number of sessions. For instance, you can say that “presenting problems like yours usually require 15-50 45-minute sessions, at X number of dollars per session”.
- Revise the estimate. It is incredible to think that you have to provide an estimate before you even have an intake session with a client. It is almost an impossible task. So, feel free to adjust the estimate once you have completed the intake or even after a few sessions.
- Overestimate. It is better to overestimate costs than underestimate them. Since this bill is all about preventing excessive costs and protecting consumers, you don’t want the client to be surprised with a huge bill they weren’t expecting. Filing a cost dispute is an act that would most certainly hurt treatment.
- Don’t stress too much about it. It is just an estimate. The good faith estimate is not a binding contract. It is an attempt to help help the client manage their expectations so they are not overbilled. You don’t need to get it exactly correct.
What if the Cost of Client Services is Much Higher Than the Estimate?
Let’s say that your estimate somehow turns out to be way off. But you feel justified that your billing is correct and the client should pay the higher costs. If the client disagrees, they can ask the government to make you adhere to the original estimate. Part of the No Surprises Act includes a dispute resolution process. If the bill is $400 higher than the estimate, the client can appeal. The client must submit their claim to the United States Department of Health and Human Services and it must be done within 120 days of receipt of the medical bill. It costs $25 to file the dispute. If the client’s appeal is considered unsuccessful, they will be required to pay the higher amount listed on the bill. A detailed description of the Patient-Provider Dispute Resolution (PPDR) process can be found here.
The No Surprises Act: A Challenging Yet Beneficial Bill for Therapists and Clients
The No Surprises Act has the best intentions but presents difficulties in implementation for therapists. The new legislation aims to protect consumers from unexpectedly high medical bills by asking providers to present consumers with an estimate of potential prices. This is very reasonable for most healthcare services. Unfortunately, psychotherapy is not a static practice. It has many moving parts and can be difficult to estimate costs. Still, with a little forethought and flexibility, it is not an insurmountable task. Plus, any bill that can increase client comfort seems well worth the effort.
