The Good Faith Estimate

The legal side of healthcare can often feel out of reach to those of us who don’t have the time or expertise needed to decipher pages and pages of technical language. When it comes to translating that into our daily lives, staying informed on advancements within provider/patient relationships, and what changes to look for, often shifts from being inconvenient to borderline unrealistic. While deciding to educate ourselves on our evolving rights might feel like a jump into the abyss, it doesn’t have to be. I took the time to consolidate everything you need to know about the recent No Surprises Act so you can focus on what takes priority for you – while staying in the loop. This is especially important for providers in private practice, where understanding patient rights and compliance measures is essential to maintaining transparency.

What you need to know

The No Surprises Act, which went into effect on January 1, 2022, was ultimately designed to protect patients from unanticipated medical bills. The good faith estimate, which is one component of the act, works to standardize the goal of patient protection by requiring all healthcare providers and facilities licensed or approved by the state to provide estimates of any expected charges for the services they offer. This applies to a wide range of therapy practices, including private pay therapy and out-of-network therapy services. One important thing to note is that, as of right now, this mandate only applies to uninsured patients (although the projected plan is to expand access to all patients, regardless of insurance status).  

At the onset of 2023, all healthcare providers (including mental healthcare) will be required within predetermined timeframes to provide cost approximations of insurance coverage for their services, including (but not limited to) fees regarding consultations, tests, procedures, and medications. For therapists running a cash-pay therapy practice, this means clearly communicating therapy fees in advance to avoid any billing disputes. Additionally, a successful good faith estimate will consider all factors unique to the patient. The value must be given prior to the start of any services to new self-pay clients or any continued services for current patients, and should be representative of projected costs annually. The new regulations also establish specific requirements regarding the content and delivery of the good faith estimate. For therapists starting a private practice or transitioning into a solo therapy practice, being familiar with these rules is vital for building private practice operations that are compliant and client-focused.

The good faith estimate and patients

The goal of the good faith estimate is to ensure a new standard of transparency between patient and provider as it relates to both care and costs. Rather than being a ballpark estimate, the cost presented should reflect an acknowledgement of the patient as an individual, with an individualized set of needs. A development of this kind works to optimize reasonable treatment plans for each client in both emergency and non-emergency situations. By instituting this model of transparency, the hope is that patients can access the details they need to make informed decisions regarding their health, and providers can receive appropriate compensation for their time and expertise. This is particularly beneficial in private therapy practice settings, where trust and open communication about therapy fees are critical for establishing strong client relationships.

Mental health providers offering sliding scale therapy fees should also note that these discounts must still be reflected in the estimate provided. Patients should never be caught off guard by charges, especially when cost is a determining factor in whether they pursue treatment.

The good faith estimate and providers

While The No Surprise Act is a positive step forward for patient protection, ensuring professional compliance does require increased organization and effort on behalf of healthcare providers. The good faith estimate’s primary purpose — preventing surprise fees — is dependent upon the accuracy of the estimate provided. Licensed mental healthcare professionals will need to prioritize record keeping in ways that were not necessitated before, and should have comprehensive knowledge in the relevant course of action for each patient. Tools for therapists such as practice management software and SOAP notes templates can help streamline this process. Beyond this more general shift in the expectations of providers, there are specific provisions that must be met as well (such as notices of the accessibility of the good faith estimate on websites and in offices). Both The California Association of Marriage and Family Therapy (CAMFT) and The U.S. Department of Health and Human Services have created sample notices for healthcare professionals. CAMFT has also drafted a useful good faith estimate template. If you're building a private practice or starting a therapy practice from scratch, understanding how to incorporate this regulation into your workflow will help establish credibility from day one.

Inaccurate good faith estimates

There are standard protocols in place for clients who wish to resolve inconsistencies regarding the initial good faith estimate and what they are ultimately billed. If the fee is $400 or more than the value predicted on the good faith estimate, a third-party arbitrator can be requested to review the information and assess whether the increase in fees adheres to the guidelines of the No Surprises Act. The U.S. Department of Health and Human Services plan to create an online portal which will assist patients in filing disputes correctly and efficiently.  Having a clear roadmap for managing disputes and patient communication can safeguard your practice and protect your clients.

Moving forward 

Since the good faith estimate became the expected procedure at the start of this calendar year, various organizations have devoted effort to simplifying the process for all parties. Resources continue to be created for both patients and providers, and it is safe to say that these resources will only multiply as these changes become customary in our healthcare system. While the majority of these changes are reliant on the labor and knowledge of providers, the benefits of an act such as this expand beyond patient protection alone. 

When trust is championed, how many people who were previously unwilling to seek professional expertise for their medical dilemmas will reevaluate? What resources might be conserved if more attention is given to individualized treatment and record-keeping? And, perhaps most important, how will the No Surprises Act influence your own experience of giving or receiving care? Hopefully that question feels a little less baffling now! If you're growing your private practice or considering how to start a private therapy practice, now is the time to incorporate compliance tools into your foundation.