Providers must furnish ‘good-faith’ price estimates to self-pay patients starting next year

Regulations that would require providers to also give good-faith estimates to health plans won’t take effect in 2022 as previously scheduled.

A newly issued federal rule on surprise billing includes regulations designed to improve price transparency for self-pay patients starting in 2022.

The interim final rule with comment period (IFC) requires providers to ask about a patient’s coverage status at the time a service is scheduled. If the patient does not have insurance, “a good-faith estimate” of expected charges for items and services must be provided — generally within three business days.

The requirement also applies if the patient has insurance but does not intend to submit a claim.

The rule states that the estimate must include “any items or services that are reasonably expected to be provided in conjunction with scheduled or requested items or services and such items or services reasonably expected to be so provided by another healthcare provider or healthcare facility” along with “the expected billing and diagnostic codes for any such items or services.”

Using knee surgery as an example, the rule states that the estimate should include an itemized list of services such as professional fees, facility fees, prescription drugs and durable medical equipment. “All items or services that are reasonably expected to be provided from admission through discharge as part of that scheduled knee surgery, from all physicians, facilities or providers, [should] be included in the good-faith estimate.”

Separate estimates would be required for distinct preoperative and postoperative items and services. HHS seeks comments on the viability of expanding the requirement so that a single estimate would include related services to be furnished before and after the surgery or other primary service.

The regulations “do not require the good-faith estimate to include charges for unanticipated items or services that are not reasonably expected and that could occur due to unforeseen events.”

HHS also states that for 2022 it plans to exercise enforcement discretion in situations where the estimate leaves out charges from a co-provider. The relaxed enforcement recognizes the need for “additional implementation time to develop appropriate communication channels that may not yet exist among various co-providers or co-facilities.” 

Patient bills could be subject to arbitration

The rule establishes a dispute resolution process for situations in which the billed amount substantially exceeds the estimate. Substantially in excess is defined as more than $400 above the estimate for any provider or facility that was included.

The patient must initiate the process within 120 days of receiving the bill, file the required documentation and pay a $25 administrative fee. 

Estimates to insurers aren’t required (yet)

In the rule, HHS clarifies that the requirements don’t include submission of good-faith price estimates from providers to health plans. Although such regulations were previously issued, subsequent feedback made clear that developing the requisite infrastructure would be daunting.

In response, HHS will defer enforcement of that requirement pending further rulemaking. 

The big picture on surprise billing

The new requirements are among various billing-related regulations that take effect starting Jan. 1, 2022. A previously issued IFC established the consumer protections that will be in place, while a proposed rule set forth enforcement procedures and penalties for violations.

The requirements about good-faith estimates were included in a new rule that also established an arbitration process for settling disputes between health plans and providers over payments for out-of-network care.

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